Davey v Liquorland (Qld) Pty Ltd; Towner v Liquorland (Qld) Pty Ltd [2002] QIRC 122 (2002) 170 QGIG 471

23 August, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 471 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 276 – power to amend or void contracts Marilynn Anne Davey AND Liquorland (Qld) Pty Ltd (No. B349 of 2002) Jennifer Rosemary Towner AND Liquorland (Qld) Pty Ltd (No. B350 of 2002) COMMISSIONER SWAN 9 August 2002 Application pursuant to s. 276 of the Industrial Relations Act 1999 (the Act) – Two jurisdictional challenges mounted – Whether contract of service was covered by an industrial instrument – Whether application precluded because of prior s. 74 application – Section 135 of the Act considered – Employees’ contract of service is covered by an industrial instrument – In the alternative contracts are not unfair – Jurisdictional challenge upheld. DECISION There are two amended applications before the Commission. The applications are identical and are made by Ms Jennifer Towner and Ms Marilynn Davey. Both applications are made pursuant to s. 276 of the Industrial Relations Act 1999 (the Act), and seek the following: “1. A decision, declaration, ruling or order which amends or declares void wholly or partially two contracts of employment which are attached to Schedule 1. The relevant Award for consideration of section 276(2)(c) of the Industrial Relations Act 1999 is the Clerical Employees Award – State and the Termination Change and Redundancy Decision, 16 June 1987 as amended, however the clauses in dispute in the two contracts attached in Schedule 1A and B are not covered by an industrial instrument. This application is made pursuant to section 276 of the Industrial Relations Act 1999 ‘Power to Amend or void Contracts’. This application is seeking a declaration and order by the Commission that part of the contracts in Schedule 1 are void and that the contracts are a device to avoid the obligations by the employer under the provisions of the Termination of Employment, Introduction of Changes and Redundancy Full Bench Decision dated 16 June 1987 as amended and the provisions of the Clerical Employees Award – State; and A decision that the contracts were unfair; and 2. The following decision: (a) That the contracts of employment attached in Schedule 1 to this application are unfair contracts pursuant to section 276(2) and (4). (b) The applicant seeks that the Commission make an order it considers appropriate about the payment of amounts for a contract, amended or declared void pursuant to section 276(5). The amounts sought are as follows: (i) Severance pay of 4 weeks (an amount of $2615) pursuant to the provisions of the Termination of Employment, Introduction of Changes and Redundancy Full Bench Decision dated 16 June 1987 as amended by the Queensland Industrial Relations Commission. (ii) The benefits of 8 weeks pay (an amount of $5231) provided in the contract of employment dated Monday 18 June 2001 included in Schedule 1 paragraph 5(e). (c) A declaration or order that a second contract of employment dated 29 October 2001 titled ‘Addendum to Employment Contract dated 28 June 2001’ marked B in Schedule 1 is an unfair contract and the third paragraph is void ‘ab initio’. (d) The applicant seeks a declaration or order for general damages for pain and suffering including emotional distress, humiliation and loss of wages and seeks the sum of $5,000 compensation or such other amount as the Commission deems appropriate. (e) The applicant seeks a declaration or order for the full sum of the amounts claimed in (b) and (d) above which is a total of $12,846.”. These matters have had a protracted history before the Commission. Pursuant to s. 74 of the Act, an application (application for reinstatement) had been lodged by the applicants with the Commission with the focus being upon the payment of the “retention bonus” only. Whilst a conference had been held (but no certificate issued by the Commission pursuant to s. 75(3)), the advice given to the parties was that their applications might be misplaced and might be better pursued under s. 276 of the Act. Section 276 applications were then lodged. -- 1 of 4 -- 472 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 23 August, 2002 In the interests of all parties, it was agreed that, notwithstanding the fact that the respondent raised a jurisdictional challenge, the matter should proceed with the jurisdictional point being heard in conjunction with the applicants’ full case. This occurred, and as it has transpired, the jurisdictional challenge has been upheld by the Commission. The jurisdictional challenge has been made on two grounds, namely: 1. That the applicants were employed pursuant to the Clerical Employees Award – State. Both were exempt employees being paid above the relevant exemption rate in the Award. Relevantly, s. 276(1) of the Act states that: “276 Power to amend or void contracts (1) On application, the commission may amend or declare void (wholly or partly) a contract if it considers – (a) the contract is – (i) a contract of service that is not covered by an industrial instrument; or (ii) a contract for services; and (b) the contract is an unfair contract.”. The respondent states that the applicants are excluded from utilising the provisions of s. 276 of the Act because they were in a contract of service which is covered by an industrial instrument (see s. 276(1)(a)(i) of the Act). 