T8934
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Health Services Union of Australia, Tasmania No.1 Branch and Our Place Inc.
Industrial dispute - redundancy entitlements - quantum of severance pay - payment in lieu of notice - arbitrated - payment ordered REASONS FOR DECISION On 12 April 2000, the Health Services Union of Australia, Tasmania No.1 Branch (the applicant), applied to the President, pursuant to s.29(1) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with Our Place Inc. (the respondent) re redundancy entitlements and payment in lieu of notice for employees who had been employed under the Disability Service Providers Award. On 13 April 2000, the President convened a hearing at `Lyndhurst', 448 Elizabeth Street, North Hobart, Tasmania, before myself, to commence on Friday, 14 April 2000 at 10.30 am. On that date the matter was heard together with a separate application, T8922 of 2000, which dealt with the same employees in relation to a claim for alleged unpaid wages and other entitlements. Mr C Brown appeared for the applicant union and Mr James O'Neill of the Tasmanian Chamber of Commerce and Industry [TCCI] appeared on behalf of the respondent employer. Mr Brown gave an overview of the circumstances of the case, which related to the termination of employment of forty-one nominated employees by Our Place Inc. The names of these employees were set out in Exhibit B6/1. Our Place Inc. operated a group homes service in the North West of Tasmania until midnight on Friday 31 March 2000 and had employed the forty-one employees to work within the group homes service under the terms and conditions of the Disability Service Providers Award. On 28 March 2000 the employees were informed that the service was closing and that their employment would be terminated from midnight on 31 March 2000. Mr Brown tendered a document, Exhibit B3, headed "Transfer Agreement" which showed that a number of employees had transferred from North West Residential Support Service to Our Place Inc., and that Our Place Inc. had agreed to recognise prior service and to recognise all service as being continuous for all purposes. The agreement was not, however, a registered agreement. At the request of the applicant, and with the agreement of the respondent, the hearing was adjourned until 28 April 2000 at 10 am. In the event, on that date the hearing dealt only with matters outlined in application T8922, which was settled by way of a Consent Order, and the hearing in relation to this matter was adjourned until 8 May 2000 at 10.30 am. On that day, Mr O'Neill indicated that the respondent conceded that a redundancy situation existed.1 The hearing was then adjourned into conference so that the parties could have discussions with the aim of reaching agreement regarding the quantum of severance payments and the period of notice. The parties later reported that no progress had been made in that respect. The hearing then proceeded on the basis that the questions to be dealt with were the period of notice and the quantum of severance payments. Mr Brown said that the union's claim was for:
Subsequently, Mr Brown sought an additional one week's notice for employees over the age of 45 years, provided that they had a minimum of two year's continuous service with Our Place Inc.3 The Question of Notice The Evidence as Presented by the Applicant On Tuesday, 28 March 2000, employees of Our Place Inc. were informed of the board's intention to close the service. This amounted to three days notice to the employees of the termination of their employment.4 The employees were given a statement from the board of directors outlining the details of the closure:
As later transpired, the services previously provided by Our Place Inc. were spread across three organisations: Devonfield Enterprises, North West Residential Support Services and Youth and Family Focus Inc.6 Prior to that, on 1 December 1999, the manager of Our Place Inc., Mr Andrew Potter, issued the following statement to employees, headed `Staff Notice':
A statutory declaration was tendered as evidence, signed by a parent of a client of Our Place Inc.:
By way of clarification, Mr Brown advised that `Disability Services' is Disability Services within the Department of Health and Human Services, Louise Leslie was a staff member and Ann Shadbolt is a parent with a disabled family member who was a client of Our Place Inc.9 A copy of a letter from the Health Service Union of Australia (HSUA), signed by Mr Shane Littler, Industrial Officer, was introduced into evidence. This letter, dated 21 December 1999, was to Mr James O'Neill of the TCCI. Part of this letter said:
Louise Ellen Leslie, a witness for the applicant, in sworn testimony, said that staff began to be concerned about the financial situation of Our Place as early as June 1999 when two wages cheques, totalling less than $600, were not honoured.11 Ms Leslie testified that rumours were circulating in September and October of 1999 and that on 22 November she received a telephone call from a friend, suggesting that she talk to some family members (family of clients of the service). She spoke with Kris Plummer (who provided the statutory declaration outlined earlier in this decision). Ms Leslie said:
The staff notice issued by Mr Andrew Potter13 did little, she said, to allay the concerns of staff. The management/HSUA consultative committee met with Mr Potter on 9 December 1999 at the union office and Ms Leslie said that, at that meeting, she specifically asked him a question in relation to accrued leave entitlements. She said that Mr Potter told her that there was money in the bank to cover the entitlements. Ms Leslie's evidence was that staff were not told by the employer that closure was a possibility until the day the employees were given notice on 28 March 2000. She described the manner in which the notice was given:
