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Schipp v The Star Entertainment Qld Ltd; Minister for Education and Minister for Industrial Relations v The Star Entertainment Qld Ltd[2019] ICQ 9

Schipp v The Star Entertainment Qld Ltd; Minister for Education and Minister for Industrial Relations v The Star Entertainment Qld Ltd[2019] ICQ 9

INDUSTRIAL COURT OF QUEENSLAND

CITATION:

Schipp & Anor v The Star Entertainment Qld Limited [2019] ICQ 009

PARTIES:

David Anthony Schipp

(Appellant)

v

The Star Entertainment Qld Limited

(Respondent)

FILE NO:

C/2019/11

PARTIES:

Minister for Education and Minister for Industrial Relations

(Appellant)

v

The Star Entertainment Qld Limited

(Respondent)

FILE NO:

C/2019/12

PROCEEDING:

Appeal

DELIVERED ON:

18 July 2019

HEARING DATE:

19 June 2019

MEMBER:

Deputy President Merrell

ORDERS:

  1. The appeal in Matter C/2019/11 is dismissed
  1. The appeal in Matter C/2019/12 is dismissed

CATCHWORDS:

INDUSTRIAL LAW - QUEENSLAND APPEAL TO INDUSTRIAL COURT- where appeal against decision of Commission on the ground of error of law - where Minister contends Industrial Commissioner erred in law by failing to construe 'capacity' as distinguishable from illness - whether Industrial Commissioner erred in construction of s 95(4)(c)(i) of the Industrial Relations Act 2016 (Qld) - principles of statutory construction - context and purpose of the proportionate payment of long service leave provisions in the Industrial Relations Act 2016 (Qld)

LEGISLATION:

CASES:

APPEARANCES:

Acts Interpretation Act 1954 (Qld), s 14A

Fair Work Act 2009 (Cth), s 27 and s 387

Industrial Arbitration Act 1940 (NSW)

Industrial Relations Act 1988 (Cth), s 170DE

Industrial Relations Act 1990 (Qld), s 291, s 292, s 297 and s 288.

Industrial Relations Act 1999 (Qld), s 43, s 58, s 73, s 77 and s 278

Industrial Relations Act 2016 (Qld), s 95, s 316, s 320, s 321, s 322, s 475, s 557 and s 567

Industrial Relations and Another Act Amendment Act 2001 (Qld) s 4

Industrial Relations Reform Act 1993 (Cth)

Termination of Employment Convention 1982 (No 158)

Workplace Relations Act 1996 (Cth) s 170CG and s 652

Workplace Relations Amendment (Work Choices) Act 2005 (Cth), s 16

Workplace Relations Act 1997 (Qld), s 193, s 217 and s 220

Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378

CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384

Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194

Construction, Forestry Mining and Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 248 CLR 619

Cowan v BBC Hardware Ltd, Hervey Bay (1997) 155 QGIG 429

Cox v Photograve Pty Ltd [2008] QIC 54; (2008) 187 QGIG 127

CPB Contractors Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCAFC 70

Crozier v Australian Industrial Relations Commission [2001] FCA 1031

Crozier v Palazzo Corporation Pty Ltd Print S 5897;(2000) 98 IR 137

Dow Corning Australia Pty Limited v Monk [1984] 3 NSWLR 13

Elmes v Carpentaria Shire Council [2016] QIRC 118

Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503

Hobbs v Capricorn Coal Management Pty Ltd [2001] AIRC 408

Independent Commission Against Corruption v Cunneen [2015] HCA 14; (2015) 256 CLR 1

Jetstar Airways Pty Ltd v Neeteson-Lemkes [2013] FWCFB 9075; (2013) 239 IR 1

Manuel v Pasminco Cockle Creek Smelter Pty Ltd [1998] FCA 861; (1998) 83 IR 135

Northern Territory v Collins [2008] HCA 49; (2008) 235 CLR 619

Project Blue Sky Inc. v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

Re The Commercial Bank of Australia Ltd (1893) 19 VLR 333

Review of Entitlement to Long Service Leave [2000] QIRComm 83; (2000) 164 QGIG 236

Ross v Pacific Waste Management (1998) 158 QGIG 15

Schipp v The Star Entertainment Qld Limited [2019] QIRC 049

Shaw v University of Queensland [1999] IRCA 3

Shaw v University of Queensland [1999] FCA 1135; (1999) 91 IR 108

State Chamber of Commerce and Industry v Commonwealth [1987] HCA 38: (1987) 163 CLR 329

SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362

Mr D. Schipp, the Appellant in person, in Matter C/2019/11

Mr J. Murdoch QC, instructed by Crown Law, for the Appellant in Matter C/2019/12

Mr J. Wells of King & Wood Mallesons for the Respondents in Matters C/2019/11 and C/2019/12

Introduction

  1. [1]
    Mr David Schipp was employed by The Star Entertainment Qld Limited as a Games Dealer. Mr Schipp had a period of continuous employment with The Star from 26 May 2008 until the termination of his employment on 28 April 2018. Mr Schipp's employment was terminated by The Star because he was not fit to perform the inherent requirements of his role as a Games Dealer. Mr Schipp's period of continuous employment with The Star was nine years, 11 months and three days.
  1. [2]
    By amended application filed on 18 October 2018, Mr Schipp, pursuant to s 95(3) and s 475 of the Industrial Relations Act 2016 (Qld) ('the Act'), applied for an order for proportionate payment of long service leave. Mr Schipp contended that he had an entitlement to proportionate payment for long service leave pursuant to s 95(4)(c)(i) of the Act.
  1. [3]
    Section 95 of the Act provides:
 

Entitlement - employees other than seasonal employees

  1. (1)
    This section applies to an employee, other than a seasonal employee.

