Warren v Secretary, Attorney-General's Department

Background 4 The applicant's employment was subject to the written contractual terms to which I have referred that were contained in a signed letter of engagement dated 14 May 2013. As I have mentioned, those terms designated the applicant's employment as casual. The applicant's employment was also subject to the Black Coal Mining Industry Award 2010 (the Award), and the National Employment Standards under the Fair Work Act. 5 The Award supplemented the entitlements under the National Employment Standards by providing for some additional benefits, such as - (1) in relation to annual leave, an entitlement to five weeks' annual leave, or six weeks' annual leave for certain roster employees, for each year of employment [cl 25.2], and payment for annual leave at an increased rate of pay [cl 25.7]; (2) in relation to personal/carer's leave, an entitlement to three weeks' personal/carer's leave on commencing employment and on each anniversary of commencement [cl 26.2], and payment out of accrued personal/carer's leave upon termination by retrenchment [cl 13.5(b)]; (3) in relation to payment in lieu of notice, four weeks' notice in the event of termination due to redundancy [cl 13.4]; and (4) in relation to redundancy, a severance payment where termination is due to redundancy equal to one ordinary week's pay for each completed year of employment [cl 14.3], and an additional retrenchment payment equal to two ordinary weeks' pay for each completed year of employment where redundancies occur due to technological change, market forces or diminution of service [cl 14.4], in circumstances where the National Employment Standards entitlement to redundancy pay under s 119 of the Act was excluded [cl 14.1, and see s 121(2) of the Fair Work Act]. 6 The Award permitted an employer to employ an employee in full-time or part-time employment. Casual employment was permitted only for those classifications in Schedule B of the Award, which related to staff employees. The applicant was not within one of the classifications in respect of whom casual employment was permitted by the Award. 7 Following the termination of the applicant's employment, he made an application for an advance under the FEG Act. The main objects of that Act include to provide for the Commonwealth to pay advances on account of unpaid employment entitlements in the event of the insolvency of an employer. Claims for advances are determined by the Secretary of the Department. In this case, the applicant claimed advances on account of unpaid annual leave, payment in lieu of notice, and redundancy pay to which he was entitled. There is no dispute between the parties as to the entitlement of the applicant to those payments under the Award. The issue in dispute is whether the Secretary was entitled to take into account the casual loading which the applicant was paid as part of his hourly rate in working out the amount of the advance to which the applicant is entitled under the Act. 8 By a decision made on 30 October 2017, which followed an internal review, a delegate of the Secretary determined that the applicant was entitled to an advance under the Act, but reduced the amount of the advance by amounts that were considered to be attributable to the applicant's entitlements to annual leave, payment in lieu of notice, and redundancy pay. The applicant sought a merits review of that decision before the Administrative Appeals Tribunal. On 31 January 2019, the Tribunal set aside the reviewable decision and remitted the matter to the Secretary for reconsideration in light of the Tribunal's reasons. However, in reaching its decision, the Tribunal rejected the applicant's claim that the delegate had been in error in regarding the casual loading that he was paid as being attributable to annual leave and redundancy pay.

The obligations owed by the employer to the applicant 9 There were two sources of obligations owed by the employer to the applicant in relation to his employment. The first was under statute, being the provisions of the Fair Work Act, including the requirement under s 44(1) that the employer must not contravene a provision of the National Employment Standards, and the requirement in s 45 that the parties must not contravene the Award. The second source was the contract of employment. A contract of employment may provide additional benefits, but cannot be effective to derogate from the statute and displace the benefits that it confers, whether under the National Employment Standards, or under the Award: Fair Work Act, s 44(1), s 45, s 61(1). In Visscher v Giudice [2009] HCA 34; 239 CLR 361 at [13], Gummow J described the employment relationship in issue there as representing a compound of statutory elements and of the common law of contract, where the statutory elements predominated: see also, Heydon, Crennan, Kiefel and Bell JJ at [71].

