Malcolm Jones v AWU-FINE Amalgamated Union [1995] IRCA 67

C A T C H W O R D S INDUSTRIAL LAW - Termination of employment - complaint of unlawful termination - whether the "relevant wages of the applicant exceeded $60,000 during the period of 12 months before termination" - reasonableness of termination payment. Industrial Relations Act 1988, S170CD, S170DB, S170DE, S170EA. John Anthony Ardino v Count Financial Group (No. NI 517 of 1994) Terry Shields v Chief Commission of Payroll Tax (1989) 98 ALR 55) Attard v Nilsen Electric (unreported SI 217 of 1994) MALCOM JONES v AWU-FINE AMALGAMATED UNION - No. NI 885 of 1994 Before: Judicial Registrar TOMLINSON Place: Sydney Hearing Date: 23 January 1995 Judgement Date: 9 March 1995

INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N0. NI 885 of 1994

Between: MALCOM JONES Applicant And: AWU-FINE AMALGAMATED UNION Respondent Before: Judicial Registrar TOMLINSON Place: Sydney Hearing Date: 23 January 1995 Judgement Date: 9 March 1995 MINUTES OF ORDER THE COURT DECLARES 1. The termination of the employment of the Applicant did contravene Division 3 of Part VIA of the Industrial Relations Act, (the Act) 1988. AND THE COURT ORDERS THAT: 1. The Respondent is to pay to the Applicant the sum of four thousand dollars. 2. Stay of 21 days NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules. INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NO. NI 885 of 1994

Between: MALCOM JONES Applicant And: AWU-FINE AMALGAMATED UNION Respondent Before: Judicial Registrar TOMLINSON Place: Sydney Hearing Date: 23 January 1995 Judgement Date: 9 March 1995 The applicants Mr Gary Daw (Application no. NI 884 of 1994) and Malcolm Jones (Application no. NI 885 of 1994) were employed by the same respondent and worked together in the accounting section of the same union. The applicants were terminated in exactly the same manner on the same day by their common employer the respondent. For convenience the Applications were heard simultaneously and the reasons for decision will be dealt with together. By Application dated 4 October 1994 the applicant Gary Daw sought a declaration that the termination of his employment contravened Division 3 of Part VIA of the Industrial Relations Act ("the Act"). Additionally the applicant sought reinstatement and compensation and an order was sought seeking such other relief as the Court deemed fit and proper. By application dated 4 October 1994 the applicant Malcom Jones sought a declaration that the termination of his employment contravened Division 3 of Part VIA of the Industrial Relations Act ("the Act"). Additionally the applicant sought reinstatement and compensation and an order also was sought seeking such other relief as the Court deemed fit and proper. By affidavit dated 10 November 1994 Stephen Patrick Harrison, Joint National Secretary of the respondent Amalgamated Union, stated that the applicants total packages were in excess of $60,000.00 per annum. The Court heard evidence from the applicants, Mr Harrison and also from Mr Joseph Cochrane. In order to assist the Court Counsel on behalf of the parties to the litigation provided written submissions some time at the conclusion of the taking of evidence. The applicant Mr Daw told the Court he began with the respondent on 16 July 1990 as an accountant at an annual salary of $45,864.00 and at the time of the termination of employment the final salary was $56,200.00 ("the final salary"). In addition to this the employer provided for the applicant a motor vehicle which at the time of the termination was a Ford Falcon station wagon. This vehicle was available at all times for the personal use of the applicant for both private and work related activities. In addition the respondent paid an annual leave loading of 20% which had risen to 25% at the time the applicants were in receipt of the final salary. Further, the respondent paid directly into the accounts of the applicants the sum of $6,000.00 per annum non-contributory superannuation monies. The applicants also advised the Court that an amount equivalent to 20% of existing salary in addition to the superannuation amount referred to above was paid in to the Union's Superannuation Fund on their behalf. There was no evidence presented to the Court that the applicant could direct those funds anywhere else. On occasion the applicant Mr Daw would travel to Newcastle as part of his duties and attend meetings there. For this he was paid overnight expenses of $140.00 per night. Those monies were not taxable. The applicant Mr Jones told the Court that he commenced employment with the respondent on 24 September 1994 as an accountant and that he had obtained the position as a result of a word of mouth recommendation from his friend Mr Daw. There apparently was no advertisement or interview procedure. Mr