Ardelle v Spastic Society of Victoria Ltd [2000] FCA 1429 (20 October 2000)

Last Updated: 20 October 2000

FEDERAL COURT OF AUSTRALIA

Ardelle v Spastic Society of Victoria Ltd [2000] FCA 1429

INDUSTRIAL LAW - alleged underpayment of wages - whether respondent committed a breach or non - observance of the Health Services Union of Australia (Private Sector) Interim Award 1993 and the Health (Residential Care - Victoria) Award 1995 - interpretation of applicable awards - alleged repudiation of employment contract - whether, by failing to pay the applicants in accordance with the applicable awards, the respondent repudiated the contracts of employment between it and each applicant - whether applicants consequently entitled to termination pay

Workplace Relations Act 1996 (Cth) s178

Employee Relations Act 1992 (Vic)

Health Services Union of Australia (Private Sector) Interim Award 1993

Health (Residential Care - Victoria) Award 1995

City of Wanneroo v Holmes (1989) 30 IR 362 followed

Toyota Motor Corporation Australia Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (1999) 93 IR 95, [1999] FCA 1471 applied

Canberra Television Ltd v Australian Theatrical and Amusement Employees Association (1979) 24 ALR 529 referred to

KIMRAY ARDELLE AND GERALDINE ARDELLE v SPASTIC SOCIETY OF VICTORIA LTD (ACN 004 280 871)

V 507 of 1999

MARSHALL J

MELBOURNE

20 OCTOBER 2000

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 507 of 1999

BETWEEN:	KIMRAY ARDELLE FIRST APPLICANT GERALDINE ARDELLE SECOND APPLICANT
AND:	SPASTIC SOCIETY OF VICTORIA LTD (ACN 004 280 871) RESPONDENT
JUDGE:	MARSHALL J
DATE OF ORDER:	20 OCTOBER 2000
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. It is declared that the respondent has committed a breach or non-observance of the Health Services Union of Australia (Private Sector) Interim Award 1993 ("the 1993 Award") by failing to pay the applicants between 20 December 1993 and 2 August 1995 in accordance with clause 6 of the former Residential Child Care Workers Award of the Industrial Relations Commission of Victoria.

2. It is declared that the respondent has committed a breach or non-observance of the Health (Residential Care-Victoria) Award 1995 ("the 1995 Award") by failing to pay the applicants between 3 August 1995 and 1 July 1998 in accordance with clause 23(l)(ii) of the 1995 Award.

3. It is declared that the respondent did not commit a breach or non-observance of the 1995 Award by refusing to pay termination pay to the applicants.

4. The proceeding be adjourned to a directions hearing at 10.15 am on 20 November 2000 for the purpose of considering any further submissions on what further orders, if any, the Court should make.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 507 of 1999

BETWEEN:	KIMRAY ARDELLE FIRST APPLICANT GERALDINE ARDELLE SECOND APPLICANT
AND:	SPASTIC SOCIETY OF VICTORIA LTD (ACN 004 280 871) RESPONDENT

JUDGE:	MARSHALL J
DATE:	20 OCTOBER 2000
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 This is an application pursuant to s178 of the Workplace Relations Act 1996 (Cth) ("the Act"). The applicants, Mr and Mrs Ardelle, were at all material times employed by the respondent, Spastic Society of Victoria Ltd ("the Society"), as 24 hour care workers. In their claim before the Court, the Ardelles have alleged that the Society failed to pay them correctly in breach of the relevant applicable industrial awards. They also alleged that the Society failed to pay them the termination pay to which they were allegedly entitled upon the termination of their employment.

Factual background

2 As at February 1992, the Ardelles were employed by the respondent as 24 hour care workers at the Society's premises in Glen Waverley known as "Glen Waverley House". The work performed by the Ardelles involved caring for four severely disabled young people who lived at Glen Waverley House. The Ardelles also resided at Glen Waverley House and were engaged by the Society on a regular basis for seven days per week. At all material times, each applicant was a member of the Health Services Union of Australia ("the HSUA"), an organisation of employees registered pursuant to the Act.

