Coates v McGarry [2012] QCAT 187

CITATION: Coates v McGarry [2012] QCAT 187 PARTIES: Mr John Coates (Applicant) v Sean McGarry t/a Abstract Plumbing Services ABN 13059592971 (Respondent) APPLICATION NUMBER: MCDO189-11 (Pine Rivers) MATTER TYPE: Other minor civil disputes matters HEARING DATE: 30 March 2012 HEARD AT: Pine Rivers DECISION OF: Jeremy Gordon, Member DELIVERED ON: 3 May 2012 DELIVERED AT: Brisbane ORDERS MADE: Mr McGarry is ordered to pay to Mr Coates the sum of $2,695.95 plus filing fee of $95, a total of $2,790.95. CATCHWORDS: MINOR CIVIL DISPUTE – JURISDICTION – CLAIM FOR CONTRACTUAL ENTITLEMENTS UPON TERMINATION OF EMPLOYMENT – whether Tribunal has jurisdiction to hear the matter – whether plumber on daily hire or weekly hire – effect of the National Employment Standards and of the Plumbing and Fire Sprinklers Award 2010 Fair Work Act 2009 (Cth), s 26(1) Queensland Civil and Administrative Tribunal Act 2009, ss 11, 12, 52(7) Wiechers v Sodexo Remote Sites [2012] QCAT 16 considered Australian Meat Industry Employees’ Union v Belandra Pty Ltd [2003] FCA 910 considered APPEARANCES and REPRESENTATION (if any): APPLICANT: John Coates -- 1 of 10 -- 2 RESPONDENT: Mr McGarry, assisted by his wife REASONS FOR DECISION The claim [1] Mr Coates claims the sum of $2,695.95 plus interest from his former employer Mr McGarry as “monies owing”. The claims are for: (a) one week’s pay in lieu of notice on termination of employment; (b) a waiting time penalty under the relevant Award for the delay in paying the one week’s pay in lieu of notice; and (c) unpaid accrued holiday pay owing on the date of termination. Background and issues [2] As from Monday 5 September 2011 Mr Coates was taken on as an employed plumber and gasfitter by Mr McGarry. Having worked up to Tuesday 13 September 2011, he was dismissed on that day by Mr McGarry. On termination he was not paid any more than he was entitled to for the hours that he had actually worked. [3] Mr McGarry defends the claim on the grounds that: (a) Mr Coates was a “daily hire” employee and therefore not entitled to one week’s pay in lieu of notice on termination of employment;1 (b) during his employment Mr Coates had been paid more than he was entitled to be paid under the relevant Award and therefore any compensation should be reduced by the amount of the overpayment; and (c) Mr Coates had retained two items owned by Mr McGarry and any compensation should be reduced by the value of these items. [4] The question arises as to whether QCAT has jurisdiction to hear the claim bearing in mind it is a dispute between an employer and employee. To analyse this question, it is necessary first to identify the legal framework which applies to the employment and to the claim. The applicable legal framework [5] Mr Coates was taken on as employee by Mr McGarry acting as employer in his individual capacity as operator of a private industry business. [6] As from 1 January 2010, employees of private industry businesses in Queensland are “national system employees” within the enlarged definition of that phrase contained in section 30M of the Fair Work Act 2009. This 1 The right to the minimum period of notice is excluded in the case of a daily hire employee working in the building and construction industry by s 123(3) of the Fair Work Act 2009. -- 2 of 10 -- 3 section comes into play because Queensland referred its industrial relations powers for the private sector to the Commonwealth on 31 December 2009.2 [7] Section 43 of the Fair Work Act 2009 states that: (1) The main terms and conditions of employment of an employee that are provided under this Act are those set out in: (a) the National Employment Standards (see Part 2-2); and (b) a modern award (see Part 2-3), an enterprise agreement (see Part 2-4) or a workplace determination (see Part 2-5) that applies to the employee. [8] In this case, Mr Coates’ employment was covered by the Plumbing and Fire Sprinklers Award 2010 – MA000036. This is a modern award under the Act. It commenced on 1 January 2010, but the relevant version which applied at the time of Mr Coates’ dismissal was as varied on 6 September 2011. [9] It is clear from the wording of section 43 that the National Employment Standards (the “NES”) and the terms of any applicable modern award are incorporated in an employee’s contract of employment. This means that the contractual obligations and entitlements which apply between employer and employee are those in the NES and the modern award. [10] The table below shows the provisions of the NES and of the Award that Mr Coates relies on to support his claim: Claim NES or Award Provision (a) One week’s pay in lieu of notice section 117 in the NES (minimum period of notice or payment in