T10165
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Steven John Matthewson and The Egg Marketing Board Tasmania (represented by Mr John di Falco, Dep't of Primary Industry Water and Environment)
Industrial dispute - breach of award or registered agreement - whether overtime worked - whether overtime authorised - purpose of allowance - whether overtime claim can be offset against over-award payments made - recommendation REASONS FOR DECISION [1] On 26 April 2002, Steven John Matthewson (the applicant), applied to the President, pursuant to s.29 (1A) of the Industrial Relations Act 1984 (the Act), for a hearing before a Commissioner in respect of an industrial dispute with The Egg Marketing Board Tasmania (represented by Mr John di Falco, Department of Primary Industry Water and Environment) (the respondent,) arising out of severance pay in respect of termination of employment as a result of redundancy, alleged breach of an award or registered agreement and a dispute over the entitlement to long service leave. [2] On 1 May 2002, the President convened a hearing at `Lyndhurst', 448 Elizabeth Street, North Hobart, Tasmania before myself, to commence on Thursday 23 May 2002 at 10.30 am. After a number of adjournments the hearing commenced on 26 June 2002. Mr J Crotty sought and was granted leave to appear on behalf of the applicant and Mr C Willingham appeared for the respondent. Following a conference, a further hearing was set down for 25 July 2002. There were further requests for adjournments; eventually there was a Directions Hearing on 31 July 2002. There were further delays and further Directions issued regarding the production of documents. The substantive matters were dealt with at a hearing conducted over 7 and 8 November 2002. Background [3] Those aspects of the application relating to long service leave entitlements and severance payment as a result of redundancy were not pursued, leaving the matter to be determined that of the alleged breach of an award or registered agreement. [4] Mr Steven John Matthewson was employed by the Egg Marketing Board from 1969 until 2001. He commenced as a truck driver and progressed through the ranks. The number of employees at the Egg Marketing Board declined over the years. He was made Production Manager in 1996. He assumed the duties of two employees who left: Mr Chester Pearson, Operations Manager and Inspector, and Mr Robert Butler, Assistant Production Manager. Mr Matthewson was appointed an Inspector under the provisions of the Egg Industry Act 1988. In April 2001 Mr Matthewson was made redundant. [5] Put simply, Mr Matthewson's claim is based upon the assertion that it was necessary for him to work overtime every day in order to complete the tasks that he was required to perform, and that the overtime, for which, he says, he was never paid, was performed with the knowledge and approval of Mr Barry Titmus, the General Manager of the Egg Marketing Board. Mr Titmus denies that the overtime was worked, and denies authorising overtime, apart from on some defined and limited occasions. The overtime claim relates to an alleged daily early start of one and a half hours plus lunch time work. [6] From 17 October 1995 until 17 October 1997, staff at the Egg Marketing Board worked under the terms and conditions of an enterprise agreement, TE219 of 1995. When the agreement came to an end Mr Matthewson was translated to Level 9 of the Operational Employees Award. [7] Clause 11 of that award states:
[8] Whilst it was agreed between the parties that Mr Matthewson was classified at Level 9 of the Operational Employees Award, the hourly rate that he was paid during the relevant time was higher than the rate at Level 9 of that award. It was comprised of the "normal salary rate" expressed in the Operational Employees Award plus a number of other components: an allowance when he took over the duties of the Operations Manager and Inspector, a call-out allowance, and another allowance, the basis for which is one of the issues in dispute, in particular, whether it was intended to cover any overtime that he worked. [9] The applicant's claim is confined to the period from the expiration of the enterprise agreement until the date that his employment was terminated as a result of his position becoming redundant, that is, from the pay periods 21 October 1997 until 24 April 2001. [10] The issues in dispute are complicated by a number of factors, not the least of which is that the evidence of Mr Matthewson and the evidence of Mr Barry Titmus are in direct conflict in a number of significant areas. [11] The questions to be determined are:
Witnesses [12] The following witnesses gave oral evidence:
[13] Unchallenged statements were tendered by Mr Crotty, on behalf of the applicant, from:
THE EVIDENCE Mr Matthewson's evidence [14] According to Mr Matthewson's evidence, the Egg Marketing Board operated from a facility in Moonah. There was a quota system operating in Tasmania and egg farmers paid the Egg Marketing Board a levy based on the quota system. Eggs that farmers were unable to sell had to go to the Egg Marketing Board to be processed. They would arrive there in trucks. In some circumstances the eggs could only be unloaded by a fork lift truck, which was the case with the main producer, Pure Foods. At the plant, surplus eggs were processed into liquid egg pulp that was then sold to bakeries. The processing of the eggs took around three or four hours. It then took another three or four hours to clean the plant. That happened on a daily basis, except for Friday, when everything was scrubbed down. [15] The Egg Marketing Board was also responsible for the inspection of farms. The role of the Inspector was to visit the farms, count the number of birds on the premises, check the quality assurance programs and to ensure the quota system was complied with. This involved travelling around Tasmania. [16] Mr Matthewson's duties included being responsible for the security of the Egg Marketing Board premises, which involved being called out after hours approximately once a month. [17] The production staff started at about 8 o'clock. A number of things needed to be operational so that the production staff could commence their duties, including the need for the pasteurising plant to be going, which required firing up the boiler and bringing it up to 180 degrees Fahrenheit, which took about half an hour. The boiler needed to be started at about 7am. There were other tasks to be performed before the factory could start production, including circulating a sanitiser through the plant for 15 or 20 minutes and assembling an egg crusher, which took about 20 minutes to half an hour. On occasion he made trips to the tip before 8.00am and during his lunch hour [18] Mr Matthewson was asked what his hours were from September 1997:
[19] He said that he would finish work at about 4.30 or 4.45pm. He worked five days per week, with occasional weekend work, for example, to unload eggs that were required for Monday's operation. [20] Mr Matthewson's evidence was that he worked through his lunch breaks:
[21] Mr Matthewson was shown copies of pages headed "sign on and sign off attendance records"3 which show him as starting work at 8.30am each day and finishing at 4.30pm from 1996 until the termination of his employment in 2001. He said that he was instructed by Mr Titmus [the General Manager] to write 8.30am as the start time in the book. The reason for this was that Mr Titmus had said that the farmers could not afford to pay the overtime and that he was giving him a pay rise anyway. According to Mr Matthewson, this conversation took place in about 1997. [22] Mr Matthewson said that he told Mr Titmus he could not do the work in the time allowed. Mr Titmus' response had been:
[23] He did receive the salary increase, which was about $100 per week:
[24] Mr Matthewson was shown two documents. One said: "S. Matthewson 3.6.99
... 291 hours @ $19.49 (Extra duties) ..."6 [25] The second document, was a wage and leave record that was kept in relation to Mr Matthewson, in it there is an amount referred to as "overtime allowance re R Butler."7 [26] Mr Matthewson said he was paid an over-award allowance for doing Mr Butler's duties, not as a higher duties allowance, because Mr Butler had been below him. It had been for taking on the additional work and it was included in his hourly rate. [27] He said that he commenced working at 7am in about 1995. As Production Manager, he had seen the need to start early to get the work done. He had made the decision to start at that time and then raised the issue of overtime payments with Mr Titmus. He had raised it with Mr Titmus a few times but could not remember the dates.