Note -

For provisions applicable to seasonal employees, see subdivisions 7 and 8.

  1. (2)
    The employee is entitled to long service leave, on full pay, of -
  1. (a)
    if the employee has completed 10 years continuous service - 8.6667 weeks; and
  1. (b)
    after 10 years service, if the employee has completed at least a further 5 years continuous service - a period that bears to 8.6667 weeks the proportion that the employee's further period of continuous service bears to 10 years.
  1. (3)
    An employee who has completed at least 7 years continuous service is entitled to a proportionate payment for long service leave on the termination of the employee's service.
  1. (4)
    However, if the employee's service is terminated before the employee has completed 10 years continuous service, the employee is entitled to a proportionate payment only if -
 
  1. (a)
    the employee's service is terminated because of the employee's death; or
  1. (b)
    the employee terminates the service because of -
  1. (i)
    the employee's illness or incapacity; or
  1. (ii)
    a domestic or other pressing necessity; or
  1. (c)
    the termination is because the employer -
  1. (i)
    dismisses the employee for a reason other than the employee's conduct, capacity or performance; or
  1. (ii)
    unfairly dismisses the employee; or
  1. (d)
    the termination is because of the passing of time and -
  1. (i)
    the employee had a reasonable expectation that the employment with the employer would continue until the employee had completed at least 10 years continuous service; and
  1. (ii)
    the employee was prepared to continue the employment with the employer.
  1. (5)
    Long service leave is exclusive of a public holiday that falls during the period of the leave.
  1. (6)
    An employee who is entitled to long service leave other than under this Act is entitled to leave that is at least as favourable as the entitlement under this section.
  1. (7)
    In this section -

proportionate payment means a payment equal to the employee's full pay for a period that represents the same proportion of 8.6667 weeks that the employee's period of continuous service bears to 10 years.

  1. [4]
    An earlier claim by Mr Schipp, that he was entitled to proportionate payment for long service leave pursuant to s 95(4)(c)(ii) of the Act because The Star had unfairly dismissed him, was abandoned in the amended application.[1]
  1. [5]
    By order made on 21 March 2019, the Industrial Commissioner who heard the matter dismissed Mr Schipp's application. The reason given was that s 95(4)(c)(i) of the Act does not confer an entitlement to proportionate payment for long service leave when an employer dismisses an employee because of the employee's illnessbased incapacity for work.[2]
  1. [6]
    Pursuant to s 557(1) of the Act, Mr Schipp and the Minister for Education and Minister for Industrial Relations appeal against the Industrial Commissioner's order on the ground of error of law. Their contention is that the Industrial Commissioner erred in law because, on the construction of s 95(4)(c)(i) of the Act, 'capacity' does not mean illnessbased incapacity for work.
  1. [7]
    These appeals are by way of rehearing on the record.[3] Such appeals are for the correction of error.[4]
  1. [8]
    The issue for determination is whether the Industrial Commissioner erred in law in his construction of s 95(4)(c)(i) of the Act.

The agreed facts and reasons for decision

  1. [9]
    On 14 December 2018, Mr Schipp and The Star filed a statement of agreed facts in the proceeding before the Commission.[5]  That statement relevantly provided:

7) Mr Schipp's employment was terminated by The Star on 28 April 2018. The Star wrote to Mr Schipp in 2 letters, explaining its reason, as follows:

a) a brief letter from The Star to Mr Schipp dated 28 April 2018, given to Mr Schipp on the day of termination which included the following:

Your employment has been terminated on the basis of you being unable to fulfil the inherent requirements of the role of Games Dealer.

b) a more complete letter dated 2 May 2018 which included:

(1) The medical evidence indicated that you would be unable to safely return to your role as Games Dealer.

(2) The Star Gold Coast has determined that you are not fit to perform the inherent requirements of your Dealer role now or in the foreseeable future and there are no reasonable accommodations that can be made in the workplace to accommodate your non-work related condition.

(3) In relation to your request for pro-rata payment for long service leave on termination, The Star Gold Coast has determined you do not have any such entitlement. Under Qld legislation this is not payable as The Star Gold Coast ended your employment based on your inability to perform the inherent requirements of your role. The legislation entitles you to a pro-rata payment if you chose to resign your employment based on illness or incapacity.

  1. [10]
    In his reasons for decision, the Industrial Commissioner relevantly stated:
  1. [71]
    The provisions of s 95(4)(c)(i) of the Act had its legislative genesis in the Industrial Relations and Another Amendment Bill 2001 where it appears that the Government of the day were accepting of a position adopted by the Full Bench of this Commission in the Review of Long Service Leave Entitlement where they found:

 In our view, an employee who has unlawfully brought the engagement to an end, or who has lawfully terminated the engagement for a reason other than illness, incapacity, or domestic or other pressing necessity (or death), should not be entitled to a proportionate payment in lieu of long service leave after 7 continuous years of service. Further, given the experience with unlawful and unfair dismissals which industrial tribunals have acquired in the past decade, it seems to us entirely appropriate to march away from the distinction between serious misconduct and misconduct simpliciter, and to deny entitlement where there is a valid reason for the dismissal related to the employee's conduct, capacity or performance.

