WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES GREG LOGAN-SCALES, DEPARTMENT OF CONSUMER &EMPLOYMENT PROTECTION

CLAIMANT

-v-

TICKET XPRESS PTY LTD

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

HEARD WEDNESDAY, 20 APRIL 2005, WEDNESDAY, 20 JULY 2005, WEDNESDAY, 27 JULY 2005, WEDNESDAY, 14 SEPTEMBER 2005

DATE THURSDAY, 4 AUGUST 2005

CLAIM NO. M 295 OF 2004

CITATION NO. 2005 WAIRC 02787

CatchWords Sick leave, annual leave, forfeiture of annual leave by reason of misconduct, outstanding wages, accrual of sick leave and annual leave, cessation of employment, alleged failure to work out notice, lack of jurisdiction to determine counterclaim.

Result Claim allowed in its entirety.

Case(s) referred to in decision:

Myers v Viscount Plastics Pty Ltd [2003] SAIR Comm 25:

Fremantle Port Authority v MUA (1978) AILR 339

Case(s) also cited:

Robertson v Eden Bay Limited trading as Aust Rural (1991) 71 WAIG 1926

Representation 

Claimant  Mr. W Milward (of Counsel) instructed by the Department of Consumer and                                           Employment Protection appeared for the Claimant.

Respondent Mr A Klein, the Respondent’s Director, represented the Respondent

REASONS FOR DECISION

The Facts

1          The Claimant is and was at all material times an Industrial Inspector.  The Respondent is and was at all material times a Corporation incorporated in Victoria, which has its registered office at Sandringham, Victoria.  The Respondent’s directors are Anthony Janos Klein and his wife Amanda Ruth Klein.

2          The Respondent operates under different entities within the tourism industry.  One such entity is known as 26th Parallel.  The Respondent, trading as 26th Parallel, commenced operations in both Carnarvon and Exmouth by setting up offices in those locations.  In the early part of 2003 the Carnarvon office was established.  Those working within it and the Exmouth office were responsible to managers at the Respondent’s head office in Victoria.  From the evidence, the precise nature of 26th Parallel’s operations is somewhat unclear but it suffices to say that it was involved in the design and delivery of tourist services particularly for overseas tourists from Asia and North America visiting the Carnarvon and Exmouth regions.

3          On or about 31 March 2003, the Respondent appointed Ms Kathryn King as its Office Manager for the Carnarvon branch of 26th Parallel.  The method by which Ms King came to be employed by the Respondent is in dispute.  Ms King asserts that the process was relatively informal and that she attained the position without formal interview.  The Respondent, on the other hand, through each of its directors says that Mrs Klein formally interviewed Ms King prior to her appointment.  Mrs Klein testified that she met with both Ms King and her mother at which time the terms and conditions of employment were fully discussed.  Mrs Klein did not however, during the course of her testimony, specify what was actually discussed.

4          In any event it is not in dispute that Ms King was appointed to work on a full time basis as the Respondent’s Carnarvon Office Manager.  She was required to work a forty-hour week comprised of eight hours each day.  Ms King asserts that she worked from 9.00 am until 5.30 pm inclusive of a half hour unpaid lunch break each weekday.  Her salary package was $38,000 per annum consisting of a base salary of $34,000 plus a discretionary bonus of two economy airfares to the value of $4,000 once per year.  It was part of Ms King’s responsibilities to directly supervise about fifteen trainees working at the Respondent’s Carnarvon office engaged by the Respondent pursuant to a government traineeship scheme.

5          Ms King commenced working for the Respondent at its Robinson Street, Carnarvon office on 22 April 2003.  She assisted in setting up the office in anticipation of the arrival of trainees.  The trainees started working in the office in about the first week of May 2003.  Each trainee was required, in completing his or her training modules to work twenty hours per week in accordance with a roster prepared by Ms King.  The trainees could either work a morning or afternoon shift or a combination of both in any given week.  In the initial stages trainees were permitted to work two full days plus a half-day to make up their weekly hours, but that was later changed to require them to attend training each weekday.  In order to facilitate the payment of wages Ms King was required to collate information derived from the trainees’ time cards and to transmit the same to the Respondent’s accountant in Victoria.  That was done on a fortnightly basis.  Ms King was not required to submit a time sheet for herself given that she was paid by salary.