lieu) (b) Penalty for non- payment of above clause 27.4 of the Award (waiting time for payment of the above, one week’s pay maximum ) (c) Accrued holiday pay on termination section 90 in the NES (payment for untaken leave on termination) as enhanced by the additional leave loading provided by clause 34.2(b) of the Award [11] In each of these claims he relies on a provision of his contract of employment as incorporated into his contract by section 43 of the Fair Work Act 2009. Considerations: QCAT’s jurisdiction to hear this claim [12] By section 11 and Schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009, QCAT has jurisdiction over claims to recover a debt or a liquidated demand of money up to the prescribed amount. The debt might arise (and usually does arise) from contractual obligation between the 2 By the Fair Work (Commonwealth Powers) and Other Provisions Act 2009 (Qld) and other transitional legislation. -- 3 of 10 -- 4 parties. On the face of it such a contract could be a contract of employment. [13] The question arises however, whether the Fair Work Act 2009 provides a comprehensive and exclusive legal framework for claims arising in the context of a contract of employment. [14] There are comprehensive provisions in the Fair Work Act 2009 for compliance and enforcement of its provisions by the courts3, which confer no jurisdiction upon QCAT. However there is nothing in the Act to suggest that such jurisdiction is exclusive and that QCAT’s jurisdiction under the QCAT Act is ousted. In particular, section 26 of the Fair Work Act 2009 specifically excludes State or Territory industrial laws, but the QCAT Act is not such a law. And section 27 of the Fair Work Act 2009 provides that the Fair Work Act 2009 does not affect a State law dealing with claims for “enforcement of contracts of employment”4, and the QCAT Act is such a law. [15] Section 26 also permits regulations to be made as to the interaction of the Fair Work Act 2009 and State laws but there is nothing in the regulations which affect this particular case. [16] Clause 9 of the Award provides for disputes which could not be resolved in the workplace to be referred to Fair Work Australia. Sections 737 to 740 of the Act make provisions for what can be so referred. Nothing in these provisions would oust QCAT’s jurisdiction. [17] QCAT often hears claims made by employees for money owed by an employer. A typical claim might be for non-payment of wages and superannuation. These are clearly “debt” claims and within the jurisdiction of QCAT5. Such claims arise from the employer’s obligation in the contract of employment to pay wages and superannuation. [18] I conclude therefore that provided an employee’s claim can be regarded as a debt claim or one for a liquidated demand of money and which arises from the contract of employment it is within QCAT’s jurisdiction. All Mr Coates’ claims in this case are of that nature. Considerations: the claim on its merits [19] The minimum period of notice (one week for an employee whose continuous service was not more than one year) is contained in section 117 of the Fair Work Act 2009. This is part of the NES contained in the Act. If the period of notice is not given, then the employer must make a payment in 3 In Chapter 4. 4 This the combined effect of section 27(1)(c) and 27(2)(o): under these provisions, a State court can enforce a contract of employment but would have no jurisdiction to refuse to do so on the grounds that a term was unfair. 5 This was confirmed by Judge Fleur Kingham, sitting as Acting President in Wiechers v Sodexo Remote Sites [2012] QCAT 16. -- 4 of 10 -- 5 lieu of notice. However by section 123(3) the minimum period of notice would not apply to “a daily hire employee working in the building and construction industry (including working in connection with the erection, repair, renovation, maintenance, ornamentation or demolition of buildings of structures)”. [20] This is reflected in the Award which provides in Clause 11 that a worker on daily hire is entitled to one day’s notice of termination or the equivalent pay in lieu of notice. Notice may be given at or before the usual starting time of any ordinary working day to expire at the completion of that day’s work. [21] This contrasts with the provisions in the Award covering weekly employees (Clause 12). Such employees would work an average of 38 hours a week and would be entitled to the minimum notice as provided in the NES. [22] Clearly if Mr Coates was a daily hire employee he would come within the exception in section 123(3). He tried to argue that he did not work in the building and construction industry, however in my view he clearly does even if doing only domestic plumbing work. [23] The sole question therefore to resolve Mr Coates’ claim for one week’s pay in lieu of notice is whether he was a daily hire employee. [24] The Award in clause 10 provides as follows: 10.1 Employees under this award will be employed in one of the following categories: (a) daily hire employees (plumbing and mechanical services classifications only); (b) weekly hire employees; or (c) casual employees. 