Mr O'Neill, for the employer, declined to cross-examine the witness. An article from the `Advocate' newspaper, dated 11 April 2000, was tendered as evidence. The article quoted Mr Gary Coates, president of the board of Our Place Inc. as saying inter alia:
The article went on to say:
None of the above statements were challenged. The Applicant's Submissions Mr Brown referred the Commission to section 31[1A] of the Industrial Relations Act 1984 which states that:
The Convention, at Part II, Standards of General Application, Article 11 says:
There was no question of misconduct in this case, Mr Brown said. The sole reason given for the termination of employment was that there were insufficient funds for the service to continue operating. Therefore, he said, the employer is clearly obliged under the terms of the article to provide a reasonable notice period.18 Mr Brown said that a decision of a Full Bench of this Commission, T125 of 1985, was a "seminal decision'' of the Commission regarding termination, change and redundancy. He said that the decision had been used as a guide in applications such as the instant one.19 Mr Brown referred in particular to statements made at pages 28 and 30 of that decision:
Mr Brown said that the ILO article and the Full Bench decision T125 of 1985 place a requirement on the employer to provide as much notice as the circumstances allowed, the purpose of which is to enable employees to make arrangements to minimise their losses and the negative impact on their lives.21 Whilst it was unclear precisely how long the board had been aware of the seriousness of the problem Mr Brown claimed that it was "certainly months rather than days" as the notice period to staff would suggest.22 Mr Brown said that the board could reasonably have been expected perhaps as early as 18 August (the date of the meeting between the board and the Minister) to at least have been giving some consideration to the fact that closure may in fact be a possibility.23 Given the size of the deficit, Mr Brown said that any responsible board would have been considering closure as at least one of its options, particularly in the event of the department not providing additional funding.24 For the Department of Health and Human services to have been encouraging the Board to continue their operations as reported in the `Examiner' then it "logically followed" that they must have been considering not doing so.25 Mr Brown said:
The staff notice of 1 December denying rumours of a merger or takeover was "of interest", Mr Brown said, in that it contained no denial of closure, yet the rumour of closure was just as strong as the rumours in relation to a merger or takeover.27 The statutory declaration of Mrs Plummer contained a statement which was "at odds" with what Mr Potter had said in the statement to staff on 1 December, according to Mr Brown.28 He said that it appeared that Mr Potter was prepared to forewarn families of possible closure but was not prepared to say so to staff.29 Mr Brown said that the purpose of giving adequate notice was to give employees the opportunity to minimise the impact of the redundancy by enabling them to arrange their finances, to look for other employment and to allow them to come to terms with the situation.30 The board could have assisted the employees to cushion the effect of the redundancies in a number of ways, according to Mr Brown, they could have:
However, Mr Brown said, management of Our Place Inc. did not do any of those things and did not even bother to provide the employees with employment separation certificates or references which the employees could use in seeking other employment, nor was time off given during the two and a half day notice period to attend for job interviews.33 The board of Our Place Inc., Mr Brown claimed, had shown an almost total disregard for the employees who, the board had admitted, had provided an excellent service. The board, he said, had failed in its legal and moral responsibilities toward its employees.34 Authorities Mr Brown referred to three precedents of this commission. The first being a decison of the President in T7339 of 1997 - Jennifer Marguerite Phillips -v- Murphy & McKay Funerals,35 in which the President said that whilst the dismissal of the employee was for a valid reason, owing to the fact that the position of the employee was redundant, the payment of two weeks pay in lieu of notice was unreasonable and inadequate because the employer had considered making the position redundant well before that date. In that case, Mr Brown said, the employer had given a great deal of consideration to dismissing the employee but did not think it appropriate to warn her of his deliberations. The President, in his decision, said:
The second precedent referred to was a decision of Deputy President Johnson, in matter T8150 of 1998 Fellows -v- Lloyds North Pty Ltd.36 In that case the employer argued that there was no obligation on the employer to consult until such time as a definite decision to terminate employment had been made. At page 9 of that decision the Deputy President said:
The third decision Mr Brown referred to was T4204 of 1993, which was a dispute between the Shop Distributive and Allied Employees' Association, Tasmanian Branch, -v- Fosseys Australia Pty Ltd T/A Coles Variety, in which Commissioner Imlach found that the employer had "failed woefully" in its obligations to give the employee concerned adequate notice (in that case no general or specific notice was given, and the employee was paid three weeks' pay in lieu of notice].
