Kucks v CSR Limited [1996] IRCA 141

DECISION NO: 141/96 CATCHWORDS INDUSTRIAL LAW - AWARD INTERPRETATION - meaning of "ordinary rate of pay" INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - REDUNDANCY - whether long service leave entitlement include shift allowance Industrial Relations Act 1988 (Cth): s.179, s.413 CSR Staff (Consolidated) Award 1992 Scott v Sun Alliance Australia Pty Ltd (1993) 178 CLR 1 Catlow v Accident Compensation Commission (1989) 167 CLR 543 Kezich v Leighton Contractors Pty Ltd (1974) 131 CLR 362 TREVOR KUCKS v CSR LIMITED QI201 of 1994 CORAM: MADGWICK J PLACE: BRISBANE DATE: 19 APRIL 1996

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY No. QI201 of 1994 BETWEEN TREVOR KUCKS Applicant AND CSR LIMITED Respondent CORAM: MADGWICK J PLACE: BRISBANE DATE: 19 APRIL 1996 MINUTES OF ORDER 1. The application is dismissed. 2. Judgment for the respondent.

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY No. QI201 of 1994 BETWEEN TREVOR KUCKS Applicant AND CSR LIMITED Respondent CORAM: MADGWICK J PLACE: BRISBANE DATE: 19 APRIL 1996 REASONS FOR JUDGMENT MADGWICK J: The applicant sues, under s179 of the Industrial Relations Act 1988 (Cth) for the recovery of an alleged underpayment of an amount due to him, pursuant to the CSR Staff (Consolidated) Award 1992 ("the Award"), upon the termination of his services. He claims a shade under $14,500, for underpayment of his untaken long service leave entitlement.

A long-term shift worker is retrenched There is no dispute about the factual setting. Mr Kucks was employed at the respondent's New Farm refinery on 3rd March 1958 and worked continuously there for 36 years until his retrenchment on 29th April 1994. He had been promoted to a position known as Shift Superintendent and thereby to the salaried staff of the respondent on 1st November 1987. At all relevant times, his contract of employment was governed by the Award, its predecessors and related agreements. As from August 1992 the respondent introduced at the New Farm refinery a 38-hour, seven-day continuous shiftwork roster based on 12-hour shifts. Mr Kucks worked in accordance with that roster until his retrenchment. He was paid shift allowance of 40% of his ordinary salary for time worked on that roster. It is agreed that that occurred pursuant to Clause 13(g) of the Award which is in the following terms: Employees working a seven-day continuous roster shall be paid an allowance in lieu of afternoon and night shift allowances, weekend penalty rates and payment for any rostered overtime shift included in the cycle. This allowance shall be determined at each location by the Company and the Association. Provided that employees working a 7 day continuous roster which operates over a 4 week, 38 hours per week, roster cycle shall be paid a shift allowance of 40% of ordinary salary for time worked. (emphasis added) When payment was made to him, upon the termination of his services, for untaken long service leave, Mr Kucks was paid for the relevant period his "salary" (within the meaning of Clause 4 of the Award), but not the shift allowance of 40%. It is that non-payment which is said to constitute an underpayment, having regard to the terms of the Award. Thus the case concerns the interpretation of the Award, in particular, the words "ordinary rate of pay" contained in Clause 18(h). The Award Cl.18 of the Award is in the following terms: "18. LONG SERVICE LEAVE Entitlement to Leave (a) Employees shall be entitled to long service leave in respect of continuous service with the Company. Period of Leave (b) (i) The amount of long service leave shall be as follows: ... (3) In the case of an employee who has completed at least twenty years service, leave shall be calculated at the rate of 1.4 weeks per each year of service. (ii) Such leave shall be granted and taken and, except as provided elsewhere in this Clause, payment in lieu thereof shall not be made or accepted. (iii) Where termination of employment occurs after one year's continuous service due to: - resignation or retirement at age 52 or more; or - death or incapacity at any age; long service leave will be calculated on the basis of 1.4 weeks per year of service. ... (c) ... (ii) The following absences shall not break the continuity of service ... (1) Absences following any termination of the employment by the Company on any ground other than slackness of trade, if the employee is re-employed by the company within period not exceeding two months from the date of such termination. (2) Absence following any termination of the employment by the Company on the ground of slackness of trade if the employee is re-employed by the Company within a period not exceeding six months from the date of such termination. ... Time of Taking Leave (e) Long service leave shall be granted and taken at such time as may be agreed between the Company and the employee having regard to the needs of the establishment where the employee is working. Payment on Termination for Leave not Taken (f) Where the employment of an employee is terminated other than by death and the employee has an entitlement to long service leave, the employee shall be deemed to have entered upon and taken the leave from the date of such termination and the Company shall forthwith pay to the employee in full ordinary pay for such leave. ... Payment of Period of Leave (h) Each employee shall be paid for each week of leave the employees ordinary rate of pay applicable at the date of taking the period of leave. Such rate of pay shall be for the standard hours prescribed by the award. For the purposes of this Clause, rate of pay shall not include: Overtime, commissions, bonuses, allowances or the like. No deductions shall be made from the rate of pay for board and/or lodging or the like which is not provided and taken during the period of leave. Method of Payment (i) Payment shall be made in one of the following ways: (i) in full before the employee goes on leave, or (ii) at the same time as the employee's salary would have been paid if the employee had remained at work. (iii) ... Public Holidays and Annual Leave During Period of Leave (j) Any long service leave shall be inclusive of any public holidays specified in the award occurring during the period when the leave is taken, but shall not be inclusive of any annual leave. ... Leave to be in Satisfaction of all Rights (l) The entitlement to long service leave provided for in this Clause shall be in substitution for and satisfaction of any other long service leave, or benefit in the nature of long service leave, to which the employee may be entitled in respect of the service referred to in subclause (a) hereof." (emphasis added) Other portions of the Award which may be relevant are set out in Schedule 1 of these Reasons (again, where emphasis is shown, I have added it):