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Tasmanian Industrial Commission

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T11422

 

TASMANIAN INDUSTRIAL COMMISSION

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

Benjamin David Leicester
(T11422 of 2004)

and

Eyelines

 

COMMISSIONER T J ABEY

HOBART, 9 August 2004

Industrial dispute - alleged breach of award or registered agreement - variation to contract of employment - notice - application dismissed

REASONS FOR DECISION

[1] On 31 March 2004, Benjamin David Leicester (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 Eyelines, arising out of the alleged breach of an award or registered agreement.

[2] This matter was listed for a conciliation conference on 25 May 2004. Mr B Leicester was self-represented. Mr D Fails represented the employer. The conference failed to find a settlement to the dispute and, as a consequence, was listed for hearing on 21 June 2004.

[3] Upon resumption both parties represented themselves. The applicant chose to proceed by way of submissions supported by documentation. The respondent made a sworn statement and was subject to cross-examination.

[4] This dispute concerns the amount of notice required upon resignation or termination.

[5] Mr Leicester was appointed to the Eyelines organisation by letter dated 18 July 2000.1

"This letter is to confirm your appointment as Store Manager and optical dispenser for Eyelines Kingston store. This is a full time position. The position will be reviewed after a three month probation period.

As we discussed your hours of work will be those required to effectively manage the store, normally this will be Monday to Friday 9.00am to 5.30pm and rostered Friday evenings and Saturdays. These hours may vary from time to time in line with commercial requirements.

The Base Salary is $32500 p.a. This works out at $15.62 per hour for a 40 hour week, overtime etc. is at single time.

Your start date will be Monday 4th September.

I trust this letter represents what we have discussed and is clear. If you have any queries please contact me as soon as possible, otherwise please sign and return one copy of the acknowledgement below."

[6] This letter of appointment was silent on the matter of notice. Both parties accepted that Mr Leicester was not subject to an Award. Whilst I am not convinced that this is beyond doubt, it is not a question I am required to determine.

[7] On 28 July 2002 Mr Leicester attended an Eyelines managers' meeting. The minutes of that meeting relevantly record the following:2

"Manager's Bonus System

It was decided by D Fails and C McKenzie to issue a 'Loyalty bonus' to all managers after one year of service as manager. This will be paid as a weekly amount rather than a lump sum.

1 year $1000
2 years $2000
3 years $3000
4 years $4000

This bonus is effective now, and applies to service since 30 June 2001. New letters of employment will be provided for store managers, with the addition of a minimum notice period relevant to length of service. Notice will be one month per year of service ie. 1 month = 1 year, 2 months = 2 years etc."

[8] On 1 March 2004 Mr Leicester telephoned Mr Fails advising of his intention to resign with effect from 12 March 2004.

[9] The position adopted by Mr Fails is well summarised in his letter to Mr Leicester dated 16 March 2004:

"Thank you for your letter by email yesterday. I am sorry you feel that you did not receive all of your entitlements and, even after the explanatory letter I gave you, wish to pursue the matter further.

Upon the introduction of the Loyalty Bonus for Store Managers in July 2002, your notice period became one month. This was introduced at the Managers meeting on 28 July 2002, and you were present at this meeting. As you were involved in the meeting and later received two copies of the minutes, one in advance of, and the second one at, the following quarterly managers meeting, I am surprised you claim not to have been aware of (or agreed to) the notice period. You have not at any time queried the minutes or the bonus arrangements outlined in them.

You have received payments for the abovementioned bonus, of $1 000 per annum since July 2002, increasing to $2 000 per annum from July 2003. In total you received loyalty bonuses of $2 385. These payments are listed separately on your pay sheet, and you have not queried or disputed the basis of these payments.

When you telephoned me at about 5.30pm on Monday 1 March 2004 to let me know you intended to resign, and first raised your desire for 12 March 2004 as your final day, I pointed out that your notice period was a month.

You queried the notice period, as you thought it might be two weeks, and asked me to get back to you with more details. I offered to not enforce the full notice period if you worked until 19 March 2004 to coincide with your planned annual leave; you rejected this as you wanted a break before starting your new job. Our conversation continued when we spoke by mobile phone again at about 5.40pm when I offered you a change of role in the company - as relief dispenser - which you said you would consider.

You faxed your resignation to the administration office a few minutes later (which I received on the morning of 2 March 2004 when I returned to the office) not giving me any opportunity to get back to you with more details of why the notice period was one month.

After consideration of the above, it is clear that when you resigned you must have been aware that the notice period was one month. Hence your entitlements payout, as set out in my previous letter, was correct. I urge you to reconsider the course of action you have outlined in yesterdays letter."

[10] An amount equivalent to 100 hours' pay was deducted from Mr Leicester's termination pay. This equates to the two and one half weeks that Mr Fails considered the notice fell short by. It would seem that this deduction was taken from wages owed rather than accrued annual leave.

