CITATION : 2013 WAIRC 00581 CORAM : COMMISSIONER S J KENNER HEARD : TUESDAY, 12 FEBRUARY 2013, TUESDAY, 11 JUNE 2013 DELIVERED : WEDNESDAY, 7 AUGUST 2013 FILE NO. : B 264 OF 2012 BETWEEN : LEAHNE ROWLEY Applicant AND BHP BILLITON IRON ORE Respondent Catchwords : Industrial law (WA) – Contractual benefits claim – Whether Commission has jurisdiction – Whether the Applicant’s salary exceed the prescribed amount – Statutory interpretation – What constitutes “salary” for the purposes of ss 29AA(4) and (5) of the Industrial Relations Act 1979 (WA) and reg 5(2)(c) of the Industrial Relations (General) Regulations 1997 (WA) – Meaning of “remuneration” – Principles applied – Declaration that the Commission has jurisdiction to hear the claim 540 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 94 W.A.I.G. Legislation : Industrial Relations Act 1979 (WA) ss 29AA(4), 29AA(5); Workplace Relations Act 1996 (Cth) ss 170CC(3), 170CC(4); Industrial Relations (General) Regulations 1997 (WA) regs 5, 5(2)(a), 5(2)(b), 5(2)(c); Workplace Relations Regulations 1996 (Cth) reg 30BC Result : Declaration issued Representation: Counsel: Applicant : Dr R Whitwell Respondent : Mr R Lilburne Solicitors: Applicant : Dr R Whitwell Respondent : Ashurst Australia Case(s) referred to in reasons: Bogunovich v Bayside Western Australia Pty Ltd (1998) 79 WAIG 8 Ciccotosto v TPS Firepower Pty Ltd (2004) 84 WAIG 2607 Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297 Foti v PCH Access Pty Ltd (ACN 008 802 480) (2004) 84 WAIG 1199 Genovesi v Affluence Pty Ltd t/as Swan Districts Real Estate (2005) 85 WAIG 1314 Millar v JB & BL Nominees Pty Ltd T/A Southern Cross Traders (2005) 85 WAIG 3797 O'Sullivan v Cooks Construction (2003) 83 WAIG 2860 Papps v Robe River Mining Co Pty Ltd (2005) 85 WAIG 3565 Remedios v Oceaneering Australia Pty Ltd (2005) 85 WAIG 3161 Springdale Comfort Pty Ltd t/as Dalfield Homes v Building Trades Association of Unions of Western Australia (Association of Workers) (1986) 67 WAIG 325 The Totalisator Agency Board v Fisher (1997) 77 WAIG 1889 Case(s) also cited: Capewell v Cadbury Schweppes Australia Ltd (1998) 78 WAIG 299 Condon v G James Extrusion Company (1997) 74 IR 283 Daly v Chubb Protective Services, A Division of Chubb Security Pty Ltd (2004) 84 WAIG 1177 Fischer v SMS Employees Pty Ltd atf SMS Consulting Unit Trust (2000) Print T0978 Kunbarllanjnja Community Government Council v Fewings (1998) Print Q0675 O'Sullivan v Cooks Construction (2003) 83 WAIG 2860 Ross v Chevron Australia Pty Ltd (2003) 84 WAIG 383 Vacher & Sons Limited v London Society of Compositors [1913] AC 107 Volkofsky v Clough Engineering Limited (2003) 83 WAIG 4120 Watiyawanu Community Government Council v Jones (2000) Print S7110 Reasons for Decision 1 The applicant, Ms Rowley, was employed as Superintendent Community Projects for BHP Billiton Iron Ore. In this position, Ms Rowley was responsible for the delivery of community infrastructure projects in the local community in the Port Hedland area, in the Northwest of the State. Ms Rowley started work in January 2012 and her employment ended in December 2012. 2 On termination of Ms Rowley’s employment, she contended that she has been denied benefits due to her under her contract of employment. It is common ground that in the position that Ms Rowley occupied, no applicable industrial instrument of this Commission had application. Ms Rowley contended that the contract of employment was for a two year fixed term until January 2014. She seeks the balance of her salary for this term in the sum of $147,928. In addition, Ms Rowley seeks other benefits said to have been denied to her, including superannuation contributions in the sum of $20,710; an annual short term incentive bonus in the sum of $34,912; annual leave travel assistance in the sum of $2,516 and the value of a motor vehicle in the sum of $21,736. The total amount claimed is $227,801. 