T7697
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Nicola Jane Burt and Hatice Trish Papadelias trading as 'The Midway Salon'
Long service leave dispute - proportionate entitlement - other pressing necessity - arbitrated - order for payment made REASONS FOR DECISION This was a dispute referred to the Commission for hearing and determination under Section 13 of the Long Service Leave Act 1976 (the LSL Act). The dispute concerned a claim for a proportionate long service leave entitlement under Section 8(2)(b) and Section 8(3)(c) of the LSL Act by Miss Nicola Jane Burt of Montrose against her former employer Hatice Trish Papadelias trading as 'The Midway Salon', hairdressers of the Tasman Highway, Midway Point (the employer). The relevant parts of Section 8 of the LSL Act provide as follows: "8(2) ... the period of long service leave to which an employee is entitled under this Act is -
8(3) Subsection (2)(b) applies to -
At the first hearing, in Hobart, on Tuesday, 23 June 1998 Mr M Crisp, a solicitor, sought and was granted leave to appear on behalf of Miss Burt. The employer did not appear and was unrepresented: the hearing proceeded ex parte. Miss Burt commenced employment with the employer as an apprentice hairdresser on 22 January 1990 and she resigned from that employment on 2 August 1997 after seven and a half years of employment. She was a qualified hairdresser having completed her apprenticeship in the early years of her employment. Miss Burt appeared as a witness and said that on at least three occasions, commencing on 8 July 1997, the employer had told her that, because of a downturn in custom, her hours of work were to be reduced from 40 hours per week to 32 hours per week. The circumstances were that on 8 July 1997 the employer told Miss Burt she was considering cutting wages because the business was not going well. The following week, on 14 July 1997, in the staff room the employer told Miss Burt she was going to cut wages by reducing the hours of work. On 19 July 1997, Miss Burt arranged for an interview for another job which had been advertised on that day. On 22 July 1997, the employer notified all her employees at a work meeting that because the business was not going well hours of work would be reduced starting from 24 July 1997. The reduction in hours was said to be for a period of approximately six weeks to allow the business to recover. There was also mention of extra work being available on Saturdays over and above the ordinary reduced hours. On 23 July 1997, Miss Burt attended the pre-arranged interview and accepted the other job on that day. On 28 July 1997, Miss Burt gave notice of her resignation to the employer and ceased work on 2 August 1997. Miss Burt said she could not afford to keep up her personal financial commitments on the reduced hours of work. It was agreed between the parties that Miss Burt's ordinary weekly rate of pay was $418.10 According to the report of the Workplace Standards Authority inspector the employer claimed that Miss Burt left her employment because she "might have bitten off more that she could chew" in relation to her personal financial commitments. Mr Crisp submitted that on the evidence Miss Burt had been unable to cope financially with the reduction in her hours of work and was therefore entitled to a long service leave payment under the provisions of Section 8(3)(c) of the LSL Act. Mr Crisp submitted that in any case the reduction in hours imposed unilaterally by the employer, was in fact a termination of her employment contract which circumstances, under Section 8(3)(d) of the Act, also provided a long service leave entitlement to Miss Burt. The hearing was reconvened on Wednesday, 2 September 1998, after it was purportedly completed because the Commission decided in the meantime to give the employer a second opportunity to appear and make submissions. This change in course was taken by the Commission to ensure that "not only must justice be done, but, it must be seen to be done". At the second hearing, Mr P Sandman, appearing on the employer's behalf, apologised for the employer's failure to appear at the first hearing citing shorthandedness in a small business as the reason. Mr Sandman said the changes made by the employer had been brought about because she had a child in March 1997 which meant she had been absent from the salon and unable to keep the business in full operation. The employer had since resumed work and full working hours had been resumed. The employer did not agree that Miss Burt had left her employment due to any pressing necessity, but, rather to seek to improve her career prospects as outlined in her letter of resignation. The employer said Miss Burt had actually initiated the conversation at which the proposal to reduce hours work was first mentioned; Miss Burt had asked for a wage rise at the time and this elicited the employer's reduction in hours response. The employer claimed that the formal advice to employees of the reduction in hours had been made on 22 July 1997, but, Miss Burt had already applied for her new job on 19 July 1997 and that new job was on the same basis as the job she would have held with the employer at 32 hours of work per week. The employer said that Miss Burt was intending to leave her employment prior to any notification about the reduction in hours of work. The employer also said that the reduced hours of work proposal included the possibility of increased work requiring extra hours plus Saturday work. The employer agreed that the hours of work had been changed unilaterally. DECISION I am satisfied on the evidence before me that the employer signified her intention to reduce Miss Burt's hours of work before Miss Burt applied for the other position: whether the advice was given formally or not is immaterial. I accept that the decision of the employer to reduce Miss Burt's full-time hours of work and consequently her wages did bring about a "other pressing necessity" in that Miss Burt was unable to meet her existing financial obligations as a result. It seems to me the proposed period of six weeks reduction in hours was not definite and was subject to the amount of business in the intervening period. I also consider that the Saturday work possibility was subject to demand and not to be taken as reliable or regular. It is not to the point to compare the conditions of Miss Burt's new employment; the point is that the employer initiated the change in employment which caused Miss Burt to resign. I am also satisfied that the employer's unilateral decision to reduce Miss Burt's hours of work effectively terminated the contract of employment in this case and in such circumstances Miss Burt's application would also succeed under Section 8(2)(b) and Section 8(3)(d) of the LSL Act. Section 8(2) has been recited previously in this decision, Section 8(3)(d) provides as follows:
For all these reasons I am satisfied that Miss Burt is entitled to a proportionate long service leave payment from the employer pursuant to the relevant provisions of Section 8 of the LSL Act. The calculations are as follows:
ORDER In accordance with the power vested in me under Section 13 of the Long Service Leave Act 1976, in determining this dispute, I hereby order that, within fourteen days from the date of this decision, Hatice Trish Papadelias trading as 'The Midway Salon' of 13 Tasman Highway, Midway Point 7171, pay to Nicola Jane Burt of 30 Riverway Road, Montrose 7010, the sum of two thousand, seven hundred and eighteen dollars ($2718.00) being payment due under the provisions of the Long Service Leave Act 1976.
P A Imlach Appearances: Mr R Millhouse, with Mr G Williams (23.06.98), for the Chief Executive of the Workplace Standards Authority Date and place of hearing: |