Australian Municipal, Administrative, Clerical and Services Union v Moreland Community Health Service Inc

[2010] FWA 1738

Note: An appeal pursuant to s.604 (C2010/154) was lodged against this decision.

[2010] FWA 1738

FAIR WORK AUSTRALIA

DECISION

Workplace Relations Act 1996
s.170LW - pre-reform Act - Application for settlement of dispute (certified agreement)

Australian Municipal, Administrative, Clerical and Services Union
v
Moreland Community Health Service Inc
(C2008/3397)

COMMUNITY HEALTH CENTRE (STAND ALONE SERVICES) MULTI-EMPLOYER CERTIFIED AGREEMENT 2005
(ODN AG2005/8834)  [AG845926]

Health and welfare services
COMMISSIONER CRIBB	MELBOURNE, 5 MARCH 2010

Alleged dispute concerning long service leave.

[1] An application has been made by the Australian, Municipal, Administrative, Clerical and Services Union (ASU) pursuant to s.170LW of the Workplace Relations Act 1996 (the Act). The application is with respect to a dispute between the ASU and the Moreland Community Health Service Inc (MCHS) regarding the application of the Community Health Centre (Stand Alone Services) Multi-Employer Certified Agreement 2005 (the Agreement). The dispute concerns clause 18.5 of the Agreement and the entitlement or otherwise to pro rata long service leave on termination of employment.

JURISDICTION

[2] Neither party challenged the jurisdiction of the Tribunal to deal with this matter pursuant to s.170LW of the Act.

[3] However, it is necessary for the Tribunal itself to be satisfied that the jurisdictional pre-requisites set out in s.170LW have been met.

[4] Section 170LW of the Act states as follows:

“170LW Procedures for preventing and settling disputes

Procedures in a certified agreement for preventing and settling disputes between the employer and employees whose employment will be subject to the agreement may, if the Commission so approved, empower the Commission to do either or both of the following:

(a) to settle disputes over the application of the agreement;

(b) to appoint a board of reference as described in section 131 for the purpose of settling such disputes.”

[5] The Agreement that is the subject of the dispute is the Community Health Centre (Stand Alone Services) Multi Employer Certified Agreement 2005. Clause 23 of the Agreement states:

“23. DISPUTE SETTLEMENT

It is the objective of this procedure to ensure that grievances are resolved by negotiation and discussion between the parties.

The parties to this agreement recognise that from time to time individual employees may have grievances, which need to be resolved in the interest of good relationships.

An employee will have the right for grievances to be heard through all levels of line management.

(i) In the first instance the employee/parties shall attempt to resolve the grievance with his/her immediate supervisor. The local union representative or other representative shall be present if desired by either party.

If the grievance is still unresolved the matter shall be referred to senior management and the senior local or state union representative.

(iii) It is agreed that these steps shall take place within seven days of the issue first being raised unless the parties agree otherwise.

(iv) Where matters remain unresolved following application of the steps referred to in subclauses (i) to (iii) above, then as provided by s.17OLW(a) of the Workplace Relations Act 1996, they shall be referred to the Australian Industrial Relations Commission for assistance in reaching settlement, through conciliation in the first instance or arbitration.

(v) Work shall continue normally in accordance with custom or practice existing before the grievance arose, while discussions take place.

No party shall be prejudiced as to the final settlement by the continuance of work.

Health and Safety matters are exempted from point (v).

For the purposes of this clause the word "individual' includes parties to this agreement.”

[6] On the basis of clause 23 of the Agreement, I find that the dispute settling procedures in the Agreement empower the Tribunal to resolve disputes by conciliation or arbitration.

[7] It is also necessary to consider whether the dispute in question is a dispute over the application of the Agreement. Both parties held the view that they were in dispute over the application of clause 18.5 of the Agreement. Specifically, the parties did not agree about whether or not Ms Wan, an employee of MCHS when she was made redundant on 22 December 2008, was entitled to be paid pro rata long service leave.

[8] On the basis of the material before me, I find that the dispute between the parties is one over the application of clause 18.5 of the Agreement. As the dispute concerns the application of the Agreement, I find that the Tribunal has jurisdiction to deal with the application.