3 These claims are contested by BHP. In short, it contended that Ms Rowley’s contract of employment was not for a fixed term of two years. Rather, it says that the contract was for a maximum period of two years, but was able to be terminated prior to the expiry of two years, by the giving of notice. The company gave notice in accordance with the contract and paid to Ms Rowley all entitlements due to her at that time. BHP therefore contended that it has no further contractual obligations to 94 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 541 Ms Rowley. Whether Ms Rowley’s claim of a fixed term contract for two years can be made good, depends on a proper construction of the terms of the contract. 4 Before dealing with Ms Rowley’s substantive claims however, a preliminary issue arises. That issue is whether Ms Rowley was, for the period of her employment by the company, paid a salary in excess of that prescribed by ss 29AA(4) and (5) of the Industrial Relations Act 1979 and reg 5 of the Industrial Relations (General) Regulations 1997. If so, Ms Rowley’s claim is beyond the jurisdiction of the Commission and must be dismissed. The salary cap at the time of the termination of her employment, for the purposes of s 29AA(4) of the Act, was $140,400, effective from 1 July 2012. Jurisdiction 5 It is trite to observe that Ms Rowley must establish her claim and that it is within the jurisdiction of this Commission: Springdale Comfort Pty Ltd t/as Dalfield Homes v Building Trades Association of Unions of Western Australia (Association of Workers) (1986) 67 WAIG 325. 6 It is convenient to set out the relevant statutory provisions at this point. ss 29AA(4) and (5) are as follows: (4) The Commission must not determine a claim that an employee has not been allowed by his or her employer a benefit to which the employee is entitled under a contract of employment if — (a) an industrial instrument does not apply to the employment of the employee; and (b) the employee’s contract of employment provides for a salary exceeding the prescribed amount. (5) In this section — industrial instrument means — (a) an award; or (b) an order of the Commission under this Act that is not an order prescribed by regulations made by the Governor for the purposes of this section; or (c) an industrial agreement; or (d) an employer-employee agreement; prescribed amount means — (a) $90 000 per annum; or (b) the salary specified, or worked out in a manner specified, in regulations made by the Governor for the purposes of this section. 7 Regulation 5 of the Regulations is in the following terms: 5. Prescribed amount — section 29AA (1) For the purposes of paragraph (b) of the definition of “prescribed amount” in section 29AA(5) of the Act the specified salary is $90 000, or that amount as affected by indexation in accordance with regulation 6. (2) For the purposes of paragraph (b) of the definition of “prescribed amount” in section 29AA(5) of the Act the salary provided for in an employee’s contract of employment is to be worked out as follows — (a) for an employee who was continuously employed by an employer and was not on leave without full pay at any time during the period of 12 months immediately before the dismissal or claim — the greater of — (i) the salary that the employee actually received in that period; and (ii) the salary that the employee was entitled to receive in that period; (b) for an employee who was continuously employed by an employer and was on leave without full pay at any time during the period of 12 months immediately before the dismissal or claim — the total of — (i) the actual salary received by the employee for the days during that period that the employee was not on leave without full pay; and (ii) for the days that the employee was on leave without full pay an amount worked out using the formula — pay; full without leave on not days pay full without leave on days x (i) ph subparagra in mentioned on remunerati or (c) for an employee who was continuously employed by an employer for a period less than 12 months immediately before the dismissal or claim — the amount worked out using the formula — employed. days 365 x received on remunerati 8 The question to be answered at this stage of the proceedings is whether, at the time of the termination of her employment, and the commencement of this claim, Ms Rowley’s “salary” for the purposes of ss 29AA(4) and (5) exceeded the statutory cap Given the arguments advanced by the parties, which I will summarise shortly, this involves not just whether Ms Rowley’s 542 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 94 W.A.I.G. salary, in the common law sense, exceeds the cap, but whether also, the total “remuneration” received by Ms Rowley, is to be taken into account in determining the relevant “salary” for the purposes of the statute. This involves a threshold question of construction. If the latter contention, as advanced by BHP, is correct, Ms Rowley’s claim must be dismissed. 