Jordan v Tasmanian Perpetual Trustees
[2007] FMCA 1511
•14 September 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JORDAN v TASMANIAN PERPETUAL TRUSTEES | [2007] FMCA 1511 |
| INDUSTRIAL LAW – Application for the enforcement of award – interpretation of award – ambiguity – pro rata long service leave on termination. |
| Workplace Relations Act 1996 (Cth) ss.719, 722 Trustee Industry Award 1999 |
| City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) FCA 813 Kucks v CSR Ltd (1996) 66 IR 182 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 |
| Applicant: | GLENN MATTHEW JORDAN |
| Respondent: | TASMANIAN PERPETUAL TRUSTEES ACN 009475629 |
| File Number: | LNG 6 of 2007 |
| Judgment of: | O'Sullivan FM |
| Hearing date: | 31 August 2007 |
| Date of Last Submission: | 31 August 2007 |
| Delivered at: | Melbourne (heard in Hobart) |
| Delivered on: | 14 September 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr. Felman |
| Solicitors for the Applicant: | Australian Government Solicitors |
| Counsel for the Respondent: | Mr. Zeeman |
| Solicitors for the Respondent: | Butler McIntyre & Butler |
ORDERS
The matter be adjourned to a date to be fixed for the purposes of making orders to give effect to these reasons and orders as to penalty if any to be imposed.
The parties provide to the Court:
(a)an agreed minute of orders (other than orders as to penalty) to give effect to these reasons by 21 September 2007; and
(b)written submissions on the order/s if any as to penalty for which they respectively contend by 28 September 2007; and
(c)such answering submissions to those in order 2(b) as they may wish to make by 5 October 2007.
NOTE:
The parties also provide a copy of the agreed minute of orders and submissions referred to in order 2 by email to the Associate to Federal Magistrate O’Sullivan at: [email protected]
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT HOBART |
LNG 6 of 2007
| GLENN MATTHEW JORDAN |
Applicant
And
| TASMANIAN PERPETUAL TRUSTEES (ACN 009475629) |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr. Robert Fitzgerald worked for Tasmanian Perpetual Trustees (“the respondent”) for almost 34 years. The matter before the Court concerned a dispute over whether he had been paid all of his long service leave entitlements on termination.
Mr. Glenn Jordan (“the applicant”), is a Workplace Inspector appointed under section 167(2) of the Workplace Relations Act1996 (“the Act”). By application filed 20 March 2007 he sought the following orders:
“1. That a penalty be imposed on the respondent pursuant to s.719(1) of the Workplace Relations Act 1996 in respect of a breach of clause 18 of the Trustee Industry Award 1999 particularised in the affidavit of Glenn Jordan filed in support of this application.
2. That pursuant to s.719(6) of the Workplace Relations Act 1996 the respondent pay to Mr. Robert Fitzgerald the amount underpaid in respect to his entitlement to payment in lieu of long service leave under the Trustee Industry Award 1999 as particularised in the affidavit of Glenn Jordan filed in support of this application.
3. That interest be paid pursuant to s.722(1) of the Workplace Relations Act 1996.”
By a response filed 17 April 2007 the respondent sought that the application be dismissed with costs.
Both parties filed affidavits. The applicant filed an affidavit on
20 March 2007 and the respondent filed an affidavit from Mr. Geoffrey Dodds, the respondent’s Human Resources Manager on 17 April 2007.
In accordance with directions made on 3 April 2007, both parties filed contentions of fact and law.[1]
[1] Applicant’s contentions of fact and law filed 1 June 2007. Respondent’s contentions of fact and law filed 22 June 2007.
In this matter there is no dispute about the facts.[2] Rather, the dispute concerned the correct interpretation of the relevant terms of the applicable industrial instrument (i.e. the Trustee Industry Award 1999 (“the award”)).
[2] See Affidavit of Mr. Geoffrey Dodds at paragraph 5 and the Respondent’s contentions of fact and law at paragraphs 2 & 3.
Background
I adopt paragraphs 2-11 of the applicant’s contentions of fact and law (which are agreed) as an accurate summary of the background facts in this matter:
“2. The Respondent (TPT) is, and was at all relevant times, bound by the Trustee Industry Award 1999 (the Award).
