Divekar v Mornington Shire Council [2025] QIRC 98

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION CITATION: Divekar v Mornington Shire Council [2025] QIRC 098 PARTIES: Divekar, Saati (Applicant) v Mornington Shire Council (Respondent) CASE NO.: B/2024/54 PROCEEDING: Application to recover unpaid wages DELIVERED ON: 7 April 2025 HEARING DATES: The application was heard on the papers MEMBER: Merrell DP ORDERS: The order contained in paragraph [53] of these reasons for decision CATCHWORDS: INDUSTRIAL LAW – QUEENSLAND – RECORDS AND WAGES – PROTECTION AND RECOVERY OF WAGES – by contract of employment entered into between the Applicant and the Respondent, the Applicant was employed by the Respondent in the position of Manager Infrastructure Services commencing on 28 February 2024 – the Applicant was employed for a fixed term of six months which could be extended by agreement for a period of three years – the Applicant was also initially employed on probation for that six month period – cl 16 of the contract of employment provided for the payment by the Respondent to the Applicant of relocation costs and that if the Applicant ceased his employment before 12 months’ service was completed, the Applicant was required to pay back to the Respondent a percentage of the relocation costs paid – cl 19 of the contract of employment provided that on termination, the Applicant authorised the Respondent to -- 1 of 12 -- 2 deduct from his remuneration and accrued entitlements the value of any debts he had incurred to the Respondent – the Respondent paid the sum of $881.90 for the Applicant's travel costs to relocate to Mornington Island to commence employment with the Respondent – on 4 April 2024 the Applicant resigned from his employment with the Respondent without giving any notice – the final payment made to the Applicant was for his untaken entitlement to annual leave and the Respondent withheld the amount of $881.90 from the payment of that entitlement to the Applicant – the Applicant contends that the Respondent had no authority to withhold the amount of $881.90 and made an application to recover unpaid wages in that amount – consideration of whether the Respondent could lawfully withhold payment to the Applicant of the amount of $881.90 from his untaken entitlement to annual leave – held that deduction was unlawfully made – the amount of $881.90 was payable and unpaid to the Applicant by the Respondent – order that the Respondent pay the Applicant the amount of $881.90 LEGISLATION Industrial Relations Act 2016, s 7, s 8, s 21, s 30, s 31, s 35, s 38, s 371, s 475, s 476, s 477, s 531 and sch 5 Queensland Local Government Industry (Stream A) Award – State 2017, div 2, s 1, sub-cl 4.2 CASES: Bateup v Mornington Shire Council [2025] QIRC 061 Reasons for Decision [1] The Mornington Shire Council ('the Council') is situated in the Gulf of Carpentaria in North West Queensland and, as stated on the Council's website, '… comprises of the twenty-two islands that make up the Wellesley Islands, with Mornington Island, Bentinck Island, and Sweers Island the largest.' The Council's website also states that the Shire covers a landmass of approximately 1274km2 and that it is '…arguably one of the most remote and isolated Local Governments in Northern Australia.' [2] On 23 February 2024, Mr Saati Divekar and the Council entered into a written contract of employment for Mr Divekar to work for the Council in the position of Manager -- 2 of 12 -- 3 Infrastructure Services ('the contract'). Mr Divekar commenced employment with the Council in that position on 28 February 2024. The location of his employment was the Mornington Shire Council Office in Gununa on Mornington Island. [3] On 4 April 2024, Mr Divekar resigned from employment with the Council without giving any notice. Mr Divekar left Mornington Island on the same day. Pursuant to sub-cl 15.1.2 of the contract, Mr Divekar was required to give the Council one months’ notice, in writing, that he was terminating the contract. [4] This matter concerns an application made by Mr Divekar on 14 June 2024, pursuant to s 475 of the Industrial Relations Act 2016 ('the IR Act'), to recover from the Council alleged unpaid wages in the amount of $881.90 ('the application'). [5] The controversy arises from the facts that: • the Council paid Mr Divekar's airfare to travel from Townsville to Mornington Island, in the amount of $881.90, to take up employment with the Council; and • upon his resignation, pursuant to a term of the contract, the Council withheld the amount of $881.90 from the payment to Mr Divekar of the amount that represented his untaken entitlement to annual leave. [6] This is not the first time such a controversy has been litigated before this Commission involving the Council and an employee where the employee's relocation costs were met by the Council and where the employment ended after a short period of time. Industrial Commissioner Power recently dealt with a similar issue in Bateup v Mornington Shire Council ('Bateup').1 [7] By the application, Mr Divekar contends that the Council had no lawful authority to withhold the amount of $881.90 from the payment to him of his untaken