The contractual terms of employment 10 The written contractual terms of employment were referred to by the Tribunal as the "letter agreement" because they were contained in the letter from the employer dated 14 May 2013 that was countersigned by the applicant. I shall likewise refer to the written contractual terms as "the letter agreement". The material features of the letter agreement were as follows - (1) the applicant was employed on a casual basis from time to time, and each period of engagement as a casual employee was to constitute a separate period of employment [cl 1.1]; (2) the applicant's duties were to be that of a mining operator [cl 2.1]; (3) the applicant would work shifts of up to 12 hours and 30 minutes each, with a minimum of four hours' payment on each shift [cl 5.3]; (4) the employment relationship might be terminated by the applicant or the employer by giving one hour's notice, or pay in lieu of notice [cl 6.1]; (5) the applicant was not entitled to redundancy pay [cl 6.3]; (6) the applicant was not entitled to annual leave or any other form of paid leave, with the exception of long service leave, which would accrue in accordance with the Coal Mining Industry (Long Service Leave Funding) Act 1992 (Cth) [cl 7.1, 14.1]; (7) the letter agreement contained an entire agreement clause [cl 15.1]; (8) the letter agreement contained a severance clause in clause 16.1 in the following terms - 16.1 Any provision of this letter which is or becomes illegal, void or unenforceable in any jurisdiction: (a) is severable; (b) will be ineffective and severable in that jurisdiction to the extent of the illegality, voidness or unenforceability; (c) will not invalidate the remaining provisions of this letter; and (d) will not affect the validity or enforceability of that provision in any other jurisdiction. 11 Of central importance to the submissions put by the parties in this proceeding are the terms of clauses 3.1 to 3.4 of the letter agreement, concerning the applicant's rate of pay, which were in the following terms - 3. Rate of Pay 3.1 You will be paid an all-inclusive flat rate for all hours worked. Your hourly rate will be $39.01 per hour (gross). This includes a base rate plus 25% casual loading and further loading to compensate for other loadings, penalty rates and allowances. You will be paid weekly by electronic deposit to an account nominated by you. 3.2 Notwithstanding clause 3.1 of this letter, your hourly rate of pay for work on a recognised public holiday will be $80.29 per hour (gross). This public holiday rate includes a base rate plus 25% casual loading and a further loading to compensate for other loadings and allowances. Where you are required to work on a recognised public holiday, you will be paid at the rate of treble time the public holiday rate. 3.3 The payment of a casual loading of 25% is inclusive of, and compensates you for, any and all benefits with respect to paid annual leave, other forms of paid leave (including but not limited to paid personal/carer's leave, paid compassionate leave and paid community service leave) and severance pay (other than as set out in this letter) that arise under the Award or any other industrial agreement. The payment of the further over-award loading is inclusive of, and compensates you for, all allowances, penalty rates and loadings (other than as set out in this letter) that arise under the Award or any other industrial agreement, including all: (a) rest breaks; (b) incentive based payments and bonuses; (c) monetary allowances for expenses incurred in the course of employment; (d) monetary allowances for disabilities associated with the performance of particular tasks or work in particular conditions or locations; (e) loadings for working overtime; (f) loadings for working shift work; (g) penalty rates; and (h) outworker conditions. 3.4 You agree that the payment of the casual and over-award loadings fully discharge the Company's obligations with respect to these benefits. In the event any of the above benefits become due and payable for any reason, the monetary value of such benefit may be set off against the amount paid as casual or over-award loading (as applicable), in which case the monetary value of the benefit will be calculated by reference to your base rate of pay. (Emphasis in original)

The Fair Work Act 2009 12 The principal object of the Fair Work Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians. 13 Chapter 2 of the Fair Work Act provides for terms and conditions of employment, and relevantly includes Part 2-2 in relation to the National Employment Standards, and Part 2-3 in relation to modern awards, such as the Award that applied to the applicant's employment. Those Parts establish a hierarchy of employment rights. At the apex are the National Employment Standards, which are minimum standards that apply to the employment of employees and which cannot be displaced: s 61(1); WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 (WorkPac v Skene) at [87] (Tracey, Bromberg and Rangiah JJ). The standards relevantly include entitlement to annual leave in Division 6, and provision for notice of termination and entitlement to redundancy pay in Division 11. An employer must not contravene a provision of the National Employment Standards: s 44(1). Beneath the National Employment Standards, are modern awards. Modern awards must not exclude the National Employment Standards, but may include terms that are permitted by, or which are ancillary to, or which supplement, the National Employment Standards: ss 55(1) to (4). If a modern award applies to a person, then the person must not contravene the award: s 45. It is appropriate to refer to the employer's obligations under both the National Employment Standards and the Award as statutory obligations, and to the corresponding entitlements as statutory entitlements. 14 Relevant to this appeal, are the following statutory entitlements that were payable to the applicant upon termination of his employment - (1) payment on account of accrued annual leave (Award, cl 25.7; Fair Work Act, s 90(2)); (2) payment in lieu of four weeks' notice of termination (Award, cl 13.4; Fair Work Act, s 117(2)(b)); and (3) in relation to redundancy, a severance payment in the event of redundancy equal to one ordinary week's pay for each completed year of employment, amounting to three ordinary weeks' pay in the case of the applicant (Award, cl 14.3), and in addition a retrenchment payment in the event of redundancy due to technological change, market forces or diminution of reserves equal to two ordinary weeks' pay for each completed year of service, amounting to six ordinary weeks' pay in the case of the applicant (Award, cl 14.4), which together amounted to a total of nine ordinary weeks' pay in the case of the applicant. 