Department of Industrial Relations v Ashbrook Group Pty Ltd [2002] QIRC 64 (2002) 170 QGIG 25

17 May, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 25 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 278 – unpaid wages Department of Industrial Relations AND Ashbrook Group Pty Ltd (Case No. W189 of 2001) COMMISSIONER ASBURY 3 May 2002 Application for order for payment of unpaid wages – Industrial Relations Act 1999 s. 278 – Property Sales Award Queensland – State – Claim for wages and annual leave under Part “B” of Award – Individual Flexibility Agreement under Part “C” of Award – Change of ownership of business – Status of Part “C” Agreement with first employer – Transfer of Part “C” Agreement to subsequent employer in manner provided for in Award – No entitlement to wages and annual leave under Part “B” of Award in circumstances where Part “C” Agreement transferred as provided by Award – Consideration of relationship between Award provisions and annual leave entitlements under Chapter 2 Division 3 of Industrial Relations Act 1999 – Case law – Application for wages and annual leave under Award provisions dismissed – Insufficient material before Commission for finding in relation to application of Chapter 2 Division 3 of Industrial Relations Act 1999. DECISION -- 1 of 4 -- 26 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 17 May, 2002 Overview This is an application by the Department of Industrial Relations (the applicant) on behalf of Mr Graham William Field, seeking an order under s. 278 of the Industrial Relations Act 1999 (the Act) in relation to unpaid wages said to be owed to Mr Field, pursuant to the provisions of Part “B” of the Property Sales Award Queensland – State (the Award). The application seeks the order to be made against the Ashbrook Group Pty Ltd (the respondent). An ex parte order was issued in relation to this application on 26 November 2001, in the absence of the respondent. Following an application by the respondent under Rule 63 of the Industrial Relations (Tribunals) Rules 2000, the application was reheard. The uncontested facts in relation to this application are as follows:– • The respondent owned and operated a real estate business under the registered business name of Island Keys Realty, at Suite 3, 60 Santa Cruz Boulevarde, Clear Island Waters. • Mr Field was employed as a real estate salesperson on what both he and the respondent understood to be a “permanent” basis: I take this to mean that both the applicant and the respondent agree that Mr Field was a full-time Property Salesperson as described by the Award, as this was the classification upon which the alleged underpayment was calculated. • Mr Field was employed by the respondent on the basis described above for a period from 2 September until 2 October 2000. • The respondent purchased the business of Island Keys Realty on 1 September 2000 and commenced to operate the business from 2 September 2000. • Prior to this Mr Field had been employed by the previous owner under an Individual Employee Flexibility Agreement registered in accordance with clause 3.2.2 of the Award. • Upon taking over the business, a Director of the Ashbrook Group Pty Ltd, Mr Szabolcs (John) Tardy, attempted to implement new Individual Employee Flexibility Agreements with salespersons. • Mr Field ceased employment with the respondent on 2 October 2000. Relevant Award Provisions The provisions of the Award which are relevant to this matter, are contained in Part C. Clause 3.1 of Part C provides inter alia:– “Application of Part C and Statement of Intent This part allows employers and employees covered by this Award to arrive at arrangements which differ from the provisions of Part B and, subject to such arrangements being registered as prescribed, to apply those arrangements in lieu of the provisions of Part B…”. Clause 3.2.2 goes on to set out a mechanism which can be utilised by employers and employees to put into place Individual Flexibility Agreements, which are termed “Part ‘C’ Agreements”. This mechanism was referred to by the President in Trovas Holdings Pty Ltd, trading as Ray White Carina v William Barry Gannon (1999) 162 QGIG 337 as a somewhat novel facilitative provision, which permits arrangements which differ from Part B of the Award. Clause 3.3.2(b) of the Award sets out requirements for the making and approval of such Individual Flexibility Agreements. It is common ground between the parties that such an agreement was in place between the employee and the former owner of Island Keys Realty, prior to that business being acquired by the respondent in this matter. Subclauses 3.2.2(d) and (e) of the Award provide as follows:– “(d)Where an employee who is party to an Individual Flexibility Agreement ceases employment with the employer party and is engaged by another employer covered by this Award, the employee shall – (i) revert to coverage under Part B of the Award; or (ii) enter into a new Part C Agreement with the new employer, in which case there shall be no requirement to seek approval of such new agreement. (e) An approval under Part ‘C’ of this Award is transferable by an employee from one employer to another. Therefore, unless agreed otherwise, the employee shall pay all registration fees.”