              Statutory Interpretation

  1. [72]
    Schipp relied upon the matter of Project Blue Sky v Australian Broadcasting Authority which found that it was the duty of the court "to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have". The Queensland Government in amending the IR Act 1999 in terms of "conduct, capacity and or performance" had reflected the finding of the Full Bench in the Review of Long Service Leave Entitlement, which on my reading was patently obvious, that an employee with more than seven years but less than ten years' service whose employment was terminated by the employer for capacity (as in this case), were to be denied a proportionate payment of long service leave. Those provisions were transferred to the current Act that was assented to on 9 December 2016.
  1. [73]
    The statutory interpretation of s 95(4)(c)(i) would in my view reflect the "ordinary" meaning attached to the wording.

 Finding

  1. [74]
    On consideration of the submissions and material placed before the proceeding I have determined based upon the requisite standard of proof that s 95(4)(c)(i) of the Act does not confer a pro rata long service leave entitlement (continuous service in excess of seven years) when an employer dismisses an employee because of the employee's illnessbased incapacity for work. The application is dismissed.[6]

Mr Schipp's grounds of appeal and submissions

  1. [11]
    Mr Schipp did not set out any concise grounds of appeal. However, his principal contention is that the Industrial Commissioner erred in construing the noun 'capacity' in s 95(4)(c)(i) as meaning an employee's illness-based incapacity for work and that a capacity dismissal concerns the inability of an employee to work for reasons other than illness or illness based incapacity.[7]
  1. [12]
    Mr Schipp's submissions, in summary, were:
  • the duty of the Commission was:
  • -to give effect to the words in legislation the Parliament intended;
  • -to avoid construing legislation to produce absurd results; and
  • -to consider the words of a provision in context to produce a result that is fair and workable;
  • pursuant to s 95(4)(b)(i) of the Act, where an employee resigns because of the employee's illness or incapacity, the employee is entitled to a proportionate payment of long service leave and, as such, an unjust, unreasonable and absurd result is produced by construing s 95(4)(c)(i) to preclude an employee, who is dismissed by an employer for an illness related reason, from an entitlement to proportionate payment of long service leave;
  • the decision was inconsistent with existing human rights legislation that prohibits unlawful discrimination against employees on the ground of impairment or disability; and
  • the decision did not reflect the review of long service leave undertaken by the Full Bench of the Queensland Industrial Relations Commission in 2000 ('2000 Review') [8] and the related amendments to the long serve leave provisions in the Industrial Relations Act 1999 (Qld) ('the 1999 Act') made by the Industrial Relations and Another Act Amendment Act 2001 (Qld) ('the 2001 Amendment Act') both of which did not intend to preclude an employee from receiving a proportionate payment of long service leave when dismissed for reasons relating to illness or incapacity.

The Minister's grounds of appeal and submissions

  1. [13]
    There were six grounds to the Minister's appeal. Fundamentally, the Minister contends the Commissioner erred in law because the Commissioner failed construe 'capacity' in s 95(4)(c)(i) as distinguishable from illness.

 

  1. [14]
    The Minister submitted that:
  • the Industrial Commissioner failed to construe s 95(4)(c)(i) in context, in a way to give effect to the Act's harmonious goals and to best give effect to the purpose and language of the section;
  • the provision of a guaranteed safety net of fair, relevant and enforceable minimum employment conditions through the Queensland Employment Standards ('QES') is a way the main purpose of the Act is achieved; and the QES provide that an employee is entitled to a proportionate payment of long service leave on termination of the employee's service where the employee had at least seven, but less than 10, years continuous service on meeting certain qualifications;
  • one such qualification is contained in s 95(4)(b)(i) where the employee terminates the employee's service because of the employee's 'illness or incapacity' and, in that regard, because the Parliament used the word 'or', illness is not a subset of incapacity;
  • the other relevant qualification is contained in s 95(4)(c)(i) where the termination is because the employer dismisses the employee for reason other than the employees 'conduct, capacity or performance';
  • in construing s 95(4) of the Act, there must be harmony between s 95(4)(b) and s 95(4)(c), it would be disharmonious if the Parliament did not contemplate such an entitlement where the Act does not mention illness in s 95(4)(c)(i) and, for that reason, 'capacity' in s 95(4)(c)(i) does not include illness;
  • the word 'capacity' in s 95(4)(c)(i) must be given some meaning and, properly construed, it means where an employee's skill does not meet the requirements of the job;
  • such a construction is confirmed by the 2000 Review and by the Second Reading Speech for the Industrial Relations and Another Amendment Bill 2001 (Qld) ('the 2001 Amendment Bill') both of which suggest a more beneficial entitlement was intended namely, that where an employee's service is terminated because the employer dismisses the employee for illness, the employee is entitled to proportionate payment of long service leave; and
  • it stretches the language to construe 'capacity' to mean illness, but it does not stretch the language to construe 'capacity' to mean skill.