3. Mr Robert Fitzgerald was an employee of TPT for approximately 34 years. He commenced on 7 March 1972 and left on or about 31 March 2006. TPT treated him as being on leave for a period of time thereafter.
4. During the period of his employment Mr Fitzgerald took a total of approximately 12 weeks of long service leave (60.5 days).
5. After he ceased work Mr Fitzgerald was paid $25,319.27 in lieu of long service leave calculated on the basis of 74.6356 days, or 559.767 hours, of unused long service leave (see annexure ‘GJ-2’ to the affidavit of Glenn Jordan).
6. Mr Fitzgerald queried the calculation of his entitlement to payment in lieu of long service leave with TPT in an email dated 29 April 2006 to Mr Geoff Dodds, Manager HR at TPT (annexure ‘GJ-3’ to the affidavit of Glenn Jordan).
7. Mr Dodds confirmed by email dated 1 May 2006 (annexure ‘GJ-3’ to the affidavit of Glenn Jordan) and letter dated
12 May 2006 (annexure ‘GJ-4’ to the affidavit of Glenn Jordan) that in TPT’s view the payment made by it in lieu of long service leave was correct.
8. The Applicant wrote to TPT by letter dated 21 September 2006 in relation to a possible underpayment of the payment in lieu of long service leave made to Mr Fitzgerald following his retirement (annexure ‘GJ-5’ to the affidavit of Glenn Jordan) and sent TPT a breach notice dated
1 November 2006 (annexure ‘GJ-6’ to the affidavit of Glenn Jordan).
9.Mr Fitzgerald’s entitlement to long service leave and to any payment in lieu thereof was governed by clause 18 of the Award. Clause 18 is reproduced as annexure ‘GJ-7’ to the affidavit of Glenn Jordan.
10. TPT contends that under the Award it is only required to make a payment to Mr Fitzgerald in lieu of LSL in respect of LSL to which he had a vested entitlement at the time he ceased employment and which he had not taken, i.e. in respect of:
·4.6 days not taken from the LSL to which he became entitled in 1987;
·35 days LSL not taken to which he became entitled in 1995; and
·35 days LSL not taken to which he became entitled in 2003.
11. Accordingly, it has not made any payment to Mr Fitzgerald in lieu of LSL in respect of his 3 years of service from 2003 to 2006.”
Legal framework
In this case, the Court is asked to determine the dispute over how an employee who worked more than 15 years with the respondent should have pay in lieu of long service leave calculated on termination.
Before turning to consideration of that issue, it is necessary to set out the legal framework within which this issue will be resolved.
I adopt the following paragraphs from the applicant’s contentions of fact and law as an accurate summary of the legal framework of this matter:
“12. By s.167 of the Act the Minister is empowered to appoint a person as a Workplace Inspector. Pursuant to s.718(1), item 3, of the Act a Workplace Inspector may apply for a pecuniary penalty or other remedy under Division 2 of Part 14 of the Act in respect of a breach of a term of an award. Under s.719 of the Act the Federal Magistrates Court, as an ‘eligible court’, may impose a penalty in respect of a breach of an award (s.719(1)). The maximum penalty is 300 penalty units (s719(4)).
13. Where the proceeding is against an employer and an employee has been underpaid, the court may also order the employer to pay to the employee the amount of the underpayment (s.719(6)). If it does so, the Court must also, upon application, order the payment of interest at such rate as the court thinks fit ‘unless good cause is shown to the contrary’ (s.722).
The Award and its competing interpretations
14. The Award is a consolidation of the Trustee Officers Consolidated Award 1990. It was made for the purposes of award simplification and took effect from 21 September 1999.”
The award
There was no dispute that the award set out the respondent’s obligations to Mr. Fitzgerald in relation to long service leave. Clause 18 to 18.3 of the award provides as follows:
“18. LONG SERVICE LEAVE
18.1 Entitlement to long service leave
18.1.1General entitlement
Subject to 18.1.2, an employee is entitled to:
18.1.1(a) thirteen weeks of long service leave on ordinary pay on completing fifteen years of continuous service with one employer; and
18.1.1(b) seven weeks of long service leave on ordinary pay on completing each period of eight years of continuous service with that employer after the first fifteen years of continuous service with that employer.