3 Mr Ardelle was employed as a 24 hour supervisor. Mrs Ardelle was employed as a 24 hour care worker. In February 1992, the Ardelles agreed with the Society, in writing, upon certain employment conditions. In the relevant document, the conditions were described as "the position". The "position" was described in the document as follows (as far as is material):

"This is a live-in position with conditions of employment under the Residential Care Workers Award - 24 Hour section. However by mutual agreement certain conditions exist outside this award. Annual leave is 28 days as the normal working week is 7 days. Annual Leave, Public holidays, Stand Downs and accumulated time off are accumulated and taken in groups of 4 times per year at 2 weeks each time. A ten day fortnight is not adhered to ... ."

4 Between 20 December 1993 and 1 July 1998, the Ardelles' working position was as follows:

* They worked seven days per week for periods of eleven weeks at a time without a day off.

* At the end of each eleven week period they took a combination of annual leave, days off in lieu of public holidays and accrued days off, for a period of two weeks.

* The Society did not allow the Ardelles two consecutive days off per week or four days off per fortnight.

* The Society remunerated the Ardelles at the rates of pay prescribed in the relevant awards for a seven day week.

* The Society did not grant the Ardelles equivalent time off for days off which were in fact worked by the Ardelles.

* From November 1997 to June 1998, the Ardelles took long service leave.

* Whilst on long service leave, the Ardelles formed the view that they had not been accorded their correct entitlements by the Society and asked the HSUA to take that matter up with the Society.

* The Ardelles believed that as 7 day care workers they were entitled to two consecutive days off per week or four days off per fortnight which could be taken at a later time as time off or payment received in lieu. The Society disputed that alleged entitlement.

* Mr Ardelle, under cross-examination by Mr B Lacy (counsel for the Society), said that he and Mrs Ardelle had decided that they no longer wished to work seven days, "irrespective of the question of payment" and that that decision had been made prior to them contacting the HSUA.

* The Ardelles met with Ms Heggie of the Society on 16 June 1998. At the meeting, Ms Heggie advised the Ardelles that there was a proposal in place to change the applicable award, the effect of which was that the Ardelles would become 8 hour workers instead of 24 hour workers.

* The Ardelles offered to work five days per week until the award was altered in eight weeks' time. Ms Heggie refused that request. Mr Ardelle gave evidence that "we refused to work eight weeks straight without a break". The Ardelles had also written to Ms Heggie whilst on long service leave saying that they "weren't prepared to come back to work on that model, the 24 hour model, if the pay wasn't adjusted to what we believed we'd been advised we should be paid".

* Ms Heggie informed the Ardelles that when the award changed there would be a job at Glen Waverley House for them "on the eight hour model". The Ardelles were not prepared to work on "an eight-hour system".

* A representative from the HSUA, a Ms Williams, advised the Ardelles that they were entitled to "redundancy". Ms Heggie disputed the existence of any such entitlement, but ultimately, the Ardelles received redundancy pay.

* In re-examination, Mr Ardelle was asked whether, had Ms Heggie offered payment in accordance with his interpretation of the award, would that have had any, and if so what, effect on his decision to remain in his employment or leave it. Mr Ardelle responded by saying:

"I don't really know ... I think we might have ... . My wife and I would have talked about it and discussed it, yes. I can't really say."

The awards

5 From 20 December 1993 until 2 August 1995, apart from the position document earlier referred to, the Ardelles' terms and conditions of employment were governed by the Health Services Union of Australia (Private Sector) Interim Award 1993 ("the 1993 Award"), an award made by the Australian Industrial Relations Commission ("the AIRC").

6 From 3 August 1995 until 1 July 1998, the relevant award of the AIRC was the Health (Residential Care-Victoria) Award 1995 ("the 1995 Award").