The Star's submissions

  1. [15]
    The Star submitted that:
  • the fact that s 95(4)(b)(i) refers to 'illness or incapacity' does not mean illness and incapacity are mutually exclusive in that, in their ordinary meaning, an employee can have an illness but not be incapacitated;
  • the word 'incapacity' in s 95(4)(b)(i) therefore informs the meaning of the word 'capacity' in s 95(4)(c)(i);
  • in the 2000 Review, the Full Bench, noting the experience of industrial tribunals with unlawful and unfair dismissals in the previous decade, made it clear that no proportionate payment of long service leave should arise on termination where there was a valid reason related to the employee's 'conduct, capacity or performance' and the proper context of that phrase comes from the 'well-worn phrase' contained in s 320 of the Act;
  • the Second Reading Speech for the 2001 Amendment Bill ('the Second Reading Speech') specifically referenced the 2000 Review, and therefore the intention of the Parliament was to align the entitlement to proportionate payment of long service leave with s 320 of the Act, namely:
  • -where the reason for an employee's dismissal related to the employee's conduct, capacity or performance; and
  • -if an employee was dismissed for a such reason, there was no entitlement to proportionate payment of long service leave; and
  • if the dismissal was for the employee's conduct, capacity or performance but was unfair, then, by s 95(4)(c)(ii), the intention of the Parliament was that employees, in those circumstances, would be entitled to a proportionate payment of long service leave.

The Minister's submissions in reply

  1. [16]
    In reply to a written submission made by The Star, that the proper context of the phrase 'conduct, capacity or performance' is to be taken from s 320 of the Act, the Minister submitted[9] that it was not perfectly clear that s 320, which is contained in ch 8, pt 2 of the Act, was meant to relate to the provisions about proportionate payment of long service leave which are contained in ch 2, pt 3 of the Act.
  1. [17]
    The Minister also submitted that while the Parliament put the 2000 Review into legislative form, in that review, the Full Bench specifically marched away from prior legislative prescription that an employee did not receive proportionate payment for long service leave where the employee was dismissed for serious misconduct; so that the qualification was that an employee would not be entitled to proportionate payment of long service leave where the employee was dismissed for misconduct simpliciter. The Minister submitted that s 95(4)(c)(i) picked up that change and, as such, there was no intention to deprive an employee of proportionate payment of long service leave where the employee was dismissed for illness.
  1. [18]
    The Minister further submitted that the Court should be cautious to adopt the construction pressed by The Star. This was because it would require an employee who was ill, and who was dismissed by an employer, of establishing an unfair dismissal before the employee could claim a proportionate payment of long service leave. The Minister submitted that would extend the incongruity with an employee who resigned due to illness.

The construction of s 95(4)(c) of the Act

The relevant principles of statutory construction

  1. [19]
    The technique of statutory construction is to choose from among the range of possible meanings the meaning which Parliament should be taken to have intended.[10]
  1. [20]
    The plurality consisting of Kiefel CJ, Nettle J and Gordon J in SZTAL v Minister for Immigration and Border Protection[11] summarised the modern approach to statutory construction:
  1. The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meeting must be rejected.[12]
  1. [21]
    The meaning of the provision in a statute must be determined by reference to the language of the instrument viewed as a whole[13] and the legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.[14] Further, the purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of relevant provisions.[15]
  1. [22]
    However, it is still the fundamental duty of a court to give meaning to the legislative command according to the terms in which it is been expressed and legislative history and references to pre-existing law should not deflect from the duty of resolving an issue of statutory construction which ultimately is always text-based activity.[16]
  1. [23]
    Section 14A(1) of the Acts Interpretation Act 1954 (Qld) is also relevant. That section provides that in the interpretation of a provision of an Act, interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation. Schedule 1 to that Act provides that 'purpose', for an Act, includes policy objective.
  1. [24]
    All parties submitted the Court should consider the 2000 Review and the Second Reading Speech in construing s 95(4)(c)(i) of the Act. In my view, that extrinsic material may be considered in the construction of that provision.
  1. [25]
    A consideration of the context of statutory text includes the legislative history and extrinsic materials.[17] The context should be considered at the first instance not at some later stage and context includes things such as the existing state of the law and the mischief the statute intended to remedy.[18] Therefore it is permissible to have regard to extrinsic materials in order to identify the context and purpose of a statutory provision, including the identification of any mischief to which the legislative amendment was directed.[19]
  1. [26]
    Extrinsic material that the courts have considered, relevantly include:
  • a report made pursuant to a statutory obligation under the Industrial Arbitration Act 1940 (NSW) by the President of the Industrial Commission of New South Wales to the New South Wales Parliament about the functioning of that Commission;[20]
  • a second reading speech;[21] and
  • definitions in the Macquarie Dictionary.[22]

The relevant legislative history

  1. [27]
    The 2001 Amendment Act commenced operation on 3 June 2001. Section 4 of that Act amended s 43 of 1999 Act. Section 43 of the 1999 Act dealt with the entitlement, for all employees other than seasonal employees, to long service leave.
  1. [28]
    Immediately before the operation of the 2001 Amendment Act, s 43 of the 1999 Act relevantly provided:
  1. (3)
    An employee is entitled to a proportionate payment for long service leave if -
  1. (a)
    the employee has completed at least 10 but less than 15 years continuous service; and
  1. (b)
    the employee's service is terminated by -
  1. (i)
    the employee's death; or
  1. (ii)
    the employee; or
  1. (iii)
    the employer, for a cause other than serious misconduct.[23]
  1. [29]
    Section 58(2) of the 1999 Act provided that a Full Bench of the Commission, before 30 June 2000, had to review the entitlement to long service leave under ch 2 of that Act.
  1. [30]
    In the 2000 Review, the Full Bench, in respect of the proportionate payment of long service leave, stated that as set out in paragraph [10] of this decision.
  1. [31]
    In the Second Reading Speech, the then Minister relevantly stated:

The requirement in section 58(2) for a full bench to review the current entitlement to long service leave reflects the Taskforce recommendation on this issue.

