Australian Workers' Union, New South Wales Branch and Canterbury Olympic Ice Rink [2007] NSWIRComm 71

Building and Construction Industry Long Service Payments Act 1974 LEGISLATION CITED: Industrial Relations Act 1996 Interpretation Act 1987 Long Service Leave Act 1955

Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 99 IR 29 Collison v State Rail Authority (1992) 43 IR 332 Endeavour Coal and others v CFMEU [2007] NSWIRComm 70 Kaal Australia Pty Ltd v Federated Clerks' Union of Australia (2001) 103 IR 344 Lindner Pty Ltd v Builders Licensing Board (1982) 1 NSWLR 612 CASES CITED: Ombudsman v Commissioner of Police (1987)11 NSWLR 386 Quality Bakers v Australian Liquor, Hospitality & Miscellaneous Workers' Union, NSW Branch (2004) 139 IR 416 Scally v Southern Health and Social Services Board [1991] 4 All ER 563 State Part-Time Work Case (1998) 78 IR 172 AWARD: Theatrical Employees Recreation and Leisure Industry (State) Award 2000 319 IG 406

APPLICANT Mr S Bali Australian Workers' Union LEGAL REPRESENTATIVES: RESPONDENT Ms M O'Neill Australian Federation of Employers and Industries

• 20 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Notification under section 130 by the Australian Workers' Union, New South Wales Branch of a dispute with Canterbury Olympic Ice Rink re long service leave DECISION [2007] NSWIRComm 71 1 This decision arises from a notification of dispute, pursuant to section 130 of the Industrial Relations Act 1996 ('the Act'), filed on 25 July, 2006 by the Australian Workers' Union, New South Wales Branch. The dispute concerns the entitlement to long service leave for one of the Union's members, Mr Jim Kayrouz, who has been employed as a part time duty manager for almost 18 years at Canterbury Olympic Ice Rink ('the respondent'). The parties both rely on different interpretations of the provisions of the Long Service Leave Act 1955 ('the LSL Act') as they apply to Mr Kayrouz's particular and unusual set of circumstances. 2 At the request of the parties, the Commission has been asked to resolve the dispute in accordance with the Commission's interpretation powers under s 175 of the Act which are expressed as follows: 175 Powers of interpretation

The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument). 3 There is no doubt that the LSL Act is a relevant law for the purposes of s 175 of the Act: see Industrial Relations Act Dictionary, and that the principles to be applied in determining this matter are those applicable to the principles of statutory construction. I shall return later to consider these principles. 4 Attempts were made at conciliating a settlement of the dispute on 7 August, 2006. As these conferences proved unsuccessful, I made a finding of attempted conciliation, directed the parties to file written submissions and listed the matter for hearing on 31 October, 2006. However, on 26 October, the respondent (who was initially unrepresented) was now represented by Ms M O'Neill from Employers First (as it then was). Ms O'Neill sought a further conciliation of the matter and, if this proved unsuccessful, an opportunity to put further submissions. Reluctantly Mr Bali, for the Union, agreed to do so. However, the conference again proved unsuccessful. New directions were issued and a new date for hearing set for 21 November, 2006. The disputed issue 5 Mr Kayrouz has been employed part time by the respondent for almost 18 years under the terms of the Theatrical Employees Recreation and Leisure Industry (State) Award 2000 319 IG 406. From April 1989 until January 2000 Mr Kayrouz worked approximately 19.5 hours a week. From around 2000 to the end of 2002 he worked 13 hours a week and since January 2003 he has worked 6.5 hours a week. The reduction in the hours of work was at Mr Kayrouz's request and agreed to by the respondent. 6 In August, 1999 Mr Kayrouz inquired of management as to his entitlement to long service leave after 10 years 4 months service and was told in writing that his entitlement was 174.72 hours. In November, 2005 Mr Kayrouz applied for, and proceeded on 14 weeks long service leave. Mr Kayrouz was paid according to a calculation based on the average weekly remuneration over the previous five years of $173.60 x 14 weeks. Whilst this equates to $2430.40, Mr Kayrouz was in fact paid $2970.22. It is unclear how the discrepancy arose, but, in any event, the respondent later relied on advice from the Department of Industrial Relations which supported its view of the calculation it had made. 7 The Union submitted that Mr Kayrouz's long service leave should be calculated by reference to hours accrued after the first 10 years based on 19.5 hours a week paid at the current wage rate (then $20.70) and then accruals based on each five years of additional service. Therefore, at 15 years of service Mr Kayrouz should have accumulated 208.4 hours based on 19.5 hours x 8.666 weeks plus 9.1 hours x 4.333 weeks and paid at $20.70 an hour. This amounts to a figure of $4313.88. In the result, it was said that Mr Kayrouz was underpaid $1343.66. The legislative framework 8 It is necessary, before outlining the submissions of the parties, to set out the various provisions of the LSL Act referred to during the course of argument. 9 Section 4 of the Act describes the entitlement to long service leave: 4 Long service leave

(1) Except as otherwise provided in this Act, every worker shall be entitled to long service leave on ordinary pay in respect of the service of the worker with an employer. Service with the employer before the commencement of this Act as well as service with the employer after such commencement shall be taken into account for the purposes of this section. (2) (a) Subject to paragraph (a2) and subsection (13) the amount of long service leave to which a worker shall be so entitled shall: (i) in the case of a worker who has completed at least 10 years service with an employer be:

(A) in respect of 10 years service so completed, 2 months, and

(B) in respect of each 5 years service with the employer completed since the worker last became entitled to long service leave, 1 month, and (C) on the termination of the worker's services after the completion of 15 years service, in respect of the number of years service with the employer completed since the worker last became entitled to an amount of long service leave, a proportionate amount on the basis of 2 months for 10 years service, and (ii) in the case of a worker who has completed at least 10 years service but less than 15 years with an employer and whose services with the employer are terminated or cease for any reason, be a proportionate amount on the basis of 3 months for 15 years service, and (iii) in the case of a worker who has completed with an employer at least five years service, and whose services are terminated by the employer for any reason other than the worker's serious and wilful misconduct, or by the worker on account of illness, incapacity or domestic or other pressing necessity, or by reason of the death of the worker, be a proportionate amount on the basis of 2 months for 10 years service. (a1) (Repealed)

(a2) In the case of a worker, whose service with an employer began before the commencement of the Long Service Leave (Amendment) Act 1963 and whose service would entitle the worker to long service leave under this section, the amount of long service leave to which such worker shall be entitled shall be the sum of the following amounts: (i) an amount calculated on the basis of three months for twenty years service in respect of the period of service of the worker before such commencement, and (ii) an amount calculated on the basis of 2 months for 10 years service in respect of the period of service of the worker as from such commencement. (a3) For the purposes of subsections (2), (3) and (3A), month means 4 and one-third weeks.

(b) (i) A worker entitled under this section to long service leave in respect of a period of service with an employer shall not, except in pursuance of an agreement between the worker and the employer entitling the worker to leave in the nature of long service leave in addition to long service leave under this Act, be entitled otherwise than under the provisions of this Act to leave in the nature of long service leave in respect of that period of service with that employer. (ii) Where before or after the commencement of this Act: (A) a worker has otherwise than in pursuance of this section been granted by an employer and taken any leave in the nature of long service leave in respect of a period of service with the employer, or (B) payment of the monetary value of leave in the nature of long service leave has been made to the worker or other person entitled thereto, the leave so granted and taken or the leave in respect of which such payment has been made shall, except where such leave has been taken or payment therefor has been made pursuant to an agreement referred to in subparagraph (i), be deducted from any amount of long service leave to which such worker is entitled pursuant to this section in respect of that period of service with that employer.

10 Ordinary pay is defined at s 3(1): Ordinary pay , in relation to any worker, means the sum of:

(a) where the worker is, on the prescribed date, remunerated wholly in relation to an ordinary time rate of pay fixed by the terms of the worker's employment: (i) the amount of the ordinary remuneration of the worker, as on the prescribed date, or (ii) the average weekly amount of the ordinary remuneration which was earned by the worker as a worker during that part of the period of 5 years ending on the prescribed date during which the worker was so remunerated, whichever is the greater, (b) where the worker is, on the prescribed date, remunerated otherwise than wholly in relation to an ordinary time rate of pay so fixed - the amount of the average weekly wage which was earned by the worker as a worker (being the average of the amounts received by the worker each week under those terms after excluding any amount payable to the worker in respect of shift work, overtime or other penalty rates) during the period actually worked by the worker during: (i) the period of 12 months, or (ii) the period of 5 years, ending on the prescribed date, whichever amount of average weekly wage is the greater, 11 The definitions of 'ordinary remuneration' and 'prescribed date' are found at s 3(2)(a) & (b): 2) For the purposes of: (a) the definition of ordinary pay in subsection (1) and of subsection (2A), prescribed date , in relation to a worker: (i) means, except as provided in subparagraph (ii), the date immediately preceding the date on which that worker enters, or is deemed to have entered upon long service leave or the date of that worker's death, as the case may require, or (ii) where the worker has, in relation to any period of long service leave, entered into an agreement authorised by subsection (2B), means, in relation to that period of long service leave, the date of that agreement, (b) paragraph (a) of that definition, ordinary remuneration , in relation to a worker, means the remuneration for that worker's normal weekly number of hours of work calculated at the time rate of pay fixed by the terms of that worker's employment for his or her work under the terms of that worker's employment reduced by any amount payable to that worker in respect of shift work, overtime or other penalty rates or, where 2 or more time rates of pay are so fixed, the amount of remuneration for that worker's normal weekly number of hours of work calculated at the higher or highest of those rates and so reduced,

12 Where the worker has no fixed weekly hours of work a calculation of average weekly hours is found at s 2A: 2A) For the purpose of subsection (2) (b), where no normal weekly number of hours of work is fixed for a worker under the terms of that worker's employment, the normal weekly number of hours of work shall be deemed to be the average weekly number of hours worked by that worker during the period of 12 months, or 5 years, as the case may require, ending on the prescribed date.

SUBMISSIONS For the Union 13 Mr Bali referred to the Minister's Second Reading Speech when the then Minister for Labour and Industry, Mr Landa, introduced the LSL Act in 1955. Mr Bali submitted that the legislation was beneficial in its intent and designed to be construed broadly. 14 Mr Bali said that when Mr Kayrouz was told by the respondent that he was entitled to 174 hours long service leave after 10 years, he did not expect that after a further six years service his entitlement would actually decrease by 50 hours. In addition, Mr Kayrouz was neither told, nor warned by the respondent that his entitlement would be reduced. There was an obligation on the respondent to do so: see Scally v Southern Health and Social Services Board [1991] 4 All ER 563. This raised the prospect that the respondent may have breached the provisions of the Act by deliberately avoiding or evading its obligations under the Act. 15 Mr Bali submitted that the Act makes provisions for the calculation of long service leave entitlements in hours and this would apply when the leave is calculated pro rata. Support for this proposition derives from the decision of the Full Bench of the Commission in the State Part-Time Work Case (1998) 78 IR 172 where it was said that leave for part time workers is calculated pro rata. 16 Mr Bali said that the leave is calculated at the 10 year mark and "locked down". Further entitlements to leave are recalculated every five years. Mr Bali relied on an extract from the Industrial looseleaf service CCH which described the requirement on the employer to keep records of the dates which an employee becomes entitled to leave. 17 Mr Bali criticised the advice received from a Department of Industrial Relations officer as to the application of the LSL Act to Mr Kayrouz. It was not open for a public servant to give such advice when the Commission is charged with interpreting the legislation. For the respondent 18 Ms O'Neill submitted that long service leave is not calculated in terms of hours, but rather provides for an entitlement of two months after 10 years service and one month for each additional five years service. Mr Kayrouz at 15 years service, was entitled to three months long service leave or 13 weeks. She said that to calculate the monetary value of the 13 weeks it is necessary to look at the current rate of pay over the previous 12 months or five years which ever is the greater: see s 3(1). 19 The only occasion hours enters the equation is where there are no fixed number of weekly hours: see s 3(2)(b). This is not the case here. Even if it was accepted that Mr Kayrouz had no fixed weekly hours, under the relevant provision the average would be 9.1 hours equating to $188.46 per week x 14 weeks totalling $2638.44. This figure was still less than the amount that Mr Kayrouz actually received. Ms O'Neill said that in 1999, there had been no agreement between Mr Kayrouz and the respondent to postpone the leave. 20 Ms O'Neill rejected Mr Bali's reliance on the State Part-Time Work Case as having no relevance to an employee employed under a State award. That case dealt exclusively with employees employed under part time work agreements under Ch 2 Pt 5 of the Industrial Relations Act. 21 Ms O'Neill said that s 4(3) of the LSL Act makes it clear that leave is to be taken in periods of months and weeks, not hours. The Act does not provide for splitting of the leave into 10 year and five year periods. In any event, Mr Kayrouz's 10 year entitlement to two months leave was protected. 22 Ms O'Neill acknowledged that the letter given to Mr Kayrouz in 1999 was an error in the calculation for long service leave and was not calculated in accordance with the Act. It should have recorded two months as the entitlement, not an amount of hours. It would not have been known to the respondent at the time, that the reduction in hours later sought by Mr Kayrouz would reduce his understanding of the calculation of accrued leave. In any event, Mr Kayrouz could have requested to postpone his leave and hadn't done so.

In reply 23 Mr Bali said that the respondent had not identified one authority for the interpretation it places on the Act's provisions. Whereas the Union relied on the State Part-Time Work Case and the Minister's Second Reading Speech. 24 He said that it was grossly unfair that Mr Kayrouz was told what his entitlement was and then now told it was all a mistake. The letter in 1999 was an implied agreement that cannot now be ignored. The respondent had breached its obligation of reliability and trust in the employment relationship.

CONSIDERATION Principles of Statutory Construction 25 While neither party referred the Commission to the principles of statutory construction, the task to be undertaken by the Commission under s 175 of the Industrial Relations Act requires those principles to be carefully borne in mind. 26 That being so, I consider the discussion in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 99 IR 29 at [42] and [43] to be most helpful: 42 The construction of s 51A is thus to be approached in terms of the usual approaches to construction, although the court should have at the forefront of its consideration the nature of the legislation which is being considered, and the potentially serious consequences of the construction reached. A useful starting point in terms of recent authorities is the judgment of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 - 382, where McHugh , Gummow , Kirby and Hayne JJ said: 69. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute (See Taylor v Public Service Board (NSW) (1976) 137 CLR 208 at 213, per Barwick CJ). The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole" ( Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 320, per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617, per Lord Scarman , "in the context of the legislation read as a whole"). In Commissioner for Railways (NSW) v Agalianos ((1955) 92 CLR 390 at 397), Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed ( Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590 at 597; Minister for Lands (NSW) v Jeremias (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 312, per Gibbs CJ; at 315, per Mason J; at 321 per Deane J). 70. A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals ( Ross v The Queen (1979) 141 CLR 432 at 440, per Gibbs J). Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions (See Australian Alliance Assurance Co Ltd v Attorney-General (Q) [1916] St R Qd 135 at 161 per Cooper CJ; Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 at 574, per Gummow J; 116 ALR 54 at 63). Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other" ( Institute of Patent Agents v Lockwood [1894] AC 347 at 360 per Lord Herschell LC). Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme. 71. Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision ( The Commonwealth v Baume (1905) 2 CLR 405 at 414, per Griffith CJ; at 419, per O'Connor J; Chu Kheng Lim v Minister for Immigration Local Government & Ethnic Affairs (1992) 176 CLR 1 at 12 - 13, per Mason CJ). In The Commonwealth v Baume (1905) 2 CLR 405 at 414 Griffith CJ cited R v Berchet (1688) 1 Show KB 106 [89 ER 480] to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent". 43 See also the discussion in the recent Full Bench judgment in Drake Personnel Limited t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432 at 445 - 446, where it was said: … the primary task of the court is to ascertain the intention of parliament by examining the language of the legislation itself. If the terms of the legislation are clear, so is the duty of the court. If, however, the legislation is ambiguous or uncertain the court must decide between contending interpretations. In doing so, the court should prefer the construction which best accords with the evident purpose of parliament in enacting the legislation. Relevant considerations include the need to avoid a construction the consequences of which are manifestly inconvenient, absurd, irrational or capricious or which would result in serious injustice: see, for example, Clarke v Bailey (1993) 30 NSWLR 556 at 566. For example, in their judgment, in Cooper Brookes (Wollongong) Pty. Limited v. Commissioner of Taxation (Cth) (1981) 147 CLR 297, Mason J (as he then was) and Wilson J observed (at 321): "Quite obviously questions of degree arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended." Gibbs CJ, in the same case (at 304-305), observed that the object in interpreting a statute was "to see what is the intention expressed by the words used", and held: "However, if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust (my emphasis). To say this is not to insist on too literal an interpretation, or to deny that the court should seek the real intention of the legislature. The danger that lies in departing from the ordinary meaning of unambiguous provisions is that "it may degrade into mere judicial criticism of the propriety of the acts of the Legislature", as Lord Moulton said in Vacher & Sons Ltd. v London Society of Compositors ([1913] A.C. 107, at p.130); it may lead judges to put their own ideas of justice or social policy in place of the words of the statute. On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice. Since language, read in its context, very often proves to be ambiguous, this last mentioned rule is one that not infrequently falls to be applied."

27 There can be no doubt that the LSL Act is social legislation and its terms should be construed beneficially. In this respect, I refer to what Samuels JA said in Lindner Pty Ltd v Builders Licensing Board (1982) 1 NSWLR 612 when considering the purpose of the Building and Construction Industry Long Service Payments Act 1974: It seems to me that once one arrives at that general conclusion about the purpose of the Act, it is, as Cross J, viz Builders Licensing Board v BJ Linder Pty Ltd [1982] 1 NSWLR 561, described it, a piece of social legislation designed to provide benefits for a category of the workforce. That being the case, it is entitled to a beneficial construction rather than to a strictly literal one, this being the approach applied to legislation of similar purpose in cases such as State Government Insurance Office (Queensland) v Crittenden (1966) 117 CLR 412, and in earlier cases in the High Court … Lindner was expressly cited in a case referred to me by Mr Bali - Collison v State Rail Authority (1992) 43 IR 332 where at 338 Miller CIM said: Without question the Long Service Leave Act is social legislation designed to provide benefits for a category of the workforce. As such it is entitled to a beneficial construction rather than a strictly literal one: See Lindner Pty Limited v Builders Licensing Board [1982] 1 NSWLR 612 Samuels JA at 613; and Bull v Attorney-General of NSW (1913) 17 CLR 370 Isaacs J at 384.

See also more recently the judgment of the Full Bench of the Industrial Court in Endeavour Coal and others v CFMEU [2007] NSWIRComm 70.

28 That being said, if the language used in a beneficial statute is ambiguous or obscure, then it should be interpreted in a manner favourable to the intended beneficiary. Nevertheless, the words used should be given their plain ordinary English meaning. 29 Mr Bali referred extensively to the Minister's Second Reading Speech and argued that the intention of the legislation supported his interpretation of the Act in respect to Mr Kayrouz's entitlement. The use of extrinsic material as an aid to statutory interpretation, such as the Minister's Second Reading Speech, is, of course permissible. So much so it is evident from s 34 of the Interpretation Act 1987: 34 Use of extrinsic material in the interpretation of Acts and statutory rules (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or

(b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or

(ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable. ... (f) the speech made to a House of Parliament by a Minister or other member of Parliament on the occasion of the moving by that Minister or member of a motion that the Bill for the Act be read a second time in that House, ... (3) In determining whether consideration should be given to any material, or in considering the weight to be given to any material, regard shall be had, in addition to any other relevant matters, to: (a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), and (b) the need to avoid prolonging legal or other proceedings without compensating advantage.

30 However, as Lee J said in Ombudsman v Commissioner of Police (1987) 11 NSWLR 386 "those speeches cannot be used to create doubt where none exists". I refer further to what the Full Bench said in Quality Bakers v Australian Liquor, Hospitality & Miscellaneous Workers Union, NSW Branch (2004) 139 IR 416 at [10]: 10 Where the language of a statute is not ambiguous or uncertain, the court will apply the ordinary and grammatical meaning of the words unless to do so would give the statute an operation that was obviously unintended: Mills v Meeking (1990) 169 CLR 214 at 223. See also, generally the discussion in Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217; Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSWIRComm 135 at [44] - [46]; Zoological Parks Board of New South Wales and The Australian Workers' Union, New South Wales [2004] NSWIRComm 85 at [43] - [46]. 31 In my view, notwithstanding the unusual outcome for Mr Kayrouz, the language of the Act is neither ambiguous, unclear nor uncertain. Indeed, neither party suggested it to be so. Nor do I consider that the consequences of the construction of the Act which I favour would produce a serious injustice for Mr Kayrouz. Applying the provisions of the Long Service Leave Act 32 It should not be lost sight of that the beneficial purpose of the LSL Act is to provide for paid leave for an employee, not necessarily for payment in lieu thereof. This is because the purpose of taking the leave, is in order for the employee to rest, re-energise and recuperate after many years of loyal service to an employer. This purpose was referred to in Kaal Australia Pty Ltd v Federated Clerks Union of Australia (2001) 103 IR 344 where Hungerford J said at para [26]: 26 I accept that the employees here have expressed no objection to having the option for paid leave or payment in lieu thereof, with the latter situation allowing unpaid leave at some time in the future during their employment, but the exercise of such an option by an individual employee may well be driven by exigencies contrary to the fundamental and inherent purpose of the Long Service Leave Act , that is, a period of paid leave for long service. (my emphasis) 33 The purpose is plainly defeated by the payout of the leave. Of course, payment of an accrued entitlement to long service leave is a statutory entitlement paid out in the event of the termination of employment or the death of the employee. However, ordinarily the payout of long service leave is to be discouraged as employees are encouraged to take the leave as soon as the employee becomes eligible to do so, subject to convenience and practicality: see s 3 of the Act. 34 In November 2005 Mr Kayrouz sought, and was granted, 14 weeks leave. In reality, he did not take 208 hours of leave as Mr Bali contends he was eligible to be paid for. Rather, he took 14 weeks leave at 6.5 hours a week, totalling, if hours is the denominator, 91 hours. This equates to $1884.61 which is less than the amount the respondent claims he was entitled to, and significantly less than the amount he was actually paid. While this calculation is not the correct interpretation of Mr Kayrouz's entitlement, it does demonstrate the following proposition. I do not imagine that the Act was intended to provide a worker with more leave in monetary terms, than if the worker had continued to work. This would seem to be one curious consequence of Mr Bali's approach to the matter. On the other hand, what the Act does seek to address is the circumstances of a worker whose hours of work might be reduced in the year, or part thereof, prior to the entitlement to leave falling due. This is the obvious reason for the five years average. Thus, as I will later explain, the correct approach is to average the weekly rate of pay over the last five years prior to the prescribed date. 35 In addition, it seems to me that one other unintended consequence of Mr Bali's approach would actually deny long service leave entitlements to workers whose employment history corresponded in the opposite way to Mr Kayrouz's. Take a worker who works part time for 6.5 hours in the first 10 years and 19.5 hours in the next five years. On Mr Bali's logic the worker would have a preserved entitlement of leave based on the 10 years at the much lower calculation (and presumably lower rate of pay preserved at the time) plus the higher calculation for the last five years. This would be in stark contrast to the result based on 19.5 hours calculated over the last 12 months or five years, whichever is the greater. Such an outcome would no doubt have an adverse impact on women in the workforce who might usually increase their hours of work over time as parental responsibilities are rearranged when children progress to school. 36 Having said that, how then should Mr Kayrouz's circumstances be addressed in terms of the relevant provisions of the Act? 37 Firstly, I cannot accept that the entitlement to long service leave should be expressed in hours. While hours might be relevant to the deeming calculation of normal weekly hours, it is not referrable to the entitlement which plainly speaks of months for years of service. A month is defined as 4 1/3 weeks. I am fortified to this view by what Miller CIM said in Collision v State Rail Authority "The words "average weekly wage" must be beneficially interpreted in the context of the Act where the leave entitlement is clearly based on months and weeks." Secondly, I would agree with Ms O'Niell's submission that Mr Kayrouz had fixed weekly hours of work and thus was covered by the definition of ordinary pay at 3(1) of the Act. 38 When viewed in this context, it would seem plain enough that when Mr Kayrouz took 14 weeks long service leave, the calculation of ordinary pay is made by reference to the prescribed date and the average weekly amount of the ordinary remuneration of the previous 12 months or five years, whichever is the greater. In this case it is the calculation based on the previous five years before 29 November, 2005 (being the prescribed date). The section does not, either expressly or implicitly, give support for the proposition that leave is calculated at the 10 year mark and recalculated in five year blocks thereafter. Moreover, it is tolerably clear from the language of s 3(2)(a)(1) that the prescribed date does not relate to the date at which the worker accrues the entitlement to long service leave, but rather the date at which the worker takes the leave or defers the leave. Of course the accrual of leave and the taking of the leave may coincide, but they certainly did not in Mr Kayrouz's case at 10 years service. Thus, there is no warrant to suggest, as Mr Bali contends, that the prescribed date means the date at which the 10 years service applies. 39 Whether the respondent had agreed or not to the amount of 174 hours in 1999 and had not informed Mr Kayrouz at the time that his entitlement would be reduced if he reduced his hours, is really not the point. How would the respondent have known Mr Kayrouz would reduce his hours so dramatically in 2000 and 2003? 40 In addition, I do not consider that the respondent was in breach of s 10(3) of the Act which prohibits an employer, either directly or indirectly, from avoiding or evading its obligations under the Act. The respondent was perfectly entitled to seek advice as to what it should pay Mr Kayrouz. The respondent was open and transparent in what it sought to do. There was no evidence that the respondent deliberately sought to evade or avoid its obligations. Indeed, on the contrary, by obtaining the advice it did, it was expressly seeking to ensure it was complying with its obligations under the Act. 41 The Commission understands why Mr Kayrouz would feel aggrieved by what he was told in 1999 and what he was paid in 2005. I sympathise with the injustice as he perceives it. However, the Commission cannot interpret the words of the statute beyond a meaning they will not reasonably bear or apply provisions of the statute which are simply not applicable to Mr Kayrouz's employment circumstances. While Mr Bali relied on various sections of the Act to support his arguments, Mr Kayrouz's circumstances are comprehended by the express provision dealing with averaging found at s 3(1). It must be said that any calculation based on hours is referrable to the category of employment Mr Kayrouz did not fall under; that is a worker with irregular part time hours. It is not open to import this provision into Mr Kayrouz's circumstances. 42 Nor, do I think, does the reliance on the Part Time Work Test Case assist Mr Bali's submissions. That case was specifically concerned with the entitlements of employees who might be employed under the terms of a part time work agreement as defined in Ch 2 Pt 5 of the Industrial Relations Act. It is the language used in the LSL Act which must be applied in this case. 43 Further, Mr Bali's reliance on the CCH extract of what records the employer is required to keep in respect to long service leave, is misplaced. He emphasised the following dot point: "Dates on which employee has become entitled to each amount of long service leave." These words are unremarkable and can only mean the anniversary dates at which an entitlement falls due, it does not require a calculation of what is to be paid at each anniversary date. This requirement becomes necessary when the leave is actually taken, deferred or paid out. 44 For the reasons herein expressed, I see no grounds to interpret the LSL Act in the manner proposed by the Australian Workers' Union in respect to Mr Kayrouz's circumstances. The respondent's obligations under the Act have been discharged in respect to the entitlement to long service leave provided to Mr Kayrouz in 2005. 45 These dispute proceedings are concluded. Peter J Sams, AM Deputy President

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