Mr Brown said that there were similarities between that case and the present one, in that the Board of Our Place also failed to provide adequate notice.38 The Respondent's Case Mr O'Neill, for the respondent said that, whilst acknowledging the trauma suffered by the employees, the claim for eight weeks' notice was excessive.39 He said that, despite the financial situation, as late as fourteen days prior to the closure of Our Place Inc. the board still thought that they would be trading on, on the basis that they were given assurances and encouraged to do so by the Department of Health and Human Services, who were the funding body.40 As far as the organisation was concerned it was going to continue on, Mr O'Neill said.41 The fact of two and a half days notice was evidence in itself that until that point in time the board had believed the service would continue, despite their financial situation, due to assurances that were given to management and to the board, he said.42 A number of discussions had taken place and people could read from those discussions certain outcomes that just weren't there (referring to the discussion between Mr Potter and Mrs Plummer).43 Mr O'Neill submitted no authority for consideration by the commission, nor did he address the precedents referred to by the applicant. Findings I agree with the submissions made by the applicant union to the effect that an employee is entitled to as much notice as the circumstances allow so that they can make arrangements to minimise their losses and the negative impact on their lives. This is supported by the authorities referred to (and to which I shall be returning later in this decision) and by the ILO Convention at Part II, Standards of General Application, Article 11 (which the Commission is required to take account of). In determining what would have been reasonable in the circumstances it is necessary to look at the chronology of events established through the evidence, none of which was contested. August 1999 It is clear from the evidence that by August 1999, if not earlier, the service was in grave trouble. So much so that, according to the article in the "Examiner", on August 18 there was a meeting between the Minister of Health and Human Services and the Board of Our Place Inc. at which a number of strategies "to reduce the budget expenditure" were outlined. Further such meetings took place, but, according to the Minister, the strategies were not implemented. This was not challenged by the respondent.44 In my view, a reasonable employer would have at least consulted with staff at this stage, ie, at the stage at which they entered into discussions with the funding body aimed at implementing strategies to ensure the continuation of its operations. There is nothing in the evidence to refute the Minister's statement, reported in the `Examiner' to the effect that the strategies were not implemented. If the future of the organisation was dependent upon putting strategies in place, and those strategies were not implemented, then it would have been obvious to the employer that the future of the operation was at risk. Late November 1999 According to Mrs Plummer's statutory declaration, Mr Potter said to her that if changes were not made it could result in the closure of the service and the transfer of clients to Devonfield Services. Mr Potter was the manager of the service, he was the person with whom the union had dealings, he was the signatory to at least one document concerning the future of the service. Clearly, Mr Potter would have had knowledge of the future of the service. The evidence of the statutory declaration was not challenged, apart from Mr O'Neill's statement that "people can read from those sorts of things outcomes that are just not there".45 Mr Potter was present at each day of hearings. It was open to the respondent to bring evidence to refute the submissions and evidence of the applicant. They did not do so. I think it is more probable than not that a closure was being considered at this stage, ie, at least a week before the general notice was issued to staff denying a takeover or a merger. In coming to this conclusion I have borne in mind the whole of the evidence, but consider the statutory declaration, which was supported by Ms Leslie's evidence, to be of particular significance. 1ST December 1999 On 1 December the manager, Mr Andrew Potter, issued a statement acknowledging the existence of rumours and stating that there had been no discussions regarding a takeover or merger. However, the statement was silent on the issue of a closure, which rumour, Mr Brown said, was just as strong as the rumours regarding a takeover or merger. I think it likely that this was a deliberate omission, in view of the statutory declaration of Mrs Plummer describing events which took place one week before the staff notice was issued. In view of the financial difficulties, on the balance of probabilities, it seems to me that the more likely scenario is the one Mr Potter outlined to Mrs Plummer, ie, that the service would close if changes were not made, and that the assurances given to the employees and their representatives did reveal the whole story. 