Jones was similarly provided with a motor vehicle by the respondent for his personal use for both private and work related activities. On behalf of the applicant Mr Jones it was argued that his weekly salary was $1,038.50 and using a simple 52 week multiplier and annual pre-tax salary or wage of approximately $54,000.00 is achieved. Section 170CD of the Act deals with the exclusion of employees not employed under award conditions whose wages exceed a particular amount. Section 170CD (1)(a) provides "in respect of an employee who was continuously employed during the period of 12 months immediately before the termination day - on the termination day the employee's relevant wages exceeded the applicable amount". Section 170CD (2) specifies that amount to be $60,000.00. It will be necessary to deal with the jurisdictional issue first in which the Court lacked the capacity to deal with the applications on the basis that the wages of the applicants at the time of their terminations exceeded the specified amount. On behalf of the applicant Gary Daw it was argued his weekly salary was $1,080.80 and so that if a simple 52 week multiplier was used an annual pre-tax salary or wage of approximately $56,000.00. The respondent sought to raise issues as to the jurisdictional threshold which encompassed the provision of motor vehicles to the applicants and additionally the payment by the employer of an amount of superannuation into the relevant employers superannuation fund. In dealing first with the contention regarding the motor vehicle the applicant relied upon the case of Terry Shields v. Chief Commission of Payroll Tax (1989) 98 ALR 559 where the Court was asked to consider, inter alia, the question of whether the provision of a motor vehicle for the use of employee was within the definition of wages in the Payroll Tax Act, 1971 (New South Wales). Mr Justice Lee stated: "In light of the citations above set out, I am of the view that the definition of wages in the Act is not intended to attribute to the words wages, salary used in the definition a meaning other than their ordinary meaning and that the meaning is one which contemplates an agreement between employer and employee that an agreed amount of money shall be paid as wages.....the provision of a car for private use is certainly not within the concept of wages as understood in this country". Chief Justice Wilcox in John Anthony Ardino v. Count Financial Group (No NI 517 of 1994) 14 November 1994 stated: "In relation to non-pecuniary benefits, I cannot see how they can ever be regarded as 'wages' for the purpose of the definition. The word wages is not defined by the Industrial Relations Act, so in Section 170CD it bears its ordinary meaning....So far as money payments are concerned (superannuation, school fees etc), the critical question is whether the employee ever had an entitlement to receive the money himself or herself.... The only reason why he did not receive the monies was that he elected to have them paid to someone else....This is a case where, being entitled, he elected not receive his wages but to have them paid to someone else....". On behalf of the respondent it was argued that in having regard to the ordinary meaning of the term "wages", it is necessary to have regard to the historical background of relevant legislation including the definition of "wages and salary" in the Income Tax Assessment Act and also very relevantly the respective Truck Acts enacted in the various states at the turn of the Century. In those Truck Acts "wages" is defined to: "Include any money or think had or contracted to be paid, delivered, or given as recompense, reward or remuneration for any service, work, or labour done or to be done, whether within a certain time or to a certain amount for a time or an amount uncertain". In the Ardino case Chief Justice Wilcox states: "I do not think it ("relevant wages") includes payments made by an employer or behalf of an employee pursuant to a binding antecedent obligation, whether statutory or contractual. It is now common place for employers to make payments to a superannuation fund in respect of individual employees. This is usually because of a statutory obligation to that effect and sometimes because of a binding contractual obligation". Having regard to the opinion of the Chief Justice in the case referred to above I find that the relevant wages of both applicants fall within the jurisdiction of this Court. The applicant Mr Daw commenced employment with the respondent on 16 July 1990 as an accountant and in addition to those duties was appointed to the Board of the Joint National Superannuation Fund situated in Newcastle. The position with the respondent was one of employment and he was not elected to it. During the course of the employment of the applicant the respondent