Williams v Macmahon Mining Services Pty Ltd
[2009] FMCA 511
•28 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WILLIAMS v MACMAHON MINING SERVICES PTY LTD | [2009] FMCA 511 |
| INDUSTRIAL LAW – whether employee a casual employee – whether employee entitled to annual leave. |
| INDUSTRIAL LAW – entitlement to annual leave – whether set-off available. |
| ESTOPPEL – Whether estoppel defeats statutory guarantee. |
| CONTRACT – Mistake – rectification. |
| Acts Interpretation Act 1901(Cth), s.15AA Industrial Relations Act 1979 (WA), s.85 Workplace Relations Act 1996 (Cth), ss.5(1), 178, 182, 185, 186, 227, 228, 232, 233, 235, 262, 264, 635, 638(1), (4), (5), (11) and (12) |
| Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545 Hamzy v Tricon International Restaurants and Another (2001) FCR 78; [2001] FCA 1589 James Turner Roofing Pty Ltd v Peters [2003] WASCA 28 McGhie v Fremantle Lumpers Union (1937) 39 WALR 111 McLennan v Surveillance Australia Pty Ltd (2005) 142 FCR 105; [2005] FCAFC 46 Mander Pty Ltd v Clements [2005] WASCA 67 Melrose Farm Pty Ltd trading as Milesaway Tours v Milward [2008] WASCA 175 Metropolitan Health Service Board v Australian Nursing Federation (2000) 99 FCR 95; [2000] FCA 784 Mill v Avenga Pty Ltd [2008] AIRC 1163 Mill v Avenga Pty Ltd [2008] AIRCFB 789 Nightingale v Little Legends Child Care (2004) 134 IR 111 Payne v Howison (unreported, Industrial Relations Commission of New South Wales in Court Session, No. 389206, 26 September 1997) Personnel Contracting Pty Ltd t/as Tricord Personnel v The Construction Forestry Mining and Energy Union of Workers [2004] WASCA 312 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 R v Casey; R v Smythe [1977] Qd R 132 Reed v Blue Line Cruises Ltd (1996) 73 IR 420 Regional Express Holdings Ltd v Clarke (2007) 165 IR 251; [2007] FCA 957 Serco (Aust) Pty Ltd v Moreno (1966) 65 IR 145 Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250; [2002] FCA 1406 The Club Cape Schanck Resort Co Ltd v Cape Country Club Pty Ltd (2001) 3 VR 526; [2001] VSCA 2 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 |
| RP Meagher, JD Heydon and MJ Leeming (Eds) Meagher, Gummow and Lehane’s Equity Doctrine and Remedies (4th Edn) (Chatswood: Butterworths LexisNexis, 2002) |
| Applicant: | ADRIAN CLIFFORD WILLIAMS |
| Respondent: | MACMAHON MINING SERVICES PTY LTD |
| File Number: | PEG 83 of 2008 |
| Judgment of: | Lucev FM |
| Hearing date: | 5 November 2008 |
| Date of Last Submission: | 5 November 2008 |
| Delivered at: | Perth |
| Delivered on: | 28 May 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr D.H. Schapper |
| Solicitors for the Applicant: | Derek Schapper Solicitor |
| Counsel for the Respondent: | Mr T.H.F. Caspersz and Ms R. Harding |
| Solicitors for the Respondent: | Jackson McDonald |
DECLARATIONS AND ORDERS
DECLARATIONS
The Court declares that:
Mr Williams was:
(a)not a casual employee for the purposes of s.227 of the WR Act; and
(b)subject to declaration (2) below, entitled to annual leave payment for accrued annual leave on termination of employment in accordance with ss.232 and 235(2) of the WR Act.
Macmahon Mining is entitled to set-off any sum of money appropriated from the casual loading paid to Mr Williams in lieu of annual leave against any entitlement Mr Williams has to annual leave payment for accrued annual leave on termination of employment in accordance with ss.232 and 235(2) of the WR Act.
ORDERS
The Court orders:
The parties to confer on the appropriate form of an order, if any, to reflect Mr Williams’ entitlement to be paid accrued annual leave upon termination of employment taking into account any set-off to which Macmahon Mining is entitled.
Costs, if any, be reserved.
The matter be adjourned to a directions hearing at 9.45am on 12 June 2009.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 83 of 2008
| ADRIAN CLIFFORD WILLIAMS |
Applicant
And
| MACMAHON MINING SERVICES PTY LTD |
Respondent
REASONS FOR JUDGMENT
As Corrected
Application
The applicant, Mr Williams, applied under the Workplace Relations Act 1996 (Cth)[1] seeking payment from the respondent, Macmahon Mining Services Pty Ltd,[2] for:
a)unpaid accrued annual leave as at the date of termination of his employment; and
b)one week in lieu of notice;
and the imposition of penalties and interest on any amounts found to be due to him by Macmahon Mining.
[1] “WR Act”.
[2] “Macmahon Mining”.
At hearing, Mr Williams elected to proceed on the annual leave issue only.[3]
[3] Transcript at page 2.
Issues
The primary issue in these proceedings is whether Mr Williams was or was not employed as a casual employee. If he was a casual employee he will not be entitled to the annual leave payment he claims. If he was not a casual employee he will be entitled to the annual leave payment claimed, subject to certain other defences raised by Macmahon Mining. Those defences raise a number of secondary issues, including (if Mr Williams is not a casual employee), the following:
a)whether estoppel operates to defeat the claim;
b)whether set-off is available;
c)whether there is a mistake capable of rectification;
d)whether Mr Williams has been unjustly enriched, and ought make restitution; and
e)whether any damage has been suffered.
Facts
Mr Williams was employed as a “casual” miner by Macmahon Mining from 9 November 2006 until 16 December 2007 at the Argyle Diamond mine site[4] under a letter of employment dated 16 November 2006[5] (and signed by the applicant on 19 December 2006).[6] The Contract of Employment included a term that:
Your acceptance of this offer is your acceptance to work in accordance with these employment conditions.