[9] The ASU raised the issue of whether the Tribunal has jurisdiction pursuant to s.170LW of the Act when the dispute relates to a former employee. It should be noted in this regard that the ASU notified the Tribunal of the dispute on 17 December 2008 which was prior to the cessation of Ms Wan’s employment with MCHS. Further, the principles outlined in the majority decision in ING Administration Pty Ltd v Jajoo 1 are adopted in this matter.

SUBMISSIONS

ASU

[10] A written outline of submissions of the applicant (ASU) was provided by the ASU 2 together with a written statement by Ms Stracke3. During the hearing, Ms Bowe, on behalf of the ASU, expanded on the union’s written material.

[11] It was the ASU’s contention that, when Ms Wan was made redundant on 22 December 2008, she was entitled to be paid pro rata long service leave. Her service with MCHS at that time, for the purposes of long service leave, was nine years and two months.

[12] The basis for the ASU’s claim is founded in clause 18.5 of the Agreement which provides that long service leave will be taken at such time when entitled in accordance with the Social and Community Services – Victoria – Award 2000 (the Award) or the LongService Leave Act 1992 (Vic) (Long Service Leave Act), whichever is the earlier.

[13] With respect to the Award, the ASU stated that, at the time of the certification of the Agreement (12 January 2006), the long service leave provisions of the Award set out an entitlement to three months leave after 15 years continuous service. The Award also provided for pro rata long service leave where an employee was terminated with at least 10 years service but less than 15 years, except in the case of serious or wilful misconduct. 4

[14] In terms of the provisions of the Long Service Leave Act, it was pointed out by the union that section 58 provided for an entitlement to pro rata long service leave if an employee’s employment was ended and they had at least seven but less than 15 years continuous service.

[15] It was submitted that the issue in dispute is whether, pursuant to clause 18.5 of the Agreement, clause 35.8 of the Award or section 58 of the Long Service Leave Act applies to Ms Wan’s long service leave accrual. 5

Meaning of “Taken”

[16] With respect to the terms of clause 18.5 of the Agreement, the ASU argued that the meaning of the word “taken” in the phrase “long service leave will be taken” is not that it can only be “taken” by way of leave and not otherwise. Ms Bowe stated that the word did not have any specific legal meaning and should therefore be given its usual meaning based on its context. To construct “taken” as requiring long service leave to be enjoyed was said to be overstating the meaning of “taken”. It was contended that the primary meaning of “taken” is “to obtain possession” and that the sensible construction of “long service leave will be taken” is that an employee is entitled to take the entitlement of long service leave in whatever form it is available when the entitlement accrues. 6

[17] Further, it was noted that “taken” does not appear in clause 35 of the Award in relation to long service leave. It was said that “pay” is used in clause 35.5. However, it was contended that clause 35.6 which provides for pro rata long service leave on termination of employment makes no mention of payment. The conclusion reached by the ASU was that the intent of clause 35.6 is that an employee will be paid pro rata long service leave if the circumstances of the termination of their employment trigger the operation of the clause.

[18] With respect to section 58 of the Long Service Leave Act, it was stated that there was no mention of payment – rather, an entitlement (s.58(2)). However, it was agreed that such an entitlement could only be accessed in those circumstances by way of a payment. 7

Changes to Clause 18.5

[19] In terms of clause 18.5 of the Agreement, the ASU stated that the words “whichever is the earlier” are new words which were not in the previous Agreement. This Agreement was the Community Health Centre (Stand Alone Services) Multi Employer Certified Agreement 2002 and at clause 14.5, it stated:

“Long service leave will continue to be taken in accordance with the Social and Community Services – Victoria – Award 2000, at such time when entitled.”

[20] The union argued that clause 18.5 in the current Agreement contained a number of changes compared to the 2002 Agreement. The first part of the current clause, up to “2000” was said to have the same meaning as the clause set out above. However, it was submitted that the balance of the current provision (clause 18.5) must be given a meaning as the new additional words (compared with the previous Agreement) had to have work to do. 8

[21] The ASU stated that, following the negotiations for the new Agreement in 2005, there was a long period between the end of the negotiations and the conclusion of the balloting process in all of the participating workplaces. The additional words were included because the parties recognised the impact of the changes to the long service leave entitlements in the Long Service Leave Act which had occurred at the time of the negotiations but which had not yet come into force (1 January 2006). In addition, the Award had not been varied in relation to long service leave. 9 In support of these contentions, a witness statement of Ms Stracke was tendered.10

