Hanmer v B and F Brack Plant Hire Pty Ltd

[2014] FCCA 1374

FEDERAL CIRCUIT COURT OF AUSTRALIA

HANMER v B & F BRACK PLANT HIRE PTY LTD [2014] FCCA 1374

Catchwords:
INDUSTRIAL LAW – Claims with respect to underpayment under the small claims provisions of the Fair Work Act 2009 – breaches of Act and Building and Construction General On-site Award 2010 found – claim for offsetting rejected.

Legislation:

Fair Work Act 2009 (Cth), ss.45, 90(2), 117(2)

Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250

Building and Construction General On-site Award 2010 [MA000020] cls.22.2(s), 36.2, 38.2

Applicant: GRAEME JOHN HANMER

Respondent: B & F BRACK PLANT HIRE PTY LTD

File Number: MLG 549 of 2014

Judgment of: Judge Whelan

Hearing date: 20 June 2014

Date of Last Submission: 20 June 2014

Delivered at: Melbourne

Delivered on: 1 July 2014

REPRESENTATION

Counsel for the Applicant: Applicant in person

Counsel for the Respondent: Ms Tueno

Solicitors for the Respondent: Meier Denison Guymer Pty Ltd

ORDERS

THE COURT DECLARES THAT:

1. The Respondent breached section 90(2) of the Fair Work Act 2009 (Cth) (“the Act”) by failing to pay the Applicant’s annual leave at the time the employment ended.

2. The Respondent breached section 117(2) of the Act by failing to pay two weeks payment in lieu of notice.

3. The Respondent breached section 45 of the Act by failing to comply with:

   (a)Clause 38.2(b) of the Building and Construction General On-Site Award (“the Award”) by failing to pay annual leave loading;

   (b)Clause 36.2 of the Award by failing to pay overtime in accordance with the Award provisions; and

   (c)Clause 22.2(s) of the Award by failing to pay the allowance specified in that clause.

THE COURT ORDERS THAT:

1. The Respondent pay the Applicant the sum of $8,849.92 forthwith.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 549 of 2014

GRAEME JOHN HANMER

Applicant

And

B & F BRACK PLANT HIRE PTY LTD

Respondent

REASONS FOR JUDGMENT

Background

1. This is an application by the Applicant, MR GRAEME JOHN HANMER (“the Applicant”) in which he claims that he was underpaid by the Respondent, B & F BRACK PLANT HIRE PTY LTD (“the Respondent”).

2. The Applicant claims five areas of underpayment. The Applicant was employed under the terms of the Building and Construction, General On-site Award 2010 [MA000020] (“the Award”). The Applicant claims that, in accordance with that Award, he was:

   ·Underpaid overtime;

   ·Not paid 4 weeks annual leave;

   ·Not paid annual leave loading;

   ·Not paid an allowance specified for employees carrying fuels, or oils and greases; and

   ·Not paid, in accordance with the National Employment Standards (“the NES”), two weeks pay in lieu of notice.

3. The Respondent accepts that:

   ·The Applicant should be paid two weeks pay in lieu of notice; and

   ·Annual leave in the amount of 139.96 hours is owing to the Applicant,

   but otherwise disputes that the Applicant was:

   ·Owed annual leave loading;

   ·Underpaid on overtime; and

   ·Entitled to be paid an allowance for employees carrying fuels, or oils and greases.

The evidence

1. Evidence was given by way of affidavit[1] and oral evidence by the Applicant and also by the Respondent’s bookkeeper MS LINDA BRACK (“Ms Brack”)[2] and Managing Director MR BARRIE BRACK (“Mr Brack”).[3] The Applicant, in the course of the proceedings, conceded that the amount of annual leave owing was 139.96 hours.

   [1] Affidavit of Graeme John Hanmer filed 28 March 2014.

   [2] Affidavit of Linda Brack filed 19 June 2014.

   [3] Affidavit of Barrie Brack filed 19 June 2014.

2. The areas of contention in the evidence related to three issues.

   ·The first of these was whether, at the time of his engagement, the Applicant was told that the over-award payment he would receive (at that time his rate of pay was $28.00 per hour and the Award rate was $24.00 per hour) was in lieu of annual leave loading and time taken to grease machinery.

