Rixton v Wantirna Village Services Association Inc
[2019] FCCA 312
•18 February 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RIXTON & ANOR v WANTIRNA VILLAGE SERVICES ASSOCIATION INC | [2019] FCCA 312 |
| Catchwords: INDUSTRIAL LAW – Whether employer breached terms and conditions of employment – small business employer – no contravention of s 44(1) of Fair Work Act 2009 – Nurses Award – uniform allowance and laundry allowance – no obligation on employer to pay where employee was not required to wear or launder a uniform in the course of employment – windfall gain – redundancy pay – small business employer exempt by reason of s 121(1)(b) of Fair Work Act 2009. |
| Legislation: Corporations Act 2001, ss.50AA, 50AAA Fair Work Act 2009, ss.44(1), 119, 121(1)(b) |
| Cases cited: Kucks v CSR Ltd (1996) 66 IR 182 Mutual Acceptance Co Ltd v Federal Commissioner of Taxation (1994) 69 CLR 389 Other materials: Nurses Award 2010 |
| First Applicant: | JANE PATRICIA RIXTON |
| Second Applicant: | AUSTRALIAN NURSING AND MIDWIFERY FEDERATION |
| Respondent: | WANTIRNA VILLAGE SERVICES ASSOCIATION INC |
| File Number: | MLG 631 of 2017 |
| Judgment of: | His Honour Judge J D Wilson QC |
| Hearing date: | 18 December 2018 |
| Dates of Last Submission: | 22 and 23 October 2018 18 December 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 18 February 2019 |
REPRESENTATION
| Counsel for the First Applicant: | Ms S Kelly |
| Solicitors for the First Applicant: | Gordon Legal |
| Counsel for the Second Applicant: | Ms S Kelly |
| Solicitors for the Second Applicant: | Gordon Legal |
| Counsel for the Respondent: | Mr J D’Abacao |
| Solicitors for the Respondent: | Aitken Partners |
ORDERS
The application filed on 28 March 2017 is dismissed.
By 4pm on 4 March 2019 each party file and serve written submissions on the question of costs.
The proceeding is listed on 18 March 2019 at 10:15am for further directions on the question of costs.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 631 of 2017
| JANE PATRICIA RIXTON |
First Applicant
| AUSTRALIAN NURSING AND MIDWIFERY FEDERATION |
Second Applicant
And
| WANTIRNA VILLAGE SERVICES ASSOCIATION INC |
Respondent
REASONS FOR JUDGMENT
Introduction
Despite the voluminous nature of the evidence in this case, the simple point for determination was whether the respondent was a small business employer within the meaning of s 119(1)(b) of the Fair Work Act 2009. If the answer to that question was in the affirmative the respondent was not required to do certain things the applicants said it failed to do in this case. Conversely, if the respondent was not a small business employer, then the applicants were correct in pointing out that the respondent should have but failed to do certain things in this case.
The respondent’s status as a small business employer depended on whether the respondent was an “associated entity” of a publically listed corporation which in turn depended upon whether the test prescribed by s 50AA of the Corporations Act 2001 was met. The respondent contended that it was not an associated entity because the relevant publically listed company did not exercise the requisite “control” over the respondent. Conversely, the applicants said that by reason of the operation of an immensely complex contractual regime between the publically listed company and the respondent, the requisite control was demonstrated on the facts of this case.
The question for me was whether the relevant publically listed company, Stockland Corporation Limited (“SCL”), controlled the respondent for the purposes of s 50AA of the Corporations Act 2001.
Synopsis
For the reasons that follow, in my judgment the respondent was not an associated entity of SCL. While a complex contractual regime existed at all relevant times between SCL and the respondent, in my view, the elements of s 50AA(2) were not met in the circumstances of this case, especially s 50AA(2)(b). By reason of that finding, I am of the view that the respondent did not contravene s 44(1) of the Fair Work Act 2009 in paying Ms Rixton at the rate the respondent paid her. It follows that I dismiss this proceeding. I will hear the parties on the question of costs.
Some factual details
At all relevant times Wantirna Village Services Association Inc (“WVSA”), the respondent, was incorporated and registered under the Associations Incorporation Reform Act 2012 (Vic). It was common ground that at all relevant times the respondent conducted a retirement village in Wantirna more colloquially known as Wantirna Village, operative since 1986. Currently, about 210 people reside at Wantirna Village in various villas and serviced apartments. All residents at Wantirna Village are members of the respondent. Elected members of the respondent’s committee of management continue to administer the operations of the respondent.
It was also common ground that Stockland Wantirna Village Pty Ltd (“SWV”) was the registered proprietor of the land on which Wantirna Village was operated with the result that most of the villas and apartments at Wantirna Village were owned by SWV. In turn, SWV entered into leases with individual residents in respect of each villa and apartment and SWV entered into a lease with the respondent in respect of common areas at Wantirna Village. No dispute arose in this case that SWV was at all relevant times a wholly owned subsidiary of SCL.
The debate in this case focused upon the control, in fact and in law, that SCL exerted on the respondent. That was relevant as it bore upon aspects of the employment of Ms Rixton, the first applicant in this case. The first applicant cast her case on the basis that –
a)the respondent was a national system employer in relation to the first applicant;
b)the first applicant was entitled to be paid redundancy pay;
c)the respondent was not a small business employer;
d)when associated entities were taken into account the respondent had more than 15 employees;
e)the respondent’s liability for redundancy payments was not properly assessed on the basis that the respondent was a small business employer;
f)by reason of the respondent’s status of not being a small business employer, various clothing and uniform allowances had to be accorded to Ms Rixton;
At once it will be apparent that this case turned upon the respondent’s status as a small business employer which in turn focused on whether it was appropriate in any calculation of the number of respondent employees that the respondent’s association with SCL rendered the respondent something other than a small business employer.
Agreed facts
The parties agreed on a number of facts in this case. It is useful to record those in precise terms. The agreed facts were as follows (with emphasis in the original) –
The ultimate questions for determination
1.The ultimate questions arising in this proceeding are:
(a)whether Ms Rixton was, on termination of her employment, entitled to be paid redundancy pay pursuant to s 119 of the Fair Work Act 2009 (Cth) (the FW Act); and
(b)whether Ms Rixton was entitled to be paid, during the course of her employment, a uniform allowance and a laundry allowance in accordance with clause 16.2 of the Nurses Award 2010 (the Award).