[22] Alternatively, the ASU submitted that the first part of the first sentence of clause 18.5 is a separate entitlement to the remainder of the sentence beginning with “or”. It was contended that clause 18.5 gave the employee the option of having their long service entitlement in accordance with the Award or in accordance with the Long Service Leave Act – whichever is the earlier. By “earlier”, the union argued that it referred to the point in time at which an entitlement under either instrument arose. The union stated that, if this approach was adopted, there were no ambiguity or uncertainty in the clause. In applying the principles set out in decision in Telstra Corporation Limited v CPSU 11, the union argued that the objectively ascertained mutual intention of the parties could be identified by comparing clause 14 of the previous 2002 Agreement with clause 18.5 of the current Agreement, taking into account the chronology of events set out in Ms Stracke’s witness statement.12

VICTORIAN HOSPITALS’ INDUSTRIAL ASSOCIATION

[23] The Moreland Community Health Centre was represented by the Victorian Hospitals’ Industrial Association (VHIA) and Mr Hooper made oral submissions during the hearing. A written outline of submissions 13 and witness statement by Mr B Sullivan14 were also tendered at the hearing.

[24] With respect to the issue of the Tribunal’s jurisdiction, it was submitted that the Tribunal’s role in this matter should be as provided for in the terms of the Agreement and also in light of the full circumstances of the Agreement’s negotiation and settlement, together with the accompanying documentation. It was further contended that the Tribunal had no power to undertake a legal/judicial interpretation of the relevant clauses. 15

Background

[25] The background to the long service leave clause in the Agreement was outlined as:

• Prior to the preceding 2002 Agreement, employees’ long service leave entitlements were as per the Award – “shall be entitled to leave of absence”. The quantum of absence was three months after 15 years with payment of a “gratuity” on resignation or retirement after 15 years. There was also an “ostensible” provision for the proportionate payment of long service leave on termination for other than serious and wilful misconduct after 10 years service. These were said to be the Award provisions which were still current at the time the 2005 Agreement negotiations were concluded. 16

2002 Negotiations

• In the negotiations for the 2002 Agreement, the ASU had been able to close the differential between community health sector employees and public health sector employees with respect to long service leave entitlements. Clause 14 was the result and clause 14.5 was noted where it provided for the taking of leave “at such time as entitled”.



• The 2005 (current) Agreement provided for additions to the former clause 14.5 (of the 2002 Agreement) which referred to the Long Service Leave Act and the granting of long service leave before it had been accrued. The opening sentence of clause 18.5 in the current Agreement states that long service leave “will be taken at such time when entitled” – ie entitled to actually take leave in accordance with the Award or the Victorian Act. The last part of clause 18.5 provides for the “grant” of long service leave before the entitlement has accrued.



• The Award clause in 2002 and 2005 also contained a specific provision regarding the timely giving and taking of leave. 17

2005 Negotiations

[26] The VHIA, in its outline of submissions and Mr Sullivan’s witness statement, set out details of the negotiations which resulted in the current Agreement. Essentially, it was argued that:

• There were no further negotiations between the parties following the employer final offer.



• Changes to the former clause 14 arose solely during the agreement drafting process.



• This process necessitated the adaptation of the then current clauses 14.1 and 14.2 to reflect the phasing-in of the improved 2002 quantum of long service leave. Clauses 14.1 and 14.2 became clauses 18.1 and 18.2.



• With respect to clause 18.5, the ASU requested that, in light of the changes to the Long Service Leave Act, at least the earlier entitlement to the taking of leave at 10 years be conceded.



• On the basis that there was an accrual entitlement, after 10 years, already under the Award (albeit on termination), the request was accepted.



• Critical to the acceptance was that it would not result in any additional cost to employers.



• The ASU provided the VHIA with a tracked change draft of the new Agreement. The changes in clause 18.5 had no basis in the employer offer.



• The ASU gave verbal assurances that the intent of changes to clause 18.5 was to enliven the Long Service Leave Act to allow employees access to the taking of leave after 10 years which was a new provision in the Act.



• VHIA had an expectation that the new 10 year entitlement under the Act would most likely flow to the public health sector prior to the expiry of the ASU Agreement. 18

Meaning of “taken”

[27] VHIA submitted that the concept of long service leave being “taken” should be construed by reference to the documents referred to in clause 18 of the Agreement.

