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T5029

 

TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.43 application for interpretation of an award

Australian Liquor, Hospitality and Miscellaneous Workers Union,
Tasmanian Branch

(T5029 of 1992)

MISCELLANEOUS WORKERS (PUBLIC SECTOR) AWARD

 

PRESIDENT F. D. WESTWOOD

HOBART, 21 September 1994

Interpretation - Clause 23 - Payment of Wages

REASONS FOR DECISION

With this application the Australian Liquor, Hospitality and Miscellaneous Workers Union, Tasmanian Branch (ALHMWU), sought an interpretation of Clause 23 - Payment of Wages, in the Miscellaneous Workers (Public Sector) Award.

The clause is as follows:

    "The employer shall specify a time and place at which wages and other moneys are to be paid to the employees other than employees engaged for less than one week. The time so specified shall not be more than 48 hours from the time when such wages become due and shall not be later than Thursday in the week. Any employee who is not paid at the time so specified shall be deemed to be working during the time he/she is kept waiting. Casua1 employees shall be paid within one hour of the termination of the employment.

    Payment may be made weekly or fortnightly as agreed between the employer and the employee and shall be in cash, or by cheque or by direct bank deposit into an account nominated by the employee. The method of payment shall be at the discretion of the employer.

    Where payment is to be made by cheque or direct bank deposit and such cheque is not met on presentation such bank deposit is not made at the time specified, otherwise than in circumstances beyond the control of the employer waiting time shall be paid."

The ALHMWU argued that the provision relating to "waiting time":

  • should be interpreted to mean that all time spent waiting for wages to be paid should be deemed to be time spent working:
  • that such time should be paid as if the work continued for all such time;
  • that time, other than time spent working, should be paid at overtime rates; and
  • that elapsed time after the contract of employment ceases should be counted as waiting time for the purposes of Clause 23.

To assist the Commission the ALHMWU referred to a particular case which had highlighted the different views being applied to this clause. In this case two employees of the Department of Environment and Land Management who had been engaged as cleaners for 19 hours per fortnight had accepted a redundancy package offered generally to state service employees. The two employees previously had worked for the Department of Construction, later the Department of Transport and Works.

The effective date of termination was 30 June 1993. However, due to the fact that the Department of Transport and Works continued to prepare the fortnightly pays for the employees, the final fortnightly pay cheque having been sent from Transport and Works to Environment and Land Management, was held by Environment and Land Management while it put together the redundancy package payment, including taxation group certificates. The redundancy package, plus the last fortnightly pay, was given to the two redundant employees on 13 July 1993.

It appears that these two employees having completed their last day's work did not wait at the workplace for their pay, and there is some confusion as to the precise time at which they notified their former employer that they had not been paid.

Whilst the employer claimed there was no intention to delay payment, the union asserted that the employees had enquired about their pay on or about 6 or 7 July 1993. On 6 September 1993, following discussions and correspondence between the union and the Department, a further payment equivalent to 19 hours pay was made to each of the two employees. This was regarded by the employer as being suitable compensation for the delay in payment.

The union submitted that the award provided that employees were deemed to be working during the time they were kept waiting for their pay which should have been available on the day they finished work, viz. 30 June 1993. Since it was required that they be deemed to be working, it followed that payment should be calculated as if they were at work for all time between close of business on 30 June 1993 up until payment was effected, viz. 13 July 1993. If these employees were deemed to be working for the entire period, overtime rates should apply from close of business on 30 June 1993.

The union drew the Commission's attention to an interpretation by President Koerb i n  i n Matters T752, 796 and 802 of 1987, dealing with the Payment of Wages Clause in the Hospitals Award. It was contended that the award provision concerned, whilst not identical with the Payment of Wages clause the subject of this interpretation, involved the same principles. It provided as follows:

    "An employee kept waiting for her wages on a normal pay day for more than a quarter of an hour after the usual time for ceasing work shall be paid at overtime rates after that quarter of an hour, with a minimum of a quarter of an hour."

In that matter President Koerbin declared in his decision dated 24 June 1987 that "on the proper construction of the award ... employees who received no pay on pay day (were) entitled to be paid waiting time" and he further declared that "payment should be at the overtime rate applicable to the employees concerned and should not exceed the maximum permitted by the award."