[11] Mr Leicester relied on s.47[2] of the Act, which reads:

"(2) Subject to subsection (3), a term or period of service of employment to which this Division applies that is of indefinite duration is terminable by either party by -

(a) a week's notice, if the wages are payable weekly;

(b) a fortnight's notice, if the wages are payable fortnightly; or

(c) a month's notice in any other case."

[12] As Mr Leicester was paid weekly, he submitted that one week's notice was all that was required.

[13] Mr Leicester claims that the loyalty bonus and the concomitant extended notice were effectively imposed by management. There was no opportunity to dissent or negotiate any alternative arrangements. Importantly, Mr Leicester said at no stage did he expressly agree to the revised arrangements.

[14] Mr Leicester's assertions were refuted by Mr Fails in his sworn statement. He said:3

"THE COMMISSIONER: Yes, Mr Fails?---Commissioner, following on from the conciliation here I would just like to review the statement of response that Ben was employed with Eyelines on 4 September 2000 as per his letter of employment. He was not employed under an award at that time. Over time there have been several changes to Ben's employment contract, including a change of location, pay rises and a number of different bonuses. These changes were implemented in consultation with Ben by way of one-on-one meetings or group management meetings.

These meetings were usually followed up with a note, letter or copies of the minutes. One such change was the introduction of the manager's loyalty bonus involving a change of notice period and bonus payment, both linked to length of service as manager. This was implemented at the July manager's meeting in 2002 and minuted. Ben was present, he received copies of the minutes and received the bonus payments. At the meeting there was ample time for discussion of the matter and there was debate about aspects of it.

All managers had an opportunity to put the bonus scheme back on the agenda at subsequent group management meetings. Managers clearly had an opportunity at the meeting and afterwards to reject or renegotiate the bonus. I refute completely Ben's assertion in his conciliation conference executive summary that he had no choice but to accept the bonus. Ben had ample opportunity for discussion with me on the bonus and notice period at his subsequent quarterly appraisals and store reviews when he did negotiate and receive pay increases.

He at no time indicated any concern over any part of the bonus scheme. When Ben told me of his intentions to resign I reminded him of the notice period. I offered a compromise period which he declined. Ben asked me to check on the notice period and get back to him but before I could do so within minutes he had faxed his letter of resignation and subsequently failed to work out the full month's notice. His final pay was reduced by the deficit in his notice period and the calculations were clarified to him before he left Eyelines."

[15] Mr Fails tendered statutory declarations from two store managers who attended the meeting on 28 July 2002.4 The thrust of these statements indicate that the loyalty bonus/notice arrangements were widely discussed at the meeting, and, save one manager who did not qualify for the bonus, no objection was raised by any person present.

[16] Mr Fails said that his failure to confirm the new arrangements in writing on an individual basis was an administrative oversight.

[17] At the time of resignation Mr Leicester had been paid a total of $2385 in loyalty bonus payments.

Finding

[18] I do not accept that s.47[2] of the Act precludes parties to an employment contract entering into an arrangement that provides for extended periods of notice. This is consistent with the scheme of s.86, which does not prohibit contracting out of an award, provided that such an arrangement confers more favourable conditions of employment.

[19] In my experience, extended notice, whilst being a two-way street, is generally considered a superior benefit to that of the minimum prescription of one week.

[20] In this matter the question to be determined is whether the requirement for one month's notice was properly imported in to the contract of employment applicable to Mr Leicester.

[21] It is clear that the "loyalty bonus" and concomitant extended notice was an initiative of Mr Fail.

[22] I am satisfied that Mr Leicester was fully aware of the proposal advanced at the 28 July 2002 meeting.

[23] I am further satisfied that Mr Leicester had the opportunity, either at that meeting or subsequently, to raise concerns about the change and failed to do so.

[24] It is also clear that Mr Leicester accepted payment of the loyalty bonus on a weekly basis for the subsequent 19 months.

[25] The fact that the respondent failed to confirm this new arrangement in writing on an individual basis is a matter of regret. However given that the change was recorded in the minutes, this administrative oversight is not sufficient to negate the arrangement.

[26] I therefore find that the changed arrangements in respect of the loyalty bonus and extended notice were transparently incorporated into Mr Leicester's contract of employment.

[27] In exercising its jurisdiction the Commission is bound to "act according to equity, good conscience and the merits of the case without regard to technicalities or legal forms".

[28] In my view the requirement to give (and receive) one month's notice of termination is not unreasonable, given that it is a management level contract of employment.

[29] I also note that Mr Fails attempted to negotiate a compromise arrangement at the time when Mr Leicester first advised of his intention to resign.

[30] In all the circumstances I see no reason to interfere with the respondent's decision to withhold 100 hours' payment.

[31] The application is dismissed. I so order.

 

Tim Abey
COMMISSIONER

Appearances:
Mr B D Leicester, self-represented
Mr D Fails for Eyelines

Date and Place of Hearing:
2004
May 25
June 21
Hobart

1 Exhibit A1
2 Exhibit A1
3 Transcript PN 31 to 34
4 Exhibits R2 and R3