10.2 At the time of engagement an employer will inform each employee, in writing, of the terms of their engagement and, in particular, whether they are engaged as daily hire, weekly hire or casual employees. [25] The legal consequences of a daily hire are that at the end of each day of employment, the employment relationship terminates but the engagement as a regular daily hire worker continues until terminated by notice. Whilst that engagement lasts, employees are obliged to attend each day unless they are notified that they are not required to attend.6 [26] Being taken on as daily hire is potentially much less valuable to an employee who is seeking regular work than being taken on as weekly hire. Mr McGarry told me that because of this, daily hire employees might be paid more than weekly hire employees. This can be seen in the Award which provides for a lost time loading. A higher hourly rate might also be paid. 6 These legal consequences are as stated by North J in Australian Meat Industry Employees’ Union v Belandra Pty Ltd [2003] FCA 910 at [38]. -- 5 of 10 -- 6 [27] I heard evidence from both parties in order to resolve the issue whether Mr Coates was taken on as a daily hire employee. The parties are in agreement that Mr McGarry interviewed Mr Coates on about 1 September 2011. They discussed the nature of the work, the hours, the general terms of employment, wages and overtime rates. Mr McGarry explained that the job was full-time. He offered the job to Mr Coates and Mr Coates accepted it. He was to start the following Monday, 5 September. [28] There was no mention at the interview as to whether Mr Coates was being taken on as a “daily hire”; nor was it mentioned that he was being taken on as “weekly hire”. Nothing in writing was given to Mr Coates to state this one way or the other, as required by clause 10.2 of the Award. [29] Both sides agree that there was a discussion in the interview about Mr Coates being employed initially on six months’ probation. [30] Mr McGarry told me that in the interview he explained to Mr Coates that only one day’s notice on either side was required to terminate the employment. Mr Coates disputes that this was said. I do not accept Mr McGarry’s evidence about this because he knew at the time of the interview that in the following week he would be presenting Mr Coates with a contract to sign which would deal with the required notice period. I do not think it is likely that he would have wished to refer at the interview to termination of an employment which was on that very day being offered to a new employee. It is much more likely that he would have left this to be dealt with in the contract which he was to provide later. [31] That contract was provided to Mr Coates about two days after he started work. It was left for him to sign. This contained this passage: “Six (6) months probation (for new employee) – this means during this period both you and the employer have the opportunity to decide whether the employment relationship can continue in the longer term. If you, or we, wish to end the employment relationship during probation, this can occur with one days notice, or the payment in lieu or forfeiture of pay.” [32] The contract did not state whether Mr Coates was on daily hire, or weekly hire. However the provision for termination (one day’s notice only during the probationary period) was consistent with a daily hire and inconsistent with a weekly hire at least during the first 6 months of the employment. [33] After reading this document Mr Coates refused to sign it. Mr McGarry submits that by continuing to work having received the contract Mr Coates was deemed to have accepted it. In effect his submission put in legal phraseology is that Mr Coates accepted the contract by conduct. I do not agree with this. The very fact that Mr Coates did not sign the contract indicates that he did not accept its terms. He already had an oral contract of employment in different terms which he was working under. This was made up of the oral contract of employment together with the terms and conditions incorporated in that contract from the NES and from the Award. I accept -- 6 of 10 -- 7 that if he had worked for Mr McGarry for a much longer period without objecting to the contract it is possible he might have impliedly accepted it. But he was there only