2.Determination of the question at paragraph 1(a) above requires the Court to determine:
(a)Did Stockland Corporation Limited have 12 or more employees at the time of Ms Rixton’s termination of employment?
(b)Does Stockland Corporation Limited, through its wholly owned subsidiary, Stockland Wantirna Village Pty Ltd, have the capacity to determine the outcome of decisions about the Association's financial and operating policies within the meaning of s 50AA of the Corporations Act 2001 (Cth)?
(c)If yes, does Stockland Corporation Limited “control” the Association within the meaning of s 50AAA of the Corporations Act 2001 (Cth)?
(d)If yes, was Stockland Corporation Limited an “associated entity” of the Association within the meaning of the Corporations Act 2001 (Cth)?
3.Determination of the question at paragraph 1(b) requires the Court to determine:
(a)whether, on its proper construction, cl 16.2(a) requires an employer to pay a uniform allowance to an employee where the employer does not require the employee to wear a uniform and the employee does not wear a uniform;
(b)whether, on its proper construction, cl 16.2(b) requires an employer to pay a laundry allowance to an employee where the employer does not require the employee to wear a uniform and the employee does not wear a uniform.
Agreed facts
4.The respondent (the Association) is an association registered under the Associations Incorporation Reform Act 2012 (Vic).
5.The Association operates in relation to a retirement village located at 2 Old Stud Road, Wantirna (the Village).
6.The Association is governed by rules of association (the Rules).
7.Under the Rules, the business of the Association must be managed by or under the direction of a Committee.
8.The Committee meets on a monthly basis.
9.Stockland Corporation Limited, through its wholly owned subsidiary, Stockland Wantirna Village Pty Ltd, owns the land on which the Village is located and the various residences on it, save for 13 strata titled apartments which are directly owned by certain residents.
10.The first applicant (Ms Rixton) was employed by the Association between 11 October 2010 and 24 November 2015 in the position of Nurse in Charge.
11.During her employment, Ms Rixton was a national system employee within the meaning of the FW Act.
12.During Ms Rixton’s employment, the Association was a national system employer in relation to Ms Rixton.
13.The FW Act applied to Ms Rixton in her employment with the Association and to the Association as Ms Rixton’s employer.
14.The Nurses Award 2010 covered and applied to Ms Rixton in her employment with the Association.
15.In the course of her employment with the Association, Ms Rixton was not required to wear a uniform and did not do so.
16.On 24 November 2015, Ms. Rixton’s employment with the Association came to an end because of the redundancy of Ms Rixton’s position.
17.As at 24 November 2015, the Association had fewer than 15 employees.
18.Section 119(1) of the FW Act provides that:
(1) An employee is entitled to be paid redundancy pay by the employer if the employee's employment is terminated:
(a)at the employer's initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b)because of the insolvency or bankruptcy of the employer.
19.Sections 121, 122 and 123 inclusive of the FW Act describe the circumstances in which an employee does not have the entitlement prescribed by s 119 of the FW Act.
20.Relevant for present purposes is section 121 which provides that:
(1) Section 119 does not apply to the termination of an employee’s employment if, immediately before the time of the termination, or at the time when the person was given notice of the termination as described in subsection 117(1) (whichever happened first):
(a)the employee’s period of continuous service with the employer is less than 12 months; or
(b)the employer is a small business employer.
21.“Small business employer” is defined by s 23 of the FW Act as follows:
A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
22.By s 23(3), for the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
23.By s 12 of the FW Act “associated entity” has the meaning given to it by s 50AAA of the Corporations Act (Cth).
24.Section 50AAA of the Corporations Act provides, in part, that:
(1)One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.
(2)This subsection is satisfied if the associate and the principal are related bodies corporate.
(3)This subsection is satisfied if the principal controls the associate.
(4)This subsection is satisfied if:
(a) the associate controls the principal; and
(b) the operations, resources or affairs of the principal are material to the associate.
(5)This subsection is satisfied if:
(a) the associate has a qualifying investment (see subsection (8)) in the principal; and
(b) the associate has significant influence over the principal; and
(c) the interest is material to the associate.
(6)This subsection is satisfied if:
(a) the principal has a qualifying investment (see subsection (8)) in the associate; and
(b) the principal has significant influence over the associate; and
(c) the interest is material to the principal.
(7)This subsection is satisfied if:
(a) an entity (the third entity) controls both the principal and the associate; and
(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.
25.Section 50AA of the Corporations Act (Cth) provides:
50AAControl
(1)For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.
(2)In determining whether the first entity has this capacity:
(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).
(3)The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.
(4)If the first entity:
(a) has the capacity to influence decisions about the second entity's financial and operating policies; and
(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members;
the first entity is taken not to control the second entity.
Uniform and Laundry Allowance
26.Clause 16.2 of the Award provides, and provided, in part that:
16.2Clothing and equipment
(a)Employees required by the employer to wear uniforms will be supplied with an adequate number of uniforms appropriate to the occupation free of cost to employees. Such items are to remain the property of the employer and be laundered and maintained by such employer free of cost to the employee;
(b)Instead of the provision of such uniforms, the employer may pay such employee a uniform allowance at the rate of $1.23 per shift or part thereof on duty or $6.24 per week, whichever is the lesser amount. Where such employee's uniforms are not laundered by or at the expense of the employer, the employee will be paid a laundry allowance of $0.32 per shift or part thereof on duty or $1.49 per week, whichever is the lesser amount.
The evidence
Several witnesses gave evidence about the role of SCL in the affairs of the respondent. It is necessary to take the evidence of each in turn.
Edward Thomas Fieldhouse gave evidence in this case and was cross‑examined. Mr Fieldhouse sworn in his affidavit made 30 January 2018 that he served on the respondent’s committee of management from 2009 until 2011. He swore that the committee of management of the respondent was made up of seven members plus one representative of SWV. Mr Fieldhouse swore that each committee member had 10% of the committee vote and that SWV had 30%. While Mr Fieldhouse did not say as much, if the Wantirna Village committee members voted unanimously with 70% of the vote they could always outvote SWV on the basis that the members held the majority of voting power.
In paragraph 4 of his affidavit, Mr Fieldhouse swore as follows –
… At no stage during my tenure on the committee did the SWV representative vote with other committee members to override the wishes of the rest of the committee. …
That evidence addressed SWVs voting practices. So far as the financial involvement of SWV and the respondent was concerned, Mr Fieldhouse swore as follows at paragraph 6 of his affidavit –
The respondent is funded from levies paid by the residents of the Village. It does not rely on, or receive, any funds from SWV or Stockland. Essentially, the respondent is responsible for the maintenance of the common property of the Village, which is paid for by an annual levy imposed upon the residents equally. The residents are responsible for their own units and SWV is responsible for capital expenditure on the Village. From time to time issues will arise as to whether expenses are capital expenses or not, but otherwise the respondent is self-funded.