[28] It was argued that “long service leave will be taken” in clause 18.5 refers only to an employee taking an actual paid break from service and not pro rata payment on termination. Therefore, provision for payment on termination (after 10 years service) is provided for in the Award. 19

[29] VHIA contended that clause 35 of the Award, as it was at the date of certification of the Agreement, clearly distinguished between “taking” long service leave as a break from service and the payment of long service leave on termination. Clause 35.7.1 was said to separate an employee “taking” leave from an employee being paid out leave on termination or death. In addition, clause 35.3 was said to provide for an actual long service break to be taken in a timely fashion by use of the word “given” and the employee “taking….such leave”, With respect to clauses 35.4, 35.5 and 35.6, it was noted that the provisions relating to the pay out of long service leave used different language eg “amount” and “gratuity”. Clause 58(2) of the Long Service Leave Act which provided for payment of an “amount” of long service leave on termination after seven years was compared with “amount” which was used in the Award provisions relating to payments on termination of employment. 20

Cost and Precedent Issues

[30] If the union’s contention was found to be correct, it was said that employers would face a prima facie 30% increase in liability for long service leave. As employees covered by this Award were more likely to achieve seven years service rather than 10 years, it was said to be likely that employers’ liability could increase by 50%. Such an increase has not been provided for in any of the funding arrangements between government and the employers.

[31] Further, VHIA stated that, since 2005, it has been the position of the Department of Human Services and the Victorian Government that they will not accept “cherry picking” between the more generous long service leave quantum entitlements in the public and community health sectors and the more advanced pro rata entitlement to long service leave on termination contained in the Long Service Leave Act. 21

[32] In summary, VHIA argued that the plain meaning of clause 18.5 of the Agreement related to the entitlement to take leave and not to having payment made in lieu of leave on termination. During the 2005 negotiations, no new entitlement to long service was agreed – rather, specifically – the opposite. In the alternative, VHIA contended that, even a construction of the meaning of “taking” leave in clause 18.5 of the Agreement based only on the Agreement, the Award and the Long Service Leave Act established that the “taking” of leave refers to an actual paid break from service and not payment on termination. Therefore, the Award would apply ie pro rata payment on termination after 10 years service. 22

CONCLUSIONS

[33] The dispute between the parties concerns the application of clause 18.5 of the Agreement to a (now) former employee of MCHS. The parties have different views about the meaning of that clause and, therefore, about whether or not Ms Wan was entitled to pro rata long service leave when she was made redundant on 22 December 2008 with service, for the purpose of long service leave, of nine years and two months.

[34] The ASU argued that the effect of clause 18.5 was that, on termination, an employee could access pro rata payment of long service leave after seven years. This was on the basis that the word “taken” in clause 18.5 of the Agreement should be understood to mean “take” the entitlement of long service leave in whatever form it is available when the entitlement accrued. Alternatively, the ASU contended that the “or” provided an employee with the option of having their entitlement to long service leave either in accordance with the Award or in accordance with the Long Service Leave Act. Therefore, it was contended that it was the Long Service Leave Act which applied, as it was the “earlier” referred to in clause 18.5 of the Agreement.

[35] On the other hand, VHIA submitted that clause 18.5 of the Agreement clearly provided that the entitlement to actually take long service leave was in accordance with the Award or the Long Service Leave Act. It was emphasized that this was the actual taking of leave and not a gratuity on resignation or payment in lieu on termination. The VHIA also contended that the provisions of clause 35 of the Award distinguishes between “taking” long service leave and the payment of long service leave on termination. Clause 58(2) of the Long Service Leave Act was referred to as providing an “amount” of long service leave on termination after seven years. It was highlighted that clauses 35.5 and 35.6.3 of the Award (pro rata payment of long service leave on termination) used the same word “amount”. This was in contrast to the word “taken” which was utilized in the Agreement and the Award to refer to long service leave actually taken by an employee. Accordingly, it was said that it was the Award which applied.

[36] It would be useful, at this point, to set out the three clauses around which this dispute revolves.

