O'Farrell and Secretary, Department of Employment
[2016] AATA 921
•18 November 2016
O'Farrell and Secretary, Department of Employment [2016] AATA 921 (18 November 2016)
Division
General Division
File Numbers
2015/5585
2015/5580
2015/5637
2015/5705
2015/5986
2015/6272
2015/6329
2015/6371
2016/09012016/0983
Re
Stephen O'Farrell
David Burke
Julian Kolodko
Andrew Thomas
David Bernadi
Eric O'Donnell
William Granger
Graeme Bowyer
James AndrewBrendan Shield
APPLICANTS
And
Secretary, Department of Employment
RESPONDENT
DECISION
Tribunal Deputy President J W Constance
Dr L Bygrave, MemberDate 18 November 2016 Place Sydney 1.In each matter the decision under review is set aside.
2.Each matter is remitted to the Secretary, Department of Employment for reconsideration in accordance with these reasons for decision.
................[sgd]........................................
J W Constance
Deputy PresidentCATCHWORDS
EMPLOYMENT - Fair Entitlement Guarantee - wages entitlement - wages entitlement period - when Applicants' employment ended - whether certain payments taken to be taken into account when calculating wages entitlement - payment for annual leave and long service leave - decisions set aside and remitted
LEGISLATION
Corporations Act 2001 (Cth) ss 459A, 459C
Fair Entitlements Guarantee Act 2012 (Cth) ss 3, 5, 6
CASES
BGC Partners (Australia) Pty Ltd v Hickey [2016] NSWSC 90
Byrne v Australian Airlines Pty Limited (1995) 131 ALR 422
IW v City of Perth (1997) 146 ALR 596
Siagian v Sanel Pty Ltd (1994) 122 ALR 333Re Walsh, ex parte Deputy Commissioner of Taxation (1982) 42 ALR 727
REASONS FOR DECISION
Deputy President J W Constance
Dr L Bygrave, Member18 November 2016
INTRODUCTION
The Applicants were all employees of Precision Mechatronics Pty Limited (the Employer).
On 4 February 2014, the Employer became insolvent and as a consequence, the Applicants had unpaid wages and outstanding employment entitlements.
In accordance with the provisions of the Fair Entitlements Guarantee Act 2012 (Cth) (the FEG Act), the Applicants received assistance and the payment of employment entitlements.
The Applicants are seeking a review of the FEG assessments undertaken between 29 September 2015 and 9 February 2016 by the Secretary, Department of Employment (Secretary). In particular, the Applicants are seeking a determination of the “wages entitlement period” within the meaning of section 5 of the FEG Act and their wages entitlement in accordance with section 6(6) of the Act.
BACKGROUND
The following facts are taken from the Amended Agreed Statement of Facts lodged by the parties.
The Employer began to experience financial difficulties from July 2012 and ceased the payment of statutory superannuation contributions to the Applicants.
From February 2013, the Employer did not pay the wages of the Applicants on a regular and timely basis.
The Employer stopped paying the Applicants their wages from 28 May 2013, although the Applicants continued to work for the Employer after that date.
On 26 or 28 June 2013, each of the Applicants sent written demands to the Employer for the immediate payment of their outstanding wages and superannuation contributions. The Applicants also lodged a formal complaint with the Fair Work Ombudsman regarding the failure of the Employer to pay them their wages and their superannuation contributions.
In July 2013, the Employer began to offer the Applicants the opportunity to seek work elsewhere and to apply for leave without pay. On 22 July 2013, the Applicants received a document from the Employer headed Stakeholders Update to Staff, which included the following statement:
Some staff may also have the opportunity to obtain work elsewhere during this period, while retaining your length of service and entitlements should you choose to return to PreMecha once the major funds are received. This pathway will be at the discretion of management, so you would need to talk to Jason about it if you want to pursue this option.
