WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2015 WAIRC 00484 CORAM : ACTING SENIOR COMMISSIONER P E SCOTT HEARD : WEDNESDAY, 29 APRIL 2015, MONDAY, 11 MAY 2015, WEDNESDAY, 20 MAY 2015 DELIVERED : FRIDAY, 3 JULY 2015 FILE NO. : B 234 OF 2014 BETWEEN : FIKRET BECIRBASIC Applicant AND BUILDING WEST PTY LTD Respondent CatchWords : Denied contractual entitlements – Contract of employment – Repudiation of contract – Summary dismissal – Implication of a term in the contract – Misconduct – Termination of employment – Payment for completion or part completion of projects – Annual leave – Pay in lieu of notice – Superannuation Legislation : Fair Work Act 2009 s 87(1)(a) Industrial Relations Act 1979 s 29(1)(b)(ii) Minimum Conditions of Employment Act 1993 s 23(1) Result : Application granted in part Representation: Applicant : Mr P Mullally as agent Respondent : Mr B McPherson of counsel and with him Ms K O’Brien of counsel Reasons for Decision 1 The applicant says that he has been denied benefits arising from his contract of employment, of payments for completion or part completion of a number of projects; payment for annual leave; was unjustifiably summarily dismissed so he seeks four weeks’ pay in lieu of notice, and he seeks payment of superannuation benefits said to arise from the contract. 2 The respondent says, in respect of the particular projects, that they were not completed to the stage that the applicant claims, or that the applicant was not involved in the work on those projects at all, such as to warrant payment to him. In respect of the claim for annual leave, the respondent says that because the applicant was dismissed prior to the completion of 12 months, he was not entitled to a pro rata amount. His employment was justifiably terminated for serious misconduct so he is not entitled to pay in lieu of notice. The respondent says the superannuation claim arises from a statutory scheme not from the contract. Background 3 The applicant was employed by the respondent as a building supervisor to supervise the construction of residential homes and units undertaken by the respondent. The employment commenced on 11 November 2013 and terminated on 4 November 2014. The duties of that position involved supervising and managing the sites; quality control of the work; authorising payments to subcontractors; being responsible for all safety requirements on the site – the supervisor stands in the shoes of the builder, and his licence makes him responsible for the proper management of the site (evidence of Peter John Edmonds (ts 126)). 4 The parties signed a written contract of employment on 12 November 2013, which said that it commenced on Monday, 11 November 2013. Its relevant clauses for the purposes of this claim include: 6. Remuneration Salary Component The Employee will receive a $120,000.00 per annum. Remuneration will be paid monthly in arrears and will be paid as outlined in Clause 7 below. The appropriate PAYG deductions will be applicable. Salaries are reviewed annually and are adjusted at the Employer’s discretion to take into account the Company’s performance, the Employee’s performance and the industry salary movements. ... 95 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1417 8. Superannuation 8.1 Choice of Superannuation The Employer makes superannuation contribution payments on behalf of the Employee into a superannuation fund nominated by the Employee from time to time. The amount of these superannuation contribution payments are the required minimum rate set by the Superannuation Guarantee Scheme. 8.2 The Employee is at liberty to direct, before the Employee earns any portion of the Salary, to have either some or all of that Salary contributed into Superannuation. … 10. Responsibilities/Duties The Employee’s Responsibilities and Duties are as follows: - Will complete the relevant form of statutory declaration relating to his Proposed engagement as Nominated Registered Supervisor - Carrying out any duties which are within the Employee’s skill, competence and expertise as a Licensed Builder and Nominated registered Supervisor whilst liaising with the Employer, and other contractors and sub contractors. - Will manage and supervise the building works under construction for this employer in such a manner to ensure that the whole of the building work is carried out in proficient and workmanlike manner. … 12. Employee Conduct The Employee must: - Serve the Employer faithfully and diligently and exercise all due care. - Act in the employer’s best interest. - Refrain from acting or giving the appearance of acting contrary to the Employer’s interest. - Use the Employee’s beast[sic] endeavours to protect and promote the Employer’s good name and reputation. - Perform such duties to the best of the Employee’s ability. … 14. Terminating without notice This Contract may be terminated without notice by the Employer if: - The Employee commits a serious breach of any of the provisions of their Contract. - The Employee commits any act that amounts to a repudiation of this Contract. - The Employee engages in serious and wilful misconduct. 15. Annual Leave The Employee is entitled to Annual Leave that has accrued in the immediate 12 month period. It is taken at a time mutually agreed between the Employee and the Employer having regard to the operational requirements and needs of the Employer. If no mutual agreement then the Employee takes Annual Leave as directed from time to time by the Employer. The Employee gives the Employer a minimum of 2 weeks written notice of the Employee’s intention to take Annual Leave. Leave must be taken in each 12 month period and not later than 15 months from the beginning of each 12 month period. 16. Terminating with notice At any time either party may terminate this contract by giving the required amount of written notice to the other party which is 4 weeks (“The Notice Period”). The Notice Period is not reduced under any circumstances. Exhibit R4, QHD-1 5 Within a matter of days of the contract being signed, the parties agreed to amend section 6 of the contract in the following terms: Section 6 is amended by deleting: “The employee will receive a $120,000 per annum” and inserting a new way of payment instead: - Double storey house- $ 15,000.- - Single storey house- $8,000.- - Town houses- $10,000.-each unit (up to 3) $5,000.-for each unit after 3 - Triplex $18,000.-( $ 6,000.- each unit) - Single Units- $8,000.- - Two Units $15,000.- ( $ 7,500.