Melrose v Realcold Ltd [2011] FMCA 719 (23 September 2011)

Last Updated: 26 September 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MELROSE v REALCOLD LTD

[2011] FMCA 719

FAIR WORK – Small claim – notice in lieu of termination – entitlement.

Fair Work Act 2009 Workers’ Compensation and Rehabilitation Act 2003 ss.28(1), 46, 48(1), 66(2), 109(3)

Applicant:

MONIQUE MELROSE

Respondent:

REALCOLD LTD

File Number:

BRG 494 of 2011

Judgment of:

Jarrett FM

Hearing date:

12 September 2011

Date of Last Submission:

12 September 2011

Delivered at:

Brisbane

Delivered on:

23 September 2011

REPRESENTATION

Solicitors for the Applicant:

In person

Solicitors for the Respondent:

In person

ORDERS

(1) The application filed 20 June 2011 be dismissed.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

BRG 494 of 2011

MONIQUE MELROSE

Applicant

And

REALCOLD LTD

Respondent

REASONS FOR JUDGMENT

1. This is a small claim made under the Fair Work Act 2009.
   The applicant, Monique Melrose, claims $3,012.50 from the respondent, Realcold Ltd, her former employer.
2. The facts of the matter are not in dispute and may be stated as follows:
   1. By a written contract of employment dated 4 December, 2007 Ms Melrose was employed by the respondent as an account manager.
   2. Her employment commenced on 17 December, 2007.
   100. Her remuneration was agreed to be a salary of $50,000 per annum payable in equal weekly instalments. Her rate of pay was inclusive of rest breaks, annual leave loadings, public holidays, loadings for overtime or shift work and penalty rates. Her initial salary was subject to annual review.
   4. The position required her to work more than 38 hours per week, but she would not be paid any additional amounts for hours worked in excessive of 38 ordinary hours per week.
      
   5. By clause 16 of the agreement either Ms Melrose or the respondent could terminate the employment by giving to the other one month’s written notice. However, the employer could waive the requirement on the employee to give one month’s written notice upon the employee paying to the employer, the equivalent of one month's salary. Similarly, the employer could pay the employee the equivalent of one month’s salary in lieu of such written notice.
      
   6. The applicant commenced on a suitable duties plan, organised by WorkCover Queensland in about January, 2011. That plan came about because she was injured at work and had made a WorkCover Claim.
   7. On 19 January, 2011 the respondent wrote to Ms Melrose and confirmed that her position was to be terminated for reasons of redundancy.
   8. Ms Melrose was paid for the following four weeks but her last day of actual work appears to have been 19 January 2011.
   9. For each of the four weeks following and including pay weeks of 19 January 2011 the respondent paid to Ms Melrose the sum of $347.60 gross per week representing 12 hours work per week at the rate of $28.97 per hour.
   10. In addition, Ms Melrose received from WorkCover Queensland, pursuant to her WorkCover claim, an additional gross payment per week of $1,100.72 so that for each of the four weeks, from and including the week ending 19 January, 2011 she received payment for at least 38 hours per week at the rate of $28.97 per hour, part of which was paid by WorkCover Queensland and part of which was paid by her employer.
3. Ms Melrose argues that pursuant to her contract of employment, it was her employer’s obligation to pay her four weeks wages, calculated on a 38 hour week from and including the pay week ending at 19 January, 2011 irrespective of the payments received by her from WorkCover Queensland. She argues that the payments from WorkCover were payments of compensation due to her under the Workers’ Compensation and Rehabilitation Act 2003 because she was an injured worker and they bear a very different character to the payments the respondent was required to make to her pursuant to clause 16 of her employment contract.
4. The respondent argues that it is not obliged to make any further payment to Ms Melrose because at best she is entitled to four weeks wages at 38 hours per week for the notice period. Part of that money has been paid by WorkCover Queensland and part by the respondent. If the respondent is required to pay Ms Melrose's claim:
   1. She will receive double payment for 26 hours per week for the four weeks of the notice period; and
   2. The respondent will breach the obligations imposed on it by the Workers’ Compensation and Rehabilitation Act 2003 (to which I shall refer shortly).
5. It is clear from the evidence, and it does not seem to be in dispute between the parties, that Ms Melrose was given four weeks notice of the termination of her employment. The respondent did not elect under clause 16.2(b) to pay her a month’s salary in lieu of such notice.
   In those circumstances, the respondent's obligation was to continue paying her normal salary in accordance with the contract of employment. Ms Melrose’s obligation was to continue to perform her duties pursuant to that contract. Neither party suggested that this was a situation where Ms Melrose ceased working having accepted from the respondent that she would be paid one month’s salary in lieu of notice.
6. The fact that Ms Melrose was receiving WorkCover benefits at the time the notice period ran is not to the point.
7. Pursuant to s.46 of the Workers’ Compensation and Rehabilitation Act 2003 it is the respondent’s legal liability to pay compensation to Ms Melrose for injuries sustained by her in the course of her employment. The respondent, however, is required to insure against such liability with WorkCover Queensland, unless it has a licence as a self insurer (pursuant to s.48(1) of the Act).
8. WorkCover Queensland is obliged by the policy of insurance that it issues to the respondent to make the payments (subject to any excess that the employer is liable to pay pursuant to section 66(2) of the Act) on behalf of the respondent that the respondent is otherwise liable to pay to Ms Melrose for compensation under the WorkCover Queensland Act.
9. During the four-week notice period, Ms Melrose received her salary as she ordinarily would have, although part of it was paid by WorkCover as the insurer of the respondent’s liability to continue to make payments to her despite her injury. To the extent that the payments from WorkCover did not meet her full entitlements under the contract of insurance, the respondent made up the difference. It was obliged to do no more in the circumstance. Indeed, if the respondent had done any more, it may have breached s.109(3) of the Workers’ Compensation and Rehabilitation Act 2003 thereby rendering it liable to the imposition of penalties by WorkCover Queensland.
10. Ms Melrose’s case misconceives the nature of the obligation cast on the parties, and in particular the respondent, by clause 16 of the employment contract. She is not entitled to four weeks notice and payment in lieu of notice – it is either one or the other. There seems to be no dispute between the parties that the respondent elected to give her the appropriate notice rather than payment in lieu of notice.
11. During the course of submissions, Ms Melrose suggested that she was entitled to a “redundancy payment". Nothing in the evidence before me suggests that she was entitled to a redundancy payment in the sense in which that term is commonly used. By letter from the respondent to Ms Melrose dated 19 January, 2011 the respondent explained to Ms Melrose that her position was terminated for reasons of redundancy, but that the respondent was entitled to terminate her employment on four weeks notice which it did. She was not entitled, by the terms of her employment contract to a “redundancy payment” – that is a further lump sum amount beyond that provided for in cl.16 of the employment contract.
12. The respondent was obliged to pay her usual salary for the four-week notice period, or if it chose to make a payment to her in lieu of notice, a payment calculated by reference to one month’s salary. It chose the former over the latter. Had the respondent chosen the latter course, then arguably the payment to be made to Ms Melrose was of a different character than the payments received by her during the period of notice. Such a payment might more properly be characterised as a contractual payment not in the nature of wages or salary, but a payment pursuant to cl.16 of the agreement. However, her employment would have terminated on 19 January 2011, and her entitlements to WorkCover benefits would have terminated on that day as well.
    The respondent, then, would have been left to make the payment in lieu of notice in its entirety.
13. But on either scenario, Ms Melrose would only have received one month’s salary. In that respect, her present claim does involve double payment.
14. The application cannot succeed and it must be dismissed.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of Jarrett FM

Associate:

Date: 23 September 2011