for a few days. [34] Mr McGarry submitted and I accept, that it was very common in the plumbing industry in Queensland for employees to be on “daily hire”. This matches the employer’s requirement for workers in that industry, which may fluctuate greatly from day to day. [35] However, Mr Coates told me and I accept, that he had never previously been taken on as daily hire, despite being an experienced plumber. [36] It can be seen by looking at the various Awards covering plumbers working around Australia that before 1 January 2010 the practice as to the type of hire varied greatly around the nation. It would also vary depending on nature of work, size of business and number of employees. A larger plumber’s business might have a core of weekly employees, topped up with daily and/or casual employees to provide some flexibility. [37] So it is perfectly feasible that both Mr Coates and Mr McGarry from their own individual experience are right as to their understanding of the usual practice. [38] Mr McGarry says that he intended at the time to take on Mr Coates as daily hire. He says that this is indicated by the fact that Mr Coates was on a base rate of $28 per hour which was higher than it would otherwise have been. Also he says it is indicated by the notice period in the written contract he asked Mr Coates to sign. [39] Mr Coates says that he thought he was being paid more because of his experience. He did not intend to accept the employment as a daily hire and thought it was weekly hire. [40] I accept the evidence both of Mr McGarry and Mr Coates on this matter. This means that in their minds they held different views as to the terms of that employment: Mr McGarry thought it was daily hire; Mr Coates thought it was weekly hire. [41] In determining whether the employment was daily hire or weekly hire, the contractual test which I have to apply is not what Mr McGarry thought in his mind or what Mr Coates thought in his, but what appears objectively from what was said and from other circumstances, at the time. [42] A useful test is how a reasonable person in Mr Coates’ position would have interpreted what was said to him7. At the interview all he was told of relevance about the job was that is was a “full-time” job. The remainder of the discussion was about the nature of the work. There was nothing else said in the interview which would have suggested one way or the other to a 7 Paragraph [110-230] of Halsbury’s Laws of Australia. -- 7 of 10 -- 8 reasonable man in Mr Coates’ position whether in this employment he was entitled to work on a regular basis or whether he was only entitled to work on a daily basis and that he could be laid off if there was no such work. He was informed that there was a probationary period of 6 months which tends to suggest that the employer intended the employment to be a long term one, although this is not necessarily inconsistent with daily hire. [43] Mr Coates was only in employment with Mr McGarry until 13 September 2011. I looked for things which happened during the time of his employment, some seven working days which might indicate one way or the other whether he was employed on daily or weekly hire. Two things are more suggestive of weekly hire. One is that over the seven days he worked every working day. The second is that his first payslip gave his annual pay rate at $55,328, whereas it might seem odd to state this for a daily hire employee: I note that this was missing from his second and final payslip. Against this is the draft contract which was more consistent with daily hire. I do not regard any of these things as conclusive nor indeed that they much assist one way or the other, since they are not necessarily inconsistent with either possibility. [44] So there was nothing in what was said between the parties nor in the circumstances which helps to determine on an objective basis whether the employment was on daily hire or weekly hire. [45] A “meeting of the minds” is an important element in establishing a contract in the first place, but it is not necessarily fatal to the contract if the contracting parties misunderstand its terms. Here both sides understood that after that meeting, Mr Coates was employed by McGarry. And everything which happened afterwards (attendance at work by Mr Coates, provision of work, payment of wages, and offer of written terms by Mr McGarry, and the dismissal itself), was consistent with the existence of a contract of employment. [46] Clause 10.1 of the Award requires that the employer must inform the employee in writing at the time of the engagement whether the employee is on daily hire, weekly hire or casual. Clearly one of the reasons why an employee should be informed of this is so that the employee