- each unit) 1418 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 95 W.A.I.G. Any other project not specified on the list will be discussed and payment made accordingly. Exhibit R4, QHD-2 6 The applicant says that it was agreed that he would be paid for each building project the lump sum by progress payments on certain milestones being reached. He says that those milestones fell into eight equal stages of (1) site works, (2) slab finish, (3) brickwork finish, (4) roof cover finish, (5) lock up, (6) cabinets and main floor, (7) painting, brick paving and outdoor, and (8) final payment. 7 The applicant’s evidence was that he was paid certain amounts relating to each of a number of projects but was not paid the full amount. The applicant’s Further and Better Particulars of Claim, filed on 6 March 2015, contains Schedule 2 which sets out the address of each project and the stage of progress of that project at termination; payments due to him according to his calculation in respect of the level of completion; the amount already paid to the applicant on a progress basis, and the amount now claimed, as follows: Job address Stage reached at termination of employment Total payment due to the applicant for this job Amount already paid to the applicant on progress basis Amount now claimed from the respondent by the applicant 9 Changton Way WESTMINSTER Roof cover $9000 $4091.04 $4908.95 71 Mirrabooka Avenue WESTMINSTER Lock up $11250 $8609.58 $2640.42 322A Main St, BALCATTA Brickwork finish $11,250 $9085.81 $2164.19 1 Raleigh Road, BAYSWATER - 64 Nollamara Avenue, NOLLAMARA Slab finish and 25% brickwork $5062.50 $4109.58 $952.92 77 Curlington Crescent, BALGA Lock up $11,250 $6145.83 $5104.17 207 Ravenswood Drive, WESTMINSTER Brick work $6750 $4091.04 $2658.96 207 Mirrabooka, BALGA Completed $18,000 nil $18,000 28 Wittering Street Completed $18,000 nil $18,000 2 Grime Road, ARDROSS Completed $15,000 nil $15,000 IGA Shop MARANGAROO Completed $5,000 nil $5000 TOTAL $71,789 6 March 2015 8 The applicant filed a witness statement on 17 April 2015, signed by him on that day. At the hearing on 29 April 2015, he gave evidence that apart from a correction to his licence number contained at [2], the statement was true and correct, and it was received into evidence. At [9] of the witness statement, he asserted that the particulars contained in Schedule 2 to the further and better particulars he had filed on 6 March 2015 as set out above, were true and correct. He further asserted that he ‘provided [his] services as a building supervisor to the building work done on each of those projects’. 9 On 20 April 2015, the applicant filed an amended schedule 2. The amendments were that the house number in the claim for ‘207 Mirrabooka ,BALGA’ was amended to ‘205’; the name ‘Grime Road’ was amended to ‘Grimsay Road’; and the ‘IGA Shop MARANGAROO’ was amended to ‘DIAMOND NAILS SHOP BANKSIA GROVE’. The amounts and stage reached, and all other details, remain unchanged. 10 The applicant concedes that his initial claim contained some substantial inaccuracies, including that he was never involved in work on the IGA Shop Marangaroo and he substituted Diamond Nails Shop Banksia Grove. 11 The respondent says that payments were due to be made to the applicant under the contract as lump sums at the completion of each project, and not by progress payments. However, the respondent deviated from this and paid certain amounts when the applicant demanded payment. The amounts were not based on particular entitlements but were projected forward, and for accounting purposes, were allocated against particular projects and particular completion stages. In this way, the respondent calculates that there were overpayments in respect of some projects because by the time the applicant’s employment terminated, some of those payments already made were not due. 95 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1419 12 The respondent set out its position as to the stages of completion of each of the projects as follows: ITEM PARTICULARS ($) (%) VALUE(%) ($) ($) VALUE COMPLETE COMPLETE PAYMENT REMAINING / (SURPLUS) 1. 9 Changton Way, Westminster $18,000.00 10% $1,800.00 $4,500.00 -$2,700.00 2. 64 Nollamara Ave Nollamara $18,000.00 10% $1,800.00 $4,500.00 -$2,700.00 3. 71 Mirrabooka Ave Westminster $18,000.00 50% $9,000.00 $9,000.00 $0.00 4. 77 Curlington Cres Balga $18,000.00 50% $9,000.00 $6,750.00 $2,250.00 5. 207 Ravenswood Dr Westminster $18,000.00 8% $1,440.00 $4,500.00 -$3,060.00 6. 322A Main St Balcatta $30,000.00 5% $1,500.00 $9,999.99 -$8,499.99 7. 2A Grimsay Ardross $15,000.00 40% $6,000.00 $0.00 $6,000.00 8. 28 Wittering Balga $18,000.00 100% $18,000.00 $11,250.00 $6,750.00 TOTAL $153,000.00 $48,540.00 $50,499.99 -$1,959.99 Response to Applicant’s Further and Better Particulars of Claim at [2] 13 This assessment was based on information provided by Mr Peter John Edmonds, who was engaged by the respondent, apparently to replace the applicant as its supervisor. Mr Edmonds’ assessment was based on his observation of the sites when he inspected them on 13 and 14 October 2014. 14 Mr Edmonds clarified that in respect of 322A Main Street, reference to 5% complete meant less than 5% of the bricklaying on the second storey rather than 5% of the total project. 15 I also note that reference to a payment of $11,250 having been made to the applicant for 28 Wittering was in error. It did not recognise that the applicant had repaid the respondent this amount on the basis that the project is said to have been completed under the supervision of the applicant’s predecessor in the role, Mr Mikic, and the respondent paid that amount to Mr Mikic. The dismissal 16 I infer from the evidence that sometime before 13 October 2014, the respondent became concerned about the applicant’s performance of his duties. As noted earlier, it engaged Mr Edmonds as supervisor and he undertook an assessment of the sites and reported to the respondent’s sole director, Mr Quoc Hung Du. On Mr Edmonds’ recommendation, work on the sites was stopped for approximately two weeks while the sites were cleaned up of rubbish, excess building materials and other equipment, and for proper signage to be installed. 17 On 20 October 2014, the applicant telephoned the respondent’s office and the call was answered by Anh-Thi Fiona Hoang, the new receptionist. Ms Hoang said that the applicant was abusive and threatening in this conversation. Mr Gordon Du, brother of Mr Quoc Hung Du and the respondent’s accountant or chief financial officer, then spoke to the applicant about this conversation. 18 On around 23 October 2014, Mr Quoc Hung Du and Mr Gordon Du are said to have met the applicant and discussed areas of dissatisfaction with his work and attitude. 