. The Case for the Applicant The applicant’s case is that upon the respondent taking over the business of Island Keys Realty on 1 September 2000, no new agreement was signed between Mr Field and the respondent. The material facts set out in the application state that from 2 September 2000 Mr Field agreed to work on a commission only basis for the respondent. Those material facts go on to say that Mr Field states that he did not sign a new agreement with the respondent, and was not asked to do so. The application, including the material facts set out in it, was sworn by Mr David Cox, who also conducted the case for the applicant. Mr Field’s evidence was that prior to the sale of the business, he and other salespersons had been employed on a commission only basis. Mr Field had worked for the previous owner of Island Keys Realty under an Individual Flexibility Agreement reached pursuant to clause 3.3.2 of the Award. That agreement had been registered with the Property Sales Association of Queensland in the manner provided for in clause 3.3.2 of the Award. Mr Field said that on 29 August 2000, Mr Tardy had attended a staff meeting, at which he had informed staff that he was taking over the business of Island Keys Realty with effect from 2 September 2000 and that all of the salespeople (including Mr Field) could stay on as salespersons on commission. Mr Tardy also told salespersons that he would be changing the sales territories and the commission arrangements, and reflecting those changes in a new agreement. Mr Field said that he accepted the offer of a position as a commission only salesperson at the sales meeting of 29 August 2000, pending an examination of the new agreement. New agreements were drawn up by Mr Tardy and provided to salespersons including Mr Field. Mr Field said that he did not agree with the terms of the new agreement, and did not sign it. For a number of reasons, including his dissatisfaction with the proposed new agreement, Mr Field ceased employment with the respondent on 2 October 2000. Mr Field said that in the period between 2 September and 2 October 2000, he worked under the Agreement applicable to his employment prior to the Ashbrook Group Pty Ltd taking over the business of Island Keys Realty. Mr Field said that he could not recall his reason for being dissatisfied with the proposed new agreement. -- 2 of 4 -- 17 May, 2002 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 27 The applicant’s argument is that the employee and the respondent had not entered into a new Part “C” Agreement as provided in clause 3.2.2(d)(ii) of the Award. It was further contended by the applicant that the phrase “a new Part ‘C’ Agreement” in clause 3.2.2(d)(ii) refers only to the original Agreement (ie. the Agreement with the first employer) and that if the employee and the respondent had agreed that the original Agreement continued until it expired, then there would be no claim. If a new agreement had been entered into between the employee and the respondent, it was required to be registered with the Property Sales Association of Queensland (PSAQ) as provided in clause 3.2.2(b) of the Award. It was submitted that there was no agreement between the respondent and the employee that the old agreement would continue, nor was a new agreement registered with the PSAQ. The effect of this was that the employee reverted to Part B of the Award, pursuant to clause 3.2.2(i). Accordingly, it is contended by the applicant, that for the period from 2 September to 2 October 2000, the employee was entitled to be paid under Part B of the Award, and that an underpayment of $1536.73 has occurred. The alleged underpayment is comprised of payment at the minimum award rate of $409.00 per week for the period from 2 September to 2 October 2000, and an additional amount for pro rata annual leave accrued during that period. The Case for the Respondent The respondent’s case, which was put by Mr Tardy, is that advice was sought from the PSAQ and the Queensland Real Estate Industrial Organisation of Employers (QREIO) upon the respondent taking over the business of Island Keys Realty. That advice had been that there were current agreements in place between salespersons, including Mr Field and the previous employer, and there was no requirement to register any new agreements until the expiry of the original Agreements. Mr Tardy contended that Mr Field had been employed on a commission only basis by the previous employer and by the respondent in this matter, and accordingly had no entitlement to wages or annual leave. Mr Tardy’s evidence was that at a meeting on 29 August 2000, prior to the respondent taking over the business of Island Keys Realty, all sales staff were told by him, as a Director of the respondent that they could remain in employment on the same basis as they had been employed on by the previous owner. All sales staff including Mr Field, had agreed to accept this offer of employment. All salespersons, including Mr Field, were provided with a new agreement on 5 September 2000, which they were asked to sign and return promptly. The proposed new