[37] First, clause 18 of the Agreement is as follows:

“18. LONG SERVICE LEAVE

18.1 From the date of certification of the superseded Community Health Centre Multi Employer Certified Agreement 2002 (the superseded agreement) each employee shall accrue long service leave at the rate of 1.3 weeks per every year of service (equates to four and a half months after 15 years of continuous service).

18.2 Twelve months from the date of certification of the superseded agreement each employee shall accrue long service leave at the rate of 1.7333 weeks per every year of service (equates to six months long service leave after 15 years continuous service).

18.3 The above arrangements do not apply to long service leave accrued prior to the date of certification of the superseded agreement. That is, the arrangements outlined above will only apply to long service leave accrued after the date of certification of the superseded agreement. Prior to that time the award long service leave entitlement shall apply.

18.4 Where an employee is entitled to a period of long service leave the employee may by agreement with the employer take the whole or any part of leave at double the quantum of leave at half pay or half the quantum of leave at double pay, as the case may be.

18.5 Long Service Leave will be taken at such time when entitled in accordance with the Social and Community Services - Victoria Award 2000 or in accordance with the provisions of the Victorian Long Service Leave Act 1992, whichever is the earlier. Although, an employer may by agreement with an employee grant long service leave to the employee before the entitlement to that leave has accrued.”

[38] At the time of the certification of the Agreement (12 January 2006), the Award was as follows (extraneous provisions omitted):

“35.LONG SERVICE LEAVE

35.1 Subject to the provisions set out in 35.2, all employees after the completion of a period of fifteen years' continuous service shall be entitled to leave of absence as in the said 35.2.

35.2 An employee other than one to whom 35.2.1 applies who has been in the service of the same employer for the period specified in 35.1 shall be entitled to three months' leave of absence on full salary or wages.

35.3 The long service leave to which an employee is entitled shall be given as soon as practicable having regard to the needs of the employer's establishment but the taking of such leave may be postponed to such date as is directed by the Industrial Relations Commission but no such direction shall require such leave to commence before the expiry of six months from the date of such direction.

35.4 When an employee who has been in the relevant service for at least the period prescribed in 35.1 resigns or is retired and has not received long service leave due to him/her under this clause, such employee shall be entitled to a retiring gratuity from the employer equivalent to the salary or wage for the period of leave to which the employee would have been entitled under 35.2.1; plus a pro rata amount for all service in excess of fifteen years provided that such resignation or retirement is not due to serious or wilful misconduct.

35.5 Upon the death from any cause of an employee who, at the date of death was eligible for a grant of long service leave the employer shall pay to the legal representative of the deceased employee the amount that the employee would have been entitled to receive had he/she retired immediately prior to the date of his/her death.

35.6 In the case of an employee who has completed at least ten years' service but less than fifteen years with his/her employer(s) and whose employment is terminated:

35.6.1 by the employer for any cause other than serious or wilful misconduct;

35.6.2 by the employee for any reason;

35.6.3 such amount of long service leave as equals:

•In the case of an employee to whom 35.2 hereof applies - 1/60th of the period of continuous employment; or

•In the case of an employee to whom subparagraph 35.2.1 hereof applies - 1/30th of the period of continuous employment.”

[39] Third, clause 58 was inserted into the Long Service Leave Act 1992 (Vic) in 2005 and it came into operation on 1 January 2006:

“56. Basic entitlement to long service leave

An employee is entitled to -

(a) 13 weeks of long service leave on ordinary pay on completing 15 years of continuous employment with one employer; and

(b) 4 1/3 weeks of long service leave on ordinary pay on completing each period of 5 years of continuous employment with that employer after the first 15 years of continuous employment with that employer.

56A. Entitlement to long service leave after 10 years

(1) If an employee has completed at least 10, but less than 15, years of continuous employment with one employer, the employee is entitled to an amount of long service leave equal to 1/60th of the period of continuous employment with that employer.

(2) For the purposes of working out when an employee becomes entitled to long service leave under this section, only 2/3rds of the employee's continuous employment completed before the commencement of this section counts as continuous employment.

58. Entitlement to long service leave if employment stops after 7 years

(1) This section only applies if an employee's employment is ended and the employee has completed at least 7, but less than 15, years of continuous employment with one employer.

(2) The employee is entitled to an amount of long service leave equal to 1/60th of the period of his or her continuous employment.”

