United Voice v Akzo Nobel Pty Ltd
[2014] FWC 3997
•16 JUNE 2014
[2014] FWC 3997 |
FAIR WORK COMMISSION |
RECOMMENDATION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
United Voice
V
Akzo Nobel Pty Ltd
(C2014/4155)
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 16 JUNE 2014 |
Dispute over long service leave entitlements in redundancy - construction of agreement - High Court judgement in AB v Western Australia [2011] HCA 42 - “fair, large and liberal” reading of agreement required pressed - found that agreement not beneficial or remedial etc legislation - recommendation on construction
[1] This matter concerned an alleged dispute under section 739 of the Fair Work Act 2009 (“the Act”) about matters arising under the terms of the Akzo Nobel Pty Ltd, Yeronga Enterprise Agreement 2012-2015 (“the Agreement”)
[2] The parties to the dispute are the employees of the employer (Akzo Nobel Pty Ltd) for whom the United Voice is the representative (given that they are members thereof) and the employer.
[3] The matter in contest concerns the entitlement to long service leave payments where employees are made redundant. The parties have been unable to resolve their disagreement through conciliation.
[4] Following unsuccessful conciliation, the parties have sought from me a recommendation as to the construction of the Agreement in relation to the employee’s entitlements. The recommendation is not binding and the parties, and in preference to accepting the recommendation, either party may prefer to seek the resolution of the dispute by arbitration.
[5] Before continuing it is helpful first of all to set out the relevant entitlements as they appear in the Agreement.
[6] Clause 7.2.1 provides as follows:
“7.2.1. Entitlement
(a) Employees have an entitlement to take Long Service Leave after attaining 10 years service. Upon attaining this entitlement:
(i) All employment service prior to June 2002 will be calculated at the rate of 0.86 weeks per year of service.
(ii) All service from June 2002 will accrue at the rate of 1.3 weeks per year of service.
(iii) Pro-rata LSL will be available to employees terminating their employment with the employer after 7 years service.
(b) All terms and conditions other than those stated above, relating to LSL will be those as specified in the relevant Legislation.
(c) Application
Long Service leave is to be taken as a minimum of one week at a time.
(d) Taking a minimum of one week means 4 consecutive working days for employees on a 4 day week and 3 consecutive days for employees on a 3 day working week, including days which cross over a weekend.” [My emphasis]
[7] Clause 4.4 of the Agreement provides as follows:
“4.4. Redundancy
4.4.1. The NES shall apply subject to the following.
4.4.2. Application
(a) The application of this clause of the agreement shall only extend to employees who have been on weekly hire for not less than three months.
4.4.3. The following Redundancy provisions will apply.
(a) Notice: 8 weeks
(b) Redundancy payment: 4 weeks pay for every completed year of service
(c) Payment of Pro-Rata Long Service Leave.
(d) A cap of 52 weeks maximum payment applies to all new employees, employed after 13th August 2001
(e) All statutory requirements will be met by the employer.
4.4.4. Procedures”
[8] The United voice contends that clause 4.4.2(c) of the Agreement has the effect of ensuring that employees are entitled to pro rata long service leave when they made redundant the respective of the duration of their employment.
[9] United Voice argues that the subclause places no conditions on access to the payment of pro rata long service leave in relation to periods of service and that the employer is in breach of the agreement in so far as it is refusing to make pro rata payments to employees regardless of the period of service.
[10] The United Voice contends that:
“Given the lack of evolution of this clause of the agreement, evidence will be scarce as to the intent of the drafters of this clause, but it is apparent that the effect was to deliberately provide an entitlement above the minimum provided in the Act.
United Voice submit that when this purposive approach is applied to clause 4.4.3(c), it is apparent that the framers deliberately sought to provide an entitlement in excess of the minimum provided in the Act, and generally by clause 7.2.1 in the event of redundancy.
Whilst United Voice accepts that any industrial instrument (or indeed statute) must be read as a whole, the failure to cross reference clause 4.4.3(c) with clause 7.2.1 must be viewed as a deliberate omission – meaning that the framers did not intend to have the entitlement to [pro rata long service leave] in the event of redundancy otherwise limited.”