[4] “Argyle”.
[5] “Contract of Employment”. The Contract of Employment is Annexure ACW 1 to the affidavit of Adrian Clifford Williams sworn 5 August 2008 (“Mr Williams’ Affidavit”).
[6] Mr Williams’ Affidavit at para.9.
The Contract of Employment also included a term that:
Any location changes, which may occur from time to time, will be in consultation with you but shall be at the sole discretion of the Company.
Macmahon Mining paid Mr Williams a “Flat Hourly Rate” of $40.00 per hour[7] under the Contract of Employment, which provided that:
The rate of pay is all inclusive and takes into account all responsibilities, disabilities, allowances ... and includes payment for all hours necessary to undertake your rostered duties, and as a casual employee, a loading in lieu of paid leave entitlements. The rate includes compensation for any necessary shift, public holiday and weekend work.
[7] “Flat Hourly Rate”.
The hours of work set out in the Contract of Employment were:
You will work 12 hours (sic) shifts on a 2 weeks on/1 week off roster. You are entitled to 1 meal breaks (sic) of 30 minutes duration whilst on this work pattern and they are paid.
The employee is required to perform such duties as required by the Company….
The employee agrees to work a shift roster system as determined from time to time to be appropriate to the operations and to working reasonable amounts of overtime. The rostered hours for a site may include:
· A requirement to be rostered to work on either day or night shift
· A requirement to be rostered to work on a Saturday, Sunday or Public holiday.
Mr Williams worked 12 hour shifts on a two weeks on/one week off roster, that is seven consecutive night shifts, then seven consecutive day shifts, and then seven days off, for the entire period of the employment, save for the first three months when he worked day shifts only on his two weeks on.[8] The only exception to this arrangement was in about May or June of 2007 when Mr Williams wished to attend his son’s naval graduation ceremony. On this occasion Mr Williams filled out a leave form asking to have seven day shifts off and then to resume work at the end of that period. That request was granted. The effect was to swap work days for days off so no work time was lost.[9] Otherwise, Mr Williams did not take any paid leave during the period of his employment and did not receive any pay for any accrued untaken leave on termination.[10]
[8] Mr Williams’ Affidavit at para.10.
[9] Mr Williams’ Affidavit at para.11.
[10] Mr Williams’ Affidavit at para.17.
Mr Williams worked in one of three crews at Argyle. He was on “C” crew.[11] For most of the time that he was employed he worked on mobile plant (such as a loader known as an IT),[12] and which the project manager described as “Equipment Operator … for miscellaneous underground construction activities.”[13] The crews followed on from each other on each shift performing the same type of work on the job or jobs then underway.[14] The work within the mine was subject to strict safety requirements.[15] Work had to be co-ordinated with mine workers and their supervisors from time to time.[16]
[11] Mr Williams’ Affidavit at para.13.
[12] Mr Williams’ Affidavit at para.12.
[13] Annexure ACW 3 to Mr Williams’ Affidavit, being a reference for Mr Williams from the Project Manager.
[14] Mr Williams’ Affidavit at paras.12 and 13.
[15] Mr Williams’ Affidavit at para.14.
[16] Mr Williams’ Affidavit at para.14.
For the 2008 calendar year Mr Williams was provided with a “CRE 2008 C Crew Roster” which set out his crew’s night and day shifts and flight times for the charter flights to and from Argyle for that 12 months.[17]
[17] Annexure ACW 2 to Mr Williams’ Affidavit.
Mr Williams was flown to Argyle by charter flight and accommodated at Argyle in a camp.[18]
[18] Mr Williams’ Affidavit at para.16.
On 16 December 2007 Macmahon Mining gave Mr Williams notice of termination of his employment under the Contract of Employment,[19] which provided:
Employment may be terminated by the provision of notice, being one hour in the case of a casual employee….
[19] Mr Williams’ Affidavit at para.17.
Mr Williams did not receive any payment for annual leave on termination of his employment.[20]
[20] Mr Williams’ Affidavit at para.17.
Further necessary facts are set out below.
Mr Williams’ submissions
Mr Williams says that his employment was not of a casual nature because of the roster system in place as stipulated in the Contract of Employment which meant that he could not work on an informal, uncertain or irregular basis (but rather that he was required to work on a regular, predictable and systematic basis) and because he was unable to choose his terms of employment. Mr Williams says that he was required to work regular, predictable hours as set out in the Contract of Employment, and he could not choose to work on a casual or informal basis.
Mr Williams says that although Macmahon Mining labelled the employment as “casual” the employment was not “casual”, and he was not a “casual employee” within the meaning of s.227 of the WR Act, and that he is entitled to annual leave under ss.232 and 235 of the WR Act.
Macmahon Mining’s submissions
Macmahon Mining notes that there is no definition of “casual employee” in the WR Act. It says that “casual employee” must be construed to take into account the context in which it appears and the WR Act provisions as a whole, including the purpose of the WR Act and its provisions.[21] Macmahon Mining notes that s.227 of the WR Act, in which “casual employees” appears for relevant purposes, is part of the Australian Fair Pay and Conditions Standard[22] and that another AFPCS, namely “parental leave”, provides an entitlement for an “eligible” casual employee to take parental leave.[23] In similar vein Macmahon Mining notes that “casual employee” is referred to in the provisions concerning minimum entitlements on termination of employment, and that a long term “casual employee” has minimum entitlements in that regard.[24] Macmahon Mining also notes that casual employees are entitled to a casual loading under the AFPCS of at least 20% in addition to their ordinary rate of pay.[25]
[21] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 per McHugh, Gummow, Kirby and Hayne JJ; [1998] HCA 28 at paras.69-71 per McHugh, Gummow, Kirby and Hayne JJ (“Project Blue Sky”); Acts Interpretation Act 1901 (Cth), s.15AA.