7 As is evident from its title, the 1993 Award was an interim award. It was designed to maintain the status quo of state award coverage which was disturbed as from 1 March 1993 by the coming into operation of certain provisions of the Employee Relations Act 1992 (Vic). It was a term of the 1993 Award, prescribed by cl 3 thereof, that the terms and conditions prescribed in the Residential Child Care Workers Award ("the State Award") applied to persons coming within the purview of the 1993 Award. The State Award was a former award of the Industrial Relations Commission of Victoria.

(i) The State Award

8 The State Award, in cl 2 thereof, set out the "wages per week" for an "8 hour care worker" and a "24 hour care worker" according to various classifications of employee. Clause 2(f)(i) of the State Award defined "8 Hour Care Worker" to mean:

"an employee who is engaged on the basis that the normal working week will consist of 38 hours."

Under cl 2(f)(ii), "Residential Worker" was defined to mean:

"an employee who is engaged to care for children and whose responsibilities extend over 24 hours in each working day."

9 Pursuant to cl 2(f)(xiv) of the State Award, "week" is defined to mean "five days, except when the employee is engaged on a regular basis up to seven days per week".

10 Clause 6 of the State Award was headed "WEEKLY TIMES OFF (24 HOUR CARE WORKERS ONLY)" and provided that:

"(The days off provided by this clause are in addition to the Annual Leave prescribed by Clause 14, and the Public Holidays prescribed by Clause 15).

(a) Each employee shall be allowed two consecutive days of 24 hours off per week or four days off every fortnight, but shall only be required to work ten days by mutual agreement between the employer and employee without a break. The employer shall pay one-fifth of the employee's wage rate for each such day that is not allowed. Provided that by mutual agreement between an employer and an employee, such days off may be worked and the equivalent time accumulated, to be taken by the employee at a time and for a period agreed upon by the employer and the employee. Provided further that no more than 30 days may be accumulated at any one time."

11 It appears that the terms "24 hour care worker" and "residential worker" are used interchangeably in the State Award. It also appears that the award provided for two categories of such an employee. The first category is that of a 24 hour care worker who works five days per week. The second category is that of a 24 hour care worker who works seven days per week.

12 An employee who worked five days per week as a 24 hour care worker was entitled to take the other two days off per week. If that time off was not allowed, an employer was obliged to pay the employee one day's pay for each such day not allowed or time off in lieu at a later time. The parties accepted that that was how the State Award would have operated with respect to a five day per week residential care worker.

13 The parties were in dispute about the effect of cl 6 upon a 7 day residential care worker. Counsel for the Ardelles, Ms M Richards, submitted to the following effect:

* Clause 6 applied to 7 day residential care workers - the clause applies, in terms, to all 24 hour care workers - if it had intended to apply only to 5 day residential care workers, it would have so provided.

* Seven day residential care workers are unable to take their two days off each week so their only alternative is to take time off in lieu at some later occasion in addition to time off for annual leave and in lieu of public holidays.

14 Mr Lacy submitted that cl 6 of the State Award only applied to 5 day residential care workers. He contended that it was simply not possible for the two days off to be allocated to 7 day residential care workers and that it would be anomalous if 7 day residential care workers received two days off when they were on duty seven days per week.

15 In my view, the interpretation of the State Award contended for by Ms Richards is the correct one. Clause 6 makes no exception for 7 day residential care workers. The opening words, in parenthesis under the heading, show that the clause was intended to provide for time off in addition to other accrued time off. The reference in cl 6(a) to "(e)ach employee" being allowed time off is a reference to each residential care worker. In the case of a 7 day residential care worker, it was not possible for time off to be allowed. In the case of such employees, this had the consequence of bringing into immediate operation the sentence, "(t)he employer shall pay one-fifth of the employee's wage rate for each such day that is not allowed". If the employer preferred to not make that payment, the equivalent time off was entitled to be taken "at a time and for a period agreed upon by the employer and the employee".