2. That the applicants had made an earlier application to the Commission pursuant to s. 74 “application for reinstatement” and are precluded from accessing s. 276 relief (see s. 276(6)(a) as a consequence of that application). Relevantly, s. 276(6)(a) reads as follows: “(6) A person can not make an application under this section if – (a) an application has been made under section 74 for the same matter; or”. It is submitted that the relief sought in the s. 74 application contained the essence of the relief sought in the s. 276 application. In order to understand the decision taken in this matter, a brief outline of the applicants’ case is as follows. Brief History of Applicants’ Claim Both applicants had worked for the Leda Hotel Group for approximately one year. In around June 2001, Leda declared their positions redundant. The Leda Hotel Group was purchased by the respondent, Liquorland (Qld) Pty Ltd. Liquorland utilised stock control systems different to those used by the applicants when employed by Leda. Liquorland however, required the services of the applicants for the transitional period only. To this effect, Liquorland offered short-term contracts to both applicants. In order to ensure that the applicants, who would presumably be looking for more secure employment, stayed for the requisite period of time, Liquorland offered an incentive bonus. The incentive bonuses were payable upon completion of the task and the contract drawn between the parties set a “target date” for such completion. For the purposes of further following the debate, the relevant sections of the contract entered into between the applicants and Liquorland is stated hereunder: “… 3. Period of Engagement Your employment with the Company will commence TBC pending final settlement of the contract with Leda. Subject to Clause 15, the contract will terminate at a target date of 30 November 2001. The target date will only be revised with the provision of one months written notice by the business. 4. The purpose of the Contract The reason for your employment being on a limited tenure basis is to assist in the introduction and conversion to a new Point of Sale system. 5. Retention Program Principles/Severance (a) Liquorland will pay a severance payment as advised to you at the time of your appointment or a retention bonus in accordance with this clause whichever is the greater, on termination by Liquorland. (b) The target date is 30 th November, 2001. (c) The target date will only be revised with the provision of one month’s written notice. (d) If the employee accepts an alternative position on completion of the target the retention bonus shall be applied. (e) If the employee works up to the target date, Liquorland will pay a retention bonus equivalent to 8 weeks pay. (f) This formula is based on: 4 weeks notice plus, 1 additional week for each month worked. (g) Where Liquorland moves the target date with a month’s notice the bonus will increase by 1 week for each month of service up to a maximum of 12 weeks (including the bonus provided in paragraph (e). If the employee resigns prior to the target date or is terminated in accordance with paragraph 15 no retention bonus or severance payment shall be applied. … 15. Termination Notwithstanding the fixed period of employment provided for in this contract, termination for reasons that constitute summary dismissal may occur without notice.”. -- 2 of 4 -- 23 August, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 473 On 29 October 2001, Liquorland corresponded with the applicants in the following manner: “Addendum to Employment Contract dated 18 June 2001 With reference to your limited contract of employment, we wish to advise that the target date has been extended from 30th November, 2001 to 22nd February, 2002. The reason for this revision is the delay with the conversion to the new Point of Sale system. The extended period of your contract will also ensure that hotel management teams can progressively take on responsibility for all administrative matters other than the Focus stock system. As the need for administration reduces, it is envisaged that your duties will vary and will incorporate operational tasks in the retail or hotel outlets in addition to your Focus related responsibilities. Under the terms of your contract, the 8 week retention bonus for working up to 30th November will be included in your final payment if you continue to work up to the revised target date of 22nd February 2002. In addition to this 8 week retention bonus, as the target date has now increased by 3 months, you will be eligible for an additional 3 weeks retention pay at the completion of your contract on 22 nd February 2002. In line with the needs of the business, you may choose to reduce your working hours from full-time to part-time and concentrate solely on the Focus system. To determine if this is the case, you need to consult with Stuart McLeod. Please be aware that in this scenario, your retention bonus would be calculated on a pro rata basis according to your new part-time hours. A revised contract will be issued should this option eventuate. This letter is in an addendum to your original contract and we recommend you refer to it accordingly. All other terms and conditions are as prescribed in your employment contract dated 18 June 2001. Please do not hesitate to call me should you require any further clarification. I would also ask that to signify your acceptance of this addendum, you sign and return the attached copy and return it to me no later than Friday 2 nd November 2001. Regards, Julia Crombie Human Resources Manager.”