eee100315644

WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATE’S COURT

PARTIES JILLIAN MICHELE VILLANOVA

CLAIMANT

 -v-

 BALWA PTY LTD T/AS 7 MILE INN

RESPONDENT

CORAM MAGISTRATE G CICCHINI IM

DATE  WEDNESDAY, 19 FEBRUARY 2003

CLAIM NO M 206 OF 2002

CITATION NO. 2003 WAIRC 07761

_______________________________________________________________________________

Representation

Claimant Mr P Mullally as agent

Respondent Ms J Auerbach of counsel

_______________________________________________________________________________

Reasons for Decision

Background

1         The Claimant was at all material times an employee of the Respondent.  She was employed by the Respondent as a bar attendant working for it at its tavern known as the 7 Mile Inn.  The Claimant commenced working for the Respondent on 3 August 1998.  Her employment ceased on 27 May 2002.  The employment relationship for part of that period (3 August 1998 to 30 April 2001) was subject to the Hotel and Tavern Workers Award 1978 (the Award).  The balance was subject to a workplace agreement.

The Claim

2         The claim relates to the period 3 August 1998 to 27 May 2001 and is brought pursuant to the Award.  The applicability of the Award to the employment relationship during that period is not in issue.  What is in issue is whether the relationship was one of casual employment or, alternatively, part-time employment.

3         The Claimant contends that she was at all material times a part-time employee as defined in the Award.  The Respondent, on the other hand, contends that the Claimant was at all material times a casual employee as defined in the Award.

4         The Claimant alleges that she was not paid for annual leave not taken or for public holidays that occurred during the relevant period.  Accordingly, she seeks to recover $3,672.24 with respect to unpaid annual leave and $1,626.40 with respect to unpaid public holidays, totalling $5,298.64.

5         The Respondent contends that the Claimant is not entitled to the amounts claimed because the evidence dictates that the nature of the relationship was a casual one.  In that regard the Respondent points to the fact that the Claimant worked varying hours each week depending on the Respondent’s business needs and the Claimant’s availability for work.  Further, it is submitted that the Claimant was engaged as and paid as a casual.  It was clear to her that her rate of pay included a loading to compensate for entitlements foregone by the nature of her engagement.  That was not only well known by the Claimant but was accepted by her as exemplified by the fact that she did not seek payment of annual leave or holiday pay during the currency of her employment.

6         The Respondent argues that if it is found that the Claimant was a part-time employee then any amount paid to the Claimant in excess of the Award entitlement should be set-off against the Award entitlements.

The Facts

7         The factual issues in this matter are, in the main, not in contention.

8         The Respondent took over the business (7 Mile Inn) from Tony Villanova, a cousin of the Claimant’s father.  Prior to the Respondent’s acquisition of the business the Claimant had been working at the tavern as a bar attendant employed on a casual basis.

9         When the Respondent took over, nothing changed in that regard.

10     Sometime relatively soon after the Respondent acquired the business, the Claimant was offered a choice of shifts in order to entice her to remain working for the Respondent.  That occurred in circumstances where she was threatening to leave her employment in sympathy with a work colleague who had had her employment terminated.

11     In consequence of the offer put to her, the Claimant agreed to work for the Respondent each day shift, Monday through to Saturday.  Later she dropped Saturday work and worked only Mondays through to Fridays inclusive.

12     She worked throughout the material time within the Sports Bar of the establishment.  Her work times were rostered by the Respondent’s director, Ms Ellenson, taking into account the Claimant’s requirements.  Although the rosters were set, there was a fair degree of flexibility.  Often the Claimant would swap shifts with other employees either on account of her own needs or alternatively on account of the other employees’ needs.  The Respondent was not averse to that arrangement.  Indeed, that conduct was accepted so long as the employees, between them, ensured that the bar was adequately staffed.  Accordingly, the Claimant did not necessarily work in accordance with her roster, although in the main, she did.

