Maurice Alexander Management Pty Ltd v Sato

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INDUSTRIAL COURT OF QUEENSLAND

CITATION:

Maurice Alexander Management Pty Ltd v Sato [2023] ICQ 014

PARTIES:

MAURICE ALEXANDER MANAGEMENT PTY LTD

(appellant)

v
KAORI SATO

(respondent)

FILE NO:

C/2020/23

PROCEEDING:

Appeal

DELIVERED ON:

21 June 2023

HEARING DATE:

1 June 2021

MEMBER:

Davis J, President

ORDER:

The appeal is dismissed

CATCHWORDS:

INDUSTRIAL LAW – COMMONWEALTH – INDUSTRIAL INSTRUMENTS – APPLICATION AND EFFECT – EFFECT – where the respondent was an employee of the appellant – where the respondent’s employment was governed by an enterprise agreement made in 2006 (the first agreement) – where the first agreement was made pursuant to the Workplace Relations Act 1996 (Cth) – where the first agreement was superseded by an agreement in 2010 (the second agreement) and an agreement in 2015 (the third agreement) – where the first agreement provided for payment of a loading to compensate for entitlements, including long service leave – where the respondent was a casual employee of the appellant for more than 10 years – where the Workplace Relations Act 1996 was repealed – where the Fair Work Act 2009 (Cth) was enacted – where the Fair Work Act 2009 (Cth) provided that State and Territory provisions prevailed over Commonwealth enterprise bargains – where there were transitional provisions – where the Industrial Relations Act 1999 (Qld) provided for long service leave – where the respondent claimed that service under the first agreement counted towards calculation of long service leave entitlements under the Industrial Relations Act 1999 (Qld) – where the QIRC held the service did count – where the appellant appealed – whether there was error in the Queensland Industrial Relations Commission’s finding

Fair Work Act 2009 (Cth), s 26, s 27, s 29, s 113, s 113A
Fair Work Bill 2008
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, s 2, s 5A, s 7
Industrial Relations Act 1999, s 43, s 47, s 49
Industrial Relations Act 2016, s 475, s 477, s 557
Workplace Relations Act 1996 (Cth), s 61, s 62, s 170LT, s 170LY, s 170LZ, s 346D
Workplace Relations Amendment (Work Choices) Act 2005, schedule 7

CASES:

Byrne v Australian Airlines Ltd (1995) 185 CLR 410; [1995] HCA 24, cited
Byrnes v Kendle (2011) 243 CLR 253; [2011] HCA 26, cited
Compass Group (Australia) Pty Ltd v Bartram (2007) 161 IR 307, followed
Conroy’s Smallgoods v Australasian Meat Industry Employees Union [2023] FCAFC 59, cited
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7, cited
Ex parte McLean (1930) 43 CLR 472; [1930] HCA 12, cited
Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 224 CLR 508; [2011] HCA 33, followed
Maughan Thiem Auto Sales Pty Ltd v Cooper (2014) 222 FCR 1; [2014] FCAFC 94, cited

Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2020) 271 CLR 495; [2020] HCA 29, cited
Mount Bruce…

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Details
Case
[2023] ICQ 14
Decision Date

CaseChat Overview and Summary

In Maurice Alexander Management Pty Ltd v Sato, the respondent, Ms Sato, was a casual employee of the appellant, Maurice Alexander Management Pty Ltd, for more than 10 years. Her employment was governed by three successive enterprise agreements made in 2006, 2010, and 2015. The 2006 agreement provided for the payment of a loading to compensate for entitlements, including long service leave. The legal dispute arose when Ms Sato claimed that her service under the 2006 agreement counted towards the calculation of long service leave entitlements under the Industrial Relations Act 1999 (Qld). The Queensland Industrial Relations Commission (QIRC) held that the service did count, but the appellant appealed this decision.

The central legal issue in this case was whether Ms Sato's service under the 2006 agreement should be included in the calculation of her long service leave entitlements. This involved interpreting the relevant clauses in the 2006 agreement and determining the effect of transitional provisions from the repealed Workplace Relations Act 1996 (Cth) to the Fair Work Act 2009 (Cth), and then to the Industrial Relations Act 1999 (Qld). The court had to decide whether the casual loading provided in the 2006 agreement precluded Ms Sato's entitlement to long service leave or if it merely represented a form of compensation for those entitlements.

The court found that Ms Sato's service under the 2006 agreement did indeed count towards her long service leave entitlement. It reasoned that the transitional provisions from the Workplace Relations Act 1996 (Cth) to the Fair Work Act 2009 (Cth) preserved the operation of the 2006 agreement, including its clause on casual loading. The court also held that the casual loading did not preclude Ms Sato's entitlement to long service leave as it was not intended to exclude but rather compensate for those entitlements. Given that all grounds of appeal had failed, the appeal was dismissed.

The final order was that the appeal is dismissed, with no party seeking costs of the appeal. The decision confirms that Ms Sato is entitled to long service leave based on her service under the 2006 agreement.

