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  4. Cunningham v Gympie Regional Council (No. 2) - [2022] QIRC 163

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Cunningham v Gympie Regional Council (No. 2)[2022] QIRC 163

Cunningham v Gympie Regional Council (No. 2)[2022] QIRC 163

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION:

Cunningham v Gympie Regional Council (No. 2) [2022] QIRC 163

PARTIES: 

Cunningham, Darren

Applicant

v

Gympie Regional Council

Respondent

CASE NO:

B/2021/48

PROCEEDING:

Application to recover unpaid wages

DELIVERED ON:

19 May 2022

HEARING DATES:

On the papers

MEMBER:

HEARD AT:

McLennan IC

Brisbane

ORDERS:

  1. 1.That the application of Mr Darren  Cunningham filed on 7 June 2021 is granted.
  2. 2.That the respondent is to pay the       applicant the sum of $50,000.00.
  3. 3.That payment is to be made within 21 days of this decision.

CATCHWORDS:

INDUSTRIAL LAW – APPLICATION TO RECOVER UNPAID WAGES – where sick leave entitlements applicant had accrued during his previous employment were credited upon commencement with new employer – where applicant was made redundant – whether applicant was entitled to have his accrued but untaken sick leave entitlements paid out – whether amount sought is payable – whether amount sought is unpaid – whether it is appropriate to grant the relief sought

LEGISLATION AND OTHER INSTRUMENTS:

CASES:

Acts Interpretation Act 1954 (Qld) s 14A, s 14B, s 32A, s 32AA

Industrial Relations Act 2016 (Qld) s 451, s 475, s 476, s 545, sch 5

Statutory Instruments Act 1992 (Qld) s 7, s 15

Industrial Relations (Tribunals) Rules 2011 (Qld) r 64E

Gympie Regional Council Certified Agreement 2018 cl 2, cl 7, cl 30

Queensland Local Government Industry (Stream A) Award – State 2017 cl 20

Australian Broadcasting Commission v Australasians Performing Right Association Ltd [1973] HCA 36

Brisbane City Council v Queensland Services, Industrial Union of Employees [2021] QIRC 5

Cunningham v Gympie Regional Council [2021] QIRC 387

Reasons for Decision

  1. [1]
    Mr Darren Cunningham (the Applicant) built a career in local government spanning 33 years. 
  1. [2]
    Over that time, he has worked for the communities of Pine Rivers, Lockyer Valley, Sunshine Coast, Ipswich, Gympie - and is now with the South Burnett Regional Council.
  1. [3]
    On 7 June 2021, Mr Cunningham filed a Form 15 – Application to recover unpaid wages (the Application).
  1. [4]
    In brief, the Application claims an entitlement to be paid out his sick leave accruals upon the redundancy of his position as Manager Construction with Gympie Regional Council (GRC). 
  1. [5]
    Mr Cunningham is represented by his Union in this matter - the Queensland Services, Industrial Union of Employees.
  1. [6]
    The matter was conferenced on 21 July 2021[1] but did not resolve there.
  1. [7]
    The Application was referred to me to hear and decide.

Background

  1. [8]
    Mr Cunningham commenced work at Ipswich City Council (ICC) on 2 February 2015.  Upon the cessation of his employment at ICC, Mr Cunningham had accrued significant leave entitlements – a sick leave balance of 564.55 hours and 382.61 hours of long service leave.[2]
  1. [9]
    Mr Cunningham then commenced work at GRC on 4 March 2019. 
  1. [10]
    The leave entitlements that Mr Cunningham had accrued during his previous employment at ICC were credited upon his commencement with GRC, pursuant to cl 20(e) of the Queensland Local Government Industry (Stream A) Award – State 2017 (the Award). 
  1. [11]
    Mr Cunningham's payslip dated 15 May 2019 evidenced that to be the case, as his long service leave and sick leave balances had been adjusted to reflect such credit of those accrued entitlements.  As at 15 May 2019, his sick leave balance was 587.35 hours and his long service leave balance was 392.99 hours.
  1. [12]
    Notwithstanding Mr Cunningham's contract with GRC was for a three year term concluding on 4 March 2022, his position was made redundant on 16 June 2020. 
  1. [13]
    Mr Cunningham's gross payment upon redundancy was $191,567.45, comprising:
  • $12,492.32 as payment in lieu of notice;
  • $121,800.12 as redundancy pay (26 weeks redundancy pay plus 13 weeks additional incentive payment), pursuant to the contract of employment;
  • $20,479.37 as payment of accrued annual leave; and
  • $36,795.64 as payment of accrued long service leave.[3]

That amount did not include the payment of his accrued sick leave entitlements.

Mr Cunningham received his wages up to and including the date of termination.

  1. [14]
    Mr Cunningham commenced work for South Burnett Regional Council (SBRC) on 7 September 2020.[4] 
  1. [15]
    However, the period between Mr Cunningham's position being made redundant at GRC and securing employment at SBRC exceeded the requisite timeframe under the Award for allowing the credit of his sick leave accruals.[5]

Question to be decided

  1. [16]
    The issue in dispute is whether or not Mr Cunningham was entitled to have his accrued (but untaken) sick leave entitlements paid out by GRC, upon his position being made redundant on 16 June 2020. 
  1. [17]
    This involves my consideration of whether the amount sought is payable, whether it is unpaid and whether or not it is appropriate to grant the relief sought. 

