WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2014 WAIRC 01059

DELIVERED : WEDNESDAY, 24 SEPTEMBER 2014

FILE NO. : M 117 OF 2013

CLAIMANT

AND

Midwest Auto Group Pty Ltd (ACN 124 354 721)

RESPONDENT

Catchwords : Small Claim as provided for in section 548 of the Fair Work Act 2009; Claim for $9,963.17, plus interest, for unpaid wages; Alleged contravention of section 45 of the Fair Work Act 2009; Alleged non-compliance with the Vehicle Manufacturing, Repair, Services and Retail Award 2010.     

Legislation : Fair Work Act 2009     

Instruments : Vehicle Manufacturing, Repair, Services and Retail Award 2010 [MA000089]

Result : Claim not proven

Representation

Claimant : Mr Luke Jones, in person

Respondent : Mr R Gifford of the Motor Trade Association of WA (Inc.), by leave, appeared for the Respondent

REASONS FOR DECISION

Background

1         By written agreement dated 5 March 2010, Midwest Auto Group Pty Ltd (ACN 124 354 721 (the Respondent) employed Luke Terrence Jones (the Claimant) to work as a vehicle salesperson at its Geraldton car yard to commence on 8 March 2010.  The Claimant thereafter remained in the Respondent’s employment until 24 February 2012.

2         The written agreement contained provisions with respect to the Claimant’s remuneration.  Those provisions provided inter alia that:

• he would be paid a retainer of $26,000.00 per annum, inclusive of superannuation; and
•  he would be paid a commission on :
  • all vehicles which he sold that were delivered,
  • aftercare products he sold, and
  • any finance contract written up as a consequence of his sale.

3         Notwithstanding those contractual arrangements as to remuneration, the Respondent was nevertheless obliged, by section 45 of the Fair Work Act 2009 to pay the Claimant his minimum weekly wage entitlement in accordance with the applicable Modern Award, being the Vehicle Manufacturing, Repair, Services and Retail Award 2010 [MA000089] (the Award).

4         The weekly amount payable by way of retainer was below the applicable weekly minimum wage.  Accordingly, commissions earned by the Claimant were added to the retainer payable so as to satisfy the Respondent’s obligation to pay him the minimum weekly wage required by the Award.

5         Where commission had not been earned and payable during the particular weekly pay period, the Respondent would “top up” the retainer, so that the Claimant was paid the minimum weekly wage prescribed by the Award.  The Respondent later clawed back the “top up” payments made from the Claimant’s commissions subsequently earned.  I was informed by the Respondent’s Manager that such is in keeping with industry practice. I observe that there appears to be no apparent contractual or other legal foundation for that practice.

6         The Respondent concedes that during the Claimant’s employment, it was obliged by Clause 33.4 (within Clause 33 – Classification and minimum weekly wages) of the Award,  to pay him the following weekly minimum wage:

• 8 March 2010 to 6 September 2010 - $603.90 per week (Level 4);
• 7 September 2010 to 30 June 2011 - $663.60 per week (Level 6); and
• 1 July 2011 to 21 September 2011 - $686.20 per week (Level 6).

7         It appears from the available evidence (see exhibit 6), that the Respondent did in fact pay the Claimant the applicable minimum weekly wage for each week of his employment.  Whether in doing so it was lawfully entitled to claw back the “top up” payments made from commissions the Claimant subsequently earned, is something which I will comment upon later.

The Claim

8         The Claimant’s Claim is predicated on the number of hours worked. In essence, he says that he was not paid for all hours worked.  From 8 March 2010 to 28 October 2010 he worked from 8.00am to 6.00pm, Monday to Friday, and 8.00am to 1.00pm on Saturdays.  Thereafter, his finish time on weekdays changed to 5.30pm.  It will be obvious that he initially worked a 55 hour week, and thereafter, a 52.5 hour week.

9         The Claimant asserts that the weekly minimum wage payable to him was for 38 hours worked, and that all hours worked in excess of that attracted additional payment at the applicable hourly rate.  The Respondent on the other hand, contends that its obligation was to pay him the minimum weekly wage, irrespective of the hours worked, and that any claim based on hours worked is erroneous.

10      The Claimant has limited his Claim to only part of the period of his employment (8 March 2010 to 21 September 2011).  He claims that during that period, he was underpaid $9,963.17, calculated as follows:

11      The Respondent’s position is reflected in paragraphs 10 and 11 of its Particulars of Defence:

“10.  …the Claimant's earnings entitlement under the Award, may be calculated as follows:

                      $

                  Period on Level 4:   26 weeks @ $603.90/wk                =            15701.40

                                   (8 March 2010 - 6 September 2010)                                 

Period on Level 6:     43 weeks @ $663.60/wk                         =             28534.80

                                  (7 September 2010 - 30 June 2011)

Period on Level 6:    11.364 weeks @ $686.20/wk                   =              7797.98

                                 (1 July 2011 - 21 September 2011)

                            _______ 

                                 Total (80.364 weeks)                            52034.18

Total retainer + commission received                                     =           58121.17

Earnings entitlement (as above)                                             =           52034.18

              6086.99

11.  Compared with his actual earnings over that period, constituted as retainer and commission, of $58121.17, he was accordingly paid in advance of the Award over the period of his employment to the extent of $6086.99.”

