Hughes v Reeve Bulk Food Transport Pty Ltd
[2010] FMCA 298
•6 May 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HUGHES v REEVE BULK FOOD TRANSPORT PTY LTD | [2010] FMCA 298 |
| INDUSTRIAL LAW – Underpayment of wages – applicant a driver for a company that collected milk from dairy farms and delivered it to processing plants – employee claimed incorrect award was applied in calculating his wages resulting in underpayment – employee’s calculations based on employment as a casual disputed by respondent – no evidence of what he should have been paid under separate award as a permanent employee – set off – where respondent had paid the employee amounts after termination in order to cover any discrepancies as alleged by him – award coverage – only relevant if underpayment established – Federal Magistrates Court inappropriate forum for award coverage dispute. |
| Workplace Relations Act 1996 (Cth), ss.570, 720 Annual Holidays Act 1944 (NSW) |
| RS Components Ltd v Irwin [1974] 1 All ER 41 Nightingale v Little Legends Child Care (2004) 134 IR 111 Mill v Avenga Pty Ltd [2008] AIRC 1163 Williams v Macmahon Mining Services (2009) 182 IR 104 |
| Applicant: | CRAIG HUGHES |
| Respondent: | REEVE BULK FOOD TRANSPORT PTY LTD |
| File Number: | SYG 2821 of 2009 |
| Judgment of: | Raphael FM |
| Hearing dates: | 27 March & 27 April 2010 |
| Date of Last Submission: | 29 April 2010 |
| Delivered at: | Sydney |
| Delivered on: | 6 May 2010 |
REPRESENTATION
| Solicitors for the Applicant: | Transport Workers' Union of Australia |
| Counsel for the Respondent: | Mr P Newall |
| Solicitors for the Respondent: | Guild Legal Limited |
ORDERS
Application dismissed.
Costs reserved.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2821 of 2009
| CRAIG HUGHES |
Applicant
And
| REEVE BULK FOOD TRANSPORT PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
By his application, Mr Hughes seeks payment of a maximum of $1,718.98 that he alleges he was underpaid by the first respondent for whom he claims he worked as a casual driver collecting milk from various dairies in the Southern Highlands that he would deliver to a site operated by National Foods at Penrith where the milk was processed. The applicant commenced his work in mid 2007 but the claim for underpayment relates to a period between 3 January 2008 and 12 March 2008 when he left that employment. Mr Hughes claims he was entitled to be paid as a casual driver pursuant to the Transport Industry (State) Award whereas he was being paid as a permanent employee pursuant to the Butter, Cheese and Dairy Products (State) Award. The application is brought under s.720 of the Workplace Relations Act 1996 (Cth) for recovery of wages payable under a notional agreement preserving a state award. The statutory procedure by which the applicant was enabled to bring this claim, including a claim under the Annual Holidays Act 1944 (NSW), is set out in the helpful contentions provided by the applicant at [3-7]. The respondent does dispute that the Court has jurisdiction to hear Mr Hughes’ claim.
During the course of the hearing, the Court ordered, by consent, that the claim against B & K Milk Transport Pty Ltd (ACN 108 039 185) (“B & K”) be dismissed as Mr Hughes was claiming that his only employer was the first respondent, Reeve Bulk Food Transport Pty Ltd (“Reeve”). Reeve disputed that Mr Hughes was its employee at the relevant time, that if he was, he was employed as a casual at the relevant time, that if he was employed by Reeve as a casual at the relevant time, he was underpaid and finally that the Transport Industry (State) Award applied to Mr Hughes. It is no secret that this proceeding, which was run for Mr Hughes by Transport Workers’ Union (TWU) Legal Department, was principally concerned with award coverage for drivers of the type employed by the respondents. But this is not a court in which coverage disputes at large are generally heard. Those matters have always been the province of the appropriate industrial commissions. Whilst it might be necessary for a court to adjudicate upon coverage, any decision would be personal to the applicant and where, in a case such as this, the principal ground for bringing such proceedings, namely, the underpayment is denied on any basis of coverage, it is appropriate to consider first whether the underpayment has been established before deciding which award the applicant should properly have been remunerated under. If the Court cannot be satisfied that there was an underpayment (on the basis that the Transport Industry (State) Award was the appropriate award) then there is no necessity to make any findings as to the appropriate coverage.
