T9164
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Malcolm Geoffrey Sarich and Gateway Manufacturing Pty Ltd
Industrial dispute - severance pay - alleged breach of Metal and Engineering Industry Award - order issued REASONS FOR DECISION On 29 August 2000 Malcolm Geoffrey Sarich (the applicant) applied to the President, pursuant to Section 29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with Gateway Manufacturing Pty Ltd (the employer) arising out of the alleged breach of the Metal and Engineering Industry Award and severance pay owing in respect of the termination of his employment. On 19 September 2000 the A/President convened a hearing before myself at the Supreme Court, Cameron Street, Launceston to commence at 10.30am on Thursday 14 September 2000. From the application it was apparent that the employer had ceased operating as a business at the Killafaddy Road address. A search of the Australian Securities & Investments Commission revealed that Rangott & Slaven, 14 Napier Close, Deakin, ACT, had been appointed "Liquidator in voluntary winding up by creditors". As a consequence the notice of hearing was sent to the Liquidator. When the hearing commenced on 14 September 2000, Mr Sarich represented himself. The Liquidator was not present. The Commission proceeded to hear the submissions of Mr Sarich, at the conclusion of which the hearing was adjourned until 10.30 am on Wednesday 4 October 2000. On 19 September 2000 the Commission wrote to the Liquidator in the following terms:
Correspondence from Rangott & Slavin dated 8 September 2000 was received by the Commission on 21 September 2000. The letter read as follows:
Further facsimile correspondence was sent by the Liquidator on 3 October 2000 in the following terms:
When the hearing resumed on 4 October 2000, Mr Sarich was provided with a copy of this latter correspondence. Mr Sarich also provided evidence which satisfied the Commission that his last day of employment was Friday 21 July 2000. Notwithstanding the fact that the Company has ceased operations and a Liquidator has been appointed, the role of the Commission is to establish the extent of award breaches [if any] and make appropriate Orders. What follows from there is a matter for the Liquidator. The relevant period for the Commission's consideration is 28 January 1998 through to 21 July 2000, being the period during which Mr Sarich was employed on a full-time basis. CLASSIFICATION Mr Sarich was primarily engaged in the manufacture of security and industrial fencing. Mr Sarich is a qualified boilermaker/welder and according to his evidence, spent "at least 80 per cent" of his working day on electric MIG welding. He did however concede that the type of welding involved did not demand a trade level welding qualification as a prerequisite and "... someone could be trained to do it ...". Mr Sarich used a wide range of machine and power tools. They included pipe bending machines, power saws, drills, electric welders, air compressors, spray units, bench grinders, hammer drills, a pipe guillotine machine and a helicoil wire bending machine. Mr Sarich also used a range of hand tools including hand grinders, hand drills, measuring devices, squares and spanners. Mr Sarich worked from plans which ranged from the relatively simple to complex drawings. Mr Sarich drove the fork lift and utility vehicle, maintained stock levels and had a supervisory/training role insofar as a trainee was concerned. Decision Clause 7 of the award contains comprehensive definitions ranging from Wage Group Level 1 [essentially an entry point for employees without any formal qualification or training] up to Wage Group Level 19, applicable to a senior professional engineer. The base grade tradesperson is at Level 7, with a relativity of 100%. All other classifications are expressed with a relativity to the base trade level. At Wage Group Level 5 an Engineering/Production Employee - Level IV is defined as follows:
In examining the work that Mr Sarich performed on a daily basis I have no hesitation in concluding that it fits comfortably within this definition and I find accordingly. Mr Sarich provided pay slips which enabled the Commission to conclude that during his period of full-time employment, he was paid at the following rates:
The correct rate for Level 5 is as follows: From 28 January 1998 $11.04 per hour
My Order will reflect an estimation of the difference between what Mr Sarich was actually paid and the amount he was entitled to be paid under the award. The estimation is based on ordinary hours of 38 per week as there is insufficient evidence available to make a calculation of the consequential impact upon overtime earnings. SUPERVISORY ROLE Mr Sarich submitted that he should have been paid an additional allowance in recognition of his supervisory role. He proposed two alternatives, the first of which is "Trainer/ Supervisor/Co-ordinator - Level 1". This classification provides for an employee so classified to receive "not less than 122 percent of the rate paid to the highest technically qualified employee supervised or trained". In the event that this claim was not acceded to, Mr Sarich proposed the Leading Hand Allowance of $16.20 per week [Clause 8.7[c]]. The evidence on this aspect of the claim is less than clear cut. Mr Sarich stated that "... from September last year [1999] I was promoted to workshop foreman ...".1 By way of explanation Mr Sarich went on to state as follows:
Apparently the former foreman did not return to work and in the words of Mr Sarich:
Regrettably, this arrangement was not confirmed in writing. However the correspondence from Rangott & Slavin dated 3 October 2000 states:
The term "foreman" is not recognised by the award. It is nonetheless a term that is widely used in workplaces and generally connotes a person in charge of a section or group, with supervisory and organisational responsibilities. From the evidence it is clear that Mr Sarich did perform functions which could be considered to go beyond the substantive classification of a Level 5. Mr Sarich was invariably the senior person on the factory floor. The proprietor of the business was usually out in the field and seldom had any significant role in the production process. Mr Sarich was responsible for opening and closing the premises. He certainly had a role in stock control, although his role in ordering materials appears to have been limited. Mr Sarich had direct contact with customers and some suppliers. He also at times handled significant amounts of cash and cheques. Mr Sarich closely supervised the trainee and had a loose supervisory relationship with the employee responsible for powder coated fencing. Decision I am quite satisfied that the employer consciously placed Mr Sarich in a position of seniority and responsibility, and that Mr Sarich accepted these additional responsibilities. I am not however satisfied that Mr Sarich met the definition of "Trainer/ Supervisor/ Co-ordinator - Level 1". At the very least the definition contemplates at least the partial completion of a formal qualification in supervision and/or training. There was no evidence that this was applicable in the case of Mr Sarich. Clause 8.7[c] states as follows: "(c) Leading Hands Production and Engineering employees appointed the employer as Leading Hands shall receive the following allowances per week in addition to their classification rate:
In the circumstances only the allowance applicable to two employees can be considered. Even this is somewhat problematic, given that apprentices and juniors are excluded. Nonetheless in a number of material respects the duties of Mr Sarich went beyond that normally associated with a leading hand. I am satisfied that the intent and actions of the employer do fit comfortably with the expression "or if appointed as such ...". I therefore conclude that Mr Sarich should have been classified as a "Leading Hand in Charge of 2 Employees" for the period 1 September 1999 until his termination of employment. The Commission's Order will reflect this decision. ACCRUED ANNUAL LEAVE Mr Sarich claimed that he had, at the time of his termination, accrued six weeks' annual leave for which he has not been paid. This has been agreed by the Liquidator. Mr Sarich has also claimed a 17.5% annual leave loading. Decision I accept the accuracy of Mr Sarich's claim and I therefore conclude that an amount equivalent to six weeks' wages is owing to Mr Sarich. The relevant wage rate is that applicable to a Level 5 employee as at the date of termination, i.e. $460.50 per week. I turn now to the question of annual leave loading. The most common prescription in awards is that in a termination situation the leave loading is payable on a full 12 months' accrual [i.e. 152 hours] but not payable on a pro rata entitlement. In this case the relevant sections of the award are subclauses 9[e]:
and 9[g]:
The wording in these two subclauses is less than clear. As a consequence I have resorted to the following principles which I believe hold considerable currency in determining questions of this nature. The first principle is that an employee should not be disadvantaged by reason only of the fact that annual leave is not taken as soon as it falls due. In this case Mr Sarich would have been entitled [subject to Clause 9[i] - Time of Taking Leave] to have taken leave when 152 hours had been accrued. Had that occurred, the annual leave loading would have been payable at the time. The second principle is that an employee does not have an "as of right" entitlement to take annual leave until a full 152 hours' entitlement has accrued. In this case Mr Sarich did not have an entitlement to take the two weeks' pro rata component of the accrued leave, assuming his employment had continued on an ongoing basis. It follows that the annual leave loading would not have been payable on the pro rata component. I conclude that the 17.5% annual leave loading is payable on the first 152 hours of accrued but not taken annual leave. However the leave loading is not payable on the pro rata balance of accrued leave [two weeks]. The Order will reflect this decision. UNPAID WAGES Mr Sarich submitted that during the final week of employment he was not paid for the Wednesday, Thursday and Friday. He was therefore owed wages for 24 hours' employment. In the absence of any contrary evidence I accept the submission of Mr Sarich. I conclude that Mr Sarich is owed wages for 24 hours worked but not paid and this finding will be reflected in the Order. REDUNDANCY Mr Sarich submitted an unspecified claim for a redundancy payment. The applicant's written statement of claim was in the following terms:
The submissions of Mr Sarich during the hearing were consistent with this statement. The award is silent on the question of redundancy and therefore no "as of right" entitlement arises. This of course is the case with the majority of awards of this Commission. The Tasmanian Industrial Commission has consistently over many years adopted a case-by-case approach to redundancy situations and a clear power exists, pursuant to Section 31[1C] of the Act, to make an order where circumstances warrant. In this particular case we are dealing with a small employer which, following a difficult trading period, has been forced into receivership. In such circumstances the practicality of going beyond statutory and award entitlements, particularly when no special case has been made out, is a serious consideration. I am also influenced by the fact that Mr Sarich was effectively given between eight and 11 weeks' notice of termination. Given the presumably perilous financial position of the Company, I suspect that extended notice was the most practical means of ameliorating the hardship facing Mr Sarich. In all the circumstances I decline to make an Order in relation to the claim for a redundancy payment. COMPENSATION Mr Sarich submitted an unspecified claim for compensation. In support of this claim Mr Sarich referred to what he described as "... a duty of care to make sure I am on the right pay rate ...".4 Mr Sarich submitted that he had suffered financially and emotionally as a consequence of the underpayments. Whist I can be sympathetic to Mr Sarich's position, the jurisdiction of the Commission is limited to correcting the award breach or breaches. There is no power to award compensation beyond that remedy. I therefore decline to make an Order for compensation. ORDER Pursuant to Section 31 of the Act, I hereby Order that Gateway Manufacturing Pty Limited (in Liquidation, Rangott & Slaven appointed] ACN 079 092 863, pay to Malcom Geoffrey Sarich, 33 Birch Ave, Launceston, Tasmania, 7250 the sum of seven thousand, two hundred and forty eight dollars [$7248.00], such payment consisting of the following components:
Such payment to be made within 21 days from the date of this decision.
Tim Abey Appearances: Date and Place of Hearing: 1 Transcript p. 4 |