T8439
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Australian Liquor, Hospitality and and Rans Management Group Pty Ltd trading as
Appeal - decision by Commissioner P A Imlach in matter T7772 and T7773 of 1998 - breach of the Health and Fitness Centres Award - failure to pay over award payments not subject to breach of award provisions of the Act - breach of award calculated by reference to each pay period - Commissioner's reasons adequately canvassed in his decision - appeal grounds rejected - appeal dismissed - Commissioner's decision confirmed REASONS FOR DECISION On 15 June 1998, the Australian Liquor, Hospitality and Miscellaneous Workers Union, Tasmanian Branch (the applicant), pursuant to s.29(1A)(b) of the Industrial Relations Act 1984, made two applications for a hearing in respect of an industrial dispute with RANS Management Group Pty Ltd trading as Tattersall's Hobart Aquatic Centre (the Company). Background Briefly stated, the disputes concerned alleged breaches by the Company of the Health and Fitness Centres Award (the award), in respect of the payment of wages and conditions of employment for two employees of the Company. In those matters the applicant contended that the two employees, James Winton and Alexandra Wallace, who were on annual salaries of $30,000 and $33,000 respectively, and paid monthly, should have been employed and paid under the terms and conditions of the award. By not doing so, it was submitted, the Company had underpaid the two employees and the applicant sought payment of monies said to be due. The Company, whilst admitting the employment arrangements it had entered into with the two employees were not in accordance with the award denied, except for one or two instances, that the employees had been underpaid. The Company claimed that by offsetting what had been paid week by week, in accordance with an unregistered agreement, against what should have been paid week by week under the award's prescription, its liability was not great. In the original hearing the applicant contended that, as the over-award rate was not inconsistent with the award, the over-award rate should be used for the purpose of calculating all entitlements under the award including such things as overtime entitlements. This, it was said, was consistent with s.85(3) of the Act. In rebuttal, the Company maintained that the Commission's jurisdiction in this matter was limited to the provisions of the award and did not extend to the terms of the unregistered enterprise agreement. The Company submitted that payments made under the terms of the unregistered enterprise agreement should be set off, on a week by week basis, against the payments due under the award. In his Reasons for Decision dated 1 December 1998, Commissioner Imlach found that:
As a result of those findings, Commissioner Imlach directed the parties to confer on how the actual weekly payments should be calculated. On 27 April 1999, Commissioner Imlach was provided with documentation detailing those calculations. This was set out on a weekly basis, in the form of a spreadsheet which identified each week worked, the number of hours worked at ordinary time, time and one half, double time, and double time and one half, the award hourly rate, the award rate for the week, the amount paid and the amount owing or overpaid in each week. In respect of employee Winton, the records commenced from and including the week ending 21/9/97 up to and including the week ending 9/8/98. The records showed that, on four occasions [when the annual salary was converted to a weekly wage] the employee did not receive the amount of wages required to be paid by the award for the hours worked during those weeks. This amounted to a total underpayment of $220.25. In respect of employee Wallace, the records commenced from and including the week ending 21/9/97 up to and including the week ending 2/8/98. The records showed that on two occasions [when the annual salary was converted to a weekly wage] the employee did not receive the amount of wages required to be paid by the award for the hours worked during those weeks. This amounted to a total underpayment of $65.68. On 10 May 1999, Commissioner Imlach issued an Order requiring employees Winton and Wallace to be paid the amounts they were underpaid. On 31 May 1999, the Australian Liquor, Hospitality and Miscellaneous Workers Union, Tasmanian Branch (hereafter referred to as the appellant) lodged a Notice of Appeal pursuant to s.70 of the Act, the grounds of which are as follows:
With leave of the Commission, Mr J Bronstein (of Counsel) represented the appellant and Mr R Brown of the Tasmanian Chamber of Commerce and Industry Limited represented the Company. Submissions for the Appellant Mr Bronstein dealt with both grounds of appeal together as he was of the view that they necessarily involved a consideration of "mutual" issues. He contended that:
In respect of that part of the Commissioner's decision which found that the Company had breached the award but that it could set off, on a weekly basis, what it paid in the form of wages, Mr Bronstein submitted that the Commissioner made no further comment as to why he believed that a breach of award had occurred and why he believed that offsetting was available to the Company. Mr Bronstein said that whilst there was nothing specific in his decision, the Commissioner appeared to rely on three authorities1 tendered by the Company. He submitted that even if it could be inferred that the Commissioner relied on those decisions they were capable of challenge as to their precedent value since none of them mirrored the particular circumstances of the matter before him. Mr Bronstein then analysed certain aspects of the three cases in an attempt to highlight factual differences and other features that he considered distinguished them from the matter being dealt with by Commissioner Imlach. Mr Bronstein also submitted that there was no reference in the Commissioner's decision to Lynch v Buckley Sawmills Pty Ltd (1984) (Keely J) 3FCR at 503, which was tendered as part of the applicant's case. He said there were some parallels between Lynch v Buckley and Monodelphous in that the status of the employees was raised, but subsequently it was held they were employees and that the employer had breached the award because payments made pursuant to an agreement, not referrable to an award, could not be offset. Mr Bronstein said:
Mr Bronstein also relied on Peter Anthony Poulos v Waltons Stores (Interstate) Limited 15IR at 313, and the Transport Workers Union (WA Branch) v Arrow Holdings Pty Ltd I.R.C. WA No.1385 of 1988. In the case of Poulos v Waltons, Mr Bronstein said the employer was attempting to set off commission payments against the possible award entitlement, not contemplated by either the employer or the employee. Gray J dealt with the issue of offsets and stated:
Mr Bronstein went on to say, that His Honour specifically referred to Lynch v Buckley Sawmills. He said there was a similar finding in Transport Workers Union (WA Branch) v Arrow Holdings Pty Ltd WAIRC No.1385 of 1988, where Fielding C ruled, that it was not permissible to offset obligations under the award against an over award payment. In respect of Emmerton v Jackson & Terry, Mr Bronstein submitted he did not know what weight the Commissioner put on that decision, but in any case it would not have assisted the Company as it was prosecuted under a completely different award and Wright J found that the respondent had committed an offence under s.51 of the Act and remitted the complaint back to the magistrate for re-hearing. He said there was nothing in the decision of Emmerton v Jackson & Terry, which related to the applicant's submission in the hearing at first instance concerning the effect of s.85(3) of the Act and there were no authorities specifically relied upon by the Commissioner which supported his decision on either the Commission's jurisdiction, so far as minimum award standards and the effect of s.85(3) were concerned, or the ability, generally, of employers to offset award payments. When attempting to establish that Commissioner Imlach erred in law in that he failed to give any, or any adequate, reasons for reaching his conclusions, Mr Bronstein relied on the State of Queensland & AWU and FEDFA & Ors (Print K2897) 15/5/92 and Burgess v Umina Park Home for the Aged & Anor., Tas Reports (1993) 246. He said Burgess v Umina Park was highly persuasive. In that case Underwood J found that:
His Honour went on to say:
Mr Bronstein requested the Full Bench to exercise its powers under s.71(13) of the Act and refer the decision back to the Commissioner Imlach to restate in detail the reasons upon which he based his decision. Submissions of the Respondent Mr Brown took the Commission to ss.49, 51 and 52 of the Act and submitted that an employee was only entitled under those sections to the rate of remuneration fixed by the award and "there can only be an offence where the amount paid to an employee is less than what the award would have provided".3 Further, he submitted that s.85(3) did not give the Commission jurisdiction to order that an over-award rate of pay can become the award rate for the purpose of calculating various entitlements under the award, nor did it enable more favourable conditions than those prescribed by the award to be read as being the award rate. Mr Brown contended that the only claim to be prosecuted before the Commission, if an employee was paid in accordance with an award, would be the amount due under that award. In respect to the Commission's ability to set off over-award payments against award entitlements Mr Brown relied on Jackson v. Monadelphous. He responded to Mr Bronstein's claim that the case dealt with a different issue by submitting that after Moore J had found the applicants in that case were employees and not independent contractors, he moved on to find that they were paid an hourly rate which exceeded the award rate. He said that when it came to enforcing the award Moore J relied on the legal principle discussed by Sheldon J in Ray v Radano. He claimed the matter before Commissioner Imlach was similar to Jackson v Monadelphous. Mr Brown rejected Poulos v. Waltons as being authoritative because of the different circumstances. He said the respondent in that case sought to set off certain sums paid as commission against wages prescribed in the award. The evidence before the Commissioner at first instance, Mr Brown said, allowed him to set off award entitlements against over-award payments in accordance with the principles determined in Ray v. Radano. He said the Commissioner's decision clearly indicated that he endorsed the employer's position that the Commission does not have jurisdiction to rule that an over-award payment can be used for the purpose of calculating overtime and penalty payments as award entitlements. Mr Brown submitted that, when read in full, it could be seen that Commissioner Imlach determined the relevant period for the purpose of calculating the employees entitlements was weekly and that was consistent with Emmerton v. Jackson & Terry. Mr Brown also submitted that Commissioner Imlach addressed the relevant authorities in determining entitlements due under the award and that his decision was correct at law. He submitted the appeal should be dismissed on those grounds. Findings Even though Mr Bronstein placed greater emphasis on appeal ground 2 than on appeal ground 1, we feel compelled to address, in detail, the latter appeal. It asserts:
Section 3 of the Act defines an "industrial dispute" to be a dispute in relation to an industrial matter. An "industrial matter" includes, among other things, a breach of an award. An "award" is defined to mean an award made under the Act by the Commission. The applications before Commissioner Imlach were in respect of breaches of an award. During the original hearing the applicant placed much weight on s.85(3) in an attempt to convince Commissioner Imlach that any calculations undertaken to determine breach of award should be based on a rate higher than the award rate. Section 85(3) of the Act states:
The applicant interpreted this to mean:
Over the period during which employees Winton and Wallace claimed breach of the Health and Fitness Centres Award, they each were paid in excess of $6000.00 in over-award payments. In brief, in the case of employee Winton, Commissioner Imlach found that on four occasions, that is in respect of four separate weeks, the employee was not paid the amount of wages required to be paid by the award for each of those weeks. There was a total underpayment of $220.25. In the case of employee Wallace, Commissioner Imlach found that on two occasions, that is in respect of two separate weeks, the employee was not paid the amount of wages required to be paid by the award for each of those weeks. There was a total underpayment of $65.68. The Commissioner did not permit those underpayments to be set off against the total over-award payments made by the employer but ordered that payments be made for the weeks the employer did not pay the minimum rates prescribed by the award for work undertaken during those weeks. In our view, this approach is correct and is consistent with that adopted by Moore J in Jackson v 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. Sheldon J said, in part:
We concur with that view as it applies to the circumstances of this case. It follows that we do not agree with Mr Bronstein's submission that Lynch v Buckley Sawmills Pty Ltd is the appropriate authority in these circumstances. Nor do we think that Waltons Stores, which was not raised with Commissioner Imlach at first instance, is relevant to the matter before us. As submitted by Mr Brown, that matter deals with the proposal that commission payments can be set off against any entitlement to wages; a proposition which was rejected. The Health and Fitness Centres Award provides that for employees, such as Winton and Wallace, employment shall be by the week. The award specifies a weekly wage rate. By examining the claim over each week that the employees were claiming breach of award, we consider that Commissioner Imlach adopted the correct approach which is consistent with Emmerton v Jackson & Terry. In that case Wright J stated:
We also consider that the Commission, when dealing with disputes alleging that an employer or employee has breached an award, is only required to consider the terms and conditions contained in the award as defined by the Act. Over-award payments, by their very nature and description, do not fall into that definition and it is not open to the Commission to treat "conditions of employment that are more favourable than those provided by an award" as if they were an award made by order of the Commission under the Act. In the circumstances we do not consider that Commissioner Imlach erred in law in determining that the "Award amount of wages due" in each week "is to be offset against the amount of wages actually paid for that week". Accordingly we reject the first ground of appeal. Appeal ground 2 claims that: "The Commissioner erred in law in that he failed to give, any or any adequate reasons for reaching the conclusions referred to above." Mr Bronstein's position is best summed up in his own words. He said:
We agree with Mr Bronstein's contention that members of the Commission have a duty to give adequate reasons for their decisions. However, the brevity of a decision does not necessarily mean that it lacks adequate reasoning. In his Reasons for Decision, published on 1 December 1998, Commissioner Imlach stated that he accepted the submissions and adopted the precedents relied on by the respondent employer. Even though each of us may have written the decision differently, given the matters canvassed in his decision, and we are satisfied that those matters were adequately referred to by Commissioner Imlach. We are satisfied that Commissioner Imlach adopted the correct authorities and we are in no doubt as to the grounds upon which he decided the applications. We consider his decision was correct at law and adequately reasoned. In the circumstances we reject the appellant's contention that the Commissioner failed to give any, or any adequate, reasons for reaching his conclusions and in so doing reject the second ground of appeal. Accordingly, pursuant to section 71(13) of the Act, we confirm Commissioner Imlach's decision.
F D Westwood Appearances: Date and place of hearing: 1 Martin Jackson & Anor v Monadelphous Engineering Associates Pty Ltd IRCA (Moore J) 1997; Ray v Radano (1997) 67 AR (NSW); Michael John Emmerton v Richard Jackson and Donna Lee Terry (Wright J) Supreme Court of Tasmania A10/1994. |