[22] “AFPCS”.
[23] WR Act, ss.262 and 264.
[24] WR Act, ss.635 and 638(1)(d), (4), (5), (11) and (12).
[25] WR Act. ss.185-186.
Although conceding that whether an employee is a “casual employee” is ultimately a question of fact, Macmahon Mining contend that Parliament’s intention expressed in s.638(11) of the WR Act is that a person can be a “casual employee” despite being employed:
a)long term, that is for more than 12 months;
b)on a regular and systematic basis for a sequence of periods of employment;
c)on a regular and systematic basis for a sequence of periods of employment; and
d)with a reasonable expectation of continuing employment.
The decisions cited in support of the contention that that is Parliament’s intention are decisions of the Full Bench of the Australian Industrial Relations Commission.[26]
[26] Nightingale v Little Legends Child Care (2004) 134 IR 111; Mill v Avenga Pty Ltd [2008] AIRC 1163; and Mill v Avenga Pty Ltd [2008] AIRCFB 789.
Macmahon Mining also contend that the absence of a firm advance commitment as to the duration of employee’s employment, or the days or hours the employee will work, as a factor indicative of when an employee is a “casual employee” must now be understood in the context of the existing provisions of the WR Act, including the fact that a person who is a long term regular and systematic worker with a reasonable expectation of continuation may be a “casual employee” for the purposes of the WR Act.
Macmahon Mining submits that Mr Williams acknowledged that he had read, understood and accepted employment in accordance with the terms of the Contract of Employment. Further, that at the time of making the Contract of Employment, both Mr Williams and Macmahon Mining knew, or could be taken to have known, that:
a)the Contract of Employment related to project mining work which would eventually end;
b)Macmahon Mining was not committed to indefinitely employing the applicant if it could no longer employ him at Argyle; and
c)this was corroborated by the contractual provision entitling Macmahon Mining to terminate on one hours notice.
Macmahon Mining submits that the nature of the work was such that the duration of project mining contracts such as those between Macmahon Mining and Argyle were uncertain and that Argyle as head contractor had a right to refuse access to its site to a sub-contractor’s employee, and that it was that event which led to the termination of Mr Williams’ employment. Further, Macmahon Mining says that transport and roster arrangements were necessary to facilitate the fly-in / fly-out nature of the employment.
In relation to the Contract of Employment Macmahon Mining submits that, assuming it is not a sham, effect should be given to its provisions concerning casual employment if they do not contradict the effect of the Contract of Employment as a whole.[27] Macmahon Mining says that Mr Williams was employed as a casual and paid as such, and that this is consistent with the use of the word “casual” in the Contract of Employment to describe the nature of the employment relationship between the parties.
[27] Personnel Contracting Pty Ltd T/as Tricord Personnel v CFMEU [2004] WASCA 312 at paras.24-25 per Steytler J is relied upon (“Tricord Personnel”).
Macmahon Mining submits that the meaning of, and the parties’ conduct subsequent to the making of, the Contract of Employment, are matters which indicate that Mr Williams was employed as a “casual employee” on the terms outlined in the Contract of Employment. Macmahon Mining says that, to a reasonable person, the Contract of Employment would convey that Mr Williams was a “casual employee” by reason of his being:
a)employed to work on a regular and systematic basis for sequences of periods of employment as dictated by a roster;
b)without a firm advance commitment by Macmahon Mining as to the duration of employment if he could no longer be utilised at Argyle, thereby giving rise to the contractual provision that he be terminated on one hours notice; and
c)not entitled to be paid annual leave, but to be paid a rate of pay in consideration of being employed and paid as a “casual employee”, inclusive of a loading in lieu of paid annual leave.
Macmahon Mining submits that Mr Williams is estopped from denying that he agreed to be employed as a “casual employee” and that his claim ought not be allowed for that reason.[28] Macmahon Mining also says that no damage has been suffered and that the casual loading paid to the applicant can be taken to have been at least what was provided for in the AFPCS, namely 20%, and that the applicant cannot prove any damage as a result of not having been paid for annual leave.
[28] Citing Payne v Howison (unreported, Industrial Relations Commission of New South Wales in Court Session, No. 389206, 26 September 1997).
It is also submitted by Macmahon Mining that the common intention of the parties at the time of making the contract was that Mr Williams be a casual employee, and that if the parties were mistaken about the effect of their agreement, rectification of the contract is justified. Macmahon Mining also submits that the mistake gives rise to an obligation to make restitution, and that Mr Williams ought make restitution. Macmahon Mining submits that the casual loading paid to Mr Williams should be set-off against any amounts that he is found to be entitled to as claimed.
Macmahon Mining also contends that the casual rate of pay of $40.00 per hour it paid to Mr Williams was inclusive of a loading in lieu of paid leave entitlements, and that the casual rate of pay was 20% greater than the rate of pay that Mr Williams would have been paid if he were not employed as a casual employee. Macmahon Mining says that if it had not paid Mr Williams at the rate of $40.00 per hour (inclusive of loading in lie of paid leave) it would have paid him at the rate of $33.333 per hour ordinary pay and $6.67 per hour as casual loading.[29]
[29] Response filed 11 August 2008.
Macmahon Mining says that Mr Williams was a casual employee and that by reason of s.227 of the WR Act he is not entitled to annual leave under ss.232 and 235 of the WR Act.
What Is a Casual Employee?
The question of whether an employee is a casual employee is a question of fact[30].
[30] Serco (Aust) Pty Ltd v Moreno (1966) 65 IR 145 at 149 per Sharkey P.