19 Some days later, the respondent wrote to the applicant a letter dated 23 October 2014, headed ‘Reasons for Redundancy’ in the following terms: The Company has undertaken a review of our performance with current and future workload to meet the future operational requirements. Based on this review we have made the decision that we cannot justify your contractor fees on our projects as Nominated Supervisor, therefore, I, Mr Quoc Hung Du, the director of the company, has made the decision to terminate your employment with Building West Pty Ltd. We have records proving your poor performance (if not non-performance), poor supervisions[sic] and lack of management, which cost the company lots of money. Furthermore, I am not happy in recent times with your non-performance in your duty as the companies[sic] Nominated Supervisor in allocating time in overseeing the supervision of our projects as required by the WA Building Commission regulations. ► Under the Building Services (Regulation) Act 2011 you are to ensure that building services to be carried out by the company will be managed and supervised in a proficient manner unfortunaly[sic] this was not happening. ► Your lack of financial management of our projects has caused a number of financial loses[sic] across all projects due to your lack of onsite supervision. ► Our[sic] project development and management skills to establish project definition and outcomes, formulate clear objectives and deadlines and to establish project parameters are wanting. ► Staff development with on-the-job training of Paul Du in supervision, training and mentoring was non-existent. ► Supervisory Skills to set time lines, monitor progress, ensure best practices are used and be responsible for outcomes. 1420 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 95 W.A.I.G. We are mindful that the change will have a big impact on you. We wish you all the best in the future. Exhibit R4, QHD-3 20 The letter was subsequently sent to the applicant. 21 The applicant appears to have then come into the office, very angry, and is said to have been banging on the table. 22 There is no dispute that the employment came to an end on 4 November 2014. Assessment of witnesses 23 I found the applicant’s evidence to be unreliable and he was not credible. This is based on a number of aspects of his evidence. There is no explanation of the applicant’s inclusion of a claim for a property, IGA Supermarket, Marangaroo, in his Further and Better Particulars of Claim filed on 6 March 2015. He later acknowledged he did not work on that project but instead claimed he worked on a nail shop in a different suburb. 24 Also, the applicant says quite adamantly that he does not swear. He explained that building sites are places where tradespeople do swear but not him, he does not swear. At one stage in his evidence, the applicant appeared to accept Ms Hoang’s evidence that he had telephoned the office on 20 October 2014 and that she had answered the call, he asked abruptly ‘Where is my money. When am I getting paid’. As the conversation continued, he said ‘Tell Paul to watch out. He’s in danger. If I don’t get paid, he’s in fucking danger’ (exhibit R6, [3]). Ms Hoang said that later she attended a meeting where Mr Gordon Du spoke to the applicant on the telephone and asked him if it was true that he had said those things to her, and Ms Hoang says that the applicant acknowledged that he had, that he was angry and people say things like that when they get angry. 25 The applicant initially appeared to accept that he had said those things but subsequently appeared to deny them, and his demeanour suggested that he was quite pleased with himself in making the denial. He then became serious and said that he was asking for payment for himself and others, and that he had spoken out of frustration. 26 Further, Mr Quoc Hung Du referred to an SMS message from the applicant dated 4 November 2014 (QHD-7) in which the applicant said, amongst other things, ‘Do not pass any responsibility to anybody else for that fucken job anything whats wrong there’. The applicant acknowledged in his evidence that he had sent that SMS, and that ‘fucken’ is a swear word. 27 While a witness’s demeanour is unreliable for the purposes of assessing that witness’s credibility, I note that the applicant appeared to be complacent in his attitude to the seriousness of giving sworn evidence. He would shrug and smile as if it did not matter. 28 There were further occasions where his evidence was unreliable, such as where he asserted an entitlement to payment for 31 Mildmay Street, yet there was a Notice of Completion which demonstrates that that project was complete on 15 November 2013, three days after he commenced employment with the respondent. Whilst he asserts that there is a second page to the Notice of Completion under the Building Act 2011 s 33 which indicated that he also signed off on the completion of that project, he then asserted that he had some influence and helped the company out before the completion of that project (that is, before he commenced employment with the respondent), and therefore he says he is entitled to payment. 29 As to 9 Changton Way, the applicant claimed that he was entitled to payment of $9,000 because that job had reached the stage of roof cover. However, the evidence of Mr Edmonds and Mr Du, confirmed by an email from Prime Metal Roofing (QHD-13), indicates that roof cover was not to be commenced until after the termination of his employment. The applicant attempted to distinguish between when the roof support structures were complete and when the Colourbond sheets were installed. It is quite clear that at the time of the termination of his employment, while some part of that roof structure had been installed, it was far from a covered roof, and this did not commence until after his employment had ended. 30 When asked whether there was an agreement between him and the respondent for superannuation payments to be on top of salary, he did not answer and appeared to accept that this was not the case. 31 When asked about wearing proper safety equipment including a safety helmet, the applicant indicated that he only works on ground level jobs. However, the evidence was that he was supervising the construction of some two storey buildings which required the construction of a floating floor or slab and supports for those. 32 In those circumstances, I prefer the evidence of witnesses other than the applicant except where other evidence supports his evidence. 