[28] Asked when Mr Titmus had told him to start work early, Mr Matthewson said that Mr Titmus had told him that:
[29] Mr Matthewson said that would have been at the time when Robert Butler left in about 1997. [Later, Mr Matthewson agreed that it was, in fact, 1999 when Mr Butler left]. In answer to a direct question as to whether or not Mr Titmus had directed him to start at that time, he said:
[30] And, in answer to another direct question during re-examination, he said:
[31] Mr Matthewson said that Mr Titmus would have been aware that he started work at about 7.00am because the work would never have got done had he not. When asked how Mr Titmus would have been aware, Mr Matthewson said that Mr Titmus never arrived there until 8.30 or 9.00am each day, so would have no firsthand knowledge as to whether he was at work or not. He did, however know that Mr Matthewson was starting early.:
[32] Mr Matthewson said that despite the fact that he and Mr Titmus had worked together for twenty years Mr Titmus would have had no idea of what it was that Mr Matthewson did. He said that Mr Titmus was always out and never took the time to ask questions about the plant, but that he would have to know that Mr Matthewson started up the pasteurising unit and the sanitiser because he knew that there was no-one else there to do it. He said that Mr Titmus would know that he was there in the mornings because Maypole Bakery was their biggest customer and demanded that they get their egg pulp before 12 o'clock. Mr Matthewson needed to be there early so that could happen. Mr Titmus also knew that the Pure Foods truck was there early every morning.
Witness Statements Mr Vincent Airey [33] Mr Vincent Alfred Airey's statement, dated 18 October 2002, said that he worked for Pure Foods and had done so for about 12 years He had been driving a truck for five to six years. When he was driving the truck he regularly called on the Egg Marketing Board at Moonah, three or four times a week. He would usually arrive there at about 7.00 or 7.15am. Mr Matthewson was the person he dealt with for the entire time he was going there. He would be at work when Mr Airey arrived and would help him unload the truck. Mr Airey did not have a fork lift licence and Mr Matthewson would unload the racks from the truck using a fork lift. Mr Airey could not recall an occasion in the entire time that he was driving for Pure Foods when he got to the Egg Marketing Board and Mr Matthewson was not there.14 Mr Paul Beltz [34] Mr Paul Henry Beltz's statement, dated 4 November 2002. said that from 1991 until 2001 he worked the morning shift at the Moonah Newsagency, which required starting at about 5am. A regular customer was Mr Matthewson who would call in at about 7am and collect the papers for the Egg Marketing Board. This was a daily order. Mr Matthewson called in on the vast majority of days.15 Mr Ronald Simonds [35] Mr Ronald Eric Simonds's statement, dated 5 November 2003, said that he had known Mr Matthewson since 1975. He retired in 1998. For approximately three years before retirement, he had been employed by Prestige Couriers. During his time with Prestige Couriers he would leave for work moments before 7am, except on Wednesdays. On most mornings Mr Matthewson would already be at work when Mr Simonds left. He could recall Mr Matthewson being there, on average, two or three days a week before he left for work. The Egg Marketing Board is about 50 metres from his home. After retiring in August 1998 he began going to the Egg Marketing Board almost every morning, Most mornings he would see Mr Matthewson park his ute outside the Egg Marketing Board. This happened between 7.00 and 7.15am. Mr Simonds would then go and have a chat and a cup of coffee with Mr Matthewson while he went about his work. On most days this would be between 7.15 and 7.30am. There were very few days when Mr Matthewson was not there. Sometimes Mr Simonds would assist Mr Matthewson and on occasions he was paid for that work, for example, for unloading semi trailers and for driving the forklift. Mr Simonds said that there were regular deliveries to the Egg Marketing Board by Pure Foods between 7.15 and 7.45am most mornings16. Mr Ross Brockman [36] Mr Ross Wayne Brockman's statement, dated 6 November 2002, said that during the period 1998 to 2000 he would visit the Egg Marketing Board two or three times a week to see Mr Matthewson, who is his brother-in-law. Usually he would visit first thing in the morning, sometimes between 7.15 and 7.30am. While there he frequently saw a Pure Foods van, and sometimes spoke to the driver, whom he knew as Vince. Another old fellow used to be there frequently, whose name was Ron and who lived just down the road. In about 2000 Mr Brockman installed a roller door at the Egg Marketing Board at the back door. He arrived at 7.15 and Mr Matthewson was there to open up.17 Ms Dianne Didocha [37] Ms Dianne Patricia Didocha's statement said that she saw Mr Matthewson at work every day prior to 8am when she attended her employment at the Egg Marketing Board, which commenced in April 2000. Her hours of employment were from 8.00am until 1.00 or 2.00pm. Ms Didocha would leave her home at Blackmans Bay at about 7.15 or 7.20am so that she could avoid later traffic on the Southern Outlet. She would usually arrive at the Egg Marketing Board at 7.40 or 7.45am. On every day that she could recall Mr Mattthewson was already at work. On most days Vince from Pure Foods would have arrived and would be unloading eggs. Sometimes she would see Mr Simonds assisting, who would drop in almost every day to have a cup of tea with Mr Matthewson. There were other jobs which Mr Matthewson had to do before the process workers commenced at 8.00am, including setting up the pasteurisation machine and assembling the pulping machine. That machine was operated by Joanne Williams who started work at 8.00am. Mr Brockman called in very often early in the morning before 8.00am. He would help Mr Matthewson when he was really busy. Ms Didocha was aware that Mr Matthewson used to collect the newspapers on his way to work. Mr Titmus would arrive between 8.00am and 8.30am. Ms Didocha was employed at the Egg Marketing Board for twelve months.18 [38] Mr Willingham did not seek to call any of the authors of the statements for cross-examination, saying that he would deal with their evidence by way of submissions. He said that he would be making comments in relation to each of the statements but they would stand as matters of fact rather than any issue of contention. [39] With some qualifications, Mr Willingham said that it was not a matter of contention that Mr Matthewson started work around 7.00am each morning, sometimes a bit before and sometimes a bit after, subject to any qualifying comments from his instructor. The question was whether or not that overtime was authorised? [40] However, when Mr Titmus gave evidence he seriously questioned the alleged 7.00am starting time. Mr Titmus's Evidence [41] Mr Titmus's evidence was that he was aware that Mr Matthewson occasionally came in to assist the Pure Foods driver, because Mr Matthewson had told him so. [42] He said that he had paid Mr Ron Simonds money for assisting Mr Matthewson to load egg product onto a semi-trailer and that Mr Simonds was asked to help because it was a two-man job, but, he said, that was "not necessarily" between 7.00 and 7.15am. He said that on certain occasions the transport company were not punctual:
[43] When cross examined in relation to the work Mr Simonds was paid to do, Mr Titmus agreed that he expected Mr Matthewson to be there at 7.00 to oversight and assist in that work:
[44] Mr Titmus said that between 1997 and 2001 he would have driven his son to work maybe once a month, on which occasions he would arrive at the Egg Marketing Board at a bit before 7.00am, and on none of those occasions was Mr Matthewson there. [45] From time to time he himself started at around 8.00am and Mr Matthewson was mostly there, but not always. He said that "probably" during the period of the last two years of wind-up, although "not with certainty" 1999-2001, he used to go in to work early, he "couldn't put a finger on" how often, but quite regularly, and Mr Matthewson was there on some days and not there on other days. [46] The production run was usually for two half days a week and sometimes would go into a third day. [47] There had been no discussion with Mr Matthewson regarding payment of overtime for a 7.00am start. There had been an arrangement, he said, for pre-paid overtime after Robert Butler left, to cover some additional work that was done.
[48] Later, Mr Titmus said that the "pre-paid overtime" was an exercise in "deductive reasoning" based on starting with the figure they wanted to achieve and basing the calculations around that. When asked whether he denied that the purpose of the allowance was to make up for the extra work that Mr Matthewson was doing, he said:
[49] Mr Titmus was asked why, in Exhibit A10 [the pay record for Mr Matthewson] the increase was referred to as "overtime allowance re R Butler", he said:
[50] He said that the amount calculated in Exhibit A9 was not a fiction. The contents were a fiction because they were calculated before the event and were based on certain assumptions - that some Saturdays would be worked, some early mornings be worked - and those assumptions may or may not have eventuated. He said that it was an unofficial pay increase. Mr Titmus agreed with the suggestion that the money was not for performing extra duties but was because Mr Matthewson wanted more money for performing the duties he already did. [51] Later, Mr Titmus said the allowance was:
[52] Further into the cross-examination Mr Titmus said that the allowance was paid to Mr Matthewson:
[53] A short time later Mr Titmus said that the allowance was for "a combination of both" a pay rise to keep Mr Matthewson happy and the fact that he might have to perform more tasks, tasks that had formerly been performed by Mr Robert Butler. [54] Mr Matthewson took up most of the work that had previously been done by Mr Chester Pearson, who had been Operations Manager and Inspector, and Mr Ttitmus agreed that was the reason why had had been paid an allowance. He agreed that Mr Matthewson performed those duties in addition to the duties he had been performing at the time of the expiration of the enterprise agreement in 1997. Mr Titmus agreed that the allowance in respect of the extra duties resulting from Mr Pearson's resignation commenced at around December 1996. [55] Mr Titmus confirmed that there were two different allowances relating to the departure of other staff members, one in relation to Mr Pearson in 1996 and the other Mr Butler in 1999. [56] An on-call allowance had also been incorporated into Mr Matthewson's salary for quite a number of years. This was in relation to work that he actually performed, when he was required to attend the premises after hours. This was a rate that was separate to the other allowances but was part of the salary paid to him. [57] When asked how long Mr Matthewson had for lunch, Mr Titmus said:
[58] When asked whether he had directed Mr Matthewson to work through his lunch hour, Mr Titmus said:
[59] When re-examined, Mr Titmus said that he had always thought that Mr Matthewson was paid for his lunch break. He agreed that Mr Matthewson's ordinary hours of work were from 8.30am to 4.30pm. There were days when he worked through the designated lunch break and days when he didn't. His estimate was that Mr Matthewson worked during his lunch break perhaps once a fortnight or once a month. [60] At the start of his evidence, Mr Titmus said: "...I did not direct any overtime".29 [61] This was later qualified when he said that Mr Matthewson was directed to work Saturday overtime when shows were on, but he definitely was not directed to work overtime between 7.00am and 8.30am. [62] Mr Titmus agreed that the wage records showed that Mr Matthewson was paid overtime from time to time [in addition to the "pre-paid overtime allowance"]. He said that some overtime was requested and agreed to, such has cleaning down the plant at weekends, approximately once every six months. Some overtime was paid for attendance at shows. There were times when Mr Matthewson was paid for Saturday work for inspections. From time to time Mr Matthewson had been paid a breakfast allowance out of petty cash because he had commenced work early, this was for travelling to Launceston. [63] Mr Titmus said that there were occasions when he authorised Mr Matthewson to work overtime, and he agreed that he had authorised him to work overtime in a "blanket sense" and that overtime depended upon Mr Matthewson's judgment on the day. He agreed that there was no doubt that overtime had been worked, in one form or another, by Mr Matthewson. However, he had not authorised him to work between 7.00 and 8.30am each day. SUBMISSIONS For the applicant [64] Mr Crotty said that the question was: whether or not Mr Matthewson chose to work, not because he was directed, but for some other reason? There is little doubt that he did attend work nearly every day at 7.00am. Was that authorised overtime worked at the direction of the employer? The question becomes: whether that authorisation and direction needs to be specific on each and every occasion or whether it can be generalised, and, if so, the extent of the generality? [65] The re-examination of Mr Titmus indicated that he had authorised and directed the working of overtime. There is an admission that there was a general authority and authorisation in respect of lunch-time work. Whether or not there was a more general authority is something that has to be determined on the credibility of the witnesses and the inherent plausibility of the evidence that they have given. If there is a contradiction between the evidence of Mr Matthewson and the evidence of Mr Titmus, then the evidence of the employee should be preferred. [66] There is an abundance of evidence that there was some agreement that there would be a payment for additional works performed by Mr Matthewson. The question is: what is the nature of that allowance and whether it was for the payment of overtime? There were three different explanations as to why Mr Matthewson was paid the money that is described as the "Robert Butler overtime allowance". The first, which is what appears in the documents, appears to describe a payment for overtime worked whilst travelling, on Saturdays, and for starting early when unloading trucks. The second was that Mr Matthewson was a valued employee and the employer just wanted to give him a pay rise. The third