Industrial instrument provisions

  1. [18]
    GRC provided Mr Cunningham with a contract of employment (the Contract) on 14 January 2019. 
  1. [19]
    Mr Cunningham sought confirmation that entitlements accrued with ICC would be transferred to his employment with GRC.  It was confirmed by GRC that was the case.[6] 
  1. [20]
    GRC and Mr Cunningham executed the contract of employment on 29 January 2019, ahead of his commencement on 4 March 2019. 
  1. [21]
    Mr Cunningham's payslip showed that the credit of leave accruals had taken effect.[7]
  1. [22]
    While the parties earlier apparently agreed that Mr Cunningham's employment at GRC was also subject to the terms of the Award and the Gympie Regional Council Certified Agreement 2018 (the CA),[8] the Applicant later resiled from the position that the CA applied to Mr Cunningham's employment because of cl 2.2 of the CA and the recitals of the Contract at E.[9]
  1. [23]
    Key provisions relevant to this application are extracted below:

Award

  1. [24]
    Clause 20 of the Award states:

20. Personal leave

…

  1. (d)
    The amount of sick leave to which a full-time employee is entitled depends on how long they have worked for the employer and accrues from year to year as follows:
  1. (i)
    at the rate of one day's leave for each month of employment in the first year, to a total of 12 days; and
  1. (ii)
    15 days credited at the start of the second and each subsequent year of service.
  1. (e)
    (i)Notwithstanding the provisions of clause 20(d), credit shall be allowed at the

commencement of an employee's employment for sick leave accumulated with a previous local government employer or employers provided that:

  1. (A)
    the employee's service as between such employers has been continuous; and
  1. (B)
    the employee at the time of engagement produces a certificate from the previous employer certifying the amount of sick leave accumulated to the employee's credit.
  1. (ii)
    For the purpose of clause 20(e)(i):
  1. (A)
    continuous service is defined to include service with an employer or with more than one employer which has been continuous except for the employee having been dismissed or stood down, or by the employee having terminated their own service with the employer, provided that the employee shall have been re-employed by that employer or some other employer within a period not exceeding the combination of any period of unused annual leave when the employee ceased employment with their previous employer, plus a further period of four weeks; and
  1. (B)
    employer means a local government or local authority.

…

  1. [25]
    The Award provides that credit shall be allowed at the commencement of an employee's employment for sick leave accumulated with a previous local government employer(s), under certain conditions.
  1. [26]
    It is not disputed that Mr Cunningham's employment at ICC and at GRC met the definition of continuous service under the Award.
  1. [27]
    It was confirmed that Mr Cunningham's entitlements accrued at ICC would be credited, prior to the execution of the Contract with GRC.[10]
  1. [28]
    Mr Cunningham's GRC payslip dated 15 May 2019 reflected that the credit of his entitlements accrued with ICC had taken effect.

Certified Agreement

  1. [29]
    The CA describes the circumstances by which a GRC employee is entitled to proportionate payment of accrued sick leave upon the cessation of their employment.
  1. [30]
    Clause 30.4 of the CA states:

Subject to clause 30.5, where an employee was employed by GRC prior to the certification of this agreement and either had accrued or subsequently accrues five years' service from the date of their employment with GRC, they are entitled to payout of:

  1. (a)
    25% of their accrued sick leave entitlements where their employment is terminated other than by reason of misconduct.
  1. (b)
    Employees may elect to transfer the full amount of sick leave, or be paid out for 25% of their accrued sick leave, and transfer 25% less sick leave if transferring to another Local Government.

Clause 30.4 regarding the provision of payout of sick leave is to be kept in future GRC certified agreements until it no longer applies to current GRC employees.

  1. [31]
    Clause 30.5 of the CA states:

Payout of sick leave entitlements will not be available to employees terminated in accordance with approved disciplinary procedures.

  1. [32]
    GRC submitted that Mr Cunningham is not entitled to a payout of sick leave under cl 30.4 because "although he was employed prior to the certification of the Certified Agreement on 25 March 2019, he had not and did not accrue five years' service from the commencement date of his Employment."[11] 
  1. [33]
    GRC asserted that Mr Cunningham was not entitled to the pay  out of any accrued sick leave upon redundancy under the terms of the CA – and argued that is not altered by the Contract.

Contract of Employment

  1. [34]
    On the 16 June 2020, Mr Cunningham's position at GRC was made redundant.
  1. [35]
    Clause 13.3 of the Contract states:

In the event of termination of the Employee's employment on the basis of redundancy, then, in addition to all accumulated allowances and entitlements set out in the Contract of Employment including but not limited to long service leave, annual leave, sick leave and accrued time, the Employee shall be entitled to a severance payment equal to an amount of two (2) weeks pay for every year of continuous service ending on the termination of this Contract within Queensland Local Government with a minimum payment of twenty-six (26) weeks up to a maximum payment of fifty-two (52) weeks.

  1. [36]
    Payment was made to Mr Cunningham for each of the components prescribed above - other than for his accrued sick leave.[12] 
  1. [37]
    Mr Cunningham submitted that his Contract provided for a better entitlement to be paid sick leave than that available under cl 30.4 of the CA.
  1. [38]
    Clause 13.7 of the Contract states:

In the event that the arrangements or conditions statutorily or otherwise imposed or provided for by the State of Queensland are less favourable to the employee than the provisions of Clause 12, then the provisions of Clause 12 shall apply unless contrary to such legislation.

  1. [39]
    Mr Cunningham's position was that:

…the reference to clause 12 at 13.7 is a clear typographical error and is a reference to clause [13] of the contract of employment (Redundancy).

The Applicant submits that the entitlement in clause 13.3 of the employment contract provides for a more favourable entitlement for payment of personal / sick leave where the employment ends by way of redundancy.

The Applicant submits that the proper application of clause 13.3 and 13.7 of the contract of employment results in the payment of the Applicant's accrued personal / sick leave.[13]

Interpretation approach

Mr Cunningham

  1. [40]
    It has been submitted that "The starting point for the interpretation of a contract is to look at the actual words used."[14]
  1. [41]
    The Applicant's submissions argue that:

The words used in the employment contract at clause 13.3 are not capricious or unreasonable and they are certainly unambiguous. 