Mr Hughes’ employment
Mr Hughes gave evidence[1] that around mid 2007 he obtained a truck licence because he wished to commence a career as a professional truck driver. After he had obtained his licence a friend of his told him that there was work available driving trucks “with a transport company called Reeves”. He says that prior to starting work he believed that he signed a contract of employment with Reeve that indicated he was to be a casual employee and was to be paid $15.00 an hour. He states that the contract provided that he would be paid for a minimum of 10 hour shifts whether he worked for 10 hours or not so that his basic rate of pay was $150.00 per day. He says in the affidavit that he began work in or around January 2008 but the evidence from Ms Lynne Reeve, a director of both Reeve and B & K, says that he commenced work on 27 September 2007 for B & K after having worked as a casual for Reeve for a period of time prior thereto. There is an affidavit from Mr Steven Church, affirmed on 22 April 2010, stating that he worked for B & K managing the northern operations for that company and that in September 2007 Mr Hughes had been filling in for a Mr John Robinson on a casual basis. He stated that, together with Mr Reeve, it was decided to alter the roster relating to the Southern Highlands run to a three man roster with a nine day fortnight:
[1] Affidavit of Craig Hughes dated 12 March 2010.
“I spoke to all the employees about a change of roster. They appeared happy. I personally spoke to the applicant about changing to the Highlands run and the proposed roster. I then arranged for him to have training with Mark Smith on the Highlands run. Mark Smith is essentially the leading hand on the truck which conducts the Highlands run.
On his return from training, I approached the applicant to ascertain what he though of the run and the roster that was proposed.
The applicant said words to the effect of:
“As long as its a full time permanent job, its not a problem.”
I responded with words to the effect:
“That won’t be a problem.”
The applicant then commenced to work on a permanent 9 day fortnight roster, as part of a 3 man permanent team in the Southern Highlands.”
A further affidavit was sworn by Mark Smith on 20 April 2010. He was also an employee of B & K and confirms the discussion with Mr Church referred to above. He says that he took Mr Hughes on some runs with him and recalled a conversation with the applicant who said to him words to the effect:
“I can’t survive on it. I want to know when I work, I don’t know when I’m working and the days can be too far in between. I want to be permanent.”
To which Mr Smith responded:
“We are going to be a 3 person roster and you’ll be permanent. That’s the way its going to operate.”
There is annexed to the affidavit of Mr Brett Reeve sworn on 17 March 2010 as exhibit BR1 a number of payslips addressed to Mr Hughes from B & K. The first is for the pay period 20/09/2007 to 26/09/2007. That is a week but, in fact, the payslip was meant to represent two weeks pay. The payslip contains a number of categories of payment on a current and year to date amount basis. The payment section of the payslip is reproduced below:
“Employee
Craig Hughes, 6 Gull Avenue, Sanctuary Point, NSW 2540
Earnings and Hours Qty Rate Current YTD Amount
Salary 15.26 1,220.80 1,220.80
Axle Allowance @ $2 2.00 29.40 58.80 58.80
Overtime @ $22.89 20.00 22.89 457.80 915.60
Weekend Allowance 1.00 58.85 58.85 941.60
Afternoon Shift 5.00 11.24 56.20 281.00
Bonus 2.00 100.00 200.00 200.00
Day-Night Run $200.00 540.00
Casual Shift @115 3,579.26
Axle Allowance s 88 246.96
Casual Shift Loading 757.05
Overtime @ $21.10 1,308.20
Casual Shift Allowance 1,220.80
2,052.45 11,270.07”
At BR2 there commences a series of five further payslips all of which are expressed to be for a week but are in fact for a fortnight for the whole of the claim period. The first one of those is reproduced below:
“Employee
Craig Hughes, 6 Gull Avenue, Sanctuary Point, NSW 2540
Earnings and Hours Qty Rate Current YTD Amount
Salary 80.00 15.26 1,220.80 10,987.20
Weekend Allowance 2.00 58.85 117.70 2,236.30
Afternoon Shift 3.00 11.24 33.72 719.36
Laundry Allowance 2.00 5.04 10.08 131.04
Meal Allowance 2.00 10.00 20.00 260.00
Telephone Allowance 1.00 24.00 24.00 310.00
Overtime @ 22.89 15.00 22.89 343.35 4,120.20