16 There is nothing on the face of cl 6 or any other provision in the award which demonstrates that cl 6 was not intended to apply to 7 day residential care workers. There is no reason to suggest that a literal interpretation of the clause would produce absurd results. Each time a 7 day residential care worker worked seven days per week, cl 6 operated to accrue to such employee one-fifth of her or his normal weekly wage for a two day period in each week. Alternatively, time off could have been given in lieu of such entitlement with that time being added to accrued annual leave and public holidays so that a block of time off could be taken.

17 As was stated by French J in City of Wanneroo v Holmes (1989) 30 IR 362 at 378:

* an interpretation of an award begins with a consideration of the ordinary meaning of the words used;

* the words are read as a whole and in context; and

* ambiguity may be resolved by consideration of the history and subject matter of the award.

18 I received no evidence which was relevant to the task of determining why the clause was drafted in the way it was. It remained only to consider the ordinary meaning of the words used by the draftsperson in the context of the remainder of the award. Having so considered cl 6, I am in no doubt that it should be interpreted as having provided weekly time off or time off in lieu for all 24 hour care workers.

19 The fact that an interpretation of an award clause may produce odd, anomolous or unusual consequences does not justify that interpretation being departed from when the ordinary meaning of the words compel a particular result and no relevant extrinsic material exists to gainsay that result.

20 In Toyota Motor Corporation Australia Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (1999) 93 IR 95, [1999] FCA 1471, the majority of the Full Court of this Court (Moore and Marshall JJ) said (at [17] and [18]):

"The preceding analysis of cl 17 is based on the language and structure of the clause when read with cl 21. It is consistent with the conclusion of the primary judge and the preferable interpretation having regard to the natural and ordinary meaning of the relevant provisions: see City of Wanneroo v Holmes (1989) 30 IR 362 at 378. It is true that it would result in an afternoon shift worker who works a shift concluding in the morning of the holiday being paid the holiday rate for the entire shift even if the shift worker received as a paid break from work the time that would otherwise be worked in the afternoon shift commencing on the public holiday. It is also true that a shift worker who worked on a shift commencing after 10.45 pm on the holiday would not receive payment at the holiday rate for a maximum of one and a quarter hours worked on a holiday even if no other work was performed on the public holiday. This latter effect of cl 17 tends against a conclusion that the clear purpose of the clause is to recompense an employee for working at any time on a public holiday which would explain the payment of holiday pay for the hours worked into the early morning of a holiday (as well as the remainder of the shift worked on the evening of the preceding day) on the construction of cl 17 advanced by the Union. However this anomaly does not, in our opinion, justify a construction of cl 21 and consequently cl 17, that treats the entitlement conferred by cl 21 as limited to a period other than the whole day.

Nor does one further anomaly identified by Toyota justify a construction of cl 17 that is contrary to what we view as the comparatively clear language of both that clause and cl 21. Toyota submitted that if it insisted that afternoon shift workers work on both the afternoon shift commencing on the day preceding the holiday but continuing into the afternoon shift commencing on the holiday then the cost to it would be the same as allowing the afternoon shift workers to absent themselves from the afternoon shift commencing on the holiday."

21 As in Toyota, it was within the power of the employer in this case to revise working arrangements so that the relevant payment did not accrue to residential care workers or to seek a variation of the award. See also Canberra Television Ltd v Australian Theatrical and Amusement Employees Association (1979) 24 ALR 529 at 532, per Bowen CJ, at 535, per Smithers J, and at 545, per Northrop J.

(ii) The 1995 Award

22 The equivalent provision to cl 6 of the State Award is found at cl 23(l) of the 1995 Award. That sub-clause provides as follows:

"Weekly time off - 24 hour workers only

(l) (i) The days off provided by this clause are in addition to clause 29 and clause 37.

(ii) Each employee shall be allowed two consecutive days of 24 hours off per week or four days off every fortnight, but shall only be required to work ten days by mutual agreement between the employer and employee without a break. The employer shall pay one-fifth of the employee's wage rate for each such day that is not allowed. Provided that by mutual agreement between an employer and an employee, such days off may be worked and the equivalent time accumulated to be taken by the employee at a time and for a period agreed upon by the employer and the employee. Provided further that no more than 30 days may be accumulated at any one time."

