Wahlgren v Transfield Power Systems MAustralian National UniversityFACTURING

[1996] IRCA 352

DECISION NO:  352/96

CATCHWORDS

INDUSTRIAL LAW - AWARD - imposition of PENALTY for BREACH of AWARD - provision in Award for employees to be paid overtime rate of wages are paid late - employee claims $323,638 in overtime payments for late payment of leave loading - purpose of such provision

Industrial Relations Act 1988 (Cth)
Metal Industry Award 1984

ROY ELLIS WAHLGREN v. TRANSFIELD POWER SYSTEMS MANUFACTURING

NI 1447 of  1996

CORAM:   MADGWICK J
PLACE:     SYDNEY
DATE:      17 JUNE 1996

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
NEW SOUTH WALES
DISTRICT REGISTRY

No. NI 1447 of 1996

BETWEEN  ROY ELLIS WAHLGREN

Applicant

AND  TRANSFIELD POWER SYSTEMS MANUFACTURING
  Respondent

CORAM:  MADGWICK J
PLACE:    SYDNEY
DATE:     17 JUNE 1996

MINUTES OF ORDER

THE COURT DECLARES THAT:

1. The Respondent breached the Award;

AND ORDERS THAT:

1. The Respondent pay a penalty of $1 within one year.

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
NEW SOUTH WALES
DISTRICT REGISTRY
  No. NI 1447 of 1996

BETWEEN  ROY ELLIS WAHLGREN
  Applicant

AND  TRANSFIELD POWER SYSTEMS MANUFACTURING
  Respondent

CORAM:  MADGWICK J
PLACE:    SYDNEY
DATE:     17 JUNE 1996

EX TEMPORE REASONS FOR JUDGMENT

(Revised from Transcript)

MADGWICK J:         This is, to say the least of it, an unusual case. 

The applicant was employed by the respondent from the middle of 1989 as a boilermaker.  When Christmas 1989 arose, the system of the respondent was apparently to have a general shutdown but to retain some staff, the identity of whom was decided fairly late in the piece, over the period of the general shutdown.  Mr Wahlgren, the applicant, indicated his willingness to work during the shutdown, but, because the decision as to who would work during that shutdown was taken late, he was actually paid for his annual holidays due to him, which was less than full pay for the entire period of the annual shutdown, as he only had about six months service accrued.  He was also paid, in the proper way, the 17½ per cent loading on that annual leave pay entitlement.

When it was agreed that the Applicant would work over the shutdown, the respondent reversed the payments, both for annual leave and for the annual leave loading. 

The Applicant arranged to commence his own annual holiday from 30 January 1990.  The 26 January 1990, Australia Day, was a Friday.  He was paid, on Thursday 25 January, the amount due to him for annual holidays then accrued, namely two weeks and two days, but was not paid his 17½ per cent annual loading.  A little time before, when Mr Wahlgren had approached the assistant works manager, Mr Williamson, and arranged to take his own annual holidays, he raised the subject of the unpaid loading.  Mr Williamson, without reference to the personnel section or the office manager, who were experts on the subject of pay rates, took it on himself to say that Mr Wahlgren would get, as he had asked, a few more hours' pay, because, by working over the shutdown he had actually accrued a few more hours' annual leave, but he would not get any annual leave loading on his pay. 

Mr Wahlgren's evidence is that when the pay came, that is what in fact happened, that he did not get the annual leave loading at that time.  The relevant pay slip which would put all this beyond doubt, has not survived.  The respondent re-organised its records and systems, and in the process, apparently the computer disc which might now enable a repeat print-out of what was then the pay slip, cannot be found.  Mr Wahlgren for his part presented the pay slip that he had to his union and/or to the union solicitors, Messrs Turner, Freeman & Co.  Somebody has lost it.  The only evidence to the contrary of Mr Wahlgren is the inference that, had the matter proceeded as the computer is said to have been programmed, he would have been paid the annual leave loading on 25 January, regardless of what Mr Williamson had said to him.

However, Mr Williamson had referred the matter to Mr Taylor, who was the works manager.  In the absence of evidence to the contrary, I assume that one or both of them was senior enough to countermand a computer-generated entitlement.  There would obviously be occasions when there might be some need to override such a mechanistic determination.  I also think that it is very likely that, if Mr Wahlgren was really paid the loading, the pay section, which appears to have been expert, would have re-adjusted matters so that, when Mr Wahlgren was made redundant in the middle of 1990, he would not have been paid the annual leave loading twice.  In fact, on his redundancy, he was paid annual leave loading at 17½ per cent, calculated by reference to the entirety of the period of his employment with the respondent company. 