Determination

12      The “hours” provision is contained in Clause 37 of the Award - Ordinary hours of work and rostering.  Clause 37.2 of the Award provides that the ordinary hours of work of an employee will be an average of 38 hours per week, on not more than five days in any week.  Clause 37.1 however, specifically provides that the Clause does not apply to a person principally employed to perform vehicle sales. 

13      The Award makes special provisions for people employed principally to sell vehicles (see Clause 44 - Special provisions - persons employed principally to sell vehicles).  That Clause specifically provides for  the following:

• Clause 44.1 - Hours of work - full-time employment
• Clause 44.2 - Hours of work - part-time employment
• Clause 44.3 - Casuals
• Clause 44.4 - Payment for work on public holidays and days off
• Clause 44.5 - Work on a Sunday
• Clause 44.6 - Travelling expenses
• Clause 44.7 - Meal allowance
• Clause 44.8 - Use of motor vehicles
• Clause 44.9 - Payment of commission
• Clause 44.10 - Calculation of wages

14      Relevantly, Clause 44.1 provides:

“Hours of work - full-time employment

(a)     A vehicle salesperson will be allowed one and a half days free of duty per week or by mutual agreement three full days per fortnight.”

15      Clause 44 of the Award does not otherwise stipulate the ordinary hours to be worked by full-time employees.  There is no specific limit on the number of ordinary hours a vehicle salesperson may be required to work, or to be on duty, except that the employee’s work cannot extend over more than five and a half days per week. 

16      Clause 10.2 of the Award, within Clause 10 - Types of employment, provides that unless specified otherwise in the Award, employment will be by the week.  That notion of “weekly employment” is adopted in Clause 44 of the Award.  In Clause 44.2(a)(ii) reference is made to a “weekly wage”.  Other provisions within Clause 44 refer to a salesperson’s “weekly rate”.  It is obvious that a vehicle salesperson’s remuneration is payable by the week, at the weekly rate.   Clause 33 of the Award - Classification and minimum weekly wages provides for payment of a weekly wage according to classification. Clause 33.4 makes provision for the payment of a minimum weekly wage at the specified weekly rate therein.  That provision sets out an hourly rate derived from the weekly rate, by dividing the rate by 38.  The hourly rate of pay is used to calculate payment for those employees (not vehicle salespersons) who work more than the 38 hours prescribed by Clause 37, and for the purposes of working out the payment of leave entitlements and the like.

17      Given that the Claimant’s hours of work were not limited to 38 hours per week, the hourly rate could have no application to his remuneration. Payment at an hourly rate was, and is, irrelevant to him and other vehicle salespersons.  If it was intended that a vehicle salesperson’s weekly work hours comprise only 38 hours, then their exclusion from the application of Clause 37 of the Award would not have occurred.  Further, if it was intended that vehicle salespersons be paid at an hourly rate for all hours worked in excess of 38 hours, then Clause 44 of the Award would have said so.  Significantly, it does not.

18      The Award treats those whose primary function it is to sell vehicles differently to others covered by it.  Such is apparent from Clause 26 - Meal and rest breaks, Clause 28 - Overtime rates, Clause 37, and of course, Clause 44 itself.  The specific exclusion of Clause 37 means that there are no hours of work specified, other than the limitation achieved by Clause 44.1(a).  Therefore, it is not possible to calculate a weekly wage based on an hourly rate.  The salesperson’s engagement and remuneration is on a weekly basis.

19      It follows therefore, that the Claimant’s Claim for payment at an hourly rate, for all hours worked in excess of 38 hours per week, is not maintainable.  Over the relevant period he was paid each week, at least that to which he was entitled.

20      Whether the Respondent, in making weekly payments, was entitled to claw back “top up” payments made from commissions earned, is somewhat doubtful.  Indeed, the particular claw back or “negative top up” as it is sometimes referred to, which occurred on 7 March 2012 and which resulted in the Claimant receiving less than his full annual leave payment (see exhibit 6), is, on the face of it, somewhat suspect.  Having made those observations, I recognise that I am not called upon to determine those issues, and therefore, will not address them further.

21      The Claimant has failed to prove his case.

G CICCHINI

INDUSTRIAL MAGISTRATE