9th December 1999 On 9 December at a meeting between Mr Potter and the union, Mr Potter gave an assurance that Our Place Inc. would not be merging with another operation or closing, but he indicated that savings of $150,000 needed to be made.46 This, again, conflicts with the statements Mr Potter made to Mrs Plummer. However, the size of the deficit does support the union's claim that the board must have been very seriously considering its future, and that, therefore, logically, closure must have been one of the options being considered. After 9 December 1999 There is no further evidence after 9 December 1999 of assurances being given to the union or to staff regarding the future operations of the service, from which I think it would be reasonable to conclude that after that date a decision was made to close the service, which decision, for whatever reason, the board was not prepared to make known to its employees or to the union. Mr O'Neill, for the employer said that:
I do not accept, in the absence of evidence, (which it was open to the respondent to bring), that the board of management continued to believe until fourteen days beforehand that it would be trading on.48 The following excerpt from transcript shows that Mr O'Neill was specifically invited to put evidence to the Commission to support that contention:
In rejecting the respondent's submission that the board, until fourteen days before, intended to continue trading, I do so because there is no evidence to support this contention and in the light of other evidence which supports a view contrary to that put forward by Mr O'Neill. I think it more probable, in view of the evidence, that the board simply continued to trade on until there was "not a brass razoo" left (as a member of the board described the financial situation to staff on 28 March 2000).50 The board may have done this in the vain hope (as it turned out) that the Department of Health and Human Services would provide funding for them to continue, or they may have done so simply because the Department encouraged them to continue. Whatever the case, the board was in a position to know when the money would run out and, therefore, when the service would close, but they chose not to communicate this to their employees. There is no evidence anywhere that the Department of Health Services and Human had given assurances regarding additional funding being made available to the board; there are, however, suggestions to the contrary:
Statements attributed to the Minister for Health and Human Services and reported in the `Examiner' indicate that, after December, there may have been further discussions between the Department of Human and Health Services and the board of Our Place Inc."52
Having considered all of the evidence, I find that the board of Our Place Inc. knew with reasonable certainty that, failing an injection of funds, and there is no evidence that they had any expectation of receiving such, or of savings being made through strategies which were apparently not implemented, then the service would close, and that they would have known this by no later than the end of December 1999. I say this because it is reasonable to conclude that at the end of the first two quarters, ie the end of December, the board would have known that they had no funds to operate beyond the end of the third quarter, ie the end of March. They did, indeed, continue until the end of March - until there was "not a brass razoo"54 left. I reject the argument put forward by Mr O'Neill for the respondent that the fact of two and a half days notice was, in itself, evidence that the board intended to continue to operate the service.55 I reject it on the basis that this contention is not supported by any other evidence, and indeed, goes against the evidence already referred to in this decision, in particular, the size of the operating deficit. Authorities I agree with the comments made in the precedent decisions referred to by Mr Brown. In summary:
I do not consider the decision in matter T4204 of 1993 Shop Distributive and Allied Employees Association - Tasmanian Branch -v- Fosseys Australia Pty T/A Coles Variety to be relevant to this decision, because, in that case, the decision did not differentiate between payment in lieu of notice and severance payments. Remedy Section 31(1A) of the Industrial Relations Act 1984 states:
The Convention, at Part II, Standards of General Application, Article 11 says:
In view of the above findings and the circumstances of this case, I consider that reasonable notice would have been from Monday 4th January 2000, which was the first ordinary working day after the end of December, less the three days notice given, making a total of 12 weeks pay for each of the forty-one nominated employees, and I decide accordingly. I have considered the union's claim that a further one week's notice be paid to employees aged more than 45 with more than two year's continuous service. However, no arguments were put in support of such a proposition, and I am not persuaded that, in the circumstances, such an arrangement can be justified. That part of the union's claim is dismissed. The Question of Severance Pay The Claim The union's claim was for four weeks pay per year of continuous service or part thereof.56 The union's position, throughout the hearing, was that none of the nominated employees were casual employees; that, in fact, all of the employees were