On 23 August 2013, the Applicants (other than Mr Burke and Mr Kolodko) served statutory demands on the Employer demanding the payment of their unpaid wages within 21 days. The Employer did not comply with those statutory demands and did not apply to have them set aside.
On 30 August 2013, a large number of former employees of the Employer served statutory demands on the Employer demanding the payment of their outstanding entitlements within 21 days. The Employer did not comply with those statutory demands and did not apply to have them set aside.
Section 459C of the Corporations Act 2001 (Cth) provides that, for the purposes of a winding up application, a company is deemed to be insolvent if it has failed to comply with a statutory demand. Accordingly, the Employer was deemed to be insolvent on and from 14 September 2013
The Employer granted approvals for a number of employees to seek alternate temporary work. At the time, the Applicants had not been paid wages since 27 May 2013 and the Employer was not in a position to pay the Applicants for any future work.
On 20 November 2013, the Employer was locked out of its premises at North Ryde by its landlord for the non-payment of rent. From that date, the Employer had no premises from which to conduct its business and had effectively ‘closed its doors for business’. The Employer relocated to premises in Silverwater. Very few employees assisted with the transfer of records and assets and the Silverwater premises were not set up to operate after the move.
The application to wind up the Employer
On 9 October 2013, an application was made to the New South Wales Supreme Court by a former employee of the Employer, Mr Christian Roth, for an order pursuant to section 459A of the Corporations Act 2001 that the Employer be wound up in insolvency.
The winding up application was supported by a large number of the Employer’s former and current employees, including each of the Applicants.
Each of the Applicants filed Notices of Appearance supporting the application to wind up the Employer as follows:
(a)Mr O’Farrell on 20 November 2013;
(b)Mr Kolodko on 28 January 2014;
(c)Mr Thomas on 12 November 2013;
(d)Mr Burke on 28 January 2014;
(e)Mr Bernardi on 12 November 2013;
(f)Mr O’Donnell on 14 November 2013;
(g)Mr Granger on 14 November 2013;
(h)Mr Bowyer on 12 November 2013;
(i)Mr Andrew on 12 November 2013; and
(j)Mr Shield on 18 November 2013.
The application to wind up the Employer was first listed before the New South Wales Supreme Court on 20 November 2013. On that occasion, the Employer informed the Registrar that it was opposing the application and orders were made for the filing of evidence.
The application to wind up the Employer was listed for a second time before the New South Wales Supreme Court on 16 December 2013. On 13 December 2013, the Employer was notified that on 16 December 2013, Mr Roth would press the Court for the application to be heard and determined without any further delay and would oppose any application by the Employer for a further adjournment.
On 16 December 2013, the Employer informed the Corporations Duty Judge that it was opposing the application. The Employer gave an undertaking to the Court that it would make certain payments to a number of current and former employees, including the applicants (other than Mr Burke and Mr Kolodko), by 3 February 2014. On the basis of that undertaking, the proceedings were adjourned to 4 February 2014.
In breach of its undertaking to the Court, the Employer failed to make the payments by 3 February 2014. On 4 February 2014, the Employer informed the Corporations Duty Judge that it would not oppose the winding up application. The Employer was accordingly wound up by order of the New South Wales Supreme Court on 4 February 2014.
LEGISLATION
Section 6 of the FEG Act sets out the definitions for the different types of employee entitlements. The entitlement relevant to this matter is the wages entitlement, which is set out in subsection 6(6) and provides:
The person’s wages entitlement is the amount of wages the person is entitled to under the governing instrument from the employer for work done, or paid leave taken, in the wages entitlement period.
The ‘wages entitlement period’ referred to in section 6(6) is defined in section 5 to be:
wages entitlement period for a person whose employment by an employer has ended means the 13 weeks ending at the earlier of the following times (or either of those times if they are the same):
(a)the time the person’s employment ended;
(b)the first time an insolvency practitioner has power (however expressed) to control or manage employment by:
(i) the employer; or
(ii) if the person was employed for a partnership by 2 or more partners—any of the partners who employed the person.