15 The entitlement to payment on account of untaken annual leave arises under sub-section (2) of s 90 of the Fair Work Act, which provides - 90 Payment for annual leave (1) If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period. (2) If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave. 16 It is relevant to this appeal to refer to the provisions of the Fair Work Act that limit the ability of employees to cash out leave entitlements. Section 92 prohibits the cashing out of annual leave except in circumstances that are in accordance with cashing out terms that are included in a modern award - 92 Paid annual leave must not be cashed out except in accordance with permitted cashing out terms Paid annual leave must not be cashed out, except in accordance with: (a) cashing out terms included in a modern award or enterprise agreement under section 93, or (b) an agreement between an employer and an award/agreement free employee under subsection 94(1). 17 Section 93 of the Fair Work Act imposes limitations on the permissible terms in a modern award that may provide for the cashing out of paid annual leave - 93 Modern awards and enterprise agreements may include terms relating to cashing out and taking paid annual leave Terms about cashing out paid annual leave (1) A modern award or enterprise agreement may include terms providing for the cashing out of paid annual leave by an employee. (2) The terms must require that: (a) paid annual leave must not be cashed out if the cashing out would result in the employee's remaining accrued entitlement to paid annual leave being less than 4 weeks; and (b) each cashing out of a particular amount of paid annual leave must be by a separate agreement in writing between the employer and the employee; and (c) the employee must be paid at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has forgone. Terms about requirements to take paid annual leave (3) A modern award or enterprise agreement may include terms requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable. Terms about taking paid annual leave (4) A modern award or enterprise agreement may include terms otherwise dealing with the taking of paid annual leave. 18 In the present case, clause 25.11 of the Award, which was inserted by amendment from 29 July 2016, provided for the cashing out of annual leave in accordance with a separate signed agreement in writing between the employer and the employee that was required to state the amount of leave to be cashed out, the payment to be made to the employee for it, and the date on which the payment was to be made. The Award prescribed a form of agreement for cashing out annual leave in Schedule F. In addition, the Award provided that the agreement could not result in the remaining accrued entitlement to be paid annual leave being less than four weeks, and the maximum amount of accrued leave that could be cashed out in any 12 month period was two weeks. The amendment to the Award to make these provisions for cashing out followed the model terms approved by the Fair Work Commission in 2016 in its four yearly review of modern awards: Four yearly review of modern awards - annual leave [2016] FWCFB 3177. 19 There is a corresponding prohibition in s 100 of the Fair Work Act on cashing out personal/carer's leave except in accordance with permissible terms of a modern award, and a corresponding provision in s 101 that imposes limitations on the permissible terms of a modern award that provide for the cashing out of paid personal/carer's leave - 100 Paid personal/carer's leave must not be cashed out except in accordance with permitted cashing out terms Paid personal/carer's leave must not be cashed out, except in accordance with cashing out terms included in a modern award or enterprise agreement under section 101. 101 Modern awards and enterprise agreements may include terms relating to cashing out paid personal/carer's leave (1) A modern award or enterprise agreement may include terms providing for the cashing out of paid personal/carer's leave by an employee. (2) The terms must require that: (a) paid personal/carer's leave must not be cashed out if the cashing out would result in the employee's remaining accrued entitlement to paid personal/carer's leave being less than 15 days; and (b) each cashing out of a particular amount of paid personal/carer's leave must be by a separate agreement in writing between the employer and the employee; and (c) the employee must be paid at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has forgone.

The Fair Entitlements Guarantee Act 2012 20 The FEG Act is at the heart of this appeal, and some attention must be given to its provisions, and the scheme that it establishes. It must be said that some provisions of the Act contain idiosyncratic forms of expression and grammar. 21 The Act provides for the Commonwealth to give financial assistance to persons whose employment has ended in circumstances connected with the insolvency or bankruptcy of their employer, and who have not been paid their entitlements relating to that employment. The long title of the FEG Act is - An Act to provide for financial assistance for workers who have not been fully paid for work done for insolvents or bankrupts, and for related purposes 22 The main objects of the FEG Act are set out in s 3, and include - (a) to provide for the Commonwealth to pay advances on account of unpaid employment entitlements of former employees of employers in cases where: (i) the employers are insolvent or bankrupt; and (ii) the end of the employment of the former employees was connected with that insolvency or bankruptcy; and (iii) the former employees cannot get payment of the entitlements from other sources; … 23 There are five types of employment entitlements in respect of which an advance is payable, which are reflected in the definition of "employment entitlement" in s 5 of the Act - employment entitlement means: (a) annual leave entitlement; or (b) long service leave entitlement; or (c) payment in lieu of notice entitlement; or (d) redundancy pay entitlement; or (e) wages entitlement. 