   ·The second area of contention was whether the Applicant was required, as part of his work, to carry grease in his own personal motor vehicle.

   ·The third area was the issue of overtime.

3. It was the Applicant’s evidence that, at the time of his engagement, the parties had an oral agreement and that it was never stated to him that the over-award payment was intended to be in lieu of annual leave loading.

4. It was the evidence of Mr Brack that it was the practice in the industry for over-award payments to cover all entitlements including leave loading and other allowances. He stated that all employees were given this advice at the time of their engagement.

5. With respect to the carrying of fuel oils or grease by employees, it was the evidence of Mr Brack that fuel for the excavator was delivered and the excavator refuelled by a contractor engaged by the company. In relation to the grease required to be applied to the machine, every two to three weeks he would personally deliver a box of 12 tubes of grease to the machine. This was stored in two storage compartments in the machine. He stated that the Applicant was not required to transport these materials in his car. Mr Brack did concede that there might have been one occasion where he was delivering something else to the Applicant’s home and gave him an unopened box of grease tubes to take to the site the following morning.

6. In his complaint to the Fair Work Ombudsman the Applicant stated:

   Include [sic] in the attached spreadsheet are the allowance that should have been paid to me as an employer (sic) under the Building and Constrcution [sic] Award..(sic) The Allowace [sic] for carying [sic]the grease, fuels etc is applicable as the employer provideded (sic) the grease, grease gun and motor oiul (sic) in order for me to maitain (sic) the excavator. i (sic) transport these in my vechile [sic] to and from site every day.[4]

   [4] Affidavit of Graeme John Hanmer filed 28 March 2014, Attachment “GH8” at p.3.

7. In his oral evidence, the Applicant agreed that fuel for the excavator was delivered and the excavator refuelled by a contractor engaged by the employer. He also agreed that Mr Brack would deliver a box of

   
   

   12 tubes of grease to the machine on site which was stored into storage compartments in the machine. However, he also claimed that on occasions, he met Mr Brack at another location, where he was given the grease to take in his vehicle to the site.

8. With respect to the third issue of overtime, the Applicant contended not that he had not been paid for overtime worked but, that overtime was calculated at the rate of $42.00 per hour, when it should have been calculated at the rate of $43.50 per hour. The rate of $43.50 is derived from the Applicant’s actual rate of pay of $29.00 per hour. It was the Respondent’s contention that within the industry, overtime was paid on the Award rate of $24.00 which came to $42.00 for each hour of overtime worked.

The relevant Award provisions

1. Clause 38.2 of the Award deals with the issue of payment for annual leave. It provides as follows:

   (a)Instead of the base rate of pay as referred to in s.90(1) of the Act, an employee under this award, before going on annual leave, must be paid, in advance, the amount which they would have received for working ordinary time hours if they had not been on leave. [Original emphasis].

   (b)In addition to the payment prescribed in clause 38.2(a), an employee must receive during a period of annual leave a loading of 17.5% calculated on the following rates, loadings and allowances if such rates, loadings and allowances would have been received by the employee for working ordinary time hours had the employee not been on annual leave.[5]

   [5] Building and Construction General On-site Award 2010 at p.84.

2. The Award then specifies a number of allowances contained within the Award, which are to be included as part of the calculation, none of which are relevant in these proceedings.

3. Clause 36 of the Award deals with the issue of overtime. Clause 36.2 provides as follows:

   All time worked beyond an employee’s ordinary time of work (inclusive of time worked for accrual purposes as prescribed in clauses 33—Ordinary Hours of Work and 34—Shiftwork), Monday to Friday, must be paid for at the rate of time and a half for the first two hours and at double time thereafter.[6]

   [6] Ibid at p.81.

4. The allowance at issue in this matter is covered by cl.22 – Special rates, of the Award and, in particular, at cl.22.2(s). That clause provides:

   (s)         Employee carrying fuels, oils and greases

   An employee required by the employer to carry any fuels, oils and/or greases in the employees own vehicle for use in the employer’s plant must be paid an additional 1.4% of the weekly standard rate per day in addition to any amount payable under clause 25—Fares and travel patterns allowance, for each day the employee is so required by the employer to carry such materials.[7] [Original emphasis].