The date on which each of the applicants’ employment ended is significant as that date sets the point from which the 13 week wages entitlement period is calculated to determine the wages entitlement.
The FEG Act is beneficial legislation as set out in section 3, which provides:
The main objects of this Act are:
(a)to provide for the Commonwealth to pay advances on account of unpaid employment entitlements of former employees of employers in cases where:
(i) the employers are insolvent or bankrupt; and
(ii) the end of the employment of the former employees was connected with that insolvency or bankruptcy; and
(iii) the former employees cannot get payment of the entitlements from other sources; and
(b)to allow the Commonwealth to recover the advances through the winding up or bankruptcy of the employers and from other payments the former employees receive for the entitlements.
ISSUES
The following issues arise for determination.
(a)When did the employment end for the purpose of deciding what is the ‘wages entitlement period’?
(b)What is the wages entitlement period of each applicant?
(c)Are payments made to some Applicants after 28 May 2013 to be taken into account in calculating the wages entitlement of those Applicants?
(d)For what period was each Applicant entitled to receive payment for annual leave and/or long service leave?
ISSUE 1: WHEN DID EMPLOYMENT END FOR THE PURPOSE OF DECIDING WHAT IS THE ‘WAGES ENTITLEMENT PERIOD’?
The Secretary’s argument
The Secretary argued that the employment of eight of the ten Applicants ended on 4 February 2014,[1] being the date that the Employer was placed into liquidation and the insolvency practitioner was appointed. It was put that it was on this date that the employees’ contracts of employment came to an end as between 20 November 2013 and 4 February 2014, each of the Applicants (except Mr O’Donnell and Mr Andrew) was on leave without pay and therefore still maintained a contract with the Employer.
[1] Mr O'Farrell, Mr Kolodko, Mr Thomas, Mr Burke, Mr Bernardi, Mr Granger, Mr Bowyer and Mr Shield.
It follows that the wages entitlement period for those applicants is the 13 week period from 5 November 2013 to 4 February 2014.
In the cases of Mr O’Donnell and Mr Andrew, the Secretary argued that their employment ended when they commenced employment with another employer; in the case of Mr O’Donnell 5 January 2014 and Mr Andrews 27 January 2014. Accordingly Mr O’Donnell’s wages entitlement period was the 13 week period from 6 October 2013 to 5 January 2014 and Mr Andrew’s period was from 29 October 2013 to 27 January 2014.
The Applicants’ argument
The Applicants contended that the date on which their employment ended was 20 November 2013, being the day the Employer was locked out of its premises and as a result ceased to effectively operate. The Applicants argued that from 20 November 2013, the Employer had no premises from which to conduct business and the Applicants had no workplace to attend and no work to do.
Consideration
The words “the time the person’s employment ended” are to be interpreted in the context of the Act in which they appear.
The main objects of the Act include “to pay advances on account of unpaid employment entitlements of former employees of employers” in specified cases involving the insolvency of the employers – see section 3.
Subsection 6(6) sets out a person’s “wages entitlement” under the scheme (see paragraph 23 above).
“Wages entitlement period” is defined in section 5 (see paragraph 24 above).
A consideration of these provisions and other related provisions in the Act, indicates that the scheme is intended to guarantee an employee of an insolvent company that he or she will receive payment of those work entitlements to which he or she would have received had the company not become insolvent. This entitlement is a maximum payment equivalent to that which would have been received in the specified 13 week period.
Considering this context, it appears that “the time the person’s employment ended” was intended to mean the end of the last period of productive work by the employee as distinct from the last period of a contract of employment. This inference is to be drawn from the inclusion of “work done” and “paid leave taken” in the definition of “wages entitlement” (emphasis added).