It is clear from the words used within the employment contract that in the event the employment was terminated by way of redundancy, all sick leave would be paid to the applicant.[15]

GRC

  1. [42]
    The GRC's position is that when Mr Cunningham commenced employment, it "…recognised the ICC Accrued Sick Leave, to enable the Applicant to use the sick leave in case of illness or injury whilst employed by the Respondent."
  1. [43]
    GRC submitted that:

The usage, and payment for, the ICC Accrued Sick Leave, and any subsequent accrual of sick leave during the Employment (GRC Sick Leave), was subject to the Respondent's policies and industrial arrangements.  In particular:

(a)there was no understanding or agreement that the ICC Accrued Sick Leave would be able to be accessed by the Applicant other than when he was ill while employed; and

(b)at no point was there any understanding or agreement (whether verbal or written) that the Respondent would pay out any unused ICC Accrued Sick Leave upon termination of the Applicant's Employment.

Payment in lieu of accrued personal or sick leave is not a usual benefit.  For these reasons, there would need to be a clear and specific agreement before an employer would be bound to an obligation to pay for it upon termination.[16]

Applicant - Outcome sought

  1. [44]
    Through this Application, Mr Cunningham seeks to have his sick leave accruals paid out by GRC. 
  1. [45]
    He submits that is provided for under cl 13.3 of his Contract.[17] 
  1. [46]
    Mr Cunningham stated that he had 708.52 hours of sick leave accruals as at 16 June 2020 – and that the amount of unpaid sick leave accruals equated to $58,249.54[18]
  1. [47]
    Mr Cunningham's Application seeks an order that GRC pay to him an amount of $50,000,[19] as that is the maximum amount that can be claimed under s 476 of the IR Act. 

Respondent - Outcome sought

  1. [48]
    GRC's position is that Mr Cunningham has no entitlement to a remedy under s 475 of the IR Act because no payment for his accrued sick leave entitlements is due under either the Contract, Award and / or Certified Agreement.
  1. [49]
    GRC submitted in the alternate that "…if the Commission accepts that the Applicant was entitled to a payment of his accrued sick leave upon his redundancy…, any such payment should be limited to $11,522.52, being an amount equivalent to the Applicant's accrued but unused sick leave during his employment with the Respondent, which is what is set out in the Contract of Employment pursuant to the wording of clause 13.3 of the Contract."[20] 

Commission powers

  1. [50]
    Section 475(1) of the IR Act provides that:

On application by a person under section 476, the commission may order payment of the following for the period of 6 years before the date of application. 

  1. (a)
    An employee's unpaid wages.

…

  1. [51]
    The IR Act defines wages to include:
  1. (a)
    an amount payable to an employee for –
  1. (i)
    work performed, or to be performed, by the employee; or
  2. (ii)
    a public holiday; or
  3. (iii)
    leave the employee is entitled to; or
  4. (iv)
    termination of employment; or[21]

…

  1. [52]
    Section 476(2)(b) of the IR Act provides that, for any other claim (other than a claim for occupational superannuation), the application may be made by an employee or their union. 
  1. [53]
    Section 476(1) of the IR Act provides that "An application for an order mentioned in section 475 may only be made if the total amount claimed is $50,000 or less."
  1. [54]
    While GRC submitted that Mr Cunningham has no entitlement to the amount sought, there is no dispute between the parties that Mr Cunningham's application is able to be heard by the Commission.

Interlocutory matter – Notice of Non-Party Disclosure

  1. [55]
    On 5 October 2021, GRC filed a Form 29 – Notice of Non-Party Disclosure.  That Notice sought to compel SBRC to produce various documents relating to Mr Cunningham's employment.  GRC contended the documents were relevant to the substantive proceeding.
  1. [56]
    Mr Cunningham objected to the production of all documents mentioned in the Notice pursuant to r 64E of the Industrial Relations (Tribunals) Rules 2011 (Qld) (the Rules, the Objection). 
  1. [57]
    The Directions Order dated 13 October 2021 provided for written submissions to be made.
  1. [58]
    Mr Cunningham's written submissions were filed on 18 October 2021.
  1. [59]
    GRC's written submissions were filed on 27 October 2021.
  1. [60]
    Mr Cunningham's written submissions in reply were filed on 1 November 2021.
  1. [61]
    After hearing the parties, I decided the interlocutory matter in favour of GRC.[22] 
  1. [62]
    In that earlier Decision, I observed that (emphasis added):
  1. [20]
    Mr Cunningham argues that if SBRC "has credited the Applicant any entitlement (which they have not) it would have been done so at its own volition, and not as a result of the crediting provision in the Award."[23] The Respondent argues that "if there has been any recognition of entitlements (compulsory or voluntary) it is a relevant matter for the Commission to consider."[24] The Respondent submits that despite multiple opportunities, Mr Cunningham has failed to conclusively answer whether any part of his accrued but untaken sick leave was recognised by SBRC.[25]
  1. [21]
    I agree with the Respondent that the status of recognition of such sick leave accruals is relevant to the Commission's consideration of the substantive matter. As such, the provision of the requested documents will ensure that is either ruled out or can be considered.[26] The primary question to be decided is whether or not Mr Cunningham has an entitlement to the alleged unpaid amount. Should that question be answered in the affirmative, my mind will turn to a corresponding order granting the relief sought. Section 477(1) of the IR Act provides (emphasis added):
  1. (1)
    On hearing the application, the commission or magistrate—

(a)  must order the employer to pay the employee—

(i)  the amount the commission or magistrate finds to be payable and               unpaid to the employee for the 6 years before the date of the application; and

(ii)  an amount the commission or magistrate considers appropriate, based on the return that would have accrued in relation to the contributions had it been properly paid to the approved superannuation fund; and

(b)  may make an order for the payment despite an express or implied provision of an agreement to the contrary; and

(c) may order the payment to be made on the terms the commission or magistrate considers appropriate.

