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Unfair Work Contracts |
An interesting case was recently handed down by the NSW Industrial Relations Commission which reversed an earlier decision that gave a construction worker a lump sum of 12 months pay under the unfair contract sections of the Industrial Relations Act (IR Act). The Commission determined that the worker's termination was subject to a Federal instrument (an Enterprise Agreement and an Award) and not the State jurisdiction. |
The worker had been employed for some 23 years but was terminated on the basis of an alleged lack of work for him. At such time there was an existing Enterprise Agreement (EA) which had been approved and ratified by the Commission. There was a Federal Award which applied to the worker's employment. Both the EA and the Award outlined various classifications and terms of engagement, including salary, redundancy and termination provisions. |
The issue before the full bench of the NSW Industrial Relations Commission was whether Section 106 of the NSW IR Act was inconsistent with Federal instruments. If so, it would be a breach of Section 109 of the (Commonwealth) Constitution. |
The trial judge was Trish Kavanagh J who held that although the Award applied to the worker, the facts showed that the worker was a permanent employee and was paid at a higher rate. She found the Agreement and the Award did not canvas every aspect of the employment. She held that Section 106 of the IR Act related to the worker's employment and therefore there was no inconsistency. |
When the case went to appeal, the Full Bench held that the trial judge was wrong in accepting the submission that the worker was permanent and that the Award did not provide for an employment contract on a permanent basis and the award/agreement did not therefore apply. The Full Bench went into some discussion concerning the use of the adjective "permanent". They considered that the word was used only to distinguish the nature of the worker's employment from that of a casual employee and accordingly did not bring into effect a new classification of a contract of employment which would be separate from that which was otherwise considered in both the Award and the Agreement. |
They further held that it was open to conclude that the worker was classified at a higher level than what his skills actually presented in determining his correct wages, because he had so much experience in the industry. The full bench said that this wasn't unusual and was common to many industries and accordingly it did not mean that the Award or the Agreement did not apply to the worker's classification. They therefore held that the worker was employed on a weekly hire basis under the Agreement and was only entitled to one week's notice of termination of his employment, instead of the 12 months lump sum verdict given by Kavanagh J. |
The case is important because the Full Bench considered that the Award and the Agreement did in fact apply to the worker's engagement as outlining or determining the nature of that engagement, his employment classification and the appropriate notice to be given on termination of that employment. They said that it would be incorrect to consider that the notice of termination came from the employee's contract of employment, as opposed to the Agreement. |
The Full Bench therefore held that any Orders made under s106 of the IR Act that required notice in excess of or above that which was set out in the Agreement, was in direct conflict with the terms of the Agreement and accordingly Kavanagh's Orders were invalid. They held that the trial judge's determination to give the worker a 12 month lump sum payment was inconsistent with the federal industrial instrument and accordingly that Order should be set aside. |