It is to be noted that Parliament has referred to the persons “employment” and not the persons “contract of employment”. Had Parliament intended that it should be the ending of the “contract of employment”, rather than the person’s “employment”, it would have been a simple task to have used the former words.
We have also given consideration to the principle that beneficial legislation should be given a liberal interpretation within the confines of the actual words used. In IW v City of Perth[2] Brennan CJ and McHugh J stated the principle as follows:
[It is a] rule of construction that beneficial and remedial legislation… is to be given a liberal construction. It is to be given “a fair, large and liberal” interpretation rather than one which is “literal or technical”.
[2] (1997) 146 ALR 596 at p. 702.
As the Act under consideration provides for benefits to employees who have been denied payment of wages and other benefits, it is clear that this is legislation of a beneficial nature.
Judgements and decisions to which we have been referred indicate that in industrial law jurisdictions, commonly there has been a distinction drawn between the termination of an employee’s employment and the termination of an employee’s contract of employment.
In Byrne v Australian Airlines Pty Limited the High Court said:
it does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract.[3]
[3] (1995) 131 ALR 422 at [23].
The Industrial Relations Court of Australia took the same approach in Siagian v Sanel Pty Ltd[4] when considering the date of termination of an employee’s employment under the Industrial Relations Act 1988 (Cth). The Court said:
…… it is preferable to treat the words “termination of … employment” … as including any act which brings to an end the employer-employee relationship whether or not the act, or any acceptance of it, also brings to an end the contract of employment.
……
…… it is important to bear in mind the context in which the words “termination of …employment” are used. The statute is concerned with the practical matter of industrial relations. An unfair dismissal can give rise to an industrial relations problem whether or not it is accepted by the employee as a termination of the contract of employment. Few dismissed employees would be equipped to analyse their contractual situation.[5]
[4] (1994) 122 ALR 333.
[5] At pp. 335, 350-351.
The Applicants also referred me to BGC Partners (Australia) Pty Ltd v Hickey[6] in which the Court accepted that there is a distinction between the employment relationship and the contract of employment which gives rise to it.
[6] [2016] NSWSC 90.
As set out in paragraph 15 of these reasons, after the Employer was locked out of its premises on 20 November 2013 it ceased to operate its business. The premises to which its equipment was moved was not set up for a continued operation and there was no longer work available to engage its employees. At the latest, at this time the employment relationship between the Employer and all the Applicants came to an end.
ISSUE 2: WHAT IS THE “WAGES ENTITLEMENT PERIOD” OF EACH APPLICANT?
Mr O’Farrell
Mr O’Farrell was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr O’Farrell served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 18 October 2013, the Employer gave Mr O’Farrell a letter stating:
I approve and release you from daily attendance and contractual obligations with Precision Mechatronics Pty Ltd to seek alternate temporary work to allow you to cope with the extended period of non-payment of salary and entitlements. [Emphasis added]
The Employer’s records indicate that Mr O’Farrell was on leave without pay from 22 October 2013. On 22 October 2013, Mr O’Farrell commenced employment with another employer, BluGlass Pty Ltd.
On 29 September 2015, the Secretary affirmed an earlier decision that Mr O'Farrell was not owed any wages during the wages entitlement period from 5 November 2013 to 4 February 2014 because he was on leave without pay during that period.
The advice given by the Employer to the Applicants on 22 July 2013 indicated to them that they had the “opportunity to obtain work elsewhere” and at the same time making it clear that the employment relationship was to continue. It did this by advising the Applicants that they would retain their length of service and entitlements if they chose to return to the company once further funding was obtained. Whilst it was clear that the benefit of this situation a matter for further negotiation, there was no suggestion that the arrangement involved an employee taking unpaid leave prior to obtaining alternative employment.
