T7772 and T7773
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Australian Liquor, Hospitality and and Rans Management Group Pty Ltd trading as
Industrial disputes - matters joined - alleged breach of the Health and Fitness Centres Award - ordinary rate of pay - arbitrated REASONS FOR DECISION These applications for dispute hearings made under Section 29(1) of the Industrial Relations Act 1984 (the Act) were joined at the outset. They were made by the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch (the Union) which was in dispute with RANS Management Group Pty Ltd trading as Tattersall's Hobart Aquatic Centre, of South Melbourne in Victoria (the Company). The Tasmanian Chamber of Commerce and Industry Limited (the TCCI) represented the Company in this application. The disputes concerned alleged breaches by the Company of the Health and Fitness Centres Award (the Award) in respect of the payment of wages and conditions of employment for employees Mr James Winton and Miss Alexandra Wallace (the two employees). At the time of their employment by the Company in July 1997, the two employees each received a letter of appointment plus a copy of the Company's Conditions of Employment which in each case included the relevant position name, the salary and the location of the employment, the Tattersall's Hobart Aquatic Centre, Queens Domain, Hobart. Apart from the position names and the salaries the details of the Conditions of Employment were the same for each of the two employees. Miss Wallace had been employed as the Administration Manager and Mr Winton had been employed as the Events Manager. At the time of their appointment the two employees had signed and accepted the Company's Conditions of Employment. It could be said that the two employees had signed an unregistered enterprise agreement with the Company. They were paid monthly on the basis of an annual salary. The two employees worked an average of about 40 hours per week on rosters which covered the seven days of the week. The Union contended that the two employees should have been employed and paid under the terms and conditions of the Award and as a result they had been underpaid and were entitled therefore to payment of back monies due. The Company, whilst admitting that the employment arrangements it had made were not in accordance with the Award, nevertheless, except for one or two instances, denied that the two employees had been underpaid by comparison with the Award's requirements. The Company claimed that by offsetting week by week what had been paid against what should have been paid under the Award's prescriptions week by week, its liability was not great. The Union referred to and quoted section 85(3) of the Act: "(3) Any provision of a contract of service that provides for any conditions of employment that are more favourable than those provided by an award or a registered agreement is not inconsistent only because of that fact." The Union submitted: "... it means that a higher rate is not inconsistent and therefore complies with the award by virtue of this section of the Act. So, in effect, it is the award."1 Again, "It's not at variance - the over-award rate because it's not at variance with the award by the terms of the Act - the over-award rate therefore can be taken to be the rate for the purposes of the application of the award because it is not inconsistent with the award according to the Act. And in this case, there's the rate that should therefore - because it's not inconsistent with the award, be applied to the other provisions of the award such as, the way that you calculate overtime entitlements."2 And further, "If it is not inconsistent with the award, it is therefore not inconsistent with the provisions of section 49(5)(b) for the commission to order that overtime payments be made on the basis of the over-award rate. I think you would also find, Mr Commissioner, that that's custom and practice - if somebody gets double time they get double their rate, whether it be an over-award rate or an award rate."3 The Union submitted that the term "ordinary rate of pay" in this case included normal over-award payments and overtime payments. The Union also submitted that penalty and overtime payments should be calculated on the "ordinary rate of pay" it had canvassed. The Company was of the view that the Commission's jurisdiction in this application lay only within the ambit of the provisions of the Award and not under the terms of the unregistered enterprise agreement. The Company submitted that payments made under the terms of the unregistered enterprise agreement, on a week by week basis, ought to be offset against the payments due under the Award's provisions. The Company relied on the case Jackson & Wilson v Monadelphous Engineering Associates Pty Ltd4 which in turn referred to the relevant legal principle involved which was enunciated in the 1967 case Ray v Radano. In one key quotation from the latter case, amongst a number of others put forward by the Company, Sheldon J said: "The position, as I see it, is that where a complainant has been employed by a defendant on work covered by an award, he is entitled under s 92(2) to claim any balance due to him between his award entitlement for his work and any payment made to him by the employer which is properly attributable to that award entitlement. If no more appears than that (a) work was done; (b) the work was covered by an award; (c) a wage was paid; then the whole of that wage can be set off against the award entitlement for the work whether it arises as ordinary time, overtime, weekend penalty rates or any other monetary right under the award. Prima facie a weekly sum paid by an employer to his employee is an appropriation by the employer (the debtor) to the payment due for the week [and that refers back to a previous clause] and, in my opinion, there is no legal significance in the mere verbiage by which the payment is described whether it be 'wages', 'remuneration' or the like."5 The Company, relying on comments made by Mr Justice Wright in his decision in the Tasmanian Supreme Court case Emmerton and Terry6, submitted that the relevant period for the purposes of calculating the two employees' entitlements under the Award was "the period from one pay day to the next". In this case, one week. The Union submitted that all calculations should be on the basis of a daily assessment added up to a week of seven consecutive days. The Union pointed out that the Company had breached the Award by paying the wages monthly not weekly. The Company confirmed that in its view the weekly rate in this case ought to be calculated by dividing the monthly rate actually paid by four. DECISION I accept that the Company breached the Award in that it did not pay the two employees weekly in accordance with the terms of the Award. On the other hand I accept that the Company is able to offset on a weekly basis what it did pay in the form of wages. So far as the standards of the Commission are concerned, I do not accept the Union's submissions that the ordinary rate of pay includes the over-award payment nor that the over-award ordinary rate of pay ought to be used as the basis for penalty, allowances or overtime calculations. The Commission is only concerned with the minimum amounts specified in the Award and the application of the Award specified penalty and other payments to those minimum amounts. In this case therefore the Award amount of wages due in the case of each relevant week, calculated on the basis of the hours worked on each day of that week (in which I endorse the Union's contentions) is to be offset against the amount of wages actually paid for that week. I leave it to the parties to agree on how the actual weekly payment is to be calculated based upon the $2500 actually paid each month. It follows that I reject the Union's submission related to section 85(3) of the Act, that because an over-award rate is not inconsistent with an award rate it therefore becomes an award rate. It may be that in some areas the practice is adopted for the over-award rate to be used as a basis for calculating penalty and other payments, but, such is not within the jurisdiction of this Commission to endorse. I am satisfied that the salary proposed originally by the Company was intended to cover all entitlements which could have been deemed to accrue under the Award. In all the preceding context I accept the submissions and adopt the precedents relied on by the Company where relevant. In accordance with the applications of the Union the parties are requested to meet and settle the amount and terms of a consent order consistent with this decision and I so order. Should the parties be unable to reach agreement a decision relating to the amount owing to each of the two employees, if any, will be given.
P A Imlach Appearances: Date and place of hearing: 1 Transcript, p.7 |