Farr v Gorrie and Gorries Stokes & Associates [2004] QIRC 55 (2004) 175 QGIG 1106

1106 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 26 March, 2004 ########################################################################################################################## # QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 278 – application to recover unpaid wages etc. Michelle Farr AND Stephen Paul Gorrie and Gorries Stokes & Associates (W128 of 2003) COMMISSIONER FISHER 16 March 2004 Application for unpaid wages – Applicant gives notice – No agreement about earlier finishing date – Respondent alleges applicant approached staff with regard to employment in new practice – Applicant denies allegation – Respondent found to have terminated applicant’s employment – No offers of employment made to other staff – Respondent to pay out notice period and entitlements within 22 days of release of decision. DECISION This is an application by Michelle Farr pursuant to s. 278 of the Industrial Relations Act 1999 seeking to recover wages, annual leave and superannuation contributions unpaid on the cessation of her employment with Gorrie Stokes and Associates (the Firm). Ms Farr claims the underpayment totals $3,703.61. Ms Farr worked for the Firm and various other associated entities from 1 June 1998 until 5 August 2003. From about early June 2003 Ms Farr and her husband began negotiations to purchase an existing accounting practice that Ms Farr would manage. Detailed negotiations commenced in early July 2003. Under the terms of her employment contract Ms Farr was required to give three weeks’ notice of her resignation. Consistent with that term, on 31 July 2003 Ms Farr handed Mr Gorrie, the proprietor of the Firm, a letter advising of her resignation effective 21 August 2003. Mr Gorrie required Ms Farr to work out the period of her notice as it was the busiest time of the year for an accounting practice. The following day Ms Farr approached Mr Gorrie to request ceasing her employment a day or two before her effective resignation date as she wanted those days to attend to personal business before almost immediately commencing work in her own practice. No agreement about an earlier finishing date was reached. It remained Mr Gorrie’s view that Ms Farr should work out as much of her notice as possible given the timing of her resignation in the midst of the busiest period for the practice. Until 31 July 2003 the relationship between Ms Farr and Mr Gorrie was harmonious and cordial. The relationship began to deteriorate rapidly from the afternoon of 31 July 2003 when, after the resignation had been tendered, Ms Farr gave Mr Gorrie a list of the designated clients she intended to take with her to her new practice. (The ability to take designated clients with her was a matter covered by the employment contract). Discussions took place over the next couple of days about these clients and the management of them in the interim culminating in a written direction dated (Saturday) 2 August 2003 and given to Ms Farr on 4 August 2003. Ms Farr did not complete a full day’s work on 4 August 2003 as she was ill. -- 1 of 2 -- 26 March, 2004 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 1107 Mr Gorrie gave evidence that during the course of 4 August 2003 his Administration Manager, Cathy Drescher, told him that Ms Farr had approached several members of staff about working in her new practice. It was Mr Gorrie’s evidence that he relied on Ms Drescher’s information because she was a long-standing member of staff who had personal relationships with several other staff. On 5 August 2003 Mr Gorrie confronted Ms Farr with the allegation that she had been approaching staff to work in her new practice. Ms Farr denied the allegation but admitted to having general discussions about her new practice with several staff during working hours. Mr Gorrie said that “given her actions in approaching staff as well as her actions in intending to take assets of the firm, both of which I felt tore at the core of the employment agreement, I had no choice but to consent to her request. I then handed Ms Farr the letter agreeing to her request.”. The letter stated that Mr Gorrie had decided to take up Ms Farr’s request for ceasing employment with the Firm and that the date for ceasing was 5 August 2003. Mr Gorrie paid all Ms Farr’s entitlements up to 5 August 2003. Ms Farr’s claim is for wages and other entitlements for the balance of the notice period. The evidence in this case shows that Ms Farr’s resignation was inconvenient for Mr Gorrie. Further, he wanted Ms Farr to work out the period of her notice. Ms Farr’s request to finish a day or two before her nominated ceasing date had not resulted in any agreement. As at 5 August 2003 Ms Farr understood that she was to continue working for the Firm until 21 August 2003. Although Mr Gorrie attempted to characterise the cessation of employment as an agreement to bring forward the resignation date, it is clear from the evidence that Ms Farr did not consent to such an early date. In all, the evidence shows that Mr Gorrie terminated Ms Farr’s employment on 5 August 2003. In my view I am entitled to rely on the letter given to Ms Farr by Mr Gorrie as showing the reason for the employment coming to an end. I am not obliged to go behind that and consider whether Mr Gorrie had grounds for summary termination of Ms Farr’s employment. Moreover, this argument was not specifically raised as a defence to the application. Having said that, the evidence does not support a conclusion that Mr Gorrie had grounds for summary termination. Ms Drescher was not called as a witness and of the other employees that gave evidence, the most that can be determined is that general discussions occurred about Ms Farr’s new practice. Hearsay evidence has been disregarded. Accordingly, I can only conclude that no offers of new employment were made by Ms Farr to employees of Mr Gorrie’s firm. The evidence also supports the view that the discussions between Ms Farr and Jodie Deakin, a Financial Planner, who was employed by a separate entity to the Firm, did not derogate from the applicant’s responsibility to her employer. In the circumstances I am satisfied that Ms Farr should have been terminated with notice and, given that her last date of employment with the Firm had already been specified, that she is owed monies for wages in lieu of notice and annual leave accrued for the period 6 August to 21 August 2003. The applicant amended her application in exhibit 2. In order to overcome any technical defect, I amend the application to include the amount claimed and the explanation provided in paragraphs 58 to 62 of exhibit 2. I note that Mr Gorrie did not challenge the veracity of any amounts claimed by Ms Farr, however upon examination errors in calculation have been found. The applicant also claimed pro rata superannuation on annual leave accrued from 6 August to 21 August 2003. No submissions were made as to whether this part of the application fell within the Commission’s jurisdiction. Neither were submissions made about whether superannuation contributions were required to be made for lump sums paid for accrued annual leave. To satisfy myself about this matter I have had regard to the Superannuation Guarantee Ruling 94/4 which explains what are “ordinary time earnings” as defined in subsection 6(i) of the Superannuation Guarantee Act 1992. This Ruling provides that lump sums paid for accrued annual leave are excluded from ordinary time earnings and hence superannuation contributions are not required to be paid on such amounts. Accordingly this aspect of the claim is refused. The following sets out the amounts claimed and accepted together with the correct calculation. 1. Unpaid wages: Wages payable for the period from 6 August 2003 to 21 August 2003 (inclusive) in lieu of notice of dismissal from employment not given – 12 working days at the daily rate of $253.85. Amount to be paid: $3,046.20 2. Payment for annual leave: Pro rata annual leave for period from 6 August 2003 to 21 August 2003 (inclusive) (notice period upon dismissal from employment – 1.42 days at the daily rate of $253.85. Amount to be paid: $360.46 TOTAL AMOUNT PAYABLE: $3,406.66 Accordingly I order that Stephen Paul Gorrie and Gorrie Stokes and Associates pay to Michelle Catherine Farr the above amounts within 22 days of the date of release of this decision. Such amounts are to be taxed according to law. Order accordingly. G.K. FISHER, Commissioner. Hearing Details: 2004 20 February Appearances: Ms M. Farr appearing on her own behalf. Mr S.P. Gorrie on behalf of the respondent. Released: 16 March 2004 -- 2 of 2 --