The letter given to Mr O’Farrell on 18 October 2013 was a release from his contractual obligations to enable him to seek alternate temporary work. By commencing alternative employment, Mr O’Farrell ended the employment relationship, but not his contract of employment, with the Employer. Clearly it was the intention of both the Employer and Mr O’Farrell to leave open the possibility that Mr O’Farrell may return to employment by the company at a later time. For this reason Mr O’Farrell was placed on leave without pay from the time he commenced the new employment relationship. The fact that he was on leave without pay clearly indicated that the contract of employment was still on foot.
We are satisfied that Mr O’Farrell’s employment by the Employer ended on 22 October 2013 and that his wages entitlement period was the 13 week period from 23 July 2013 to 22 October 2013.
Mr Kolodko, Mr Thomas, Mr Burke, Mr O’Donnell and Mr Granger
Like Mr O’Farrell all of these Applicants (with the possible exception of Mr Burke) obtained a release of contractual obligations from the Employer to seek “alternate temporary work” and commenced other work prior to 20 November 2012. For the reasons stated in relation to Mr O’Farrell’s claim we find that their respective wages entitlement periods comprise the thirteen week period which ended on the commencement of alternative employment.
A summary of each individual claim follows.
Mr Kolodko
Mr Kolodko was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr Kolodko served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 2 August 2013, Mr Kolodko contacted the Employer by email seeking clarification of the option to obtain work elsewhere, referred to in the staff update of 22 July 2013.
On each of 17 August 2013 and 6 September 2013, Mr Kolodko sought permission from the Employer to seek work elsewhere while on unpaid leave.
Mr Kolodko completed application forms for leave without pay dated 19 September 2013 and 31 October 2013, in which he sought periods of leave commencing on 16 September 2013.
On 24 September 2013, the Employer gave Mr Kolodko a letter stating:
I approve and release you from daily attendance and contractual obligations with Precision Mechatronics Pty Ltd to seek alternate temporary work to allow you to cope with the extended period of non-payment of salary and entitlements.
The Employer’s records indicate that Mr Kolodko was on leave without pay from 16 September 2013.
From 23 September 2013, Mr Kolodko provided services to an entity called Consolidated Switchgear on his own account.
We find that Mr Kolodko’s wages entitlement period was from 24 June 2013 to 23 September 2013.
Mr Thomas
Mr Thomas was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr Thomas served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 11 October 2013, Mr Thomas requested that the Employer provide him with a legal document which would allow him to seek other employment without resigning from his position with the Employer.
On 14 October 2013, the Employer gave Mr Thomas a letter stating:
I approve and release you from daily attendance and contractual obligations with Precision Mechatronics Pty Ltd to seek alternate temporary work to allow you to cope with the extended period of non-payment of salary and entitlements.
The Employer’s records indicate that Mr Thomas was on leave without pay from 21 October 2013.
On 14 November 2013, Mr Thomas entered into a contract with Marinov Consulting Pty Limited to provide services to that entity as an independent contractor and he commenced providing services to that entity from 18 November 2013.
We find that Mr Thomas’ wages entitlement period was from 19 August 2013 to 18 November 2013.
Mr Burke
Mr Burke was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr Burke served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 10 September 2013, Mr Burke served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 10 September 2013, Mr Burke sought approval to seek alternate employment from an external company while still employed by the Employer. Mr Burke did not receive a letter from the Employer approving and releasing him from daily attendance and his contractual obligations to seek alternative temporary work.
On 14 November 2013, Mr Burke entered into a contract with Marinov Consulting Pty Limited to provide services to that entity as an independent contractor and he commenced providing services to that entity from 18 November 2013.
Although Mr Burke did not receive a letter releasing him to seek alternative work, he did seek such a release without receiving a reply. In the absence of evidence to the contrary I am satisfied that this was a result of an oversight on the part of the Employer. In any event it does not change my conclusion that the employment relationship ended when Mr Burke commenced alternative employment.
We find that Mr Burke’s wages entitlement period was from 19 August 2013 to 18 November 2013.