Traditional Definition of “Casual Employee”
In Doyle v Sydney Steel Co Ltd,[31] Starke J said:
The description “casual worker” is not one of precision: it is a colloquial expression, and where, upon all the facts, there is a reasonably debatable question whether the work is casual or regular, the question is one of fact ….[32]
[31] (1936) 56 CLR 545 (“Doyle”).
[32] Doyle at 551 per Starke J.
In Doyle Dixon J said:
But unfortunately what is casual employment is ill defined. Indeed it is scarcely too much to say that it seems open to a tribunal of fact to treat most forms of intermittent or irregular work as casual.[33]
[33] Doyle at 555 per Dixon J.
In Doyle McTiernan J considered the expression “is not capable of exact definition”, and that “[e]ach case is to be determined on its own facts …”.[34]
[34] Doyle at 565 per McTiernan J.
In Reed v Blue Line Cruises Ltd,[35] Moore J observed:
What then, is likely to have been the feature of the employment at the time of the engagement that would characterise it as an engagement on a casual basis? Plainly it involves a notion of informality or flexibility in the employment following the engagement…
A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual.[36]
[35] (1996) 73 IR 420 (“Blue Line Cruises”).
[36] Blue Line Cruises at 425 per Moore J.
In Melrose Farm Pty Ltd trading as Milesaway Tours v Milward[37] the Western Australian Industrial Appeal Court said:
In Australian law, the expression ‘casual employee’ or ‘casual employment’ are expressions with no fixed meanings:… Reed v Blue Line Cruisers Ltd (1996) 73 IR 420, 425 (Moore J)… the issue before Moore J was whether Reed was a casual employee as that expression appears in reg 30B of the Industrial Relations Regulations (Cth). Having observed that ‘casual employee’ has no fixed meaning in Australian domestic law … went on to consider the characteristics of casual employment …:
A characteristic of engagement on a casual basis is, in my opinion, that the employer can elect to offer employment on a particular day or days and when offered, the employee can elect to work. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual (425).
In Hamzy v Tricon International Restaurants [2001] FCA 1589: 115 FCR 78 the Full Court of the Federal Court said … that the essence of casual employment is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work, but that is not inconsistent with the possibility of the employee’s work pattern turning out to be regular and systematic.
There is no one definitive test to distinguish between casual and permanent employees. There are several features characteristic of casual employment.[38]
[37] [2008] WASCA 175.
[38] Melrose Farm at paras.103-106 per Le Miere J (with whom Steytler P, at para.1, agreed; and with which Pullin J at para.31, would have agreed if he considered it necessary to determine this issue, which he did not). The Western Australian Industrial Appeal Court, is a court established by statute and composing three Supreme Court Judges sitting, generally, on appeals from the Full Bench of the Western Australian Industrial Relations Commission: see Industrial Relations Act 1979 (WA), s.85.
Consideration – was Mr Williams a casual employee as traditionally defined?
The question arises whether Mr Williams was a casual employee as traditionally defined.
The Court notes that the parties have described the relationship as “casual”. That is a factor for the Court to consider when determining whether Mr Williams was a “casual employee”, but it is not, of itself, determinative. As Steytler P observed in Tricord Personnel, the characterisation of the relationship between employee and employer must proceed by reference to the totality of that relationship, including the system operated and work practices imposed by the appellant, and an analysis of the terms of the contract entered into by the employee with the employer.[39] The Court notes that the judgment in Tricord Personnel dealt with the perennially vexing question of whether the persons concerned were employees or independent contractors, and as such, more weight might be given to the characterisation of the relationship by the parties themselves. Different considerations arise where the entitlement concerned is governed by statute, and the characterisation of the relationship (ie, whether or not it is casual) may be influenced by statutory provisions, in this case, those appearing in the WR Act, and set out below.
[39] Tricord Personnel at para.41 per Steytler P.
The Court finds that there was an expectation that Mr Williams would be available, on an ongoing basis, to perform the duties required of him, in accordance with the roster, until such time as the Contract of Employment came to an end. This was not a Contract of Employment where the availability of work was the subject of significant fluctuation from one day, or one week, or one month, to the next so as to make the work, and hours of work, irregular and uncertain. Rather, the work was performed in accordance with a stable, organised and certain roster, with certainty of working hours, ongoing until the Contract of Employment was ended, either for some cause or because the head contract between Argyle and Macmahon Mining had come to an end. In this case, Mr Williams’ Contract of Employment was terminated for cause by Macmahon Mining, and the work, and the availability of work, continued on as it had prior to his termination. Thus, the employment was regular, and was work in accordance with a roster published in advance, and in this case, significantly in advance. Macmahon Mining argued that it was necessary to have a roster published significantly in advance and to make that available to employees because of the fly-in/fly-out nature of the work, the remote location and the nature of the work concerned. True that may be, but it does little more than reinforce the fact that the work was regular and ongoing and more consonant with permanent full time employment than casual employment.
There was, in the Court’s view, mutual expectation of continuity of employment subject only to termination of employment for cause, or termination as a consequence of the head contract ending. In that regard, Mr Williams’ Contract of Employment was subject to constraints of the same nature as those of any employee. Any contract of employment might be terminated for cause (eg: by reason of the misconduct of the employee, or because that particular employee is no longer allowed on site by a head contractor or principal with control of access to the site), or may come to an end as a consequence of a contract or a project concluding. There is nothing in the nature of that situation which points towards Mr Williams being a “casual employee” and, if anything, it points away from him being a “casual employee”.
Mr Williams had, in accordance with the roster, regular work, and consistent starting and finishing times. This was not a case of an employee working for short periods of time on an irregular basis with hours varying from day to day and week to week. Those factors point to Mr Williams’ employment being other than casual in nature.
Mr Williams was paid a Flat Hourly Rate, and that Flat Hourly Rate purported to include a loading for various leave entitlements, including, relevantly, annual leave. Those facts are more indicative of a casual employment relationship.