[11] The long service leave entitlements for employees employed within a state of Queensland are set out in the Industrial Relations Act 1999 (Qld) (“the Queensland Act”). The Queensland Act provides as follows in this respect for:
“Division 2 Employees generally
43 Entitlement
(1) This section applies to all employees, other than seasonal employees.
(2) An employee is entitled to long service leave on full pay of—
(a) for the first 10 years continuous service—8.6667 weeks;
and
(b) if the employee has completed at least a further 5 years continuous service—another period that bears to 8.6667 weeks the proportion that the employee’s further period of continuous service bears to 10 years.
(3) An employee who has completed at least 7 years continuous service is entitled to a proportionate payment for long service leave on the termination of the employee’s service.
(4) However, if the employee’s service is terminated before the employee has completed 10 years continuous service, the employee is entitled to a proportionate payment only if—
(a) the employee’s service is terminated because of the employee’s death; or
(b) the employee terminates the service because of—
(i) the employee’s illness or incapacity; or
(ii) a domestic or other pressing necessity; or
(c) the termination is because the employer—
(i) dismisses the employee for a reason other than the employee’s conduct, capacity or performance; or
(ii) unfairly dismisses the employee; or
(d) the termination is because of the effluxion of time and—
(i) the employee had a reasonable expectation that the employment with the employer would continue until the employee had completed at least 10 years continuous service; and
(ii) the employee was prepared to continue the employment with the employer.”
[12] Clause 4.4.3(c) of the Agreement states merely that employees who are made redundant will be entitled to their pro rata long service leave payments.
[13] Clause 7.2.1(a)(iii) and clause 7.2.1(b) of the Agreement state that:
“(iii) Pro-rata LSL will be available to employees terminating their employment with the employer after 7 years service.
(b) All terms and conditions other than those stated above, relating to LSL will be those as specified in the relevant Legislation.”
[14] If the clauses in the Agreement are read together they mean no more than that the pro rata entitlement to long service leave is to be read subject to those specified in the relevant legislation (that being the Queensland Act as set out) in all respects other than those set out in the Agreement.
[15] United Voice contends that in so far as clause 7.2.1 (a) (iii) of the Agreement is not cross referenced to clause 4.4.3 (c) of the Agreement, employees are entitled to pro rata long service leave upon redundancy regardless of the completed period of their service. That is, in redundancy situations employees are entitled to pro rata long service leave for periods of service less than seven years.
[16] The construction pressed by United Voice sits uncomfortably with clause 7.2.1(a)(iii) of the Agreement, which stipulates that pro rata long service leave will be available to employees terminating their services after the 7 year statutory qualifying period. Generally, clause 7.2.1 of the Agreement lends no support for the construction pressed by United Voice.
[17] Irrespective of whether this is a case in which the principle of generalia specialibus non derogant applies, the reference to the pro rata long service leave entitlements at clause 4.4.3 (c) of the Agreement must also be read in the context of clause 7.2.1(b) of the Agreement. Clause 7.2.1(b) of the Agreement is of broad effect and applies to “all terms and conditions” relating to long service leave but for the matters “stated above” in the clause.
[18] Further, as a matter of ordinary construction, it would appear to me if the framers of the Agreement had intended to provide for an enhanced entitlement to pro rata long service leave it would have been set out in the prescriptive terms under clause 7.2.1 of the Agreement, and not left as an implied term in another clause.
[19] In my view, it follows that the entitlement to pro rata long service leave in redundancy situations is to provide for the statutory entitlement as set out in the Queensland Act (which is to make payment of pro rata long service leave where an employee has met the seven years continuous service requirement).
[20] This is therefore my recommended construction of the Agreement in relation to the dispute that has risen between the parties.
[21] I make one final point.
[22] The United Voice pressed upon me that I should take into account the judgement of the High Court of Australia in AB v STATE OF WESTERN AUSTRALIA & ANOR [2011] HCA 42 at 24
“In that matter the High Court upheld appeals against decisions of the Court of Appeal of the Supreme Court of Western Australia which had refused applications for recognition certificates of female to male gender reassignments under the Western Australian Gender Reassignment Act 2000 (“the GR Act”).”
