Kershaw v SUNVALLEY Australia Pty Ltd
[2007] WASCA 278
•19 DECEMBER 2007
KERSHAW -v- SUNVALLEY AUSTRALIA PTY LTD [2007] WASCA 278
| WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT | Citation No: | [2007] WASCA 278 | |
| Case No: | IAC:5/2007 | 2 NOVEMBER 2007 | |
| Coram: | WHEELER J (Deputy Presiding Judge) PULLIN J LE MIERE J | 18/12/07 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | GLENN (properly DAVID GLENN) KERSHAW SUNVALLEY AUSTRALIA PTY LTD |
Catchwords: | Appeal Industrial law Minimum Conditions of Employment Act 1993 (WA) Jurisdiction of Industrial Magistrate's Court to enforce minimum conditions Whether Full Bench misconstrued Act in relation to annual leave entitlements |
Legislation: | Industrial Relations Act 1979 (WA), s 83, s 83A, s 90 Minimum Conditions of Employment Act 1993 (WA), s 3, s 5, s 7, s 23 |
Case References: | Devaynes v Noble (1816) 1 Mer 572 |
JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT CITATION : KERSHAW -v- SUNVALLEY AUSTRALIA PTY LTD [2007] WASCA 278 CORAM : WHEELER J (Deputy Presiding Judge)
- PULLIN J
LE MIERE J
- IAC 6 of 2007
- Applicant
AND
SUNVALLEY AUSTRALIA PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Coram : RITTER AP
- SMITH SC
SCOTT C
File No : FBA 35 of 2006, FBA 36 of 2006
(Page 2)
Catchwords:
Appeal - Industrial law - Minimum Conditions ofEmployment Act 1993 (WA) - Jurisdiction of Industrial Magistrate's Court to enforce minimum conditions - Whether Full Bench misconstrued Act in relation to annual leave entitlements
Legislation:
Industrial Relations Act 1979 (WA), s 83, s 83A, s 90
Minimum Conditions of Employment Act 1993 (WA), s 3, s 5, s 7, s 23
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Applicant : Mr G McCorry
Respondent : Mr M D Cuerden
Solicitors:
Applicant : Labourline
Respondent : Michael Paterson & Associates
Case(s) referred to in judgment(s):
Devaynes v Noble (1816) 1 Mer 572
(Page 3)
1 WHEELER J (Deputy Presiding Judge): I agree with Le Miere J.
2 PULLIN J: I agree with Le Miere J.
3 LE MIERE J: The appellant appeals from the decision of the Full Bench of the Western Australian Industrial Relations Commission whereby the Full Bench dismissed the appellant's appeal from a decision of an Industrial Magistrate's Court given on 18 October 2006. The Industrial Magistrate's Court had dismissed the appellant's claims in relation to annual leave entitlements.
4 At the hearing of appeal IAC 5 of 2007, the appellant advised the court that the appeal was not pressed, and the appeal was dismissed by consent. These reasons are therefore concerned only with appeal IAC 6 of 2007.
Background
5 From 1 July 2000 to 30 June 2003 the appellant was employed as the operations manager of Rock N Tails Pty Ltd (RNTPL). RNTPL conducted the business of constructing tailings dams and other associated earthworks. Martin Bruce Jones and Gary John Trevor (the liquidators) were appointed as liquidators of the company on 17 July 2003. RNTPL agreed to sell its assets and business to the respondent by a deed dated 14 October 2003 (the deed). The parties to the deed are RNTPL, the respondent and the liquidators. On 1 July 2003 the appellant commenced employment with the respondent as its operations manager.
6 Trevor Kershaw, the appellant's brother, and his wife Julie Kershaw were the directors of RNTPL and of the respondent. The appellant and his brother had a falling out. The respondent terminated the appellant's employment on 31 January 2005.
7 The appellant commenced proceedings against the respondent in the Industrial Magistrate's Court. The appellant made claims in relation to long service leave and annual leave entitlements. The Industrial Magistrate's Court ordered the respondent to pay to the appellant an amount in relation to long service leave but dismissed his claim in relation to entitlements to annual leave under the Minimum Conditions of Employment Act 1993 (MCE Act).