Mr O’Donnell
Mr O'Donnell was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr O'Donnell served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 6 November 2013, Mr O'Donnell requested the ‘Standard Release Form’ from the Employer to enable him to pursue the possibility of temporary external work.
On 6 November 2013, the Employer gave Mr O'Donnell a letter dated 5 November 2013, stating:
I approve and release you from daily attendance and contractual obligations with Precision Mechatronics Pty Ltd to seek alternate temporary work to allow you to cope with the extended period of non-payment of salary and entitlements.
On 11 November 2013, Mr O’Donnell entered into a contract with Marinov Consulting Pty Ltd to provide services to that entity as an independent contractor and he commenced providing services to that entity from 13 November 2013.
The Employer’s records indicate that Mr O’Donnell was on leave without pay from 13 November 2013.
On 6 January 2014, Mr O’Donnell commenced full time permanent employment with another employer, Hotwire Pre-emptive Intelligence Pty Limited.
We find that Mr Burke’s wages entitlement period was from 14 August 2013 to 13 November 2013.
Mr Granger
Mr Granger was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr Granger served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 25 October 2013, the Employer gave Mr Granger a letter stating:
I approve and release you from daily attendance and contractual obligations with Precision Mechatronics Pty Ltd to seek alternate temporary work to allow you to cope with the extended period of non-payment of salary and entitlements.
The Employer’s records state that Mr Granger ‘completed part-time work to termination’.
Mr Granger completed application forms for leave without pay dated 18 December 2013 and 2 February 2014, in which he sought periods of leave commencing on 18 November 2013.
On 8 November 2013, Mr Granger entered into a contract with Marinov Consulting Pty Limited to provide services to that entity as an independent contractor and he commenced providing services to that entity from 11 November 2013.
We find that Mr Granger’s wages entitlement period was from 12 August 2013 to 11 November 2013.
Mr Bernardi
Mr Bernardi was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr Bernardi served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions. The Employer responded to Mr Bernardi, simply acknowledging receipt of his letter.
On 21 October 2013, the Employer gave Mr Bernardi a letter stating:
I approve and release you from daily attendance and contractual obligations with Precision Mechatronics Pty Ltd to seek alternate temporary work to allow you to cope with the extended period of non-payment of salary and entitlements.
Mr Bernardi applied for a period of unpaid leave, commencing on 29 October 2013, which he sought to extend on 10 December 2013.
The Employer's records indicate that Mr Bernardi was on leave without pay from 29 October 2013.
On 13 January 2013, Mr Bernardi commenced casual employment with another employer, BluGlass Pty Limited, pursuant to a written offer of employment.
We find that Mr Bernardi’s wages entitlement period was from 21 August 2013 until 20 November 2013, being the date on which the employer ceased to operate its business. As of that date Mr Bernardi had not obtained other employment and therefore his employment by the Employer had not come to an end prior to 20 November 2013.
However Mr Bernardi was on leave without pay for the period 29 October 2013 until 20 November 2013 and beyond. Unlike other employees, this leave was granted by the Employer at his request and was properly characterised as such. We are unable to determine the circumstances in which the request was made or the leave granted. As Mr Bernardi was not engaged in work for the Employer, nor was he on paid leave, he is not eligible for a wage entitlement for the period 29 October 2013 until 20 November 2013.
Mr Bowyer
Mr Bowyer was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr Bowyer served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
The Employer’s records state that Mr Bowyer was on leave without pay from 23 December 2013.
On 17 January 2014, Mr Bowyer was given a written offer of casual employment with Softwire Systems Pty Ltd, with a commencement date of 20 February 2014.
For reasons already stated we find that Mr Bowyer’s wages entitlement period was from 21 August 2013 until 20 November 2013.
Mr Andrew
Mr Andrew was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 26 June 2013, Mr Andrew sent an email to the Employer demanding the payment of his unpaid wages and superannuation contributions.
Mr Andrew did not seek leave without pay from the Employer.