9 In short, the contentions of the parties are as follows. 10 Ms Rowley submitted that it is only her base salary of $139,648 per annum, which should be considered for present purposes. On the other hand, BHP contended that Ms Rowley enjoyed other benefits as part of her employment package that should also be brought to account. These included an incentive scheme payment ($14,610); use of a motor vehicle ($13,460.85); annual leave travel assistance ($5,032) and the value of a housing subsidy ($12,000). On this basis, the company contended that the “salary” for Ms Rowley was, for the purposes of s 29AA(5) of the Act, at least $174,594.39 per annum, which is well above the cap. If the respondent’s contention is correct, Ms Rowley concedes that her salary is in excess of the cap. 11 In relation to the interpretation of reg 5(2)(c), Ms Rowley relied on a number of decisions of the Commission. In particular, she referred to and relied upon a decision of Smith C in Millar v JB & BL Nominees Pty Ltd T/A Southern Cross Traders (2005) 85 WAIG 3797. In Millar Smith C at par 89 concluded, in obiter observations, that in reg 5(2)(c), the reference to “remuneration”, should be read down in view of the opening words of reg 5(2), to mean “salary” in the sense used in The Totalisator Agency Board v Fisher (1997) 77 WAIG 1889. Ms Rowley also relied upon other decisions including O’Sullivan v Cooks Construction (2003) 83 WAIG 2860 per Wood C; Papps v Robe River Mining Co Pty Ltd (2005) 85 WAIG 3565 per Kenner C and Foti v PCH Access Pty Ltd (ACN 008 802 480) (2004) 84 WAIG 1199 per Harrison C. 12 On this approach, and applying the ratio of Fisher, Ms Rowley submitted that none of the other components of her remuneration package meet the meaning of “salary” for the purposes of ss 29AA(4), (5) and reg 5(2)(c). Therefore, applying the formula in reg 5(2)(c) to Ms Rowley’s salary, as she was employed for less than 12 months, namely 351 days, that leads to a salary of $134,658, which was within the cap at the material time. 13 For BHP, it was contended that on its proper construction, reg 5(2)(c), when read with ss 29AA(4) and (5), requires the wider concept of “remuneration” to be used to calculate an employee’s salary for the purposes of the cap. On this basis, on the view of the relevant statutory provisions adopted by the company, the decision of Smith C in Millar, upon which Ms Rowley placed most reliance, was wrongly decided. In further support of its position, BHP referred to several decisions of the Commission where, according to the company, the broader approach to the interpretation of reg 5(2)(c) had been applied. These included Remedios v Oceaneering Australia Pty Ltd (2005) 85 WAIG 3161 per Mayman C; Ciccotosto v TPS Firepower Pty Ltd (2004) 84 WAIG 2607 per Coleman CC; and Genovesi v Affluence Pty Ltd t/as Swan Districts Real Estate (2005) 85 WAIG 1314 per Smith C. 14 BHP submitted, that applying the accepted approach to statutory interpretation, there is no warrant for reading the word “remuneration” in reg 5(2)(c) down. The sub regulation is a method for working out the salary of an employee, on the plain meaning of the words used. Consideration 15 For the following reasons, in my view, the approach adopted by Ms Rowley to the interpretation of reg 5(2)(c) is to be preferred. I am not persuaded to the view advanced by BHP. 16 I have set out the statutory provisions above. There is no dispute as to the meaning of “salary” and “remuneration”. The latter is a concept of considerably greater breadth than the former: Bogunovich v Bayside Western Australia Pty Ltd (1998) 79 WAIG 8. It would clearly incorporate those additional elements contended by the company, save perhaps, for the housing component. 