In cross‑examination, Mr Fieldhouse acknowledged that SWV was required to approved capital expenditures of or greater than $10 000.
A representative of SWV was a permanent member of the respondent’s board, according to Mr Fieldhouse. SWV also held a power of attorney that allowed SWV to bind the respondent to management contracts and it permitted SWV to make amendments to a management agreement without reference to the respondent. Vicki Lam, a consultant to the respondent and joint chair, explained that the office of joint chair was created to address the influence SCL was exerting on the respondent’s operations.
Ms Lam swore that after she became aware of an issue in relation to powers of attorney, the respondent revoked general powers of attorney conferred upon SWV and granted in lieu thereof more limited powers of attorney which had the effect of requiring SWV to only execute a particular version of a management agreement between SWV and the respondent.
Ms Lam gave evidence that SCL could not and did not regulate the contents of the respondent’s policy and procedure handbook.
Ms Lam gave evidence that Stockland had one member only on the respondent’s committee of management. She said that she attended committee meetings of the respondent as the respondent was a not‑for‑profit body and she provided advice to the committee from a treasury perspective. A debate emerged between Ms Lam and Ms Kelly of counsel about Ms Lam’s lawful entitlement to attend committee meetings. While Ms Lam disagreed with the proposition that she had no lawful entitlement to attend those meetings, little turned on the point as she asserted that at the very least she was in attendance by invitation. Further, once the material in Ms Lam’s affidavit concerning her opinion on certain issues had been deleted, Ms Lam addressed most factual matters of which she was able to give direct evidence.
The manager of Wantirna Village, Justin Wicks, gave evidence and introduced a collection of documents into evidence. Mr Wicks swore that Wantirna Village had been operating since 1986. He swore that approximately 210 retirees resided in the village in a mix of villas, units and serviced apartments. He said Wantirna Village employed two part‑time employees and the respondent retained grounds maintenance contractors.
Mr Wicks addressed the contractual regime that regulated the commercial arrangements between SWV and the respondent. He said that –
a)SWV owned the whole of the land on which Wantirna Village stood;
b)all dwellings except for 13 strata titled apartments were owned by the residents;
c)28 apartments and 139 independent units were let by SWV to tenants;
d)the land surrounding the dwellings was let at a peppercorn rent from SWV to the respondent;
e)SWV is a wholly owned subsidiary of SCL;
f)the respondent is an independent body representing the interests of its members, all of whom are residents in Wantirna Village; and
g)the business of the respondent is conducted by a 10‑member independent committee of management constituted under the respondent’s rules of association.
Mr Wicks gave evidence that persons intending to live at Wantirna Village are first required to enter into a resident’s contract with SWV as well as a management contract or service agreement with SWV. Mr Wicks provided by way of illustration samples of each document. Mr Wicks gave evidence in relation to the assertion that SWV or SCL or both “control” the affairs of the respondent. While ultimately that was a matter that fell for me to decide, Mr Wicks’s evidence addressed factual issues that went to the resolution of the point. He offered 10 reasons for his contention that SWV and SCL did not control the respondent. Those 10 reasons were as follows –
(a)The SWV appointee does not have the majority of votes on the committee of management. That appointee has 30% of the votes; the majority 70% is held by the seven resident members;
(b)The committee meets monthly, on the third Thursday of the month;
(c)A finance report is published and circulated to the committee with the agenda prior to each meeting. The agenda is also published on a public notice board before each meeting and feedback from residents is received and considered by the committee;
(d)Residents are encouraged to write to the committee or myself with issues for consideration by the committee;
(e)Committee members are available to residents and each has a geographical part of the village for which they are the first point of call for the residents;
(f)Residents can require items to be included on committee meeting agendas;
(g)Residents are consulted directly on matters of significance or contention such as catering for social activities and smoking in the village;
(h)Subcommittees of the committee of management exist for the annual fete, the operation of the Village shop which is staffed by volunteer residents, and social activities and events;
(i)The committee of management is responsible for the employment of staff and contractors and it decides who to engage, without any interference by Stockland or SWV;
(j)When a capital item is required and cannot wait until the next capital expense budget, it is paid for by respondent. The committee of management may then, it it resolves to do so, request SWV to pay the expense.
Mr Wicks was cross‑examined. Among the more important issues that he addressed in cross‑examination were the following –
a)the respondent was required to insure all buildings in Wantirna Village in the name of SWV and SCL;
b)for about 12 months in 2007, Mr Wicks was aware that under cl 25 of the management agreement between SWV and the respondent, Mr Wicks was under the direction and control of SWV but SCL took that away from his role;
c)Mr Wicks accepted that amendments to the management agreement could not be made without the consent of SCL;
d)up to the end of 2015 SCL had not been involved in the respondent’s books of accounts;
e)sometimes, SWV provided proposed changes to the respondent’s rules of association, occasionally, unilaterally;
f)management agreements were entered into an amended form on behalf of the respondent by SCL in the exercise of its power as attorney;
g)SCL was to manage strata title residences under the Owners Corporation Act 2006 (Vic);
h)the respondent’s rules were altered in 2011, 2013 and 2014 upon SCL proposing the relevant changes to the rules;
i)in Mr Wicks’s opinion SCL was wrong in appointing the respondent as the owner’s corporation manager; and
j)SCL prepared a maintenance contract for the respondent, Mr Wicks saw that plan but the respondent already had its own maintenance plan, so the SCL plan was viewed by the respondent and it did nothing about the SCL maintenance plan.
In re‑examination, Mr Wicks referred to the 2011 changes to the respondent’s rules and said those rules were changed because an issue emerged as an SCL permanent member had not been correctly appointed. Mr Wicks also said that the respondent ceased engaging with SCL on a regular basis from about 2008.
That last point was important at a temporal level. It also went a considerable way to meeting the point that the applicants advanced in this case to the effect that at a practical level, whatever may have been the complex contractual relationship between SCL and the respondent, the practical influence of SCL over the respondent was very limited, and the pattern of behaviour as between SCL and the respondent in respect to the respondent’s financial or operating policies was likewise very limited. That bore directly upon the matters germane to s 50AA of the Corporations Act.