8 In summary, the appellant's claim under the MCE Act was for payments in lieu of annual leave which he contended he was entitled to
(Page 4)
during his employment with RNTPL. The appellant contended that by reason of the deed the respondent became responsible for the obligations of RNTPL for the appellant's annual leave entitlements. The appellant claimed that by 30 June 2003 the appellant had accrued an annual leave entitlement of 38 weeks' leave under the MCE Act and the respondent became responsible for those entitlements. The appellant claimed that he still had this entitlement when his employment with the respondent was terminated on 31 January 2005. Accordingly, the appellant contended, due to the provisions of s 24 of the MCE Act, the appellant had an entitlement to be paid by the respondent for 38 weeks' annual leave.
Findings of Industrial Magistrate's Court
9 The Industrial Magistrate found that the appellant accrued an entitlement to annual leave during the period between July 2000 and July 2003 when he was employed by RNTPL. The Magistrate said that it appears that the appellant did not take annual leave during that period and therefore that he may be able to recover payment in that regard.
10 The respondent asserted that, given that the basis of the appellant's claim was against the respondent for annual leave entitlements allegedly accrued whilst he was an employee of RNTPL, the Industrial Magistrate's Court does not have jurisdiction to determine that claim. The Industrial Magistrate upheld the respondent's submission and determined that the court lacks jurisdiction to determine the issue of annual leave entitlements accrued by the appellant with respect to its employment by RNTPL.
11 The Industrial Magistrate concluded that insofar as the appellant's claim for annual leave relates to the respondent for the period July 2003 until termination, it had not been established that there had been a failure on the part of the respondent to pay the appellant's entitlements in that regard. The Industrial Magistrate dismissed the appellant's claims in relation to annual leave entitlements.
Appeal to the Full Bench
12 The appellant appealed to the Full Bench on two grounds. The first was that the Industrial Magistrate erred in fact and in law in finding that the Industrial Magistrate's Court does not have jurisdiction to determine the appellant's claim against the respondent for annual leave entitlements accrued while he was in the employment of RNTPL. The Full Bench found that the Industrial Magistrate's Court did not have jurisdiction to determine this aspect of the appellant's claim against the respondent and dismissed that ground of the appeal.
(Page 5)
13 The second ground of appeal was that the Industrial Magistrate erred in law in finding that the respondent did not owe the appellant annual leave entitlements in respect of his period of service between 1 July 2003 and 31 January 2005 in that the six weeks annual leave taken by the appellant in December 2004 and January 2005 was, by operation of the rule in Devaynes v Noble (1816) 1 Mer 572, annual leave accrued in the service of RNTPL for which the respondent had assumed liability under the deed.
14 The Acting President, with whom the other members of the Full Bench agreed, made four findings relevant to that issue. First, the appellant took unpaid leave from January 2002 to October 2002 and therefore during that period did not accrue an entitlement to annual leave. Secondly, the appellant took other leave from time to time between 1 July 2000 and 30 June 2003. Thirdly, there was evidence that in June or July 2003 the appellant admitted that he was owed no outstanding annual leave as at 30 June 2003. Fourthly, there was a lack of clarity in the evidence about the appellant's asserted entitlement to annual leave as at July 2003. The Acting President found that given the state of the evidence the appellant had not established on the balance of probabilities an outstanding entitlement to at least 12 weeks of annual leave for the period of his employment with RNTPL from July 2000 to June 2003. The Full Bench dismissed that ground of appeal.
The appeal to this court
15 The appellant now appeals to this court on two grounds. I will consider each ground separately.
Ground 1
16 The notice of appeal states that the first matter appealed against is:
The decision of the Full Bench that the Appellant could not take proceedings against the Respondent in the Industrial Magistrate's Court in respect of annual leave entitlements solely conferred by the [MCE Act] and accrued while in the employ of [RNTPL] and for which the respondent had accepted liability.
