T6531
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Transport Workers' Union of Australia, Tasmanian Branch WHOLESALE TRADES AWARD
Interpretation of award - Annual Leave clause - Payment for Period of Leave - additional $257.40 for annual leave loading to be paid in full REASONS FOR DECISION The Transport Workers' Union of Australia, Tasmanian Branch, on behalf of one of its members formerly employed at Statewide Independent Wholesalers Ltd sought, in accordance with section 43 of the Industrial Relations Act 1984, an interpretation of Clause 9 - Annual Leave, of the Wholesale Trades Award, in particular subclause (f), Payment for Period of Leave. Clause 9, Annual Leave, is as follows:
The union claimed that at the time of his termination of employment the employee had a proportionate annual leave entitlement which was met by the employer. But an amount of money, said to represent the proportionate annual leave loading due to the employee on one week's leave which had accrued in the employee's last full leave year but which had not been taken, had not been paid. The union conceded that proportionate annual leave loading was not payable in respect of the uncompleted year of service. Mr Gill, for the union, submitted that in view of the wording of the second sentence in subclause (f), employees were entitled to receive the full year's annual leave loading whenever they went on annual leave. It was submitted that even if the employee had taken only one day of his annual leave entitlement the full annual leave loading amount, viz. $257.40, should have been paid. Mr Gill was at pains to point out that the union was not demanding that the amount of $257.40 was due every time an employee took less than a full period of annual leave but that the loading was an entitlement that could not be extinguished by the employee's termination of employment. The employer's representative disputed the claim that the employer was required to pay any proportionate annual leave loading on termination of employment. It was claimed that subclauses (f) and (i) had been observed in full. Mr Gates, for the Tasmanian Chamber of Commerce and Industry Limited, addressed subclauses (a), (d), (e), (f) and (i) and submitted that payment for a period of annual leave was predicated on the employee "going on annual leave" and that payment was required before the employee went on annual leave [see subclause (f)]. Mr Gates said the wording of the clause meant that the $257.40 should be "relevant to the period of leave which is taken". Consequently if the full annual leave was taken the full amount of loading should be paid, but if part only of the annual leave entitlement was taken only the relevant proportion of the leave loading should be paid. He found support for this proposition in subclause (i) which provides for leave to be taken "in any combination" and claimed that:
Transcript, p.14 Mr Gates submitted that the subclause (d) Proportionate Leave on Termination of Service, referred to service "in any qualifying 12-monthly period" which could be, say, 7 months or indeed 5 years and 7 months and consequently all the employer was required to do was to pay the employee for 12.67 hours for each month of continuous service. He said:
Transcript, p.14 He also submitted that the commencement date of any qualifying period would depend on whether there had been any break in the employee's continuity of service. An Exhibit, TCCI.1, was tendered purporting to reflect the accrued annual leave entitlements and annual leave taken by the employee in the period from his commencement with the company on 25 February 1986 to termination on 10 September 1996. There was no reference to any break in service. The exhibit reveals that in his final uncompleted year of service commencing on 26 February 1996 the employee took three blocks of annual leave of 1 day, 8 days and 3 days (he had a debit balance of 2.3 days at the commencement of his final year), leaving a balance of 5.7 days annual leave due from his last completed year of service. He had been paid pro rata of the $257.40 on all leave taken. Subclause (a) establishes the amount of leave available to an employee after 12 months continuous service and its wording is not in contention. Nor are subclauses (b) and (c) dealing with public holidays which occur during a period of annual leave and the calculation of continuous service respectively. As to the meaning of subclause (d) Proportionate Leave on Termination of Service, I agree with the submissions of the employer's representative; however, given my final conclusions this subclause is not relevant to the circumstances of the application. Subclauses (e) Payment in Lieu Prohibited, (g) Successor or Assignee, and (j) Disputes, were not at issue, although the latter subclause is clearly an anachronism and should be reviewed by those with an interest in the award. With respect to subclause (h) Time of Taking Leave, whilst there was some debate about whether or not it should have been applied to these circumstances, the fact is that it was not and it is not relevant to the question of the leave loading. In order to address the issues raised in this application it is necessary to consider the meaning of the remaining subclauses. Subclause (f) of the Annual Leave clause was inserted in the Wholesale Grocers' Industrial Board Award in much the same form and wording as it is today, effective from 1 July 1975. At that time the major change to the subclause which dealt with the method of determining the way in which an employee should be paid for the period of annual leave, was the appearance of the provision that in addition to their "ordinary pay", employees other than casuals and part-timers working less than 20 hours per week, should be paid the minimum wage prescribed in the award. The Wholesale Grocers' Industrial Award was retitled the Wholesale Trades Industrial Board Award in 1980 and again retitled in 1985 when it became an award of this Commission. The first sentence of the subclause which deals with payment of wages for leave taken is not in dispute. It requires employees to be paid the amount of wages they would have received if they had been at work before they proceed on annual leave. There may be a need to review the wording at some time in the future for the sake of achieving more clarity. I have considered the words and expressions in the second sentence and I have arrived at the following conclusions. Payment of the amount of $257.40, which is assumed to be an annual leave loading although it is not expressly identified as such in the award, must be paid once an employee commences to take a period of annual leave as defined in subclause (a). There is no direction in the award as to when the loading should be paid other than the implication that it must be paid in addition to wages at the time of taking annual leave. The employee in question took one day of his accrued entitlement on 26 April 1996, the first of his annual leave days after his leave became due on 25 February 1996. The subclause specifically refers to "an amount of $257.40" which must be paid in addition to the amount of wages an employee would receive in respect of the ordinary time that would have been worked had the employee not been on leave. There is no hint in this subclause that it should be paid on a pro rata basis. I do not accept the employer submission that subclause (i) Broken Leave gives the employer the unilateral authority to pay the loading of $257.40 on a pro rata basis. The provision simply allows leave to be taken "in any combination", presumably of hours (subclause (a) establishes annual leave to be a period of one hundred and fifty-two hours), so long as the employer and employee agree. The requirement in the subclause for the employer and employee to agree on any "broken leave" which was used by the employer representative to support the contention that the loading can be broken up pro rata to the leave taken could be used equally to support the argument that if broken leave is by agreement, pro rata payment of the loading should also be by agreement. In my opinion the use of either contention cannot be supported by the words and expression of subclauses (f) and/or (i). It is my view that subclause (f) confers on the employee before proceeding on annual leave an entitlement to be paid one amount of $257.40 additional to annual leave pay once the entitlement to a full period of annual leave has been earned. In the circumstances, pursuant to section 43(1) of the Industrial Relations Act 1984, I declare that subclause (f), Payment for Period of Leave of Clause 9, Annual Leave of the Wholesale Trades Award, means -
Accordingly, it is my view in respect of the particular circumstances giving rise to this application that the employee in question, having established an entitlement to annual leave, should have been paid an additional amount of $257.40 in accordance with the second part of subclause (f) when he proceeded on annual leave of one day on 26 April 1996. I can find support for no other conclusion.
F D Westwood Appearances: Date and place of hearing: |