can then change his mind and refuse to take on the engagement at that early stage if he does not like the type of employment on offer. It is clear that clause 10.1 is not prescriptive. Non-compliance with that clause would not invalidate an otherwise valid contract of employment. [47] So the contract of employment existed. The term that was missing was whether it was weekly hire or daily hire, and in this case the parties were never agreed as to that matter. [48] The significance of this for this case is that I do not make a determination that Mr Coates was a daily hire employee. Nor do I make a determination that he was a weekly hire employee. The exclusion from the minimum period of notice in section 123(3) is only engaged in the case of daily hire -- 8 of 10 -- 9 employees and it cannot be said that Mr Coates was a daily hire employee. Accordingly Mr Coates is entitled to the minimum period of notice provided by section 117 of the Fair Work Act 2009. He was not given this, so he is entitled to one week’s pay in lieu of that notice. [49] As for the waiting time under the clause 27.4 of the Award, the clause provides that this is payable for a delay in payment under clause 17 of the Award. Clause 17 requires notice of termination in accordance with the NES. Since I have found that termination provisions in the NES apply, it follows that clause 27.4 also applies and Mr Coates is entitled to his waiting time. [50] As for his unpaid holiday pay he is also entitled to this and I have no reason to disagree with the amount that is claimed in respect of this. [51] However, Mr McGarry seeks a set-off from the award on three grounds. [52] Firstly, on the basis that Mr Coates was paid more than the Award. It is said that he was paid at an hourly rate of $28 which was greater than provided by the Award. Therefore he was overpaid and this should reduce his claim. This submission ignores the fact that Mr Coates was entitled to be paid at his agreed contractual rate, which was $28. It is therefore not appropriate to reduce his claim on these grounds. [53] The second challenge is that it is said that Mr Coates retained two items – a tap resealing tool worth about $60 and a shirt worth about $25. Mr Coates denies having retained these items. Having heard evidence about this matter I find that Mr Coates did not retain these items. My reason is that I do not think that Mr Coates is lying about this matter. He gave his evidence with great care. And I think there is scope for Mr McGarry to be mistaken about this, since it is must be very difficult in a business of this sort to track the exact whereabouts of things such as tools and clothing. [54] In any case there is no counter application before me in relation to these items so they cannot be dealt with as a discrete claim, and can only be dealt with as a set off against Mr Coates’ claim. His rights arise from the oral contract of employment as adjusted by the NES and the Award. Mr McGarry relies on clause 11 of the written contract proffered to Mr Coates which Mr McGarry says entitles him to withhold final monies until all property is returned. [55] However Mr Coates did not agree these contractual terms so this cannot be relied on. [56] In any case section 61(1) of the Fair Work Act 2009 provides that the minimum standards in the NES cannot be displaced, and clause 7.3(b) of the Award provides that any variation of the Award can only leave an employee better off overall, which would not be the case if clause 11 stood. Therefore there can be no set off against Mr Coates’ contractual rights. -- 9 of 10 -- 10 [57] It is also argued by Mr McGarry that Mr Coates was given one day’s notice and refused to work it, so he is not entitled to any pay in lieu of notice. Clause 11 of the Award is relied on. However, on my findings Clause 11 of the Award does not apply (it only applies to daily hire employees). In any case, on my findings Mr McGarry was in breach of the contract of employment by only giving one day’s notice and so Mr Coates was entitled to leave immediately and rely on the NES entitlement to payment in lieu. Conclusion [58] In the circumstances I shall allow the claim in the sum of $2,695.95 as claimed. I also award the filing fee of $95. The total is $2,790.95. [59] Mr Coates claims interest on the sums claimed at 10%. QCAT does have jurisdiction to award interest on such claims, however this is discretionary. It seems to me that it would be inappropriate to award interest in a case where the Award itself provides for a penalty for late payment and which has already been awarded. Whilst the claim for holiday pay might attract interest, the figures are very small and I do not propose to award interest on that element. -- 10 of 10 --