6          Leading up to Christmas 2003 the Respondent decided to close its Carnarvon operation from Monday 22 December 2003 until Monday 5 January 2004.  All staff members were required to take annual leave during such period and indeed took annual leave during that period.

7          On 21 January 2004 Ms King applied for 14 days “recreational leave” from March 2 until March 19, 2004.  The purpose for taking leave at that time was so that she could work as a Relief Manager at the Gateway Motel.  Ms King testified that she informed Mr Klein about her intentions and that he had no problem with it.  Indeed he approved her application for paid leave for that time.  Such approval was communicated verbally.  Mr Klein on the other hand asserts that he only approved two weeks leave with the remaining week to be taken on an unpaid basis.  There is no documentary evidence to support either version.  In any event it is the case that Ms King took leave and worked at the Gateway Motel during that period.  Whilst working thereat, Mr Klein attended upon her to discuss various matters, including the purchase of a block and the needs of trainees.

8          On Monday 22 March 2004 Ms King was due to return to work but could not do so because she was unwell.  She had flu like symptoms and accordingly informed the Respondent’s Carnarvon office that she would not be attending work that day.  She attempted to consult her doctor that day but could not see him because he was booked out but consulted him the following day.  Dr Howes diagnosed that she was suffering from a stress reaction and associated upper respiratory tract infection.  He prescribed her medication and issued a certificate declaring her to be unfit for work until 26 March 2004.  Immediately following her medical appointment Ms King attended the Respondent’s Carnarvon office in order to fax the medical certificate to the Respondent’s Melbourne office.  Having done so she left and returned to the Gateway Motel where she was then staying; “house sitting” pending the return of the Gateway Motel’s Manager who had been delayed in returning to Carnarvon.  Ms King testified that upon returning to the motel she went to bed.  She convalesced and did not do any work.

9          Mr Klein and Mrs Klein testified that they, during Ms King’s absence on sick leave, contacted Ms King at the Gateway Motel.  As a result of such contact they became highly suspicious about the veracity of Ms King being sick.  Indeed they were concerned about her bona fides.  They formed the view that Ms King was not sick but rather had claimed to be sick in order to facilitate her continued acting management of the Gateway Motel in the absence of its Manager.

10       It was Ms King’s evidence that during the period of her sick leave Mr Klein contacted her imploring her to attend an important meeting with a representative of Hertz.  Despite her being unwell she agreed to attend and did attend the meeting on Thursday 25 March.  Following the meeting she returned to the Gateway Motel to continue in her convalescence.

11       On Monday 29 March 2004 she returned to work for the Respondent.  She had been away a total of four weeks, three weeks on approved leave and one week on sick leave.  She completed a formal leave notification for the sick leave taken (exhibit 11) and submitted that to the Respondent.  Later Ms King noted that she had not been paid for that sick leave.  There was contention concerning payment of the sick leave.  The Respondent through its accountant formed the view that a medical certificate had not been provided and therefore refused to pay Ms King sick leave entitlements.  Ms King asserted that a medical certificate had been sent and therefore maintained her claim for sick leave.  In the end Ms King was not paid for the period 23 to 26 March 2004.

12       In late April 2004 Ms King sent to Mr Klein an email in which she informed him that she was resigning from her employment with the Respondent.  She gave two weeks notice of her resignation and informed the Respondent that her last day of work would be Tuesday, 11 May 2004.  Her letter of resignation (exhibit 13) is not dated however by way of inference, having regard to the period of notice and the nominated final day of work, it is possible to conclude that her resignation was tendered on 28 April 2004.  By facsimile dated 3 May 2005 (exhibit 14) Mr Klein acknowledged receipt of the resignation received by him on Thursday, 29 April 2004 and confirmed that Ms King’s last day of work for the Respondent would be the Wednesday week (12 May 2004).