agreements were identical to the previous agreements, with the exception of the open listing commission, which was slightly increased to provide greater incentive to sales staff to bring in listings, and performance targets were included. Performance targets were subsequently removed from the proposed agreements, as they were thought inappropriate by Mr Tardy on the basis that “times were tough”. Mr Tardy said that staff were told that the proposed new agreements were almost identical to their existing agreements and contained only minor changes. Mr Tardy said that all employees, with the exception of a Mr Adam, had signed and returned the agreements. Mr Tardy maintained that Mr Field had signed and returned his agreement. However, Mr Tardy also contended that Mr Field had removed the contents of his file, including the signed agreement, upon ceasing employment with the respondent. Mr Tardy was unable to produce a copy of the new agreement which he contended had been signed by Mr Field. Conclusions Clause 3.2.2(d)(ii) of the Award contemplates situations where employees who have Part “C”, ie. Individual Flexibility Agreements formalised in accordance with the Award cease employment with one employer and are engaged by another employer party, to the Award. This may occur where the employee resigns employment with one employer to take up employment with another, or where the business in which the employee is working is sold or otherwise transmitted from one employer to another, and an employee who was employed by the first employer is employed by the second employer. In such cases, there are a number of options with respect to the employee’s Part “C” Agreement. The employee may enter into a new Part “C” Agreement with the new employer. When this option is exercised, there is no requirement to register that new agreement, until the date upon which the original Agreement expires. Alternatively, the employee may transfer any existing Part “C” Agreement with one employer, to a subsequent employer, pursuant to clause 3.2.2(e). That clause clearly provides for “the approval” of a Part “C” Agreement to be transferred by the employee, from one employer to another. A statutory provision must be read in a manner which gives meaning to every word, and renders it useful and pertinent (Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 382; The Commonwealth v Baume (1905) 2 CLR 405 at 414). In my view, the proper interpretation of clauses 3.2.2(d) and (e) is that where an employee ceases employment with one employer party to the Award and is engaged by another employer party to the Award, and that employee has entered into an Agreement under Part “C” of the Award with the first employer, the options are as follows:– • the employee may reach agreement on a new Part “C” Agreement with the second employer in different terms to the first Part “C” Agreement; • the employee (with the agreement of the second employer) may transfer the Part “C” Agreement with the first employer to the second employer; or • where a new Part “C” Agreement is not reached, or an existing one transferred, the employee reverts to coverage under Part ‘B’ of the Award. Clearly clause 3.2.2(e) gives the employee some ownership of an existing Part “C” Agreement, by virtue of the fact that the employee has paid for its registration. However, in my view the Agreement of the second employer to the transfer would be required, for the simple reason that if there was no agreement by the second employer to the transfer, the arrangement with the first employer would no longer be an “Agreement”. I can see no basis for restricting the phrase “a new Part ‘C’ Agreement” in clause 3.2.2(d)(ii) of the Award, to situations where an existing agreement with one employer is transferred to a subsequent employer, as was contended by the applicant. In my view, to restrict the phrase in this way would be to make clause 3.2.2(e) useless and void of meaning. If an existing Part “C” Agreement became a new agreement when an employee ceased employment with one employer and commenced employment with another employer under the Award, there would be no need to transfer a Part “C” Agreement pursuant to clause 3.2.2(e), and that clause would serve no purpose at all. Whichever option identified above is chosen by the parties to an employment relationship, there is no requirement to seek approval of the “new” agreement or the “transferred” agreement until the nominated expiry date of the original agreement. When neither of the two options is exercised, the employee reverts to coverage under Part “B” of the Award as provided in clause 3.2.2(d)(i). I am unable to be satisfied on the evidence before me that a Part “C” Agreement was reached between the respondent and Mr Field subsequent to the respondent taking over the business of Island Keys Realty. However, I am satisfied that the Part “C” Agreement which the applicant had with the former owner of the business was transferred to the respondent in this matter, pursuant to clause 3.2.2(e) of the Award. -- 3 of 4 -- 28 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 17 May, 2002 Accordingly, by virtue of the operation of clause 3.2.2(e) there