17 Regrettably, the drafting of reg 5(2) is less than ideal. There can be no issue taken with the proposition that the purpose of reg 5(2) is to prescribe a method of “working out” an employee’s salary. Three methods are set out, depending upon whether a person has had less than 12 months of service prior to a dismissal or claim, and whether the person was on unpaid leave or not, and in the case where they have had at least 12 months service. 18 Also, there is no doubt that reg 5(2), depending on which circumstance applies, draws a distinction between “salary received” and “salary that the employee was entitled to receive”. That distinction is not material for present purposes. 19 The problem arises, as in this case, when considering the meaning of “remuneration” in the formula referred to in reg 5(2)(c). “Remuneration” is only referred to in regs 5(2)(b) and (c). There is no reference to the word “remuneration” in reg 5(2)(a), which refers only to salary. The reference to salary in reg 5(2)(a), is plainly to the common law meaning of salary, in the terms of ss 29AA(4) and (5) of the Act. This is also the case in reg 5(2)(b)(i), where again, reference is made to “the actual salary received …”, as part of the formula in that sub regulation. 20 The difficulty with BHP’s argument arises when one carefully examines reg 5(2)(b)(ii). This deals with that part of the formula used to calculate a “salary” component, for time an employee is on leave without full pay. The formula refers to “remuneration mentioned in sub paragraph (i)”. One then looks at sub paragraph (i). It refers to the first component of the calculation as “the actual salary received …”. Thus on its plain meaning, for the purposes of reg 5(2)(b)(ii), “remuneration” means “salary” in its common law sense, and not the wider concept of remuneration, referred to in the cases. It would be nonsensical, and lead to an absurd result, to construe “remuneration” in reg 5(2)(b), in any other way. 21 Returning then to reg 5(2)(c), the controversial provision. It is trite to observe that a statutory provision should be construed in context. One should have regard to reg 5(2)(c), as a part of reg 5(2) as a whole. It is also a canon of construction, although rebuttable, that the same words used in a statute, especially in the same section, are presumed to have the same meaning (see Pearce, D C and Geddes, R S Statutory Interpretation in Australia 6th Ed at pars 4.6-4.7). 22 Given the terms of reg 5(2)(b)(ii), and how “remuneration” is to be interpreted, I take the view that it was not the intention of the draftsperson, in reg 5(2)(c), when referring to “remuneration” to mean the wider concept as in the cases. Whilst it would 94 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 543 have plainly been better to simply refer to “salary” in both regs 5(2)(b)(ii) and (c), which was, in my view, the meaning intended, it is the function of a court or tribunal to construe the relevant provisions in such a way that is in accord with the overall purpose of the provision in question. Both regs 5(2)(b) and (c) provide for formulas for calculating a salary, depending on an employee’s length of service. What reg 5(2)(c) does, is to provide, in effect, for a pro rata calculation of salary, based on the number of days of employment, relative to 365 days in a calendar year. 23 To construe “remuneration” in reg 5(2)(c), in the manner contended by BHP, which is completely different to that prescribed in reg 5(2)(a) and (b), would lead to some extraordinary results. For example, in this case, had Ms Rowley been employed for a full year, and was not on leave without full pay in that period, she would have a base salary of $139,648 for the purposes of the cap. Yet, had she been employed for 364 days, just one day less, she would, on the company’s argument, be held to have a “salary”, based on her total remuneration, as high as $175,072.25, on applying the formula in reg 5(2)(c). This would be an arbitrary and capricious result. It is a construction to be avoided: Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297. 