13     If the Claimant wanted time off then, except in cases of sudden onset of illness, she would have to give the Respondent substantial notice in advance.  The Respondent would not object to the Claimant taking such leave provided that sufficient time was given to organise a replacement.  Any time taken off as agreed to or, alternatively, not worked on account of sickness was not paid. The Claimant testified that the bar was usually closed on a public holiday with the exception of the early part of her employment with the Respondent.  When open on a public holiday she worked.  When the bar was not open she did not work and did not receive any payment.  The Claimant said that she was not paid for 19 public holidays that occurred during the material period of her employment.

14     The Claimant testified that she was engaged as a casual, paid as such and that she knew she was not entitled to paid leave.  She said that as far as she knew there were no part-time or full-time positions available within the hospitality industry.  That is why she proceeded on the basis that she did.

15     The documentary evidence before the Court together with the viva voce evidence given by the Claimant establishes that her hours of work were reasonably regular.  She usually started work at 10.00 am or 11.00 am and finished work at 5.00 pm or 6.00 pm.  She generally had a half hour lunch break between 2.00 pm and 2.30 pm.  Having said that, I acknowledge that there was some variation to that regime.

16     A perusal of exhibit 10, being the summary of hours worked and payments made, illustrates that for the period the week ending 10 August 1998 through to the week ending 30 April 2001, the Claimant worked less than 20 hours per week only on 8 occasions and in a number of instances, only marginally less.  In the main she worked in the region of about 30 hours per week.

17     It is obvious that this was the Claimants only job and that she expected to work in that job on an ongoing basis.  Indeed, the Respondent expected her to continue working on an ongoing basis.

18     In that regard Ms Ellenson confirmed that the Claimant did more work than anyone else and it took a fair bit of organising to cover her each time she took leave.  It was for that reason that she would normally receive at least two week’s notice of the Claimant’s intention to take leave.

19     It is clear that the Claimant was the mainstay of the Respondent’s bar operations.  She did more hours than other staff and the Respondent relied upon her.  The Claimant was considered to be reliable and could do the job without supervision.  There was an expectation on Ms Ellenson’s part that the Claimant would present herself for work each week in accordance with the roster.

Determination

Casual or Part-time?

20     I am called upon to determine whether the Claimant was a part-time employee and, therefore, entitled to unpaid award entitlements, albeit that she was engaged as a casual and paid as such.

21     Clause 11(1) of the Award defines “casual employees” as follows:

(1)  A casual employee shall mean an employee engaged and paid as such and whose employment may be terminated by either the employer or the employee giving not less than 1 hours notice or the payment or forfeiture, as the case requires, of 1 hours pay.

22     “Part-time employees” are defined in Clause 12(1) of the Award.  It provides:

(1)  A part-time employee shall mean an employee who, subject to the provisions of clause 8.-Hours, regularly works no less than twenty ordinary hours per fortnight nor less than three hours per work period.

23     There can be no doubt that, on the evidence, it has been clearly established that the Claimant regularly worked no less than twenty hours per fortnight nor less than three hours per work shift.  The evidence clearly establishes that she falls within the definition of “Part-time employees” found in clause 12(1) of the Award.  Can it, however, be said that she also falls within the definition of “casual employees” as defined in clause 11(1) of the Award?  In that regard the evidence clearly dictates that she was engaged and paid as a casual, but was it the case that she could be terminated by the giving of 1 hour’s notice or the payment or forfeiture of 1 hour’s pay?  The evidentiary material before the Court does not specifically address that issue.  What it does do, however, is demonstrate the true nature of the relationship between the parties as is evidenced by the dealings between them.  Such is necessarily considered to determine whether the claimant falls within the Award definition of “casual employees” (see Squirrell v Bibra Lakes Adventure World Pty Ltd 64 WAIG 1834 per Fielding C at page 1835).  The fact that the Claimant considered herself to be a casual and that she was paid as such is not determinative of the issue.  As the Full Bench of the Western Australian Industrial relations Commission said in Serco (Australia)Pty Ltd v John Joseph Moreno 76 WAIG 937 at 939 in respect of the definition of “casual employee”, that (the parties):

“…cannot by the use of a label render the nature of a contractual relationship something different to what it is (see Stewart v Port Noarlunga Hotel Ltd  (op cit) per Haese DPP at pages 5-6).