[40] The changes to the wording of clause 14.5 of the 2002 Agreement, so that it became clause 18.5 of the 2005 Agreement, occurred during the new agreement drafting stage. On the material before me, the changes came about following discussions between Mr Henderson of the ASU and Mr Sullivan of the VHIA. Ms Stracke and Mr Sullivan have both provided written witness statements which reveal two different recollections of the same set of events.

Ms Stracke

[41] Ms Stracke, in her witness statement, recalled raising the issue of the proposed changes to the State Long Service Leave Act which were being debated at the time, in the Victorian Parliament. These changes were said to include pro rata payment for long service leave after seven years instead of the current 10 years. It was recounted that Mr Henderson advised Mr Sullivan that it was the ASU’s intention to seek to amend the Award once the legislative changes were finalised. 23

[42] The response from Mr Sullivan was said to be that he was not prepared to pre-empt the proposed legislative changes by incorporating them into the new Agreement. It was recalled by Ms Stracke that Mr Sullivan said to her that he was prepared to agree on an “in principle” basis that the clause in the draft Agreement could be amended to reflect the possibility of changes. Ms Stracke stated that the clause was amended in this fashion and that the amendments to the Long Service Leave Act were passed relatively soon after by Parliament. Further, it was stated that the terms of the Award were varied to reflect the changes to the Long Service Leave Act, by Order of the Tribunal on 22 March 2006. 24

Mr Sullivan

[43] On the other hand, Mr Sullivan’s witness statement provided a very different recollection of these events. It was recounted by Mr Sullivan that, during the 2002 negotiations, the ASU achieved the same long service leave quantum and pro rata payment on termination after 10 years as applied in the public health sector. 25

[44] With respect to the 2005 negotiations, it was recalled by Mr Sullivan that, during the negotiations with the ASU, long service leave did not appear to be a high priority claim for the union. 26 During the agreement drafting process, it was recounted by Mr Sullivan that Mr Henderson raised concerns regarding the imminent changes to the Long Service leave Act. It was said that the union was concerned that, by entering into a new agreement, the union may then be “locked out” from possible enhancements to long service leave flowing to other community health employers in their next agreement negotiations. This would result in the union’s members again being at a disadvantage compared with public sector employees. It was recounted by Mr Sullivan that he could not anticipate what might happen in the next public sector negotiations. However, there was no objection to the union “reserving” the issue for further discussion and agreement to amend the Agreement if the legislative changes did flow to the public health sector.27

[45] Mr Sullivan also outlined a telephone conversation between himself and Mr Henderson regarding the effect of the proposed changes to the new clause 18.5. It was stated that the context of the discussion was the public availability of the new Long Service Leave Bill/Act which created, inter alia, a new entitlement for continuing employees to take pro rata long service leave after 10 years. Mr Sullivan indicated that his understanding from the conversation was that the effect of the ASU’s proposed wording changes to the new clause 18.5 was with respect to the taking of leave by a continuing employee. It was stated that at no time was there any reference by the union to the enlivening of the Long Service Leave Act regarding payment of pre rata long service leave on termination after seven years service. 28

[46] It was indicated by Mr Sullivan that, at no point, did the employers offer or agree to pro rata payment of long service leave at seven years instead of 10 years service. There had been no objection, in the end, to the union’s proposed wording of clause 18.5. This was because the existing Agreement and the Award provided for pro rata payment on termination after 10 years and the employers and his under understanding of the conversation with Mr Henderson was that the effect of the proposed clause would be the ability for continuing employees to take pro rata leave after 10 years. 29

[47] As can be seen, the two witness statements differ markedly regarding their respective recollections and understanding of the discussions between the parties about the imminent legislative changes to long service leave and the proposed new wording for clause 18.5 of the new Agreement. Neither Ms Stracke nor Mr Sullivan were called to give oral evidence during the hearing. It should also be noted that, for whatever reason, neither of the witness statements were in the form of sworn affidavits.

[48] Having considered carefully all of the material, I am of the view that there is no basis in the material which would allow me to prefer one version of the events over the other. Both sets of recollections, as far as can be ascertained, appear to be logical and plausible. The only observation that might be made is that the amendments to the Long Service Leave Act, effective 1 January 2006, included both the ability to access long service leave after 10 years and payment of pro rata long service leave on termination after seven years service.