entitlement to annual leave and that he should recover those unpaid wages. Mr Divekar made his own written submissions to the Commission. [8] The Council contends that because Mr Divekar ceased his employment before 12 months’ service was completed, by the combined effect of cls 16 and 19 of the contract, the amount of $881.90 paid by the Council as relocation costs for Mr Divekar was a debt he incurred to the Council, the amount of which could lawfully be withheld from the payment to him of his untaken entitlement to annual leave on the termination of his employment. Mr Kenneth Tapfield, Human Resources Manager, made written submissions to the Commission on behalf of the Council. [9] The ultimate question for my determination is whether the amount of $881.90 are wages that are payable and unpaid by the Council to Mr Divekar such that I should make an order that the Council pay Mr Divekar that amount. Having regard to the relevant provisions of the IR Act and to the parties' submissions, the question is answered by determining whether the contract lawfully permitted the Council to withhold the amount of $881.90 from the payment to Mr Divekar of his untaken entitlement to annual leave on the termination of his employment. 1 [2025] QIRC 061 ('Bateup'). -- 3 of 12 -- 4 [10] For the reasons that follow, I find that the amount of $881.90 is payable and unpaid by the Council to Mr Divekar. [11] The consequence is that I will make an order that the Council pay Mr Divekar the amount of $881.90. The relevant provisions of the Industrial Relations Act 2016 that confer power on the Commission to make the order sought [12] Section 475 of the Act deals with the Commission's power to make an order for the payment of unpaid wages. That section relevantly provides: 475 Power to recover unpaid wages and superannuation contribution etc. (1) On application by a person under section 476, the commission may order payment of the following for the period of 6 years before the date of the application— (a) an employee’s unpaid wages; (b) an apprentice’s unpaid tool allowance under section 137; (c) remuneration lost by an apprentice or trainee because the employer has contravened section 371(2); (d) contributions to the approved superannuation fund payable for an eligible employee that are unpaid. [13] By s 476(1) of the IR Act, an application for an order mentioned in s 475 of the IR Act may only be made if the total amount claimed is $100,000 or less. [14] Section 477(1)(a)(i) of the IR Act provides that on hearing the application, the Commission must order the employer to pay the employee the amount the Commission finds to be payable and unpaid to the employee for the six years before the date of the application. [15] The noun 'wages' is exhaustively defined in sch 5 to the IR Act: wages means– (a) an amount payable to an employee for– (i) work performed, or to be performed, by the employee; or (ii) a public holiday; or (iii) leave the employee is entitled to; or (iv) termination of employment; or (b) a salary; or (c) an amount payable from wages for the employee, with the employee’s written consent. -- 4 of 12 -- 5 The approach taken in determining the application [16] By Directions Order dated 13 August 2024, I ordered the parties to file and serve written submissions and affidavit material in respect of the application. In response, Mr Divekar emailed to the Industrial Registry a copy of his final payslip for the pay period 22 April 2024 to 28 April 2024 and a copy of the contract. The Council did not file any material. [17] Following a mention on 1 November 2024, I issued a further Directions Order requiring: • Mr Divekar to file and serve written submissions and his witness statement; • the Council to file and serve written submissions and witness statements; • Mr Divekar to file and serve a witness statement in reply; and • the matter to then be mentioned by telephone. [18] Subsequently, Mr Divekar filed a brief witness statement and a brief submission. The Council filed written submissions with various annexures including a witness statement of its Senior Human Resources Advisor. [19] Section 531(2) of the IR Act relevantly provides that, in proceedings, the Commission is not bound by the rules of evidence and may inform itself in the way it considers appropriate in the exercise of its jurisdiction. By virtue of s 531(1)(a) of the IR Act, s 531(2) applies to proceedings for the recovery of '…a relevant amount' which is defined by s 531(6)(b) of the IR Act to be '…an amount ordered under … s 475.' [20] Accordingly, pursuant to s 531(2)(b) of the IR Act, I will determine the application on the basis of the written submissions and witness statements filed by the parties. At a further mention on 30 January 2025, the parties confirmed they were content for me to decide the matter on this basis. The undisputed facts The payment by the Council for Mr Divekar's airfare from Townsville to Mornington Island, Mr Divekar's service, his resignation and final payment [21] Mr Divekar: • on 23 February 2024, executed the contract with the Council; • on 28 February 2024, flew from Townsville to Mornington Island to take up his employment with the Council