On 28 January 2014, Mr Andrew commenced full-time permanent employment with another employer, Walls Machinery Adaptapack.
For the reasons previously stated we find that Mr Andrew’s wages entitlement period was from 21 August 2013 until 20 November 2013.
Mr Shield
Mr Shield was employed by the Employer pursuant to an employment agreement dated 3 August 2009.
On 28 June 2013, Mr Shield served a letter on the Employer demanding the payment of his unpaid wages and superannuation contributions.
On 19 December 2013, Mr Shield submitted an application form for leave without pay, in which he sought a period of leave commencing on 23 December 2013.
The Employer’s records state that Mr Shield was on leave without pay from the Employer from 23 December 2013.
For the reasons stated we are satisfied that Mr Shield’s wages entitlement period was from 21 August 2013 to 20 November 2013.
Although Mr Shield submitted an application for leave without pay on 19 December 2013, this was after the Employer had ceased to operate its business. We have no evidence to enable us to find that Mr Shield did any work for the Employer after 20 November 2013. His applying for leave is consistent with the continuation of his contract of employment after his employment relationship had ended.
ISSUE 3: ARE PAYMENTS MADE TO APPLICANTS AFTER 28 MAY 2013 TO BE TAKEN INTO ACCOUNT IN CALCULATING THE WAGES ENTITLEMENT OF THOSE APPLICANTS?
Sometime after 27 May 2013 the employer made the following payments:
·to Mr O’Donnell, $2000.00;
·to Mr Granger, $6105.02;
·to Mr Bowyer, $9561.33;
·to Mr Andrew, $9849.48;
·to Mr Shield, $4000.00.
Although the Employer treated these payments as payment of wages, there is insufficient evidence to enable us to make a finding as to the nature of these payments. It is agreed that:
·the Employer did not issue any pay slips in respect of the payments;
·the Employer did not include the payments in any PAYG summaries issued to the Applicants;
·there is no evidence that the Employer remitted any PAYG tax to the Australian Tax Office in respect of those payments.
Even if the payments were payments of wages we are not satisfied that any, or any part, of them should be treated as payments in respect of the wages entitlement period.
At the times of the payments none of the Applicants had been paid wages after 27 May 2013. We accept the argument put on behalf of the Applicants that payments are presumed to be appropriated to debts in the order in which the debts were incurred.
In Re Walsh, ex parte Deputy Commissioner of Taxation[7] Lockhart J said:
A debtor who owes two debts to a creditor is entitled to appropriate a payment which he makes to his creditor to one debt rather than to the other. If he omits to do so, the creditor may make the appropriation. If neither makes any appropriation, the law appropriates the payment to the earlier debt.
[7] (1982) 42 ALR 727 at 728.
In the absence of evidence that the Employer or the Applicants intended to appropriate the payments to any particular debt they would be appropriated to unpaid wages commencing 27 May 2013, well before any of the wages entitlement periods.
ISSUE 4: FOR WHAT PERIOD WAS EACH APPLICANT ENTITLED TO RECEIVE PAYMENT FOR ANNUAL LEAVE AND/OR LONG SERVICE LEAVE?
The Applicants seek directions in relation to the calculation of their entitlements to annual leave and to long service leave.
The parties agree that entitlement to these benefits accrued until the end of the employment relationship. We are satisfied that this is the correct position.
CONCLUSION
In each matter the decision under review will be set aside.
Each matter will be remitted to the Secretary, Department of Employment for reconsideration in accordance with these reasons for decision.
I certify that the preceding 127 (one hundred and twenty -seven) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance, Dr L Bygrave, Member ...............[sgd].........................................................
Associate
Dated 18 November 2016
Date of hearing 7 July 2016 Date final submissions received 7 July 2016 Solicitors for the Applicant Mr C Barton; CBELaw Pty Ltd Solicitors for the Respondent Mr L Holcombe; HWL Ebsworth Lawyers
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