The union argued that in that matter it had been found that the employees were entitled to be compensated for not receiving their pay on time. Similar circumstances were said to exist in this matter and accordingly these employees should be deemed to be working from the time at which they normally received their pay until the actual time of payment. The union was not aware of the precise time wages were paid but asserted that there was a "normal pay time".

The union said that, in respect of employees engaged for one week or more, the employer was required to specify the time and place at which wages were to be paid. That time and place had to be no more than 48 hours after the wages became due but, in any case, no later than Thursday in the week.

It was argued that although the contract of employment between the two employees and the Department of the Environment and Land Management (technically the Minister administering the Tasmanian State Service Act 1984) ceased on 30 June 1993, the award provided that the employees whose services were terminated were deemed to be working while waiting for their pay. This award provision was held to be unaffected by the termination of employment. An opposite finding on this point would enable an employer to avoid the waiting time penalty by "purporting to dismiss an employee". In the union's view the contract of employment was not completed until the payments required by the award were made. Taken further, the union submitted that the contract of employment was the award and in this case the award deemed the employee to be working until any wages due were paid.

The union drew comfort from the last paragraph of Clause 23 which, it was claimed, confirmed that "waiting time shall be paid" where payment is not made at the time specified.

It was the union's belief that if the clause had any meaning at all, it had to mean that having been deemed to be working, the employee was entitled to be paid for the elapsed time and the calculation of pay for that period would have to be in accordance with other provisions in the award, particularly the provision dealing with overtime. Equally, the union submitted, the deeming provision overcame any suggestion that the contract of employment had ceased because the provision deemed the employee to be working until he or she was paid.

In response to the suggestion that the provision was directed more towards those who continued to be employed rather than those whose services were terminated, the union said the award specifically provided for casual employees whose employment, by definition, was terminated at the end of each shift had to be paid within one hour of the termination of employment. That provision seemed to suggest that the award could be made to apply post termination.

The Minister informed the Commission that the two employees concerned were normally paid by cheque every second Thursday just prior to knock-off time which was 7.30 a.m. The cheque for the last pay was made up by the Department of Transport and Works and delivered to the Department of Environment and Land Management prior to 30 July 1993, but the cheque was mistakenly believed to relate to the redundancy package and it was held until all the redundancy papers were prepared. It was confirmed that payment was made on 13 July 1993. The Minister said the payment of the additional 19 hours pay was in recognition of the delay resulting from mistakes which had been made; it was not paid as waiting time as the Minister did not believe that the employees had been kept waiting.

The Minister argued that the expression "waiting time" used in the last paragraph of the clause was relevant only in circumstances where a cheque had not been honoured on presentation or where a direct bank deposit was not made at the time specified.

Dictionary definitions of the words "keep" and "wait" were presented in an endeavour to show that an employee must be detained in the expectation that something will happen in order to meet the criteria set out in the third sentence of the first paragraph of the clause. The Minister added that no employees were "kept waiting" - that is, detained until something happened - in current times. Therefore no additional payments were required.

A decision by Deputy President Robinson in a matter heard in accordance with Section 29 of the Act, being a dispute between the Department of Education and the Arts and the Tasmanian Teachers Federation1 was tendered to support the argument that if an employee was not aware that payment of wages had not been made then it followed that they could not have been kept waiting. In that case payment of wages had been effected by electronic funds transfer to the bank account of an employee with a similar name, and the first employee had not been aware of the failure for two pay periods. Whilst recognising that the two cases were not based on similar circumstances, the Minister submitted that the provision should not be capable of being used by an employee to allow compensation to build up by not telling the employer that wages had not been paid on time.

The Minister referred to a decision concerning "waiting time" in the Supreme Court of South Australia handed down in 1947 by Mayo J. in matters Cranford-Webster v. McFarlane, Collins v. McFarlane and Sweeney v. McFarlane. Amongst other things, in that decision "waiting time" was determined to mean time that an employee "spent and wasted in loitering about whilst payment of wages ... was not forthcoming" Further, that "the appropriate meaning to be given to "waiting time" would seem to be "staying in expectation, stopping, or remaining stationary, or inactive till the happening of the event, holding over departure". Mayo J. went on to find that the waiting time payment was compensation for time lost and not a "penalty imposed for dilatory settlements". It was submitted that President Koerbin had not given sufficient weight to this decision when dealing with the Hospitals Award matter mentioned earlier.