- on the ground that:
The Full Bench erred in its construction of section 7 of the [MCE Act] in that on a proper construction of s 7, proceedings in respect of an entitlement to a minimum condition of employment conferred by the Act may be conducted only in the Industrial Magistrate's Court and not elsewhere.
(Page 6)
17 The MCE Act provides for minimum conditions of employment. Section 3(1) provides that 'minimum condition of employment' means amongst other things, a condition for leave prescribed by the MCE Act. Section 23(1) provides that an employee (other than a casual employee) is entitled, in relation to each year of service, to a period of paid annual leave equal to the number of hours the employee is required ordinarily to work in a four week period during the year, up to 152 hours. Section 5(1) provides that the minimum conditions of employment are taken to be implied in a contract of employment. Section 7 provides that a minimum condition of employment may be enforced where the condition is implied in a contract of employment, under s 83 of the Industrial Relation Act 1979 (WA) (IR Act) as if it were a provision of an award, industrial agreement or order other than an order made under s 32 or s 66 of that act.
18 Section 83 of the IR Act is in the following terms:
83. Enforcement of certain instruments
(1) Subject to this Act, where a person contravenes or fails to comply with a provision of an instrument to which this section applies any of the following may apply in the prescribed manner to an industrial magistrate's court for the enforcement of the provision -
…
(e) any person on his or her own behalf who is a party to the instrument or to whom it applies;
…
(2) In this section -
'instrument to which this section applies' means -
(a) an award;
(b) an industrial agreement;
(c) an employer-employee agreement; and
(d) an order made by the Commission, other than an order made under section 23A, 32, 44(6) or 66.
(3) An application for the enforcement of an instrument to which this section applies shall not be made otherwise than under subsection (1).
- (4) On the hearing of an application under subsection (1) the industrial magistrate's court may, by order -
(a) if the contravention or failure to comply is proved -
(i) issue a caution; or
(ii) impose such penalty as the industrial magistrate's court thinks just but not exceeding $2 000 in the case of an employer, organisation or association and $500 in any other case;
or
(b) dismiss the application.
(5) If a contravention or failure to comply with a provision of an instrument to which this section applies is proved against a person as mentioned in subsection (4) the industrial magistrate's court may, in addition to imposing a penalty under that subsection, make an order against the person for the purpose of preventing any further contravention or failure to comply with the provision.
…
19 Section 83A of the IR Act provides that where in any proceedings brought under s 83(1) an employee has not been paid the amount he was entitled to then he may recover the underpayment. Section 83A is in these terms:
83A. Underpayment of employee
(1) Where in any proceedings brought under section 83(1) against an employer it appears to the industrial magistrate's court that an employee of that employer has not been paid by that employer the amount which the employee was entitled to be paid under an instrument to which that section applies the industrial magistrate's court shall, subject to subsection (2), order that employer to pay to that employee the amount by which the employee has been underpaid.
…
(Page 8)
- enforcement proceedings under s 83 of the IR Act and before and only before an Industrial Magistrate's Court. The appellant submits that the policy of the MCE Act and the proper construction of s 7(c) of that Act and s 83(3) of the IR Act leads to the conclusion that where that has been a failure to observe a minimum condition of employment implied into a contract of employment, the failure will be enforceable only by way of proceedings under s 83 of the IR Act. The appellant puts the same point another way by saying that properly construed, s 7 of the MCE Act and s 83 of the IR Act provide that the Industrial Magistrate's Court is the only court in which the claim against an employer - or a third party provider - for a minimum condition of employment, can be pursued.
21 Clause 5 of the deed provides that from 1 July 2003 the respondent 'is solely responsible for any Transferring Employee, any Employee Entitlements and the wages of any Transferring Employee'. 'Employee Entitlements' is defined to include all entitlements of employees, including the appellant, including statutory annual leave entitlements owing at 30 June 2003. The appellant says that the respondent assumed responsibility for the appellant's annual leave entitlements arising from the MCE Act.