Mr Williams was not regularly contacted and asked to work. Rather, this was a contractual relationship where the work was organised and Mr Williams knew when and where he was required, and how he was required to get there. That points to the employment relationship being other than a casual one. So to does the fact that he was not free to refuse to work at any time due to other commitments. The nature of the fly-in / fly-out roster, the hours to be worked, the shifts to be worked, and the work undertaken in the environment that it was undertaken (mining construction on a mine in a remote location) all point to the relationship being permanent rather than casual.
On a consideration of all of the above factors, and looking at the relationship in its totality, the Court does not consider the employment relationship entered into by Mr Williams with Macmahon Mining was one characterised by informality, uncertainty or irregularity of engagement such as to give it the characteristics of being casual employment. Rather, the employment was, from its commencement until it was terminated for cause, formal, certain and regular, and because of its nature, probably more formal, more certain and more regular than most permanent employment relationships.
Leaving aside, for the moment, the provisions of the WR Act, which are considered below, the Court therefore considers that Mr Williams’ employment relationship was that of a “casual employee” when considered in the light of the traditional definition of “casual employee”.
Provisions of the WR Act
The next question which arises is whether Mr Williams is a casual employee for the purposes of the WR Act, and in particular, a casual employee as referred to in s.227 of the WR Act.
The meaning of “casual employee” must be considered in the context of the provisions of the WR Act dealing with casual employees.[40]
[40] Project Blue Sky: see fn 21 above.
The definition of employee in s.5(1) of the WR Act is of no assistance, and there is no express definition of “casual employee” in the WR Act.
For relevant purposes “casual employees” appears in s.227 of the WR Act which provides as follows:
227 Employees to whom Division applies
This Division applies to all employees other than casual employees.
Section 227 of the WR Act does not define “casual employees”.
Section 228(1) of the WR Act defines certain terms including “annual leave” which has the meaning given by s.232(1) of the WR Act, and “employee” which “means an employee to whom this Division applies under s.227.”
Section 232 of the WR Act provides for a statutory guarantee of annual leave in the following terms:
232 The guarantee
(1) For the purposes of this Division, annual leave means leave to which an employee is entitled under this Subdivision.
All employees to whom this Division applies
(2) An employee is entitled to accrue an amount of paid annual leave, for each completed 4 week period of continuous service with an employer, of 1/13 of the number of nominal hours worked by the employee for the employer during that 4 week period.
Example: An employee whose nominal hours worked for a 12 month period were 38 hours per week would be entitled under this subsection to 152 hours of annual leave (which would be the equivalent of 4 weeks of annual leave if his or her nominal hours worked remained unchanged).
Additional leave entitlement for shift workers
(3) An employee is also entitled to accrue an amount of paid annual leave, for each completed 12 month period of continuous service with an employer, of 1/52 of the number of nominal hours worked by the employee, for the employer, as a shift worker during that 12 month period.
Example: A shift worker whose nominal hours worked for a 12 month period were 38 hours per week, and who worked as a shift worker throughout that period, would be entitled under this subsection to an additional 38 hours of annual leave (which would be the equivalent of one week of annual leave if his or her nominal hours worked remained unchanged).
Section 233 of the WR Act provides for an entitlement to cash out annual leave, but that is not relevant here.
Section 235 of the WR Act sets out payment rules for annual leave, including accrued annual leave on termination, and provides in that latter respect as follows:
(2) If the employment of an employee who has not taken an amount of accrued annual leave ends at a particular time, the employee’s untaken accrued annual leave must be paid at a rate that is no less than the employee’s basic periodic rate of pay at that time.
Sections 185 and 186 of the WR Act deal with the guarantee of casual loadings and provide as follows:
185 The guarantee
(1) This section applies to a casual employee for whom, under section 182, there is a guaranteed basic periodic rate of pay, other than a casual employee in relation to whom the following paragraphs are satisfied:
(a) subsection 182(1) applies to the employee;
(b) the APCS that covers the employment of the employee does not contain casual loading provisions under which a casual loading is payable to the employee;
(c) the employee’s employment is not covered by a workplace agreement.
(2) The casual employee must be paid, in addition to his or her actual basic periodic rate of pay, a casual loading that is at least equal to the guaranteed casual loading percentage of that actual basic periodic rate of pay.
Note: The employee’s actual basic periodic rate of pay should at least equal the guaranteed basic periodic rate of pay under section 182.
(3) The guaranteed casual loading percentage is as set out in the following table: [Note: table deleted].
186 Default casual loading percentage
(1) The default casual loading percentage is 20%, subject to the power of the AFPC to adjust the percentage.
(2) Any adjustment of the default casual loading percentage must be such that the adjusted rate is still expressed as a percentage.
An employee does not become a “casual employee” by reason of the payment of the relevant casual loading. Rather, the employee must first be a casual employee to be entitled to the loading.
The Division in which ss.185 and 186 of the WR Act appear contains a definitions section, s.178 of the WR Act, which defines various kinds of employees (including “APCS piece rate employee”, “employee with a disability” and “junior employee”) but which does not define “casual employee”. Section 182(1) of the WR Act (referred to in s.185(1) of the WR Act) refers to an “employee” covered by an APCS who is not an “APCS piece rate employee”.
Division 6 of Part 7 of the WR Act deals with parental leave and in s.262 provides that the Division “applies to all employees, other than casual employees who are not eligible casual employees.” Again, “casual employees” is not defined. Section 264 of the WR Act sets out the meaning of “eligible casual employee” as follows:
264 Meaning of eligible casual employee
(1) For the purposes of this Division, an eligible casual employee is a casual employee:
(a) who has been engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months; and
(b) who, but for an expected birth or an expected placement of a child, would have a reasonable expectation of continuing engagement by the employer on a regular and systematic basis.