  1. [22]
    If it is found that the entitlement has been transferred or there is some other special arrangement with SBRC with respect to the accrued leave, it would be unreasonable not to consider that information - as that information may affect my view on whether it is appropriate to order the full amount of relief sought. I accept that the Respondent is engaging in a legitimate line of inquiry that will rationally affect the assessment of what order should be made in circumstances where the entitlement is made out on the facts.
  1. [23]
    The documentation subject of the Notice will tend to prove or disprove whether the amount is payable and unpaid and hence, whether or not the relief sought should be ordered. On that basis, I conclude the documents sought are directly relevant to an issue in the Proceeding.[27]

Substantive matter - Decided 'on the papers'

  1. [63]
    At the Mention held on 29 November 2021, I sought the parties' views as to whether this matter was one conducive to being heard and decided 'on the papers', given this case turns on the interpretation of provisions and the only witness at that time was the Applicant himself.
  1. [64]
    I noted s 451 of the IR Act permits the Commission to exercise its power to do all things necessary or convenient for the performance of its functions, including giving directions about the hearing of a matter.
  1. [65]
    The parties gave consideration to my suggestion and confirmed with the Industrial Registry that they agreed with that course. 
  1. [66]
    The parties confirmed they did not wish to cross-examine Mr Cunningham and Ms Hone on their filed Affidavit evidence. 
  1. [67]
    Directions were issued for the parties to file written submissions.

Applicant's submissions

  1. [68]
    Following the Directions Orders of 12 August 2021, 29 November and 20 December 2021, Mr Cunningham filed written submissions on 25 August 2021, an Affidavit on 1 December 2021, further written submissions on 15 December 2021 and written submissions in reply on 25 January 2021. 
  1. [69]
    Those may be briefly summarised as follows:
  • Mr Cunningham's employment with the Respondent was subject to the terms of the Award and the CA.[28]

Though Mr Cunningham later resiled from his earlier position that the CA applied to him.[29]  Mr Cunningham argued that he was not eligible for coverage of the CA, as cl 2.2 states:

This agreement will not apply to any employee appointed to a position, pursuant to a written contract of employment, where:

  1. (a)
    the contract states that the agreement will not apply to the terms and conditions applicable to the employee; and
  1. (b)
    the terms and conditions of the contract did not result, on balance, in a reduction of the overall terms and conditions of employment applicable to the employee under this agreement.

Mr Cunningham submitted that the Contract did state that "The Employer and the Employee have agreed that the Employee's Employment for the term shall be governed by the terms and conditions of this contract of employment ("this Contract.")[30]  Further, the Contract did not, on balance reduce the overall terms and conditions of employment applicable under the CA.[31]

 Mr Cunningham was not exempt from the Award, pursuant to cl 4.2.

The Applicant's position is that "On this basis, the proper interpretation is that the Certified Agreement did not apply, while the Award continued to operate alongside the contract of employment."[32]

  • The Award "provides that credit shall be allowed at the commencement of an employees (sic) for sick leave accrued with a previous local government employer or employers".[33] Mr Cunningham referred to cl 20(e)(ii) and (iii) of the Award in that regard.
  • Mr Cunningham was previously employed with ICC and held a personal / sick leave balance at the time of cessation of his employment there.  That was credited to his new employment with GRC.
  • On 16 June 2020, Mr Cunningham was made redundant.[34] Clause 13.3 of Mr Cunningham's Contract with GRC states:

In the event of termination of the Employee's employment on the basis of redundancy, then, in addition to all accumulated allowances and entitlements set out in the Contract of employment including but not limited to long service leave, annual leave, sick leave and accrued time, the employee shall be entitled to a severance payment equal to an amount of two (2) weeks' pay for every year of continuous service ending on the termination of this Contract within Queensland Local Government with a minimum payment of twenty-six (26) weeks up to a maximum payment of fifty-two (52) weeks.[35]

  • Despite the unambiguous wording of cl 13.3 as set out above, the Respondent did not make payment for Mr Cunningham's accumulated sick leave.
  • The Contract provided for a better entitlement to be paid personal / sick leave than an employee's entitlement under cl 30.4 of the CA.
  • Clause 13.7 of the Contract states (emphasis added):

In the event that the arrangements or conditions statutorily or otherwise imposed or provided for by the State of Queensland are less favourable to the Employee than the provisions of clause 12, then the provisions of Clause 12 shall apply unless contrary to such legislation.

The Applicant asserted that the reference to cl 12 in the extract above is a clear typographical error and is a reference to cl 13 Redundancy of the Contract.

Further, the "entitlement in cl 13.3 of the Contract provides for a more favourable entitlement for the payment of personal / sick leave where the employment ends by way of redundancy…the proper application of clause 13.3 and 13.7 of the contract of employment results in the payment of the Applicant's accrued personal / sick leave."[36]

The reference to the "State of Queensland" is not as a party to the contract, but rather prescribes how the parties will treat any changes "statutorily or otherwise imposed."[37]

Respondent's Submissions

  1. [70]
    The Respondent filed submissions on 9 September 2021 and 14 January 2022.
  1. [71]
    Those may be briefly summarised as follows:
  • Although the Respondent recognised the ICC accrued sick leave, the usage, and payment for that sick leave as well as any sick leave accrued during employment with the Respondent was subject to the Respondent's "policies and industrial arrangements."[38]
  • There was no understanding or agreement that the ICC accrued sick leave would be able to be accessed by Mr Cunningham other than when he was ill while employed. Further, there was no understanding or agreement that the Respondent would pay out any unused sick leave accrued during employment at ICC upon termination of Mr Cunningham's employment.[39]
  • "Payment in lieu of accrued personal or sick leave is not a usual benefit.  For these reasons, there would need to be a clear and specific agreement before an employer would be bound to an obligation to pay for it upon termination."[40]
  • Mr Cunningham's employment was subject to the Certified Agreement. Mr Cunningham is not entitled to a payout of sick leave pursuant to cl 30.4 of the Certified Agreement because although he was employed prior to certification, he had not accrued five years' service from the commencement date of his employment.[41] This position is not altered by the Contract because:
  • The only conferred entitlement relating to sick leave is the entitlement to 15 days' sick leave each year as outlined in cl 7.3 of the Certified Agreement;
  • The circumstances in which sick leave would be a benefit payable upon redundancy must be qualified by the Award and Certified Agreement;
  • The Contract makes no reference to the ICC accrued sick leave and there was no agreement that sick leave was a contractual entitlement;[42]
  • Clause 13.3 of the Contract only provides for a redundancy entitlement to be paid in addition to the entitlements "set out in the Contract of Employment."[43]
  • Clause 13.7 of the Contract states (emphasis added):

In the event that the arrangements or conditions statutorily or otherwise imposed or provided for by the State of Queensland are less favourable to the Employee than the provisions of clause 12, then the provisions of Clause 12 shall apply unless contrary to such legislation.