Excerpts from various other authorities were tendered for the Commission's consideration, dealing with the meaning of the terms "kept waiting" and "waiting time", although it was conceded that the award provisions concerned may not have been identical.

I was asked, particularly, to have regard to the decision of Commissioner Brown of the Australian Conciliation and Arbitration Commission in a matter involving R.M. Parsons Co. Ltd and the Building Workers Industrial Union and the Amalgamated Carpenters and Joiners in 1976 which contained the following statement:

    "Concerning what is to be paid for waiting time, a reading of pertinent decisions leads me to regard waiting time as working time on the following day until the pay was actually delivered to the men; that is in addition to any time spent on Tuesday after ordinary ceasing time on the job until told that there would be no payment of wages made and the Commission decides to that effect."

As to the union's proposition that waiting time other than time spent working should be paid at overtime rates, the Minister contended that Clause 23 made no mention of overtime and since it was not possible in an interpretation to determine something outside the award, the union's claim should fail.

It was submitted that the union should be required to show that overtime rates were applicable by virtue of the precise wording within the award, rather than by the assumption that the expression "deemed to be working" contemplated the need to apply the overtime provisions of the award. The Minister claimed that the union sought to penalise the employer for late payment rather than to compensate the employee for waiting to be paid. Further, the Minister was of the view that compensation should be no more than the employees would have earned if they had worked in the period, even if they had been detained, or kept waiting.

With respect to the union's claim that elapsed time after the contract of employment ceased should be counted as waiting time, the Minister said the award was silent on what was to apply to employees whose services had been terminated and therefore the claim was outside the award.

In summarising the Minister's representative said:

    "Mr President, you're asked to interpret an outdated award a provision in a way that will provide for windfall gains to employees. The determination sought is indeed extravagant and should be determined against the applicant. The canons of construction referred to by Mayo (J.) appear to require that decision. However if you are persuaded that the union's contention should prevail I seek prospective interpretation. A retrospective determination may cause difficulties in this case or in similarly worded awards i f pub 1 is sector agencies have applied their award previously in the way that I've outlined. "

    Transcript p. 44

In reply the union submitted that the precedents cited were not on all fours with the provision in this case.

The award provision catered for a variety of methods of payment which existed today, existed and were relevant in 1988, when the award was made, and continued to be relevant in 1994.

In respect of the Minister's submissions on the definitions of "keep" and "waiting" the union's representative said:

    "To keep waiting, in my view, means to have a person maintained in the circumstances of awaiting their payment, but if you read that in the context again of the award it doesn't mean that you are remaining on site if your pay is actually not paid to you on site.

    For example, where the award a 1 lows i t to be paid by direct bank deposit. Clearly, that is not paid to you on site. And the intention is extended in relation to that circumstance by saying if the money is to be paid by that method and it is not there you are deemed to be kept waiting."

    Transcript p.50

Further:

    "There is a nominated time and place and method of payment, and where that is not observed the employee is deemed to be working until they are paid."

    Ibid.

The provision deeming an employee to be working while waiting to be paid would ensure that overtime rates started to apply at the very least after 8 hours, but where the employee had performed his or her ordinary hours, the overtime clause would dictate the rate of payment. The employer's proposition that the application of overtime conditions was outside the award therefore was flawed, the union said.

The union argued that that provision was part of the contract of employment which continued until whatever entitlement or obligation resulting from the contract was met. It was also argued that it would be possible, as an example, to include in the award a clause providing that proportionate leave on termination which was not paid by a certain time would attract a penalty. Similarly the payment of wages clause was a provision which existed beyond the precise point at which the performance of work under the contract of employment ceased.

Finding

Clause 23 requires the employer to inform employees who are engaged for one week or more when and where they shall be paid their wages and other regular entitlements. Payments may be made weekly or fortnightly as agreed between the employer and employee. The time at which wages are to be paid may be no later than Thursday in the week of payment and must be within 48 hours of the time the wages fell due. Wages may be paid in cash, cheque or direct bank deposit at the discretion of the employer. Where a pay cheque is not honoured following presentation at an appropriate bank, or where wages are not deposited at an appropriate bank by the specified time, an employee is entitled to be paid waiting time unless there are circumstances beyond the control of the employer which prevent such payments being received by the employee.