was that Mr Matthewson undertook additional work that had formerly been performed by Mr Butler, and he was being recompensed both for that work and for some prospective work that he might have to do. [67] In Mr Crotty's submission, if any of those three potential explanations are accepted then the Commission can be satisfied as a matter of fact, that additional work was actually performed by Mr Matthewson. The question then becomes: what was the extent of that work and whether or not it forms any part of an existing allowance? [68] Mr Airey's uncontroverted evidence and an abundance of other evidence suggests that from 7.00am until 8.30am each day Mr Matthewson was at work. From the evidence of Didocha, Simonds and Brockman, Mr Matthewson was habitually at work at that early time. [69] The question becomes: if Mr Matthewson has already received a payment of some sort for performing that work, is it already one of the allowances he is being paid, or hasn't he been paid appropriately? [70] Mr Matthewson's income is said to comprise of three [actually, four] components: the operational activities, the on-call allowance, an inspectorial allowance, and the "Robert Butler allowance". [71] If the Commission finds that the "Robert Butler allowance" is for overtime, then it is a matter of calculation to see whether or not that allowance properly meets the amount due under the award each week. [72] The overtime claim has two components: early morning and lunch-time. Mr Matthewson concedes that he cannot prove beyond reasonable doubt that he worked every lunch time of every day of his employment, but, on the balance of probabilities, on the majority of days, he worked his lunchtime and should have been paid overtime. Similarly, whilst he cannot prove that he worked every day starting at 7.00am, the witnesses say that he was habitually there and was expected to be there somewhere between 7.00am and 7.15am every day. [73] In respect of the additional allowances that Mr Matthewson received, they were extra award, outside of the provisions of the award. They were not payments according to the award. For the respondent [74] Mr Willingham said that the Commission needs to do more that just look at the balance of probabilities, but ought to be absolutely satisfied that the applicant has proved every single day of overtime that is claimed. There should be no room for doubt. The onus is upon the applicant to prove the claim absolutely. [75] Mr Titmus's evidence was that Mr Matthewson might have worked through his lunch break once a week or once a fortnight. [76] Mr Matthewson had worked from 7.00am before Mr Chester Pearson and Mr Robert Butler left. His hours of work, on his testimony, did not change. What changed was the amount of money he received. He received allowances. On occasion he was paid overtime, for example, for Saturdays. [77] From the evidence it was revealed that Mr Matthewson's wages had various components: his ordinary time payment, on-call allowance, and sometimes paid and authorised overtime. He received an allowance, after Mr Pearson's departure, for inspection and extra duties, and another allowance in 1999 as the result of the departure of Mr Butler. [78] It is obvious that Mr Titmus and Mr Matthewson got together and spoke about Mr Matthewson's belief that he was not being adequately compensated for what he was doing. They struck a figure and at some subsequent stage attempted to put some form of justification for it. That was irregular, but it is not in dispute that Mr Matthewson received it. [79] Mr Titmus's testimony, on many occasions, was that he never authorised or directed Mr Matthewson to work between 7.00am and 8.30am on each and every day. Mr Matthewson, on several occasions, declined to say that Mr Titmus did so direct him. The testimony of both the applicant and the respondent demonstrates without any doubt that there was no such authorisation and no such direction. [80] When assessing whether or not the calculations [upon which the applicant's claim is based] are accurate, the Commission must have regard for the award rate, which has not been varied since the Consolidated Award of Number 1 of 1997. [81] The Commission must take the award rate, plus any increases or entitlement that Mr Matthewson may have been entitled to, plus any overtime entitlements then add them together and compare them with the actual amount of money paid to Mr Matthewson. That is clear from Martin Jackson & Anor v Monadelphous Engineering Associates Pty Ltd ["Monadelphous"] and Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch and Rans Management Group Pty Ltd trading as Tattersall's Hobart Aquatic Centre ["Rans"]. The exercise is one of offsetting, he said. [82] The primary position was that there was no direction for the work to be performed between 7.00am and 8.30am. There was no authorisation of overtime. If the Commission found against that position, then the Commission must be absolutely and utterly satisfied of the accuracy of the times worked by the applicant. [83] Mr Willingham submitted that the Commission should have regard to the circumscription which applied to applications for breach of award when they could only be dealt with before a court of competent jurisdiction and to the provisions of section 52 of the Act dealing with breach of award matter before a Magistrate, where that Magistrate is effectively limited to dealing with only two years in retrospect. Although conceding that the Commission is not circumscribed by statute in that manner, the Commission ought to have regard to that, in making a decision. FINDINGS [84] This has been a very difficult case to determine. The evidence of the two major witnesses was in direct contradiction in a number of significant areas essential to the determination of this matter. The same two witnesses were obviously antagonistic toward one another, which may have coloured some of the evidence. [85] The evidence of Mr Titmus changed frequently in relation to the allowance that was paid to Mr Matthewson under the guise of "Roger Butler overtime allowance". He gave many different versions as to what the allowance was for, another critical question to be determined. [86] Some of the arrangements at the Egg Marketing Board were, in the words of Mr Willingham, "irregular" and in the words of Mr Titmus, "a fiction"; a circumstance which does not assist me in trying to determine what the facts are. [87] The time records kept by the Egg Marketing Board appear to have little relationship to the reality of the situation. [88] Basically, Mr Matthewson is claiming that he worked regular overtime and that it was approved, and Mr Titmus is claiming that regular overtime was not worked, and if it was worked, it was not approved. I agree with Mr Willingham's contention that the Commission ought be satisfied that the applicant has proved every single day of an overtime claim. However it is not necessary for this to be proved beyond doubt, as he asserted. There is only one standard of proof in proceedings before the Commission, and that is the balance of probabilities. In this case, where there are so many irregularities in record-keeping, the credibility of the witness evidence has assumed more importance than it might have done had accurate records been kept. Credibility of witnesses [89] As mentioned