  • "The State of Queensland is not a party to the Certified Agreement so any entitlements that might arise from the Certified Agreement are not imposed or provided for by the State of Queensland, as required for clause 13.7 of the Contract to operate."[44]

Consideration

  1. [72]
    The question to be decided here is whether or not Mr Cunningham was entitled to have his sick leave accruals paid out by GRC, upon his position being made redundant. 
  1. [73]
    I have earlier observed this question will be informed by:
  • whether the amount sought is payable;
  • whether it is unpaid; and
  • whether or not it is appropriate to grant the relief sought.

The Contract of Employment

  1. [74]
    Mr Cunningham has asked the Commission to simply apply the plain and ordinary meaning to the terms of the Contract struck between he and GRC. 
  1. [75]
    Clause 13.1 of the Contract provides that "In the event that the Employee's employment with the Employer is terminated or is sought to be terminated on the grounds of redundancy…then the following provisions of this clause shall apply." 
  1. [76]
    Clause 13.2 of the Contract goes on to provide that, in the event of such redundancy, the employer shall use its best endeavours to have the employee considered for a position that is not less favourable than the current position or such other position mutually agreed.[45] 

I observe that particular requirement was discharged by GRC, as evidenced by its correspondence to Mr Cunningham dated 16 June 2020 in which he was advised that his employment had been terminated by reason of redundancy.  That correspondence particularised attempts by GRC to find Mr Cunningham such an alternative position, without success.

  1. [77]
    Clauses 13.3 and 13.4 of the Contract prescribe the payment to be made to the employee in the event of termination of employment on the basis of redundancy.  Specifically, the Contract provisions require an employee in those circumstances be paid the following:
  • "…all accumulated allowances and entitlements set out in the Contract of Employment including but not limited to long service leave, annual leave, sick leave and accrued time…"

The plain and ordinary meaning of that provision includes the requirement for GRC to pay out an employee's accumulated sick leave entitlements, in the event of the termination of their employment on the basis of redundancy.  It is not disputed that did not occur here.  While the Contract contains provision for the accumulation of sick leave;[46] the benefit of the crediting of an employee's accumulated sick leave when moving from one Council to another in certain circumstances is contained in the Award.[47]  It cannot be disputed that the Award clause providing for the crediting of accumulated sick leave applied to Mr Cunningham, as that is in fact what did occur, as evidenced by the pay slip dated 15 May 2019.

However, I do note the other remaining requirements were discharged by GRC, as evidenced by its correspondence to Mr Cunningham dated 16 June 2020.  That correspondence particularises that Mr Cunningham "…will also be paid your accrued entitlements and any outstanding pay up to and including your last day of employment.  This includes the balance of any time off instead of overtime paid accrued but not yet taken (paid at the overtime rate applicable when the overtime was worked), and superannuation."  Amounts payable under the heading "Entitlements (Estimate)" for annual leave accruals and long service leave accruals were particularised in a schedule attached to GRC's correspondence. 

I further note that GRC's correspondence to Mr Cunningham dated 16 June 2020 includes acknowledgement of its requirement to pay "the balance of any time off instead of overtime paid accrued but not yet taken (paid at the overtime rate applicable when the overtime was worked)".  Although that particular benefit does not appear to be a matter contained within the Contract, but rather it appears in the Award and CA, GRC did not resile from the commitment to pay that in its correspondence to Mr Cunningham advising his position was redundant.

  • A severance payment equal to an amount of two weeks pay for every year of continuous service, with a minimum payment of 26 weeks up to a maximum payment of 52 weeks. 

I observe that particular requirement was discharged by GRC, as evidenced by its correspondence to Mr Cunningham dated 16 June 2020.

  • An additional further payment equivalent to 13 weeks pay, if the employee accepts an offer of redundancy within 14 days.

While clause 13.4 of the Contract states this particular 13 weeks pay sum upon redundancy is "in addition to the payments referred to in Clause 12.3", that is quite nonsensical as the suite of payments in that circumstance are instead listed at clause 13.3.  Clause 12.3 pertains to an entirely different matter of when the employer may terminate the contract without notice – it does not list any "payments" at all.  Further, here too I observe that particular requirement was discharged by GRC, as evidenced by its correspondence to Mr Cunningham dated 16 June 2020.

  1. [78]
    Clause 13.5 further qualifies that if the employee accepts the offer of new or alternative employment with the employer and that position is no less favourable in terms of position, salary and conditions "then the provisions of Clauses 12.3 and 12.4 shall not apply." 

It is apparent that the references to cls 12.3 and 12.4 are incorrect here.  As noted above, cl 12.3 is about when the employer may terminate the Contract without notice.  Clause 12.4 states that an employee is not entitled to the "Additional Termination Payment" as at cl 11.1 where the employment is terminated in particular circumstances or by redundancy.  Clause 12.4(b) of the Contract goes on to prescribe that "Any payment and entitlements payable to the Employee in the case of a redundancy shall be made in accordance with Clause 12."  As an aside, the matter of the "Additional Termination Payment" is referred to in cl 12.1 of the Contract, not cl 11.1.  Whilst it is obvious that the Contract template requires a tidy up, in terms of the clear typographical errors in some clause references – that is an issue of style, not substance. 

  1. [79]
    It has been said that "Words mean things."  Even with the typographical errors of some incorrect references to clause numbers, I consider the precise wording of the Contract detailing what is payable to an employee upon redundancy for "accumulated allowances and entitlements" are not so infected.  I accept the inclusion of "sick leave" in the Contract clause may be a matter of regret for GRC, but that is not the same as a matter of error.  My further consideration of such interpretation is explained in the paragraphs that follow.