24 In turn, each of the five entitlements is defined by s 6 of the Act - 6 Kinds of employment entitlements (1) This section defines the various kinds of employment entitlements of a person whose employment by an employer has ended, by reference to the person's entitlements under the governing instrument for the employment. Note: Part 3 may affect the calculation of the person's employment entitlements for the purposes of working out the amount of an advance the person is eligible for. Annual leave entitlement (2) The person's annual leave entitlement is the amount the person is entitled to under the governing instrument from the employer for paid annual leave that the person: (a) had accrued at the end of the employment; and (b) had not taken by then. Long service leave entitlement (3) The person's long service leave entitlement is the amount the person is entitled to under the governing instrument from the employer: (a) for long service leave that the person had accrued at the end of the person's employment and had not taken by then; or (b) on account of long service leave that, had the person's employment continued until the person qualified for long service leave, would have been attributable to the period before the actual end of the person's employment. Payment in lieu of notice entitlement (4) The person's payment in lieu of notice entitlement is the amount the person is entitled to under the governing instrument from the employer for a shortfall in the period of notice of termination of the employment. Redundancy pay entitlement (5) The person's redundancy pay entitlement is the amount of redundancy pay the person is entitled to under the governing instrument from the employer for termination of the employment. Wages entitlement (6) The person's wages entitlement is the amount of wages the person is entitled to under the governing instrument from the employer for work done, or paid leave taken, in the wages entitlement period. Entitlement unaffected by payment (7) The person's receipt of some or all of an amount he or she was entitled to under the governing instrument does not affect what is the person's annual leave entitlement, long service leave entitlement, payment in lieu of notice entitlement, redundancy pay entitlement or wages entitlement under this section. Example: If: (a) under the governing instrument, the person accrued 8 weeks of annual leave that had not been taken by the end of the person's employment; and (b) the employer paid the person for 3 of those weeks; the person's annual leave entitlement is the entitlement to be paid for 8 weeks annual leave. 25 The terms of s 6(7) and the example given should be noted. To take the example of annual leave, s 6(2) has as a commencement point the entitlement to paid annual leave that had accrued at the end of the employment. As will be seen, reduction for any payment that is attributable to that annual leave entitlement is effected by another provision of the Act, namely s 19(2). 26 The term "governing instrument" which is referred to in each of the sub-sections of s 6 is defined in s 5 as follows - governing instrument for employment means any of the following that governs the employment: (a) a written law of the Commonwealth, a State or a Territory; (b) an award, determination or order that is made or recorded in writing; (c) a written instrument; (d) an agreement (whether a contract or not). 27 For present purposes, the governing instruments would include the letter agreement, the Award, and the National Employment Standards under the Fair Work Act. 28 The FEG Act does not provide for the payment of advances in respect of all unpaid entitlements, or of unlimited amount. For instance, it does not provide for an advance by reference to an entitlement to be paid accrued personal/carer's leave. In this instance, clause 13.5(b)(i) of the Award made provision for payment on account of untaken personal leave where an employee's employment was terminated by retrenchment, but the applicant is not entitled to any advance under the FEG Act on that account. Further, the liability under the FEG Act to pay an advance that is referrable to unpaid wages is limited. The "wages entitlement period" is limited to 13 weeks by the definition in s 5 of the Act, and s 27 limits the basic amount for the purposes of calculating the wages entitlement to a "maximum weekly wage rate", as defined by s 5. The FEG Act also limits liability to pay an advance in respect of a payment in lieu of notice entitlement to a maximum of five weeks' pay, and in respect of a redundancy pay entitlement to a maximum of four weeks' pay for each full year of service with the employer for which the employer was required to pay redundancy pay by the governing instrument for the employment: s 22(b) and s 23(b)(i). Those limits do not apply to or affect the applicant's eligibility for an advance in respect of those employment entitlements. 29 Section 15 of the FEG Act provides that the Secretary of the Department must decide whether an applicant for an advance is eligible, and if so in what amount the advance should be paid - 15 Secretary must decide effective claim (1) If an effective claim that a person is eligible for an advance is made to the Secretary, the Secretary must decide whether the person is eligible for the advance. (2) If it is decided that a person is eligible for an advance, the Secretary must decide the amount of the advance in accordance with Part 3. 30 The Secretary's functions may be delegated: s 47. The duty of the Secretary to decide is subject to an internal review at the Secretary's own initiative, or upon application by a person the subject of the decision: s 37 to s 39. Following internal review, the Secretary's original or substituted decision is subject to review by the Tribunal, which is what occurred in the present case: s 40. 