Ms Lam gave evidence that she was not aware of any occasion when SCL had directed the respondent to adopt certain policies or procedures.
The contractual regime that historically existed between SCL and the respondent and which currently exists was the subject of detailed examination by the applicants. In her final address Ms Kelly of counsel very helpfully analysed that contractual regime so as to ultimately contend that SCL exercised practical control over the respondent’s operating and financial policies with the consequence that SCL was an associated entity of the respondent leading to the result that the first applicant was entitled to a redundancy payment.
It was common ground that SWV was a wholly owned subsidiary of SCL. SWV owned the land on which the retirement village was located, save for 13 strata titled apartments. SWV let the surrounding lands to the respondent for a peppercorn rent. Individuals taking up residence at the retirement village were required to enter into a residence contract with SWV. The respondent was not a party to the residence contract. The terms of the residence contract required the residents to enter into a management contract, as defined, meaning the management contract to which the resident, the respondent and SWV were parties. The requirement was expressed in mandatory terms.
Pursuant to the provisions of the management contract, the relevant resident agreed that the resident would be bound by the rules of association of the respondent. Ms Kelly of counsel for the applicants relied heavily on cl 3 of the management contract. It provided that the respondent was required (the word “must” was in fact used) to enter into a management contract in similar form with any person who became or in the future would become entitled possession of a unit if requested by SWV to do so. Pursuant to cl 28.2 of the management contract the respondent’s power, services, functions and activities or work could not be restricted, reduced, limited or extinguished by a resolution of members of the respondent under cl 28.1 of the management contract.
Ms Kelly argued that by reason of the tight interlocking network of contracts, the respondent appeared to be an independent body when in truth it was highly controlled by SCL through SWV. Ms Kelly said three features arose from that contractual structure. They were –
a)the residence contract was the principal document and it prevailed over the management contract as the residence contract contained the contractual stipulation requiring the resident to enter into the management contract, one consequence of which was that SMV had absolute control over the resident’s entry to the retirement village as well as membership of the respondents;
b)the terms of the management agreement required the respondent to enter into a management contract with any person who became entitled to possession of a unit, if requested to do so by SMV, the consequence of which was, so Ms Kelly said, that the respondent had no discretion to do otherwise than comply with a direction by SMV in respect of entry into management contracts; and
c)by operation of cl 3(a), SMV was empowered in its absolute discretion to amend the form of management contracts and SMV was thereafter entitled to require the respondent to enter management contracts as amended, giving the respondent no power to reject those changes as required by the SMV.
Ms Kelly said that the contractual structure set out above conferred practical control over the respondent’s operating and financial policies in favour of SMV. She submitted that SCL through SMV had power to determine –
a)the body that is to be the “association” for the purposes of the residence contract (that is, whether it is to be the Wantirna Village Services Association Inc or some other body);
b)the terms of the residence contract;
c)the terms of the management contract;
d)the circumstances in, and the times at, which the association enters into a management contract;
e)the composition of the association;
f)the persons who become members of the association;
g)the power of the association to raise funds;
h)the purposes for which the association’s funds must be spent; and
i)the conditions under which the association’s funds may be spent.
In addition, Ms Kelly argued that SMV exercised or had the capacity to exercise control in relation to nine matters. She said those bore directly upon the respondent’s operating and financial policies. They were –
a)membership;
b)source of funds;
c)expenditure of funds;
d)auditing of finances;
e)insurance;
f)maintenance;
g)provision of services;
h)employees and contractors; and
i)the owners corporation.
Ms Kelly was critical of the respondent’s officers, especially Mr Fieldhouse and Mr Wicks, for what she said was a remarkable lack of knowledge of the contractual framework under which the respondent operated. Ms Kelly submitted that the respondent’s committee had “illusory control” (her words). In debate I asked Ms Kelly whether despite the complicating contractual regime between the parties in this case the parties largely ignored those contractual provisions, never insisting on their strict operation, so that while the contract seemed to make certain provisions, as Ms Kelly said, rarely were those provisions actually exercised.
On behalf of the respondent, Mr D’Abaco of counsel submitted that the resolution of the factual dispute between the parties on the issue of s 50AAA of the Corporations Act lay in the wording of s 50AA(2). He submitted as follows[1] –
… And, your Honour, section 50AA subsection (2) makes it crystal clear that it is the reality of the situation which the court must be required to consider, not the theoretical possibilities of what may occur in the management agreement. Subsection (2)(a) provides that in determining whether there is a capacity to determine the outcome of decisions, the practical influence the first entity can exert rather than the rights it can enforce is the issue to be considered.
Now, there has only been one concrete example, your Honour, which the applicants have been able to point to as evidencing some influence exerted by Stockland in respect of the association’s operating or financial policies, and that’s in relation to the insurance issue. It’s the only one, your Honour, where there’s provision in the management agreement enabling Stockland to essentially have a right of veto, and in circumstances where the subject of the insurance are the assets owned by Stockland itself, that’s unexceptional. But what actually happens on the ground – and my learned friend took your Honour to the relevant footnote reference of Mr Wicks’ evidence – is that the association has shopped around, sought to obtain a more competitive quote, but, ultimately, Stockland is the best quote which can be obtained. So they’ve gone with that.
That’s the highest point that the applicant’s case reaches, your Honour. Subsection (b) of section 50AA(2) provides that the second aspect to be considered in determining this issue of control is any practice or pattern of behaviour affecting the second entity’s financial or operating policies. There is no evidence before you, your Honour, of any practice or pattern of behaviour by Stockland or Stockland Wantirna Village affecting the decisions which are made by the association. The evidence is all the other way, your Honour. …
[1] Transcript of proceeding (18 December 2018) 153
Mr D’Abaco addressed the “theoretical possibilities of what may occur in the management agreement” (his words). Mr D’Abaco contended that irrespective of the contractual framework that may have existed as between the respondent, SWV and the residents, the reality of the situation had to be considered including any practice or pattern of behaviour affecting the respondent’s financial or operating policies. Mr D’Abaco said that –
a)at no stage during Mr Fieldhouse’s tenure as president of the committee of the respondent did SCL impose its wishes on the committee;
b)at no stage did the SCL representative vote to override the wishes of the committee;
c)both Mr Fieldhouse and Mr Wicks said in evidence that all funds the respondent derived emanated from residents’ levies;
d)residents determine the quantum of the levy;
e)all finances were within the control of the committee;
f)the respondent’s committee engaged employees and contractors;
g)SCL did not interfere, in any way, on any of those issues;
h)Ms Lam as an external consultant provided accountancy, tax and human resources services, financial and business related advice covering “the whole realm of financial and operational issues”, so Mr D’Abaco contended; and
i)the respondent relied on Ms Lam not SCL.
