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[Extract from Queensland Government Industrial Gazette,
dated 8 July, 2005, Vol. 179, No.12, pages 410-411]
INDUSTRIAL COURT OF QUEENSLAND
Industrial Relations Act 1999 – s. 321(1) – appeal against decision of industrial commission
Keith Brady Real Estate (Qld) Pty Ltd t/a Keith Brady Real Estate AND William Barry Gannon and
Property Sales Association of Queensland, Union of Employees
(No. C19 of 2005)
PRESIDENT HALL 28 June 2005
DECISION
In November of 2004 each of two applications brought against Keith Brady Real Estate (Qld) Pty Ltd t/a Keith Brady Real Estate came before the Queensland Industrial Relations Commission constituted by a Commissioner sitting alone. Each application related to monies in lieu of long service leave said to be owing by Keith Brady Real Estate (Qld) Pty Ltd to a former employee of the company. The first application was brought pursuant to s. 278 of the Industrial Relations Act 1999 to recover the monies as unpaid wages. The second application was brought pursuant to s. 49(3) and/or (5) to recover the same sum by way of an order about long service leave. (By Act No. 11 of 2005 s. 49(3) to (6) were relocated and renumbered as s. 46(8) to (11)). The applications were joined. In the result the amount said to be owing was ordered to be paid to the former employee, see 178 QGIG 275.
The real issue between the parties concerned the construction of clause 1.6.8 of the Property Sales Award – Queensland and its application to the (somewhat unusual) facts of the case.
The former employee had been remunerated on a commission only basis. Such employees are entitled to long service leave on “full pay”; Industrial Relations Act 1999 and Ussher v Pharlark Pty Ltd t/a Tarrants Ford and Hyundai (2004) 175 QGIG 1152. Quantifying the “full pay” of a commission only employee is not without difficulty, see e.g. Trovas Holdings Pty Ltd v Gannon (1999) 162 QGIG 337 and Ussher v Pharlark Pty Ltd t/a Tarrants Ford and Hyundai, op. cit. Clause 1.6.8 of the Property Sales Award – Queensland seeks to meet the difficulty by providing a method of calculation. The clause provides:
“1.6.8 Long Service Leave
All employees covered by this Award shall be entitled to Long Service Leave on full pay under, subject to, and in accordance with the provisions of the Industrial Relations Act 1999 and any amendment thereto:
Provided that, in the case of employees remunerated wholly or partially on the basis of commission payment “full pay” shall mean the average weekly earnings calculated over the five (5) years of employment immediately preceding the date upon which the leave is taken, except that the highest earnings year of employment and the lowest earnings year of employment in that period shall not be taken into account.
Commission earnings paid prior to, or subsequent to, the five (5) year period shall not be taken into account unless they were due and payable during that period.
An employee may be paid for all or part of an entitlement to long service leave instead of taking the leave or part of the leave if the employee and employer agree by a signed agreement.”.
The debate is about the proviso. It must be conceded that the formula is about the averaging of “weekly earnings” not “commissions paid”. But the purpose of the formula is to flesh out the statutory obligation to remunerate employees on long service leave by paying those employees their “full pay”. Indeed, it may be doubted whether an award might lawfully substitute an obligation to pay a lesser amount. Further, “earnings” has historically been taken to mean the full sum for which an employee is engaged to work; see e.g. Abram Coal Company Ltd v Southern [1903] AC 306 at 308 per Lard Macnaghton and Paterson v Stanmorr Pty Ltd (2000) 2VR 460 at 463 per Phillips J.A. In my view the Commission was right to treat the change in language from “commission” to “earnings” as designed to accommodate the case of employees remunerated in part by the payment of wages and in part by the payment of commission rather than as an attempt to deprive commission only employees of a “full pay” derived from their full commission earnings.
The unusual facts are these. Keith Brady Real Estate (Qld) Pty Ltd provided the former employee with a team of secretarial and personal assistants subject to her direction. The former employee agreed to contribute to the employment costs of the team. The critical clause in the annexure to her employment contract was:
“It is further agreed that Keith Brady Real Estate (Qld) Pty Ltd shall deduct costs of employment of the personnel on the percentage basis nominated from the commission entitlements of the said Judith-Ann Latham.”.
The issue is whether in performing the calculation at clause 1.6.8 one uses the commissions payable before the authorised deduction is made or the commissions paid after the authorised deductions are made. The commission adopted the first of the two contentions. The circumstance that the deductions are to be made “from commissions” suggests that that view is carried. So also does a line of authority in this Court, see O’Connor v Electroboard Administration Pty Ltd (2001) 168 QGIG 90, Murgatroyd v Database Services Pty Ltd (2003) 173 QGIG 387 and Repco Limited v Hayward (2005) 179 QGIG 190 equating payment to an employer and payment to an employee’s creditor at the direction of the employee. There being no suggestion of a sham, it does not matter that the creditor was the employer. In my view the commissions payable prior to deduction are the commissions to be used in the calculation.
I dismiss the appeal.
Dated 28 June 2005.
D.R. HALL, President.Released: 28 June 2005 / Appearances:
Mr J. Murdoch, S.C. directly instructed by Queensland Real Estate Industrial Organisation of Employers for the Appellant.
Mr K. Watson directly instructed by Property Sales Association of Queensland, Union of Employees for the Respondent.
Government Printer, Queensland
ÓThe State of Queensland 2005.
C19[2005]Decision.doc