Ervin v Smipat Pty Ltd t/as LJ Hooker Burleigh Heads [2013] QCATA 153

CITATION: Ervin v Smipat Pty Ltd t/as LJ Hooker Burleigh Heads [2013] QCATA 153 PARTIES: Shane Ervin (Applicant) v Smipat Pty Ltd t/as LJ Hooker Burleigh Heads (Respondent) APPLICATION NUMBER: MCD555-12 MATTER TYPE: Referral of question of law under s 117, Queensland Civil and Administrative Tribunal Act 2009 (Qld) HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Justice Alan Wilson, President DELIVERED ON: 9 July 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. Answer the question referred under s 117(1) of the Queensland Civil and Administrative Tribunal Act 2009 – namely, whether the Tribunal is an ‘eligible State or Territory court’ within the meaning of s 12 of the Fair Work Act 2009 – in the negative. 2. Answer the question referred under s 117(1) of the Queensland Civil and Administrative Tribunal Act 2009 – namely, whether the Queensland Civil and Administrative Tribunal Act 2009 is a law which deals with ‘claims for enforcement of contracts of employment’ within the meaning of s 27(2)(o) of the Fair Work Act 2009 – in the negative. CATCHWORDS: MINOR CIVIL DISPUTE – MINOR DEBT – QUESTION OF LAW – STATUTORY INTERPRETATION – JURISDICTION – where employees are generally entitled to four weeks paid annual leave – where if leave is not taken at the end of employment the employer must -- 1 of 7 -- 2 pay the employee the amount that would have been payable had the employee taken leave – where applicant commenced minor debt claim in the Tribunal seeking unpaid annual leave from respondent – whether Tribunal has jurisdiction to make orders in relation to unpaid annual leave arising under a contract of employment – where Fair Work Act 2009 provides that an „eligible State or Territory court‟ may make such an order – whether Tribunal is an „eligible State or Territory court‟ MINOR CIVIL DISPUTE – MINOR DEBT – QUESTION OF LAW – STATUTORY INTERPRETATION – JURISDICTION – where s 27 of the Fair Work Act 2009 provides that the Act does not apply to the exclusion of a State law so far as the law deals with „non-excluded matters‟ – where „non excluded matters‟ include claims for enforcement of contracts of employment – whether Queensland Civil and Administrative Tribunal Act 2009 deals with claims for enforcement of contracts of employment in minor civil dispute jurisdiction Fair Work Act 1994 (SA), s 14 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 11, s 117, s 164, Schedule 3 Constitution of the Commonwealth, s 109 Fair Work Act 2009 (Cth), s 12, s 26(1), s 27(1)(c), s 27(2)(o), s 44(1), s 45, s 87(1), s 90(2), s 539, s 545(3), s 681 Judicial Act 1903 (Cth), s 79 Property Sales Award Queensland – State 2005, cl 1.6.5 Real Estate Industry Award 2010, cl 25 HRX Holdings Pty Ltd v Pearson [2012] FCA 161, distinguished J F Hodge Pty Ltd v Brown [2013] QCATA 36, followed Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen (2012) 265 FLR 392, cited Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, applied Wiechers v Sodexo Remote Sites [2012] QCAT 16, cited -- 2 of 7 -- 3 APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION [1] QCAT has jurisdiction to hear and decide minor civil disputes.1 A minor civil dispute is defined in Schedule 3 of the QCAT Act to include, amongst other things, „a claim to recover a debt or liquidated demand of money, with or without interest, of up to the prescribed amount‟.2 [2] A question of law has arisen in the Minor Civil Disputes jurisdiction of QCAT. The question has been referred to the President of QCAT under s 117 of the QCAT Act by the presiding Member, a QCAT Adjudicator. [3] The learned Adjudicator was asked to hear and determine an application by Shane Ervin to recover unpaid annual leave (and annual leave loading) which he claimed were owed to him by his former employer, Smipat Pty Ltd (t/as LJ Hooker Burleigh Heads). [4] Mr Ervin commenced employment with LJ Hooker as a Real Estate Sales Consultant on 3 November 2005. The terms and conditions of his „Commission-Only‟ employment were covered by the Property Sales Award Queensland – State 2005 („the pre-modern award‟) until 1 January 2010, at which time, the Real Estate Industry Award 2010 („the modern award‟) applied. [5] In May 2011, he wrote to LJ Hooker giving four weeks notice of his intention to cease employment there. In that notice he also sought to finalise some other matters, including the cashing out of 13 weeks annual leave, which he alleged he had accrued. In response, the Principal at LJ Hooker told Mr Ervin that he was not entitled to annual leave, or annual leave loading. [6] In October 2011, the Fair Work Ombudsman („FWO‟) issued a „Determination of Contravention‟ letter to LJ Hooker in which it detailed its findings to a complaint lodged by Mr Ervin.3 Relevantly, it found that Mr Ervin had not been paid annual leave or annual leave loading which was payable under the modern award. (The pre-modern award provided that a „Commission-Only‟ employee was not entitled to be paid annual leave.4) [7] Mr Ervin filed an application in QCAT‟s Minor Civil Disputes jurisdiction when LJ Hooker did not „rectify the contravention‟ and pay him $6,392.59, 1 Queensland Civil and Administrative Tribunal Act 2009 s 11 („QCAT Act‟). 