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T10785

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.29 application for hearing of industrial dispute

Bernadette Rogers
(T10785 of 2003)

and

Branch and Associates

 

COMMISSIONER T J ABEY

HOBART, 9 August 2004

Industrial dispute - alleged breach of the Retail Trades Award - manager - no award application - application dismissed

REASONS FOR DECISION

[1] On 28 March 2003, Bernadette Rogers (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 Branch and Associates, arising out of the alleged breach of the Retail Trades Award.

[2] This matter was listed for conciliation conferences which were subsequently adjourned. A conciliation conference was held on 15 March 2004 and 26 April 2004, and finally listed for hearing on 7 and 8 June 2004. Mr M Daly, solicitor, represented the applicant. Mr J Avery, solicitor, represented the respondent.

[3] Miss Rogers commenced employment with the respondent in August 1994 and continued until February 1998. The applicant asserts that she was employed under the terms of the Retail Trades Award. The applicant further asserts that the respondent breached the award in a number of material respects. The particulars of the claim relate to wage rates; overtime; Saturday and Sunday work; annual leave; public holidays and superannuation. In financial terms the totality of the alleged breaches over the period of employment amounted to $158497.

[4] Before dealing with the merits of the separate items within the claim, it is necessary to determine whether or not the award has application to the work performed by Miss Rogers.

[5] Mr Branch purchased the "Original Bothwell Store and Newsagency" [the store] some time in 1992/3. He described the purchase as "opportunistic" rather than planned. The store became the retail division within his group of operating businesses.

[6] Initially the store was managed on Mr Branch's behalf by a series of [two, maybe three] husband and wife teams. Mr Branch was absent overseas for much of the time and visited the store once or twice a year.

[7] Miss Rogers responded to a newspaper advertisement, which in her words sought someone for the "day to day running" of the store.

[8] Whilst neither party could produce a signed copy of the original agreement, it was common ground that an unsigned draft tendered in evidence, was in all material respects, the same as the signed document. The draft contract read as follows:1

"Contract

This contract is between Branch and Associates of 1153 Tasman Highway Cambridge, Tasmania and Bernadette Rogers of Alexander Street Bothwell, Tasmania. Bernadette Rogers will be referred to as the management team for the purpose of this contract.

Contract Term:
The contract term will be for two years with an option for a further two years. The contract commencement date being Monday August 8, 1994.

The following conditions are applicable.
1. If Branch & Associates decide to sell the leasehold, the present management team has the first option to bid. Their intend should be in writing within seven days of notice to sell.
2. If the gross weekly turnover does not exceed four thousand five hundred dollars averaged over two consecutive months, then Branch & Associates has the right to replace the management team giving 30 days notice in writing.
6 A review of the terms and conditions will be had at the 3 month mark (November 8, 1994) and all parties will be involved to discuss the suitability of the arrangements.
7. Thirty days notice in writing is required for termination of this contract by either party.

Remuneration Package:
The management team will be paid the sum $300 hundred dollars each week as part payment of the management package. This income will be taxed at the appropriate rate. The tax on $300.00 per week is $45.20. This tax will be paid by head office and the management team can draw a cheque for the amount of $264.80 per week.

The balance of the remuneration package will comprise the following.

1. Rent:
No rent will be charged to the management team.
The property cannot be sublet.
2. Food:
The management team have the right to use only shop stock for daily food supplies.
3. Car Maintenance and Fuel:
Branch & Associates will supply a small van or station wagon for shop use only. The fuel and maintenance costs will be charged to the business.
4. Residence:
The management team have the exclusive use of the private residence attached to the General Store.
5. Bonus Scheme:
A bonus will be paid to the management team comprising of the following: At the end of each two week period a bonus will be paid amounting to 30% of the gross profit over and above a weekly take of $5000.00. For the purpose of this calculation a gross profit value of 20% will be used for this calculation. A stock take will be initiated at 6 monthly intervals to calculate the "real gross profit margin" and adjustments to the bonus payments will be made accordingly. The difference in payment will be balanced on the proceeding bonus payment after the stock take.
6. Annual Leave:
Four weeks annual leave at the payment rate of four hundred dollars per week ($400.00) will be paid to the management team, pro rata from the 7th August 1994.

Management Team Responsibilities:
The management team will be responsible for the day to day running of the Bothwell Store and Newsagency. These duties include:

Counter sales
Newsprint delivery
Stock Purchase within predetermined overdraft limits (currently $10,000.00)
Inventory List
Weekly sales summary on supplied forms to head office each Monday.
Advertising and displays.
Daily maintenance and reporting to head office of major maintenance problems."

[9] There was considerable confusion as to whether Miss Rogers' sister and brother-in-law were party to the original contract. I have concluded that this question is not material. All documentation and evidence identified Miss Rogers as the "management team".

[10] It is also common ground that a vehicle was not provided by the company. However a vehicle allowance was paid.

[11] Miss Rogers agreed that her duties were broadly in line with those outlined in the contract.