above, much of the evidence of Mr Matthewson and Mr Titmus is not reconcilable. One or other must not be telling the truth in relation to some significant matters. I find Mr Matthewson to be a more credible witness than Mr Titmus and where the evidence of either party is in conflict and is unable to be substantiated from any other source, I have preferred the evidence of Mr Matthewson. Mr Matthewson's evidence in relation to start times was supported by other witness evidence, whereas Mr Titmus's evidence in this regard cannot be believed in the light of the unchallenged evidence of a number people and taking into account the operating requirements of the plant. There were a number of aspects of Mr Titmus's evidence that were inconsistent, for example, in relation to what the "Robert Butler allowance" was for. Hours of work Documentary records [90] On the evidence, the time records that were kept by the Egg Marketing Board are not accurate. I have concluded that the "sign on sign off"30 record does no more than record Mr Matthewson's "official" hours (ie, the hours on which payments were based and the hours shown on the pay records) rather than the actual hours worked each day. However, these records are of some value in establishing what Mr Matthewson's "official" working day or week was. Length of working day and week [91] The "sign on sign off" book shows Mr Matthewson as working between 8.30 and 4.30 each day, ie 8 hours without taking into account a lunch break, which makes a forty hour week, or 37 ½ hour week assuming a half hour lunch break. [92] The wage records show Mr Matthewson as working a forty hour week, with overtime paid on occasion, which, it was established through the evidence, was for such things as Saturday work. It is clear from the wage records that Mr Matthewson's weekly rate was determined by multiplying an hourly rate by 40. For example, for the pay period 1 February 2000, the remittance advice31 shows an hourly rate of $22.38 multiplied by 40 hours giving a weekly rate of $895.20. [93] Mr Willingham said that the ordinary hours of work that should have applied were 38 hours per week, but that if the custom and practice had been a 37 ½ hour week then he would stand by that. The hours recorded in the "sign on sign off" book for a number of employees, eg Ms M King, the office worker and Mr Butler, show 8.30am to 4.30. Assuming a half hour lunch break, that is a 37 ½ hour week. This, I think, supports the view that the "custom and practice" and the "official" hours at the Egg Marketing Board were based on a 37 ½ hour week, and I find accordingly. Lunch times [94] Mr Matthewson's evidence was that he worked through his lunch breaks. [95] His "ordinary hours" as established above, were 37 ½ hours per week. The "sign on sign off" book shows him being at work between the hours of 8.30am until 4.30pm. So, officially, he was there between the hours of 8.30am and 4.30pm, which makes 40 hours per week assuming no lunch break. He was paid for 40 hours per week according to the wages records. This supports Mr Titmus's evidence that Mr Matthewson was paid for his lunch breaks. [96] According to Mr Titmus's evidence, Mr Matthewson ate his sandwiches at work and would have served customers if they came in. The premises were open between 8.30am and 4.30pm, Mr Titmus said, and if "chook farmers" came in [during those hours] they would be looked after. Although, during re-examination, Mr Titmus said that he estimated that Mr Matthewson only worked during his lunch break once a week or once a fortnight, I prefer the evidence of Mr Matthewson, who said that he worked through his lunch breaks. [97] I find that Mr Matthewson was expected, paid for and, therefore, implicitly authorised, to be on the premises and on duty during his lunch hours. I find that the payment for lunchtime work should have been paid at the overtime rates as set out in Clause 8 of the General Conditions of Service Award. Starting time for week days [98] During the course of the proceedings and during his final submissions Mr Willingham acknowledged that Mr Matthewson did start work early each day. Mr Willingham said that Mr Matthewson had started work at 7.00am before Mr Chester Pearson left and continued to do so during the period of time the subject of this claim. Mr Titmus's evidence, however, was that Mr Matthewson did not start early, except for very occasionally. This is a critical aspect of the applicant's claim. It is therefore necessary, despite Mr Willingham's comments, to closely examine the evidence in order to establish, on the balance of probabilities, what Mr Matthewson's regular start time was. [99] Mr Matthewson gave detailed evidence about his starting time and the tasks he performed between 7.00am and 8.30am. His evidence was supported by that contained in the statements of: Mr Airey, a truck driver for Pure Foods; Mr Beltz, a newsagent; Mr Simonds, a neighbour; Mr Brockman, his brother-in-law; and Ms Didocha, an ex-employee. The evidence of each of these witnesses corroborates that of each other and that of Mr Matthewson in a number of significant areas. None of the evidence contained in any of the witness statements was challenged. [100] Mr Airey saw Mr Matthewson at work between 7.00 and 7.15am. Mr Airey said he drove trucks for five or six years prior to signing his statement in October 2002, therefore Mr Matthewson was there to help him unload trucks from, at the latest, 1997. Mr Matthewson would help him unload the Pure Foods truck three or four times a week. Mr Airey could not recall an occasion when Mr Matthewson was not there. Mr Beltz said that Mr Matthewson collected the newspapers from his nearby shop at about 7.00am each day. Mr Simonds, during his time with Prestige Couriers, saw Mr Matthewson at work most days before he left for work himself at 7.00am. Since 1998 he saw Mr Matthewson arrive most days between 7.00am and 7.15am. Mr Brockman visited Mr Matthewson at the Egg Marketing Board two or three days a week between 1998 and 2000, usually between 7.15 and 7.30am. Ms Didocha said he was there every day when she arrived before 8.00am. [101] Mr Willingham said that the statements of these witnesses would stand, as matters of fact. [102] Mr Titmus's evidence was that between 1997 and 2001 he arrived at work before 7.00am about once a month and that on none of those occasions was Mr Matthewson there. However, it was not established what time Mr Matthewson actually arrived on those occasions, whether it was 5 minutes later or half an hour later, or whether those were days when Mr Matthewson was away conducting inspections. Mr Titmus said that from time to time he started at 8.00am and that Mr Matthewson was mostly there, but not always. Again, it was not established whether or not the days when Mr Matthewson was not there were inspection days. Mr Titmus also referred to comments allegedly made to him by a Ms King. Both Mr Crotty and Mr Willingham said that the Commission should disregard that part of Mr Titmus's evidence, which I have done on the basis that it was hearsay only, and it was open to the respondent to bring Ms King as a witness, but they elected not to do so. [103] I do not accept the evidence of Mr Titmus in relation to the starting time of Mr Matthewson. It is not supported by the other witness evidence. I