Mr D’Abaco’s final submission on the subject of SCL’s control over the respondent was pithy and to the point. He said the following[2] –
Ultimately, your Honour, our submission is that you look at the situation on the ground, bearing in mind the issues which are to be considered under section 50AA, which focus upon practical realities, and the practical reality of the situation is that you have an association which has objectives and responsibilities to carry out, an elected committee of management is charged with responsibility of managing the affairs of the association in conformity with those objectives, and it does so free of interference, but more particularly, free of the requisite degree of control which is required to be made out. In those circumstances, in the respondent’s submission, it is an entity free of control of Stockland. It’s not a related entity for the purposes of the Fair Work Act, so you don’t overcome the hurdle of the association employing 15 or more employees at the time of Ms Rixton’s redundancy back in 2015, and hence no obligation to pay the redundancy pay. If your Honour pleases.
[2] Ibid 157
The authorities
Both counsel relied on the decision of the Honourable Justice Sloss in Amcor Ltd v Barnes.[3] Her Honour’s scholarly explanation of the operation of s 50AA is directly apposite to the circumstances of this case and I gratefully adopt her Honour’s observations for the purposes of this proceeding. Relevantly distilled –
a)“control” means the capacity of an entity to dominate decision making, directly or indirectly, in relation to the financial and operating policies of another entity so as to enable that other entity to operate with it in pursuing the objectives of the controlling entity;
b)“capacity” means ability or power, whether direct or indirect, and includes ability or power that is presently exercisable as a result of, by means of, in breach of, or by revocation of, any of or any combination of the following –
i)trusts;
ii)relevant agreements; and
iii)practices;
[3] [2016] VSC 707 (at [1275])
In Amcor, her Honour applied the reasoning of Brereton J in Hancock v Rinehart[4] where his Honour held that the concept of “control” is concerned with the practical ability of one entity to determine the outcome of decisions of another entity, taking into account any relevant practice or pattern of behaviour. The focus is not on legal rights capable of being exercised or enforced. As the Honourable Justice Sloss put the point in Amcor, the question of control is not answered by looking at the number of shares held at any particular time, or to strict legal rights, or to the rights of directors but the question is answered by looking to see whether the entity had the capacity, in a real and practical sense, to determine the important decisions of the company that set the framework for the operation of the business in meeting its legal and regulatory obligations and in achieving its financial and other corporate objectives as distinct from the day to day decisions made within that framework.
[4] [2015] NSWSC 646; (2015) 106 ACSR 207
From the foregoing it will be at once apparent that the applicants cast their case on “control” by focusing on the legal rights that were capable of being exercised or enforced. Ms Kelly relied heavily on the terms of the contractual regime. She argued that the complex compact of contractual provisions enabled SCL to control the respondent. Perhaps that was true. However, it ignored the reality that SCL chose not to exercise whatever contractual rights it possessed. At a temporal level, it will be recalled that Mr Wicks mentioned SCL having no meaningful say in the operations of the respondent since 2008. I accept his version of events in that regard. As to the suggestion that Mr Fieldhouse or Mr Wicks somehow showed a want of command over the details of the respondent’s operations, I do not accept that as a valid criticism. It was readily apparent that the committee met as required, it struck levies, residents were issued with levies, those levies were collected and funds were applied in the respondent’s day to day activities. Importantly, those activities were done without SCL’s or SWV’s involvement.
In my judgment, SWV and SCL did not control the respondent for the purposes of s 50AA of the Corporations Act.
That may have been sufficient to dispose of this case because the applicants’ claim was dependent on the first applicant succeeding in her contention that the respondent was not a small business employer. Having regard to the foregoing, I have determined that SCL and SWV were not at any relevant time an associated entity of the respondent.
It follows that by operation of s 121(1)(b) of the Fair Work Act the respondent, as a small business employer, was excluded from the obligation to make a redundancy payment otherwise imposed by s 119 of the Fair Work Act.
Uniform claim
The first applicant claimed in this proceeding that she was entitled to be paid a uniform allowance as well as a laundry allowance prescribed by the Nurses Award 2010. The parties agreed that the questions for resolution were as follows –
a)whether, on its proper construction, cl 16.2(a) of the Modern Award requires an employer to pay a uniform allowance to an employee where the employer does not require the employee to wear a uniform and the employee does not wear a uniform; and
b)whether, on its proper construction, cl 16.2(b) of the Modern Award requires an employer to pay a laundry allowance to an employee where the employer does not require the employee to wear a uniform and the employee does not wear a uniform.
The agreed facts on which this issue proceeded were as follows –
a)Ms Rixton was employed by the association between 11 October 2010 and 24 November 2015 in the position of nurse in charge;
b)during her employment Ms Rixton was a national system employee within the meaning of the Fair Work Act;
c)during Ms Rixton’s employment the association was a national system employer in relation to Ms Rixton;
d)the Fair Work Act applied to Ms Rixton in her employment with the association and to the association as Ms Rixton’s employer;
e)the Nurses Award 2010 covered and applied to Ms Rixton in her employment with the association; and
f)in the course of her employment with the association Ms Rixton was not required to wear a uniform and did not do so.
The principles governing the proper construction of awards were not the subject of dispute between the parties. The High Court’s decision in Amcor Ltd v Construction, Forestry, Mining and Energy Union[5] remains the locus classicus, approving as it did the decision of the Federal Court of Australia in Kucks v CSR Ltd.[6] Those authorities instruct that when construing an award, the industrial purpose and context of the agreement must be considered in the commercial and legislative purpose in which it applies. Further, when examining the words used in an industrial agreement, the decision in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union[7] held that those words must not be interpreted in a vacuum, divorced from industrial realities. In Short v FW Hercus Pty Ltd[8] Burchett J held that courts must take into account the nature of the document, the manner of its expression, the context in which it operates and the industrial purpose it serves. Marshall J held in Australian Municipal, Clerical and Services Union v Treasurer of the Commonwealth of Australia[9] that the context of an industrial instrument may also include the ideas that gave rise to an expression in a document from which it has been taken. The award is not to be construed with an eye that favours either the employer or the employee as the obligations an award imposes are various, intended to strike a balance between the interests of the employer and the employee, as was held by Barker J in Beauglehole v The Griffin Coal Mining Co Pty Ltd.[10]
[5] (2005) 222 CLR 241
[6] (1996) 66 IR 182
[7] (2006) 153 IR 426
[8] (1993) 40 FCR 511
[9] (1998) 82 FCR 175
[10] [2018] FCA 899
Clause 16.2 of the relevant award imposed upon the employer an obligation to provide for uniforms and their laundering. Clause 16.2(a) spoke of employees who were required by their employer to wear uniforms being supplied with an adequate number of uniforms free of cost to the employee. The employer was required to launder the uniforms, also free of cost to the employee. Clause 16.2(b) spoke of a uniform allowance and a laundry allowance at particular rates.
