GHAZI v Taronne Pty Ltd

[2019] FCCA 2465

FEDERAL CIRCUIT COURT OF AUSTRALIA

GHAZI v TARONNE PTY LTD [2019] FCCA 2465

Catchwords:
INDUSTRIAL LAW – Small claims – application of Health and Allied Services – Private Sector – Victoria Award 1995 – underpayment of long service leave entitlements on termination.

Legislation:

Health and Allied Services –Private Sector - Victoria Award 1995, cls.5, 19, 38

Fair Work Act 2009 (Cth), s.113
Long Service Leave Act 2018 (Vic)

Applicant: FAY GHAZI

Respondent: TARONNE PTY LTD

File Number: MLG 965 of 2019

Judgment of: Judge Mercuri

Hearing date: 12 August 2019

Date of Last Submission: 12 August 2019

Delivered at: Melbourne

Delivered on: 15 August 2019

REPRESENTATION

Advocate for the applicant: Ms Alcock

Solicitors for the applicant: None

Advocate for the respondent: In person

Solicitors for the respondent: None

ORDERS

1. Within 21 days, the respondent pay to the applicant the sum of $12,498.57.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 965 of 2019

FAY GHAZI

Applicant

And

TARONNE PTY LTD

Respondent

REASONS FOR JUDGMENT

(Revised from the Transcript)

1. These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

2. The applicant has brought a claim in this court’s small claims jurisdiction with respect to outstanding long service leave entitlements. 

3. The facts in this matter are not largely in dispute.  The applicant was employed by the respondent from September 2008 until her resignation on 16 November 2018.  The applicant had completed 10 years and 2 months employment with the respondent and had not taken any long service leave during this period. 

4. The key issue in dispute in this case is the nature of the applicant’s role with the respondent and whether by reference to that role, her employment was covered by either the Health and Allied Services –Private Sector - Victoria Award 1995 (“Pre-Reform Award”), or the Tarrone Pty Ltd trading as Benlynne Park Private Nursing Home and Sixth Eastway Pty Ltd trading as North-Western District Private Nursing Home ANMF and HSU Enterprise Agreement 2014 (“2014 Enterprise Agreement”).

Applicant’s evidence

1. In essence, the applicant’s case is that she was employed as an administration clerk or an assistant and her employment was subject to the Pre-Reform Award. As the applicant was employed prior to 1 January 2010, she argues that her entitlement to long service leave is determined by reference to the operation of section 113 of the Fair Work Act 2009 (Cth) (“FW Act”).

2. Section 113(1) essentially provides that, if there are applicable award-derived long service leave terms, an employee is entitled to long service leave in accordance with those terms. Section 113(3) of the FW Act further provides that an applicable award-derived long service leave term includes a term of an award:

   that would have applied to the employee at the test time, if the employee had at that time been in his or her current circumstances of employment and would have entitled the employee to long service leave.

3. The test time, relevantly, is defined to be immediately before 1 January 2010.

4. It is submitted on behalf the applicant that her duties as an administration clerk fall within the scope of the Pre-Reform Award.  The Pre-Reform Award, to which Benlynne Nursing Home was a named respondent, provides for long service leave at clause 38.  Relevantly, clause 38.1.1(a) provides that:

   All persons employed:

   a)in or about a hospital, benevolent asylum or convalescent home doing any kind of work connected with the carrying on of a hospital, benevolent asylum or convalescent home;

   …

   shall be entitled to long service leave as hereinafter provided.

5. Clause 38.1.2 then goes on to say that “an employee shall be entitled to long-service leave with pay in respect of continuous service with one and the same employer in accordance with provisions of this clause.”

6. Clause 38.1.3(c) further provides that:

   An employee shall have the following entitlement to long service leave:

   c)in the case of an employee who has completed at least 10 years service but less than 15 years service and whose employment is terminated for any cause other than serious and wilful misconduct, such amount of long service leave as equals 1/30th the period of service.

7. Clause 5 of the Pre-Reform Award provides that it applies among others to “those employers listed at Appendix B - Schedule of Respondents”, which includes Benlynne Park Private Nursing Home, which is operated by the respondent. 

