Department of Justice

Tasmanian Industrial Commission

www.tas.gov.au
Contact  |  Accessibility  |  Disclaimer

T993

 

IN THE TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984

 

T.993 of 1987 IN THE MATTER OF AN APPLICATION BY THE TASMANIAN CONFEDERATION OF INDUSTRIES FOR INTERPRETATION OF THE CARRIERS AWARD

RE: PAYMENT OF WAGES

 

PRESIDENT 21 DECEMBER 1987

INTERPRETATION

APPEARANCES:
For the Tasmanian Confederation
of Industries
Mr W J Fitzgerald
For the Transport Workers' Union
of Australia
Mr J T Lynch
with
Mr B Hansch
DATE AND PLACE OF HEARING:
19.11.87                       Hobart

 

This application for interpretation was lodged with the Commission by the Tasmanian Confederation of Industries. It seeks confirmation or otherwise of the applicant's view that if substantial, but not all, wages are paid on pay day, no extra penalty is attracted pursuant to sub-clause (c) or (d) of Clause 30 of the Carriers Award1.

Specifically there is an issue between the applicant and the Transport Workers Union regarding an employer's obligation to make a compensatory payment of $6.55 per day for each day that overtime worked remains unpaid on or after the pay day for the period during which the overtime was worked.

On the one hand the union relies upon the following provision of Clause 30 (Payment of Wages) to support its contention that any shortfall in the requirements and procedure set out (or prescribed) in sub-paragraphs (a) and (b) prima facie attract payment under sub-paragraph (c) of this clause.

The relevant sub placita are:

    "30. PAYMENT OF WAGES

    (a) All wages and overtime shall be paid in the employer's time on a day to be determined by the employer but not later than Thursday of each week. The day on being fixed shall not be altered more than once in 3 months. All wages shall be paid enclosed in an envelope. On or prior to pay day, the employer shall give to each employee, in writing, details of the amount of ordinary pay, overtime, penalty rates and allowances to which the employee is entitled, the amount and nature of deductions made therefrom and the net amount being paid to the employee.

    (b) All earnings, including overtime, shall be paid within 2 days of the expiration of the week in which they accrue.

    (c) If an employer fails to make payment to any employee as prescribed on pay day he shall pay to each such employee $6.55 for each and every day thereof during which such default continues, unless he satisfactorily shows that such failure is due to some act on the part of the employee or to circumstances not under his control and which he could not reasonably have foreseen and which he took reasonable steps to avoid or overcome."

The instant parties cannot agree on the meaning of these provisions when applied to the following circumstances.

A is an employer of truck driver B. B claims that he has been underpaid for overtime. A agrees that B has worked overtime and is prepared to make the necessary pay adjustment. However, employee B, through his union, claims payment of $6.55 per day in addition. This claim is made because the employer has allegedly defaulted in not paying overtime when it was earned. Furthermore, the employer has not pleaded any unforeseen circumstances in mitigation of the non-payment.

On the other hand, employer A, through his agent, admits there is an entitlement to overtime as yet unpaid, but repudiates any entitlement to waiting time as provided for in sub-clause (d) which states:

    "(d) An employee kept waiting for his wages on pay day for more than a quarter-hour after the usual time for ceasing work shall be paid at ordinary rates for a minimum of half an hour provided that this subclause shall not apply when the delay is occasioned through no fault of the employer."

Employee B, through his union, denies that he is claiming waiting time. He claims instead he is seeking compensation for default as set out in sub-clause (c).

The Commission is therefore required to interpret sub-clauses (a), b), (c) and (d). However, as I believe sub-clause (e) may be of some assistance in interpreting both (c) and (d), I propose considering that provision also. It reads:

    "(e) Notwithstanding anything contained herein, any employer shall pay to an employee who leaves or is dismissed all moneys due to him forthwith, failing which he shall pay to the employee the sum of $8.70 for each and every day or part thereof during which such default continues.

This subclause shall not apply to any employee dismissed after normal time of cessation of work, provided that a cheque for all moneys due is posted to him on the morning of the next working day."

When considered as a whole I am of the opinion that sub-clauses (a) and (b) set out (or prescribe) the method by which award wages shall be paid. In this regard it is clear that:

1. All wages and overtime shall be paid in the employer's time.

2. Pay day shall be not later than Thursday of each week.

3. Payment will be weekly.

4. Pay day may be altered but only after three months' notice has been given.

5. Payment shall be enveloped and written details of the pay abstract (i.e. overtime, allowances, deductions etc.) shall either be enclosed in the pay envelope or given to each employee before pay day.

6. All earnings, including overtime, shall be paid within two days of the close of pay of the pay period (i.e. an employer shall not keep more than two days' pay in hand).