permanent employees, some part-time and some full-time. Mr Brown said that there were some employees who received a 20% loading in lieu of paid leave but were not casuals under the terms of the Disability Service Providers Award. Mr Brown made this point on four separate occasions.57 Mr Brown said that the union's claim was that the calculation of severance payments should be based on the award classification that applied to the employees at the time of the terminations; all work related allowances applicable on days or shifts normally worked; and a 15% over-award payment for hours worked Monday to Friday, which, he said, was paid in lieu of overtime.58 There was some dispute as to what the 15% loading was for, with Mr O'Neill claiming that it was a shift loading, not a loading in lieu of overtime.59 The union was also seeking the inclusion of an additional amount for two employees, Lorraine Bendall and Helen Cornick, who had private use of a motor vehicle as part of their salary packages. Mr Brown said that private use of a vehicle should be calculated at a value of $5,000 per annum, which worked out at $96 per week.60 The Evidence Exhibit B6/2, tendered by the applicant, showed that most employees gained either casual or temporary employment with the organisations which took over the provision of the group homes service previously operated by Our Place Inc. The exhibit showed that four employees were employed by North West Residential Support Services, four by Youth and Family Focus Inc., two did not transfer to any other organisation, and the remaining employees were employed by Devonfield Enterprises. Exhibit B6/3 contained examples of offers of employment to the employees. In the case of Devonfield Enterprises the offer was for temporary employment from 1 April 2000 to 30 June 2000. Youth and Family Focus invited expressions of interest in temporary casual employment from 1 April 2000 to 30 June 2000, and North West Residential Support Service Inc. offered temporary casual employment. Exhibit B6/1 was two tables, showing details of the forty-one employees, including their commencement date, years of service and age. One table showed length of service with Our Place Inc. and the other showed length of service with Our Place Inc. plus length of service with North West Residential Support Services. This was provided by the applicant. Exhibit B7 was a set of documents, which Mr Brown said had been provided to the union by Mr Potter of Our Place Inc., setting out the employment details of the nominated employees, including their hourly rate, their normal hours worked, their classification level and the basis of their employment. This document lists a number of employees designated as `casuals', who received a loaded pay rate, and others designated either `full-time' or `part-time' who did not receive a loaded rate. Mr Potter, of Our Place Inc., undertook to provide to the Commission and to the applicant union further details outlining the hours worked by each employee. The record shows that if the applicant did not agree with the accuracy of the further details provided then the hearing would be reconvened in order to hear argument on that aspect, but, if the details were agreed, the applicant would so inform the Commission, and that those figures would be taken into account in the Commission's deliberations.61 Subsequent to the hearing further documents were provided by the respondent to the applicant, who forwarded a copy to the Commission, showing details of hours worked by each employee. These documents were headed "Payroll Register" and, in addition, itemised all loadings and penalty rates received by employees. Each employee received a loading of 15%, entitled "shift loading" for hours worked Monday to Friday. Mr Brown advised the Commission, in correspondence dated 12 May 2000, that he was seeking confirmation from the forty-one employees as to the accuracy of the documents provided by the employer. In further correspondence, per facsimile, received by the Commission on 30 May 2000, Mr Brown advised that:
The Applicant's Submission Mr Brown, for the applicant, said that it had been established that the termination of the employment of the forty-one employees was at the initiative of the employer and had resulted from the closure of Our Place Inc. He referred to Article 12 of the ILO Convention 158 which reads:
He said that in order to determine what the quantum of that severance pay should be the Commission should consider the Full Bench decision in T125 of 1985, where the Commission declined to make specific provisions for redundancy, in favour of examining each case individually, according to the merits of the case. The employees had, Mr Brown said, lost their employment security, their accrued benefits, such as sick leave and long service leave entitlements (for those with less than seven years service), their annual leave loading, and their continuity of service.63 Mr Brown said that the temporary or casual employment gained by thirty nine of the employees was not as the result of any intervention on the part of Our Place Inc., but was merely as a result of the urgent need for Devonfield Services to provide staff experienced in the care of the clients. He said that this was supported by the board's own statements in Exhibit B1, where they had said:
This, Mr Brown said, was not the statement of an employer working to secure employment for its employees, instead the board of Our Place Inc. was "simply a messenger not an initiator."65 Mr Brown referred to a decision of a Full Bench of this Commission in T8170 and T8171 of 1998 which was a cross appeal against a decision of King DP in the case of Geoffrey Gerald Corrigan and Kelair Pumps Australia Pty Ltd., in which the Full Bench said that the Commission is not required to take into account any alleged monetary gain following termination for redundancy. Mr Brown said that the only issues to be considered are the length of service and the level of wages of the dismissed worker. Therefore, Mr Brown said the Commission should not place any weight upon the fact that Our Place Inc. employees gained temporary or casual employment immediately following the termination of employment with Our Place Inc.66 In addition, he said that there was no continuing employment obligation with the new employer, the employment was only of a temporary or casual nature, and the conditions of employment were not similar because there was no job security.67 Mr Brown said that in view of the fact that the organisation did "very little, if anything at all"68 to cushion the effects of the terminations, the union's claim, for four week's pay for each year of service or part thereof, was a reasonable claim and it was clearly open to the Commission to award the employees that amount.69 The Respondent's Case Mr O'Neill said that the respondent had conceded that a redundancy situation existed, and acknowledged the submissions put to the Commission in respect of the stress and trauma suffered by the employees.70 He said that the employer had negotiated, in good faith, with a new service provider to provide a service to existing clients and that the ex-employees of Our Place Inc. commenced work with the new provider on 1 April 2000, on the same rate of pay, in the same locations, with the same clients and, according to Mr O'Neill's understanding, on the same rosters, therefore four week's pay [per year of service] was excessive.71 Mr O'Neill said that within the Tasmanian jurisdiction there was no legislative or award entitlement to severance pay, and the Commission must look at each case on its merits. He said that there was "nothing extraordinary" (in the instant case] that should go beyond "the principle of two weeks' pay for each completed year of service'.72 Findings There was no dispute between the parties that the employer had a valid reason for terminating the employment of the forty-one employees and that it was a genuine redundancy situation. Subsequent employment As to the question of whether or not, when deciding the quantum of severance pay, I should take into account the fact that thirty nine employees found casual or temporary (or casual and temporary) employment with the three services to whom the clients of Our Place Inc. were transferred, the decision of a Full Bench of this Commission in T8170 and T8171 Geoffrey Gerald Corrigan -v- Kelair Pumps Australia Pty Ltd, at page 8, is instructive:
Following the reasoning in that case I am not satisfied that the severance payments awarded in the instant case should be reduced or discounted. I am also of the opinion that because the employment gained with the new organisations was merely of a casual and/or temporary nature, it should not, in any event, be taken into account. I accept the position as put by Mr Brown that Our Place Inc. did not actively seek employment for the employees whose employment it was about to terminate. On the evidence it appears that they did no more than provide a list of names to those organisations who were about to take over the services formerly provided by Our Place Inc. to their clients Length of service and level of wages As has been adverted to, the Commission is required, pursuant to section 31(1A) of the Act, to take account of Article 12 of ILO Convention 158 concerning Termination of Employment at the Initiative of the Employer, which says that:
Length of service A number of employees had transferred from North West Residential Support Service to Our Place Inc. at the end of 1995.73 There was an agreement between the HSUA and Our Place Inc. to the effect that the prior service of those employees with North West Residential Support Service would be recognised by Our Place Inc. and that their employment would be deemed to be continuous for all purposes. This was not a registered agreement, therefore its application is outside of the jurisdiction of this Commission. The Industrial Relations Act 1984 contains no provisions which allow for the transmission of entitlements between one employer and another (apart from in the case of registered enterprise agreements, where a successor employer is bound by the registered agreement). In the absence of transmission provisions or a registered agreement under section 55 or section 61 of the Act, I am unable to recognise any service with any employer other than Our Place Inc. Therefore, I have determined "length of service", in the circumstances of this case, to mean length of service with Our Place Inc. Level of wages The applicant submitted that in determining the severance payment I should take into consideration a shift allowance payment of 15% which was regularly made to employees, a 20% loading which was paid to some employees in lieu of paid leave, and the provision of a car for private use in the case of two employees. (Whilst it was never completely clarified what the nature of the 15% loading was, what is clear is that it was regularly paid to all employees for all ordinary hours worked from Monday to Friday). "Wages" is not defined in the Industrial Relations Act 1984, apart from to say that "wages" includes salary. In the absence of a detailed definition, it is necessary to go to other sources. The dictionary definitions of "wages" serve as a guide to the ordinary meaning of the word: The CCH Maquarie Dictionary of Employment and Industrial Relations defines "wage" as:
The Macquarie Concise Dictionary defines "wage" as:
Clearly, these definitions relate to the payment, the regularity of the payment, and the fact that the payment arises as a result of work or services performed. What is apparent from the above definitions is that there is a common thread - nowhere does it say that "wages" are prescribed by any instrument, or that they must be payments to which the employee is contractually entitled, or entitled to as the result of an award provision, but, simply, the actual payment made by an employer to an employee as a consequence of the employee providing his or her services. I have concluded that "level of wages" is a broad term which should not be given a narrow interpretation, and that it means all payments regularly made to an employee by an employer arising from their contract of service. Such payments might include salary, commission, fringe benefits or allowances, whether payable in cash or in kind. Therefore, in my view, "level of wages", in the circumstances of this case, would include regular penalty payments and loadings, such as the 20% paid in lieu of paid leave and the 15% shift allowance paid on all ordinary hours worked Monday to Friday and any regular over-award payments. I have therefore decided to award severance payments based upon the hours worked by each employee at their hourly rate of pay, including regular penalty payments and loadings. Provision of car I find that the provision of a car for personal use falls within the notion of "level of wages", in that it is a quantifiable benefit arising from the provision of services by the employee to the employer. In view of the increasing tendency toward "salary packaging" whereby employees and employers agree to convert a proportion of the wage/salary to non-cash benefits, I think that this approach recognises modern industrial reality. In the absence of argument to the contrary, I accept the figure submitted by the union of $5,000 per annum, or $96 per week, as a reasonable estimate of the value of the provision of a car for private use. I have decided to take the provision of a car for personal use into account in determining the severance payments for the two employees concerned: Lorraine Bendall and Helen Cornick. Formula to be applied A Full Bench of this Commission in T125 (the state Termination Change and Redundancy case) decided that cases such as this should be assessed on their merits, and without regard to a set formula. The "case-by-case" approach was endorsed by the Full Bench in T7168 of 1997 (which was an appeal against a decision of the President in relation to several industrial disputes concerning the quantum of severance payments (T6674/5/6 of 1996 and T6691/2/3/4/5/6/ and T6704 of 1997) between Fosseys (Austalia) Pty Ltd and the Australian Liquor Hospitality and Miscellaneous Workers Union). Therefore it is not open to Mr O'Neill to assert that this Commission has determined what he referred to as "the principle of two weeks' pay for each completed year of service".74 There is no such "principle" in this jurisdiction. Indeed, the quantum of severance pay awarded has varied depending upon the circumstances and the merits of the particular case; a range of formulas has been applied, based upon the level of wages and the length of service This is in keeping both with the ILO Convention and with the opinion expressed in T125 at page 36:
After having taken into account all of the evidence and arguments, and in view of the circumstances and the merits of the case, I have concluded that the amount of severance pay to be awarded to each of the forty-one employees who are the subject of this application should be the hourly rate paid to each employee (based on Exhibit B7) x the hours worked in a week (based on the information provided and agreed upon between the parties) x 2.5 x years of service or part thereof with Our Place Inc. (based on Exhibit B6/1), excepting in the case of Lorraine Bendall and Helen Cornick, who each shall receive, in addition to that outlined above an amount of $240.00 per year of service or part thereof, and I decide accordingly. ORDER I hereby Order, pursuant to s.31 of the Industrial Relations Act 1984, in settlement of the industrial dispute referred to in matter T 8934 of 2000, that Our Place Inc. pay to the nominated employees the amounts listed below, such amounts to be paid no later than 5.00 pm on Tuesday, 20 June 2000.
P C Shelley Appearances: Date and place of hearing: 1 Transcript 8/5/00 p.12. |