and, at his request, the cost of the flight of $881.90 was borne by the Council; • on 28 February 2024, commenced employment with the Council in the position of Manager Infrastructure Services; and -- 5 of 12 -- 6 • on 4 April 2024, resigned from his employment with the Council, without giving any notice, and left Mornington Island that same day. [22] The final payment made by the Council to Mr Divekar was on 8 May 2024. The payslip stated that the payment made was for 'Annual Leave – A1 (Remaining balance) (incl. leave loading)' for 18.4039 hours in the amount of $1698.42. The amount of $881.90 was deducted and was referenced as 'Private Works'. After tax of $624.00, the net amount paid was $192.52. There is no dispute that the reference to 'Private Works' was in respect of the airfare paid by the Council for Mr Divekar's flight from Townsville to Mornington Island on 28 February 2024. [23] On 8 May 2024, the Council drew a tax invoice for the payment by Mr Divekar to it of the amount of $881.90 described as 'Travel Reimbursement – Relocation/Repatriation.' The contract [24] The contract provided that: • by cl 1, sub-cl 1.1, Mr Divekar was appointed '… fixed term (6 months) as Manager Infrastructure Services by the Council in accordance with the terms and conditions of this Contract.'; • by cl 2, sub-cl 1.1, in accordance with div 2, s 1, sub-cl 4.2 of the Queensland Local Government Industry (Stream A) Award – State 2017 ('the Award'), the Award did not apply to the employment terms and conditions of Mr Divekar unless otherwise stated in the contract; and • by cl 4, the contract operated for a period of six months commencing on 28 February 2024 and terminating on 27 August 2024, but that the contract could be extended for a period of three years subject to the agreement of both the Council and Mr Divekar. [25] Clause 3 ('PROBATIONARY PERIOD') relevantly provided: 3.1. The Officer will initially be employed for a period of six months and will be on a probation during this time. The Officer agrees that the period of probation is reasonable having regard to the nature and responsibility of the position. [26] The issue of leave entitlements was dealt with in cl 12 of the contract and relevantly provided: 12. LEAVE ENTITLEMENTS 12.1. General 12.1.1. Council will pay remuneration calculated by reference to the base salary listed in Schedule B to the Officer immediately prior to the Officer commencing on paid leave under this Clause, unless otherwise stated. 12.1.2. On the termination of this Contract, and if the Officer is not offered a new contract of employment, the Council will pay: -- 6 of 12 -- 7 12.1.2.1. to the Officer in the case of annual leave; and 12.1.2.2. to the Officer or new employer Council in the case of long service leave, any untaken accrued leave entitlements. 12.1.3. While absent on paid leave, the Officer may access paid, personal sick/carer's leave in lieu upon production of a medical certificate or other evidence satisfactory to the Council. For the purposes of this clause, a statutory declaration will be satisfactory evidence. 12.2. Annual Leave 12.2.1. The Officer shall be entitled to be paid annual leave at the rate of six (6) weeks per year on a pro rata basis. 12.2.2. Annual leave shall be taken at a time to be mutually agreed between Council and the Officer, and during a period that will not affect the operational requirements of Council. 12.2.3. The Council may direct the Officer to take annual leave by giving at least four (4) weeks prior written notice. 12.2.4. Payment for annual leave taken shall be calculated by reference to the base salary rate listed in Schedule B plus 17.5% annual leave loading. [27] Clause 16 dealt with relocation costs and provided: 16. RELOCATION AND REPATRIATION COSTS The Officer shall be entitled to Relocation Costs of up to $5,000.00 exclusive of GST and Repatriation Costs of up to $5,000.00 exclusive of GST. Where the officer ceases their employment before 12 months service is completed, the officer will be required to pay back to MSC, a percentage of the relocation expenses paid by Council in accordance with Council's Relocation and Repatriation Policy. [28] The Mornington Shire Council Relocation and Repatriation Policy ('the Policy') relevantly provided: Agreement (a) Relocation Where an employee ceases their employment voluntarily before 12 months service is completed, they will be required to pay back to MSC a percentage of the relocation expenses paid by Council based on the following scale: Length of Service Percentage Within the probationary period 100% 3 to 6 months * Note this will apply if an employee has completed their probationary period (i.e. probationary period of 3 months). If an employee is within their probationary period (i.e. 6 months) they will be required to repay 100% as outlined in the column above. 