Sub-clause (c) needs to be read in conjunction with (d) as it applies only in circumstances when (d) does not. In short, if an employer defaults in making any payment on pay day, compensation of $6.55 is payable to each employee for each day he is not paid. Sub-clause (d) applies when payment is made on pay day, but in circumstances where the employee is kept waiting for more than 15 minutes after the normal ceasing time. Thus is payment was made one hour after ceasing time, each employee would attract one hour's pay at ordinary time for being paid in his own time and for waiting for payment.

Sub-clause (e) deals with the position of an employee who terminates his employment or whose employment is terminated. In either circumstance he is entitled to be paid on termination all moneys due to him. If not, he must be paid $8.70 extra for each day or part of a day he is kept waiting for his final pay. The only exception is when dismissal occurs after normal ceasing time (e.g. while working overtime). In such cases the sub-clause is satisfied if a cheque covering moneys due is posted on the morning of the next day.

It follows from the foregoing that I do not read sub-clauses (a) and (b) down to mean that default (if that be the correct terminology) in observance of any single aspect of the requirements of sub-clause (a) or (b) ipso facto will attract payment pursuant to sub-clause (c).

Bearing in mind that the entire clause is but a mirror of the Federal Transport Workers Award, Clause 142 (except for money amounts), to which there are at least 1800 named respondents - to say nothing of the number of persons bound by the Carriers Award in Tasmania - it seems clear that to do other than apply a common-sense interpretation to the whole clause could have the potential to create problems where few now appear to exist.

Common sense therefore suggests that prima facie default in observance of any of the pay day requirements set out in sub-clauses (a) and (b) may not necessarily mean automatic application of sub-clause (c). That is, prima facie default by not providing all relevant pay details in writing may not automatically result in payment of $6.55 per person in compensation. Such a provision, using that extreme case as an example, if intended to operate in that way, would be, I think, mischievous and conducive of much disputation. Clearly that is not the way the provision is to be generally observed. Nevertheless it is true that such a construction is possible. But it must be remembered that awards are drawn by lay persons. The language used to frame awards is that generally understood by lay practitioners and those who derive benefit from the award itself. It is only when the principles relating to interpretation of statutes are applied to interpretations of awards that ambiguities more often than not appear to arise.

This is just one more example of the need for careful consideration to be given by award-makers in framing a provision of this kind. No doubt the immediate parties to the original variation or inclusion were fully cognisant of the intention of this particular provision. But with the passage of time and the understandable change in representation the earlier-understood purpose of a particular provision tends to become lost in obscurity. Other interpretations lead inevitably to disagreement and sometimes disputation.

On almost every occasion that the Commission is invited to interpret an award, an observation or recommendation has been made to the parties that they attempt to remedy any perceived ambiguity by way of variation to the award itself. This process services the dual purpose of allowing merit argument and of course with that, clarification of the particular provision in question.

In the immediate case the Commission can only interpret the award in a way permitted by the language used and consistent with a common-sense layman approach. Nevertheless in doing so it is not permissible to read into a provision an intention clearly not apparent from the verbiage used in framing the provision itself.

It is also noted that a number of references were made to an earlier interpretation of the Hospitals Award3. That award did not contain a provision similar to sub-clause (c) of Clause 30 of this award. Accordingly, the Hospitals Award was interpreted according to its terms - not merit. In that case it was held that "waiting time" (which was cast in terms similar to sub-clause (d) of this award) would continue to be attracted when substantial payment was not made on pay day and thereafter until payment was made. To that extent the two matters are different.

In this award both situations are covered: delayed payment of wages (or substantial wages to borrow the Hospitals' case terminology) attracts "waiting time" on pay day only provided wages are paid on that day. If no payment at all is made, "compensation" in the form of a flat daily payment of $6.55 per day is attracted until payment is made.

A similar (albeit greater by approximately 30 percent) compensatory payment is, generally speaking, attracted when default occurs in paying off an employee who resigns or has his service terminated.

Of course the question of penalty for award breach is neither a matter for this Commission nor is it a matter for inclusion as an award provision. Section 48 of the Act deals with matters of this kind. The question of penalties as such for award breach should not be considered in Section 43 proceedings. In short, having now interpreted the award, discovery of any wilful breach of any provision if not put right may at any time become the subject of proceedings in another place. But no right to compensation arises merely because overtime due and payable was not, for one reason or another, paid during the pay period in which it was earned. As discussed earlier, wilful withholding of moneys due may give rise to proceedings in another place. This decision does not purport to address that question.

No declaration will be issued unless an organisation with members subject to the Carriers Award so requests. However I indicate now that should it become necessary to issue a declaration it will operate prospectively.

 

L A Koerbin
PRESIDENT

1 P014
2 Print P2076
3 T.752, T.796 and T.802 of 1987