T5795 - 25 July
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Australian Liquor, Hospitality and Miscellaneous Workers Union and Thermoform Packaging Pty Ltd
Industrial dispute - unauthorised deduction of monies from termination pay - arbitrated - order made REASONS FOR DECISION This application, which has been already the subject of an interim decision of the Commission(1), was for a dispute hearing and was made under Section 29 of the Act by the Australian Liquor, Hospitality and Miscellaneous Workers Union (Tasmanian Branch) (the Union). The dispute concerned the alleged unauthorised deduction of monies by Thermoform Packaging Pty Ltd of Huntingfield (the Company) from the pay of Mr P Griggs in breach of the Fibreglass and Plastics Award and/or the Clerical and Administrative Employees (Private Sector) Award (the Awards). The Company had raised some jurisdictional arguments against the Commission proceeding to hearing the application: in the interim decision the Commission found that jurisdiction did exist. As I understand the situation from the evidence, the relevant facts of the case were that Mr Griggs, who was at the time a Director of the Company, with the approval of the Board of Directors of the Company, somewhere between 1991 and 1992 took the position of the day-to-day Manager of the Company's factory because, despite significant investment, it was losing money seriously. Mr Griggs immersed himself in the everyday running of the factory and during the period of his holding the position of Manager, he claimed he had performed just about every duty that was required of anyone employed in the factory, ranging from the operation, maintenance and repair of the machines to the office work, buying of equipment and materials, research and development and negotiations with outside parties over all these things. At the time Mr Griggs took over as Manager, his salary had been settled with Mr Charles Ayers, the Chairman of the Board of Directors of the Company, at $700 per week with the promise of $800 per week if and when the Company returned to an efficient, profitable business, however, Mr Griggs had requested that he be paid without any taxation deductions and he withdrew his pay at $2000-$2500 per month approximately, when and where it was available from funds. Mr Griggs' losses elsewhere offset the taxation deductions. He said the $2000-$2500 payments were `nett' amounts needed to cover his living expenses. Mr Ayers was in fact, through another Company, Ayers Nominees Pty Ltd, the almost exclusive shareholder of the Company and was in full control. Mr Griggs had done everything originally with the full knowledge, consultation and approval of Mr Ayers. At some other time Mr Ayers had made a private and personal loan to Mr Griggs of $10 000 for the purpose of kitchen remodelling in Mr Griggs' home. Due to Mr Griggs' exertions the fortunes of the Company were reversed dramatically in almost eighteen months, from generally a $330 000 loss position to a $70 000 credit position. As a result of different interpretations of the circumstances surrounding research and development involving Mr Griggs' collaboration with another complementary company an unfortunate breakdown in co-operation and goodwill occurred between Mr Griggs and Mr Ayers. Mr Griggs claimed that a modification to a machine in the factory which had been mutually devised between the other company and himself was looked upon by Mr Ayers as his property and not available to the other company to develop and sell. Mr Griggs saw this attitude of Mr Ayers' as completely unfair to the other company and from about that time relations between the two men had soured. The improved machine had been built at the joint expense of the Company and the other company. All of this resulted in Mr Griggs giving one month's notice of his resignation as Manager and as a Director of the Company. This was in July 1994. At the same time Mr Ayers terminated Mr Griggs' employment forthwith. When Mr Griggs departed the $10 000 disputed private loan amount was deducted from his wages payout figure so that instead of receiving $12 480.49 in wages, Mr Griggs received $2 480.49. This was the nub of the dispute, Mr Griggs claimed that the $10 000 loan money had been deducted from his wages without authority. Incidentally, in his evidence Mr Griggs said that prior to their fall-out Mr Ayers had told him to forget about the loan repayment on account of the good work Mr Griggs had done in returning the Company to profitability. The Union sought an order directing the Company to pay to Mr Griggs the amount of $10 000 deducted from his termination of employment payment. The Union referred to Section 51(3) of the Act which says: "51(3) Where, by virtue of an award, an employee is entitled to be paid any sum by his or her employer, that employer is guilty of an offence if that sum is paid otherwise than in money without any deductions other than those that may be authorized by the employee." The Union submitted that the requirement of the Section applied in this case. The Union also submitted that Mr Griggs could only be regarded as an employee since he fulfilled the main requirements, he was employed by the Company and apart from the general monthly payment was paid also for annual leave, days worked and days in lieu of notice. As well the Union said that the references in the documentation it had produced clearly showed Mr Griggs had been an employee-