[12] Much of the evidence went to the degree of autonomy enjoyed by Miss Rogers. It is convenient to deal with this question under a number of headings.

Reporting

[13] Mr Branch said that his businesses were formed into a number of operating divisions of which the retail division (the Bothwell store) was one. Apart from brief visits to the store once or twice a year, Mr Branch said he "wasn't involved in the running or management of it at all, not even as a chief executive of the company".

[14] Mr Branch said Miss Rogers had "total autonomy" in running the business.

[15] Notwithstanding this "total autonomy", it was also clear that Miss Rogers was in regular consultation with, and arguably subject to direction from, other divisional managers within the group. The most prominent of these was a Mr Alex Vail, and towards the end, an external accountant, Mr Gerald Coombes. Miss Rogers said she would hear from head office on a "weekly basis".

[16] Miss Rogers agreed that she held herself out to the community as the manager of the store. She also agreed that "broadly speaking, (she had been) given carte blanche to run this little shop as best she could".

Opening Hours

[17] Mr Branch said that as part of the autonomy of the position, it was up to the manager to decide the trading hours and days.

[18] Miss Rogers said the shop traded seven days a week apart from Christmas Day and Good Friday. She said she had no choice as to how many days a week the store would trade. Miss Rogers said the trading hours on each day would be set in consultation with head office. Indeed the closing time was altered from 8.00pm to 5.30pm following consultation with Mr Vail.

Employment of Staff

[19] Miss Rogers agreed that she had the discretion to hire and fire staff, but as a matter of course, always did so in consultation with head office. The following exchange is illustrative:2

"So it was solely at your discretion as to how you ran this business, wasn't it?---Yes and no.

Well, what do you mean by no, where does the no come in?---There's a lot of work that wasn't written always down on paper, it was what was discussed when people came to visit.

Yes, but basically you were it, you were up there on your own at Bothwell, you could employ whoever you wanted to, and you did, I suggest?---Yes.

You paid them from Bothwell?---Yes.

You paid yourself from Bothwell?---Yes.

So really you were running it like your own business, weren't you?---But it wasn't my own business.

I know it wasn't. I am suggesting you ran it as if it was, didn't you?---Yes."

[20] It would seem that the employment of extra staff was not extensive and in large measure, was for the purpose of providing relief when Miss Rogers was away from the business. The weekly expenditure on extra staff was in the order of $100.

Stock Control

[21] Miss Rogers agreed that she had a wide discretion as to product selection and would order stock within budget limits. She also stocked and sold produce which she had cooked herself, such as cakes and condiments.

[22] In the early part of the employment contract input from head office could be characterised as limited guidance. Later this control became far more direct and decisive.

[23] The following extract from a fax from Gerald Coombes to Mr Branch dated 25 June 1996 is illustrative:3

"So far as the shop is concerned, I have placed strict controls on Bernie's spending and banned spending on cards & gift lines - this seems to have worked & I am monitoring this on a weekly basis as best I can. Will let you know June results as soon as available."

Remuneration

[24] The components of the remuneration package were as follows:

  • Cash; $300 per week
  • Use of private residence at no charge.
  • Food for personal consumption to be taken from store stock.
  • Power costs associated with premises.
  • Bonus scheme

[25] The bonus scheme was based on a formula of 30% of gross profit over and above a weekly take of $5000.

[26] Miss Rogers agreed that the bonus system was results driven. Her evidence was:4

"And in fact it was your intention and the intention of Branch and Associates, I suggest, that you were to run the store and your remuneration, what you would get out of it was pretty dependent on how well you managed it?---Yes.

Right, because there was a bonus structure, wasn't there?---Yes.

The better you sold and you turned this old shop around the more you would get out of it, that is a fair way of putting it, isn't it?---Yes."

Financial Control

[27] Miss Rogers said she played no role in budget formulation for the store and no contrary evidence was adduced.

[28] According to Mr Branch, Miss Rogers was responsible for operating within overdraft limits. This was accepted by Miss Rogers.

[29] The following extracts from correspondence from head office dated 14 November 1994 and 6 February 1995 are to point:5

"I am extremely happy with the way you are managing this business and the feedback from the locals has been very encouraging. There are however a couple of 'housekeeping' tasks that we need to work on.

The stock purchase and payment system needs to be looked at, especially with the view to the overdraft. It is imperative that you keep the overdraft below the 10K level, even if this means holding back payment to creditors. I realise that it is difficult due to the nature of this business and it does fluctuate especially near the end of the month but the regular issue of overdraft fees by the bank reflects on the whole of our operation and not just the shop."

"To date the only concern we have is the fact you haven't been able to control the overdraft which seems to be an ongoing difficulty. Unfortunately, this is a major consideration because it reflects badly on other B&A operations as well as on the Newsagency. The Bank Manager has threatened to bounce cheques which could make trading with reps difficult if not impossible.

Before your last banking the overdraft was above $17,000. This is unacceptable.

