Murray John Hoy v Knight Frank Hooker (Vic) Pty Ltd
[1995] IRCA 104
•16 March 1995
CATCHWORDS
INDUSTRIAL LAW - Termination of employment - Claim of unlawful termination -
Relevant wages for a period of less than 12 months - Normal hours for the performance of work not prescribed in the contract of employment expressly or by implication - Exclusion of employee not employed under award conditions.
Industrial Relations Act 1988, S170CD, S170EA.
BP Refinery v Shire of Hastings [1977] 16 ALR 363.
Adams v Liverpool Corporation [1927] 137 LP 396
Ardino v Count Financial Group (unreported) IRCA 109/94 14 November 1994 NI 517 of 1994
Kanan v Australian Postal and Telecommunications Union [1992] 43 IR 257
Saddington v Oliver [1993] 121 ALR 601.
MURRAY JOHN HOY V KNIGHT FRANK HOOKER (VIC) PTY LTD
No. VI-2214/94
Before: Ryan JR
Place: Melbourne
Date: 16 March 1995
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY Matter No VI-2214/94
B E T W E E N: MURRAY JOHN HOY
Applicant
AND: KNIGHT FRANK HOOKER (VIC) PTY LTD
Respondent
RYAN JR
MINUTES OF ORDER
16 MARCH 1995
THE COURT ORDERS THAT:
The initial application under S170EA be struck out for want of jurisdiction because of the provisions of S170CD(1)(b) and the total amount of wages the employee received.
The application that the applicant pay the respondent’s costs be dismissed.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS
COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY Matter No VI-2214/94
B E T W E E N: MURRAY JOHN HOY
Applicant
AND: KNIGHT FRANK HOOKER (VIC) PTY LTD
Respondent
COURT: RYAN JR
PLACE: MELBOURNE
DATE: 16 MARCH 1995
REASONS FOR JUDGMENT
NOTICE OF MOTION
The applicant seeks remedy for unlawful termination of employment. The respondent has filed a Notice of Motion that the application be struck out for want of jurisdiction pursuant to S170CD and that the applicant pay the respondent’s costs.
SECTION 170CD
S170CD(1)(b) provides that subdivisions (B), (C), (D) and (E) of Division 3 do not apply to a termination of employment of an employee who is not employed under award conditions if in respect of an employee who is continuously employed by the employer for a period less than 12 months immediately before the termination day - on the termination day the employee’s relevant wages exceeded the amount worked out using the formula:
days employed
365 x applicable amount
The applicable amount is $60,000 - see S170CD(2).
The term “relevant wages” is defined in S170CD(4) as:
“relevant wages”, in relation to an employee, means the total amount of the wages that the employee received, or was entitled to receive, from the employer in respect of:
(a)if paragraph (1)(a) applies to the employee - the period of 12 months referred to in that paragraph; or
(b)if paragraph (1)(b) applies to the employee - the lesser period referred to in that paragraph;
but, in relation to an employee whose contract of employment prescribes normal hours for the performance of work (whether by prescribing the number of hours in which, or the times at which, work is normally to be performed in a particular period), does not include any wages, additional to normal wages, in respect of additional hours of work performed or in respect of work performed at other times.”
THE SUBMISSION OF LACK OF JURISDICTION
The respondent submits that the applicant was employed under a contract of employment contained in a letter and schedule of 8 June 1994. The applicant was not employed by the respondent under award conditions. The applicant’s base salary as provided in the contract of employment was $70,000 pa exclusive of superannuation.
The applicant was employed by the respondent for 120 days from 1 July 1994 to 28 October 1994.
The respondent submits that pursuant to S170CD(1)(b) subdivisions B to F of Division 3 do not apply to the employment of the applicant as at the date of termination the applicant’s relevant wages exceeded the amount calculated using the formula in S170CD(1)(b).
The respondent further submits that the contract does not prescribe normal hours for the performance of work either by prescribing the number of hours in which, or the times at which, work is normally to be performed.
