Australian Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, Union of Employees v Castlemaine Perkins Pty Ltd [1999] ICQ 4 (1999) 160 QGIG 163

163 n rnm nt ■ I I I zePUBLISHED BY AUTHORITY pp 451207100086 Annual Subscription $297 Vol. 160 FRIDAY, 5 MARCH, 1999 e ISSN 0155-9362 No. 9 QUEE.KSLAND INDUSTRIAL COURT Workplace Relations Act 1997 s. 360(2) - appeal from decision of industrial commission Austrnliau Liquor, Hospitality and Miscellaneous Workers Union, Queensland Branch, l:nion of Employees AND Castlemaine Perkins Pty Ltd (No. C71 of 1998) Jl:STICE WILLIAMS, PRESIDENT 19 February 1999 Industrial law severance pay - meaning of expression ·•pay presently used as the hasis for annual leave entitlements". 201229-17 -- 1 of 2 -- 164 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETrE 5 March, 1999 JUDGMENT TI1is appeal is concerned with the proper construction of a clause man Enterprise Agreement between the appellant and other Union, of the ont'. part, and the respondent of the other. The Agreemt':nl in questiou is tht'. 1997 Castkmaine Perkins Pty Ltd Enterprise Agrncmrnt: Appendix G is a Redundancy Agreement. and dause 9 1hereof which deals ,.vith Severance Payments is the clause m issue. It ism these tcrms:- "(a) The entitkmt'.nt of the employee to severance payment.~ prescribed by this clause is an automatic entitlement which exists wher,.: an employee's services have been terminated 1D accordance with this Agreement. (h) Severance payments to employees whose 3ohs have been made redundant shall be calculated as follows: (i; Each employee shall receive the number of weeks pay as prescribed in the attached Schedule based on the numbL~r of completed years· service. In the case of an incomplete year of service, a pro rata payment for each completed month of service shall be paid at the rate prns,xibed for that period. A week's pay sh<1.ll he deemed to be the pay presently used as th,: basis for annual leave entitlements: (ii) Each employee shall he paid all a.cLTUed sick leave; (iii)Each employee shall be paid long service leave entitkmeuts on a pro rata hasis for all years after 5 year's service; (iv)Sub_iect to Clause 12, under no circumstances may an c:,mployee receive a greater number of weeks' pay, as provided for in sub clause (i) hereof, than the number of ordinary weeks between the employee's termination date and tht'. employee'.< 65th birthday.'' The particular provision in dispute 1s the last sentence in (b)(i). The specific question is as to its operation with respect to contmuous shift workers. Clame <J provi<l,~, the mechanism wherehy the amount payable to an employee on termination is cakulat0d. The number of weeks pay to which the employee is entitled is cstahlished by looking at the Schedule. The other factor 1s the ··week's pay" reterre<l to in the last .sentence of (h)(i). Commissioner Bloomfield accepted the submission of counsel for the respondent vmployer indicating how a "week's pay" for purpose of the provision wa~ to h;;:: d,:termined. Es.<entially he hdd that the relevant pay was that which was used as the basis of the calculation (the basic pay) and not the actnal pay per week received by a worker going on annual leave. Thal meant that he rej1::cted the submissiou of counsel for the appellant union that the words in dispute meant that au employee was entitled to receive as his weekly severance entitlement the same amount that that employee would rece1 ve each week if he was going on leave on the day of retrenchment. The compc:ting submissions put to this court were identical with those addrcssPd to Commissioner Bloomfield. Jn my view 1t is of critical importance to note at the outset that clause 9 applies to all employees. "Jbat i~ important in this case becaw,e different catcgones of emplu1 ees of the respondent have their adual weekly wages (and annual kave pay entitlem,:nt) calculated in different way.-,. For present purposes there are at least four categories of workers employed by the respondent:- ( 1) ~ ~hift continuous shift workers; (:l) 4 shift continuous shift work.ers; {3) Non continuous shift workers: (4) Other employeto.,. In broad tcrms all shift workers are entitled to a shift allowance, th<' quantum of which depends upon whether the employee is wnrking a day. afternoon. or night shift. Employees who art'. 4 .s.hift continuous shift workers or oon continuou,., shift workers have their pay calculakd each week by adding to their bas0 pav thl.'. actual shift allowance for that period plus other entitlements. However. the wages of 'i shift continuous shift workers arc averaged over a 40 week p~.riod so that ,·ach rtcceives preciseiy the same amount each week: that avoids such workers rec.::iving very high wages in one week and very much low,,r in another. Shift allowances and other enhtlements are mduded m the calculation of wages for the 40 week period and the amount so determmed 1s then averaged over that period Clause 9 by ;ts terms directs attention to the t:ntitkment of a worker to waies during a pcriod of annual leave. Clame 36 of the Agreement deal~ with annual ie<1ve and the following ,:xtrn.ct is material for present purposes: "Emplcrye,:, are entitkd to annual ieave as folluw.s;- J. Conlmuous shift workers -- 175 hours/annum (22 work ~hifts or 35 continuous days off). 111is is paid in accordance with the employee's projected shift roster. 