Of the phrase “allowance”, relevantly here referable to cl 16.2(b) of the award, the High Court construed it in Mutual Acceptance Co Ltd v Federal Commissioner of Taxation.[11] There, Latham CJ held as follows (with emphasis added) –
When the word [allowance] is used in connection with the relation of employer and employee it means in my opinion a grant of something additional to ordinary wages for the purpose of meeting some particular requirement connected with the service rendered by the employee or as compensation for unusual conditions of that service. Expense allowances, travelling allowances, and entertainment allowances are payments additional to ordinary wages made for the purpose of meeting certain requirements of service. Tropical allowances, overtime allowances, and extra pay by way of “dirt money” are allowances as compensation for unusual conditions of service.
[11] (1994) 69 CLR 389
In developing her argument about the context of cl 16.2 of the award, Ms Kelly most thoroughly examined the evolution of the clause, commencing with the award modernisation request. Lengthy as it may be to do so, in my view it is useful to record the terms of Ms Kelly’s highly elucidating discussion of the present examination of cl 16.2. It was as follows (with citations omitted) –
95.The modern award process involved the consolidation of a large number of awards into a smaller number of numbers. In the case of the Nursing Award 2010, that process of consolidation resulted in the termination of many individual awards applying across the states and territories.
96.The health industry was included in Stage 2 of the award modernisation process. On 23 January 2009, the Australian Industrial Relations Commission published an exposure draft of what was then called the Nurses Occupational Industry Award 2010. That exposure draft contained proposed clause 16.2, which was in the following terms:
16.2 Clothing and equipment
(a) Employees required by the employer to wear uniforms will be supplied with an adequate number of uniforms appropriate to the occupation free of cost to employees. Such items are to remain the property of the employer and be laundered and maintained by such employer free of cost to the employee.
(b) Instead of the provision of such uniforms, the employer may, by agreement with the employee, pay such employee a uniform allowance at the rate of $1.23 per shift or part thereof on duty or $6.24 per week, whichever is the lesser amount. Where such employee’s uniforms are not laundered by or at the expense of the employer, the employee will be paid a laundry allowance of $0.32 per shift or part thereof on duty or $1.49 per week, whichever is the lesser amount.
(c) The uniform allowance, but not the laundry allowance, will be paid during all absences on leave, except absences on long service leave and absence on personal/carer’s leave beyond 21 days. Where, prior to the taking of leave, an employee was paid a uniform allowance other than at the weekly rate, the rate to be paid during absence on leave will be the average of the allowance paid during the four weeks immediately preceding the taking of leave.
97.Clause 16.2 remained unchanged throughout the consultative process, and when the Nurses Award 2010 was made, cl 16.2 was in the same terms as in the exposure draft.
98.It can readily be seen that cl 16.2 in both the exposure draft and the Award as made were in terms substantially similar to those found in the Nurses (Victorian Health Services) Award 2000 (the 2000 Award). Before dealing with the 2000 Award, it is convenient to start with its predecessor award - Nurses (Victorian Health Services) Award 1992 (the 1992 Award). The 1992 Award, which was made under the Industrial Relations Act 1988 (Cth), was the first federal award regulating the terms and conditions of nurses in Victoria.
99.Part B of the 1992 Award applied to registered nurses, Part C applied to enrolled nurses and Part D applied to mothercraft nurses.
100.Part B defined uniform to mean “such apparel as may be required by the employer”, while cl 24(d), headed “Uniform and laundry allowance” was in the following terms:
(d)
(i) On commencing the first year of training a female trainee nurse shall be provided with dresses, aprons, caps, collars, cuffs and cape according to the specific requirements of the individual hospital, and a male trainee nurse shall be provided with equivalent items according to the specific requirements of the individual hospital. Articles so provided remain the property of the hospital and a trainee nurse leaving the hospital during the first year of training shall return such items.
(1)After the first year of training the hospital shall provide each trainee with a sufficient quantity of the aforementioned items during each subsequent year or part thereof. All such items shall be laundered by the hospital free of cost to the trainee.
(ii)
(1)Where uniforms are not provided for an employee (other than a general trainee) such employee shall be paid a uniform allowance at the rate of 83 cents per day or part thereof on duty or $4.14 per week whichever be the lesser amount. Where such employee's uniforms are not laundered by or at the expense of the hospital, the employee shall be paid a laundry allowance of 21 cents per day or part thereof on duty or $1.07 per week, whichever be the lesser amount.
(2)The uniform allowances but not the laundry shall be paid during all absences on leave, except absence on long service leave and absence on sick leave beyond 1 days. Where, prior to taking leave, an employee was paid a uniform allowance other than at the weekly rate, the rate to be paid during absence on leave shall be the average of the allowance paid during the four weeks immediately preceding the taking of leave.
(iii) Where an employer provides an employee with uniforms, all articles so provided remain the property of the hospital.
101.Part C contained no definition of “uniform”. Within Part C, clause 63(f), headed “Uniforms, Protective Clothing” was in the following terms:
(i)Employees required by the employer to wear uniforms shall be supplied with an adequate number of such uniforms, overalls, caps, or aprons appropriate to the occupation free of cost to employees
(ii)Uniforms, overalls, caps or aprons shall remain the property of the employer and be laundered and maintained by such employer free of cost to the employee.
(iii)In lieu of the provision of such caps and uniforms the employer may, by agreement with the employee, pay such employee a uniform allowance at the rate of 88c per day or part thereof on duty or $4.40 per week whichever be the lesser amount. Where such employee’s uniforms are not laundered by or at the expense of the employer, the employee shall be paid a laundry allowance of 19c per day or part thereof on duty or 95c per week whichever be the lesser amount.