Orders

Orders of the court

The appeal is dismissed

Background

Background to the litigation

MAM appealed that decision. There is no dispute as to the quantum of Ms Sato’s claim. The only issue is whether she is entitled to the sum awarded.Background Ms Sato worked as a casual flight attendant. On 27 March 2006, Ms Sato’s employment with MAM commenced. It finished on 24 September 2016 after a period of continuous service of 10 years and six months. Any entitlement to long service leave arose at 10 years’ service.[6] [6]Industrial Relations Act 1999, s 43. As earlier observed, over the period of her employment with MAM, Ms Sato’s working conditions were regulated by three consecutive enterprise agreements:1.The Flight Attendants’ Association of Australia Domestic/Regional Division Casual Flight Attendants Enterprise Agreement 2006 (“the 2006 agreement”);2.The Flight Attendants’ Association of Australia Domestic/Regional Division Casual Flight Attendants Enterprise Agreement 2010 (“the 2010 agreement”); and3.the Flight Attendants’ Association of Australia Domestic/Regional Division Casual Flight Attendants Enterprise Agreement 2015 (“the 2015 agreement”). Over the course of the three enterprise agreements Commonwealth industrial legislation was in force. The 2006 agreement was approved pursuant to the Workplace Relations Act 1996 (Cth). Each of the 2010 agreement and the 2015 agreement were approved pursuant to the Fair Work Act 2009 (Cth). Presently in force in Queensland is the Industrial Relations Act 2016 (2016 IR Act). It provides for long service leave entitlements.[7] The 1999 IR Act was in force over the relevant period and it is common ground that it governs Ms Sato’s claim to long service leave.[7]Industrial Relations Act 2016, Chapter 2, Part 3, Division 9. While the 1999 IR Act governed Ms Sato’s entitlement to long service leave, the proceedings in the QIRC were conducted pursuant to the 2016 IR Act which vests jurisdiction both in the QIRC and this Court. The periods of service during the time of each of the 2010 agreement and the 2015 agreement are taken into account in the calculation of service for the purposes of entitlement to long service leave. That much is admitted. It is the period under the 2006 agreement which is contentious. The 2006 agreement contained the following provision:“13. BASE HOURLY RATE13.1A Flight Attendant shall be paid a base hourly rate as set out in clause 39. This hourly rate of pay includes:13.1.1a casual loading that is paid in lieu of any entitlement to paid annual leave, paid personal leave (including sick leave), long service leave or payments for notice of termination or redundancy; and13.1.2expenses incurred during the course of a Flight Attendant’s duty as follows:Miscellaneous expenses.Grooming allowance.13.1.3A payment in lieu of shift penalties.” MAM argued that:1.clause 13.1 operated so as to exclude Ms Sato’s service under the 2006 agreement in the calculation of any long service leave claim. This, it was submitted, was part of the price Ms Sato paid in exchange for the casual loading;2.alternatively, Ms Sato’s claim for long service leave has been satisfied by the casual loading;3.alternatively, any discretion conferred by s 475 of the 2016 IR Act to award unpaid entitlements to Ms Sato should be exercised in favour of MAM by the QIRC refusing to order payment to Ms Sato.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Ms Sato has established her legal entitlement to payment and there is, in my view, no logical reason why her remedy ought to be denied as a matter of discretion.Conclusions and orders All grounds of appeal have failed so the appeal should be dismissed. No party sought costs of the appeal. Therefore, the only order is:Appeal dismissed.

Ratio Decidendi

Legal Principle Established

However, the Commonwealth Parliament passed the Workplace Relations Amendment (Work Choices) Act 2005 which commenced a reform of the Commonwealth industrial relations system. Upon the commencement of the amendments, Schedule 7 of the Workplace Relations Act contained transitional provisions, including clause 2 relevantly in these terms:“2 Continuing operation of pre-reform certified agreements—under old provisions(1)Subject to this Schedule, the following provisions of the pre-reform Act continue to apply in relation to a pre‑reform certified agreement, despite the repeals and amendments made by the Workplace Relations Amendment (Work Choices) Act 2005:(a) …(g) sections 170LY and 170LZ; …(r) any other provision relating to the operation of the provisions mentioned in the preceding paragraphs. …” It is not contentious that:1.the 2006 agreement is a “pre-reform certified agreement”;2.section 170LZ continues to apply to the 2006 agreement. Therefore, s 170LZ of the Workplace Relations Act would continue to operate so as to give primacy to clause 13.1 of the 2006 agreement over the long service leave entitlements granted by the provisions of Part 3 of Chapter 2 of the 1999 IR Act. In 2006, the Work Choices case[40] was decided which led to the Fair Work Act 2009 (Cth). The Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 provided:[40]New South Wales v Commonwealth of Australia (2006) 229 CLR 1.“5A Transitional instruments continue to be subject to the same State and territory interaction rules(1)The same State and Territory interaction rules that applied in relation to WR Act instruments of a particular kind immediately before the WR Act repeal day continue to apply in relation to instruments of that kind that become transitional instruments.(2)State and Territory interaction rules are provisions of a law of the Commonwealth, as in force immediately before the WR Act repeal day, the effect of which is that:(a) an instrument prevails over, or excludes, a law of a State or Territory; or(b) an instrument has effect subject to a law of a State or Territory.Note: Most of the state and Territory interaction rules were in the WR Act.”And:“7 No loss of accrued rights or liabilities when transitional instrument terminates or ceases to apply(1)If a transitional instrument terminates, or ceases to apply in relation to a person, that does not affect:(a) any right or liability that a person acquired, accrued or incurred before the transitional instrument terminated or ceased to apply; or(b) any investigation, legal proceeding or remedy in respect of any such right or liability.(2)Any such investigation, legal proceeding or remedy may be instituted, continued or enforced as if the transitional instrument has not terminated or ceased to apply.(3)This item has effect subject to a contrary intention in this Act or in the FW Act.” It is not contentious that:1.section 170LZ of the Workplace Relations Act is a “State and Territory interaction rule” for the purpose of s 5A, so s 170LZ continued to apply;2.the 2006 agreement is a “transitional instrument”.[41][41]Fair Work (Traditional Provisions and Consequential Amendments) Act 2009, s 2(3)(a).