23 Clause 29 of the 1995 Award deals with annual leave and cl 37 of the 1995 Award makes provision with respect to public holidays. It can be readily seen that cl 23(l) of the 1995 Award is in materially identical terms to cl 6 of the State Award. Both counsel submitted, and I agree, that there is no reason to interpret cl 23(l) of the 1995 Award differently to cl 6 of the State Award.

Conclusion on the payment issue

24 It follows from the above analysis that the Society contravened the provisions of the 1993 Award and the 1995 Award by failing to pay the Ardelles in accordance with cl 6 of the State Award and cl 23(l) of the 1995 Award respectively. I find that when properly construed, each such clause did have application to the Ardelles in their employment with the Society. One can readily understand why the Society may have disagreed with such an interpretation given the infelicitous language used in the relevant provisions. That is a matter which may be relied upon in due course in mitigation of such penalty, if any, which may subsequently be imposed.

25 The parties agreed that in the event that the Court found that the relevant clauses did apply to the Ardelles, a calculation of the sums owing would be arrived at by the solicitors on each side of the record. It is sufficient at this stage to make declarations recording the respective award breaches and otherwise adjourn the proceeding to a directions hearing at which the Court will consider submissions regarding any further orders which may be made to dispose of the proceeding.

The termination issue

26 Ms Richards submitted that in failing to pay the Ardelles in accordance with the relevant awards, the Society repudiated the contracts of employment between it and each applicant. It followed, so the argument ran, that the Ardelles were entitled to accept that repudiation and leave their employment with an associated entitlement to termination pay.

27 The difficulty about that submission is that it is at odds with the evidence. Mr Ardelle's evidence was that he had decided (as had Mrs Ardelle) to cease working continuous seven day shifts, irrespective of the question of proper payment for working those shifts. He said in effect that the decision had been made to stop working the way he and Mrs Ardelle had been working before their long service leave, whilst they were on long service leave, and before the HSUA became involved. In re-examination, Mr Ardelle expressed uncertainty about whether the issue of proper payment would have affected his decision to leave his employment. There is no reason to consider that Mrs Ardelle was in any different position.

28 In my opinion, the best analysis of that evidence is that the Ardelles made a decision to leave their employment, being a decision which was not taken consequently upon the Society's refusal to make payments to them in accordance with cl 23(l)(ii) of the 1995 Award.

29 I see no merit in the Ardelles' claim of entitlement to termination pay and will make a declaration to that effect.

30 The orders of the Court are as follows:

1. It is declared that the respondent has committed a breach or non-observance of the Health Services Union of Australia (Private Sector) Interim Award 1993 ("the 1993 Award") by failing to pay the applicants between 20 December 1993 and 2 August 1995 in accordance with clause 6 of the former Residential Child Care Workers Award of the Industrial Relations Commission of Victoria.

2. It is declared that the respondent has committed a breach or non-observance of the Health (Residential Care-Victoria) Award 1995 ("the 1995 Award") by failing to pay the applicants between 3 August 1995 and 1 July 1998 in accordance with clause 23(l)(ii) of the 1995 Award.

3. It is declared that the respondent did not commit a breach or non-observance of the 1995 Award by refusing to pay termination pay to the applicants.

4. The proceeding be adjourned to a directions hearing at 10.15 am on 20 November 2000 for the purpose of considering any further submissions on what further orders, if any, the Court should make.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate:

Dated: 20 October 2000

Counsel for the Applicant:	Ms M Richards
Solicitor for the Applicant:	Maurice Blackburn Cashman
Counsel for the Respondent:	Mr B Lacy
Solicitor for the Respondent:	Michael Rahilly
Date of Hearing:	5 September 2000
Date of Judgment:	20 October 2000