31 Sections 16 and 19 of the Act are the main provisions that are concerned with working out the amount of any advance. Section 16 provides, inter alia - 16 General rule for working out the amount of an advance (1) If a person is eligible for an advance for the person's employment by an employer, the amount of the advance is the total of the amount worked out under Division 2 for each of the person's employment entitlements for the employment. … 32 It is to be noted that s 16(1) requires that an amount for each of the five employment entitlements be worked out under Division 2. Section 19 is within Division 2, and provides - 19 Working out amounts for employment entitlements (1) Work out the amount for each of a person's employment entitlements to be taken into account under section 16 by: (a) working out the basic amount for the entitlement under Subdivisions B and C; and (b) reducing the basic amount (but not below nil) by the sum of the amounts described in subsections (2) and (3) for the entitlement. (2) One amount of the reduction of the basic amount for a particular employment entitlement of a person for his or her employment by an employer is the total of amounts that: (a) are attributable to the entitlement; and (b) have been paid by anyone: (i) to the person; or (ii) to someone else for the person's benefit or in accordance with the person's direction; and (c) are not costs of the winding up or bankruptcy of the employer. (3) The other amount of the reduction of the basic amount for a particular employment entitlement of a person for his or her employment by an employer is the total of amounts that: (a) are attributable to the entitlement; and (b) are payable (and have not been paid) by anyone: (i) to the person; or (ii) to someone else for the person's benefit or in accordance with the person's direction; and (c) are not payable: (i) under the Corporations Act 2001 in the winding up of the person's employer; or (ii) under the Bankruptcy Act 1966 from the proceeds of the property of the bankrupt employer of the person; or (iii) under this Act. 33 The explanatory memorandum for the Fair Entitlements Guarantee Bill 2012 (Cth) explained the clauses that became ss 19(2) and (3) in the following terms at [86] - The reductions provided for in subclause 2 and 3 ensure that, in working out the amount of an advance, the amount will not include payments that have already been received (subclause 2) or that will be received in future through another source (subclause 3). This could include money paid or owed by redundancy trusts or where the entitlement relates to employment after the appointment of an insolvency practitioner with responsibility for meeting those debts. 34 The key phrase that arises for consideration in this appeal is "attributable to the entitlement" appearing in s 19(2)(a), because the Tribunal held that a proportion of the wages that the applicant received during his employment were attributable to some of the entitlements in respect of which the applicant claimed an advance from the Commonwealth under the Act. 35 The basic amount for each of the five entitlements in respect of which the Act provides for an advance payable to a person by the Commonwealth is the subject of separate provisions in s 20 to s 24 of the Act - 20 Basic amount for annual leave entitlement The basic amount for a person's annual leave entitlement for his or her employment by an employer is so much of the entitlement as is not a cost of the winding up or bankruptcy of the employer. 21 Basic amount for long service leave entitlement The basic amount for a person's long service leave entitlement for his or her employment by an employer is so much of the entitlement as is not a cost of the winding up or bankruptcy of the employer. 22 Basic amount for payment in lieu of notice entitlement The basic amount for a person's payment in lieu of notice entitlement for his or her employment by an employer is so much of the entitlement as: (a) is not a cost of the winding up or bankruptcy of the employer; and (b) does not exceed 5 weeks' pay at the rate relevant to working out that entitlement. 23 Basic amount for redundancy pay entitlement The basic amount for a person's redundancy pay entitlement for his or her employment by an employer is so much of the entitlement as: (a) is not a cost of the winding up or bankruptcy of the employer; and (b) does not exceed the total of: (i) 4 weeks' pay (at the rate relevant to working out that entitlement) for each full year of the person's service with the employer for which the employer was required to pay redundancy pay by the governing instrument for that employment; and (ii) if that instrument requires payment of redundancy pay for a proportion of a year (less than a full year) of the person's service with the employer - that proportion of 4 weeks' pay (at the rate relevant to working out that entitlement). 24 Basic amount for wages entitlement The basic amount for a person's wages entitlement is the wages entitlement less any amount required to be withheld under Part 2-5 (Pay as you go (PAYG) withholding) in Schedule 1 to the Taxation Administration Act 1953 from the wages covered by the entitlement. 36 The cost of the winding up or bankruptcy of an employer that is referred to in each of the above provisions is defined by s 5 of the Act as referring to the expenses described in s 556(1)(a) or s 558 of the Corporations Act 2001 (Cth), and s 109(1)(a) or s 109A of the Bankruptcy Act 1966 (Cth). No issue in relation to whether the applicant's entitlements were costs of the winding up of the employer arises. 37 Finally, it is necessary to mention s 34 of the Act, which provides for a statutory form of restitution in the event of payment by a third party of an amount for an employment entitlement - 34 Recovery from person eligible for advance (1) This section applies if: (a) the Commonwealth pays someone (the payee) an advance for a person's employment by an employer; and (b) an amount (the later amount) for an employment entitlement of the person for which an amount was included in the advance is later paid by someone (the later payer) to the person or for the benefit of the person or in accordance with the person's directions; and (c) the later payer is not: (i) the Commonwealth; or (ii) the liquidator or bankruptcy trustee of the employer; or (iii) the payee. (2) There is a debt due by the person to the Commonwealth of the lesser of the following (or either of them if they are equal): (a) the later amount; (b) the difference between the advance and the sum of: (i) the amounts paid to the Commonwealth in the winding up or bankruptcy of the employer because of Division 1; and (ii) the debts (if any) created by previous operations of this section in relation to the person. (3) A debt under this section may be recovered by the Secretary, on behalf of the Commonwealth, in a court of competent jurisdiction. 38 It may be noted that s 34(1)(b) refers to an amount "for" an employment entitlement, rather than an amount "attributable" to an employment entitlement.