18.1.2 Entitlement if service commenced before
1 March 1965
An employee whose continuous service commenced before1 March 1965 is entitled to an amount of long service leave equal to:
18.1.2(a) 1/80 of the period of his or her continuous service with one employer completed prior to 1 March 1965; plus
18.1.2(b) 1/60 of the period of his or her continuous service with that employer completed subsequent to 28 February 1965; less
18.1.2(c) any long service leave which has already been granted to and taken by the employee.
18.2 Payment in lieu of long service leave if employment stops after fifteen years
18.2.1 Entitlement to payment in lieu
If an employee becomes entitled to long service leave in accordance with 18.1, and that leave is not taken, the employee is entitled to payment in lieu of leave if his or her employment ends.
18.2.2 Entitlement
The employee is entitled to payment in lieu of long service leave equal to:
18.2.2(a) 1/80 of the period of his or her continuous service with that employer prior to 1 March 1965; and
18.2.2(b) 1/60 of the period of his or her continuous service with that employer subsequent to
28 February 1965.
18.3 Entitlement to long service leave if employment stops after
ten years
18.3.1 Between ten and fifteen years’ continuous
service
This section only applies if an employee’s employment is ended for any reason other than dismissal for serious and wilful misconduct and the employee has completed at least ten, but less than fifteen, years of continuous service with one employer.
18.3.2 Entitlement
The employee is entitled to an amount of long service leave equal to:
18.3.2(a) 1/80 of the period of his or her continuous service with that employer completed prior to 1 March 1965; and
18.3.2(b) 1/60 of the period of his or her continuous service with that employer completed subsequent to 28 February 1965.”
For the purposes of the resolution of the issues in dispute, clauses 18.4 to 18.14 of the award are not presently relevant and neither party suggested the contrary.
Finally, there was no issue regarding the Court’s jurisdiction to interpret the award in the context of the dispute between the parties.
Approach to interpretation of award
It was common ground that the Court, in interpreting the award, should have regard to general principles of statutory construction. The Court was referred to the decision of Short v F W Hercus Pty. Ltd. (1993) 40 FCR 511, where Burchett J. said at 520:
“The principles of statutory interpretation referred to are not inapplicable to an award which seeks, in a way, to legislate for the terms of conditions of employment of a number of persons engaged in a particular industry: cf. George A. Bond & Co. Ltd. (in liq.) v McKenzie (1929) AR (NSW) 498 at 503. Their application to the present problem would require the Court to consider the wider context of the award provision as the product of a series of decisions which might reveal plainly its general purpose and policies.”
There was no evidence before the Court regarding the history of the relevant clause of the Award. In George A Bond & Co. Ltd (in liq) v McKenzie [1929] AR (NSW) 498, Street J. said at 503-504:
“Now speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees as such and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between the parties couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of the words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give the meaning consistent with the general intention of the parties to be gathered from the whole of the award.”
The Court was also referred to the decision of Kucks v CSR Ltd. (1996) 66 IR 182 at 184, where Madgwick J set out the following legal principals applicable to the construction of an award:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framers of the document, bearing in mind that such framer(s) were likely of a practical bend of mind: and may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite near inconsistencies or infelicities of expression which might tend to some other readings. And meanings which avoid inconveniences or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.”
Finally, on this issue the Court was also referred to the decision in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) FCA 813, at [57] where French J, said:
“It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 in cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned – see eg. Geo A Bond & Co. Ltd. (In Liq.) v McKenzie (1929) AR 499 at 503-4 (Street J.).
It may be that this means that no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal construction
I repeat what I said in - City of Wanneroo v Holmes 380:“Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.”
In summary, the approach to be taken in the interpretation of the award is well settled by the authorities. The award is to be interpreted in the same way as a statute or written contract. The award should be read as a whole, giving the words their ordinary and natural meaning. However, it is important to bear in mind that awards are often framed without careful attention to form and draughtsmanship. It is often appropriate to avoid a too literal approach to the words used.