13       Ms King testified that following her resignation Mr Klein telephoned her and asked her to work out the final two weeks of her employment at half hours to which she agreed.  Consequently she was to work the same hours as the remaining trainees.  It later transpired that the Respondent decided to close its Carnarvon office and the remaining two trainees were, on 3 May 2004, offered alternate options including relocation or redundancy in light of the closure.  Each accepted a redundancy package on or about 4 May 2005.

14       On 3 May 2004 Ms King wrote to Mr Klein (exhibit 26) informing him that she believed that she was entitled to sick leave and holiday entitlements which had not been paid.  It is not known whether that letter was sent on the day it was written or whether it was sent on some later date.  Further its mode of delivery is not known despite reference within the letter to facsimile transmission.  What the letter does do however is to make it clear that by early May 2005 Ms King and her employer were in substantial dispute.  It is evident from the correspondence passing between them at about that time that the employment relationship had broken down.

15       On or about 5 May 2005 and following the departure of the last two trainees Ms King in accordance with Mr Klein’s instructions packed up all the staff files and transmitted the same to the Respondent’s Melbourne office by registered mail.  She also facilitated a quotation for the packing and removal of the remaining office equipment.  Having done that there was nothing else for her to do.  She accordingly sent Mr Klein an email (exhibit 15) in which she said:

“Dear Tony

Please be advised that I still have not been paid.

Also I have a doctors letter stating that I am not to be lifting computers or heavy boxes.

I have sent you 2 boxes of staff information by registered mail.  All other equipment is still here R & L couriers will be giving you a quote on packing and shifting the rest of the gear.

Please be advised that I will be leaving the company today.  There are no trainees in and nothing to do everything is secured and the building will be locked.”

16       Subsequently Ms King was contacted by Sandy, an employee of the Respondent’s Exmouth office, advising that Mr Klein had instructed her to collect all “the gear” and take it to Exmouth.  It was arranged that the gear be picked up on Sunday, 9 May 2004.  Sandy turned up on that Sunday and picked up the gear.  Ms King asked her to record what she took but Sandy did not do so because she was in a hurry to get back up to Exmouth before it got dark.  Thereafter Ms King returned the office keys to the owners of the office namely the Shire of Carnarvon.

17       Given that Ms King was not paid subsequent to 19 April 2004 she made a complaint to the Department of Consumer and Employment Protection.  On 14 June 2004 Cheryl Greenough, an Industrial Inspector, wrote to Mr Klein informing him of the alleged non-payment of correct entitlements in accordance with the Minimum Conditions of Employment Act 1993 (the MCEA).  The parties thereafter entered into discussion concerning the matter but have not been able to resolve the dispute.

The Claim

18       The Claimant claims the following:

1. Outstanding wages of $523.07 for the four days sick leave taken from 23 March 2004 to 26 March 2004 inclusive as prescribed by section 19(1) of the MCEA; and

2. Outstanding wages of $944.00 for the pay period ending 28 April 2004 as prescribed by section 10 of the MCEA; and

3. Outstanding wages of $112.10 for the pay period ending 12 May 2004 as prescribed by section 10 of the MCEA; and

4. Accrued annual leave of $811.36 due on the cessation of her employment on 5 May 2004 as prescribed by section 24(2) of the MCEA.

Response

Sick Leave

19       The Respondent asserts that sick leave accrues each financial year from 1 July to 30 June following and that pursuant to section 21 of the MCEA any untaken leave from the previous year does not carry over.  Accordingly Ms King did not have a sufficient sick leave entitlement to cover the period taken.

20       Further and or in the alternative the Respondent asserts that Ms King was not sick during the material period.  In that regard the Respondent asserts that Ms King worked at the Gateway Motel during the period of her alleged illness.

21       Further and or in the alternative the Respondent asserts that a medical certificate was not provided by Ms King and that she failed to prove her entitlement as is required by section 22 of the MCEA.

Outstanding Wages

22       The Respondent asserts that there is no evidence to prove that Ms King worked or attended the workplace during the pay periods ending 29 March 2004 and 12 May 2004.