8. Clause 5.2.1(c) further provides:

   This award applies to the whole of Victoria in relation to the process, trade, business or occupation of:

   …

   c)a person or class of persons employed in or in connexion with the doing of any kind of work associated with the carrying-on of – a hostel giving residential care, a nursing-home, a geriatric-home or centre, a daycentre, a special-accommodation house, a convalescent-home, a retirement home, lodge or village. 

9. The respondent operates aged-care facilities and therefore falls within this definition. 

10. Clause 19 of the Pre-Reform Award then sets out the various rates of pay for different classifications.  Clause 19.2, relevantly, applies to all aged-care services, including nursing-homes, hostels, special-accommodation homes, supported residential units and the like.  It includes an administrative and clerical stream.  Appendix A to the

    
    

    Pre-Reform Award further defines the relevant skills, levels and classification definitions.  It includes administrative clerical services at various levels, ranging from Level 4 through to Level 11. 

11. It was submitted, that the applicant’s employment would fall within the Level 6 classification, which provides that:

    An employee at this level:

    ·Is capable of prioritising work and exercising discretion within established policies, guidelines and procedures.

    ·Is responsible for work performed with a medium level of accountability.

    ·Works under limited supervision, either individually or in a team.

    …

    ·Possesses well developed communication, interpersonal and/or arithmetic skills.

    ·Requires substantial on-the-job training, may require formal qualifications and/or relevant skills training or experience.

12. Indicative tasks at Level 6 include a pay clerk. 

13. The applicant gave evidence that:

    a)she was employed on a fulltime basis from 9:00am until 5:00pm, Monday to Friday;

    b)she was employed an administration clerk assistant;

    c)her duties included processing the wages on a fortnightly basis as well as accounts payable;

    d)she explained that she would do invoices on a Friday, would then calculate wages for the following fortnight on the Monday to Wednesday and she would then report this to the director or to her manager and, once they were happy with the figures, they would approve payment;

    e)she was also responsible for processing superannuation payments, accounts receivable and she worked with the respondent’s accountants to reconcile accounts;

    f)she processed the pays electronically; and

    g)she was responsible for petty-cash re-imbursements, again, together with her manager.

14. In terms of her authority regarding the processing of pay, the applicant’s evidence was that she did not have authority to transfer money. Rather, she would perform the calculations of the pay obligations of the respondent, inform her manager or the director of those amounts and then they would approve the necessary transfers. 

15. The respondent conceded that it was the employing entity at all relevant times.  The applicant resigned from her position and worked through the four-week notice period.  Exhibit A shows the final payslip that the applicant received on termination, which indicates that she was paid for 356.2 hours in respect of long service leave entitlements on termination.  This translated to a figure of $14,203.00.

Respondent’s evidence

1. The respondent’s position is that the applicant was not covered by the Pre-Reform Award or any enterprise agreement. It was submitted on behalf of the respondent that the applicant had significant autonomy, not only with respect to her duties, but also her hours of work. Essentially, the respondent submitted that she was able to come and go as she chose, that she took long lunches, and in effect that she was a member of the management team together with the managing director and his son, who was her manager. The applicant rejected these propositions when put to her during cross-examination.

2. Mr Haej, the owner of the respondent, gave evidence. He stated that he had been associated with the respondent since 1994. I understood from his evidence that he and his brother had been the major share-holders in the respondent company until in or about November 2018, Mr Haej’s brother and Mr Haej’s nephew were involved in the day-to-day running of the company, together with the applicant, and that Mr Haej had remained a silent partner in the business until he took over in November 2018.

3. It was Mr Haej’s evidence that the applicant was authorised to access the company’s banking-accounts through CommBiz, a Commonwealth Bank payment system. He stated that when he took over the operation of the company in November 2018, it became apparent to him that neither his brother nor his nephew had accessed CommBiz on behalf of the company since 2011.  His evidence was that it was the applicant who effected payments through Comm Biz for the respondent. 

4. Mr Haej stated that when the applicant was initially employed by the respondent she was earning about $30,000 per annum. By 2017, this had increased to $90,000 per annum.  Mr Haej said that the applicant was never employed under the Pre-Reform Award or under the 2014 Enterprise Agreement, she did not report to the operations manager, and she did not clock on and clock off. As far as Mr Haej was concerned, the respondent treated the applicant as a member of the family and the applicant was not, in his view, one of the “workers”. 

