Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland v Fast Signs & Displays Pty Ltd [2001] QIRC 99 (2001) 167 QGIG 270

13 July, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 270 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 278 – unpaid wages Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland AND Fast Signs & Displays Pty Ltd (No. W27 of 2001) COMMISSIONER ASBURY 29 June 2001 Wages claim – Change in employment from weekly to casual – Change to casual employment agreed by applicant – Issue of correct award classification level – Entitlement to annual leave for period of weekly employment – No entitlement to payment of sick leave and public holidays not worked during period of casual employment – Payments for annual leave made by respondent in excess of award entitlement to be offset against obligation to pay annual leave – Application granted in respect of period of weekly employment. DECISION The Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (the AMEPKU), has made an application seeking an Order pursuant to s. 278 of the Industrial Relations Act 1999 (the Act), that Fast Signs & Displays Pty Ltd (the respondent) pay unpaid wages to Mr Peter Watson (the applicant). The claim, which was amended during proceedings, is for an amount of $10,559.45, together with interest. The amount claimed comprised $5,725.35 for thirteen weeks of annual leave and leave loading; $87.92 for non-payment of the Labour Day holiday in May 2000; $175.84 for unpaid sick leave taken in 2000; and $4,570.34 for underpayment of the award rate. During the course of the hearing, the AMEPKU conceded that documentation produced by the respondent indicated that it had been the practice to close down the business for two weeks in December of each year, and that the applicant had been paid for this period. This information had not been apparent during the process of discovery preceding the hearing of the application, because the respondent had caused some information on photocopies of time and wages records produced to the AMWU, to be obscured. Accordingly, the AMEPKU sought leave to amend the application to reduce the amount of annual leave claimed, from thirteen weeks to seven weeks. The claim for annual leave loading for the entire thirteen week period, as well as the period when the applicant was employed under a traineeship agreement, was still pressed. The facts associated with the claim can be briefly stated as follows:– • The applicant was employed by the respondent from March 1997 until 30 June 2000; • Neither the applicant or the respondent were able to provide any evidence of the actual date in March 1997 when the applicant commenced employment; • The applicant was employed under the terms of the Building Products, Manufacture and Minor Maintenance Award – State (the Award); • For the first twelve months of his employment the applicant was employed as a trainee under a traineeship agreement; • The work performed by the applicant was the manufacture and installation of signs; and • The applicant was not a tradesperson. The AMEPKU for the applicant contended that the work performed by the applicant was that of an Assembler “A” as defined by the Award. The AMEPKU also contended that the applicant was employed on a weekly basis at all times and had not agreed to any change to casual employment. The AMEPKU submitted that there were no time and wages records to indicate the hours worked by the applicant on each day, or during each week. Further, the respondent had not supplied payslips to verify what was paid to the applicant or what payments related to. It was stated for the respondent, that financial considerations had lead to a situation where payments to the applicant were not strictly in accordance with the respondent’s obligations under the Award or relevant legislation. The respondent also contended that the fact that payments to the applicant were not strictly in accordance with the Award was discussed with the applicant and he had agreed to accept those payments. It was argued that the applicant had been provided with training, and maintained in employment, despite the financial difficulties being experienced, by the respondent, and the unsatisfactory work performance of the applicant. The respondent also maintained that the basis of the applicant’s employment had been changed from weekly to casual, with effect from 16 July 1999, and that the applicant had been paid the Award rate for a casual employee from that date. The respondent said that the applicant had accepted and agreed with this change, and that accordingly, the applicant had no entitlement to payment for annual leave, loading on annual leave, sick leave and public holidays not worked, from that date. I accept that the financial situation of the respondent, was, and remains, extremely difficult. However, this is not a factor which can over-ride the respondent’s obligation to pay wages and to provide employees with entitlements to leave, consistent with the Award. The fact that an employee may have agreed to accept wages and conditions of employment which are less than those contained in a relevant Award, is not a matter that the Commission can take into account, in the face of s. 135 of the Act, which provides that an Award prevails over a contract of service, to the extent of any inconsistency, unless the contract of service provides for more favourable conditions to the employee than the Award. The object of the Act as provided in s. 3 does not derogate from the specific provisions of s. 135. -- 1 of 3 -- 13 July, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 271 This is not a case where it can be argued that the applicant received payment in excess of the Award, which can be offset against other Award entitlements. The evidence clearly establishes that the applicant has been underpaid in accordance with the provisions of the Award. The respondent also concedes that such an underpayment has occurred. Even if the respondent’s contention that the applicant was a casual employee from 16 July 1999 is accepted, the evidence of the respondent clearly establishes that the applicant has been provided with only two weeks per annum of annual leave during the period of weekly employment, and no annual leave loading has been paid. The respondent also concedes that superannuation payments have not been made to the applicant. The major issues for determination are:– • Whether the applicant was a casual employee, within the meaning of the Award, from 16 July 1999; and • Whether the applicant was required to perform the work of an Assembler “A” as defined in the Award. In my view, there is clear evidence that agreement was reached between the respondent and the applicant, with