23       The Respondent contends that there is no documentary evidence available or discovered as a consequence of Mr Logan-Scales’ investigation to support the contention that Ms King worked for the Respondent during the relevant period.

24       Further the Respondent submits that the claim for outstanding wages is a recent invention given the failure by Ms King and the Industrial Inspector to specifically mention the same in correspondence leading up to the institution of the claim.

Accrued Annual Leave

25       The Respondent asserts that Ms King accrued only 140 hours of annual leave and not the 157.77 hours claimed.  The Respondent says it has paid Ms King 108.8 hours of her accumulated entitlement.  With respect to the balance the Respondent asserts that because Ms King did not work out her two week’s notice that she was terminated for serious misconduct as provided for by section 170CM of the Workplace Relations Act 1996.  Given that Ms King was dismissed for misconduct, section 24(3) of the MCEA applies in disentitling Ms King to accrued annual leave.

26       Further the Respondent contends that Ms King had only completed 48 weeks of work and had not completed a year’s work as is required under the MCEA.

Counterclaim

27       By way of counterclaim the Respondent asserts that Ms King only worked 7.5 hours per day amounting to 37.5 hours per week rather than the 40 hours per week she was obliged to work.  Consequently she was overpaid $1,815.00.  The Respondent seeks to set off such overpayment against any liability it might incur in the event that the Court finds against it in respect of this claim.

Determination

Counterclaim

28       I deal firstly with the Respondent’s counterclaim.  The counterclaim is incompetent.  The enforcement of the MCEA is governed by section 7 of the Act.  Relevantly section 7(c) provides:

“A minimum condition of employment may be enforced –

(c)   where the condition is implied in a contract of employment, under section 83 of the IR Act as if it were a provision of an award, industrial agreement or order other than an order made under section 32 or 66 of that Act.”

29       The IR Act is defined in section 3 of the MCEA to mean the Industrial Relations Act 1979 (the IR Act).

30       There is no provision of which I am aware within the MCEA or the IR Act which facilitates, by way of counterclaim in an action for enforcement pursuant to section 83 of the IR Act, the recovery of wages allegedly over paid.  Indeed this matter demonstrates the nonsense of such given that the counterclaim is purportedly made against the Industrial Inspector.  He was not the Respondent’s employee and cannot in fact or in law be the subject of the counterclaim.  The Respondent is misguided in its counterclaim.  This Court lacks jurisdiction to consider and determine the counterclaim.  Accordingly the counterclaim must, and will be, struck out.

Outstanding Wages

31       The Respondent asserts that the claim for outstanding pay is a matter of recent invention.  A premise for such contention is that Industrial Inspector Greenough in her letter dated 14 June 2004 to Mr Klein made no mention of outstanding pay.  Such premise is erroneous because in her letter Industrial Inspector Greenough said that what needed to be addressed was:

“(the) non payment of correct entitlements in accordance with the Minimum Conditions of Employment Act”.

32       That statement, in my view, clearly encompasses outstanding wages.  The failure by the Respondent to pay her wages was at that time a matter of concern for her as it had been leading up to her complaint.  Indeed Ms King in her email to the Respondent dated 5 May 2004 (exhibit 15), which I accept was sent, expressly stated that she had not been paid.  Ms King was an impressive witness and I have no difficulty in finding that she is a witness of truth.  Her evidence concerning the transmission of that email and indeed on other issues is entirely accepted.

33       I accept Ms King’s evidence that she worked for the entire period from her return from leave on 29 March 2004 until her employment ended.  In my view her evidence in that regard is not only supported by the viva voce evidence of Mr Grayson, which I also accept, but also by the documentary evidence.  For example the email from Mr Klein to Ms King dated 28 April 2004 (exhibit 12) which contains certain instructions is consistent with her ongoing performance of the duties of an office manager.  Other correspondence such as the email sent by the Respondent to Ms King on 3 May 2004 (exhibit 14) is also reflective of the fact that Ms King exercised a managerial role, was working in that capacity and was expected, by the Respondent, to continue in that capacity until Wednesday, 12 May 2005.  As mentioned earlier, Mr Grayson’s evidence is supportive of a finding that Ms King worked for the Respondent on a continual basis through to the time he left.