was a Part “C” Agreement in place between Mr Field and the respondent for the period covered by this application. The result is that Mr Field has no entitlement to wages under Part “B” of the Award for that period. The element of the applicant’s claim seeking payment of accrued annual leave for the period between 2 September and 2 October 2000 raises additional issues. The claim for annual leave for that period, as it was argued before me, was based on the provisions of Part “B” of the Award, which were said to be operative because of the provisions of clause 3.2.2(d)(i). I have found that this is not the case, and for the reasons outlined above, the applicant has no entitlement to annual leave under the provisions of Part “B” of the Award. However, because of the provisions of Division 3 of Chapter 2 of the Industrial Relations Act 1999, this is not the end of the matter. Division 3 of Chapter 2, which deals with annual leave, does not contain a general exclusion, where an award provides for annual leave on conditions other than those in the Division. This means that Mr Field may have an entitlement to annual leave under Division 3 of Chapter 2 of the Industrial Relations Act 1999. During the hearing in relation to this application, I referred the parties to a decision of a Full Bench of this Commission in Property Sales Association of Queensland (1999) 162 QGIG 289, and requested submissions on the effect of that decision on this application. In particular, I alerted the respondent to the fact that Mr Field may have an entitlement to annual leave, as provided in Division 3 of Chapter 2 of the Industrial Relations Act 1999, notwithstanding the fact that a Part “C” Agreement was in effect under the Award, which purported to provide compensation to Mr Field in lieu of such an entitlement. The Full Bench decision referred to above was released on 2 November 1999, following an application by the parties to the Property Sales Award Queensland – State seeking to avoid the operation of certain of the general conditions of employment in Chapter 2 of the Industrial Relations Act 1999, including Division 3, annual leave. The Full Bench found that Part “C” Agreements under the Award could have no effect to the extent of any inconsistency with the provisions of Division 3 of Chapter 2 of the Industrial Relations Act 1999, and that employees under Part “C” Agreements could be entitled to annual leave subsequent to the enactment of Chapter 2. No detailed submissions were put by the applicant or the respondent about the possible impact of the Full Bench decision in Property Sales Association of Queensland (1999) 162 QGIG 289, on this application. However, I have given further consideration to this matter and the impact of a number of decisions of the Industrial Court and the Commission subsequent to the Full Bench decision referred to above. On 10 November 1999, the President, in Trovas Holdings Pty Ltd, trading as Ray White Carina v William Barry Gannon (1999) 162 QGIG 337 at 338, stated that he was not at all sure that a property salesperson paid by commission was not a pieceworker, and that the term “piecework rates” might have been read broadly to cover a system of payment by results. Further, in Property Sales Association of Queensland Union of Employees v Trovas Holdings Pty Ltd trading as Ray White Carina (2000) 164 QGIG 128 at 129, Fisher C found that a property salesperson employed under the terms of a Part “C” Agreement, was a pieceworker, on the basis of the circumstances of that case and the terms of the particular Agreement. In this case, I have not been provided with a copy of the Part ‘C’ Agreement applicable to Mr Field at the relevant time, by either the applicant or the respondent. This Agreement is presumably available from the PSAQ with whom it was registered according to the applicant and the respondent. Further, neither party has had an opportunity to put submissions on the issue of whether or not Mr Field was a pieceworker, and as such, whether or not he had an entitlement to annual leave pursuant to Division 3 of Chapter 2 of the Industrial Relations Act 1999. I am satisfied that Mr Field has no entitlement to annual leave under Part “B” of the Award, because of the existence of the Part “C” Agreement which was transferred to the respondent pursuant to clause 3.2.2(e) of the Award. In my view, if it was established that Mr Field was a pieceworker, then he would also have no entitlement to annual leave under either Part “B” of the Award or Division 3 of Chapter 2 of the Industrial Relations Act 1999. There is no claim before me for annual leave pursuant to Division 3 of Chapter 2 of the Industrial Relations Act 1999, and no evidence upon which I could make any finding in relation to such a claim in any event. I make no finding in relation to this matter. For the reasons outlined above, the application for wages and annual leave under Part “B” of the Award is dismissed. I order accordingly. I.C. ASBURY, Commissioner. Released: 03 May 2002 Appearances:– Mr D. Cox of the Department of Training and Industrial Relations for Mr G. Field. Mr S. Tardy on behalf of Ashbrook Group Pty Ltd -- 4 of 4 --