find it remarkable that Mr Titmus claimed that Mr Matthewson only occasionally came in early. Someone had to start up the plant, get the boiler operating and flush the sanitising agent through the plant before the production workers could commence work. Who did Mr Titmus imagine did it? [104] There was a difference between Mr Matthewson and Mr Titmus as to how many days a week the production work took place. Mr Matthewson put it at four days per week, with a clean-up on Fridays. Mr Titmus said that there was only a production run two and a half to three days per week. I prefer the evidence of Mr Matthewson. Mr Airey did not specify which days of the week he attended the Moonah premises, saying, merely, that it was three or four days a week. Mr Beltz said that Mr Matthewson called into the newsagency on "the vast majority of days". Mr Simonds said that "there were very few days when Steven wasn't there". Mr Matthewson's evidence was that he commenced at around 7.00am five days per week. This is generally supported by the evidence of Messrs Airey, Beltz and Simonds. [105] I find that Mr Matthewson, when he was at the Moonah workplace, was at work no later than 7.15am, Monday to Friday. [106] There was nothing put to me in relation to the hours worked when he was inspecting poultry farms, attending shows and the like, excepting references to him having been paid overtime on some of those occasions. Therefore, the finding that Mr Matthewson commenced work no later than 7.15am and worked during lunch breaks does not apply on the days when he was absent from the plant and working elsewhere, nor when he was absent on leave. The personnel records show some absences for leave. Was the early morning overtime authorised? [107] Mr Matthewson did not, at any time, say that he was specifically authorised to start at a particular time. He relied, instead, on the assertion that Mr Titmus would have to have known that he would need to be there early in order to perform the duties that needed to be performed in order for the Egg Marketing Board to be able to operate to timetables, and that Mr Titmus had told him to work whatever hours he needed to in order to get the work done. He said that Mr Titmus did not have any detailed knowledge of the operations of the plant. [108] Mr Matthewson's evidence was that he himself made the decision to start at 7.00am. When asked why he had started at 7.00am, Mr Matthewson said: "Because the work had to be done" and because "It was the time that Vince would be there to be unloaded and it was the time that I needed to put the boiler on." [109] It seems that Mr Titmus did not particularly concern himself with what time Mr Matthewson started work, but it is clear from the evidence that Mr Titmus was aware of the fact that Mr Matthewson started early. [110] Mr Titmus's evidence was that he was aware that Mr Matthewson was there early, on occasion, to assist the Pure Foods driver. Mr Matthewson was required to be there to assist because the use of a fork lift was required and Mr Airey did not have a forklift licence. There is no evidence to show that Mr Titmus ever instructed Mr Matthewson not to do this, therefore one would have to assume approval for this work being performed by Mr Matthewson. Mr Titmus said: "Steven was operations manager and he started whenever he had to if there was work to be done." [111] There is nothing to suggest that Mr Titmus ever told Mr Matthewson not to start early, indeed, there is evidence to the contrary. Mr Matthewson asked, at least in 1999, if not earlier, to be paid overtime for the early starts. A number of conversations took place. If Mr Titmus did not want or approve the early starts, why did he not tell Mr Matthewson so? Mr Titmus never took the necessary steps to bring the extra hours to an end. If he did not want or require those hours to be worked then it was his duty and responsibility to ensure that they were not. [112] Mr Simonds evidence was that he helped Mr Matthewson load trucks and that at times he was paid for doing so. Mr Titmus's agreed that semi-trailers arrived there at 7.00am. If Mr Simonds was paid by the Egg Marketing Board for assisting Mr Matthewson in the performance of his duties, then it logically follows from that that the employer must have authorised Mr Matthewson to perform those duties at those times. [113] It was put to Mr Titmus, and he agreed, that the overtime Mr Matthewson worked depended upon Mr Matthewson's judgement, and that he had authorised the overtime in a "blanket sense"; that the overtime worked would be based upon Mr Matthewson's judgment on the day. [114] The overtime clause in the Operational Employees Award says that employees are entitled to payment for authorised overtime worked at the direction of the employer. There is no requirement specified in the award that the authorisation or direction be in writing, or that it be specifically given for each and every separate occasion that overtime is worked. Indeed, the General Conditions of Service Award, at Clause 8(f) says:
[115] The operating requirements included unloading the Pure Foods truck using a fork lift, firing up the boiler and flushing the sanitiser through the plant; all of which tasks were required to be performed before the production staff arrived. These duties were performed early in the morning. These duties were performed with Mr Titmus's knowledge and approval. He may not have concerned himself with the specifics and he may not have given directions, either verbally or in writing as to the exact hours that these duties were to be performed, but he clearly knew that the work was being performed, who was performing them, and that they were being performed early in the morning before the production staff arrived. [116] I find that there was a general, rather than a specific, authorisation given by Mr Titmus to Mr Matthewson to work the hours required to meet operating requirements and that the overtime worked by Mr Matthewson was authorised overtime worked at the direction of the employer. That authorisation was on the basis that, as Operations Manager, Mr Matthewson was to start work at whatever hour was necessary to get the job done. Mr Matthewson's wages [117] Mr Matthewson received a rate higher than the award rate. This rate is expressed on the remittance advice slips as an hourly rate. In the Kalamazoo wage records32 additional overtime is shown as being paid in addition to payment for 40 "ordinary" hours. [118] There was agreement that an on-call allowance was incorporated into the rate. [119] The evidence was that when Mr Chester Pearson retired in 1996 Mr Matthewson received an additional allowance. There was no dispute that this allowance was because of extra duties that he undertook, for example, those of an inspector. It was never suggested at any time during the hearing that the "Chester Pearson allowance" was for the purposes of payment for any additional hours worked. [120] Mr Titmus said that there were two different allowances resulting from the departure of staff, the second being when Mr Robert Butler retired. [121] Tendered as evidence was a document dated 2 June 1999, prepared, presumably, by Mr Titmus.33 The document says: "S. Matthewson 2.6.99 Extra duties allowance in lieu of out of hours time required to cover for redundancy of Robert Butler.