Award

  1. [80]
    It is clear that Mr Cunningham's accrued leave entitlements were credited to him at the commencement of his employment with GRC, in accordance with cl 20 of the Award. 
  1. [81]
    Both Mr Cunningham's pay slip dated 15 May 2019 and the email exchange between he and GRC ahead of the execution of the Contract provide evidence of that intention and its effect.
  1. [82]
    I accept that the Award applies to Mr Cunningham.
  1. [83]
    In Brisbane City Council v Queensland Services, Industrial Union of Employees, Merrell DP discussed the application of the Acts Interpretation Act 1954 (Qld) (AI Act) to industrial instruments (citations omitted):

[37] Thirdly, awards made by the Queensland Industrial Relations Commission are statutory instruments within the meaning of s 7 of the Statutory Instruments Act 1992. This is because they are instruments made under an Act and are instruments of the type referred to in s 7(3) of the Statutory Instruments Act 1992, namely an instrument of a public nature by which the entity making the instrument (the Commission) unilaterally affects a right or liability of another entity. By virtue of pt 4 of the Statutory Instruments Act 1992, certain provisions of the Acts Interpretation Act 1954 apply in the construction of awards, including:

  • section 14A(1) of the Acts Interpretation Act 1954, which provides that in the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation;
  • section 14B of the Acts Interpretation Act 1954, as modified by s 15 of the Statutory Instruments Act 1992, which provides that consideration may be given to extrinsic material capable of assisting in interpretation in particular circumstances;
  • section 32A of the Acts Interpretation Act 1954, which provides that definitions in or applicable to an Act apply except so far as the context or subject matter otherwise indicates or requires; and
  • section 32AA of the Acts Interpretation Act 1954, which provides that a definition in or applying to an Act applies to the entire Act.[48]
  1. [84]
    The AI Act provides that in the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.[49]
  1. [85]
    In the interpretation of a provision of an Act, consideration may be given to extrinsic material capable of assisting in the interpretation:
  1. (a)
    if the provision is ambiguous or obscure - to prove an interpretation of it; or
  1. (b)
    if the ordinary meaning of the provision leads to a result that is manifestly absurd or is unreasonable - to provide an interpretation that avoids such a result; or
  1. (c)
    in any other case - to confirm the interpretation conveyed by the ordinary meaning of the provision.[50]
  1. [86]
    I have earlier noted that the Respondent has sought to distinguish the "ICC Accrued Sick Leave" from that sick leave accrued since Mr Cunningham's employment commenced with GRC.  That is reproduced at paragraphs [42] – [43] of this Decision and need not be repeated here.  However, I am not persuaded by that argument because it attempts to retrofit the words in cl 20(e) of the Award to mean something entirely different.  Clause 20(e) makes no distinction between the use of sick leave entitlements accrued with the previous local government employer, as opposed to the sick leave accruals earnt in the service of the current employer.  Neither do I agree it is the case that GRC "recognised the ICC Accrued Sick Leave, to enable the Applicant to use the sick leave in case of illness or injury whilst employed by the Respondent" – in fact, GRC recognised Mr Cunningham's accrued leave entitlements upon commencement because it was required to do so under the particular circumstances contained in the Award.

Certified Agreement (CA)

  1. [87]
    GRC has argued that Mr Cunningham does not meet the requirements under cl 30.4 of the CA to be paid out his accrued sick leave entitlements, upon the termination of his employment due to redundancy.  While GRC accepted that Mr Cunningham was employed by GRC prior to the certification of the CA, its position is that Mr Cunningham had not discharged the second limb of the provision requiring him to also have accrued five years' service with GRC.  That is correct.
  1. [88]
    However, that is no impediment to Mr Cunningham's claim to be paid out his accrued sick leave, in circumstances where the CA did not apply to his employment with GRC. 
  1. [89]
    Clause 2.2 of the CA states that:

This agreement will not apply to any employee appointed to a position, pursuant to a written contract of employment, where:

  1. (a)
    the contract states that the agreement will not apply to the terms and conditions applicable to the employee; and
  1. (b)
    the terms and conditions of the contract did not result, on balance, I a reduction of the overall terms and conditions of employment applicable to the employee under this agreement.
  1. [90]
    The Contract at sections A. – E. provides that:

• GRC "has resolved to employ" Mr Cunningham.[51] 

With respect to the stem of cl 2.2 of the CA, Mr Cunningham is indisputably an "employee".

• GRC has appointed Mr Cunningham to "the position of Manager Construction…"[52]

With respect to the stem of cl 2.2 of the CA, Mr Cunningham was indisputably appointed to "a position".

•A Contract has been executed between GRC and Mr Cunningham.

With respect to the stem of cl 2.2 of the CA, there is in evidence "a written contract of employment" here.

•The Contract states that GRC and Mr Cunningham have agreed that his employment for the term (4 March 2019 – 4 March 2022)[53] "…shall be governed by the terms and conditions of this Contract of Employment ("this Contract")."[54]  The Contract further provides that "This Contract constitutes the entire agreement as concluded between the parties, notwithstanding any prior negotiations, representations, warranties, covenants, understandings or agreements made or entered into before the executive hereof."

With respect to cl 2.2(a) of the CA then, I am satisfied that the terms and conditions of the CA do not apply to the employee.

•Mr Cunningham has submitted that "The Contract of Employment between the applicant and the respondent did not, on balance reduce the overall terms and conditions of employment applicable to the Applicant under the Certified Agreement."[55]  The Respondent has not suggested the Contract represented a diminution of the overall terms and conditions of Mr Cunningham's employment, so that submission is accepted.

With respect to cl 2.2(b) of the CA then, I am satisfied that the Contract did not, on balance reduce the overall terms and conditions of employment applicable to Mr Cunningham under the Certified Agreement.