33 I found Mr Edmonds to be a credible and impressive witness, and have no hesitation in preferring his evidence to that of the applicant where it conflicts. His evidence was not undermined in any significant way. 34 Ms Hoang’s evidence was not challenged in any way. She was a credible witness and I accept that evidence. 35 Mr Quoc Hung Du, the sole director of the respondent, gave evidence. I find that at least some of the inconsistencies in his evidence were due to language and comprehension difficulties. However, other inconsistencies and conflicts within his evidence are not so readily explained. Where his evidence is supported by that of Mr Edmonds, I have no hesitation in accepting it. Consideration and conclusions Payments for each project (i) Progress payments to the applicant 36 I find that initially there was no agreement on the respondent’s part to progress payments being made to the applicant in the way he asserts. Rather, the respondent intended to pay the applicant for each project at its completion, as had applied to his predecessor, Mr Mikic. However, the applicant would ask for, and in some cases demand, money at certain points and the respondent made payments to him. Those payments do not always appear to correspond with the proportion of completion of 95 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1421 each of the projects at the relevant times. This helps to explain why payments appear to be both above and below the amounts they would have been if paid according to what the applicant says were the various stages of completion, and why the respondent claims that there were some overpayments if this methodology applied. 37 However, I conclude that ultimately the respondent did pay according to the applicant’s demands for progress payments. On some occasions, the respondent paid according to the eight stages and at others paid by a percentage of completion (see QHD-10). Exhibit A2, a schedule, which Mr Du says was drawn up by the applicant and provided to the respondent’s accountant, which sets out only some of the payments made to the applicant, supports this. Those payments are first and second stage payments for 71 Mirrabooka Avenue, the first stage payment for 322A Main Street and five payments regarding a project the name of which is indecipherable. 38 The respondent allocated those payments to particular stages of particular projects (see exhibit R1 – Commonwealth Bank Receipts). According to those receipts, payments were made by the respondent to the applicant. These receipts contain the following details: Date of payment Amount Description 26 August 2014 $2,054.79 64 nollamara site 26 August 2014 $2,054.79 64 nollamara slab 5 June 2014 $2,250.00 71mir1stpaysitewor 5 June 2014 $2,250.00 71mir2ndpayslabfin 24 October 2014 $2,054.79 77mir brick finish 24 October 2014 $2,054.79 71mir roof cover 1 July 2014 $1,125.00 77Cur1st pmt slabs 17 July 2014 $911.25 site work 77 curli 24 October 2014 $2,054.79 77cur brick finish 24 October 2014 $2,054.79 77cur roof cover 17 July 2014 $2,036.25 site work 207 rave 8 August 2014 $2,054.79 207raven2nd pmt 16 May 2014 $3,333.34 322main1stpayment 17 July 2014 $2,708.33 brick work 322main 8 August 2014 $3,044.14 322main3rd pmt 17 July 2014 $2,036.25 9changto site work 26 August 2014 $2,054.79 9 chang slap finis 39 While there was no direct evidence on the meaning to be attributed to the description section of each invoice, from terms such as ‘64 nollamara site’, ‘64 nollamara slab’, ‘71mir1stpaysitework’, ‘71mir2ndpayslabfin’ etc, I infer that for 64 Nollamara Avenue this means the payment is for the first stage, site works, and for the same project, the second stage of slab finish had been completed; 71 Mirrabooka Avenue had stages one and two, site works and slab, completed. Therefore, the payments made to the applicant were at least allocated according to a progress payments arrangement for accounting purposes even though there was, according to the contract, no term in the contract entitling the applicant to progress payments. 40 Given that the respondent appears to have acquiesced in making the progress payments, I conclude that this became part of the agreement between the parties. (ii) Levels of completion of projects 41 In assessing the stage of completion of each project, I am assisted by the invoices for progress payments to be made by the respondent’s clients according to the next stage of the building process. Exhibit A3 to A9 are the tax invoices sent to the respondent’s clients, which bill the clients for progress payments. The clients were provided with an invoice approximately two weeks before each stage commenced. This is to allow the client time to arrange with their finance provider for inspection of the site if necessary and to arrange for payment prior to the respondent commencing work on that stage. A number of the invoices note that payment is required within 10 working days of the date of the invoice. The invoices contain the following information: Exhibit number Project Date of invoice Progress payment stage A3 64 Nollamara Avenue 26 November 2014 Fourth (three brick unit finished) A4 207 Ravenswood Drive 11 November 2014 Fourth ‘brick paving finish’ (NB: Mr Du says that reference to the fourth payment which is said to relate to ‘brick paving finish’ is in error and should refer to ‘bricklaying’) A5 9 Changton Way 11 November 2014 Fourth (Brick finish) A6 28 Wittering Crescent 14 July 2014 Ninth (cabinets installed) A7 71 Mirrabooka Avenue 31 October 2014 Sixth (lockup) A8 77 Curlington Crescent 28 October 2014 ‘50% of the fifth deposit for lock up’ A9 322A Main Street 24 October 2014 ‘Fifth process payment for the deposit to start building’ 42 A Lump Sum Building Contract (exhibit A11) relating to 2A Grimsay Road provides for progress payments of a deposit and eight progress payments at the stages claimed by the applicant. I note that this contract specified Mr Ivan Mikic as the 1422 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 95 W.A.I.G. builder’s representative. Mr Mikic is said to be the applicant’s predecessor. This contract provided for a completion date of 31 October 2014, but indicates that it was signed on 23 July 2014. 43 Apart from being cross examined as to his assertion about the state of completion of 322A Main Street and Grimsay Street, Mr Edmonds was not challenged about his assessment of the level of progress on the other sites. I accept, without hesitation, Mr Edmonds’ evidence as to the state of the various sites in terms of cleanliness and safety, as well as the stages of progress reached when he inspected the sites on 13 and 14 October 2014. He recommended that no further work be undertaken on these sites until they were cleaned up. The respondent accepted this recommendation. Mr Edmonds arranged for bins and Bobcats for the clean-up of the sites, and for them to be brought to a reasonable standard. This took approximately two weeks. 44 Therefore, I find that there was no progress in the state of the projects from 13 October 2014 for approximately two weeks, and in any event, I find that there is no evidence that the applicant performed any work for the respondent after 13 October 2014. Therefore, the assessment of payments due to the applicant based on the stages of completion of the various projects ought to be at that date, not the date of termination. (iii) The value of each project to the applicant 45 Where the applicant’s claim in his Further and Better Particulars of Claim sets out a column headed ‘Total payment due to the applicant for this job’, I take that to mean the total he would be entitled to, not for the job if it were complete, but for the stage reached according to his assessment. 46 In reaching conclusions about what payments were due to the applicant both in total and at various stages, it is necessary to know the total value, to the applicant, of each project. There was only incidental evidence as to the nature of some of the jobs and what the total payment for the completed job would be. For example, the evidence is that 322A Main Street, Balcatta was a two storey construction. As a double storey house, according to the amended contract, this would earn the applicant $15,000. However, the amended contract also provided for the parties to discuss ‘any other project not specified’ in the list and agree an amount. In its schedule, the respondent valued this project at $30,000. If this project is valued at $30,000 as the respondent’s schedule suggests, the completion of stage three of eight stages would entitle the applicant to three eighths of $30,000, which is $11,250. 47 207 Ravenwood Drive was a three unit project. I infer this would entitle the applicant to $18,000 in total or $6,000 per unit when the project was complete. 48 Mr Edmonds said that due to rubbish at the sites of 71 Mirrabooka Avenue and 77 Curlington Crescent, he was unable to gain access to the rear units, so I infer they were not single houses. In its response to the applicant’s Further and Better Particulars of Claim, the respondent has identified the value of the projects. The only projects listed in the amended contract as being valued at $18,000 were triplex units. The respondent listed 9 Changton Way, 64 Nollamara Avenue, 71 Mirrabooka Avenue, 77 Curlington Crescent, 207 Ravenswood Drive and 28 Wittering Crescent as being valued at $18,000, so I will infer that they were each triplex units. 49 The respondent listed 2A Grimsay Road as $15,000 which could be either a double storey house or two units. (iv) Assessing the applicant’s entitlement 50 For the purposes of determining the stages of completion, as at 13 October 2014, I intend to take account of Mr Edmonds’ evidence and also to draw inferences from both the Commonwealth Bank receipts and the respondent’s invoices to its clients, noting in respect of the latter that they anticipate a stage of progress by approximately two weeks. 51 Therefore, for each project I have drawn inferences as to their total value to the applicant as noted earlier and made calculations as to progress payments based on there being eight such stages. Diamond Nails – claim $5,000 52 The applicant says an electrician was paid at the end of September 2014 for the work carried on at this site (see exhibit A10 – invoice of KH Signature Electrical). The applicant says that this demonstrates that work was conducted on this site during his tenure as supervisor. 53 Mr Du accepted that KH Signature Electrical undertakes work for the respondent. The respondent says that work commenced after the date of the applicant’s termination and was supervised by Mr Edmonds. Mr Edmonds says that he was the supervisor for the Diamond Nails project and that it commenced in the second week of November 2014. 54 Exhibit A10 is an invoice dated 31 October 2014. The invoice simply says that it is for ‘Wiring to Banksia Grove Diamond Nails shop’. It does not set out a date on which the work was done or was to be done. 55 There is no evidence that the work done on this site was undertaken under the applicant’s supervision. The work may have been done after 13 October 2014 and the invoice is dated the end of October, not September as the applicant asserts. 56 It is curious too that the applicant included this claim in substitution for the IGA Marangaroo, reinforcing the suggestion that the applicant was unfamiliar with the project and therefore did not work on it. 57 Further, there is no evidence of the type of project this was so as to enable the basis for a $5,000 claim to be made. It would not appear to be a new construction project as the electrical work was described in the invoice as wiring to what appears to be an existing shop. It does not fit into any of the categories of project set out in the contract and there is no evidence of an agreement as to what the applicant would be paid for this job, if indeed he did it. 58 I conclude that there is no entitlement to pay under this claim. 95 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1423 205 Mirrabooka Avenue, Balga – Claim $18,000 59 The respondent says that the applicant intended to refer to 31 Mildmay Street, Balga as no site was under its control at 205 Mirrabooka Avenue, Balga. It says the applicant was not involved in this project and that it had reached practical completion three days after the applicant commenced employment. 60 The applicant says he signed the second page of the form regarding its completion, and he was involved with this project in assisting the respondent prior to him commencing employment with the respondent. 61 The claim before the Commission is made under s 29(1)(b)(ii) of the Industrial Relations Act 1979. It must relate to the applicant’s contract of employment and to his work as an employee of the respondent. Therefore, he cannot bring a claim related to work he might have undertaken prior to his employment as an employee of the respondent subject to the contract of employment. This project was completed three days after he commenced employment and there is no evidence that he took any role in its completion during his time as an employee of the respondent. 62 This claim is rejected. 28 Wittering Crescent, Balga – Claim $18,000 – Total value $18,000 63 The respondent says that $11,250 was paid to the applicant, but the applicant refunded this money because at all times the project was managed and supervised by Mr Ivan Mikic. The amount was then paid to Mr Mikic. The respondent says that the applicant refunded the amount to the respondent because he did not work on the project and he is now estopped from making the claim. The respondent says the remaining amount of $6,750 is not due to the applicant and there was no overpayment to him as initially claimed. 64 Exhibit R3 confirms that the applicant repaid to the respondent the amount of $11,250, and I am satisfied that this occurred because he was inappropriately paid this amount and it ought to have been paid to Mr Mikic, and it was paid to Mr Mikic. 65 The respondent sent an invoice to its client regarding this property, dated 14 July 2014, for what it described as the ‘Ninth stage (cabinets installed)’. This suggests that by 28 July 2014, the respondent anticipated this stage being complete. According to the applicant’s progress stages, ‘cabinets and main floor’ is stage six of eight. Mr Edmonds says this project was complete when he took over. 66 Therefore, somewhere between when the applicant took over this project, after Mr Mikic finished, and before 13 October 2014, the project progressed from a stage prior to stage six of eight to completion. Therefore, the applicant is due to be paid for at least the last three of eight stages. The total value of the project was $18,000. Accordingly, the applicant is due $6,750. 2A Grimsay Road – Claim $15,000 – Total value $15,000 67 The respondent says the applicant’s text message to Mr Du dated the day of termination confirms that there was much work to be done on this project. The respondent also says that at termination this project was 70% complete and the applicant’s role in it amounted to around 20%, equal to around $6,000, which it says it has paid. 68 Mr Edmonds gave evidence that the respondent and the client are still in dispute in the Building Commission or the Builders Registration Board and there are two orders pending for the respondent to remedy problems. One of those problems relates to windows which the applicant, through his own company, sold to the respondent for installation on this project, prior to the applicant commencing employment with the respondent. Further, the client had not paid for the lockup stage of the work because of the quality of the work. Mr Edmonds says that the project is 40% complete and the respondent says that it has paid for that portion of the work. 69 In any event, the client has not yet paid for lock up stage, that is stage five of eight. Therefore, the project would be no more than 50% complete and is subject to dispute as to work quality. As supervisor, the applicant was responsible for the quality of that work. 70 In the circumstances, I am unable to find that the applicant is owed any amount at this stage. 9 Changton Way – Claim $4,908.95 – Total value $18,000 71 The applicant says that roof cover was complete on this project by the date of the termination of his employment. The respondent says that it was well short of roof cover, that the roof structure, which I take to be the roof trusses, but not the Colourbond had been installed. 72 The email from Mr Jay Fox of Prime Metal Roofing and Prime Metal Roofing’s invoice demonstrate that the metal roofing had not been installed and was not due to be commenced until after the applicant’s employment terminated. Therefore, the project had not reached roof cover. It had completed three of eight stages, entitling the applicant to $6,750. He was paid $4,091.04, so he is entitled to $2,658.96. 64 Nollamara Avenue – Claim $952.92 – Total value $18,000 73 The applicant says that this was slab finished plus 25% of the brickwork. The respondent says that the project was only 10% complete, that the slab was complete but the brickwork had not yet commenced. 74 According to its invoice to its client dated 26 November 2014, the respondent anticipated commencing the fourth stage (which I assume is bricklaying) of this project by mid-December 2014. This means that according to the applicant’s stages of completion, the first two stages were complete. 75 The applicant was paid for those two stages by 26 August 2014, a total of $5,119.58. The completion of two stages would entitle the applicant to $4,500. Therefore, he has been overpaid $619.58. 1424 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 95 W.A.I.G. 207 Ravenswood Drive – Claim $2,658.96 – Total value $18,000 76 The applicant says that brickwork was complete or 95% complete, yet the respondent says that this was a three unit project, unit three had 75% of the brickwork complete, unit two 25% and unit one had not commenced the brickwork. 77 The respondent invoiced its client for brick paving (which Mr Du corrected to mean bricklaying) on 11 November 2014, anticipating commencement of bricklaying on around 25 November 2014, around five to six weeks after the applicant ceased supervising the sites. 78 This leads me to conclude that the respondent’s assessment is correct and therefore the applicant is due payment for the first two stages of site works and slab, being two eighths of the total, which is $4,500. The applicant was paid $4,091.04, and therefore is due $408.96. 77 Curlington Crescent – Claim $5,104.17 – Total value $18,000 79 The applicant says that this project was at lockup stage yet he acknowledged that glazing was done on 6 November 2014, two days after his employment ended. The respondent says that it was 50% complete and that the applicant had already been paid $6,750 and therefore his entitlement is $2,250. Interestingly, the respondent’s invoice to its client dated 28 October 2014 suggests that it would commence the lock up stage in two weeks. This together with Mr Edmonds’ evidence allows me to conclude that this project had reached roof cover finish or stage four of eight of the applicant’s stages, but not lock up stage. This would entitle the applicant to $9,000 of which he has already been paid $6,750, leaving him owed $2,250, as acknowledged by the respondent. 322A Main Street, Balcatta – Claim $2,164.19 – Total value $30,000 80 The applicant says that brickwork on this project was complete. The respondent says that only 5% of the project was complete and that the applicant had been overpaid $8,499.99. 81 Mr Edmonds says that this was the second job he visited, the slab floors had been poured on the upper-floor and there was brick loading in progress. The bricklayer was ready to start about a week later. The respondent’s calculation in its schedule in the Response to the applicant’s Further and Better Particulars of Claim was based on an erroneous assumption that the whole project was only 5% complete. However, Mr Edmonds clarified that the 5% was a reference to less than 5% of the bricklaying on the second floor. 82 The respondent sent an invoice dated 24 October 2014, notifying the client to pay within two weeks the fifth progress payment, by which time the brickwork on the second floor was anticipated as being commenced. 83 This was a two storey project. The slab floor and brickwork for the ground floor was complete. The slab for the second floor was complete but not the brickwork. Therefore, stage two was complete on both floors, but stage three was only 50% complete and the brickwork on the second storey had not started although the bricks had been placed on the site. 84 Given that the project is less than half finished, by my estimation the applicant is entitled to 3.5 of the eight progress payments. I have allocated 0.5 of a stage on the basis of it being a two storey construction of which half of the brickwork was complete because the ground floor brickwork was done. This equals $13,125. He has already been paid $9,085.81, leaving the applicant owed $4,039.19. 71 Mirrabooka Avenue, Westminster – Claim $2,640.42 – Total value $18,000 85 The applicant says that this project had reached lockup stage, which is stage six. The respondent says that it was 50% complete, there was no glazing, no ceilings and the rendering had just started. 86 The respondent invoiced its client on 31 October 2014 for the ‘Sixth (lock up)’ stage, meaning it would be commencing the lock up stage in approximately two weeks, i.e. mid-November 2014. Therefore, by 13 October 2014, the latest stage of progress would have been roof cover, if that, which is the applicant’s stage four of eight. The full payment for this project was $18,000 and he had been paid $8,609.58. Fifty percent of the total is $9,000. The applicant is therefore owed is $390.42. Pay in lieu of notice 87 The contract of employment provides that the respondent may terminate the employment without notice if the employee commits a serious breach of any provision of the contract; commits any act that amounts to a repudiation of the contract; or engages in serious and wilful misconduct. 88 Whilst the heading on the letter of dismissal is ‘Reasons for Redundancy’, the substance of the letter relates to poor performance ‘(if not non-performance), poor supervision and lack of management’, and the reference to other failings on the applicant’s part, that is, he was not dismissed due to redundancy, he was dismissed for failure to perform the contract and related matters. 89 I accept Mr Edmonds’ evidence that when he inspected the sites on 13 and 14 October 2014, they were, from his 43 years’ experience, ‘absolutely atrocious. They looked like bomb sites’ (ts 130). The company lost a large amount of money due to the lack of supervision on the sites. He said that at the 71 Mirrabooka Avenue and 77 Curlington Crescent sites, due to the extensive amount of rubbish, he was unable to gain access to the rear of the units under construction (witness statement Peter John Edmonds [10]). He says the sites did not have appropriate signage prohibiting unauthorised access or requiring those entering the site to have the necessary safety equipment. They also did not have appropriate signage to identify the builder or the supervisor as required by the Building Services (Registration) Regulations 2011. Electrical tools and leads carried out of date tags. Each of these matters is the responsibility of the supervisor. 90 The applicant’s employment terminated on 4 November 2014, however as noted earlier, I am satisfied that he did no work for the respondent from at least 13 October 2014 when Mr Edmonds commenced work. Mr Edmonds says that he did not see the applicant on any of the sites, which he visited every day from 13 October 2014 and that the applicant did not make himself 95 W.A.I.G. WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1425 available for a handover, nor was the applicant seen in the respondent’s offices during this time except when he went in to apparently challenge the letter of dismissal. 91 It seems strange to me that the applicant might claim that he was supervising the sites from 13 October until the date of termination of 4 November 2014, when in fact the sites had stopped work other than for clean-up purposes. If the applicant observed that things were happening or not happening on sites which were supposed to be under his control, there is no evidence that he raised that with the respondent after 13 October 2014 except for the SMS sent on 4 November 2014 after he had received the letter of dismissal. It is quite clear to me that the respondent brought Mr Edmonds in to properly undertake the supervision work which the applicant had failed to properly undertake, at least during the last part of his time with the respondent. 92 Although there is no conclusive evidence, there is a clear inference to be drawn that during at least some of the time when he ought to have been working for the respondent, and most likely after 13 October, the applicant spent time working on the construction of his own home in Muchea Gardens rather than on the respondent’s projects, in contravention of his responsibilities to the respondent. However, what he did with his time is not to the point. The issue is that he did not spend it performing his job for the respondent. 93 I am also satisfied that the applicant’s confusion about names of the sites of the projects he was engaged in supervising is not surprising given the state of those sites and what can only be his failure to attend and properly supervise those sites. 94 In those circumstances, I find that the applicant did not carry out the duties of a licenced builder and nominated supervisor; manage and supervise the building works for his employer so that the whole of the building work was carried out in a proficient and workmanlike manner. This was in breach of the term of the contract set out in clause 10 – Responsibilities/Duties. 95 The proper supervision of building sites is not merely a matter of interest between the employer and the employee for efficient business operations. It is a matter of compliance with legislation, which requires the builder to be licensed and to have a registered supervisor in control of the sites and to display specified signage (for example, the Building Act 2011 and the Building Regulations 2012) and for compliance with occupational health and safety law. There are significant penalties for the builder for failure to comply with these requirements and the supervisor also has liability under the legislation. Therefore, the supervisor’s responsibility goes beyond looking after the employer’s interests in the performance of its work and in its commercial interests. The supervisor is responsible for ensuring that the respondent complies with regulation and avoids penalties. 96 In this case, the applicant failed to perform an essential element of the contract in not supervising those sites according to the requirements of the law. Accordingly, he breached that part of his contract that required him to act in his employer’s best interests. His lack of performance also caused the work on the sites to be halted for two weeks. This amounts to a repudiation, that is, conduct which evinces an unwillingness or an inability to render substantial performance of the contract, or conduct which evinces an intention to no longer be bound by the contract (Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at [44] – [49]). This justifies the respondent’s decision to summarily dismiss him (Adami v Maison de Luxe Ltd (1924) 35 CLR 143). The failure to maintain the sites in a proper state and according to the requirements of the legislation that govern them was not a single act nor was it trivial. It was a course of negligence of his duties (Rankin v Marine Power International Pty Ltd (2001) 107 IR 117). 97 In this case, the applicant breached his obligations under cl 12 – Employment Contract in failing or neglecting to properly supervise the building sites. He failed to act in the employer’s best interests, and he has acted contrary to the employer’s interests in significant ways going to the heart of the respondent’s business interests. 98 I note that the letter of dismissal does not refer to the serious misconduct in relation to the matters of abuse of staff referred to in the evidence although the respondent relied on it in the hearing. I accept Ms Hoang’s evidence as to the applicant’s abusive conduct towards her and his threatening statements made to her relating to Mr Du. I also accept that when Mr Gordon Du discussed those matters with the applicant over the telephone in Ms Hoang’s presence, the applicant did not deny what it is that she relayed about what he had said. Therefore, I find that the applicant was rude, abusive and threatening to the respondent’s director and to a member of the respondent’s staff. This conduct constitutes serious and wilful misconduct. 99 In the circumstances the applicant is not entitled to pay in lieu of notice as set out in cl 14 – Terminating without notice. Superannuation 100 The applicant appears to concede that the superannuation claim is based upon the statutory scheme, and that the contract itself does not provide an entitlement. In accordance with Keane v Lomba Pty Ltd (1998) 78 WAIG 810, where the claim arises from an entitlement based on a statutory scheme then it is not enforceable pursuant to a referral of a denied contractual benefits claim. Annual leave 101 Clause 15 – Annual Leave of the contract does not specify any particular quantum of annual leave or how payment is to be calculated. It merely provides that the ‘[e]mployee is entitled to Annual Leave that has accrued in the immediate 12 month period’, and when it may be taken. The applicant says that it is appropriate to imply a term of four weeks’ annual leave per annum. 102 The requirements for implication of a term are set out in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 282-3. They are that: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must be capable of clear expression; (5) it must not contradict any express terms of the contract. 1426 WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 95 W.A.I.G. See also Byrne v Australian Airlines Ltd (1995) 185 CLR 410. 103 Four weeks’ annual leave can be said to be the standard for employees who are employed under awards and agreements, except for those on shift and weekend work. The Minimum Conditions of Employment Act 1993 s 23(1) and the Fair Work Act 2009 s 87(1)(a) both provide for four weeks’ annual leave for each year of service. Therefore, four weeks is a reasonable and equitable term as is the provision for payment of a pro rata period. 104 Without a term specifying the period of leave, the remainder of the clause lacks efficacy. It is so obvious that it goes without saying that four weeks is the period the parties would have agreed, it is capable of clear expression and does not contradict any express term of the contract. 105 There is no provision within the contract disentitling the applicant to annual leave in the event that he is dismissed for serious misconduct or where the employment ends due to his repudiation of the contract. 106 Where the contract provides that ‘[t]he Employee is entitled to Annual Leave that has accrued in the immediate 12 month period’, I take that to mean the current 12 month period. The contract does not distinguish between entitlements to fully accrued and pro rata annual leave. 107 Therefore, I find that the applicant is entitled to nearly four weeks’ pay for annual leave for the period of his employment. This should be calculated by reference to his total earnings during the period of employment, not to $120,000 per annum as the parties altered the contract to remove the salary and replace it with project-based amounts. The applicant’s service was short of 12 months by one week, so the calculation should take this into account. 108 The parties are to confer with a view to agreeing the applicant’s total earnings and the average per week for the purposes of annual leave. Conclusions 109 The applicant is entitled to payment for the projects on which he worked as follows: 28 Wittering Crescent $6,750.00 9 Changton Way $2,658.96 64 Nollamara Avenue -$619.58 207 Ravenswood Drive $408.96 77 Curlington Crescent $2,250.00 322A Main Street, Balcatta $4,039.19 71 Mirrabooka Avenue $390.42 TOTAL $15,877.95 110 No amounts are due on the remaining projects. 111 There is no entitlement to pay in lieu of notice or on account of superannuation. 112 The parties are to confer regarding the calculation of payment for pro rata annual leave and advise the Commission within 14 days. 2015 WAIRC 00749