22 The effect of s 5 of the MCE Act is that the minimum conditions of employment, including entitlement to paid annual leave prescribed by s 23, is implied in a contract of employment. The effect of s 7 is that that minimum condition may be enforced under s 83 of the IR Act as if it were a provision of an award, industrial agreement or order other than a order made under s 32 or s 66 of that Act.
23 Section 83 of the IR Act provides that specified people may apply for the enforcement of a provision 'where a person contravenes or fails to comply with a provision of an instrument to which this section applies'. A condition for paid annual leave prescribed by s 23 of the MCE Act and implied in a contract of employment is, by reason of s 7 of the MCE Act, deemed to be a provision of an instrument to which s 83 of the IR Act applies. Any person who is a party to the instrument or to whom it applies may apply for the enforcement of the provision of the instrument - see s 83(1)(e).
24 Only a party to the instrument may contravene or fail to comply with a provision of that instrument. The appellant's entitlement to annual leave is implied by s 5 of the MCE Act in his contract of employment with RNTPL. Section 7 of the MCE Act, in effect, deems that implied term of the contract of employment with RNTPL to be a provision of an
(Page 9)
- instrument to which s 83 of the IR Act applies. The appellant may apply to the Industrial Magistrate's Court for the enforcement of that provision against RNTPL. The appellant cannot apply to the Industrial Magistrate's Court for the enforcement of that provision against the respondent because the respondent has not contravened or failed to comply with a provision of an instrument to which s 83 applies, or a provision which is deemed by s 7 of the MCE Act to be a provision of an instrument to which s 83 of the IR Act applies.
25 In his appeal to the Full Bench the appellant argued that the appellant's contract of employment with RNTPL has been assigned to the respondent. However, the appellant did not press that argument on this appeal and it is unnecessary to refer to it further.
26 Section 83A of the IR Act provides, in effect, that where an employee has not been paid by the employer the amount which the employee was entitled to be paid under an instrument to which s 83(1) applies, the Industrial Magistrate's Court shall order that employer to pay to that employee the amount by which the employee has been underpaid. The underpayment must be of an amount the employee was entitled to be paid under an instrument to which s 83(1) applies.
27 In this case, the underpayment must be of an amount which the employee was entitled to be paid under an instrument which is deemed by s 7 of the MCE Act to be an instrument to which s 83(1) applies, that is the contract of employment between RNTPL and the appellant. Section 83A provides that the Industrial Magistrate's Court shall order 'that' employer to pay the amount of the underpayment. 'That' employer is a reference to the employer against whom proceedings have been brought under s 83(1) and who or which has not paid the employee the amount which the employee was entitled to be paid under the instrument to which s 83(1) applies. The employer against whom proceedings under s 83(1) are brought must be the employer that has contravened or failed to comply with a provision of an instrument to which s 83(1) applies. The respondent is not an employer that has contravened or failed to comply with a provision of an instrument to which s 83(1) applies, or which is deemed by s 7 of the MCE Act to apply.
28 The obligation of the respondent to pay to the appellant annual leave entitlements owing at 30 June 2003 arises, if at all, from the provisions of the deed. The deed is not an instrument to which s 83(1) applies and the provisions of the deed are not provisions of an instrument to which s 83(1)
(Page 10)
- of the IR Act applies or which are deemed by s 7 of the MCE Act to be provisions to which s 83(1) of the IR Act applies.
29 The appellant made other arguments before the Full Bench, including an argument based upon s 8 of the MCE Act but those arguments were not pursued before this court and it is unnecessary to consider them.
30 The Full Bench was correct to hold that the Industrial Magistrate's Court did not have jurisdiction to determine that part of the appellant's claim which related to annual leave entitlements accrued whilst working for RNTPL. Ground 1 fails.
Ground 2
31 The appellant appeals against the finding of the Full Bench that ground 2 of his grounds of appeal to the Full Bench was dependent upon the contention that the appellant had accrued not less than 12 weeks annual leave in the period July 2000 to June 2003 whilst an employee of RNTPL and that this had not been established. The appellant appeals against that finding on the ground that:
The Full Bench erred in failing to construe or to properly construe sections 23 and 25 of the [MCE Act] in that on a proper construction of those sections, any absences from work by the appellant in the period July 2000 to June 2003 do not constitute 'unpaid leave' and the six weeks annual leave taken by the Appellant in December 2004 and January 2005 could not have been annual leave accrued after July 2003, the right to take annual leave being a right to take only the leave accrued more than 12 months prior to going on the leave.