Submissions on the correct interpretation in light of the facts
Whilst in written submission their positions were different, at the final hearing both parties acknowledged the subclause relevant to the dispute was ambiguous and that the Court was required to consider the meaning of the words in the subclause in the context of the whole of the award clause (i.e. clause 18)
In Short v FW Hercus Pty. Ltd. (1993) 40 FCR 511, Burchett J said in the context of the case before him:
“The respondent says the instant award is clear, and we must shut out eyes to what went before. I think there are two answers to this argument. On the one hand, I do not accept that the award is clear on its face. The fact that I have given it a meaning by a process of construction (as it happens, contrary to the respondent’s contention) cannot disguise the possibility of understanding the language, as the learned judge understood it, differently: cf. Pickard v John Heine & Son Limited (supra) at 9, per Issacs ACJ. That is certainly sufficient to justify a reference to its source. Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in the present form, only a kind of wilful judicial blindness could lead the court to deny itself the light of that history, and to prefer to peer unaided at some obscurity in the language. “Sometimes” McHugh J said in Saraswati v The Queen (1991) 172 CLR 1 at 21, the purpose of legislation “can be discovered only by reference to the history of the legislation and the state of the law when it was enacted”. Awards must be in the same position.
But even if the language, read alone, appeared pellucidly clear, the tendency of recent decisions -- and this is the other answer to the argument put – would seem to require the court to look at the full context. Only then will all of the nuances of the language be perceived.”
In this matter the ambiguous terms of the Award are contained in clause 18.2 and it is to clause 18, and the parties’ respective contentions, that
the Court now turns.
The applicant
The applicant contended that after 15 years service an employee’s payment in lieu of long service leave should be calculated on a pro rata basis.
The applicant further contended that any amount of continuous service provided by an employee after 15 years is to be included as part of any period of service for which payment in lieu of long service leave is made on termination.
The applicant’s submission on this issue was usefully summarised at paragraph 30 of its contentions of fact and law as follows:
“Clause 18.1.1 is an entitlement clause and provides the mechanism for when an employee’s entitlement to LSL is triggered. Where an employee’s employment is terminated after 15 years, clause 18.2 outlines a regime for payment in lieu of LSL. Clause 18.2.1 is also an entitlement clause and, in effect, provides that where an employee becomes entitled to LSL in accordance with clause 18.1.1, the payment in lieu provision is triggered. The Applicant submits that this is the only work to be done by clause 18.2.1. Once an employee has reached 15 years of continuous service the employee becomes entitled to long service leave pursuant to clause 18.1.1 and, therefore, eligible, pursuant to clause 18.2.1, for payment in lieu of LSL on termination.
Once the entitlement to payment in lieu is triggered, clause 18.2.2 then sets out the method of calculating that payment which does not involve requiring an employee to have provided any completed period of service: it is a pro rata payment.”
The applicant submitted that the purpose of clause 18.2.2 (which was described in submissions as adopting the ‘fraction method’) is clear.
It was contended that clause 18.2.1 shows who is entitled to payment in lieu of long service leave on termination after 15 years of service.
The applicant contended then, that clause 18.2.2 defines how any payment in lieu of long service leave for employees entitled to such payment pursuant to clause 18.2.1 is to be calculated.
The applicant’s case was that such an interpretation would produce a more meaningful result than one that would render a clause (in this case clause 18.2.2) of no practical effect.[3]
[3] See Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355.
The respondent
The respondent’s position was that the interpretation of the award advanced by the applicant ignored the natural and ordinary meaning of the words in clause 18 of the award.
The respondent’s position was that any payment in lieu of long service leave on termination was predicated on an entitlement arising under clause 18.1. As such, the respondent’s position was that after 15 years service any amount of continuous service that did not form part of an 8 year block was not to be included in any period of service for which payment in lieu of long service leave should be made.
The respondent’s submissions on the correct interpretation were set out at paragraphs 12 to 19 of its contentions of fact and law:
“[12] When attempting to determine what that clause means, the first question that would be asked is whether or not the Award makes any provision for a pro rata entitlement.
