T7742
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Stephen Alan Freeman and Derwent Entertainment Centre Management Authority
Industrial dispute - payment of severance pay on termination of employment - period of relevant service determined REASONS FOR DECISION In this matter the parties have agreed that Stephen Alan Freeman (the Employee) has an entitlement to a severance payment. It is also agreed that payment will be made on the basis of two weeks pay for each year of service. What is not agreed and is before the Commission for determination is the length of relevant service. The matter at issue between the parties is a period of workers' compensation where the Employee was off work for approximately three (3) years. Mr Bronstein (of Counsel) for the Employee submitted that the whole period of the employment should be counted for calculation of a severance payment. However, Mr Watson of the Tasmanian Chamber of Commerce and Industry Limited as agent for the Derwent Entertainment Centre Management Authority (the Employer) submitted the period of workers' compensation was not service and should not be counted. The Employee commenced service with the Employer during 1991 as a casual employee. Later that year he commenced permanent part-time work, with hours increased in 1992, and in 1993 he was employed on full-time work and continued full-time until he commenced a period of workers' compensation which was but for a couple of weeks three (3) years of his employment until he was terminated on 13 April 1998. The parties were in agreement that if I determined the principle of the issue between them they would then resolve the detail of the service and the ultimate entitlement of the Employee. Mr Bronstein submitted that to not include the workers' compensation period in the calculation of a redundancy "would be inequitable, unfair in an industrial sense and also, discriminatory."1 He provided the Commission with a number of authorities which he submitted would assist me in reaching a conclusion in this matter. The authorities went to the determination of matters such as the entitlement to public holidays, rostered leisure days and accrual of annual leave during periods of workers' compensation. In particular he referred me to a decision of Evatt J. of the Federal Court in the Building Workers Industrial Union v Master Builders Association of N.S.W. and Another of 1987 where His Honour determined that an employee on workers' compensation should be paid public holidays which fell during the workers' compensation period. Mr Bronstein submitted that this and similar decisions relating to the accruing of annual leave and the payment of rostered days off falling during periods of workers' compensation supported his argument "that receipt of workers' compensation should not in itself preclude access to a standard industrial benefit."2 He acknowledged that he was not able to find any authority which dealt with the issue in this matter, but concluded that the similarity of the subject ie accrual of Annual Leave, payment for Public Holidays etc during periods of paid workers' compensation in the precedents provided supported his argument. He submitted I should put considerable weight on a decision of Von Doussa J. of the Federal Court in a matter of F.W. Hercus V. Sutton in 1994 where His Honour determined that a period of apprenticeship should be taken into account in determining a period for the calculation of an appropriate severance payment. Mr Bronstein also referred me to relevant provisions of the Commonwealth Disability Discrimination Act 1992 and a decision of the Human Rights and Equal Opportunity Commission constituted by Sir Roland Wilson (President) and Ms Hanifa Dean (Inquiry Commissioner) in No H94/63 dated 21 March 1997 and drew conclusions from them which he submitted supported the view that someone with a disability i.e. a workers' compensation injury should not be denied employment benefits. He submitted that s.20 of the Industrial Relations Act 1984 mirrors the principles he highlighted from the above by requiring the Commission to ensure equity, good conscience and fairness in its dealing with matters in the Tasmanian jurisdiction. Mr Watson's opposition to the inclusion of the workers' compensation period in the calculation of a redundancy payment was based on the concept of "service" compared to "employment" as the critical consideration. He submitted that it was a well established principal that redundancy payments are related to years of service and that that service should be "continuous service or a period of service"3. He took me through the then Australian Conciliation and Arbitration Commission's 1984, Termination, Change and Redundancy decision as recorded in the Australian Industrial Law Review 1984 at 256 - 265 to demonstrate clearly that the Commission determined that service was the critical component in deciding the employment period that would be taken into account in establishing a redundancy entitlement. Mr Watson quoted extensively from the above decision to leave me in no doubt as to the Federal Commission's intentions in relation to service. Mr Watson also drew my attention to the entitlements provision of that decision which again referred to service in detailing the entitlements. He then took me through the first award into which the Commission's Termination, Change and Redundancy test case provisions were inserted. The award was the Federal Map Industry Award and the decision recorded in A.I.L.R. 1985 1 - 16 reinforces the original concept of service by referring to the then Metal Trades Award definition of service as found in the annual leave clause. Mr Watson submitted that that annual leave clause clearly provided that up to 152 ordinary working hours lost in a twelve monthly period because of sickness or accident would not break the period of continuous service for the calculation of annual leave but any period of lost time in excess of 152 hours would break the service. Mr Watson urged me to accept the principles determined by the Federal Commission as the appropriate precedent to apply in this case. Mr Watson was also unable to provide me with any decision of the State Commission which would assist me in arriving at a conclusion in this matter. However, he submitted the distinction in this matter between a period of employment and a period of service was central to my consideration and that I should on merit conclude that a redundancy payment should be based on service and not a period of employment. Mr Watson referred me to the Long Service Act 1976, and after taking me through relevant provisions advised me that the Employer had counted the period of workers' compensation of the Employee in calculating his entitlement because the Act clearly provided that it should be counted. If the workers' compensation period was not counted the Employee would have no entitlement, but the Employer had not terminated the Employee during the workers' compensation absence of three (3) years and therefore accepted that a liability had accrued during that time. The Employer has accepted that liability but does not accept the workers' compensation period in the context of calculating a redundancy. Mr Watson submitted that the Disability Discrimination Act and the Sex Discrimination Act decision referred to by Mr Bronstein had no relevance to this matter. It was his submission that the Employer's decision was based on the well established industrial principles of the Federal Commission and there were no issues of discrimination. Having carefully considered all of the submissions, decisions and Acts referred to in this matter it is my conclusion that I must give precedent to the decision of the Federal Commission in the Termination, Change and Redundancy Case in terms of the precedent it establishes and more importantly the emphasis it places on "service" compared to "employment". I accept the conclusions of Mr Watson's submission that redundancy payments based on a payment per year of service must be based on the concept of service and not the employment period where in circumstances such as in this case they are not the same. This concept of service is in fact paramount in the decision of Von Doussa J. in the decision referred to earlier and relied on by Mr Bronstein where His Honour accepted "service" as an apprentice as part of the total period of service for the calculation of a redundancy. I accept the general thrust of Mr Bronstein's submission that an employee on workers' compensation should not be disadvantaged in relation to his or her industrial rights and privileges. However, I believe the right to a redundancy only accrues during periods of service and not otherwise. I also believe that this matter involves the determination of industrial issues and does not raise issues of discrimination. There is also another important consideration that the Employer in this case should not be financially disadvantaged because it did not terminate the Employee after the expiration of the first 12 months of his workers compensation. By not terminating the Employee the Employer on the face of it is facilitating a return to work, unfortunately this did not occur. I acknowledge it was demonstrated in this case that by not terminating the Employee after twelve months on workers' compensation and before seven (7) years "employment" passed the Employer incurred the cost of pro-rata long service leave. That is another issue but demonstrates the bona fides of the Employer in terms of fair treatment of the Employee. The parties asked me to determine the principle at issue between them in this matter and they would then negotiate the actual payment to be made to the Employee. I therefore determine this issue by finding that the Employee should be paid a redundancy payment based on the period of "service" with the Employer and not for the period of total "employment". Should either of the parties require an order to be issued in this matter I will do so on being advised of the actual period of service and the appropriate rate of pay.
J G King Appearances: Date and place of hearing: |