The Union relied on evidence that a claim by Mr Griggs under the Workers Compensation Act 1988 had been met and said this was further proof that he was an employee. The Union also noted that occupational superannuation payments on Mr Griggs' behalf had been made by the Company, but, it did not rely on that factor. The Company submitted as a threshold point that Mr Griggs was not an employee since he remained a Director of the Company and was not under the control of anyone which meant that he failed the High Court established `control test'. It was also submitted that the loan to Mr Griggs had come from the Company, not Mr Ayers. The original cheque had been under the name of Ayers Nominees Pty Ltd, but, that had been assigned to the Company. The Company maintained that Mr Griggs had a contract for services with the Company and there was no employer-employee relationship: in all this therefore, the Commission had no jurisdiction the Company claimed. After the main hearing concluded the Commission deemed it necessary to recall the parties for further evidence and submissions to clarify Mr Griggs' status as an employee or otherwise. This was primarily because the Company had made submissions near the end of proceedings that Mr Griggs was not an employee. The Company objected to the recall on the basis that the Commission was seeking evidence `to bolster the claimant's case'. The Company also submitted that the Commission, as a quasi-judicial body, had no role in making further investigations after a case had been properly heard. The Commission proceeded despite the Company's objections for the reasons that:
Decision I am satisfied that Mr Griggs was an employee of the Company and I accept the submissions of the Union in that regard. I also accept that it is contrary to Section 51(3) of the Act to deduct monies from an employee's wages without the authority of that employee. In this case the loan of $10 000 of Mr Griggs' was certainly a private matter and not related to his employment hence the avenue of recovery, if any, is to be found in a jurisdiction other than this. It is a very serious matter indeed, for an employer to unilaterally take money from wages due to an employee and, in this context, I accept the submission of the Union - "And we say that it is a bad industrial principle for the employer to be able - or to be allowed to ... make a judgement on monies that are between the employer and the employee and use the position of power as the employer holding monies that are due to the employee to effectively take that money and say to the employee: well its our money and do what you can, we will hold it." (Transcript, page 56) The Union made submissions to the effect that Mr Griggs was entitled to the benefit of the provisions of the Fibreglass and Plastics Award and the Clerical and Administrative Employees Award depending on the duties performed. I accept those submissions of the Union although I do not think it necessary to dwell on that since it was the amount of $10 000 deducted from the monies paid to Mr Griggs on the termination of his employment which was the subject matter of the dispute: the Union did not dispute the total amount said by the Company to be due. I consider that both the Workers Compensation Act payments and superannuation payments tend to confirm Mr Griggs' status as an employee, but, I do not rely on either factor in my decision in this matter. It is true that Mr Griggs' pay arrangements were not usual, but, such arrangements are not unknown especially for individuals like Mr Griggs who because of his history had other tax arrangements separate from PAYE. These arrangements did not in any way affect the fact that he was an employee. For all the abovementioned reasons I am satisfied that the amount of the private loan to Mr Griggs ($10 000) should not have been deducted from the monies paid to him on the termination of his employment with the Company. Therefore, in accordance with the powers vested in me under Section 31(1) of the Industrial Relations Act 1984, so as to settle this dispute, I order that, within fourteen days from the date hereof, Thermoform Packaging Pty Ltd, pay to Mr Phillip John Griggs of 794 Sandy Bay Road, Sandy Bay, the sum of ten thousand dollars.
P A Imlach Appearances: Date and place of hearing: (1) Interim decision, T5795 of 1995, 31 January 1996 |