50% -- 7 of 12 -- 8 6 to 12 months 25% [29] Clause 19 dealt with deductions and provided: 19. DEDUCTIONS During the course of your employment and on termination, you authorise and permit council to deduct from your remuneration or accrued entitlements, the value of any debts (including but not limited to leave taken in advance and unreturned goods) you have incurred to the council. The parties' submissions [30] Mr Divekar relevantly submitted that: • cl 16 of the contract cannot be applied because '…no relocation/repatriation amount was ever claimed'; • because his contract was only for a period of six months, the 12-month period referred to in cl 16 of the contract has no application; • cl 19 of the contract has no application to airfares paid by the Council; and • the Council has not produced an authority, signed by him, to deduct an amount relating to airfares from his payments. [31] The Council submitted: • by virtue of the combined effect of cl 16 of the contract and the Policy, Mr Divekar incurred a debt to the Council when he resigned within the 6 month probationary period; • the debt was 100% of the relocation costs paid for him of $881.90 for the flight from Townsville to Mornington Island; • by cl 19 of the contract, Mr Divekar expressly consented to and authorised the Council to deduct from his remuneration or accrued entitlements any debt incurred by him to the Council; and • due to the operation of cls 16 and 19 of the contract, Mr Divekar, in writing, genuinely consented to and authorised the deduction in accordance with s 371(1)(c) of the IR Act. Did the contract lawfully permit the Council to withhold the amount of $881.90 from the payment to Mr Divekar of his untaken entitlement to annual leave on the termination of his employment? [32] In deciding this issue, it is unnecessary for me to construe cls 16 and 19 of the contract with a view to determining if the airfare paid by the Council, pursuant to cl 16 of the -- 8 of 12 -- 9 contract, was a debt within the meaning of cl 19 of the contract, such that the Council was authorised and permitted to deduct that amount from Mr Divekar's '…accrued entitlements'. This is because of the applicable provisions of the IR Act.2 [33] There is no dispute that the Council was (and is) an employer within the meaning of s 7(1) of the IR Act and that Mr Divekar was an employee within the meaning of s 8(1) of the IR Act. [34] As such, ch 2 ('Modern employment conditions') of the IR Act applied to the employment of Mr Divekar by the Council. Chapter 2, pt 3 of the IR Act sets out what are known as the Queensland Employment Standards ('QES'). [35] Chapter 2, pt 3, div 1 of the IR Act relevantly provides: Division 1 Preliminary 21 Meaning of Queensland Employment Standards (1) This part provides for minimum standards of employment of employees that apply to employees and which can not be displaced except under this chapter. (2) The minimum standards relate to the following matters– (a) minimum wage–division 2; (b) maximum weekly hours–division 3; (c) a right to request flexible working arrangements–division 4; (d) annual leave–division 5; (e) personal leave, including sick leave, carer’s leave, bereavement leave, compassionate leave and cultural leave–division 6; (f) domestic and family violence leave–division 7; (g) parental leave–division 8; (h) long service leave–division 9; (i) public holidays–division 10; (j) emergency service leave–division 11; (k) jury service leave–division 12; (l) notice of termination and redundancy pay–division 13; (m) superannuation contributions–division 13A; (n) information statements–division 14. (3) Divisions 2 to 14 are the Queensland Employment Standards. [36] Chapter 2, pt 3, div 5 of the IR Act deals with annual leave and sub-div 1 relevantly provides: Subdivision 1 Entitlement to annual leave 30 Application of subdivision This subdivision does not apply to– (a) casual employees; or (b) pieceworkers; or (c) school-based apprentices or trainees. 2 Similarly, it is unnecessary for me to consider whether the Policy, as referred to in cl 16 of the contract, was incorporated into the contract. -- 9 of 12 -- 10 31 Entitlement (1) For each completed year of employment with an employer, an employee is entitled to– (a) if the employee is not a shift worker–at least 4 weeks annual leave; or (b) if the employee is a shift worker–at least 5 weeks annual leave. [37] In the present case, pursuant to sub-cl 12.2.1 of the contract, Mr Divekar was entitled to six weeks of annual leave. [38] Chapter 2, pt 3, div 5, sub-div 3 of the IR Act relevantly provides: Subdivision 3 Payment for annual leave 35 Payment for annual leave (1) Unless an employee and employer otherwise agree, the employer must pay the employee for annual leave in advance. (2) The employer must pay for the leave– (a) at the ordinary rate being paid to the employee immediately before the leave is taken; or (b) if, immediately before taking the leave, the employee is being paid at a higher rate than the ordinary rate–at the higher rate. [39] Chapter 2, pt 3, div 5, sub-div 5 of the IR Act provides: Subdivision 5 Payment on termination of employment 38 Payment for annual leave on termination of employment (1) This section applies if an employee’s employment is terminated by the employee or employer. (2) If the employee has not taken all the annual leave the employee is entitled to, the employee is presumed to have taken the leave from the day the termination takes effect (the termination day). (3) The employer must pay the employee for