The review began in November 1999 and gave all interested parties the opportunity to put their views forward. Following an extensive review of written submissions, oral argument and witness evidence from the Government, unions, and employer groups, on 27 June 2000 a full bench of the QIRC released a written statement of its findings.

The views and conclusions of the QIRC

The QIRC review supported the following changes and improvements to the current entitlement to long service leave -

 8.6667 weeks leave after 10 years continuous service, with transitional arrangements to phase in the new entitlement;

 access to a pro-rata payment for long service leave after 7 years service where the employee terminates because of illness, incapacity or domestic or other pressing necessity (or death), but not where the employee is terminated by the employer for a valid reason related to their conduct, capacity or performance;

Access to a pro-rata payment on termination after 7 years service

At present, employees have access to a pro-rata payment on termination after 10 years service. The QIRC review supported the Queensland Government position that access to a pro-rata payment on termination should be available after 7 years service.

However, the QIRC view was that the entitlement after this period should be restricted to those employees who have resigned for reasons of illness, incapacity, death, or domestic or other pressing necessity. It should not be available for employees who terminate for any other reason or who have been terminated by the employer for a valid reason related to their conduct, capacity or performance. All employees would continue to have broad access to a pro-rata payment on termination after 10 years service.

The Bill puts this into effect by first establishing that an employee is entitled to a proportionate payment for long service leave if the employee's service is terminated after completing at least 7 years continuous service. However, if the employee's service is terminated after 7 years continuous service but before the completion of 10 years continuous service the employee is entitled to a proportionate payment only if certain prescribed conditions are met, as per the QIRC decision.

This provision will bring Queensland into line with a number of other jurisdictions that provide early access to a pro-rata payment on termination on a conditional basis.

The question of what constitutes an illness, incapacity, domestic or other pressing necessity of such a nature to justify a termination is a matter to determine on the facts of each case. If the parties are unable to agree on whether an employee who terminates between 7 and 10 years service is entitled to a proportionate payment on these grounds, this will be a matter for the QIRC to determine. This is the practice in New South Wales, for example, where these questions of interpretation are determined on a case-by-case basis.[24]

  1. [32]
    After the operation of the 2001 Amendment Act, s 43 of the 1999 Act relevantly provided:
  1. (3)
    An employee who has completed at least 7 years continuous service is entitled to a proportionate payment for long service leave on the termination of the employee's service.
  1. (4)
    However, if the employee's service is terminated before the employee has completed 10 years continuous service, the employee is entitled to a proportionate payment only if -
  1. (a)
    the employee's service is terminated because of the employee's death; or
  1. (b)
    the employee terminates the service because of -
  1. (i)
    the employee's illness or incapacity; or
  1. (ii)
    a domestic or other pressing necessity; or
  1. (c)
    the termination is because the employer -
  1. (i)
    dismisses the employee for a reason other than the employee's conduct, capacity or performance; or
  1. (ii)
    unfairly dismisses the employee.
  1. [33]
    Sections 95(3) and (4) are, relevantly, in the same form as ss 43(3) and (4) of the 1999 Act as amended in 2001.

The text, context and purpose of s 95(4)(c) of the Act

  1. [34]
    The ordinary meaning of the noun 'capacity', in the sense it is used in the phrase 'conduct, capacity or performance' in s 95(4)(c)(i) of the Act, means ' … power, ability or possibility of doing something.'[25]  In this regard, it describes future capability.[26] 
  1. [35]
    The 2001 amendments made to s 43 of the 1999 Act have their genesis in the 2000 Review. The Full Bench, in respect of the proportionate payment of long service leave, concluded that employees should not have access to pro rata payment of long service leave after seven years' service where:
  • the employee unlawfully brought the engagement to an end; or
  • the employee lawfully terminated the engagement for reason other than illness, incapacity or domestic or other pressing necessity or death.[27]
  1. [36]
    The Full Bench went on to consider the circumstances where an employee has seven years' service and where the employer dismisses the employee. In that respect, the Full Bench was very clear; it did not favour proportionate payment of long service leave where there was a valid reason for an employee's dismissal related to the employee's conduct, capacity or performance. This was because of the view of the Full Bench, that given the experience with unlawful and unfair dismissals which industrial tribunals had acquired in the previous decade, it was entirely appropriate to march away from the distinction between serious misconduct and misconduct simpliciter.[28] 
  1. [37]
    Implicit in this view is that whether or not there was a valid reason for the dismissal was to be determined by the industrial tribunal due to that experience gained in respect of unlawful and unfair dismissals.
  1. [38]
    As is evident from the Second Reading Speech, the amendments made to the 1999 Act by the 2001 Amendment Act about proportionate payment of long service leave, were to achieve the above-mentioned purpose.
  1. [39]
    There is some force in the submission made by Mr Wells, who appeared for The Star, that the proper context of s 95(4)(b)(i) of the Act is taken from the 'well-worn phrase' of 'conduct, capacity or performance' in s 320 of the Act. 
  1. [40]
    Part 12, div 5 of the Industrial Relations Act 1990 (Qld) ('the 1990 Act') dealt with dismissals. The object of that division was to give effect to, amongst other Conventions and Recommendations, the Termination of Employment Convention 1982 (No.158) ('the Convention').[29]  Article 4 of the Convention provided:

The employment of a worker shall not be terminated unless there is a valid reason for such termination connected with the capacity or conduct of the worker or based on the operational requirements of the undertaking, establishment or service.

  1. [41]
    In respect of employees to whom pt 12, div 5 applied, s 291(1)(b)(i) of the 1990 Act provided that an employer must not dismiss an employee '… unless there is a valid reason … related to the employee's conduct, capacity or performance'. Section 291(2)(a) provided that a reason was not valid if ' … having regard to the employee's conduct, capacity or performance and the operational requirements, the dismissal is harsh unjust or unreasonable'. To dismiss an employee in the absence of a valid reason rendered the dismissal unlawful. Section 292(1) of the 1990 Act provided that an employer may dismiss an employee for reasons related to the employee's 'conduct, capacity or performance' only if the employer first gave the employee a reasonable opportunity to defend against the allegations made. Pursuant to s 297 of the 1990 Act, the Commission had power to order the remedies of reinstatement or the payment of compensation.
  1. [42]
    Chapter 5, pt 2 of the Workplace Relations Act 1997 (Qld) ('the 1997 Act') dealt with unlawful dismissals. An object of that chapter was, by establishing the procedures, remedies and sanctions, to help give effect to, amongst other conventions, the Convention. In respect of employees to whom ch 5, pt 2 applied, s 217(a) provided that a dismissal was unlawful if it was 'harsh, unjust or unreasonable'. Section 220 provided that in deciding whether dismissal was harsh, unjust or unreasonable, the Commission had to consider, amongst other matters, whether the decision related to '… the employee's conduct, capacity or performance;'. The Commission had the power to order the remedies of reinstatement or the payment of compensation.
  1. [43]
    Chapter 3, pt 2 of the 1999 Act dealt with unfair dismissals. In respect of employees to whom ch 3, pt 2 applied, s 73(1)(a) provided that a dismissal was unfair if it was 'harsh, unjust or unreasonable'. Section 77 of that Act provided that in deciding whether dismissal was harsh, unjust or unreasonable, the Commission had to consider, amongst other matters, whether the decision related to '… the employee's conduct, capacity or performance;'. The Commission had the power to order the remedies of reinstatement, re-employment or the payment of compensation if reinstatement or re-employment was impracticable.
  1. [44]
    Chapter 8, pt 2, div 2 of the Act deals with unfair dismissals. In respect of employees to whom ch 8, pt 2, div 2 applies, a dismissal will be unfair if it is 'harsh, unjust or unreasonable.'[30] Section 320 of the Act, like the 1997 Act and the 1999 Act, provides that the Commission, in deciding whether a dismissal was harsh, unjust or unreasonable, must consider, amongst other matters, '…whether the dismissal related to … the employee's conduct, capacity or performance;'. As with the 1999 Act, the Commission has power to order reinstatement and re-employment[31] or compensation.[32]
  1. [45]
    Similar provisions have existed in the cognate Commonwealth Acts since the enactment of the Industrial Relations Reform Act 1993 (Cth).[33]
  1. [46]
    The noun 'capacity' in the phrase 'conduct, capacity or performance', in provisions like those referred to above, is referrable to the circumstance where an employee is dismissed because the employee does not have the skill to perform the job for which he or she is employed.[34]
  1. [47]
    However, during the operation of the 1990 Act, the Queensland Industrial Relations Commission accepted that the noun 'capacity' in the phrase '… reasons related to the employee's conduct, capacity or performance' in s 292(1) of the 1990 Act, operated where a dismissal was on the basis of an employee's physical or mental incapacity.[35] A similar approach was taken by the Queensland Industrial Court.[36] The same approach was taken under the 1997 Act[37] and under the 1999 Act.[38]   
  1. [48]
    The same approach was also taken under the equivalent Commonwealth legislation. For example, in Shaw v University of Queensland,[39] the Industrial Relations Court of Australia, in considering s 170DE(1) of the Industrial Relations Act 1988 (Cth), held that 'capacity', in that section, comprehended the employee's capacity to perform, in the future, the duties required pursuant to the contract of employment and if an employee's state of health had significantly diminished the employee's capacity to perform his or her duties pursuant to the contract of employment, then the employer had a valid reason for termination under that section.[40] That same approach was taken under the equivalent provisions in the Workplace Relations Act 1996 (Cth).[41] The same approach is also taken under the Fair Work Act 2009 (Cth).[42]
  1. [49]
    The noun 'capacity', in the sense it has been used in the phrase 'conduct, capacity or performance' in unlawful and unfair dismissal provisions of industrial legislation since 1990, includes, for the reasons referred to above, the physical or mental state of health of the employee to perform the work for which he or she is contracted. The Full Bench, in the 2000 Review, was referring to 'capacity' in that sense when it referred to ' … a valid reason for the dismissal related to the employee's conduct, capacity or performance.'[43] 
  1. [50]
    While the Full Bench stated that it was entirely appropriate to move away from the distinction between serious misconduct and misconduct simpliciter in respect of denying to employees proportionate payment of long service leave when they were dismissed for those reasons, it was clear the Full Bench was including, in that group of employees, those who were dismissed because they lacked the physical or mental state of health to perform the work for which they were employed. It is equally clear, having regard to the Second Reading Speech, that aspect of the 2000 Review establishes the context and purpose of the proportionate payment of long service leave amendments made to the 1999 Act by the 2001 Amendment Act. The same provisions are contained in s 95(4) of the Act.
  1. [51]
    This was the basis upon which the Industrial Commissioner came to his decision.
  1. [52]
    Therefore, the abstract noun 'capacity', in the sense it is being used in the phrase 'conduct, capacity or performance' in s 95(4)(c)(i) of the Act, is referrable, in addition to the skill of an employee to perform the job for which he or she is employed, to the physical or mental capacity of the employee to perform the work for which he or she is engaged.
  1. [53]
    Such a construction best achieves the purpose or policy objective of the provision.
  1. [54]
    Further, having regard to the 2001 amendments made to the 1999 Act, which have been replicated in s 95(4)(c)(i) of the Act, a former employee, notwithstanding that the employer dismissed that employee for a reason related to the employee's capacity, may still receive proportionate payment of long service leave where the termination was because the employer unfairly dismissed that employee.
  1. [55]
    I do not think that the caution urged by the Minister, that such an employee would have to establish an unfair dismissal before the employee could claim a proportionate payment of long service leave, is warranted. The issue was considered by Hall P in Cox v Photograve Pty Ltd ('Cox').[44]
  1. [56]
    In Cox, the Commission stated the following case for determination by the Industrial Court of Queensland:

Whether the Queensland Industrial Relations Commission has jurisdiction to hear and determine an application for a proportionate payment of long service leave pursuant to section 43(4)(c)(ii) of the Industrial Relations Act 1999 (Qld), where the former employee:

  1.  was employed by a constitutional corporation; and
  1. has not pursued an application for reinstatement on the basis of the termination of employment being unfair in either the Australian Industrial Relations Commission or the Queensland Industrial Relations Commission.[45]
  1. [57]
    The answer of the Court was 'YES'.[46]
  1. [58]
    The reasoning adopted by his Honour in Cox, in respect of the 1999 Act, is equally applicable under the Act because the relevant provisions have not materially changed. In that case, his Honour:
  • could not identify anything in the language of the 1999 Act (now the Act) that an employee asserting an entitlement in respect of proportionate long service leave in reliance on s 43(4)(c) of the 1999 Act (now s 95(4)(c) of the Act) relying on s 278(1)(a) of the 1999 Act (now s 475(1)(a) of the Act), must first or contemporaneously test the fairness of the termination under ch 3, pt 2 of the 1999 Act (now, ch 8, pt 2, div 2 of the Act); [47] and
  • stated that by s 16(1)(a) and s 16(3)(f) of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), that Act did not apply to the exclusion of the 1999 Act so far as the 1999 Act dealt with long service leave.[48]
  1. [59]
    Similarly, s 26(1), s 26(2)(a), s 27(1)(c) and 27(2)(g) of the Fair Work Act 2009 (Cth) have the effect that the exclusive application of the Fair Work Act 2009 (Cth) to national system employees and national system employers does not extend to the exclusion of the Act so far as the Act deals with long service leave.

Conclusion

  1. [60]
    The purpose of these appeals is for the correction of any error of law in the Industrial Commissioner's construction of s 95(4)(c)(i) of the Act.
  1. [61]
    Despite the skill with which Mr Murdoch QC argued the case for the Minister, and despite Mr Schipp's impassioned plea in his submissions, for the reasons I referred to above, the Industrial Commissioner did not misconstrue the meaning of the noun 'capacity' in the phrase 'conduct, capacity or performance' in s 95(4)(c)(i) of the Act.
  1. [62]
    The appeal in Matter C/2019/11 is dismissed.
  1. [63]
    The appeal in Matter C/2019/12 is dismissed.

Footnotes

[1] Schipp v The Star Entertainment Qld Limited [2019] QIRC 049, [4] (Industrial Commissioner Thompson) ('Schipp').

[2] Ibid [74].

[3] Industrial Relations Act 2016 (Qld) s 567(1).

[4] Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 7;(2000) 203 CLR 194, [17] (Gleeson CJ, Gaudron and Hayne JJ).

[5] Schipp (n1) [32].

[6] Schipp (n1) (citations omitted).

[7] Mr Schipp's Amended Application to Appeal filed on 16 April 2019, paragraphs 15 and 16.

[8] Review of Entitlement to Long Service Leave [2000] QIRComm 83; (2000) 164 QGIG 236 (Hall P and Commissioners Baldwin and Brown) ('2000 Review').

[9] Relying on Re The Commercial Bank of Australia Ltd (1893) 19 VLR 333, 375 (Holroyd, Hodges and Hood JJ).