THE APPLICANT’S AFFIDAVIT IN RESPONSE
By affidavit dated 10 March and handed up at the hearing on 14 March the applicant requests that the Court hear and determine his claim in accordance with the jurisdiction granted to it by Parliament pursuant to S170EA of the Industrial Relations Act 1988. That request and the affidavit do not really deal with the question of whether or not there is jurisdiction. However, Counsel for the applicant, seeks to avoid the restrictions in S170CD with an argument that the contract of employment by implication prescribes normal hours for the performance of work. The argument is dealt with in more detail later in this judgment.
In his affidavit the applicant refers to long working hours as a car park manager. He was expected to inspect the car park twice in the mornings and twice in the afternoon. He was expected to be present at the car park during peak periods which, in his view, must occur outside business hours as the peak period for a car park occur at the times business people are entering and leaving the car park prior to and after normal business hours. The applicant deposes that he was expected to be in attendance at weekends on a frequent basis (at least once every weekend) particularly at busy times and rendering assistance when and whenever required.
The applicant states that the hours he was expected to work were not less than 60 per week and frequently exceeded 70. He points out that he was required to be contactable 24 hours per day, 7 days a week with an after hours phone number always made available and his mobile phone always to be contactable.
The applicant states that even if his salary was regarded as a flat hourly rate without any loading for overtime or being on call, it is clear, he submits, that his salary for standard or normal business hours of 38 hours per week was at best $44,333 pa being calculated on the basis of $70,000 pa divided by the minimum expected hours of 60 per week.
THE EMPLOYMENT
The applicant was employed as Car Park Manager at the Southgate complex by the respondent from 1 July to 28 October 1994.
The applicant had been recruited to the complex in January 1992 as Car Park Manager. His salary at that time was $60,000 pa and he also was provided with a fully maintained motor vehicle for both business and private use.
Following a change of ownership of the Southgate complex the respondent took over as managing agent and the applicant was offered continuation of employment under a contract of employment which provided for an annual salary of $70,000 a year but without the benefit of a motor vehicle.
The duties as Car Park Manager included:
annual budget
efficient running of the car park
supervision of mechanical systems
supervision of staff including rosters
active input into suggestions for improvement of car parking
supervision of cleaning
provision of a safe environment
constant presence to ensure that there are no hazards in the car park that could lead to potential injuries and/or subsequent claims e.g. water pooling, blindspots, inadequate lighting, incorrect or insufficient barrier protection, poor signage
management of costs
10.collection of revenues
11.other tasks required or directed by centre management
THE CONTRACT OF EMPLOYMENT
Clause 2.3 is as follows:
You must devote substantially all your time and attention, during business hours, to performing your duties unless you are sick or on authorised leave.
Clause 2.4 is as follows:
You must work the hours that the Company, or the Directors, require you to work. You are not entitled to any extra remuneration for working outside normal business hours.
Clause 2.6 is as follows:
You must do anything that the Directors reasonably ask you to do for the Company. You will not get any extra remuneration for that work unless the Company agrees.
Clause 16 is as follows:
Any incoming personal calls during working hours should be kept brief and personal outgoing calls, if required on an urgent basis, should also be kept as brief as possible.
Clause 20.1 is as follows:
The Company will pay you a fixed salary at the gross rate each year set out in Part 5 of the Schedule while you are employed with it. Your salary accrues from day to day and is payable in equal monthly instalments in advance on the fifteenth day of the calendar month.
The gross rate of salary in Part 5 is $70,000.
Clause 24.2 is as follows:
If you are unable to attend at your normal work place due to sickness, then you should advise the Director to whom you report prior to 8.45 am on that working day unless it is unreasonable to you to do so.
FINDINGS
The contract does not contain any definition or prescription of “business hours”, “normal business hours”, “working hours” or “working day”.
In Clause 2.3 “business hours” appears to refer to the actual hours worked by the applicant at any time and this seems to be the meaning too of “working hours” in Clause 16.