This much is reasonably clear and was not disputed by the parties, although some questions could be asked about how the conditions are to be applied in respect of payment by cheque and direct bank deposits.

The main provision in contention in this matter is the sentence which reads as follows:

    "Any employee who is not paid at the time so specified shall be deemed to be working during the time he/she is kept waiting."

None of the cases referred to by the parties dealt with an award provision which could be said to be "on all fours" with the instant case.

The key words requiring interpretation are "kept waiting", and "deemed to be working", and "any employee". Whilst there are many cases dealing with the phrase "kept waiting", there is no common interpretation available and I can find no precedents dealing with the phrase "deemed to be working" in the context of waiting time.

The provision appears to have been modified to take account of changing methods of payment without having regard for the effect such changes would have on the way in which any penalty or compensation for late payment of wages would be calculated. I think the original provision which dealt with payment by cash at a specified time and place, in practice usually at the workplace, was readily understood and administered.

When considering this particular sentence in isolation it would seem reasonable that the words "kept waiting" could only mean physically kept waiting at the specified place after the specified time and accordingly an employee would be entitled to receive an extra payment calculated as if the employee had been working all that time. Such an interpretation would make sense where payment was made directly to the employee by way of cash or perhaps by cheque. Although the introduction of payment by way of cheque and the possibility that a cheque might not be honoured on presentation to a bank could lead to some difficulty in applying that interpretation and in calculating elapsed time for payment purposes. Further complications could arise as the result of the advent of direct bank deposit as an option available to the employer.

Another interpretation, which puts emphasis on the word "during", could be that the words "deemed to be working during the time he/she is kept waiting" mean that during the elapsed time the employee is deemed to be performing no more than a normal day's work for that employer while waiting to be paid. So that if an employee normally had worked 8 hours a day during that period, he or she would receive 8 hours pay extra for every day of waiting. Such an interpretation would not provide the necessary compensation for having to wait late on the normal pay day.

A third interpretation, as proposed by the union, could be that all elapsed time between the specified time and the actual time of payment should be compensated as if the employee was physically at work for all that time. Whether or not overtime rates would apply would depend on the hours already worked on pay day up until the actual time of payment and, perhaps, on other award provisions. I think this interpretation properly reflects the meaning of the words used.

However, although Clause 23 requires casual employees to be paid their wages within one hour of the termination of employment, the clause does not indicate when an employee who is not a casual should be paid on termination of employment. The clause is silent on that point. The clause simply states that "any employee who is not paid" at the specified time is entitled to be deemed working.

Consequently, in my opinion, which is contrary to that of the union, once an employee, other than a casual, has finished work and left the workplace for the last time the contract of employment has ended and the employee cannot earn ongoing entitlements under the award. From that time, therefore, the sentence which commences with the words "Any employee" cannot apply to an employee whose employment has been terminated other than a casual whose circumstances are provided for in the next sentence of the clause. Award entitlements which have accrued during the course of employment are protected. However, with the exception of casuals, the award does not bestow on persons who are no longer employees the right to be paid waiting time.

In the circumstances, given the provisions of Section 43 of the Act, I am satisfied pursuant to subclause (lA)(b), that it would be inappropriate to declare how Clause 23, Payment of Wages, of the Miscellaneous Workers (Public Sector) Award should be interpreted and, by order, I direct the Australian Liquor, Hospitality and Miscellaneous Workers Union, Tasmanian Branch, to make application to vary the Award to more accurately prescribe the manner in which an employee should be compensated for late payment of wages.

 

F.D. Westwood
PRESIDENT

Appearances:
Mr K O'Brien for the Australian Liquor, Hospitality and Miscellaneous Workers Union, Tasmanian Branch
Mr L Foley for the Minister administering the Tasmanian State Service Act 1984 (being the Minister for Public Sector Management)

Date and place of hearing:
1994
Hobart
May 17

1 T4564 of 1993, 15 September 1993