Certain indicia may be indicative of the nature of the contract, but they are not determinative, taken alone.  These may include the classifying name given to a worker and initially accepted by the parties, the provisions of the relevant award, the reasonable expectation that work would be available to him, the number of hours worked per week, whether his employment was regular, whether the employee worked in accordance with a roster published in advance, whether there was a reasonable mutual expectation of continuity of employment, whether the notice is required by an employee prior to the employee being absent on leave, whether the employer reasonably expected that work would be available, whether the employee had a consistent starting time and finishing time, and there may be other indicia”.

24     In this case it is indisputable that there was a reasonable and mutual expectation of continuity of employment.  The fact is that the Claimant was, it seems, the most senior and important member of the bar staff.  She was a person upon whom the Respondent relied quite heavily.  When she took leave, substantial notice was required so that the Respondent could adequately replace her.  There is no way, in those circumstances, that one could conclude that the relationship was terminable on one hour’s notice, payment or forfeiture as the case may be.  That being the case, the Claimant does not fall within the definition of “casual employees” as provided by the Award.  She does, however, clearly fit within the definition of “part-time employees”.  As stated previously, the evidence supports such a finding.  For the sake of completeness I mention that what His Honour said in CPSU v State of Victoria (2000) FCA 14 has no application here.  In that case his Honour was dealing with the common law situation in the absence of award proscription as to the meaning of “casual” and “part-time employees.”  In this case the Award specifically proscribes meanings to those terms.

25     I find that the Claimant was a part-time employee as defined in clause 12(1) of the Award.

Is the Claimant Entitled to the Award Benefits Claimed? - Set-Off

26     The Claimant was at all material times paid a casual rate of pay.  That rate included a loading which took into account benefits that would ordinarily be payable but which were not paid on account of the Claimant’s perceived status as a casual employee.  The fact that the Claimant was paid at the casual rate provided by the Award is reflected in the documentary evidence.  An example of that is to be found when exhibit 2 is cross-referenced with exhibit 5.  The Award (exhibit 5) indicates that the rate for a casual Bar Attendant Category 1 with effect from the first pay period commencing on or after 28 July 1998 was $12.85 per hour.  The Claimant was in fact paid that rate at that time.  The applicable hourly rate for non-casual employees falling under the same classification at that time was $10.38.

27     It is obvious, when the Award is read as a whole that on its proper construction the loading paid to casual employees must necessarily take into account unspecified benefits foregone by virtue of the casual nature of the employment.  In this case, the Claimant was consistently paid, on a weekly basis, a much higher hourly rate of pay than she would have been if she were correctly classified as a part-time employee.  Having said that, I recognise that the payments received by the Claimant were not specially paid for the purposes of annual leave or for public holiday pay.  The payment in each instance was made for one purpose only that being in consideration of the hours worked by the Claimant as a casual employee.  The payment had no other purpose.

28     Having said that, is the Claimant entitled to payment of annual leave and holidays as claimed?  In my view the answer is yes.  I say that notwithstanding that the effect of that might be seen as double dipping given that she has already received regular weekly payments which comprised a loading.  Although seemingly harsh on the employer that approach is supported by the authorities.  In particular I have regard to what the Full Bench of the Western Australian Industrial Relations Commission had to say in AFMEPKIU v Centurion Industries Ltd 77 WAIG 319.  In that case, the employer paid a casual rate of pay to an employee who was not a casual but rather a permanent employee.  Such an amount was in excess of the prescribed amount under the relevant award in that case.  However, the respondent employer did not pay to its employee his specific award entitlements for public holiday pay, annual leave and notice upon termination.  To some extent it can be seen that the factual circumstances in that case are not dissimilar to this.  At first instance, the Learned Magistrate allowed the employer to say that the payments made at a casual rate could be treated in satisfaction of specific award entitlements.  On appeal, the Full Bench held, however, that that could not be done because the payments were not made for the purpose of compliance with the relevant award provision but rather as a wage payable to a casual employee.  His Honour President Sharkey said at page 319:

Further, the contract of employment did not contemplate any liability for the proper award entitlements, and payments made under it for other agreed purposes could not be retrospectively applied in satisfaction of liability under the award (see Jose v Geraldton Resource Centre Inc (op cit) (FB)).  Put another way, the employer cannot now claim to have applied the monies paid to Mr Coci to satisfy award obligations when the monies were specifically paid for other purposes.  Further, the respondent could not be freed from or discharged from its liability or from its obligation to pay amounts for annual leave , notice and public holidays  by reason of a contract which it entered into whereby it purported to undertake obligations other than its award obligations ( see Jose v Geraldton Resource Centre Inc (op cit) (FB) and s.114 of the Industrial Relations Act 1979 (as amended) ).

29     Payments made for a particular purpose cannot logically ex post facto be attributed to another cause or purpose.  Thus the payment of a wage in excess of the Award does not relieve an employer from the obligation to make a further different payment of a different kind under the Award (see Pacific Publications Pty Ltd v Cantlon (1983) 4 IR 415 and also Bradmill Industries Ltd v Shadbolt (1984) AILR 416; cf. Ray v Rodano (1967) AR 471).  In this case, however, the payment of loading was impliedly made in contemplation of the payment of a “casual rate” of pay and no more.  In my view, given the factual circumstances of this case, the situation contemplated by His Honour Olney J in Silberschneider v MRSA Earthmoving Pty Ltd 68 WAIG 1004 does not arise. 

30     Accordingly, I find that the totality of the loading received by the Claimant cannot operate to set-off and thereby extinguish the totality of the amounts claimed.

Result

31     The result is that there have been breaches of clauses 17 and 18 of the Award and that the Claimant is entitled to recoup her entitlements thereunder.  I accept the proper calculation of the Claimant’s entitlements is as reflected in the document entitled “Calculations of Claim” submitted by the Claimant during the course of the hearing.  The Respondent, with respect to the accuracy of the same, took no issue.  I accordingly adopt those calculations.  The calculations are made on the basis that the applicable hourly rate as at 30 April 2001 was $11.26 equating to a daily rate of $85.60.  That is taken from the then applicable fortnightly rate of $856.00.  The Claimant’s entitlement to proportionate annual leave may be calculated as follows:

• Total fortnights worked = 71.5
• Total hours worked = 4212.5
• Average hours per fortnight worked (4212.5 ÷ 71.5) = 58.92
• Proportion of fortnightly hours (58.92 ÷ 76) = 0.78
• Total period worked = 2.75 years
• Annual leave days due (0.78 x 20 x 2.75) = 42.9
• Amount payable (42.9 x $85.60) = $3672.24

32     With respect to public holidays the Claimant cannot recover with respect to those days worked, given that she was paid for the same.  When she worked those days she was paid penalty rates for having done so.  On the Claimant’s own evidence (see exhibit 10) no claim can lay for the following public holidays:

• Queens Birthday 1999
• Labour Day 2000
• Anzac Day 2000
• Anzac Day 2001

33     Further, a perusal of exhibit 2 demonstrates that the Claimant also worked and was paid penalty rates for the following holidays:

• Labour Day 1999
• Anzac Day 1999
• Foundation Day 1999

34     Accordingly, there must be a deduction of 7 days from the total of 19 public holidays claimed.  The total payable, therefore, with respect to public holidays is 12 days at $85.60 totalling $1027.20.  It follows that the amount recoverable by the Claimant with respect to both heads of claim is $4699.44.

35     I will now hear from the parties as to the consequential orders to be made.

G Cicchini

Industrial Magistrate