Hence, I am quite satisfied on the evidence that it is far more likely than not that Mr Wahlgren did not receive the annual leave loading when he proceeded on leave on either 25 or 26 January 1990. 

But that is only a small part of what the case is about.  The case fundamentally has been founded upon a misreading of clause 7e of Part I of the Metal Industry Award 1984.  That clause is in the following terms:

Subject to sub-clause (f) hereof, where the majority of employees in a particular establishment are employed under the terms of this award, wages shall be paid during ordinary working hours and if an employee is kept waiting for his wages on pay day, after the usual time for ceasing work, he shall be paid at overtime rates for the period he is kept waiting.  Where the majority of employees in a particular establishment are not employed under the terms of this award, an employee kept waiting for his wages on pay day for more than six minutes after the usual time for ceasing work shall be paid at overtime rates after the six minutes.

Mr Wahlgren has read this clause as setting out to impose condign penalties on an employer who has not in a timely way paid his employee all that is due.  But that is not the purpose of the clause, as it seems to me the facts of this case and a plain reading of the clause show.  Mr Wahlgren comes to the court claiming some hundreds of thousands of dollars, being overtime calculated from the middle of 1990 to date.  That an employer who has made a slip, apparently because of a rush of blood to the head of a supervisor, but has corrected it six months later, could, years afterwards, be held liable to pay hundreds of thousands of dollars to the employee is a result so fantastic that a court could only acquiesce in it if the language of the instrument in question were so clear that nothing could stand in the way of its application.

In any case, a plain reading of the clause indicates that it is concerned with the position where an employer negligently, foolishly, incompetently or arrogantly fails to pay an employee what the employer bona fide conceives to be due on the regular pay day and where the employee is consequently kept waiting at the workplace.  The clause gives to the employee a right to remain where he/she is, to demand payment while waiting, and to be paid while waiting.  The anticipation that such payment will ordinarily be at overtime rates is simply a reflection of the fact that the employer's primary obligation is to pay, in the ordinary course, by the close of business on pay day, at which time one assumes that the employee will have worked his/her ordinary hours of work and therefore will be entitled to overtime.

Mr Wahlgren did not wait at the employer's premises after the close of business on 25 January to be paid.  He sensibly put the non-payment of the leave loading aside to be dealt with at some other, more appropriate time. 

His own evidence is that he was advised that there was no merit in this claim for waiting time, yet he persisted in bringing it to the court.  The substance of his application cannot succeed.  However, the fact remains that, on the evidence, the employer was in default of the award. Nobody disputes now, nor can it be disputed, that he was, in fact, entitled to the annual leave loading and to be paid it in advance of proceeding on his annual holiday which he was taking soon after the close of business on 25 January 1990.

On the evidence before me, he was not paid that loading until some few months later, and that is a breach of the award.  The affair sounds as if there was something which irritated the quite senior employees of the respondent, a large and generally well-respected company, and it is not possible to view this as a case where the respondent dealt with the matter bona fide, so that the breach was entirely a technical one.  On the other hand, a great deal more might have been done in a rather more sensible fashion to bring the matter to a successful conclusion long before now, and long before Mr Wahlgren was, in fact, paid the money by the company.  I have little doubt that, had either he or his union delegate gone to see Mr Rutledge, the office manager, Mr Rutledge would have seen to the matter and put it to rights without fuss. 

I am pressed, because Mr Wahlgren has failed in the substance of the claim, to order costs against him, but as he should succeed, in my view, in securing the imposition of a penalty in a nominal sum, no occasion arises for making such an order. 

I find that the award was breached by the delay in paying to Mr Wahlgren his annual leave loading, and I impose a penalty in the nominal sum of $1 upon the respondent, which is allowed one year to pay it. 

I certify that this and the preceding 5 pages are a true copy of the Ex Tempore Reasons for Judgment of His Honour Justice Madgwick.

Associate:      

Dated:            2 August 1996

APPEARANCES

Counsel for the Applicant:                  P Strain

Solicitor for the Applicant:                  Herro & Martin

Representative for the Respondent:     A Salmon of the Metal Trade Industry of Australia

Date of hearing:  17 June 1996