(2) Without limiting subsection (1), for the purposes of this Division, a casual employee is also an eligible casual employee if:
(a) the employee was engaged by a particular employer on a regular and systematic basis for a sequence of periods during a period (the first period of employment) of less than 12 months; and
(b) at the end of the first period of employment, the employee ceased, on the employer’s initiative, to be so engaged by the employer; and
(c) the employer later again engaged the employee on a regular and systematic basis for a further sequence of periods during a period (the second period of employment) that started not more than 3 months after the end of the first period of employment; and
(d) the combined length of the first period of employment and the second period of employment is at least 12 months; and
(e) the employee, but for an expected birth or an expected placement of a child, would have a reasonable expectation of continuing engagement by the employer on a regular and systematic basis.
Section 638 of the WR Act seeks to exclude certain kinds of employees from the operation of provisions in relation to minimum entitlements on termination of employment. Section 638 relevantly provides as follows:
638 Exclusions
Exclusions from Subdivisions B, D and E and sections 660 and 661
(1) The following kinds of employee are excluded from the operation of Subdivisions B, D and E and sections 660 and 661:
(a) an employee engaged under a contract of employment for a specified period of time;
(b) an employee engaged under a contract of employment for a specified task;
(c) an employee serving a period of probation, if the duration of the period or the maximum duration of the period, as the case may be, is determined in advance and, either:
(i) the period, or the maximum duration, is 3 months or less; or
(ii) the period, or the maximum duration:
(A) is more than 3 months; and
(B) is reasonable, having regard to the nature and circumstances of the employment;
(d) a casual employee engaged for a short period, within the meaning of subsection (4);
(e) a trainee whose employment under a traineeship agreement or an approved traineeship:
(i) is for a specified period; or
(ii) is, for any other reason, limited to the duration of the agreement;
(f) an employee:
(i) who is not employed under award‑derived conditions (see subsection 642(6)); and
(ii) to whom subsection (6) or (7) applies;
(g) an employee engaged on a seasonal basis, within the meaning of subsection (8).
…
(4) For the purpose of paragraph (1)(d), a casual employee is taken to be engaged for a short period unless:
(a) subject to subsection (5)—the employee is engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months; and
(b) the employee has, or but for a decision by the employer to terminate the employee’s employment, would have had, a reasonable expectation of continuing employment by the employer.
(5) If:
(a) a casual employee was engaged by a particular employer on a regular and systematic basis for a sequence of periods during a period (the first period of employment) of less than 12 months; and
(b) at the end of the first period of employment, the casual employee ceased, on the employer’s initiative, to be so engaged by the employer; and
(c) the employer subsequently again engages the employee on a regular and systematic basis for a further sequence of periods during a period (the second period of employment) that starts not more than 3 months after the end of the first period of employment; and
(d) the total length of the first period of employment and the second period of employment is at least 12 months;
paragraph (4)(a) is taken to be satisfied in relation to the employment of the employee.
…
Exclusions from sections 660 and 661 and Subdivision D
(11) The following kinds of employee are excluded from the operation of sections 660 and 661 and Subdivision D:
(a) a casual employee, except a casual employee engaged for a short period within the meaning of subsection (4);
(b) a daily hire employee:
(i) who is performing work in the building and construction industry (including work in, or in connection with, the erection, repair, renovation, maintenance, ornamentation or demolition of buildings or structures); or
(ii) who is performing work in the meat industry in, or in connection with, the slaughter of livestock;
(c) a weekly hire employee who is performing work in, or in connection with, the meat industry and whose termination of employment is determined solely by seasonal factors.
…
Relationship between subsections (1) and (11)
(12) If, but for this subsection, an employee would be covered by both subsections (1) and (11), the employee is taken only to be covered by subsection (1) (and so is subject to the broader range of exclusions provided for by that subsection).
Consideration - WR Act provisions and casual employee
If s.227 stood alone in the WR Act there would be no doubt that what was meant was a “casual employee” within the traditional definition of that phrase, and that for reasons set out above, Mr Williams would not be a “casual employee” under that traditional definition.
Do the various references to “casual employee” or “casual employees” in the WR Act affect the interpretation of “casual employees” in s.227 of the WR Act?
The provisions of ss.228(1) and 232(1) of the WR Act take the matter no further, simply providing for the statutory guarantee of annual leave to employees, other than “casual employees”.
Sections 178, 182, 185 and 186 of the WR Act are of some assistance. It is clear from ss.185 and 186 that an employee does not become a “casual employee” by reason of a payment of the relevant casual loading. Rather, the employee must first be a casual employee (however that is ultimately defined) to be entitled to the casual loading, either guaranteed or default, under ss.185 and 186 respectively. In defining various kinds of employees, and referring to particular kinds of employees, ss.178 and 182(1) of the WR Act are of some assistance also. Those sections indicate that the Parliament has considered, and where it has thought necessary to do so, specifically defined particular kinds of employees.
In s.264 the Parliament takes a “casual employee” and defines that “casual employee” as an “eligible casual employee” if certain things have occurred (that is, looking retrospectively at the previous 12 months), namely:
a)the employee has been engaged on a regular and systematic basis; and
b)for a sequence of periods of employment.
It is relevant to note that the definition of “eligible casual employee” looks backwards to what has happened to the employee, not how the employment relationship commenced. This reflects the approach of the Federal Court in Hamzy v Tricon International Restaurants and Another[41] whereby a person who commences as a casual without a firm advance commitment as to the duration of the employee’s employment, or the days or hours they will work, but after a period of time, in this case the 12 months specified by the Parliament, and where that employee’s work pattern has turned out to be regular and systematic for the periods of employment concerned, that employee is a casual employee for limited purposes. It is also relevant to note for present purposes that reference is made in s.264 of the WR Act not to a “period” of employment, but to “periods” of employment.