(iv)The uniform allowance but not the laundry allowance shall be paid during all absences on leave, except absences on long service leave and absence on sick leave beyond 21 days. Where, prior to the taking of leave, an employee was paid a uniform allowance other than at the weekly rate, the rate to be paid during absence on leave shall be the average of the allowance paid during the four weeks immediately preceding the taking of leave.
(v)Rubber gloves and all necessary protective clothing and safety appliances shall be provided free of cost for the use of employees and an adequate supply of same shall be maintained.
102.Part D contained no definition of “uniform”. Within Part D, clause 96(e), headed “Uniform allowance” was in the following terms:
(i)An employee shall be provided from the commencement of her service with an employer with necessary caps and uniforms. Such uniforms shall remain the property of the employer.
(ii)
(1) Where uniforms are not provided for an employee such employee shall be paid a uniform allowance at the rate of 95c per day or part thereof on duty or $3.85 per week whichever be the lesser amount. Where such employee’s uniforms are not laundered by or at the expense of the employer, the employee shall be paid a laundry allowance of 19c per day or part thereof on duty or 77c per week whichever be the lesser amount.
(2) The uniform allowance but not the laundry allowance shall be paid during all absences on leave, except absence on long service leave and absence on sick leave beyond 21 days. Where, prior to the taking of leave, an employee was paid a uniform allowance other than at the weekly rate, the rate to be paid during absence on leave shall be the average of the allowance paid during the four weeks immediately preceding the taking of leave.
103.In 2000, all of the terms of the 1992 Award were deleted and were replaced with new provisions under the heading of the (Victorian Health Services) Award 2000 (the 2000 Award). Part C of the 2000 Award was concerned with registered and mothercraft nurses, while Part D was concerned with enrolled nurses.
104.Within Part C, cl 29.8 defined “uniform” mean “such apparel as may be required by the employer”, while cl 43.5 was headed “Uniform and Laundry Allowance”. Clause 43.5 was in the following terms:
43.5.1Where uniforms are not provided by the employer the employee shall be paid a uniform allowance at the rate of $1.01 per day or for Mothercraft Nurses $1.19 per day, or part thereof on duty or $5.11 per week, or $4.89 per week for Mothercraft Nurses whichever be the lesser amount. Where such employee's uniforms are not laundered by or at the expense of the hospital, the employee shall be paid a laundry allowance of 27 cents, or for Mothercraft Nurses 24 cents per day or part thereof on duty or $1.31 or for Mothercraft Nurses 96 cents, per week whichever be the lesser amount.
43.5.2Employees required by the employer to wear uniforms shall be reimbursed by the employer for an adequate number of such uniforms and aprons appropriate to the occupation..
43.5.3The uniform allowances but not the laundry shall be paid during all absences on leave, except absence on long service leave and absence on sick leave beyond 21 days. Where, prior to taking leave, an employee was paid a uniform allowance other than at the weekly rate, the rate to be paid during absence on leave shall be the average of the allowance paid during the four weeks immediately preceding the taking of leave..
43.5.4Where an employer provides an employee with uniforms, all articles so provided remain the property of the hospital.
105.In its new form, cl 43.5 dealt with both mothercraft and registered nurses, the separate part dealing with mothercraft nurses having been abolished. Clause 43.5 also no longer dealt separately with the position of trainees. The provision dealing with trainees having been removed, the general prescription requiring the payment of an allowance where uniforms were not provided became the opening subclause in the clause.
106.Clause 43.5.2 was new in relation to registered and mothercraft nurses. It had previously been part of the provision applying to enrolled nurses, but not to those applying to registered or mothercraft nurses.
107.Part D did not include a definition of “uniform”. Within Part D, cl 61.7, headed “Uniforms, protective clothing, etc.”, was in the following terms:
61.7.1Employees required by the employer to wear uniforms shall be reimbursed by the employer for an adequate number of such uniforms and aprons appropriate to the occupation.
61.7.2Uniforms and aprons supplied by the employer shall remain the property of the employer and be laundered and maintained by such employer free of cost to the employee or the employee shall be reimbursed by the employer for the cost of laundering such items.
61.7.3In lieu of the provision of such caps and uniforms the employer may, by agreement with the employee, pay such employee a uniform allowance at the rate of $1.10 per day or part thereof on duty or $5.56 per week whichever be the lesser amount. Where such employee’s uniforms are not laundered by or at the expense of the employer, the employee shall be paid a laundry allowance of 26c per day or part thereof on duty or $1.33 per week whichever be the lesser amount.
61.7.4The uniform allowance but not the laundry allowance shall be paid during all absences on leave, except absences on long service leave and absence on sick leave beyond 21 days. Where, prior to the taking of leave, an employee was paid a uniform allowance other than at the weekly rate, the rate to be paid during absence on leave shall be the average of the allowance paid during the four weeks immediately preceding the taking of leave.
108.The 2000 Award was terminated following the making of the Nurses Award. The first sentence of cl 16.2(a) of the Nurses Award can readily be seen to reflect the substance of cls 43.5.2 and 61.7.1 of the 2000 Award. The second sentence is an amalgam of 43.5.4 and part of cl 61.7.2. However, there is an important difference. The second sentence does not pick up the latter half of cl 61.7.2, which provided that, in the alternative to the employer laundering and maintaining the uniform, the “employee shall be reimbursed by the employer for the cost of laundering such items”.
109.The first sentence of cl 16.2(b) can be seen to reflect the substance of clauses 43.5.1 and 61.7.3. Again, there are important differences. Clause 43.5.1 was the leading subclause. Its opening words were “[w]here uniforms are not provided by the employer”. By contrast, cl 61.7.3 followed the earlier provisions of sub-clause 61.7 and was opening by the words “in lieu of the provision of such caps and uniforms the employer may, by agreement with the employee…”. Clause 16.2(b) does not directly follow either clause, but instead opens with the words “instead of the provision of such uniforms”. The second sentence of cl 16.2(b), directly reflects the latter half of both cl 43.5.1 and cl 61.7.3. Clause 16.2(c) directly reflects the terms of cls 43.5.3 and 61.7.3.
110.Thus, cl 16:
(a)merges (into cl 16.2(a)) the provisions of, on the one hand, cl 43.5.2 and 43.5.4 and, on the other, cls 61.7.1 and 61.7.2 (save as to the latter half of the sentence) into a single sub-clause;
(b)merges (into cl 16.2(b)), the provisions of cls 43.5.1 and 61.7.3; and
(c)merges (into cl 16.2(c), the provisions of cl 43.5.3 and 61.7.3.