The Award in fact does that but it does so only in respect of the fifteen year period referred to in 18.1.1(a). That is found in clause 18.3.1 of the Award which provides:
“This section only applies if an employee’s employment is ended for any reason other than dismissal for serious and wilful misconduct and the employee has completed at least ten, but less than fifteen, years of continuous service with one employer.”
[13]
In such a case, clause 18.3.2(b) provides that the entitlement shall be one sixtieth of the period of his or her continuous service with that employer completed subsequent to
28th February 1965.
[14]It is clear that the pro rata entitlement applies only to the initial period of service of 15 years as set out in clause 18.1.1(a) because the pro rata period relates to a situation where the employee has completed at least 10, but less than 15 years of continuous service. As the clause specifically relates to that period, there can be no justification for applying it in any way to the eight year periods as set out in clause 18.1.1(b) of the Award.
[15]Furthermore, clause 18.1.1(b) of the Award refers to “each period of eight years of continuous service.” That clause specifically does not make any reference to any part of an eight year period but specifically refers to the completion of each eight year period.
[16]Any interpretation other than that set out above completely disregards the natural and ordinary meaning of clauses 18.1.1(b) and 18.3.1 of the Award.
[17]The contention of the Applicant ignores some vital words in clause 18.2.1. That clause provides:
“If an employee becomes entitled to long service leave in accordance with 18.1, and that leave is not taken the employee is entitled to payment in lieu of leave if his or her employment ends.”
[Emphasis added].
[18]Clause 18.2.2 then goes on to provide what payment in lieu of long service leave an employee is entitled to. Whilst a possible argument is that clause 18.2.2 (a) and (b) may make it appear that the entitlement to payment in lieu is 1/80 of the period of the employee’s continuous service with that employer which might be argued to be the entire period of employment on the commencement of that person’s employment which, in the present case is since March 1972, clause 18.2.2 however commences with the words “entitled to payment in lieu…..” That entitlement only exists where a person pursuant to clause 18.2.1 has become entitled to long service leave in accordance with clause 18.1.
[19]Clause 18.1 is clear as to how long service leave entitlements accrue. Clause 18.1.1 (b) gives no entitlement to long service leave unless a period of eight (8) years has been completed. Clause 18.2.1 does not refer simply to a situation where an employee becomes entitled to long service leave. Specifically, it refers to an employee who becomes entitled to long service leave in accordance with clause 18.1, [Emphasis added].
In submissions before the Court the respondent acknowledged that there were problems with clause 18.[4]
[4] Transcript of hearing 31 August 2007 page 42 at 20.
However, in the respondent’s submission that ambiguity was not material to the matter at hand. It was the respondent’s position that clause 18.2.1 required an employee to have an entitlement pursuant to clause 18.1 and it was that entitlement which an employee received by way of payment in lieu on termination. (emphasis added)
When Counsel for the respondent was asked, given that submission, what work there was for clause 18.2.2 to do, he was unable to advance the matter further and accepted that the effect of the interpretation contended for by the respondent was to render clause 18.2.2 redundant.[5]
[5] Transcript of hearing 31 August 2007 page 43 at 29.
I now turn to consider the competing interpretations of clause 18 in light of the above submissions.
Consideration
The relevant subclauses of clause 18 have already been set out at paragraph 10 above. Clause 18 of the award provides for long service leave. Subclause 18.1.1 provides for the general entitlement to long service leave and 18.1.2 provides the general entitlement for employees employed prior to 1 March 1965.
Subclause 18.2 provides for payment in lieu of long service leave if an employee’s employment stops after 15 years.
Subclause 18.2.1 provides for the entitlement to payment in lieu and subclause 18.2.2 provides how that entitlement is to be calculated. Given the agreed facts neither party suggested clause 18.2.2 (a) was material to the resolution of the dispute.
Subclause 18.3 provides for payment in lieu if employment stops after 10 years but before 15 years.
Subclause 18.3.1 only applies if employment ends for any reason other than misconduct between 10 and 15 years. Subclause 18.3.2 then sets out the entitlement and the calculation that such an employee receives on termination.