[41] (2001) FCR 78; [2001] FCA 1589.
Section 638 of the WR Act seeks to exclude casual employees engaged for a short period from certain minimum entitlements on termination.[42] However, that exclusion does not apply to casual employees, who like eligible casual employees for the purposes of parental leave, have been “engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months”.[43] Again, the Parliament takes the concept of a casual employee as traditionally defined and redefines it for particular purposes, namely the exclusion from certain entitlements under the minimum entitlements on termination, except where the casual employee turns out to be, again looking retrospectively, an employee who has become employed on a regular and systematic basis for a sequence of periods of employment.
[42] WR Act, s.638(1)(d).
[43] WR Act, s.638(4)(a).
In the Court’s view, the Parliament has not in ss.264 and 638 of the WR Act redefined what constitutes a “casual employee” under the traditional definition of that phrase, but rather qualified it, looking retrospectively at the employment where it has been on foot for a period of 12 months or more, but then only for certain purposes, and in particular, parental leave and minimum entitlements on termination. It is significant that the Parliament has not defined “casual employee” in a manner different to the traditional definition of “casual employee”, or qualified it (as it as done for parental leave and minimum entitlements on termination) in s.227 of the WR Act for the purposes of the guaranteed entitlement to annual leave. It would have been easy for it to do so, but it did not.
The qualified definitions of casual employee in ss.262 and 638 of the WR Act assume that the person concerned commences as a casual employee within the meaning of that phrase under the traditional definition of “casual employee”. Mr Williams’ case is clearly distinguishable in that regard. Based on the traditional definition of “casual employee” he did not, for reasons set out above,[44] commence employment as a casual employee.
[44] See paras.34-42 above.
Mr Williams was also not employed for a sequence of “periods” of employment. His employment commenced on the basis that there would be a single ongoing period of employment, and that he would work in accordance with a roster which was known and certain at the time of commencement. Subsequently, he did work for a single continuous period of employment (and Macmahon Mining accept that his service was continuous) and therefore there was not “a sequence of periods of employment” within the meaning of the qualified definitions of “casual employee” in ss.262 and 638 of the WR Act. Thus, even if Macmahon Mining are correct in their contention that s.638(11) of the WR Act reflects Parliament’s intention as to what constitutes a casual employee, Mr Williams does not meet that definition because he was only employed for a single period of employment, not a sequence of periods of employment over a period of 12 months or more.
The Court also notes that a person who commences employment on the basis that that employment is to be regular and systematic, but not full-time, will not necessarily be a casual employee, but may be a part-time employee.[45] Such a part-time employee would not be entitled to a casual loading under ss.185 and 186 because they would not be a casual employee.
[45] McGhie v Fremantle Lumpers Union (1937) 39 WALR 111 at 113 per Northmore CJ.
In those circumstances, the Court considers that the meaning of “casual employees” in s.227 of the WR Act reflects the definition of “casual employee” as traditionally defined, and set out above.[46] It follows, therefore, that Mr Williams was not a casual employee for the purposes of s.227 of the WR Act and there will be a declaration accordingly.
[46] See paras.29-33 above.
Defences
By way of defence, Macmahon Mining raises a number of additional matters:
a)that Mr Williams is estopped from claiming the benefit of the statutory guarantee of annual leave by reason of his agreement under the Contract of Employment to be paid a casual loading in lieu of paid leave entitlements;
b)that in any event, the amounts paid in respect of casual loading for paid leave entitlements can be set-off against any amount to which Mr Williams may be held to be entitled under the statutory guarantee of annual leave;
c)Macmahon Mining has paid the Flat Hourly Rate by reason of a common mistake as to the nature of the Contract of Employment, and that that common mistake justifies rectification by correcting the rate of pay of $40 per hour to one that is not inclusive of the casual loading; and
d)that Mr Williams has been unjustly enriched by the mistake about the effect of the Contract of Employment and ought make restitution to Macmahon Mining in respect of the casual loading.
Macmahon Mining also say that Mr Williams has not suffered any damage as a consequence of the payment of the casual loading to him because it is notorious that the casual loading is a minimum of 20% and that he consequently cannot prove any damage as a result of not having been paid for any accrued annual leave.
Estoppel
Macmahon Mining say that Mr Williams is estopped from denying that he agreed to being employed on the terms set out in the Contract of Employment and that his claim should not be allowed for that reason. Payne v Howison, an unreported decision of the Industrial Relations Commission of New South Wales in Court Session, is cited in support of that proposition. There are however more recent judgments of the Federal Court in relation to estoppel as it applies to statutory obligations and statutory guarantees of employee entitlements.[47] Those judgments are binding on this Court.[48] Those judgments make it clear that:
a)parties cannot contract out of a statutory obligation or statutory guarantee, other than to confer additional benefits; and
b)an estoppel cannot defeat a statutory obligation or statutory guarantee.
[47] McLennan v Surveillance Australia Pty Ltd (2005) 142 FCR 105; [2005] FCAFC 46; Regional Express Holdings Ltd v Clarke (2007) 165 IR 251; [2007] FCA 957; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250; [2002] FCA 1406 (“Givoni”); Metropolitan Health Service Board v Australian Nursing Federation (2000) 99 FCR 95; [2000] FCA 784.
[48] R v Casey; R v Smythe [1977] Qd R 132 at 134 per Wanstall SPJ, Douglas and Dunn JJ; Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 at 167 per Toohey J, 158 per Dawson J, and 125 and 129-130 per Brennan J.
In those circumstances, the assertion by Macmahon Mining that Mr Williams’ annual leave claim must be dismissed by reason of estoppel cannot be sustained.
Set-Off
The question then arises as to whether or not any sum of money paid as a casual loading to Mr Williams, and which can be identified as being “in lieu of paid leave entitlements” under the Contract of Employment, can be set-off against the monetary entitlement to be paid accrued annual leave on termination, arising from s.235(2) of the WR Act.