  1. [91]
    In light of the above reasons, I find that the Certified Agreement did not apply to Mr Cunningham's employment at GRC.
  1. [92]
    If I am wrong on that point, then I would instead accept the Applicant's submissions that the Contract provided Mr Cunningham with a better entitlement to be paid sick leave than cl 30.4 of the CA.  Clause 13.7 of the Contract provides that:

In the event that the arrangements or conditions statutorily or otherwise imposed or provided for by the State of Queensland are less favourable to the employee than the provisions of clause 12, than the provisions of clause 12 shall apply unless contrary to such legislation.

As noted and explained at paragraphs [77] – [78] above, the reference to "clause 12" within cl 13 of the Contract is an obvious typographical error and in fact relates to the matter of Redundancy.  Clause 13.3 provides enhanced benefits for payment of sick leave in circumstances of redundancy, beyond that provided for in the CA.  The terms of the Contract at cl 13.7 contemplate that situation - and provide that the more favourable Contract terms should apply to Mr Cunningham in the event of redundancy.  Put another way, more is permissible, but not less.

Notice of Non-Party Disclosure

  1. [93]
    GRC sought to compel SBRC to produce various documents relating to Mr Cunningham's employment, contending those documents were relevant to the substantive proceeding. 
  1. [94]
    I have provided some recount of that interlocutory matter at paragraphs [55] – [62] above.
  1. [95]
    I decided that earlier interlocutory matter in favour of GRC, agreeing with it "…that the status of recognition of such sick leave accruals is relevant to the Commission's consideration of the substantive matter."  However, GRC has made no further mention of that line of inquiry.  It would appear that the disclosure sought by GRC has elicited no materials from SBRC that demonstrate any crediting of sick leave accruals to Mr Cunningham's new employment has occurred – discretionary or otherwise.

Interpretation

  1. [96]
    The Applicant's submissions have cited Gibbs J in Australian Broadcasting Commission v Australasians Performing Right Association Ltd as follows (emphasis added):

If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different.  The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust.[56]

  1. [97]
    The Applicant has submitted that the words used at cl 13.3 of the Contract are not ambiguous.  I agree.  Clause 13.3 of the Contract clearly lists "all accumulated allowances and entitlements" due to an employee in circumstances of redundancy – that specifically included one's "sick leave".  Those words are clear.  I further observe that other items referenced within cls 13.3 and 13.4 of the Contract were paid out at the time of Mr Cunningham's position with GRC being made redundant – with the exception being the sick leave accruals subject of this dispute.
  1. [98]
    While the point is argued by GRC that "payment in lieu of accrued personal or sick leave is not a usual benefit", neither do I find that to be an unreasonable result for an employee to be paid out their accrued sick leave in circumstances of redundancy. That is especially pertinent where Mr Cunningham's Contract unambiguously stated that to be the case, as I have found above.  It is also not an unreasonable result where Mr Cunningham was not covered by the CA and where he did not enjoy the security of permanent ongoing employment in his management position but was rather subjected to a fixed term position.  In my view it is unremarkable that such a benefit beyond the usual was extended in Mr Cunningham's Contract, given the omission of CA coverage and the inherent insecurity of a fixed term employment.
  1. [99]
    I have also carefully considered the words of Gibbs J reproduced above.  I have earlier found that the words used at cl 13.3 of the Contract are unambiguous.  I have also explained why the ordinary meaning of the provision does not lead to a result that is unreasonable.  With respect to whether the pay out of Mr Cunningham's sick leave in circumstances of redundancy would create a result that "may appear capricious or unreasonable", my view is that after 33 years in local government Mr Cunningham's long commitment to serving those communities and the industry has been most laudable.  By a most fortunate combination of both good health and good work ethic, Mr Cunningham had been able to accrue such a significant bank of accrued sick leave over those decades of service.  Add to that the reality that Mr Cunningham's position at GRC was made redundant not even halfway through his Contract term and I consider that the pay out of Mr Cunningham's accrued sick leave is an entirely reasonable result.

Findings

  1. [100]
    For the reasons explained above, I find that Mr Cunningham was entitled to have his sick leave accruals paid out by GRC, upon his position being made redundant. 
  1. [101]
    It is not in dispute that Mr Cunningham was not paid his sick leave accruals by GRC, upon his position being made redundant. 
  1. [102]
    There is no evidence before me that it is inappropriate to grant Mr Cunningham the relief sought, with respect to his subsequent employment with SBRC.
  1. [103]
    There is no dispute between the parties that Mr Cunningham's application is able to be heard by the Commission, with respect to paragraphs [50] – [54] above outlining the Commission's powers.
  1. [104]
    The value of Mr Cunningham's accrued sick leave upon the redundancy of his position at GRC has been quantified at $58,249.54;[57] however he has claimed only $50,000 to be paid in the Form 15 – Application to recover unpaid wages filed 7 June 2021.  That is because $50,000 is the maximum amount able to be awarded by the Commission for such applications.[58]
  1. [105]
    On the basis of these findings, it is appropriate that GRC pay to Mr Cunningham an amount of $50,000.

Costs

  1. [106]
    Section 545 of the IR Act outlines the Commission's power with respect to costs in this type of matter. 

545  General power to award costs

  1. (1)
    A person must bear the person's own costs in relation to a proceeding before the court or commission.
  1. (2)
    However, the court or commission may, on application by a party to the proceeding, order—
  1. (a)
    a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied—
  1. (i)
    the party made the application or responded to the application vexatiously or without reasonable cause; or
  1. (ii)
    it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or
  1. (b)
    a representative of a party (the represented party) to pay costs incurred by another party to the proceeding if the court or commission is satisfied the representative caused the costs to be incurred—
  1. (i)
    because the representative encouraged the represented party to start, continue or respond to the proceeding and it should have been reasonably apparent to the representative that the person had no reasonable prospect of success in the proceeding; or
  1. (ii)
    because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the proceeding.
  1. (3)
    The court or commission may order a party to pay another party an amount reasonably payable to a person who is not a lawyer, for representing the other party.
  1. [107]
    The default position is that each party bears their own costs. 
  1. [108]
    Neither party has made submissions about, or applied for, costs to be awarded at this time.
  1. [109]
    As this matter has been decided on the papers, the parties have not incurred the costs normally associated with an in-person Hearing.
  1. [110]
    I am also mindful that each parties' costs in representing their respective positions have been somewhat contained, given legal representation is not permitted under s 530(2)(b) of the IR Act for a matter of this type.[59]
  1. [111]
    In light of that, I am not minded to award costs in this case.  Each party shall bear their own costs.