We have had discussions in the past re the overdraft and you assured us that the limit would not be exceeded again. This has not been the case. Over draft fees to date are in excess of $300.00. Any further fees will be deducted from the bonus."

[30] Miss Rogers said she would attempt to resolve disputes with suppliers, but on occasions these would be "passed through to town".

The Relevant Award Classification

[31] Mr Daly contended that the work performed by Miss Rogers fits within the definition of a Retail Employee Grade 3. This definition, which was not subject to change during the relevant period, reads:

"RETAIL EMPLOYEE GRADE 3 Relativity 96%

General Description:

Employees at this level are required to operate at a higher level than that expected of a Retail Employee Grade 2. In the main, employees will have designated supervisory, security or operational responsibilities and will be required to exercise discretion. Employees are responsible and accountable for their own work.

Tasks:

Indicative of the tasks which might be required at this level are the following:

Supervisory assistance to a designated section manager or team leader

Opening and closing of premises and associated security

Security of cash

Fitting of surgical corsets

Advanced Floristry tasks

General clerical functions including intermediate keyboard skills and word processing

Employment Categories:

The following employment categories would normally be found at this level.

Designated second-in-charge of a section (i.e. senior sales assistant)

Designated second-in-charge to a service supervisor

Person employed alone, with responsibilities for the security and general running of a shop

Storesperson with supervisory role

Floristry tradesperson

General clerical officer, typist

Corsetiere"

Finding

[32] Whilst there can be no doubt that the Bothwell store fell within the Scope of the Retail Trades Award, the question to be determined is whether there exists a classification within the award that applies to the work performed by Miss Rogers.

[33] Both parties relied on the decision of Shelley C [as she then was] in Wyatt v Grassy Pastoral Co.6 as the appropriate authority to provide guidance as to the correct approach in determining this question. This decision in turn referred to Holt v Musketts Timber Sales7; King Mill (Australia) (t/a Thrifty Car Rental) v Marshall8;and Kerr v Jaroma9.

[34] In this decision Shelley C observed:

"The primary role of the applicants, as shown by the evidence, was to manage the farm. Whilst there were significant "hands on" aspects of their work similar in nature to that performed by farm hands, in my opinion those aspects of their work were subsidiary to their essential and primary role which was farm management. In this respect the situation was similar to that of the employee in the case cited by Mr McElwaine, Kingmill v Marshall. The approach adopted in that case was to examine the work performed in order to determine what was the primary role of the employee, and what tasks were subsidiary to that essential function. I think that is an appropriate test to be applied in the present case."

[35] In the instant case there can be no doubt that Miss Rogers was appointed and presented to the wider community as the manager of the Bothwell store. Many of the duties performed by Miss Rogers were "hands on" in nature and fit comfortably within the definition of a Retail Employee. These include counter sales, stock display, and cleaning. Likewise duties such as security of cash and premises are clearly contemplated within the classification.

[36] Purchasing of stock requiring the exercise of discretion and supervision of staff is also clearly identified, albeit at a Grade 4 level.

[37] There are however other important aspects of Miss Rogers' role which are on a quite different plane. They include:

  • The capacity to hire and fire.
  • The remote and limited nature of head office input into the running of the business. This was particularly so in the earlier part of the contract. The change in emphasis in the latter part of the contract was a consequence of the store's economic performance failing to meet the owner's expectations. It did not alter the essential character of the relationship between Miss Rogers and the respondent.
  • The requirement to manage the overdraft, including the timing of payments to suppliers.
  • The capacity of Miss Rogers to sell her own produce in the store.
  • The nature of the bonus, which was linked solely to profitability. Whilst a system involving payment by results is not fatal to award coverage, it is unusual to see such a strong link to profitability. Typically such arrangements are linked to production or productivity measures.

[38] Taken as a whole I have formed the view that Miss Rogers was very much in charge of her own destiny and, provided profitability targets were met, the store was essentially hers to run as she saw fit. Those aspects of her work that are clearly identified in the classification definition were in my view subsidiary to her primary role of managing the business.

[39] Further, I am satisfied that her management role went significantly beyond that which could be reasonably contemplated in the indicative category of:

"Person employed alone, with responsibilities for the security and general running of a shop".

[40] I find that the work performed by Miss Rogers was not covered by the Retail Trades Award.

[41] Accordingly, the application is dismissed.

 

Tim Abey
COMMISSIONER

Appearances:
Mr M Daly, solicitor, for Miss B Rogers
Mr J Avery, solicitor, for Branch and Associates

Date and Place of Hearing:
2004
March 15
April 26 (Audio-link)
June 7, 8
Hobart

1 Exhibit A1
2 Transcript PN 498 to 504
3 Exhibit A18
4 Transcript PN 390 to 392
5 Exhibits A3 & A4
6 T8867 of 2000
7 T18 of 1993 FED No. 137/94
8 [1999] SAIRC 3 February 1999
9 IRCA Marshall J 7/10/1996