[23] The purpose of the GR Act was in part to provide the issue of certificates which are intended to provide conclusive evidence that a person has undergone a reassignment procedure and has the gender characteristics specified in the relevant certificate by the Board (which functions to provide such certificates under the GR Act).
[24] In certifying such reassignments the Appeal Court had regard to the definition of gender characteristics under the GR Act:
gender characteristics means the physical characteristics by virtue of which a person is identified as male or female;
[25] Ultimately, the Appeal Court held that the certificates could not specify the male gender as requested because the relevant persons possessed female reproductive systems and remained gender characterised for that biological reason.
[26] The High Court, however, on review, construed the meaning of “gender characteristics” under the GR Act to refer to those who exhibit external characteristics of the gender upon which social recognition is based, and not by reference to any remnant organs.
[27] In the course of its judgement (as it related to adopting social recognition basis to the statutory notion of “gender characteristics”, the High Court further commented as follows (at paragraph 24 of the judgement):
“The injunction contained in s 18 of the Interpretation Act 1984 (WA) is relevant to the task of construing the provisions of the Act. Moreover, the principle that particular statutory provisions must be read in light of their purpose was said in Waters v Public Transport Corporationto be of particular significance in the case of legislation which protects or enforces human rights. In construing such legislation "the courts have a special responsibility to take account of and give effect to the statutory purpose". It is generally accepted that there is a rule of construction that beneficial and remedial legislation is to be given a "fair, large and liberal" interpretation.
[28] In light of this comment, United Voice contended that clause 4.4.3(c) of the agreement and the agreement as a whole should:
“be given a fair and liberal interpretation in order that they achieve the Act's beneficial purposes. The Act contains no warrant for implying further requirements such as potential adverse social consequences or community standards and expectations.”
[29] The judgement of the High Court concerns legislation that is intended for the enforcement of human rights and has a beneficial and remedial purpose.This much is evident from the Long Title of the GR Act, which states as follows:
“An Act to allow the reassignment of gender and establish a Gender Reassignment Board with power to issue recognition certificates; to make consequential amendments to the Constitution Acts Amendment Act 1899 and the Births, Deaths and Marriages Registration Act 1998 ; to amend the Equal Opportunity Act 1984 to promote equality of opportunity, and provide remedies in respect of discrimination, on gender history grounds in certain cases; and for connected purposes.”
[30] I do not think the Agreement before me can be characterised as a statutory instrument of this kind. The purpose of the agreement is to specify the terms and conditions of employment arrived at by way of agreement between the parties. In so far as it is intended to have a benefit, it is a benefit to those who made the Agreement. If this were not the case, with respect to the interests of which party - employee or employer - would the Agreement be interpreted liberally and fairly? In actuality, both parties are beneficiaries of the bargain they are made.
[31] The Agreement is not intended to have a socially-related remedial function as might the GR Act, or some wider social objective other that which arises from the objects of the Act itself. The Agreement, moreover, is not a statutory creation for the purposes of the advancement of human rights in the context that was before the High Court (by way of the GR Act).
[32] It may be that what was intended to be referred to was the decision of (then) Justice French in City of Wanneroo [2006] FCA 813, wherein was said in relation to the construction of Agreements (at paragraph 57):
“There is a long tradition of generous construction over a strictly literal approach. It may be that this means no more than that the courts and tribunals will not make too much of infelicitous expressions in the drafting nor be astute to discern absurdity or illogicality or apparent inconsistency.”
[33] I have approached the construction of the agreement in the ordinary manner by way of examining the plain words of the agreement in the context of the agreement read as a whole (and in relation to whatever wider, relevant extrinsic evidence may be at hand). No extraneous material has been considered as none were put to me, and it would appear that no such relevant material exists, in any event.
Recommendation
[34] The entitlement to pro rata long service leave in redundancy situations is to provide for the statutory entitlement as set out in the Queensland Act (which is to make payment of pro rata long service leave where an employee has met the seven years continuous service requirement).
SENIOR DEPUTY PRESIDENT
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