The Secretary's decision 39 The decision of the Secretary was that of a delegate dated 30 October 2017 upon an internal review, in respect of which reasons were given. The relevant features of the Secretary's decision are as follows - (1) It was accepted that under the terms of the Award the applicant could not have been employed on a casual basis, and that he was therefore entitled to be remunerated as a full-time employee. (2) The Secretary regarded s 19(2) of the Act as not being concerned with how or why payments were made, but whether payments were attributable to the relevant entitlement. (3) The Secretary treated the 25% casual loading paid to the applicant under the contract of employment as being attributable to the unpaid Award entitlements, with the consequence that the amount of the advance under the Act should be reduced in accordance with s 19(2) of the Act. (4) For the purpose of calculating the components of the wages paid by the employer to the applicant, and in particular what was the base rate of pay for the purposes of calculating the 25% casual loading, the Secretary had regard to the basic weekly rate under the Award for a mineworker based on a 35 hour week as at the date of termination, which was $831.20, and treated that as a base rate of $23.75 per hour. Based on that hourly rate, the Secretary calculated a 25% casual loading to be $5.94 per hour. (5) The Secretary identified the following entitlements of a full-time mineworker under the Award - (a) six weeks (210 hours) of annual leave per year of service, which was equivalent to 4.0385 hours of accrued annual leave per week worked or 0.1154 hours of accrued annual leave per hour worked; (b) three weeks (105 hours) of personal/carer's leave per year of service, which was equivalent to 2.0192 hours of accrued personal/carer's leave per week worked or 0.0577 hours of accrued personal/carer's leave per hour worked; (c) three weeks (105 hours) of redundancy pay per completed year of service (being the total of the entitlements to severance pay and retrenchment pay under the Award), which was equivalent to 2.0192 hours of accrued redundancy pay per week worked or 0.0577 hours of accrued redundancy pay per hour worked; (d) four weeks of pay in lieu of notice was payable to all employees if termination occurred due to redundancy. (6) The Secretary then reasoned that of the $5.94 per hour casual loading paid to the applicant - (a) $2.74 per hour was attributable to annual leave (calculated by the base rate of $23.75 × the hours of accrued annual leave per hour worked of 0.1154); (b) $1.37 per hour was attributable to personal/carer's leave (calculated by the base rate of $23.75 × the hours of accrued personal/carer's leave per hour worked of 0.0577); (c) at least $1.37 per hour was attributable to "severance pay", stated as being payment in lieu of notice and redundancy pay (calculated by the base rate of $23.75 × the hours of accrued redundancy pay per hour worked of 0.0577); and (d) the balance of $0.46 per hour was attributable to unspecified other elements of casual employment. (7) The Secretary then calculated net amounts in respect of the entitlements that were the subject of the applicant's claim - (a) in relation to annual leave - (i) based upon his length of service, the applicant had accrued 783.469 hours, which gave rise to an entitlement to be paid $29,027.53; (ii) however, of the casual loading paid over the course of his employment, $22,073.58 was in respect of annual leave; (iii) therefore, in respect of his annual leave entitlement, the applicant was eligible for an advance under the Act of $6,953.95 ($29,027.53 less $22,073.58); (b) in relation to "severance pay", which the Secretary treated as including payment in lieu of notice and redundancy pay - (i) the Secretary calculated that the applicant was entitled to $6,264.44 as pay in lieu of four weeks' notice; (ii) in addition, the applicant was entitled to $7,480.80 as redundancy pay (being nine ordinary weeks' pay at the base rate, comprised of the applicant's entitlement to both severance pay under clause 14.3 and retrenchment pay under clause 14.4 of the Award); (iii) the total entitlement to "severance pay" (as it was treated by the Secretary) was therefore calculated at $13,745.24 ($6,264.44 plus $7,480.80); (iv) however, based on his length of service, the applicant had received a total of $11,053.47 in respect of "severance pay" entitlements as part of the 25% casual loading; (v) therefore, in respect of the applicant's total "severance pay" entitlement, the Secretary determined that the applicant was eligible for an advance under the Act of $2,691.77 ($13,745.24 less $11,053.47).