Axle Allowance @ $2 2.00 29.40 58.80 529.20
Bonus 2.00 10.00 20.00 1,800.00
Day-Night Run $200.00 540.00
Casual Shift @115 3,579.26
Axle Allowance s 88 246.96
Casual Shift Loading 757.05
Overtime @ $21.10 1,308.20
Casual Shift Allowance 1,220.80
Overnight Allowance 200.00
Casual Shift Allowance 1,220.80
Demurrage 22.89 114.46
Christmas Extra 302.00
2,028.45 29,364.03”
The later slips all show that the figures down to “bonus” which is $2,000.00 in the first slip increase, whereas, the figures below that do not. Given that the largest figure in the non increasing section is for “casual shift”, it was submitted by the respondents that this indicated a change in the form of employment from casual to permanent which occurred around 27 September 2007.
Mr Hughes says that he originally commenced employment as a casual with Reeves and that he at no time agreed to transfer his employment to B & K, nor did he agree to change the nature of his employment from casual to permanent. He says that there is no figure in the payslips found at BR1 and BR2 for sick pay and holiday pay and that this corroborates his assertion that the nature of his employment did not change. The respondent says that when Mr Hughes left he received a payslip (LR3 annexed to the affidavit of Lynne Reeve dated 17 March 2010) that indicated that he had accrued 160 hours of holiday pay and was paid $2,441.60 for that plus $427.28 holiday loading.
In his affidavit, Mr Brett Reeve says that during the claim period the only work the applicant performed for Reeve was between 28 February 2008 and 12 March 2008 when he worked extra shifts on his day off from B & K and was paid as a casual a sum of $1,300.00 gross according to the hours he worked.
The general rule is that an employer cannot change the nature of an employee’s contract of employment without the employee’s consent; RS Components Ltd v Irwin [1974] 1 All ER 41 at [43]. The “nature of the contract” can include both the employer and the terms under which the employee worked. I am satisfied from the evidence that Mr Hughes was originally employed as a casual by Reeve and I am not satisfied that he was made aware of the change of employer prior to that change so that he could consent to it. The evidence is that Brett Reeve bought 50 percent of the goodwill of Reeve’s Northern Nowra Milk Collection on 1 July 2008 and that B & K Milk then commenced to perform some of the collections that Reeve used to.[2] This is inconsistent with B & K employing Mr Hughes during the claim period because Mr Hughes worked on the Northern Nowra milk run. I am not at all clear who Mr Hughes’ real employer was at the relevant time. Given the unsatisfactory state of the evidence, I would tend to the view that Mr Hughes did not change his employer and remained an employee of Reeve.
[2] Affidavit of Brett Reeve dated 17 March 2010 at [4].
I do not take the same view about the type of employment. Although it is possible for a casual employee to be employed on a regular basis in a manner which might appear to an outsider to be that of a permanent employee; Nightingale v Little Legends Child Care (2004) 134 IR 111; Mill v Avenga Pty Ltd [2008] AIRC 1163 (cases cited in Williams v Macmahon Mining Services (2009) 182 IR 104), I believe that there is sufficient evidence to allow the Court to be satisfied that Mr Hughes sought out permanent employment and was provided with it. The evidence of Mr Smith and Mr Church was unchallenged and was corroborated by the payslips where there appears to be a change in the nature of the employment. Whilst I can quite understand that Mr Hughes might not have raised any concern about the name of his employer which appeared on the payslip, if he really thought that he remained a casual and was not being paid appropriately as one, then he had every opportunity to have said so and he did not. Given the manner in which the pay system operated, in particular, the admission that the payslips referred to two weeks and not one, that a payslip wrongly referred to the applicant as undertaking grain-carting and the way in which the alleged underpayments were treated after Mr Hughes resigned, I believe that the failure to include holiday pay accruing in the payslips was just one more error of the paymaster, rather than indicative of Mr Hughes being a casual employee who did not accrue holiday pay.