111.Clause 16.2 is different from its predecessor clauses in that:
(a)it adopts the provision dealing with the requirement to wear uniforms as the first clause (consistent with cl 61.7, but in distinction from cl 43.5); and
(b)it removes from the sub‑clause dealing with the circumstance in which an employee is required to wear uniforms the employer’s option to reimburse employees for the cost of laundering those uniforms, retaining only the requirement that the employer itself launder and maintain the uniform.
112.Thus, cl 16.2 creates two distinct circumstances. In the first, the employee is required to wear a uniform by the employer. In such a case:
(a)the employer must supply an adequate number of uniforms free of cost to the employee;
(b)the uniforms must be appropriate to the occupation;
(c)the uniform remains the property of the employer; and
(d)the employer must launder and maintain the uniform free of cost to the employee (and no option to pay an allowance in lieu)
113.The second circumstance provides an employer an alternative “instead of the provision of such uniforms”. As noted above, the words “such uniform” should be read as referring to the requirement to “wear uniforms” and not to the requirement that the employer supply “an adequate number of uniforms appropriate to the occupation”. The earlier construction respects the structure of the clause and is grammatically sound. The latter construction strains the language of the clause and makes little sense. It cannot be that the alternative in paragraph 16.2(b) is an alternative to providing “an adequate number of uniforms appropriate to the occasion”. That suggests that it is not an alternative to providing an “inadequate” number of uniform “inappropriate” for the occasion.
114.The former construction is consistent with the language in the balance of the clause. Clause 16.2(a) provides that where uniforms are provided, the employer must launder and maintain them. That is consistent with the uniform remaining the property of the employer. Clause 16.2(b) provides an alternative. Where the allowance is paid, the employer must either launder (but not maintain) the uniform or pay the allowance.
One of the major issues of importance in this component of the case was whether the respondent or anyone else required the first applicant to wear a uniform. Both parties agreed the respondent did not require the first applicant to wear a uniform. That was an agreed fact.
On behalf of the respondent, Mr D’Abaco of counsel proffered a sequence of stages in what he said was the proper construction of sub‑cls 16.2(a) and (b). It is useful to record them, which I now do –
The proper construction of clauses 16.2(a) and 16.2(b) is the following:
(a)If an employer requires an employee to wear a uniform, then it must supply an adequate number of uniforms at no cost to the employee and launder and maintain those uniforms at no cost to the employee [cl 16.2(a)];
(b)If an employer requires an employee to wear a uniform but does not provide uniforms to the employee, then it must pay a uniform allowance. If it does not launder those uniforms, then it must pay the employee a laundry allowance [cl 16.2(b)];
(c)Clauses 16.2(a) and 16.2 (b) are inter-related and must be read together. So much is clear from the prefatory words to cl 16.2(b), “Instead of the provision of such uniforms”. The words “Instead” and “Such” are a clear reference to the requirement to wear uniforms contained in cl 16.2(a);
(d)The uniform allowance contemplated by cl 16.2(b) compensates an employee for the fact that the employer requires a uniform to be worn, but does not provide it.
(e)If an employer does not require an employee to wear a uniform, then no uniform allowance is payable. Absent a requirement to wear a uniform, it defies logic, common sense and the basis for the payment of an allowance (as outlined in Mutual Acceptance Co Ltd v Federal Commissioner of Taxation) for a uniform allowance to be payable – that is, an allowance is payable because of a requirement connected with the employee’s service;
(f)Similarly, the payment of a laundry allowance is conditional upon an employer requiring employees to wear a uniform. This is clear from the prefatory words “Where such employee’s uniforms are not laundered by or at the expense of the employer” and in particular the use of the word “such” in cl 16.2(b). Again, it defies both logic and common sense to require an employer to pay an employee an allowance to launder a uniform, if the employee is not required by the employer to wear a uniform and does not in fact wear a uniform;
(g)A laundry allowance is only payable provided an employee is required by the employer to wear a uniform, but the employer does not provide the actual uniforms and does not launder the uniforms worn by the employee (or pay for them to be laundered). This is evident from the words “Where such employee’s uniforms are not laundered by or at the expense of the employer…”. The payment of the laundry allowance is based upon a requirement of the employer that an employee wears a uniform (which they procure themselves, the cost of which is compensated via the payment of the uniform allowance).
The respondent did not require the first applicant to wear a uniform. As to that Mr D’Abaco wrote in his written submissions the following –
The Association did not require Ms Rixton to wear a uniform. She did not wear one. It would defy both logic and common sense to require the Association to pay Ms Rixton an allowance for a uniform she was not required to wear and which she never wore, and an allowance to launder a uniform which she was not required to wear and never wore.
I do not agree with the applicants’ construction of cl 16.2(b) as recorded in paragraphs 113 and 114 of counsel’s written submissions. The simple fact of the matter was that the respondent did not require the first applicant to wear a uniform. She was free to wear other clothing, not being a uniform. On an ordinary construction of cl 16.2(a), if the employer did not require the employee to wear a uniform the employer was at liberty to supply work clothing, not being a work uniform (by definition, such clothing not matching the clothing worn by other employees). By operation of cl 16.2(b), where the employer supplied work clothing that was not a uniform and which clothing the employer did not require the employee to wear, the employer was at liberty (hence the word “may” immediately after the first phrase of cl 16.2(b)) to pay a uniform allowance. The use of the word “may” in the opening sentence of cl 16.2(b) is to be contrasted with the word “will” in the second sentence of cl 16.2(b). As a matter of ordinary construction, “may” imports a permissive entitlement, whereas “will”, “shall” or “must” import mandatory requirements.
In all events, it seemed to me that the starting point urged by the respondent was correct. I agree that it would defy logic and common sense to require a respondent to pay the first applicant an allowance in relation to clothing in the form of a uniform in circumstances where she was not required to wear such a uniform. The evidence shows she did not wear one. Likewise, it would defy logic and common sense to require the respondent to pay the first applicant a laundry allowance in relation to a uniform in circumstances where she was not required to wear any such uniform. To hold otherwise would be to confer on the first applicant a windfall gain that the award self‑evidently does not contemplate.
Conclusion
I dismiss both claims.
I will hear the parties on the question of costs at a later date. If either party wishes to make submissions about costs, she or it must file those submissions by 4pm on 4 March 2019.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of his Honour Judge J D Wilson QC
Associate:
Date: 18 February 2019
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