The Tribunal's decision 40 On review, the Tribunal identified the basic amount of the entitlements in respect of which the applicant claimed an advance from the Commonwealth under the FEG Act, before turning to consider whether the casual loading paid by the employer to the applicant could be attributed to reduce the advance in respect of those entitlements. The Tribunal affirmed as correct the Secretary's calculation of $29,027.53 as the amount that was payable by the employer to the applicant at the end of his employment on account of accrued annual leave, which had been accepted by the parties. The Tribunal also affirmed as correct the Secretary's reasoning that the employer was liable to pay the applicant four weeks' pay in lieu of notice, calculated at the applicant's full rate of pay in accordance with s 117(2)(b) of the Fair Work Act, which had also been accepted by the parties. In relation to redundancy pay, the Tribunal determined that in addition to payment in lieu of notice, to which the applicant was entitled under s 117 of the Fair Work Act, the applicant was also entitled to a severance payment pursuant to clause 14.3 of the Award in a sum equal to one ordinary week's pay for each completed year of employment. The Award defined "ordinary week's pay" as meaning the amount in the total payment column for the award classification rate in respect of 35 ordinary hours. Schedule A to the Award set out minimum rates for different classifications of mineworkers which were described as a "Basic weekly 35 hour rate". The Tribunal did not refer to the applicant's entitlement to a retrenchment payment pursuant to clause 14.4 of the Award, which as I have stated was included in the Secretary's calculations. I note that the Tribunal did not find any error in the Secretary's inclusion of the applicant's entitlement to retrenchment pay. In this proceeding, the parties accepted that the applicant was entitled to retrenchment pay, and that there was no issue as to the calculation of the basic amounts in respect of which the applicant claims an advance under the FEG Act. The only issue was whether the casual loading could be attributed to reduce those amounts. 41 The Tribunal held at [42] that contrary to the purported effect of the letter agreement, the applicant was not a casual employee, but a full-time employee with the consequence that any terms of the letter agreement that sought to supplant rights that were conferred on the applicant by the Fair Work Act and the Award were ineffective. 42 The Tribunal then held at [48]-[49] that the payment of a casual loading appeared to involve cashing out annual leave in a way that did not conform to s 92 of the Fair Work Act, or the Award provisions. The Tribunal gave consideration to the consequences of regarding the payment of the casual loading as cashing out annual leave and concluded at [50]-[51] - 50. The effect of a contravention of sections 92 and 94 of the Fair Work Act requires analysis. One effect is that the employer will be liable to a civil penalty under s 45, but as I have already observed, that does not involve criminality, and contravention, by a contract, of a civil penalty provision does not make the contract void. 51. It seems to me that for the Fair Work Act to produce the consequence that any money paid to an employee by way of unauthorised cashing out is to be treated as an over-award payment of wages, express words would be required, and no such words have been used in the Act. 43 The Tribunal then turned attention to whether the quantum of the casual loading could be calculated. The Tribunal held that to determine the quantum of the 25% casual loading, it was necessary to quantify the base rate. The Tribunal held that the base rate was intended to refer to the applicant's ordinary hourly rate of pay, without regard to the various allowances that were excluded by clauses 3.1 to 3.3 of the letter agreement. The Tribunal stated that from within the four corners of the letter agreement, one knew only that the base rate was pay without allowances and other benefits, but one did not know what amount was intended. The Tribunal referred to the principle that courts strain to avoid the consequence that a contract, or a clause in a contract, is void for uncertainty, citing Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd [1968] HCA 8; 118 CLR 429. 44 The Tribunal held that the only way some meaning could be given to the expression "base rate" was by having regard to the Award, which the letter agreement sought to supplant in many respects. The Tribunal stated, however, that the terms of the Award were not incorporated by reference, and that the letter agreement did not recognise that its terms had effect subject to the provisions of the Fair Work Act or the Award. The Tribunal further observed that the letter agreement purported to make the applicant a casual employee. 45 The Tribunal then referred to s 16 of the Fair Work Act, which contains a definition of "base rate of pay" - 16 Meaning of base rate of pay General meaning (1) The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following: (a) incentive-based payments and bonuses; (b) loadings; (c) monetary allowances; (d) overtime or penalty rates; (e) any other separately identifiable amounts. 46 The Tribunal noted the similarity between the statutory definition, and the definition of "base rate of pay" in clause 3.1 of the Award. However, the Tribunal held that s 16(1) of the Fair Work Act did not help in ascertaining the base rate as that term was used in clause 3.1 of the letter agreement. The Tribunal stated, amongst other things, that clause 3.1 of the letter agreement did not envisage that the hourly rate would change from time to time, or that it would do so when the Award entitlements were varied. The Tribunal stated that there were annual increments to the award pay of a mining employee under the Award, and posed the question whether the "base rate" under the letter agreement was to be treated as a fixed amount, or were annual increments to be applied to the "base rate". 47 The Tribunal then stated at [67] - The Fair Entitlements Guarantee Act requires the ascertainment of amounts attributable to the entitlements specified in sections 6 and 7 of the Act: see s. 19(2) …. The entitlements are then to be reduced by the total of those amounts which have been paid to the person by anyone, including the employer. Since his hourly rate varied over the term of his employment, it seems to me that the amounts are "attributable" if actually paid, even though that may have involved a departure from the literal terms of clause 3 of the letter agreement. 