. The applicants ceased their employment with Liquorland in December 2001. They say they were constructively dismissed. They claim that Liquorland would not pay them the incentive bonuses which they believed were due to them upon the expiry of the original target date of 30 November 2001. They submit that they were led to believe that they would have received the bonuses at that time irrespective of the terms outlined in the contract which they both signed with Liquorland and to which reference has previously been made. Before considering the jurisdictional challenges, were I to determine the issue relying solely on the question of the essence of the contracts existing between the parties, I would start by saying that the contracts are clear and unambiguous. It is stated that the contracts will terminate on the “target date” of 30 November 2001. The “target date” (or date of termination) could be revised upon the giving of one months notice. That notice was given. Liquorland was obliged under the terms of the contract to pay the retention bonus upon termination of employment. Termination of employment would not occur until the revised target date was met. The applicants agreed to these terms, but resigned from Liquorland prior to the revised target date being met. On the evidence before me on that point, I do not accept that the applicants were constructively dismissed at all. They chose to leave the employment of Liquorland. Any claim around the question of redundancy is misplaced. They were not paid the retention bonus. I see nothing untoward in that. The contracts in themselves are not unfair regardless of whichever yardstick is used. The applicants were engaged under short-term contracts with a defined completion date and the applicants chose to leave before the expiration of that period of time. By doing that, the applicants lost any claims they believed they might have had in these applications. The Jurisdictional Challenge Turning to the jurisdictional challenge, the first ground cited is in my view correct. There is no question, even between the parties, that the applicants were employed pursuant to the Clerical Employees Award – State. The fact that they were exempted from certain provisions of the Award does not preclude them from being in fact covered by the Award. Section 135 of the Act states as follows: “135 Inconsistency between awards and contracts (1) To the extent of any inconsistency, an award prevails over a contract of service that is – (a) in force when the award becomes enforceable; or (b) made while the award continues in force. (2) The contract is to be interpreted, and takes effect, as if it were amended to the extent necessary to make the area of inconsistency conform to the award. (3) However, no inconsistency arises only because the contract provides for employment conditions more favourable to the employee than the award.”. The applicants’ claim is that: “the clauses in dispute in the two contracts attached in Schedule 1A and B are not covered by an industrial instrument.”. Schedules 1A and B are the contracts (already cited) and the letter headed “Addendum to Employment Contract dated 16 June 2001”. The applicants state that the contracts are not “covered” by an industrial instrument and therefore fall outside of the exclusion in s. 276 of the Act. Section 276(1)(a)(i) excludes employees who are engaged in service which is covered by an industrial instrument. It would be the “service” which was covered by an industrial instrument not the contract in existence as claimed by the applicants. The award prevails over a contract to the extent of any inconsistency in terms (see s. 135). -- 3 of 4 -- 474 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 23 August, 2002 As far as the “retention bonus” is concerned, this is a provision which is in excess of any award provision and therefore would fit within the requirements of s. 135(3). The work performed by the applicants for Liquorland is work of a type which would be covered by an industrial instrument, even though the applicants were partially exempted from the instrument because of the salaries received. On these grounds alone, the applications fail. On the second ground, it is clear that the applicants made an application pursuant to s. 74, on the grounds which were incorporated within the s. 276 application i.e. for the payment of the “retention bonus”. The s. 276 application raises broader grounds of complaint, and is not in fact confined to the “same matter” raised in the s. 74 application. Were I to simply exclude what is described as the “same matter” and consider the remaining claims, then those issues have already been considered and where relevant determined by the Commission in the body of this decision. Those claims fail as a consequence of the particular decision having been reached. Conclusion In drawing all of these issues to conclusion, I would state that even if I am wrong on the question of jurisdiction, I reiterate that I would have been unable to find any justification for a finding in the applicants’ favour in terms of the s. 276 general application for reasons earlier outlined and particularly so on the basis that the applicants had resigned from their employment. In simple terms, I believe that the applicants held an erroneous belief as to the terms of the contract into which they freely entered. The terms of the contract are not ambiguous. Those terms were explained to the applicants. The fact that the terms of the contract were enacted in full by the respondent does not make the contract or any of its contents unfair. The question became academic in any event. The applicants walked away from their employment obviating the need for me to consider any further argument regarding the possible ramifications emanating from their actions. Overall, the applicants are excluded from seeking redress in terms of s. 276 of the Act. Even had that recourse been available to them, I can see no merit in their claims on the other points raised. I dismiss all claims made by the applicants. Order accordingly. D.A. SWAN, Commissioner. Appearances: Released: 9 August 2002 Mr A. Camp of Alan Camp & Associates for the applicants in both matters. Mr D. Williams of Minter Ellison and with him Ms S. McRostie on behalf of Liquorland. -- 4 of 4 --