   [7] Building and Construction General On-site Award 2010 at p.52.

5. Clause 3 of the Award defines ‘standard rate’ to mean “either the weekly or hourly minimum wage as stated for a Level 3 (CW/ECW 3) employee in clause 19.1”.[8] The relevant rate under the Award is $724.50 per week, or $19.07 per hour.[9]

   [8] Ibid at p.8.

   [9] Ibid at p.28.

Conclusions

1. It is not disputed that the Applicant is entitled to be paid annual leave of 139.96 hours. At his ordinary rate of pay of $29.00 per hour, that comes to a total of $4,058.84. The Applicant contends that this amount is subject to annual leave loading, in accordance with the provisions of cl.38.2(b) of the Award.

2. The Respondent contends that that amount is not owing as, by virtue of an agreement entered into with the Applicant at the time of the employment commencing, annual leave loading was incorporated into the hourly rate of pay.

3. The principles applicable to determining whether payments made by an employer to an employee can be offset against payments due under an Award have been considered in a number of authorities. These authorities are discussed by Goldberg J in Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250. After considering some five previous decisions his Honour concluded:

   These authorities make it clear that where a payment is made to an employee in discharge of an award obligation, which payment is in fact in excess of the amount of the obligation, the amount of the excess cannot be set-off against a claim in respect of a different award obligation unless at the time of the payment of the excess the employer designates that the excess is payable in respect of a purpose or an obligation different from the purpose for which the initial payment is made.[10]

   [10] (2002) 121 IR 250 at para.60.

4. In summary, where there is a payment made for, or in respect of, ordinary hours of work which is in excess of the Award obligation, the excess cannot be set-off against a claim for annual leave loading, unless, at the time of the payment of the excess, the employer designates that the excess over the amount of the Award obligation is paid for the purpose of satisfying any entitlement to annual leave loading. While I accept that it may be common practice within the industry for over-award payments to be taken as subsuming an entitlement to annual leave loading, I am not satisfied that, at the time the Applicant entered into the employment he was told by the Respondent that the over-award payment of $4.00 per hour would be in compensation for any claim to annual leave loading.

5. I am therefore satisfied that the Applicant was entitled, in accordance with the provisions of the Award, to be paid annual leave loading in the sum of $710.30.

6. With respect to the issue of overtime, it is apparent from the records produced to the Court that all overtime, with the exception of the overtime in the last week’s pay provided to the Applicant, was paid at the rate of $42.00 per hour. That amount is the rate for time-and-a-half at an hourly rate of $28.00 per hour, which was the Applicant’s rate of pay when he commenced employment.

7. I do not accept the argument of the Respondent that it was common practice to pay overtime on the Award rate of $24.00 per hour, as clearly this was not what the Respondent did. In fact, it is only in the Applicant’s last pay, that the Applicant was paid correctly at the rate of $43.50 for the first two hours worked in overtime and $58.00 per hour for all hours after the first two hours. That is consistent with the requirements of cl.36.2 of the Award.

8. On the basis of the records before the Court, I am satisfied that there has been an underpayment of $1,450.50 with respect to overtime worked by the Applicant.

9. The Applicant claims payment of an allowance under the provision of cl.22.2(s) of the Award. I am satisfied that the Applicant did not carry the grease in his personal motor vehicle on a daily basis. I am however satisfied that, on two occasions, one about which the Applicant gave evidence and one about which the Respondent gave evidence, that the Applicant did carry grease in his personal motor vehicle. He is therefore entitled to be paid the allowance for those two occasions at the rate of $10.14, or a total of $20.28.

10. I am further satisfied that the last payment made to the Applicant was for the last week he worked and was not payment in lieu of notice. The Applicant is therefore entitled to two weeks pay in lieu of notice at his applicable hourly rate, or a total of $2,610.00.

11. Accordingly the Applicant is entitled to a total sum of $8,849.92 to be paid by the Respondent forthwith.

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Whelan

Associate: 

Date:  1 July 2014