However, the term “normal business hours” in Clause 2.4 clearly does not refer to all the hours worked by the applicant. To make sense of Clause 2.4 some range and parameters have to be set for the term “normal business hours”. In the absence of a specific prescription or a clear expression of intention as to what are “normal business hours” in the context of Clause 2.4, and to give business efficacy to the contract, I find that the term implies either 38 hours a week in the general range 8:30 am to 4:30 pm or 40 hours a week in the traditional concept of “9 to 5” five days a week.
In reaching that conclusion and implying that meaning I am guided by what I would regard as a general community standard and a general perception of “normal business hours”.
Counsel for the applicant (respondent to the Notice of Motion) argues that the Court should go further and find that the contract by implication prescribes normal hours for the performance of work. He argues the normal hours for the performance of work should be implied as 40 hours or 38 hours and that it follows that a component of the total salary of $70,000 should be designated as normal wages, for say 40 hours work a week, and that a component of the total salary should be designated as payment “additional to normal wages” and that this component should be allocated on the basis of the average of hours over and above 40 hours worked weekly.
The argument is that the applicant works 60 to 70 hours a week and if the average is taken at the lowest level - 60 hours a week - two thirds of the salary of $70,000 is, by implication, for normal hours of work (40 out of 60) and one third is additional to the normal hours (20 out of 60) and that the total amount of wages on which to apply the cap or limit in S170CD(1) is two thirds of $70,000 which is $46,666 or rather, because employment was for less than 12 months, a reduced amount calculated in accordance with the formula in S170CD(2).
I reject this submission.
It requires an implication far above any of the tests in BP Refinery v Shire of Hastings [1977] 16 ALR 363. The submission requires the Court to find that it is implied in the contract that the normal hours for the performance of work each week is 40 hours and that the total wages, although stated as total salary, are to be disaggregated into wages for normal hours and wages additional to normal hours.
This is absolutely the reverse of what is stated specifically in Clauses 2.4 and 2.6 of the contract and such a giant leap by way of implication is in no way justified under any of the criteria in BP Refinery v Hastings.
Counsel for the applicant cited Adams v Liverpool Corporation [1927] 137 LP 396 and Ardino v Count Financial Group (unreported) IRCA 109/94 14 November 1994 NI 517 of 1994 but neither case assists the applicant. Indeed, to the extent those cases are of assistance they support the respondent’s motion.
The Court suspects the contract was quite specifically drafted to avoid Division 3 of Part VIA not just in terms of S170CD but in broader terms. In that respect the Court notes the exclusions from entitlement to compensation in Clauses 27 and 28 and the ability to sever invalid parts in Clause 33. However, a contract can be validly drawn to avoid Division 3 of Part VIA.
The fact of the matter is:
the contract set relevant wages which were the total amount of wages the employee received
the total amount of the wages exceeded that worked out using the formula in S170CD(1)(b)
the contract of employment did not prescribe normal hours for the performance of work
the prescription in the contract of such normal hours is not a necessary implication to give efficacy to the contract or for any other reason
the contract contains an express provision excluding extra remuneration
ORDER
The Court orders that:
The initial application under S170EA be struck out for want of jurisdiction because of the provisions of S170CD(1)(b) and the total amount of wages the employee received.
The application that the applicant pay the respondent’s costs be dismissed.
In respect of 2 having considered Kanan v Australian Postal and Telecommunications Union [1992] 43 IR 257 and Saddington v Oliver [1993] 121 ALR 601, I find that the application was not instituted without reasonable course. However, even if I had found that in a strictly technical sense the application was instituted without reasonable cause I would have declined to order costs.
I certify that this and the preceding pages are a true copy of the Reasons for Judgment of Judicial Registrar Ryan.
Associate :
Date : 16 March 1995
Appearances:
Counsel for the Applicant : Bruce Shaw
Solicitor for the Applicant : Gabriel & Company
Counsel for the Respondent : M P McDonald
Solicitor for the Respondent : Phillips Fox
Date of Hearing : 14 March 1995
Judgment : 16 March 1995
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