the annual leave not taken, including– (a) any public holiday during the period the employee is presumed to have taken the leave; and (b) any annual leave loading the employee is entitled to under section 36. (4) If the employee has worked part of a year, the employer must pay the employee the proportionate annual leave for the part of the year the employee worked, including any annual leave loading the employee is entitled to under section 36. (5) The employer must pay the employee at least the ordinary rate being paid to the employee immediately before the termination day, unless an applicable industrial instrument states otherwise. [40] Having regard to s 21(1) of the IR Act, there is no provision in ch 2 of the IR Act, that I have been able to find, that allows for the minimum standard provided by s 38 of the IR Act to be displaced. [41] In the present case, the evidence is that upon the termination of Mr Divekar's employment with the Council arising out of his resignation effective 4 April 2024, the Council did not comply with the QES in that, contrary to s 38 of the IR Act, Mr Divekar was not paid his -- 10 of 12 -- 11 entitlement to his untaken annual leave as if he took that annual leave effective 4 April 2024. The amount of $881.90 was deducted by the Council from the amount paid to Mr Divekar on 8 May 2024. That amount paid to Mr Divekar was in respect of his untaken entitlement to annual leave as at the date of his resignation being 4 April 2024. [42] As a consequence, cl 19 of the contract, as construed and applied by the Council, could not displace the QES to the extent that s 38 of the IR Act provides for the payment by an employer to an employee of the employee’s untaken entitlement to annual leave on termination of the employee's employment. [43] The application by the Council of cl 19 of the contract, as it construed that clause, had the effect of displacing s 38 of the IR Act. Such a displacement is not permitted under the QES. [44] Accordingly, the amount of $881.90 is payable and unpaid to Mr Divekar. [45] Industrial Commissioner Power came to the same conclusion in Bateup,3 although the facts in that case were slightly different in that the employee was covered by the Award4 and the deduction made by the Council, on the resignation of that employee, was made from the employee's wages for work performed in addition to entitlements paid on termination of employment.5 [46] Given my conclusion above, and having regard to the precise facts of this case, it is unnecessary for me to consider the other issue raised by the Council, namely, that the deduction it made from the payment to Mr Divekar was authorised by cl 19 of the contract, in a manner consistent with ss 371(3) and (4) of the IR Act. The effect of those provisions is that if an employer employs an employee to perform work for a rate agreed between them and the rate is not fixed by an industrial instrument or permit, then the employer must pay the employee the agreed rate without deduction, other than a deduction authorised by, relevantly, the employee's consent. On the facts of the present case, because the payment made to Mr Divekar was in respect of his entitlement to untaken annual leave on the termination of his employment, no deduction could be made from that payment under any circumstance. [47] In any event, there remains a question about whether the payments made by the employer to an employee contemplated in those provisions, as well as s 371(5) of the IR Act, determined by reference to 'agreed rate' and 'wages', extend to payments made on termination of employment in respect of an untaken annual leave entitlement, as opposed to an agreed rate or wages paid for the performance of work. Conclusion [48] I appreciate that the Council is a remote and isolated local government and, for that reason, it may agree in the contracts it makes with its employees for the entitlement of relocation costs of the kind provided for in cl 16 of the contract. 3 Bateup (n1) [27] and [49]. 4 Ibid [21]. 5 Ibid [10]. -- 11 of 12 -- 12 [49] I also understand why the Council and its employees may agree on terms such as cl 19 of the contract that provides for the deduction of debts, incurred by the employee to the Council, from remuneration and entitlements. However, regard must be had to the effect of the IR Act on the operation of terms such as cl 19 of the contract. [50] The Council was required, as a minimum standard, to pay to Mr Divekar on the termination of his employment his entitlement to untaken annual leave as if he took the entitlement to that leave on the day the termination took effect. That minimum entitlement could not be displaced by cl 19 of the contract as construed and applied by the Council. [51] I find that the amount of $881.90 is payable by the Council to Mr Divekar and is unpaid. I will make an order that the Council pays Mr Divekar that amount. [52] The Council may otherwise have a remedy to recover that amount from Mr Divekar. Order [53] I make the following order: 1. Pursuant to s 477(1)(a)(i) of the Industrial Relations Act 2016, the Respondent is to pay the Applicant the amount of $881.90, to be taxed according to law. -- 12 of 12 --