5. It is common ground that on termination of the applicant’s employment she was paid long-service leave entitlements under the Long Service Leave Act 2018 (Vic). Mr Haej says that he does not have any particular knowledge of the award specifically, or employment law generally, and relied upon advice given to him that the applicant was not covered by an award and that her entitlements properly arose under Victorian law.

6. Exhibit B, which on its face is a document generated by the respondent and which states the applicant’s long service leave entitlement, was put to Mr Haej in cross-examination. Whilst he conceded that it appeared to be a document produced by the respondent company on its system, he said that the document would have been generated by the applicant and his nephew because they had control of the accounting-system. Implicit in this is that Mr Haej urged the court to give little weight to Exhibit B in determining the company’s state of knowledge about the applicant’s legal entitlements. Mr Haej went on to say that this document was reviewed by his accountant and his advisers and he was told that the document was not correct because the applicant was a member of management and therefore was not entitled to long service leave as prescribed under the Pre-Reform Award.

7. Mr Haej confirmed that he only took over the running of the business in November 2018 and that, prior to that, his role was advisory in nature. Notwithstanding this, he was aware that the applicant processed the payroll, attended to accounts payable and accounts receivable, and that she reported to Mr Haej’s brother or Mr Haej’s nephew who then approved any payments to be made before the applicant went on to process the payments. Mr Haej also conceded that the applicant undertook duties relating to petty cash and the organisation’s superannuation obligations. However, he maintained that the applicant “ran the place”.

Issues

1. As stated, the facts in this case are not in significantly in dispute.  The only real issue for determination is whether the applicant was employed in a classification covered by the Pre-Reform Award.  It was submitted that the respondent, through Mr Haej, has acted on the base of advice that, as the applicant was involved in the management of the company, she was therefore not covered by the award. 

2. Whether an award applies to a particular employee, however, is ultimately a question of construction and depends in a case such as this on a determination of whether the employee performs work with one of the classifications contained in the award.

Analysis and findings

1. In this case, the applicant’s duties are not seriously in dispute.  I accept that the applicant may well have been authorised to process payments on behalf of the respondent through CommBiz, but nevertheless, she required prior authorisation or approval from either Mr Haej’s brother in his capacity as a director of the business, or Mr Haej’s nephew as the applicant’s manager. 

2. As indicated by the applicant, Level 6 of the Pre-Reform Award includes, as one of the indicatives, the duties of a pay clerk.  Moreover, it is clear from a consideration of the other classification levels under the Pre-Reform Award that the award applies to employees who exercise significant levels of autonomy and judgment.  In some cases it also applies to employees who hold supervisory roles. 

3. The award itself does not make any real distinction between someone involved in the management of a company and someone who is, as characterised in the words of Mr Haej, a “worker”.  One needs to look specifically at the classification descriptors to determine whether the employee concerned falls within the scope and operation of the award. 

4. For example, the Pre-Reform Award states that an employee at Level 9:

   ·Is capable of functioning with a high level of autonomy and prioritising his or her own work within established policies, guidelines and procedures.

   ·Is responsible for work performed with a substantial level of accountability and responsibility.

   ·Works either individually or in a team.

   ·May require comprehensive computer knowledge or be required to use a computer on a regular basis.

   ·Possesses administrative skills and problem solving abilities.

   ·Possesses well developed communication, interpersonal and/or arithmetic skills.

   ·May require formal qualifications at post-trade or Advanced Certificate or Associate Diploma level and/or relevant skills training or experience. 

5. In terms of indicative tasks at that level, the Pre-Reform Award includes a pay clerk with a working knowledge of relevant industrial awards. Similarly, at Level 11, the Pre-Reform Award includes fairly autonomously operating descriptors, and the indicative tasks performed at that level include supervision, work allocation and rostering and/or guidance of staff.

6. In conclusion therefore, having regard to the totality of the evidence before me and the classification descriptors contained in the

   
   

   Pre-Reform Award, I am satisfied that the applicant’s employment was subject to the Pre-Reform Award.  As such, she is entitled to long service leave pursuant to that award. 

7. Having completed over 10 years of service, which is not in dispute, the applicant ought to have received $26,702.05 in respect of her accrued but untaken long service leave entitlements on termination.  She was incorrectly paid $14,203.48.  The applicant is therefore entitled to the balance outstanding, namely, $12,498.57. 

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Judge Mercuri

Associate: 

Date:  9 September 2019