[10] Independent Commission Against Corruption v Cunneen [2015] HCA 14;(2015) 256 CLR 1, [57] (French CJ, Hayne, Kiefel and Nettle JJ).

[11] [2017] HCA 34;(2017) 262 CLR 362.

[12] Ibid [14] (citations omitted).

[13] Project Blue Sky Inc. v Australian Broadcasting Authority [1998] HCA 28;(1998) 194 CLR 355, [69] (McHugh, Gummow, Kirby and Hayne JJ).

[14] Ibid [70].

[15] Certain Lloyd's Underwriters v Cross [2012] HCA 56;(2012) 248 CLR 378, [26] (French CJ and Hayne J).

[16] Northern Territory v Collins [2008] HCA 49;(2008) 235 CLR 619, [16] (Gummow A-CJ and Kirby J).

[17] Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55;(2012) 250 CLR 503, [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ).

[18] CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2;(1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey and Gummow JJ).

[19] CPB Contractors Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCAFC 70, [60] (O'Gallaghan and Wheelahan JJ, Flick J at [8] concurring).

[20] Dow Corning Australia Pty Limited v Monk [1984] 3 NSWLR 13, 19 (Glass JA).

[21] Construction, Forestry Mining and Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36;(2013) 248 CLR 619, [59] (Crennan, Kiefel, Bell, Gageler and Keane JJ).

[22] State Chamber of Commerce and Industry v Commonwealth [1987] HCA 38: (1987) 163 CLR 329, 348 (Mason CJ, Wilson, Dawson, Toohey and Gaudron JJ).

[23] Similar provisions existed in s 193 of the Workplace Relations Act 1997 (Qld).

[24] Queensland, Parliamentary Debates, Legislative Assembly, 22 March 2001, 95-96 (Gordon Nuttall, Minister for Industrial Relations).

[25] Macquarie Dictionary 5th ed, 2009 'capacity' (def 4) and Manuel v Pasminco Cockle Creek Smelter Pty Ltd [1998] FCA 861;(1998) 83 IR 135, 147 (von Doussa J) ('Manuel').

[26] Manuel (n 24) 147.

[27] 2000 Review (n 8) 244.

[28] 2000 Review (n 8) 244.

[29] Industrial Relations Act 1990 (Qld) s 288(a).

[30] Industrial Relations Act 2016 (Qld) s 316.

[31] Industrial Relations Act 2016 (Qld) s 321.

[32] Industrial Relations Act 2016 (Qld) s 322.

[33] For example, s 170DE(1) of the Industrial Relations Act 1988 (Cth), s 170CG(3)(a) of the Workplace Relations Act 1996 (Cth), s 652(3)(a) of the Workplace Relations Act 1996 (Cth) (post Work Choices) and s 387(a) of the Fair Work Act 2009 (Cth).

[34] Crozier v Palazzo Corporation Pty Ltd Print S 5897;(2000) 98 IR 137, 150 (Ross V-P, Senior Deputy President Acton and Commissioner Cribb) and Crozier v Australian Industrial Relations Commission [2001] FCA 1031, [14] (Gray, Branson and Kenny JJ).

[35] Trindle v Aboriginal and Torres Strait Islanders' Corporation for Welfare Services (1996) 151 QGIG 2201, 2201 (Chief Industrial Commissioner Hall) and Cowan v BBC Hardware Ltd, Hervey Bay (1997) 155 QGIG 429, 430 (Commissioner Bougoure).

[36] Skeeta Pty Ltd trading as Richlands Tavern v Ralph (1997) 155 QGIG 123, 124 (de Jersey P).

[37] Ross v Pacific Waste Management (1998) 158 QGIG 15, 18 (Commissioner Nutter).

[38]Elmes v Carpentaria Shire Council [2016] QIRC 118, [58] – [69] (Deputy President O'Connor).

[39] [1999] IRCA 3.

[40] Ibid [43] (Ryan J). This aspect decision was not questioned on appeal in Shaw v University of Queensland [1999] FCA 1135; (1999) 91 IR 108, [4] (Wilcox CJ and Marshall J).

[41] Hobbs v Capricorn Coal Management Pty Ltd [2001] AIRC 408, [25]-[27] (McIntyre V-P, Senior Deputy President Cartwright and Commissioner Harrison).

[42] Jetstar Airways Pty Ltd v Neeteson-Lemkes [2013] FWCFB 9075;(2013) 239 IR 1, [45] and [53] (Hatcher V-P, Senior Deputy President Drake and Commissioner Riordan).

[43] 2000 Review (n 8) 244.

[44] [2008] QIC 54; (2008) 187 QGIG 127.

[45] Ibid.

[46] Ibid 129.

[47] Ibid.

[48] Ibid.

Close

Editorial Notes

  • Published Case Name:

    David Anthony Schipp v The Star Entertainment Qld Ltd; Minister for Education and Minister for Industrial Relations v The Star Entertainment Qld Ltd

  • Shortened Case Name:

    Schipp v The Star Entertainment Qld Ltd; Minister for Education and Minister for Industrial Relations v The Star Entertainment Qld Ltd

  • MNC:

    [2019] ICQ 9

  • Court:

    ICQ

  • Judge(s):

    Merrell DP

  • Date:

    18 Jul 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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