[122] The start point of $35777 is the normal salary rate in the Operational Employees Award as at 2/6/99. [123] It seems reasonable to assume that the addition of 2%, for which no explanation is given, is the "Chester Pearson allowance" for additional duties performed by Mr Matthewson after Mr Pearson's resignation. [124] I find that Mr Matthewson's wages were made up of four components: the normal salary rate derived from the award at Level 9 (plus state service wage agreement increases); a 2% over-award payment for "extra duties" performed (the "Chester Pearson allowance"); an on-call allowance paid for on-call work performed, plus the "Robert Butler allowance". The "Robert Butler" allowance [125] Of importance in the final outcome of this dispute, is what the "Robert Butler allowance" was for. Was it for overtime or was it for additional duties? [126] Mr Titmus's evidence was very contradictory. He said, or agreed, at various times, that it was "pre-paid overtime"; that it was a calculation based on additional hours that Mr Matthewson might have to work; that it was just an exercise to arrive at a pre-determined and agreed figure; that it was an amount to cover additional work that was done; that it was a fiction and that no additional work was done; that it was simply a pay increase negotiated by Mr Matthewson at an opportune time; that it was a trumped up figure; that it was a gesture to cover extra responsibility; that it was a recognition of the fact that Mr Matthewson was working alone; that the figure was based upon assumptions that some Saturdays and some early starts would be worked; that it was not for extra duties but a recognition of duties already performed; and that it was an ex gratia payment. Mr Titmus's evidence was so inconsistent and contradictory that I have dismissed all versions excepting for the one which seems most likely, when considered in the context of all of the surrounding evidence, including Mr Matthewson's testimony. [127] Mr Matthewson said that he has "no idea" of what the document setting out the "Robert Butler allowance" meant or how the figures were arrived at. He said that when Robert Butler left Mr Titmus told him that he realised there was extra work to be done and he would pay him accordingly. [128] I think Mr Titmus was telling the truth when he said that the allowance was a combination of a pay rise to keep Mr Matthewson happy and a recognition of the fact that he had to perform more tasks as a result of Mr Butler leaving. I think he was being honest when he said:
[129] It is unlikely that it was an overtime allowance, given that Mr Matthewson was, in fact, actually paid overtime, for example, for work on Saturdays, inspections and for attending shows. [130] It was not a higher duties allowance, because Mr Butler had been classified at a lower level than Mr Matthewson. [131] It is likely that the allowance, in essence, was similar to that paid when Mr Pearson left; a pay rise in recognition of additional and changed duties. [132] In my view, the "Robert Butler allowance" can be characterised as a pay increase based on increased productivity as a result of performing more tasks in the time available. [133] I accept the evidence that the "overtime" calculations, as set out in the document, were a fiction in order to arrive at a predetermined figure by way of a pay increase negotiated between Mr Titmus and Mr Matthewson. This conclusion is supported by the fact that the figures expressed in the document setting out the calculations34 do not reflect the overtime rates set out in the General Conditions of Service Award. It shows 8am starts, resulting in 2.5 hours of overtime per week, as being at double time, whereas, according to the award, it would be time and a half; and Saturday work as being at time a half, instead of at double time as stipulated in the award. [134] I find that the "Robert Butler allowance" was not an allowance intended to cover overtime worked and that the allowance was an over-award payment based on increased productivity as a result of additional duties performed. How should the overtime be calculated? [135] Clause 8 - Overtime - of the General Conditions of Service Award says that overtime for employees, other than shift workers, Monday to Friday shall be at the rate of time and one-half of the normal salary rate for the first three hours and double time thereafter. Each day's work shall stand alone. [136] Clause 11 - Overtime of the Operational Employees Award says that payment for overtime is to be calculated by reference to the employee's actual salary as prescribed in the award at the rates prescribed in the General Conditions of Service Award. [137] I find therefore that any overtime worked by Mr Matthewson should be calculated based on the rate of pay as specified for Level 9 in the Operational Employees Award plus any increments as provided for in relevant state service wage agreements according to the penalty rates expressed in the General Conditions of Service Award. [138] Although Mr Willingham argued that the basis for any calculations should be the rates expressed in the Consolidated Award of No. 1 of 1997, I cannot ignore the existence of increases awarded by this Commission since that date. Further, the state service wage agreements identify employees covered by the Operational Employees Award as being employees to whom the agreements apply. [139] I have found that, when at the Moonah premises, Mr Matthewson worked from not later than 7.15 each day until 4.30 each afternoon, with no lunch break. Therefore, he worked 1.75 hours overtime on each of those days. Each day stands alone. The payment should be on the basis of time and a half. [140] An adjustment needs to be made for the fact that Mr Matthewson has already received payment for half an hour of that overtime, albeit at ordinary time rates, when he was paid for working through his lunch time. Off-setting [141] Mr Willingham said that the amount that should have been paid to Mr Matthewson (assuming there is unpaid overtime) under the terms of the award, should be compared, on a week by week basis, to what he was actually paid. In effect, that the overtime claim should be offset against any over-award payments made to Mr Matthewson. He cited Rans and Monadelphous as authority for this proposition. [142] I agree with Mr Willingham, but only to a point. I agree that the relevant period is a week. The reason for this is that Mr Matthewson was paid weekly. The case of Emmerton v Terry35 was referred to during the hearing, and was also referred to by the Full Bench of the Commission in Rans. In Emmerton, Wright J of the Supreme Court of Tasmania found that the relevant period, when calculating whether or not an employee was paid their entitlements under an award, was the period from one pay day to the next. He said:
[143] Whilst I concur with that point, the present case can be differentiated from Emmerton on the basis that in that case the employer mistakenly paid rates above the award in some weeks, and below the award in other weeks. The argument there was whether or not the overpayments could be set off against the underpayments. They could, provided the correct payment was made for the relevant period (a week), but one week could not be set off against another week. The present case, of course, concerns weekly allowances paid over and above the ordinary time rates in the award, and whether those allowances can be set off against a claim for overtime payments. [144] The issues are not as simple as it might seem from the approach taken by Imlach C in the decision at first instance in Rans. The claim made by the union, in the case of Rans, was that overtime payments should be based on the employee's actual hourly rate rather than on the award rate. [145] Imlach C said that the award amount of wages due in each week is to be offset against the amount of wages actually paid for that week. More properly, in my view, the situation is that the amount of wages due under the award in each week is to be offset against the amount of wages actually paid for that week, provided that any over-award payment relates to a term or condition contained within the award. If there is an over-award component of wages it is necessary to consider the reasons for that payment before determining whether or not that payment can be used to offset an underpayment of award claim. Where an over-award payment is for something that is extraneous to the award, then it cannot be taken to be in settlement of an obligation under the award. Nor can an over-award payment be used to offset an entitlement under the award unless it has been designated as being for that purpose. [146] The Full Bench in Rans cited with approval Moore J's approach in Monadelphous, in which he adopted the legal principle discussed by Sheldon J in Ray v Radano at pages 478-479, which was approved by a Full Court of the Federal Court in Poletti vs Ecob (No 2) (1989) 31 IR 321 :
[147] In Monadelphous, Moore J examines this closely when considering what was the extent of the underpayment under the award. In that case, two employees were paid a flat hourly rate for all hours worked (as was the case in Rans, but is not the situation in the present case). What the rate comprehended was expressed in some detail in a written contract, which specified that it was an all-inclusive amount intended to cover such things as paid leave and all penalty rates. It was clear that the rate was intended to compensate for all award entitlements. [148] Moore J said:
[149] I agree with the principle enunciated, ie that offsetting can only occur when the additional payment is intended to cover amounts due under the terms of an award. [150] In Ray v Radano (1967) AR (NSW) 471, referred to in Monadelphous, Sheldon J, in his dissenting opinion, said:
[151] In Poletti v Ecob, also referred to in Monadelphous, a Full Court of the Federal Court applied the principles referred by Sheldon J in Ray v Radano: The Full Court said:
[152] In that case the Full Court of the Federal Court ruled decisively that a payment made by an employer on one occasion that is in excess of its award obligations cannot be set off against a claim for underpayment of an award entitlement arising on another occasion unless at the time that the employer makes the over-award payment it clearly and specifically designates that the over-award payment is to be applied to the satisfaction of the entitlement that would otherwise have been underpaid. [153] In the present case, the call-out allowance (of approximately $70 per week) is not able to be set off against the claim for overtime payments. The reason for this is that the allowance was only ever designated as being a payment for the purpose of being on call and being called out. [154] The "Chester Pearson allowance" and the "Robert Butler allowance" are not able to be set off either; the allowances were not for the purpose of satisfaction of the entitlement to overtime payments. The allowances were made for the purposes of payment for extra duties performed. The employer cannot now claim that those payments are able to be counted as payments in satisfaction of overtime payments owed under the terms of the award. In addition, the allowances were extraneous to the award, and cannot, therefore, be offset against award entitlements. [155] What can be set off against the claim for overtime is any payment for overtime that has been paid at the over-award rate, rather than at the normal salary rate. The reason that the overtime payments are to be calculated based on the award rate, rather than the actual hourly rate, is because the award says so. The reason that the overtime payments can be offset is that they are not extraneous to the award and the payment that was made was designated as being for the purposes of payment for overtime. [156] In summary: I have found that Mr Matthewson worked 1.75 hours of authorised overtime on the days he was at the Moonah plant and that he has only been paid for 0.5 of an hour of that time; that 0.5 of an hour was paid based on the ordinary rate but should have been paid at the overtime rate; overtime should be calculated based on the normal salary rate for Level 9 of the Operational Employees Award and not be based on the actual hourly rate; the "Chester Pearson allowance" and the "Robert Butler allowance" are not able to be offset against the overtime claim; the call-out allowance is not able to be offset against the overtime claim; overtime payments already made that have been calculated on the basis of the actual hourly rate are able to be offset against any overtime claim; and the relevant period for offsetting purposes is the time from one pay period to the next. [157] Finally, I reject that part of Mr Willingham's submission where he said, in effect, that the Commission should consider limiting the period of the claim to two years in retrospect, on the basis that, if the matter were before a Magistrate, the claim would be so limited. Mr Willingham conceded that the Commission is not so limited. I do not consider that I should impose a limit that is not required of me by the Act. RECOMMENDATIONS [158] The applicant's claim was adjusted several times throughout the hearing. I recommend that it now been be recalculated taking into account the above findings. [159] I also recommend that the applicant provide the new figures to the respondent within seven days of the date of this decision. [160] I further recommend that, within seven days of receipt of the recalculated claim, the respondent indicate to the applicant whether or not the revised claim is accepted. [161] Should the parties be unable to agree on a figure in settlement of the claim, then it is open to the applicant to apply to the Commission for a further hearing date for the purpose of the presentation of submissions going to an amount in settlement of the claim, following which an Order would be issued, as appropriate.
P C Shelley Appearances: Date and place of hearing: 1 Transcript PN373 |