effect from 16 July 1999, that the basis of the applicant’s employment would change from permanent to casual. The applicant agreed during his evidence that Mr Kintzel, the Managing Director of the respondent, had said that the applicant was a casual employee “probably the last year I was there”. The applicant said that Mr Kintzel had told him that there was not enough work, and that in some weeks his hours would need to be less than full-time. The applicant said that he had responded to this request by saying “yeah”. After this discussion, there were a number of occasions when the applicant was provided with less than 38 hours work per week. There is evidence that the rate being paid to the applicant increased with effect from 16 July 2000. Further, there is evidence that the respondent commenced to record the actual hours worked by the applicant from that date, to reflect that he was now being paid on an hourly basis. At the conclusion of his employment, the applicant left of his own volition, without giving notice to the respondent. No deduction was made from the applicant’s termination pay by the respondent for failure to give notice. Although the applicant says that he did not understand that his employment status changed to casual employment on 16 July 1999, overall, I prefer the evidence of Mr Kintzel for the respondent on this point. Further, there was no argument or evidence from the AMEPKU in relation to the definition of a casual employee in the Award, and that the applicant did not come within that definition. After considering all of the evidence and submissions, I am reasonably satisfied that the applicant was a casual employee from 16 July 1999. The applicant was entitled to a total of 8 weeks annual leave for the period from March 1997 to March 1999, and a total of 20.5 hours of annual leave for the period from March 1999 to 16 July 1999, when he became a casual employee. During this period, the applicant was provided with 4 weeks of annual leave during Christmas closedowns, and three weeks of annual leave by agreement. Accordingly, the applicant has been underpaid in terms of his annual leave entitlement between March 1997 and 16 July 1999, by an amount of 58.5 hours of annual leave. The applicant is entitled to annual leave loading for all annual leave during this period, being eight weeks from March 1997 to March 1999, and 20.5 hours from March 1999 to 16 July 1999. The applicant is also entitled to three public holidays falling within the periods of annual leave taken by him from March 1998 to March 1999. The applicant is not entitled to payment for the Labour Day holiday in May 2000, or two days sick leave for 12 May and 5 June respectively, on the basis that he was a casual employee at the relevant time. The respondent is entitled to offset the payment made to the applicant during the two weeks from December 1999 to January 2000, when the respondent’s business was closed down. This payment was clearly made for annual leave, to which the applicant had no entitlement at that time, due to the fact that he was a casual employee. The respondent is entitled to offset this amount against all amounts owed to the applicant for annual leave and loading. This is consistent with the principle that set-offs must be restricted to payments which are referable, expressly or by implication, to the award obligation (see decision of the President in The Haggarty Group Pty Ltd v Justin Wallace (2001) 166 QGIG 417 at 420). In the event that the amount paid for annual leave in December 1999 to January 2000 exceeds the outstanding amount of annual leave and loading owed by the respondent to the applicant, the respondent is not entitled to offset any excess amount against other amounts underpaid. The evidence in relation to the work performed by the applicant is that he was engaged in assembling prepared pieces of material by gluing or fastening them together. There was also evidence that the applicant undertook measuring including the use of instruments for this purpose, and that the level of responsibility and initiative required of him increased from the second year of his employment. After considering the Award definition for an Assembler “A”, and the evidence and submissions of the parties, I am reasonably satisfied, that the applicant was required to perform work as described in that definition, and is entitled to be paid accordingly. To the extent that the respondent has failed to classify and pay the applicant as an Assembler “A” under the Award, the applicant has been underpaid. The quantum claimed by the AMEPKU in relation to this matter is $4,570.34. This amount may require adjustment as a result of the finding that the applicant was a casual employee from 16 July 1999. Further, on the basis of the findings in this decision, re-calculation of amounts underpaid in respect of annual leave, will be required. I also advised the respondent that in the event that I found for the applicant, the matter would be listed for further hearing if necessary, to enable submissions to be put regarding a suitable period of time for payments to be made to the applicant, given the financial difficulties being faced by the respondent. The AMEPKU also indicated that there would be no objection to the respondent being given such a period of time. Accordingly, I make the following requests of the parties:– 1. Ms Patterson (or a representative of the AMEPKU) is to re-calculate the underpayments to the applicant in light of this decision, and to provide details to the respondent within seven days of the date of release of this decision. 2. Ms Patterson (or a representative of the AMEPKU) is to have discussions with the respondent within 14 days of the date of release of this decision, in relation to the amount of the claim following the re-calculation, and attempt to reach an agreement on a system of instalments to be paid to the applicant. 3. If the parties are unable to reach agreement in relation to the payment of outstanding amounts to the applicant, Ms Patterson (or a representative of AMEPKU) is to advise the Industrial Registrar, within 21 days of the date of release of this decision. In the event that the Industrial Registrar is advised that the parties are unable to reach agreement pursuant to point 3 above, this application will be listed for further hearing for the purpose of determining these matters, and for the issuing of orders. -- 2 of 3 -- 13 July, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 272 I.C. ASBURY, Commissioner. Released: 29 June 2001 Appearances:– Ms H. Patterson, for the Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland. Mr R. Kintzel and Mrs M. Kintzel on behalf of Fast Signs & Displays Pty Ltd. -- 3 of 3 --