2 „Prescribed amount‟ is defined as $25,000.00 in Schedule 3 of the QCAT Act. 3 The FWO is a statutory office established under s 681 of the Fair Work Act 2009 („FWA‟). Its functions include: promoting the harmonious, productive and cooperative workplace relations; and ensuring compliance with the FWA and fair work instruments. In its capacity for the latter, the FWO may investigate any act that may be contrary to the FWA, a fair work instrument or a safety net contractual entitlement. 4 Pre-modern award cl 1.6.5. -- 3 of 7 -- 4 the total sum the FWO calculated was owed to him under the modern award. [8] Two questions of law have been posed by the learned QCAT Adjudicator around the central question whether the Tribunal (in its Minor Civil Disputes jurisdiction) can hear and decide claims arising under a contract of employment. The questions hinge around provisions of the Commonwealth legislation: 1. Is the Tribunal an „eligible State or Territory court‟ within the meaning of s 12 of the FWA? 2. Is the QCAT Act a law which deals with „claims for enforcement of contracts of employment’ within the meaning of s 27(2)(o) of the FWA? Eligible State or Territory court [9] Clause 25 of the modern award states that annual leave is provided for in the National Employment Standards („NES‟) which were introduced in 2010 to replace the Australian Fair Pay and Conditions Standard. The NES are set out in Part 2-2 of Chapter 2 of the FWA and comprise minimum standards that apply to the employment of national system employees.5 In particular, the NES underpin what can be included in modern awards and enterprise agreements. [10] For each year of service, an employee is generally entitled to 4 weeks of paid annual leave.6 If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.7 [11] Section 44(1) of the FWA provides that an employer must not contravene a provision of the NES.8 Where this has occurred, an employee may apply to the Federal Court, the Federal Magistrates Court, or an eligible State or Territory court for a civil remedy.9 [12] Relevantly, s 545(3) provides: An eligible State or Territory court may order an employer to pay an amount to, or on behalf of, an employee of the employer if the court is satisfied that: (a) the employer was required to pay the amount under the FWA or a fair work instrument; and 5 A „national system employee’ is an individual employed by a „national system employer’, a term itself defined to include employers whose business is a constitutional corporation. 6 FWA s 87(1). 7 Ibid s 90(2). 8 See also s 45 of the FWA which provides a person must not contravene a term of a modern award. 9 FWA s 539. -- 4 of 7 -- 5 (b) the employer has contravened a civil remedy provision by failing to pay the amount.10 [13] An „eligible State or Territory court‟ is defined in s 12 of the FWA to include: (a) a District, County or Local Court; (b) a magistrates court; (c) the Industrial Relations Court of South Australia; (ca) the Industrial Court of New South Wales; (d) any other State or Territory court that is prescribed by the regulations.11 [14] While the Tribunal is described in the QCAT Act as a „court of record‟, 12 and is recognised for certain purposes to be a „court of the State‟, 13 none of the FWA or FWR provisions extend to describe the Tribunal as an „eligible State or Territory court‟. [15] It follows that the Tribunal may not order an employer to pay unpaid annual leave owing to a former employee pursuant to s 545(3) of the FWA. Minor civil dispute [16] The FWA provides that it is intended to apply to the exclusion of all State and Territory industrial laws, so far as they would otherwise apply in relation to a national system employee or a national system employer.14 [17] That exclusion is limited, however, by s 27 which relevantly provides (by sub-s (1)(c)) that s 26 does not apply to a State or Territory law so far as the law deals with „non-excluded matters‟, which include (by sub-s (2)(o)) „claims for enforcement of contracts of employment‟ (subject to an exception not here relevant). [18] It would be unsurprising that a monetary claim for an entitlement under an employment contract might be, and has been,15 classified as a debt within the meaning of a minor civil dispute.16 As one of the Tribunal‟s learned Members said in J F Hodge Pty Ltd v Brown17: It is true that the FWA, in a list of State laws unaffected by it, refers to “claims for enforcement of employment contracts”, but in my respectful 10 The FWA notes that ss 44(1) and 45 of the FWA are civil remedy provisions. 