IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

In this matter the Secretary for Labour has requested from the Commission a declaratory response to the following set of circumstances:

Employee H. was employed as a junior wholesale salesman of electrical goods.

His employment was terminated by his employer after 15 months' service. The employee concerned had not taken any annual leave at the date of termination which came about after having first been given one week's notice. There was no evidence to suggest that there was any element of misconduct involved.

On termination the employee was paid for 4 weeks' annual leave for his first completed year of service, together with an extra week's pro rata leave covering 3 months' additional service.

Employee H. was not paid any leave loading on termination.

The question asked is whether, under the terms of the award, Mr. H. was entitled to be paid any leave loading on termination.

During discussion on this aspect the Commission was provided with a number of extracts from decisions, judgments and opinions expressed by other tribunal members and authors covering broadly similar cases.

These were of interest but helpful only to the extent that for the most part the issues determined or opinions expressed were directed toward entitlement to leave loading in accordance with the form of words used in the various awards concerned.

In dealing with questions of interpretation the Commission cannot be persuaded by considerations of merit. However it is well settled that in interpreting industrial awards it is permissible to examine the award as a whole in order to discover the probable intention of the award-maker. This would ordinarily occur where genuine doubt arises.

Of course in matters of this kind it is conceivable that different interpretations could apply where different circumstances surround the same subject matters.

This issue can only be decided on the facts relating to Mr. H. Nevertheless, as will be seen later, it is possible to distil from the result certain matters capable of being regarded as declaratory and therefore having fairly general application.

In my view the case concerning Mr. H. is a relatively simple one to decide having regard for the agreed facts.

First, Mr. H. had worked for 15 months. He was therefore due for 28 consecutive days' annual leave on account of his first completed year of service. This flows from Clause 46(a).

Second, he had accumulated 3 months' pro rata leave on account of his second year of service; namely 3 months at 13.1/3 hours per month equals 40 hours. Clause 46(d) refers.

Third, Clause 46(h) makes it clear that annual leave due shall be taken at a time fixed by the employer. It shall be taken within 6 months of falling due and, where practicable, after 2 weeks' notice has been given by the employer to the employee. However, the 2 weeks' notice may be waived by mutual agreement.

Obviously Mr. H. had not been given notice to take the leave which was in fact due to him.

Fourth, 46(f) (i) states that before going on leave, an employee shall be paid the amount of wages he would have received in respect of the ordinary time which he would have worked had he not been on leave during the relevant period. IN ADDITION:

All employees shall receive a loading of 17½% on "...payments made for annual leave as prescribed in paragraph (a), for annual leave falling due." HOWEVER, "...such loading shall not apply to proportionate leave on termination of service." [Clause 46(f)(ii).]

Mr. H. was paid for 40 hours' proportionate leave accrued on termination. In addition he was paid for 28 consecutive days' annual leave due but not taken.

Sixth, in the absence of evidence to the contrary, one must assume that Mr. H's employer had not at the point of dismissal fixed the time for him to take the leave due to him. The fact that Mr. H. had not taken leave was therefore not due to any fault on his part. The award clearly allows the employer to fix the time when leave is to be taken. However that may be, the award is equally clear that the employee shall be allowed his leave, and he shall be paid a leave loading for annual leave falling due.

Seventh, Mr. H.'s employer clearly had an obligation to allow Mr. H. to take the leave for which he had then qualified. However, it is equally clear that his employer had had six months in which to allow that leave to be taken. Although Mr. H. had worked 15 months without a leave break, the employer was not in breach of the award in requiring Mr. H. to remain at work for that period.

In my opinion the fact that an employer had not sent his employee off on annual leave, the right to which having already accrued some 3 months earlier, was no bar to Mr. H. being paid the leave loading to which he was clearly entitled under Section 46(f)(ii).

Eighth, a payment was made on termination (for annual leave that had fallen due). There can be no doubt therefore that Mr. H. was, and is, entitled to be paid leave loading for that period. However, he was not then and is not now entitled to payment of leave loading in respect of the 3 months' service, or 40 hours' payment that was made. That clearly is excluded by subparagraph (f) (ii) of Clause 46 which precludes payment for "proportionate leave on termination". In that context, proportionate leave can only mean that proportion determined in accordance with subclause (d) of Clause 46.

The award should be interpreted accordingly in relation to the facts surrounding Mr. H. Date of effect will be from the date of termination of Mr. H., namely 1 July 1988.

L.A. Koerbin
PRESIDENT