34       The Respondent’s contention that Ms King did not work for the period claimed is against the weight of the evidence and is fanciful.  The fact that job cards were not found by Mr Logan-Scales in his investigation to support Ms King’s contention is not determinative.  Ms King was not required to keep details of the hours she worked; being consistent with her salaried position.  The fact that Mr Logan-Scales was unable, in his investigations, to find any other job cards for the material period does not in any way undermine Ms King’s testimony as supported by Mr Grayson, and the documentary evidence supporting Ms King’s claim.

35       I find that Ms King worked consistently for the Respondent.  I accept her evidence that when she took leave in March 2004 it was paid leave for the entire period.  I reject Mr Klein’s assertions that leave was granted on the basis of two week’s paid leave and one week’s unpaid leave.  I do so because Mr Klein regarded Ms King to be a good and efficient employee.  He told the Court in his evidence that he abides by the philosophy that it is important to hang on to good employees even at a cost.  He expressed the view that it might even be worth overlooking a minor act of stealing to ensure that an otherwise good employee remained. Such necessitates flexibility to ensure the retention of good employees.  That self professed flexible approach is entirely inconsistent with the purported refusal to grant paid leave for the entire leave period in March.  Given that Mr Klein regarded Ms King to be an excellent employee it is most improbable that he would have rejected her application for paid leave for the entire period.

36       I find that Ms King, subject to absences on approved leave and sick leave, worked for the Respondent for the entire period between 22 April 2003 and 5 May 2004.  Her opportunity to work thereafter was frustrated by the effective closure of the Respondent’s operations in Carnarvon.  To the extent that she was obliged to do anything after that date she did, on 9 May 2004, facilitate the removal of “gear” from Carnarvon to Exmouth.  There was nothing improper or inappropriate in what Ms King did.  She did not abandon her work but rather was frustrated in her attempts to work by the Respondent’s actions.  Accordingly there was no misconduct on Ms King’s part.  Indeed prior to responding to this Claim it was never suggested in writing or otherwise that Ms King had been terminated for misconduct.  There was no protest at the material time about the alleged abandonment.  It is obvious that the Respondent’s plea of misconduct is one of recent invention aimed at defeating the claim.

37       Ms King was, in Mr Klein’s view, a good and efficient employee who he highly regarded.  It is the case that Ms King was a conscientious employee who worked from 9 am to 5.30 pm Monday to Friday.  I am satisfied on Ms King’s evidence as supported by Mr Grayson that she worked those hours.  Mr Grayson was in a position to note her daily work hours particularly during the early stages of his traineeship.  I accept that Ms King only ever had a half hour lunch break each day.  It is the case therefore that she worked eight hours per day as required.  The Respondent has seized on the apparent mistake contained in Ms King’s leave notification slips dated 17 September 2003 and 30 January 2004 to support its contention.  In my view those documents were simply incorrectly completed.  The memorandum of 19 October 2003 (exhibit 20) regarding the company employment policy was never put to Ms King.  It was unfairly raised in the Respondent’s case and accordingly carries little weight.  In any event it is readily apparent therein that the work times referred to in the roster options were applicable to trainees only and not to Ms King.

38       Finally I accept that the calculations contained in paragraphs B and C of exhibit 22, as prepared by Mr Logan-Scales are correct and that Ms King is entitled to recover those amounts sought.

Sick Leave

39       The evidence before the Court in the form of an affidavit from Dr Howes establishes that Ms King was sick and was unfit for work from 23 March to 26 March 2004.  Indeed it is obvious that she was also sick on 22 March 2004.  The fact that Ms King was sick at that time is also supported by Mr Grayson who testified concerning his observations of Ms King.  He was of the view that she was genuinely sick.  Indeed his evidence is also supportive of Ms King’s contention that she left her sick bed at Mr Klein’s request in order to attend a meeting on 25 March 2004.  Mr Klein himself testified that when he spoke to Ms King at the material time she sounded sick.