Finally, as set out earlier, subclauses 18.4 to 18.14 are not presently relevant and no party made submissions to the contrary.
The respondent’s position was simply that the words in clause
18 mean what they say.
The respondent’s position was there was no entitlement to pro rata long service leave other than in accordance with clause 18.3. The respondent’s position was an employee with 15 or more year’s service was entitled to long service leave, and had that entitlement calculated on termination, in accordance with clause 18.1.
In written submissions, in support of its position that there was no ambiguity in clause 18 [6] and that the natural ordinary meaning of the words ought to be given effect the respondent contended the award only provided for pro rata payment of long service leave on termination for employees whose employment stopped between 10 and 15 years of service.[7] Those submissions were:
“[23] In the present case, it can be said that the terms of the Award are clear and unambiguous. The natural and ordinary meaning of the words used should therefore be taken into consideration. From the clear and unambiguous words used in clauses 18.1.1(b) and 18.2.1 it is clear that the pro rata entitlement was only intended to apply to the initial period of employment of at leat 10, but less than 15 years.”
[6] See paragraph 28 of Respondent’s contentions of fact and law
[7] See clause 18.3 of the Trustee Industry Award 1999
However, in submissions before the Court the respondent acknowledged there were “problems” with clause 18 and there was an inconsistency between subclause 18.2.1 and 18.2.2[8]. The respondent also acknowledged that clause 18.3 was not the only clause that contained a pro rata payment.[9]
[8] Transcript of hearing 31 August 2007 page 56 at 24
[9] Transcript of hearing 31 August 2007 page 48 at 13
In my view the submission advanced by the respondent in its contentions of fact and law ignores not only the treatment of the calculation of long service leave elsewhere in the clause but it also ignores the practical application of the words in clause 18.2.2(b) in the context of the agreed facts. Clause 18.2.2(b) which is subject to 18.2.1 provides for an employee, whose employment stops after 15 years service and who is entitled to long service leave pursuant to clause 18, to obtain payment for long service leave on termination in accordance with the formula set out therein.
In resisting such an interpretation, the respondent in submissions before the Court, said:
a)that such an interpretation ignored reference to the words “entitled to long service leave in accordance with clause 18.1” in 18.2.1;
b)the application of the formula in 18.2.2(b) would deliver a different entitlement to that set out in clause 18.1. The respondent’s position was that the application of 18.2.2(b) would deliver more than the employee was entitled to under clause 18.1
c)the calculation in clause 18.2.2.(b) is subject to the limitation in 18.2.1 and therefore the calculation in 18.2.2.(b) is 1/60 of the entitlement in 18.1; [10] and
d)the interpretation in (c) above required to the Court to ignore the words continuous service in clause 18.2.2(b) [11].
[10] Transcript of hearing 31 August 2007 page 51 at 41
[11] Transcript of hearing 31 August 2007 page 57 at 36
As set out at paragraph 19 above in Short v F.W. Hercus (supra) Burchett J said at 518 in response to an argument that in that case the award was clear:
“…even if the language, read alone, appeared pellucidly clear, the tendency of recent decision…would seem to require the court to look at the full context. Only then will the nuances of the language be perceived.”
It is true the Court is not free to “give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award”.[12]
[12] Madgwick in Kucks at 184
Given this the difficulties facing the respondent’s submissions are:
a)they ignores the words in clause 18.2.2; and
b)that clause 18.2.1 applies to those who are entitled to long service leave in accordance with clause 18.1 and clause 18.2.2 sets out how employees so entitled are to be paid in lieu of long service leave; and
c)although clause 18.2 does not explicitly designate that payment in lieu of long service leave after 15 years service was to be calculated on a pro rata basis the practical application of clause 18.2.2(b) evinces that that was the intention of the framers of the award; and
d)to adopt the position contended for by the respondent in its written submissions that the only entitlement for such an employee was in 18.1 would render clause 18.2.2 redundant; and
e)the calculation contended for by the respondent at paragraph 44(c) above could see an employee get less than they were entitled to under clause 18.1.