32 The appellant submitted that he had accrued six weeks' annual leave from the period July 2003 to termination in January 2005. He took six weeks' annual leave immediately prior to termination. However, the appellant submitted that the six weeks' annual leave that he took was part of the annual leave that he had accrued whilst employed by RNTPL and which the respondent has assumed responsibility for in the deed. Accordingly, on termination the six weeks' leave accrued by the appellant since July 2003 remained owing and was not paid. The appellant submitted therefore that the Industrial Magistrate had erred in finding that there was no failure by the respondent to pay the appellant's annual leave entitlements.
33 The Acting President, with whom the other members of the Full Bench agreed, found that the appellant was off work from about January 2002 to October 2002 because of illness and that was a period of unpaid
(Page 11)
- leave. Section 23(3) of the MCE Act provides that a year of service does not include any period of unpaid leave. Therefore, during the period from January 2002 to October 2002 the appellant did not accrue an entitlement to annual leave. The Full Bench also found that the appellant took other leave from time to time between 1 July 2000 and 30 June 2003. The Acting President referred to the evidence of Julie Kershaw that in June or July 2003 the appellant admitted that he was owed no outstanding annual leave as at 30 June 2003. The Acting President found that there was 'a lack of clarity in the evidence about the asserted entitlement of [the appellant] to annual leave as at July 2003'. The Acting President found that the appellant had failed to establish that he had accrued not less than 12 weeks' annual leave from the period July 2000 to June 2003 whilst an employee of RNTPL and therefore that ground of appeal to the Full Bench failed.
34 An appeal lies to this court only on the grounds set out in s 90(1) of the IR Act. The appellant submits that the appeal on this ground lies pursuant to s 90(1)(b) that is that the decision of the Full Bench is:
[E]rroneous in law in that there has been an error in the construction or interpretation of any Act, regulation, award, industrial agreement or order in the course of making the decision appealed against.
- The appellant says that the Full Bench erred in its interpretation or construction of s 23(3) of the MCE Act which provides that in s 23(1), 'year' does not include any period of unpaid leave. The appellant argues that the Acting President misconstrued 'unpaid leave'.
35 The Acting President did not discuss the meaning of 'unpaid leave'.
36 The appellant submits that properly construed, the reference to unpaid leave in s 23(3) of the MCE Act is a reference to an absence from work without payment of wages, taken by permission of and at the discretion of the employer. The appellant argues that there was no evidence before the Industrial Magistrate's Court or the Full Bench that the appellant took unpaid leave. The appellant did not work between January and October 2002 because of complications from an illness but received payment of $4,000 per month from the respondent during this time. The appellant argues that it was not leave and it was not unpaid.
37 It is implicit in the reasons of the Acting President that the appellant's absence from work between January and October 2002 was with the permission of the respondent. It plainly was. The respondent made payments during that period to the appellant's wife. The leave was
(Page 12)
- unpaid. The respondent made no payments to the appellant during that period but paid $4,000 per month to the appellant's wife to assist the family to survive.
38 The Full Bench made its own findings of fact that the appellant took unpaid leave from January 2002 to October 2002. The Full Bench made its own findings of fact that the appellant took other leave from time to time between 1 July 2000 and 30 June 2003 and that the appellant had failed to establish an outstanding entitlement to at least 12 weeks annual leave for the period of his employment with RNTPL from July 2000 to June 2003. The findings of the Full Bench, the subject of this ground of appeal are findings of fact. The appellant has not demonstrated that the Full Bench misconstrued the meaning of 'unpaid leave' in s 23 of the MCE Act. This ground of appeal fails.
Conclusion
39 For the reasons stated this appeal must be dismissed.
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