Was there an underpayment?
Mr Hughes left employment on 12 March 2008. Apparently he did not give any notice to his employer. On 4 April 2008 he wrote to Mr Brett Reeve:
“To Mr Brett Reeves (sic)
I am writing to ask you to rectify the discrepancies in my wages that have been evident since I started employment with you. I have been in contact with Industrial Relations, and they have informed me by law I am required to send you this letter informing you that I have kept records of all the days I have worked and the hours I have worked per day. I have discussed this with Industrial Relations, and have also retrieved copies from the internet on the award wages and conditions from industrial relations transport section and also from the cheese butter and other dairies wages and conditions site. I am not trying to be nasty or vindictive I only want what I am entitled to by law and the award wages set out by the government and I feel it’s up to you to rectify the problem in accordance with the state award. If I don’t receive a satisfactory response you leave me no option but to take further action either through industrial relations or my own solicitor.
I also don’t want to receive phone calls from you or any of your staff in regards to this matter. It is customary by law to reply in writing within one week of this letter. Also can you please explain why my payslips have casual loading on them yet when I gave you notice you informed me I was a permanent. Casual loading applies to casual employees.
Yours sincerely
C Hughes.”
Upon receipt of that letter, Ms Reeve sent to Mr Hughes three payslips, two from B & K and one from Reeve.[3] The first one from B & K had written on it the words “Am not aware of any discrepancies but this payment should cover the unknown, thank you, Lynne Reeve.” The payment referred was described in the payslip as a “golden handshake” and was in the sum of $1,259.36. The second payslip had the words “Holiday Pay, Pro Rata = 4 weeks ordinary time. Feel free to ring me if you want more explanation. Letter 4/4/05” and the sum being paid was $2,586.48 representing holiday salary of $2,441.60, axle allowance of $111.60 and holiday loading of $427.28 less $400.00 PAYG tax. The final payslip from Reeve had written on it “we pay some casuals to do the extra bits holiday pay 1/12 ordinary time” and the payslip included a figure of $400.00 casual holiday pay.
[3] Annexure LR3 to the Affidavit of Lynne Reeve dated 17 March 2010.
The evidence produced by Mr Hughes through the affidavit of Phillip Adam Boncardo, sworn on 8 April 2010, calculates the amount allegedly due to Mr Hughes on the basis that he was a casual employee being paid under the Transport Industry (State) Award and includes shift loadings, weekend work loadings, public holiday loadings, payments to be made under the Annual Holidays Act and all other relevant payments that Mr Hughes says he should have received as a casual employee under that award. There is then a calculation of the amount of the alleged shortfall which is said to be $3,218.98. Ms Lynne Reeve considered that affidavit and replied to it in one of her own filed in Court on 27 April 2010. She points out a number of discrepancies in Mr Boncardo’s calculations, in particular, the calculations relating to overtime employment. The applicant accepted the force of some of these calculations and agreed that the underpayment would be a maximum of $1,718.98 which did not take into account the post-termination payments.
There is no evidence provided by Mr Hughes of what he should have been paid if he was a permanent employee and employed under the Transport Industry (State) Award. I have found that Mr Hughes was a permanent employee during the period of the claim. As there is no evidence, or indeed any allegation, of an underpayment on this basis, the application must fail. It is dismissed. I anticipate that there might be an application for costs notwithstanding the provisions of s.570. The respondent shall have seven days in which to make written submissions and the applicant a further seven days to make his submissions in reply.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 6 May 2010
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