It is best to reiterate the relevant provision in the Contract of Employment:
The rate of pay is all inclusive and takes into account all responsibilities, disabilities, allowances and other factors associated with the work, location and environmental factors and includes payment for all hours necessary to undertake your rostered duties, and as a casual employee, a loading in lieu of paid entitlements. The rate includes compensation for any necessary shift, public holiday and weekend work.
The evidence of Mr Williams discloses that he agreed to be paid a loading in lieu of paid leave entitlements, including annual leave. That is reinforced by the Contract of Employment. There is no doubt, on the evidence, that the employer intended that the loading to be paid would be paid in lieu of paid leave entitlements, including annual leave. Thus, the parties appear to have turned their minds as to whether or not the payment to be made to Mr Williams might include remuneration allocatable to annual leave.[49] If not expressly, then certainly impliedly, the parties have allocated remuneration to cover annual leave entitlements, and which are capable, at least on their face, of being appropriated to the statutorily guaranteed entitlement to be paid accrued annual leave on termination.[50] The arrangement appears to have been entered into for the purpose of discharging Macmahon Mining’s obligations in respect of paid leave entitlements, including annual leave.[51] Thus, there appear to have been monies which the employer has either impliedly or expressly appropriated to meet a particular incident of the employment relationship, namely annual leave, and which can now be used by way of set-off against any entitlement that Mr Williams has to be paid annual leave.[52]
[49] Givoni at para.65 per Goldberg J.
[50] Givoni at para.64 per Goldberg J.
[51] Givoni at para.63 per Goldberg J.
[52] James Turner Roofing Pty Ltd v Peters [2003] WASCA 28 at para.44 per Anderson J (with whom Scott J and Parker J agreed at paras.52 and 68 respectively).
There will therefore be a declaration that Macmahon Mining is entitled to set-off any sum of money appropriated from the casual loading paid to Mr Williams in lieu of annual leave.
The Court notes that the casual loading does not specifically identify which leave entitlements it is being paid in lieu of, but by reason of the statutory guarantee of annual leave in s.232 of the WR Act, it must have been at least in lieu of that leave entitlement. That may give rise to a difficult issue of quantification in terms of the amount of money to be allocated out of the loading to the annual leave entitlement. That difficulty might well be compounded by the fact that the loading also includes compensation “for any necessary shift, public holiday and weekend work.” In the circumstances, the evidence is not such as to allow the Court to determine what sum might be allocated as a set-off in lieu of the annual leave entitlement. For that reason there will be an order that the parties confer with respect to that issue. If it cannot be resolved, it may be that the Court will have to hear further submissions as to the amount of any set-off.
Mistake
Macmahon Mining says that there is a common mistake justifying the rectification of the contract to give effect to its proper interpretation by correcting the rate of pay of $40 per hour to one that is not inclusive of the casual loading.
On the evidence, there is no dispute that the Contract of Employment accurately records the concluded agreement between the parties and what was the parties’ common continuing intention. In this case the words used were deliberately and definitely chosen to reflect what the parties had agreed. Where the parties use a particular form of words, intentionally, rectification is not possible, even where each is mistaken as to the meaning of that word or phrase.[53]
[53] Mander Pty Ltd v Clements (2005) WASCA 67 at paras.84-87 per McLure J; The Club Cape Schanck Resort Co Ltd v Cape Country Club Pty Ltd (2001) 3 VR 526; [2001] VSCA 2; RP Meagher, JD Heydon and MJ Leeming (Eds) Meagher, Gummow and Lehane’s Equity Doctrine and Remedies (4th Edn) (Chatswood: Butterworths Lexisnexis, 2002) pages 894-896, para[26-065] and cases there cited..
Macmahon Mining’s defence of mistake, and request for rectification of a contract, therefore must be dismissed.
Unjust enrichment
It follows that because the defence of mistake has failed, the defence of unjust enrichment must also fail.
Penalty and Damage
Because the amount of any entitlement to accrued annual leave on termination is uncertain, because of the uncertainty of the quantum of any set-off, it is not appropriate that the Court presently deal with any issue related to penalty or damage.
Conclusions
The Court has concluded that:
a)Mr Williams was not a “casual employee” for the purposes of s.227 of the WR Act;
b)Mr Williams was entitled to the statutorily guaranteed annual leave under s.232 of the WR Act, and to be paid for accrued annual leave on termination under s.235(2) of the WR Act; and
c)that any sum of money identifiably appropriated by Macmahon Mining to payment of annual leave entitlements can be set-off against Mr Williams’ entitlement to be paid accrued annual leave on termination of employment.
Otherwise, the defences of estoppel, mistake and unjust enrichment raised by Macmahon Mining fail.
The Court will order that the parties confer on the appropriate form of an order, if any, to reflect Mr Williams’ entitlement to be paid accrued annual leave upon termination of employment taking into account any set-off to which Macmahon Mining is entitled. It is therefore not appropriate to deal with penalty and damage at this time.
In the circumstances, costs will be reserved (if any costs are available in the matter), and the matter adjourned to a directions hearing at 9.45am on 12 June 2009.
I certify that the preceding eighty-six (86) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S. Gough
Date: 28 May 2009
CORRECTION
Amendment to paragraph 42 of the Reasons for Judgment:
Amended from:
Leaving aside, for the moment, the provisions of the WR Act, which are considered below, the Court therefore considers that Mr Williams’ employment relationship was that of a “casual employee” when considered in the light of the traditional definition of “casual employee”.”
To:
Leaving aside, for the moment, the provisions of the WR Act, which are considered below, the Court therefore considers that Mr Williams’ employment relationship was not that of a “casual employee” when considered in the light of the traditional definition of “casual employee”.”
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