11 The Fair Work Regulations 2009 („FWR‟) does not prescribe other courts or tribunals as being included in the meaning of an „eligible State or Territory court‟. 12 QCAT Act s 164. 13 Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen (2012) 265 FLR 392 at 396- 400 as per de Jersey CJ; 405-408 as per McMurdo P; 430-431 as per Muir JA. 14 FWA s 26(1). 15 Wiechers v Sodexo Remote Sites [2012] QCAT 16 at [3] per Kingham J. 16 See paragraph [1] – [8] of the reasons for decision, above. 17 [2013] QCATA 36. -- 5 of 7 -- 6 view that provision should be read strictly as a residuary clause preserving State jurisdiction over contracts of employment not governed by an FWA award. This is not an academic point; in practice, and despite the wide embrace of the FWA, such arrangements are not uncommon.18 [19] The learned Member gave the example of The Miscellaneous Award 2010 (as amended) which relevantly provides: The award does not cover those classes of employees who, because of the nature or seniority of their role, have not traditionally been covered by awards including managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists. [20] Given this interpretation, the learned Member held that s 27(2)(o) is still given „meaning and practical effect‟.19 [21] For the reasons that follow, I am also not persuaded the QCAT Act is a law which deals with claims for enforcement of contracts of employment within the meaning of the FWA (or the intention of the legislature). [22] In HRX Holdings Pty Ltd v Pearson20, an employer sought to enforce a provision in a former employee‟s service agreement restraining him from accepting employment with or engaging in a business similar to or competitive with the employer, for a period of two years from the time he ceased employment. [23] The former employee sought to avoid the prospect of the application of the Restraints of Trade Act 1976 (NSW) („Restraints Act‟) by arguing that it was inconsistent with an enactment of the Commonwealth, namely the FWA. If the Restraints Act was inconsistent with the FWA, the Restraints Act would have no relevant operations because of s 109 of the Constitution of the Commonwealth and s 79 of the Judicial Act 1903 (Cth). In the former employee‟s submissions it was suggested that the FWA „intruded, octopus-like in almost every corner of working relationships‟ to the exclusion of other Acts. [24] Buchanan J of the Federal Court held that there was no inconsistency between the Restraints Act and the FWA since the former could be properly described as a law that dealt with claims for the enforcement of contracts of employment and, following that interpretation, not a State or Territory law to which s 26 of the FWA applied. [25] The FWA is to be interpreted in a way which will best achieve its purposes.21 On its face, an application for a minor civil dispute in which the applicant is seeking to recover unpaid annual leave (and annual leave loading) would appear to be a claim to enforce a contract of employment. 18 Ibid [14]. 19 Ibid [13]. 20 [2012] FCA 161. 21 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381. -- 6 of 7 -- 7 [26] Applying the primary object of statutory construction,22 I am not persuaded that such a broad interpretation of s 27(2)(o) is consistent with the language and purpose of all the provisions of the FWA. [27] First, I believe the answer turns on the meaning of „deals‟. In this regard, the QCAT Act can be clearly distinguished from the Restraints Act: the latter can be clearly seen to only deal with issues which arise under a contract of employment (i.e. when to preserve the reasonable operation of a restraint of trade clause), while the former can not be described in such a way. [28] Secondly, the Explanatory Memorandum to the Fair Work Bill 2008 provides that s 14 of the Fair Work Act 1994 (SA) is an example of a State law which deals with claims for enforcement of contracts of employment. Section 14 of the Fair Work Act 1994 (SA) states: The [Industrial Relations] Court has jurisdiction to hear and determine monetary claims… for a sum due to an employee or former employee from an employer or former employer under… this Act, an award, enterprise agreement or contract for employment… [29] The Industrial Relations Court of South Australia is an „eligible State or Territory court’ within the meaning of s 12 of the FWA. In my opinion this example supports the proposition that the courts referred to in the FWA form an exhaustive list of appropriate forums in which an employee may choose to commence proceedings against current and former employers. [30] It follows that the answer to both questions of law referred under s 117 of the QCAT Act regarding whether the Tribunal is an „eligible State or Territory court‟; and whether the QCAT Act is a law which deals with „claims for enforcement of contracts of employment‟ must be in the negative. [31] It also follows that confronted by a claim of that kind, the Tribunal must first consider whether it has jurisdiction. 22 Ibid. -- 7 of 7 --