24 Ms Rowley’s approach to the meaning of “remuneration” in reg 5(2)(c), is also more consistent with the use of the word “salary” in the introductory part of reg 5(2). This was the obiter conclusion of Smith C in Millar. Whilst I consider with respect, Smith C reached the correct conclusion, it was only partially for the correct reason. As I have dealt with above, in my view, another significant indicator, is the terms of the regs 5(2)(b) and (c) themselves, and the language used. Importantly also, is s 29AA(5)(b) of the Act, which only refers to “salary” and not “remuneration”. The controlling provisions in the Act, ss 29AA(4) and (5), refer to “salary” and not “remuneration”. Any conflict between the Act and the Regulations must be resolved in favour of the former. 25 The reference to salary and not remuneration in the statute is in contrast to, for example, the terms of the former ss 170 CC (3) and (4) of the Workplace Relations Act 1996 (Cth) and reg 30BC of the Workplace Relations Regulations 1996 (Cth) which, for the purposes of Federal unfair dismissal exclusions, all relevantly referred to “remuneration” and not “salary”. 26 Finally, to the extent that the decisions to which BHP referred in support of its arguments, are inconsistent with the above approach to the interpretation of reg 5(2)(c) of the Regulations, with due respect, I consider them to have been wrongly decided. Conclusion 27 Therefore, on the basis of the foregoing Ms Rowley’s salary was within the cap. The Commission has jurisdiction to hear her substantive claim. A declaration will be made to this effect. 2013 WAIRC 00715 WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION PARTIES LEAHNE ROWLEY APPLICANT -v- BHP BILLITON IRON ORE RESPONDENT CORAM COMMISSIONER S J KENNER DATE WEDNESDAY, 7 AUGUST 2013 FILE NO. B 264 OF 2012 CITATION NO. 2013 WAIRC 00715 Result Declaration issued Representation Applicant Dr R Whitwell of counsel Respondent Mr R Lilburne of counsel Declaration HAVING heard Dr R Whitwell of counsel on behalf of the applicant and Mr R Lilburne of counsel on behalf of the respondent, the Commission, pursuant to the powers conferred on it under the Industrial Relations Act 1979 hereby declares – THAT the applicant’s salary does not exceed the prescribed amount for the purposes of ss 29AA (4) and (5) of the Industrial Relations Act 1979 and the Commission has jurisdiction to hear and determine the applicant’s claim. (Sgd.) S J KENNER, [L.S.] Commissioner. 544 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 94 W.A.I.G. 2013 WAIRC 00826 WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION PARTIES LEAHNE ROWLEY APPLICANT -v- BHP BILLITON IRON ORE RESPONDENT CORAM COMMISSIONER S J KENNER DATE THURSDAY, 26 SEPTEMBER 2013 FILE NO/S B 264 OF 2012 CITATION NO. 2013 WAIRC 00826 Result Order issued Representation Applicant Ms S Cordina of counsel Respondent Mr R Wade of counsel Order HAVING heard Ms S Cordina of counsel on behalf of the applicant and Mr R Wade of counsel on behalf of the respondent the Commission, pursuant to the powers conferred on it under the Industrial Relations Act, 1979 hereby orders – (1) THAT leave be and is hereby granted for the applicant to amend its notice of application filed 20 December 2012 in the terms of its notice of application filed 25 September 2013. (2) THAT leave be and is hereby granted for the respondent to file and serve any amended notice of answer by 10 October 2013. (Sgd.) S J KENNER, [L.S.] Commissioner. 2013 WAIRC 00829 WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION PARTIES LEAHNE ROWLEY APPLICANT -v- BHP BILLITON IRON ORE RESPONDENT CORAM COMMISSIONER S J KENNER DATE TUESDAY, 1 OCTOBER 2013 FILE NO/S B 264 OF 2012 CITATION NO. 2013 WAIRC 00829 Result Order issued Representation Applicant Ms S Cordina of counsel Respondent Mr R Wade of counsel Order HAVING heard Ms S Cordina of counsel on behalf of the applicant and Mr R Wade of counsel on behalf of the respondent the Commission, pursuant to the powers conferred on it under the Industrial Relations Act, 1979 hereby orders – (1) THAT par (2) of the Commission’s order of 26 September 2013 be varied by deleting the date 10 October 2013 and inserting in lieu thereof the date 14 October 2013. (2) THAT the hearing date of 17 October 2013 be and is hereby vacated. 94 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 545 (3) THAT the application be relisted for hearing on a date and time to be fixed by the Commission. (Sgd.) S J KENNER, [L.S.] Commissioner. 2014 WAIRC 00244 WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION