WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION. Industrial Relations Act 1979. Gregory Brian Oates and Sanders Executive Pty Ltd t/a L J Hooker Morley. No. 474 of 1998. COMMISSIONER S J KENNER. 9 October 1998. Reasons for Decision. THE COMMISSIONER: This is an application pursuant to s 29(1)(b)(ii) of the Industrial Relations Act 1979 (“the Act”) by Gregory Brian Oates (“the applicant”) against Saunders Executive Pty Ltd t/a L J Hooker Morley (“the respondent’) in respect of a claim for contractual benefits. The respondent is a real estate agency. The applicant was employed by the respond- ent as a real estate sales person from 1 October 1997 to 23 January 1998. The Claim The application as filed, and as amended by leave of the Commission, claims payment of commissions for real estate sales commissions, superannuation contributions and pro-rata annual leave. The respondent has raised a preliminary issue as to the juris- diction of the Commission to entertain the applicant’s claim in respect of superannuation and annual leave. In respect of annual leave, the applicant’s claim arises out of an entitlement accrued pursuant to the Minimum Conditions of Employment Act 1993 (“MCEA”). The superannuation entitlement has as its source, the Superannuation Guarantee (Administration) Act 1992 (Cth) (“SGA”). The respondent says these limbs of the applicant’s claim are not contractual benefits for the purposes of s 29(1)(b)(ii) of the Act and accordingly, are beyond the jurisdiction of the Commission. Both parties agreed that the jurisdiction of the Commission to entertain these claims be determined as a preliminary issue. Superannuation Claim It is common ground between the parties that at its highest, the respondent agreed to pay the applicant superannuation contributions in accordance with the minimum level of contri- bution as prescribed by the SGA. On that basis, the agent for the applicant argued that given that it was an oral term of the contract of employment be- tween the applicant and the respondent that the applicant receive superannuation contributions, albeit based on the SGA, the Commission has jurisdiction to hear and determine the applicant’s claim as a contractual benefit pursuant to s 29(1)(b)(ii) of the Act. On the other hand, counsel for the respondent argued that despite the oral term of the contract between the applicant and respondent, the requirement to pay the applicant superannua- tion is a statutory obligation and not a contractual obligation. He argued that the superannuation contribution, being as it was derived from the terms of the SGA, was not a benefit pursuant to the applicant’s contract of employment for the purposes of s 29(1)(b)(ii) of the Act. Furthermore, counsel for the respondent argued that the terms of the SGA, being a Com- monwealth statute, covers the field in relation to superannuation contributions to the exclusion of the Act, irrespective of whether the level of the contractual entitlement was equal to or in ex- cess of the level prescribed by the SGA. For the purposes of s 29(1)(b)(ii) of the Act, a contractual “benefit” refers to a very wide range of entitlements and rights pursuant to a contract of employment: Balfour v Travelstrength Ltd (1980) 60 WAIG 1015. There is no doubt that a superan- nuation contribution is a “benefit” for these purposes. In Keane v Lombar Pty Ltd (1998) 78 WAIG 810 the Full Bench of the Commission dealt with an appeal from a deci- sion of the Commission at first instance, in relation to whether superannuation contributions payable to pursuant to the SGA simpliciter, were within the Commission’s jurisdiction as a contractual benefit pursuant to s 29(1)(b)(ii) of the Act. In that case, it was common ground that the only obligation to pay superannuation contributions to the appellant arose under the SGA and not otherwise. That is, there was no evidence of a term of the contract that obliged the employer to make super- annuation contributions on behalf of the employee. In view of this, it was held that the claim was beyond the Commission’s jurisdiction. It was further held by the Full Bench that s 29(1)(b)(ii) of the Act in the context of that case, was inopera- tive by reason of s 109 of the Commonwealth Constitution (“s 109”) to the extent that it was in conflict with s 109. Given the concession by the respondent, I consider that this head of claim is capable of being pursued as a benefit under the applicant’s contract of employment for the purposes of s 29(1)(b)(ii) of the Act. The position would have been other- wise however, if there was no term of the contract, either oral or written, in relation to superannuation contributions: Keane (supra). In this case, the entitlement for the purposes of the applicant’s claim arises out of the contract of employment, albeit that its source is the SGA. However, that is not the end of the matter in so far as the Commission’s jurisdiction is concerned. The SGA is a com- prehensive statute providing for the establishment and administration of the Commonwealth Superannuation Guar- antee Scheme. By that scheme, a superannuation guarantee charge is imposed on employers in respect of a superannua- tion guarantee short fall, pursuant to Part 3 of the SGA. Part 6 of the SGA, makes provision for the collection and recovery of the superannuation guarantee charge. In particular, s 50 pro- vides that a superannuation guarantee charge that is payable by an employer, is a debt due to the Commonwealth and may be sued for and recovered in a court of competent jurisdiction by either the Commissioner or a Deputy Commissioner of Taxation. It can be readily seen from the terms of the SGA, that it contains comprehensive provisions dealing with liabil- ity to pay the charge; superannuation guarantee charge statements and assessments; administration provisions; col- lection and recovery of the charge; provision for penalty charges to be imposed; distribution of the shortfall component of a charge and other miscellaneous matters. The test as to whether an inconsistency arises for the pur- poses of s 109 between a State law and a Commonwealth law is well established. Inconsistency may arise in one of two ways. The Commonwealth law may, by its terms, disclose an inten- tion to cover, comprehensively and exhaustively, the field to which it relates to the exclusion of the relevant State law: Ex parte McLean (1930) 43 CLR 472 per Dixon J at 483; Metal Trades Industry Association of Australia v The Amalgamated Metal Workers and Shipwrights Union (1983) 152 CLR 632 at 641-642. On the other hand, a direct inconsistency will arise where both the Commonwealth and State laws collide in the sense that the subject of the law can only obey one law by disobeying the other or where one law takes away a right or privilege which the other law confers: R v Licensing Court of Brisbane; ex parte Daniell (1920) 28 CLR 23; Clyde Engi- neering v Cowburn (1926) 37 CLR 466 at 477-9, 409 and 522. In this case, the claim in respect of an amount not paid by the respondent is a superannuation guarantee charge as pre- scribed by the SGA. That being the position, in my opinion, one is compelled to the conclusion that the SGA provides a comprehensive code in relation to the establishment, adminis- tration and enforcement of superannuation guarantee charge payments and covers the field in so far as the superannuation guarantee charge is concerned. In relation to a contractual en- titlement to superannuation, which does no more than oblige the employer to contribute an amount equivalent to the amount prescribed by the SGA, a claim in respect of that entitlement pursuant to s 29(1)(b)(ii) intrudes into the field covered by the Commonwealth law and is inoperative by reason of s 109: Keane (supra) at 811. In my opinion however, the SGA only covers the field in so far as superannuation contributions are payable by the employer up to the level prescribed by the SGA. In relation to contractual benefits that may confer superan- nuation entitlements in excess of the minimum prescribed by the SGA, it could not be said that the SGA would cover the field to the exclusion of s 29(1)(b)(ii) of the Act. The relevant field for the purposes of s 109, is the establishment, adminis- tration and enforcement of superannuation guarantee charge payments up to and including the level prescribed by the SGA. In view of my conclusion that the SGA covers the field to the exclusion of s 29(1)(b)(ii) of the Act, it is unnecessary for WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 1199 79 W.A.I.G. me to determine the issue as to whether there is a direct incon- sistency between the SGA and s 29(1)(b)(ii) of the Act. Annual Leave Claim The applicant argued that his entitlement to pro-rata annual leave, albeit accrued pursuant to the MCEA, was a contrac- tual benefit for the purposes of s 29(1)(b)(ii) of the Act. The argument was to the effect that by reason of s 5(1)(c) of the MCEA, the minimum conditions of employment extend to and bind all employees and employers and are taken to be implied into the applicant’s contract of employment. As an implied term, so the argument goes, the pro-rata annual leave accrued pursuant to the MCEA and implied into the applicant’s con- tract of employment, is a benefit under the applicant’s contract of employment and thus, is within the Commission’s jurisdic- tion. There is no suggestion in this matter that the applicant’s entitlement to annual leave arises independently of the terms of the MCEA. The respondent argued that the applicant’s entitlement to pro-rata annual leave, it being an entitlement pursuant to the MCEA, is, by reason of s 7 of the MCEA and s 83 of the Act, a matter exclusively within the jurisdiction of an Industrial Magistrate. For the purposes of determining this issue, it is necessary to set out the relevant provisions of the MCEA and the Act. Sec- tion 3 of the MCEA relevantly provides that— “minimum condition of employment means— (a) a rate of pay, or other requirement as to pay, pre- scribed by this Act; (b) a condition for leave prescribed by this Act; or (c) a condition prescribed Part 5.” Furthermore, s 5 of the MCEA relevantly provides as follows— “(5) The minimum conditions of employment extend to and bind all employees and employers and are taken to be implied— (a) in any workplace agreement; (b) in any award; or (c) if a contract of employment is not governed by a workplace agreement or an award, in that contract.” By the terms of s 7 of the MCEA, the following is pro- vided— “(7) A minimum condition of employment may be en- forced— (a) where the condition is implied in a workplace agree- ment, under Division 1 of Part 5 of the Workplace Agreements Act 1993; (b) where the condition is implied in an award, under Part III of the Industrial Relations Act 1979; or (c) where the condition is implied in a contract of em- ployment, under section 83 of the Industrial Relations Act 1979 as if it were a provision of an award, in- dustrial agreement or order other than an order made under section 32 or 66 of that Act.” (my emphasis) For the purposes of enforcement of awards and orders of the Commission, the provisions of Part III of the Act are relevant. In particular, s 83 of the Act provides for the enforcement of an award, industrial agreement or order, other than an order made under s 32, 44(6) or 66. Relevantly, for the purposes of these proceedings, s 83(1a) is as follows— “(1a) An application for the enforcement of an award, industrial agreement or order (other than an order made under section 32, 44(6) or 66) shall not be made other- wise than to an industrial magistrate’s court.” The effect s 5 of the MCEA, is to imply the provisions of the MCEA relating to minimum conditions of employment (as those are defined in s 3) into a contract of employment. Impli- cation of terms into a contract by statute is but one of the means by which terms may be implied into contracts generally. In itself, there is nothing exceptional about it. Once a term is implied into a contract by statute, that term is enforceable at law as any other term of the relevant contract: see generally Lindgren et al Contract Law in Australia at paras 636-643; Chitty on Contract General Principles, Chapter 13. A com- mon example, unrelated to the field of employment law, are terms implied by relevant legislation concerning the supply of goods and services. It is clear by the terms of s 7(c) of the MCEA, that Parlia- ment has, for the purposes of enforcement, created a legal fiction in that a minimum condition implied in a contract of employment, is deemed to be an award, industrial agreement or order for the purposes of s 83 of the Act. It is clear that but for this legal fiction, a minimum condition could not be so regarded from plain terms of the Act itself. A deeming provision, when used in a statute, is a “statutory fiction” and is a device for extending the meaning of a term to a subject matter which it properly does not designate: Muller v Dalgety and Co Ltd (1909) 9 CLR 693. In this case, Griffith C J observed at 696 that— “The word ‘deemed’ may be used in either sense, but it is more commonly used for the purpose of creating what James L J and Lord Cairns L C called a ‘statutory fic- tion’ (C Hill v East and West India Dock Co) (1), that is, for the purpose of extending the meaning of some term to a subject matter which it properly