MC Innes v Aegis AC Pty Ltd - [2020] FCCA 1142

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

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

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.
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’).
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

The applicant commenced employment with the respondent as an…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] FCCA 1142
Decision Date: 13 May 2020

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