Conclusion

  1. [112]
    I find that this Application should be granted. 
  1. [113]
    For the reasons explained in this Decision, Gympie Regional Council shall pay $50,000 to Mr Darren Cunningham.
  1. [114]
    I order accordingly.

Orders

1. That the application of Mr Darren Cunningham filed on 7 June 2021 is granted.

2. That the respondent is to pay the applicant the sum of $50,000.00.

3. That payment is to be made within 21 days of this decision.

Footnotes

[1] Applicant's submissions, 18 October 2021, 4 [19].

[2] Applicant's submissions, 25 August 2021, 2, [9]; Affidavit of Mr Cunningham sworn 1 December 2021, 2 [18]; Final Pay Slip from ICC for period ending 25 February 2019.

[3] Respondent's submissions, 9 September 2021, 2 [11]; Affidavit of Mr Cunningham sworn 1 December 2021, 3 [26] – [29]

[4] Applicant's submissions, 18 October 2021, 4 [19]

[5] Queensland Local Government Industry (Stream A) Award – State 2017 cl 20(e).

[6] On 14 January 2019.

[7] GRC provided the payslip to Mr Cunningham on 15 May 2019; Applicant's submissions filed 25 August 2021, 3 [10].

[8] Applicant's submissions, 24 August 2021, 1 [4]; Respondent's submissions, 9 September 2021, 1 [6]

[9] Applicant's reply submissions, 25 January 2022, 2 [5] – [7].

[10] By email on 14 January 2019.

[11] Respondent's submissions, 9 September 2021, 2 [15].

[12] Paragraph 13 of this Decision.

[13] Applicant's submissions, 15 December 2021, 5 [23] – [25].

[14] Applicant's submissions, 25 August 2021, 3 [17].

[15] Applicant's submissions, 25 August 2021, 4 [19] – [20].

[16] Respondent's submissions, 9 September 2021, 1 [8] – [9].

[17] Executed 29 January 2019.

[18] Applicant's Submissions, 25 August 2021, 4 [21] and [23]; Correspondence from Mr Neil Henderson, Secretary, The Services Union to Ms Pip Moir, Manager, People and Organisational Development, GRC dated 23 March 2021.

[19] Filed 7 June 2021.

[20] Respondent's further submissions, 14 January 2022, 2 [5].

[21] Industrial Relations Act 2016 (Qld) sch 5.

[22] Cunningham v Gympie Regional Council [2021] QIRC 387.

[23] Applicant's submissions in reply, 1 November 2021, [15].

[24] Respondent's submissions, 27 October 2021, 2 [9](a).

[25] Ibid [9](c).

[26] Ibid.

[27] Cunningham v Gympie Regional Council [2021] QIRC 387, 7 [20] – [23].

[28] Applicant's submissions, 25 August 2021, [4].

[29] Applicant's reply submissions filed 25 January 2022, 2 [5].

[30] Affidavit of Mr Darren Cunningham attachment DC03; Applicant's reply submissions, 25 January 2022, 2 [7].

[31] Applicant's reply submissions, 25 January 2022, 2 [8].

[32] Ibid [10].

[33] Ibid [5].

[34] Applicant's submissions, 25 August 2021, [11].

[35] Contract of Employment between Gympie Regional Council and Darren Cunningham, 29 January 2019.

[36] Applicant's submissions, 15 December 2021, 5 [24] – [25].

[37] Applicant's reply submissions, 25 January 2022, 3 [15].

[38] Respondent's submissions, 9 September 2021, [7]-[8].

[39] Ibid [8].

[40] Respondent's submissions, 9 September 2021, 1 [9].

[41] Ibid [15].

[42] Respondent's submissions, 9 September 2021, [14]-[17].

[43] Respondent's further submissions,14 January 2022, 1 [2].

[44] Ibid 2 [3].

[45] Clause 13.2 of the Contract.

[46] Clause 7.3 of the Contract.

[47] Queensland Local Government Industry (Stream A) Award – State 2017 cl 20.

[48] [2021] QIRC 5.

[49] Acts Interpretation Act 1954 (Qld) s 14A(1).

[50] Ibid s 14B(1).

[51] Section B. of the Contract, 1.

[52] Ibid 1.

[53] Section 8.1 of the Contract, 6.

[54] Section E. of the Contract, 1.

[55] Applicant's Reply Submissions, 25 January 2022, 2 [8].

[56] [1973] HCA 36.

[57] Applicant's submissions, 25 August 2021, 4 [23].

[58] Industrial Relations Act 2016 (Qld) s 476(1).

[59] Ibid s 475.

Close

Editorial Notes

  • Published Case Name:

    Cunningham v Gympie Regional Council (No. 2)

  • Shortened Case Name:

    Cunningham v Gympie Regional Council (No. 2)

  • MNC:

    [2022] QIRC 163

  • Court:

    QIRC

  • Judge(s):

    Member McLennan IC

  • Date:

    19 May 2022

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36
2 citations
Jump To
Cite 1 - [1973] HCA 36
Cite 2 - [1973] HCA 36
Brisbane City Council v Queensland Services, Industrial Union of Employees [2021] QIRC 5
2 citations
Jump To
Cite 1 - [2021] QIRC 5
Cite 2 - [2021] QIRC 5
Cunningham v Gympie Regional Council [2021] QIRC 387
3 citations
Jump To
Cite 1 - [2021] QIRC 387
Cite 2 - [2021] QIRC 387
Cite 3 - [2021] QIRC 387

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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