MC Innes v Aegis AC Pty Ltd

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FEDERAL CIRCUIT COURT OF AUSTRALIA

MC INNES v AEGIS AC PTY LTD [2020] FCCA 1142
Catchwords:
INDUSTRIAL LAW – Awards – interaction between contractual payments and award obligations – whether nature of contractual payments met obligations under award – nature of industrial law ‘set off’ – effect of payment of profit share component – profit share component not in the nature of a payment of an award entitlement.

Legislation:

Fair Work Act 2009 (Cth), ss.45, 539, 545

Building and Construction Award 2010

Cases cited:

Kent v Tal & Ors [2018] FCCA 3218
Fair Work Ombudsman v Lindsay F. Nelson Manufacturing Pty Limited & Anor [2019] FCCA 2151

Ray v Radano [1967] AR (NSW) 471

Lynch v Buckley Sawmills Pty Ltd [1984] FCA 306; 3 FCR 503 (194) 9 IR 469
Poletti v Ecob (No.2) [1989] FCA 779; (1989) 31 IR 321

Logan v Otis Elevator Co Pty Ltd [1999] IRCA 4; (1999) 94 IR 218

Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406
Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99
Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400
Pacific Publications Pty Ltd v Cantlon [1983] AR (NSW) 423
Wall v Kingbuilt Homes Pty Ltd & Anor [2019] FCCA 2355
James Turner Roofing Pty Ltd v Peters [2003] WASCA 28

Applicant: ANDREW PETER MC INNES
Respondent: AEGIS AC PTY LTD
File Number: LNG 23 of 2019
Judgment of: Judge Riethmuller
Hearing date: 14 November 2019
Date of Last Submission: 14 November 2019
Delivered at: Melbourne
Delivered on: 13 May 2020
Orders pronounced on: 14 May 2020

REPRESENTATION

The Applicant appeared in person.
The Respondent appeared in person.

ORDERS

  1. Within 30 days the Respondent pay the Applicant the amount of $20,000.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT HOBART

LNG 23 of 2019

ANDREW PETER MC INNES

Applicant

And

AEGIS AC PTY LTD

Respondent

REASONS FOR JUDGMENT

Introduction

  1. The Applicant claims that a contravention of the Building and Construction Award 2010 (‘the Award’) occurred during the term of his employment as an asbestos removalist for the respondent, alleging the respondent failed to him pay various entitlements.

  2. The applicant seeks relief in the sum of $19,989.85 (made up of $426.47 in wages; $2,554.27 in overtime rates, $15,876.95 in allowances, $105.74 in public holiday pay and $1,026.42 in leave loading) on the basis that he was a Level 7 employee under the Award and pursuant to sections 45, 539 and 545 the Fair Work Act 2009 (Cth) (‘the Act’).

  3. The respondent disputes that the applicant qualified as a Level 7 category employee under the Award, and submits that the hourly rate of pay in the employment agreement was all-encompassing to include all entitlements of wages, penalties and allowances. The respondent further submits that the applicant was paid additional wages in the form of a Profit Share. He denies any liability for outstanding wages or entitlements.

Background

  1. The applicant commenced employment with the respondent as an…

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Details
Case
[2020] FCCA 1142
Decision Date

CaseChat Overview and Summary

In *MC Innes v Aegis AC Pty Ltd*, the applicant, MC Innes, brought proceedings against the respondent, Aegis AC Pty Ltd, concerning alleged underpayment of award entitlements. The dispute centred on whether certain contractual payments made by Aegis AC Pty Ltd to MC Innes could be set off against, or otherwise satisfied, the obligations owed under an applicable industrial award. The matter was heard by Judge Riethmuller in the Industrial Relations Court of Western Australia.

The primary legal issue before the Court was to determine the nature of the contractual payments made by the respondent and whether they were of a character that could discharge the respondent's obligations under the relevant award. Specifically, the Court was required to consider whether a profit share component of the contractual payments constituted a payment of an award entitlement, and if so, how it should be treated in the context of an industrial law set-off.

Judge Riethmuller reasoned that for a contractual payment to be considered a set-off against an award entitlement, it must be of the same nature as the award entitlement. The Court found that the profit share component, by its very nature, was not a payment of an award entitlement. It was a discretionary payment contingent on the profitability of the company, rather than a fixed or calculable entitlement under the award. Therefore, it could not be used to satisfy the respondent's award obligations. The Court ordered that the respondent had underpaid the applicant and that the profit share component could not be set off against the award entitlements.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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