went through a process of merger and amalgamation with another union to become the AWU-FIME Amalgamated Union. It was common ground that falling membership and reduced financial circumstances caused that amalgamation. The circumstances surrounding the termination of employment of the applicant Mr Daw occurred on 21 September 1994 when the applicant stated he was at a meeting in Newcastle. The applicant was requested by telephone to return to Sydney as soon as possible. This was done and the applicant met with Mr Harrison and Mr Faulkiner in Sydney and was advised that as the sale of certain real estate had not gone ahead the employment of the applicant was to be terminated on the spot. The applicant Mr Daw, was handed a cheque and a piece of paper headed entitled "Eligible Termination Payment". This document was admitted as Exhibit "1" and stated under "Reason for Termination" - "Bona Fide Redundancy due to Amalgamation". Further, under the heading of 'Redundancy Entitlement" was entered the notation "3 weeks for each Full Year of Service". From this document it appears the applicant received the sum of $18,914.00 . The applicant Mr Daw specifically denied that he took any property of the respondent's when he left the premises and the things which he did remove were personal and belonged to him alone. The applicant advised the Court that he received less money than employees previously terminated and also that the notice payment of four week's salary was not included in the monies. The applicant Mr Daw told the Court that his duties were now being performed by Mr Laurie Hutchison and that prior to 21 September 1994 he had not been warned or cautioned that his work performance was below standard nor had he been afforded the opportunity to answer any allegations relating to his performance at work. The applicant Mr Daw further stated that the position concerning his redundancy and possible alternatives or redeployment were also not discussed with him by management. Under cross examination the applicant Mr Daw agreed that the financial position of the respondent was poor and that he was aware that the respondent needed to sell its Bathurst street property in order to be financially viable. Further, that in 1993 the applicant in his capacity as accountant advised his employer the respondent of the need to reduce overheads and to cut staff numbers. On behalf of the respondent it was argued that the evidence indicated that a general reduction in staff including clerical staff had been recommended by the applicant and that it was perhaps somewhat arrogant of the applicant Mr Daw to presume that he could appropriately recommend a 30% reduction in both elected officers and also clerical staff whilst he remained immune from consideration. On behalf of the respondent Mr Harrison, a witness for the respondent, told the Court that he had in 1993 and in 1994 sought to reduce labour costs of the respondent union by seeking volunteers from staff to take redundancy packages. The Court heard evidence that part of the duties of the applicant Mr Daw from June 1994 onwards were given to another employee but for the purposes of the subject proceedings it is not necessary to go into those facts in detail. The applicant Mr Jones advised the Court he assisted Mr Daw and he also supervised the Accounts Payable Clerk. During the morning of 21 September 1994 the applicant Mr Jones told the Court he was requested to contact Mr Daw and request he return to Sydney. The applicant Mr Jones told the Court that during that afternoon he was summonsed to the office of Mr Harrison and told that the sale of the Bathurst Street property of the respondent had fallen through and that he was being made redundant immediately as of that moment. Further, that he was not required to work out his notice. Both applicants were requested to hand in the keys of their motor vehicles and to leave the premises immediately. Mr Harrison handed to the applicant Mr Jones a separation certificate and a statement headed "Eligible Termination Payment" admitted into evidence as Exhibit "3". That statement noted under "Reason for Termination" was "Bona-Fide Redundancy due to Amalgamation" and that the "Redundancy Entitlement" was recorded as being "3 weeks for each Full Year of Service". The total payment received by the applicant Mr Jones was recorded as being $9,606.10. As with the applicant Mr Daw, Mr Jones advised the Court that one month after the termination he received the sum of $3,799.40 which he presumed to be a payment in lieu of the required 4 weeks notice. Similarly the applicant Mr Jones told the Court that never at any stage was he told that his work performance was sub-standard or that in any way was his job at risk or that his employment was jeopardised because of the amalgamation referred to earlier.