does not designate. When used in that sense it becomes very important to consider the purpose for which the statutory fiction is introduced.” Furthermore, in FCT v Comber (1986) 64 ALR 451 Fisher J, in considering a deeming provision contained in the Income Tax Assessment Act 1936 (Cth) observed at 458, that deeming provisions by their nature, are required to be construed strictly and only for the purpose for which they are resorted to. He further considered that it is improper to extend the express application of such a statutory fiction by implication. (See also East Finchley Pty Ltd v FCT (1989) 90 ALR 457 at 478). It has also been held that expressions such as “as if”, as in s 7(c) of the MCEA, are variations on deeming provisions and are to be interpreted in the same way: Loizos v Carlton and United Breweries Ltd (1994) 94 NTR 31 at 32 (see generally Pearce and Geddes Statutory Interpretation in Australia 4th Ed at paras 4.28 and 4.29). What then is the effect of s 7(c) of the MCEA? It is clear that the legislature, in enacting s 7, has provided a specific mechanism for enforcing minimum conditions of employment established by the MCEA. In essence, ss 7(a) and 7(b) do no more than make it plain beyond doubt, that existing legislation for the enforcement of workplace agree- ments and awards has equal application to provisions implied into these instruments by the MCEA. Section 7(c) is to be seen in a somewhat different light as but for its terms, mini- mum conditions implied into contracts of employment could not be enforced in the manner prescribed. In the absence of s 7(c), it would arguably be possible to pursue a claim at law for breach of contract or indeed, relevantly for present purposes, a contractual benefits claim pursuant to s 29(1)(b)(ii) of the Act. The terms of s 83(1)(a) of the Act provide for the exclusive jurisdiction of an Industrial Magistrate regarding enforcement matters. A claim of the nature prescribed by s 83 of the Act, may not be brought otherwise than before an Industrial Mag- istrate. This includes applications pursuant to s 29(1)(b)(ii) of the Act. In my opinion, given the terms of the MCEA to which I have referred, and the relevant principles regarding the inter- pretation of deeming provisions, the conclusion is inescapable that it was the intention of the legislature, when prescribing that minimum conditions of employment be implied into con- tracts of employment, that they be enforced exclusively by an Industrial Magistrate in the terms as provided by s 83 of the Act. That is, for the purposes of enforcement only, once deemed to be an award, industrial agreement or order for the purposes of s 83 of the Act, then s 83(1a) has application to confer ex- clusive jurisdiction in relation to such matters on an Industrial Magistrate. Further, that Parliament has enacted s 7(c) is, in my opinion, strongly indicative of a legislative intent to exclude other rem- edies to which I have earlier referred. If that were not the case, there would seem little purpose in enacting s 7(c) at all. My conclusion in relation to the construction of the relevant provisions of the MCEA and the Act, is fortified by reason of the fact that s 83(1a) in its present terms, was inserted into the Act by amending Act number No.79 of 1995, which com- menced on 16 January 1996. That is, the present s 83(1a) was inserted into the Act in light of the existence of the MCEA, which was assented to on 23 November 1993 and commenced on 1 December 1993. One would have thought, that if it was WESTERN AUSTRALIAN INDUSTRIAL GAZETTE 79 W.A.I.G. 1200 the intention of the legislature to excise minimum conditions of employment implied by the MCEA from the operation of the exclusive jurisdiction of the Industrial Magistrate, then plain words to that effect would have been used. That Parliament has not done so in my opinion, serves to confirm the overall legislative intention to make matters the subject of this head of the applicant’s claim, enforceable only by way of an appli- cation to an Industrial Magistrate. Conclusion Accordingly, for all of the above reasons, in my opinion, both claims in relation to superannuation and pro-rata annual leave are beyond the Commission’s jurisdiction. The remain- der of the applicant’s claim will be listed for hearing and determination in due course. APPEARANCES: Mr R Clohessy appeared as agent on behalf of the applicant. Mr D Taylor of counsel appeared on behalf of the respond- ent.