[49] As I am not in a position whereby I can make a finding regarding the parties’ intentions regarding the wording of clause 18.5 of the Agreement, and in the absence of anything else that would assist regarding this aspect of the matter, I must therefore turn to the wording of the clause.

[50] Clause 18.5 states that:

“Long Service Leave will be taken at such time when entitled in accordance with the Social and Community Services - Victoria Award 2000 or in accordance with the provisions of the Victorian Long Service Leave Act 1992, whichever is the earlier….”

[51] If clause 18.5 was to be read and applied literally, it could be said that the clause only applies to continuing employees who actually take paid leave in the form of long service leave – based on the use of the word “taken” in the first sentence of the clause. Further, the effect of the “earlier” provision would be that, in accordance with clause 18.5, provisions of the Long Service Leave Act would apply, as it is the “earlier” of the two instruments. Taken to its logical conclusion, this would mean that continuing employees only would be able to access the Long Service Leave Act. Employees who are terminated or who resign, would therefore draw their entitlements, at that point, from the Award as the Agreement is silent in this area.

[52] I have formed the view that the key word(s) of clause 18.5, in terms of the dispute regarding its application, is not the word “taken”. Rather, it is “at such time when entitled”. Clause 18.5 of the Agreement is talking about an employee’s entitlement to long service leave and whether that entitlement is in accordance with the Award or the Long Service Leave Act. It is the entitlement to long service leave that an employee accrues on a daily basis. That entitlement is “attached” to the employer, whether as a continuing employee or at the point of termination of their employment. The entitlement cannot be unbundled from the employee and separated. It is the one entitlement which can either be taken as paid leave or as payment on termination.

[53] On this basis, therefore, clause 18.5 of the Agreement, in addition to the entitlements contained in clauses 18.1 to 18.4, provides for further entitlements to long service leave for all employees, either in accordance with the Award or in accordance with the Long Service Leave Act. The basis for deciding which of the instruments applies is not whether the employee is a continuing employee or a terminating one. It is simply whichever of the two instruments is the earlier in terms of the operation of the entitlements. The clause does not contemplate cherry picking between the Award and the Long Service Leave Act. Rather, it is an “either-or” situation, determined by whether the Award or the Long Service Leave Act had the earlier operative provisions.

[54] Based on the “earlier” requirements of clause 18.5 of the Agreement, it is therefore the Long Service Leave Act that is enlivened by the clause. The Award was not varied until 22 March 2006, with effect from the beginning of the first pay period on or after 8 February 2006, to provide for the changes to the Long Service Leave Act, except that the pro rata payment of long service leave on termination was set at the completion of between 10 and 15 years. The amendments to the Act came into effect on 1 January 2006. The Agreement was certified on 12 January 2006.

[55] Therefore, in applying the terms of clause 18.5 of the Agreement to the circumstances of Ms Wan, I find that Ms Wan’s service with MCHS has led to an entitlement to payment of pro rata long service leave when she was made redundant on 22 December 2008.

[56] An Order to this effect will be issued separately.

COMMISSIONER

 1   [PR974301], 4 December 2006

 2   Exhibit A1

 3   Exhibit A2

 4   Exhibit A1 at paragraphs 12 - 14

 5   Ibid at paragraph 17

 6   Ibid at paragraphs 19 - 25

 7   Ibid at paragraphs 26 - 28

 8   Ibid at paragraphs 29 - 31

 9   Ibid at paragraphs 32 - 35

 10   Exhibit A2

 11   [PR954989]

 12   Exhibit A1 at paragraphs 32-35

 13   Exhibit R1

 14   Exhibit R2

 15   Exhibit R1 at paragraphs 4 - 6

 16   Ibid at paragraphs 7 - 9

 17   Ibid at paragraphs 11 - 19

 18   Ibid at paragraphs 22 - 33

 19   Ibid at paragraphs 34 - 35

 20   Ibid at paragraph 36

 21   Ibid at paragraphs 37 - 42

 22   Ibid at paragraphs 46 - 50

 23   Exhibit A2 at paragraphs 10 - 11

 24   Ibid at paragraphs 12 - 21

 25   Exhibit R2 at paragraphs 3 - 6

 26   Ibid at paragraphs 7 - 11

 27   Ibid at paragraphs 14 - 16

 28   Ibid at paragraphs 19 - 21

 29   Ibid at paragraphs 22 - 23

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