40       Deputy President PJ Hampton said in Myers v Viscount Plastics Pty Ltd [2003] SAIR Comm 25:

“Indeed, the approach of the Western Australian Commission in Court Session in Fremantle Port Authority v MUA (1978) AILR 339 as cited by the applicant suggests that as a general rule the production of a medical certificate, prima facie meets the standard of proof that an employee is sufficiently ill not to attend for work.  The Bench in that matter also recognised that such a certificate could be challenged where the employer was in possession of facts not known to the Medical Practitioner concerned.

In my view, there may well be circumstances where an employee’s total reliance upon a medical certificate is misplaced.  Should the applicant have lied to the Medical Practitioner about his symptoms or the nature of his work, or subsequently undertaken activities patently inconsistent with the alleged illness or injury, then in my view the applicant may well have committed misconduct destructive of mutual trust in the employment relationship.  Using my analogy of the sprained ankle, should an employee feign that injury and immediately then play vigorous sport of some description, that would raise serious issues as to the conduct of that employee in claiming sick leave even on the basis of the medical certificate obtained.  In this case however, I am not persuaded that the applicant misled the Doctor.  I am also not persuaded that the applicant’s subsequent activities, whilst certainly raising concerns, were such as to cast sufficient doubt upon the illness and the medical certificate so as to lead to the conclusion that the applicant misled or defrauded his employer.”

41       In the present matter the evidence overwhelmingly dictates that Ms King was sick.  There is no evidence to support that she otherwise worked for the Gateway Motel during that period of sickness.  The evidence of Ms Lambert, a housemaid employed by the Gateway Motel, is strongly suggestive of the fact that Ms King did not work for the Gateway Motel during the period 23 to 26 March 2004.  Having said that the fact that Mr and Mrs Klein spoke by telephone to Ms King at the Gateway Motel during the period she was away from work when purportedly sick is indisputable.  However that alone does not, and cannot, establish that she was working at the Gateway Motel and that she was not genuinely sick.  They did not see her work.  They have made assumptions based on circumstantial evidence.  Such evidence does not undermine Ms King’s contention that she did not work during that period.  The evidence given by Mr and Mrs Klein does no more than establish the fact that Ms King was at the Gateway Motel between 23 and 26 March 2004 inclusive (which is admitted in any event) and that they spoke to her.

42       I accept also that Ms King faxed a medical certificate to the employer on 23 March 2004.  I accept that exhibit 10 is a true copy of such document.  The apparent inconsistency between the date of the certificate (23 March 2004) and the date of facsimile transmission of that certificate (19 March 2004) is explained by the wrong date being programmed into the facsimile machine.  In my view Ms King provided the employer with evidence that would satisfy a reasonable person as to her entitlement to paid sick leave.  Section 22 of the MCEA has been complied with.

43       With respect to the Respondent’s contention that sick leave is calculated on a financial year basis; that is simply not the case.  Sick leave entitlements are calculated from year to year on the anniversary of the commencement of employment.

44       Given what I have said above and in light of the fact that she does not otherwise fall within the exceptions in section 20 of the MCEA, Ms King is entitled to that sought as is reflected at paragraph A of exhibit 22.  I accept Mr Logan-Scales’ evidence in that regard.

Accrued Annual Leave

45       I accept that Ms King worked from 22 April 2003 until she ceased to work on 5 May 2004.  I accept that she accumulated 157.77 hours of leave.  She was paid for 108.08 hours leaving a balance of 49.69 hours payable upon termination.  She should have been paid for those hours at the rate of $16.346 but was not.  I accept that the calculations set out in paragraph D of exhibit 22 are correct.

46       Given my earlier finding that Ms King was not terminated for misconduct it follows that she is entitled to the amount claimed.

Result

47       I allow the claim in its entirety.   I find that the Respondent has committed four separate breaches of the MCEA as alleged by failing to pay Ms King, amounts totalling $2,391.28.

G Cicchini

Industrial Magistrate