2. All oll1e1 emplc.yec:.s 140 hours/annum ( 18 work shifts or 28 continuous days off). Annual leave may be broken into 2 ~eparate periods by agre,,mcnt. -; Payment is made on base pay at the time of taking annu<1.l leavc not at the time the annual leave fails due.". Clause 28 which deais with the "annual leave honu.s" should also be' noted; so far as is relevant it provides:- " I. Non continuous shift workers are entn.led to receive 2 weeks annual leave bonus each complett>d year of .,ervice, calculated on base pay. Bas,: pay is the rate of pay when the honus is received not when it is due. 2. Continuous shift workers who are lo be pa.id thei1 normal shift rate for 22 weeks.". Those clauses mean that a 5 shift continuom; shift worker will receive for each of the 35 continuous days off (5 weeks) the same amount of wage that that worker would have received if not on leave - the same actual amount eaeh week. A 4 shift continuous shift worker pursuant to that provi.~ion would receive for each of the weeks on annual leave the wage that that worker was entitled to on the projection of that worker's ~hift roster over that period; that indicatt:s the relevance of the second sentence in clause 36.1. The weekly wage for continuous shift workers (other than .5 shitt continuous shift workers) QGIG 5/3/99 5 March, 1999 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 165 whilst on annual leave would be calculated by adding to the base pay for that worker shift allowance plus any other entitlements as if the shift for the week in question had been worked. Thus thl'. pay for each week a 4 shift continuous shift worker was on annual leave would be different. f-'or other employees the holiday pay would he calculated by taking base pay, plus annual leave bonus if applicable, plus any other specific sums to which the worker was entitled. II i.~ important that the exμcssion "pay presently used as the basis fo1 annual leave entitlemem'' have the same meaning for all workers. TI1e quantity will, of course, b.._, different for different categories of workers, but the formula must be the same. The words "deemed'', "basis" and "entitlements" are of cntical impoi:tance and hold the key to the proper construction of the provision. lbe term "deemed'' strongly suggests that something other than the real or true position is being referred to. Relevantly a "week's pay" is not what the worker actually receives but is "deemed" to be something else. What is deemed to be "week's pay" for purposes of the provision is the "pay presently used as the basis for annual leave entitlement". The reference is not to the pay that the worker would actually receive if on annual leave; the reference is to the pay which is used as the basis for calculating the wages entitlement dunng annual leave. Indeed, to that extent, there was probably agreement between counsel. From that point Mr Herbert for the appellant submitted that when determining the wage entitlement of a 5 shift continuous shift worker whilst on annual leave the ''basis" i5 the pay which such a worker receives each week. To calculate'. the total amount of annual leave entitlement that amount is multiplied by the number of we0ks (5). How,wer, in my view, that is not the calculation clause 9 is referring to. Mr Herhcrt' s submission indicates how the total wages for the a.nnual holiday period are calculated; clause 9 is essentially concerned with how the weekly wage component for that period is calculated or determined. That such must be the case is demonstrated by considering the position of all other workers than 5 shift continuous shift workers (the only employees whose wages are a.veraged). The annual leave pay entitlement of all other workers starts with the relevant base pay. That is so even for 4 shift continuous shiit workl~rs; they get base pay plus the shift allowance relevant to the projection of tlle shift roster into the annual leave period. There is also another factor which points to that as being the correct conclusion. Clause 36.5 provides that payment for the period of annual leave is made on base pay at the time of takmg annual leave not at the time the annual leave falls due. In other words if there is an increase in base pay between the date annual leave foll due> for a particular workrr and the datr that worker took annual k..ave, the leave entitlement is calculated from the higher base pay. 'That applies to 5 shifr continuous shift workers; when there is an increase in the bas0 pay relevant to their positions those workers are entitled to it and their annual leave pay entitlement would be adjusted accordingly. It cannot be said that because their wage is averaged out over a 40 week period lherc is no basic pay figure in the calculation. To adopl the construction contended for by the appellant would give 5 shift continuous shift workers in pa1ticular a benefit over and a.hove the conditions applicable to all other employees of the respondent in circumstances where there was no express provision in the Agreement of recognising an entitlement to such a benefit. The concept of "base pay" is rd1ected in a number of provisions of the Agret:ment; reference need only be made to clauses 24, 25, 26, 27, 28 and 36 (see also Appendix B). \Vhilst the expression in clause 9 "pay presently used as the basis" need not necessarily be the same as "base pay", the fact is that "ba.se pay" is the starting point for calculating all, or virtually all, of the actual wages paid to all employees of the respondent whether for an ordinary working period or for annual leave entitlement. In the circumstances I have come to the conclusion that the construction placed on the clause by Commissioner Bloomfield was correct. The paities agreed that n:gardkss of the outcome there should be no order as to costs of the appeal. The appeal is dismissed. Dat"d this 11ineteenth day of h:hruar} 1999 G. WILLIAMS, President. App;:arance<:- Mr A. Herbert (instructed by the Appellant Australian Liquor, Hospitality and Miscellaneous Workers Cnion, Queensland Branch, Union of Employees. Released: 19 h:brnary 1999 Mr G. Martin (instructed by Clayton Utz) for the Respondent. ##########################!!################################################################################################ -- 2 of 2 --