Mastop v Kmart Australia Ltd[2024] QIRC 52

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

Reasons for Decision

Background

1. [1]
   Mr Owen Mastop has been continuously employed by Kmart Australia Limited (‘Kmart’) since 4 November 2009. He is employed as a Store Inventory Manager and is covered by the General Retail Industry Award 2020.
2. [2]
   On 4 July 2023, Mr Mastop made application pursuant to s 110 of the Industrial Relations Act 2016 (Qld) (‘the IR Act’) for payment instead of taking his long service leave (‘LSL’). It is not controversial that Mr Mastop had accrued LSL by July 2023. In his application Mr Mastop sought an amount of $2257.63 which represented 2 weeks of his accrued entitlement.
3. [3]
   Mr Mastop’s application relevantly set out grounds upon which his application was based. It is not necessary in these reasons to divulge the full details. Suffice to say Mr Mastop cited relatively commonplace ‘cost of living’ grounds in conjunction with certain changing domestic circumstances requiring expenditure. Mr Mastop’s application was in every sense complete and, subject to any objection from his employer, the Commission was satisfied it met the criteria necessary to invoke the discretion found at s 110 of the IR Act.
4. [4]
   In accordance with usual procedure the Commission issued directions to Kmart on 4 July 2023 requiring them to confirm certain relevant details, including the entitlement of Mr Mastop to the amount sought. In the ordinary course of events, an employer typically complies with such directions within approximately one week following which, the Commission will proceed to make an order or address any objections or irregularities.
5. [5]
   However, in this matter, there was no response from Kmart nor any further communication by Mr Mastop with the Commission.  It was not until a routine file review was undertaken by the Commission in January 2024 that the incomplete nature of this matter was uncovered. Accordingly, the matter was listed for mention on 2 February 2024 to ascertain the status of the application.
6. [6]
   Mr Mastop and a representative of Kmart attended a mention by telephone. While the representative of Kmart was not able to immediately confirm details, it became apparent that Mr Mastop’s request for payment was satisfied by Kmart at a local level almost immediately after they received the Commission’s directions on 4 July 2023. In those circumstances neither party felt the need to further communicate with the Commission.

7. [7]
   The parties were advised that payment in this manner i.e. in the absence of an order of the Commission was potentially problematic.^[1] Mr Mastop and Kmart appeared to consider that Mr Mastop’s application had been satisfied.^[2]  In the circumstances the Commission indicated to the parties its intention to consider the matter and, if possible, make a final order reflecting the parties agreed position.
8. [8]
   To this end, the Commission directed Kmart to file an affidavit setting out the circumstances under which Mr Mastop had been paid.
9. [9]
   On 14 February 2024 the Commission received the affidavit of Ms Jacqueline Little, payroll operations manager with Kmart. The affidavit relevantly deposed that:

• Mr Mastop supplied a copy of his application to Kmart on or about 6 July 2023;
• Kmart mistakenly considered Mr Mastop’s application was an order of the Commission;
• Kmart did not object to payment to Mr Mastop as requested in circumstances where he met all requirements for entitlement to such a payment;
• On or about 15 August 2023 Kmart paid Mr Mastop $2654.40 in satisfaction of his request to be paid 2 weeks LSL.

10. [10]
    In these circumstances it now falls to the Commission to determine whether the amount paid to Mr Mastop in August 2023 was paid in compliance with s 110 of the IR Act and, if not, whether any order can be made retrospectively applying the payment to Mr  Mastop’s application.

Legislation

11. [11]
    Section 110 of the IR Act provides:

110  Payment Instead of long service leave

1.  An employee may be paid for all or part of an entitlement to long service leave instead of taking the leave or part of the leave under subsection (2) or (3).

2. The payment may be made if—

1. a relevant industrial instrument or federal industrial instrument provides for the employee to be paid for all or part of the entitlement; and

2. the employee and employer agree by a signed agreement the payment may be made; and

3. the payment is made in accordance with the industrial instrument.

3. If no relevant industrial instrument or federal industrial instrument provides for the employee to be paid for all or part of the entitlement, the payment may be made only if the payment is ordered by the commission on application by the employee.

4. The commission may order the payment only if satisfied the payment should be made—

1. on compassionate grounds; or

2. on the ground of financial hardship.

5. The full bench must not make a general ruling that allows an employee to be paid for an entitlement to long service leave instead of taking the leave.

6. In this section—

employee includes a registered worker under each of the following Acts—

1. the Building and Construction Industry (Portable Long Service Leave) Act 1991;

2. the Community Services Industry (Portable Long Service Leave) Act 2020;

3. the Contract Cleaning Industry (Portable Long Service Leave) Act 2005.

entitlement to long service leave includes an entitlement to long service leave under each of the following Acts—

1. the Building and Construction Industry (Portable Long Service Leave) Act 1991;

2. the Community Services Industry (Portable Long Service Leave) Act 2020;

3. the Contract Cleaning Industry (Portable Long Service Leave) Act 2005.

12. [12]
    Section 541 of the IR Act provides:

541  Decisions generally

The court or commission may, in an industrial cause do any of the following –

(a)  make a decision it considers just, and include provision for preventing or settling the industrial dispute or dealing with the industrial matter to which the cause relates, without being restricted to any specific relief claimed by the parties to the cause;…

13. [13]
    Section 9 of the IR Act provides:

9 What is an industrial matter

(1) An "industrial matter" is a matter that affects or relates to -

1. work done or to be done; or

2. the privileges, rights or functions of -

(i)  employers or employees; or…

(Emphasis added)

Consideration

14. [14]
    LSL is a statutory entitlement that cannot be compromised by mutual agreement except as prescribed by the IR Act.^[3]  Further, in circumstances where s 110(2) of the IR Act does not apply, payment instead of LSL can only occur legitimately by order of the Commission. Any LSL payment made contrary to the provisions of s 110 of the IR Act will prima facie not discharge the employer’s LSL liability and might constitute an overpayment to the employee.
15. [15]
    Having regard to the provisions of the General Retail Industry Award 2020 it is clear that s 110(2) of the IR Act has no application. In those circumstances any payment made by Kmart to Mr Mastop purporting to be instead of LSL has not discharged or reduced Kmart’s LSL liability to Mr Mastop as at July 2023. Additionally, any payment made to Mr Mastop in August 2023 purporting to be instead of LSL is, in these circumstances, technically an overpayment which he is liable to repay. Plainly, given the express intention of the parties to the contrary, this situation is unsatisfactory.
16. [16]
    Applications of this nature are rarely controversial. When all parties comply with directions of the Commission, the granting of such orders is both a simple and routine function of the Commission.
17. [17]
    For reasons set out above this matter has become complicated by the parties disregarding the directions issued on 4 July 2023 and simply entering into what amounts to a private arrangement for the payment of LSL instead of taking it. No criticism is made of either party. Their actions were well intentioned albeit they did not conform with the direction or the IR Act. But their actions have placed each of them in jeopardy of further dispute in respect of LSL.
18. [18]
    In circumstances where there is no controversy between the parties, the practical remedy is to make orders that place the parties in a position that legitimises their actions and reflects their mutual intentions.  On the evidence before the Commission Mr Mastop had the requisite entitlement at the time he made the application, and Kmart did not object to paying him.^[4]   Additionally, in his sworn statement accompanying his application to the Commission, Mr Mastop set out personal circumstances that would warrant an order being made on both compassionate and financial hardship grounds.^[5]
19. [19]
    There are a number of ways in which the parties error could be remedied but the least burdensome is for the Commission to make orders that have the effect of characterising the payment made by Kmart in August 2023 as being a payment made in accordance with an order of the Commission pursuant to s 110 of the IR Act.
20. [20]
    Given that such an order is required to be retrospective, it would seem to be appropriate circumstances for the use of the powers available to the Commission pursuant to s 541(1) of the IR Act. The Commission is satisfied that Mr Mastop’s application is an ‘industrial cause’ as contemplated by s 541 of the IR Act.^[6]
21. [21]
    Having regard to the material filed by the parties the Commission is satisfied that Mr Mastop ought to have payment of his LSL in accordance with the request in his application filed on 4 July 2023. Noting he has already received payment of an amount of $2654.40 from Kmart in satisfaction of his request, the Commission intends to make orders granting Mr Mastop’s application but which simultaneously recognise the payment made by Kmart in August 2023 discharges their LSL obligations to Mr Mastop by the amount paid.
22. [22]
    For the avoidance of any doubt, it ought to be plainly stated that the intent of the orders that follow is to give effect to the payment made by Kmart to Mr Mastop on or about 15 August 2023 as if that payment was made in response to an Order of the Commission pursuant to s 110 of the IR Act, and that no further amount is required to be paid by Kmart to Mr Mastop in response to his application filed 4 July 2023.  

Orders

23. [23]
    In the circumstances it is Ordered that:

    1. The application is granted;
    2. Kmart Australia Limited (‘Kmart’) must pay the Applicant the amount of $2654.40 within 21 days of the date from which this order takes effect;
    3. Pursuant to s 541 of the Industrial Relations Act 2016 (Qld) this order will take effect from 1 August 2023.