Association of Professional Engineers, Scientists and Managers, Australia, The v GM Holden Ltd

[2015] FWC 1793

[2015] FWC 1793

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Association of Professional Engineers, Scientists and Managers, Australia, The
v
GM Holden Ltd
(C2014/7124)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 16 MARCH 2015

Alleged dispute concerning employees are on paid parental leave positions have been made redundant.

[1] The Association of Professional Engineers, Scientists and Managers, Australia (APESMA) notified a dispute with GM Holden Ltd (Holden) about the entitlement to be paid out untaken paid parental leave.

[2] Two employees of Holden had been made compulsorily redundant. Their employment ended whilst they were on paid parental leave. APESMA contends that the employees should have been paid out the balance of their paid parental leave on termination of employment. Holden contends that Attachment X to the GM Holden Ltd Enterprise Agreement 2014 (the 2014 Agreement) is an exhaustive statement of employee entitlements when employees are compulsorily made redundant and that the employees were not entitled to be paid out their untaken paid parental leave.

[3] The 2014 Agreement provides for the resolution of disputes at clause 3.1. There is no dispute that this dispute is properly before the Fair Work Commission.

[4] Holden announced in December 2013 that it would close its Australian manufacturing operations and significantly reduce its engineering operations.

[5] Clause 4.18 of the 2014 Agreement provides at Attachment X for the closure plan. It provides “a complete and exhaustive account of all information and consultation processes, payments, benefits and entitlements that will apply in relation to either termination or proposed termination by way of compulsory redundancy of employees whose employment is covered by the classifications set out in Part 5 of this Agreement and whose positions are no longer required as a direct consequence of the decision by General Motors to close its Australian manufacturing operations and significantly reduce its engineering operations.”

[6] Attachment X provides for certain benefits to be paid on termination. Some of the entitlements would automatically be paid out on termination of employment for any reason. Other entitlements such as personal leave would not normally be paid out on termination. Attachment X however expressly provides for the payment of a maximum of 30 days unused personal leave to be paid out on termination. There is no reference in Attachment X for the payout of untaken paid parental leave.

[7] Clause 1.6 of the 2014 Agreement provides the parties will make no extra claims during the life of the Agreement.

[8] Clause 7.6 of the 2014 Agreement provides for paid parental leave of 6 weeks or 14 weeks depending on the employee’s service. Payment is made either in a lump sum at the commencement of the leave or on weekly/fortnightly basis throughout the period of paid leave.

[9] APESMA submitted that the entitlement to the leave accrues at the commencement of the leave. Hence it submitted that the employees were entitled to have any untaken leave paid out on termination of employment.

[10] APESMA submitted that there is no requirement for the employee to remain an employee during the period of paid leave. APESMA submitted that the fact that the amount can be paid as a lump sum or in instalments supports its contention that the entitlement accrues on commencement of the leave.

[11] APESMA submitted that the employees may not be in a position to seek new employment because they are caring for their new born child.

[12] APESMA submitted that the failure of Attachment X not to provide for the payout of parental leave on termination of employment is discriminatory. It submitted that an employee made redundant whilst on parental leave who had elected to take the payment as a lump sum would be treated differently to an employee who elected to be paid in instalments.

[13] Holden relied on the wording of Attachment X to support its contention that the employees are not entitled to a payout of the balance of their paid parental leave.

[14] Holden relied on the plain meaning of “a complete and exhaustive account” to submit that APESMA cannot now make a claim for the payout of untaken paid parental leave. It submitted that if there had been an intention to pay out the balance of the paid parental leave it would have been included in the list of benefits. It submitted that to order Holden to make the payment would be inconsistent with the Agreement. It further submitted that a claim for such a payment is contrary to the no extra claim clause.

[15] Holden further submitted that even if Attachment X did not apply, there is no entitlement to be paid out paid parental leave on termination of employment. It submits that clause 7.6 makes no such provision. It submits that upon termination of employment paid parental leave ceases.

[16] Holden did not agree that the entitlement to paid leave commences when the leave commences. It submitted that the clause relied upon by APESMA is concerned with eligibility not the entitlement to the leave. The use of the word commences in clause 7.6 is to enable the employee’s length of service to be determined.

[17] Holden further submitted that there is no differential treatment of employees. If an employee who had taken a lump sum payment resigns during the period of paid parental leave Holden would be entitled to take steps to recover the monies paid, albeit this had never occurred.

[18] Holden submitted that any dispute over discrimination is not properly before the Commission because APESMA had not referred this to the Commission. In any event Holden rejects the claim and submits that it does not pay out all forms of paid leave on termination. For example only limited personal leave is paid out.

[19] Holden also rejected the submission that it would be unfair not to make the payment because the employees are not able to immediately seek alternative work. Holden submitted that there was no evidence to support this contention and in any event the employees were in no different position to employees who are on personal leave when made redundant.

Conclusion

[20] There was no dispute between the parties as to the proper approach to the construction of agreements.

[21] Under the 2014 Agreement, employees are entitled to various forms of paid leave some of which accrues from year to year if not taken.

[22] For employees generally, not all untaken paid leave is paid out on termination of employment. For example, the NES provides for accrued untaken annual leave to be paid on termination of employment but personal leave is not.

[23] The parties to the 2014 Agreement have expressly turned their minds to this question in relation to particular types of paid leave. For annual leave see clause 7.1.10, for personal leave see clause 7.2.8 and for long service leave see clause 7.10(c). That there is no equivalent provision for paid parental leave is telling.

[24] Clause 7.6 of the 2014 Agreement defines who is eligible for paid parental leave. To be eligible the employee must have a period of service which is calculated from the day immediately before taking the leave. Provided the employee meets the service requirement and is the primary carer of the child, the employee is entitled to a period of paid leave.

[25] I accept the submissions of Holden that an employee cannot be on leave either paid or unpaid once his or her employment ceases. The entitlement to be on paid leave is only available to existing employees.

[26] To be entitled to payment in lieu of any untaken leave there must be in the 2014 Agreement an express entitlement to the payment. In this case there is not.

[27] I also accept the submissions of Holden that Attachment X is an exhaustive statement of employees entitlements if compulsorily made redundant, due to the closure of Holden’s manufacturing operations and the significant reduction of its engineering operations.

[28] It is clear that the parties turned their mind to the payment of outstanding leave entitlements and expressly modified the arrangements for the payout of paid personal leave. They could have, but did not, make any arrangement for the payment of untaken paid parental leave.

[29] I do not accept the submissions of APESMA that the failure to make the payment is discriminatory. I accept that had the employees been paid their leave in advance and Holden had elected not to seek recovery of the monies, their position would have been different. However, I am unable to conclude that the decision not to pay out the remainder of the leave is discriminatory.

[30] I therefore dismiss APESMA’s application.

DEPUTY PRESIDENT

Appearances:

B. Scholten for APESMA

F. Anderson for GM Holden Ltd

Hearing details:

2015.

Melbourne:

7 January.

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