The applicant contended the respondent’s interpretation could lead to an injustice:
“where an employee after completing a 15 year continuous period of service provides continuous services for an additional
7 years and 364 days and would not have any of that period counted as part of long service leave.”[13]
[13] Paragraph 27 Applicant’s contentions of fact and law
To suggest as the respondent does, that as clause 18.2.1 refers to clause 18.1 this requires that payment be made in accordance with clause 18.1 (and not clause 18.2.2) has the effect of rendering 18.2.2 redundant. [14]
[14] See paragraph 30 above
Moreover, such an interpretation is inconsistent with the approach adapted to the calculation of payment elsewhere in clause 18, where whilst reference is not made to clause 18.1 in those subclauses they nonetheless contemplate payment in lieu on a pro rata basis.
The applicant contends that clause 18.2.1 sets out that those who receive payment in lieu of long service leave on termination are those who are entitled to long service leave by virtue of clause 18.1. In this case there was no dispute that Mr. Fitzgerald was so entitled.[15]
[15] Transcript of hearing 31 August 2007.page 49 at 33-39
The applicant’s contention is that clause 18.2.2 then sets out how those persons who meet the provisions in clause 18.2.1 (e.g. Mr. Fitzgerald who was entitled to long service leave under clause 18.1 given his length of service.) have payment in lieu of long service leave on termination calculated. The applicant referred to the method of calculation in 18.2.2 as the “fraction method” and noted that such a method applied when calculating long service leave on termination elsewhere in clause 18.
I accept that such an interpretation resolves the inconsistency between 18.2.1 and 18.2.2.[16] Such an interpretation is consistent with the treatment of payment in lieu for other classes of employees in the award[17] as well as those under other instruments.[18] Such an interpretation does not require reference to the headings of each clause, just the words.
[16] See paragraph 19 of the Applicant’s contentions of fact and law.
[17] Paragraph 31-33 of Applicant’s contentions of fact and law and Kucks at 187
[18] See paragraph 31-35 of the Applicant’s contentions of fact and law.
The interpretation contended for by the applicant avoids a narrow and pedantic approach to the interpretation of the award [19] and promotes the purpose of ensuring employees under the award receive payment for long service leave on termination.[20]
[19] Kucks at 184
[20] See City of Wanneroo v Australian Municipal, Administrative, Clerical and Services UnionIn summary then, this interpretation is consistent with the authorities referred to above, does not render clause 18.2.2 redundant[21] and accords with the beneficial nature of the entitlement contained in clause 18 of the award.
[21] See Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355
Finally, as was submitted by the applicant:
“[32] It is clear, on its face, that clause 18.3 provides that any employee whose employment ends after 10 years but before 15 years of continuous service is entitled to payment in lieu of LSL calculated on a pro rata basis. There is no logical or discernable policy reason by why the Award would intend that an employee whose service ends after 10 years but before 15 years would be entitled to a pro rata payment of LSL based on his total service while an employee whose service ends after 15 years could, depending on the timing, receive no payment in respect of LSL for a period of up to just under 8 years of that service.”
In the circumstances I am satisfied that the applicant’s construction of clause 18 of the award should be preferred.
Conclusion
Mr. Robert Fitzgerald worked for the respondent for almost 34 years. For the reasons set out above on termination he should have received payment in lieu of long service leave in accordance with clause 18.2.2.
As the respondent acknowledged, in the event that the interpretation contended for by the applicant was preferred, the only appropriate order was for the Court to order payment of the entitlement found by the Court, with interest calculated pursuant to the Act.
Given the matter proceeded based on agreed facts it will be necessary to adjourn the matter to allow the parties to make submissions on the orders appropriate to be made to give effect to these reasons.
As indicated at the conclusion of the hearing, the parties will have an opportunity to make submissions on the issue of whether and, if so what order for penalty the Court should impose.
Therefore, I will make orders as set out at the beginning of these reasons for judgment.
I certify that the preceding sixty-two (62) paragraphs are a true copy of the reasons for judgment of O'Sullivan FM
Associate: James Naughton
Date: 10 September 2007
(2006)
FCA 813
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