48 The Tribunal stated that it would be a very strong thing to treat a contract of employment as void for uncertainty in any respect, particularly insofar as it affects the wages payable to the employee. The Tribunal concluded that the calculations made by the Secretary in the decision under review represented the correct or preferable determination of the amounts by which the entitlements of the applicant under s 19 of the FEG Act should be ascertained, subject to a question of "set-off". That is, subject to the question of set-off, the Tribunal determined that the "base rate" of pay referred to in clause 3.3 of the letter agreement was the basic weekly rate of $831.20 based on a 35 hour week under the Award as at the date of termination, which was to be treated as a base rate of $23.75 per hour. 49 Commencing at [70] of its reasons under the heading "Set-off", the Tribunal turned its attention to other issues. First, the Tribunal referred to a decision of the Federal Magistrates' Court in CEPU of Australia v C J Manfield Pty Ltd [2011] FMCA 374 (Lucev FM) (CEPU v CJ Manfield), which the applicant had cited to the Tribunal. Like the present case, CEPU v CJ Manfield involved a contract of employment which provided for a flat hourly wage rate that comprehended allowances and a loading in respect of annual leave, sick days, rostered days off, and public holidays. The loading was expressed to be 20%. The applicant made a claim for payments on account of annual leave to which employees of the respondent were entitled but had not taken. In response, the respondent claimed that there had been an express appropriation under the contract of employment of part of the all-in rate to satisfy payments on account of annual leave, namely the loading of 20%. At the time, the Australian Fair Pay and Conditions Standard (AFPCS) under Part 7 of the Workplace Relations Act 1996 (Cth), which provided for minimum standards of entitlements, were applicable. The AFPCS was the statutory precursor of the National Employment Standards. In relation to contracting out of the AFPCS, s 173 of the Workplace Relations Act provided - 173 Australian Fair Pay and Conditions Standard cannot be excluded A term of a workplace agreement or a contract has no effect to the extent to which it purports to exclude the Australian Fair Pay and Conditions Standard or any part of it. 50 In CEPU v CJ Manfield, Lucev FM held at [100] and [104] that the relevant clause of the employment agreement that provided for the incorporation of a loading purported to contract out of the AFPCS, and as a result of s 173 of the Workplace Relations Act was of no effect. A similar conclusion about the effect of s 173 had been expressed by Barker J in Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321; 201 IR 123 (Williams v MacMahon) at [67]-[68]. Lucev FM held that in consequence any loading paid under the relevant clause of the employment agreement could not be set off against the payments referrable to accrued annual leave that were due upon termination. In addition, Lucev FM held at [110] that in any event the state of the evidence was such that it was not possible to quantify the amount of the loading attributable to the various entitlements of which the loading was said to be in lieu, with the consequence that the respondent employer had not established the evidentiary basis for the claimed "set-off". 51 In the present case, the Tribunal distinguished CEPU v CJ Manfield on the ground that questions of onus of proof arose, that did not directly arise on the application before the Tribunal, and on the related ground that the decision turned on defects in the evidence before the Court in that case. 52 At [72]-[81] of the Tribunal's reasons, the Tribunal gave consideration to what meaning the delegate had attributed to "severance pay", which is a term used in clause 3.3 of the letter agreement, and which was a specific entitlement under clause 14.3 of the Award. It appears that the Tribunal accepted the applicant's submission that "severance pay…under the Award" as referred to in clause 3.3 of the letter agreement was a reference to the entitlement to severance pay arising under clause 14.3 of the Award, which was in effect a variation of the ordinary redundancy pay entitlement under s 119 of the Fair Work Act. Therefore, in the context of the employment entitlements under the FEG Act, it was a redundancy pay entitlement, and not a payment in lieu of notice entitlement. As I will identify later, on this appeal, the parties were agreed on this issue. The Tribunal held that the correct meaning had not been attributed to "severance pay", which as I have stated the Secretary treated as payment in lieu of notice and redundancy pay (including both severance pay pursuant to clause 14.3 and retrenchment pay pursuant to clause 14.4 of the Award). It was this error that led the Tribunal to set the reviewable decision aside, and to remit the matter for reconsideration in light of the Tribunal's reasons. 53 Under the heading, "Is the casual loading able to be set off", the Tribunal at [83]-[91] addressed whether the casual loading was attributable to the applicant's entitlements that were in issue, and referred to passages in the reasons of Barker J in Williams v MacMahon to which I shall return - Is the casual loading able to be set off? 83. The word "attributable" in s 19 of the Fair Entitlements Guarantee Act takes its common law meaning, that is, its ordinary English meaning. Section 19 is a provision designed to avoid double payment. That consideration alone justifies rejection of the applicant's submissions based upon cases decided under earlier legislation in my opinion. 84. As to offsetting, that produces a result consistent with two cases referred to by the respondent decided by the Full Court of the Federal Court. The cases are Australia and New Zealand Banking Group Ltd v Finance Sector Union of Australia [2001] FCA 1785; (2001) 111 IR 227 and Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99; (2015) 240 FCR 578. In the latter case, the principles are to be found in seriously considered dicta in the joint judgment of North and Bromberg JJ. If an over-award payment is made in respect of one entitlement, it cannot reduce another entitlement. On the other hand, if there is a close correlation between a contractual payment and an award entitlement, payments of the first will reduce the second. 85. The applicant relies upon another line of authority, being cases decided under the Workplace Relations Act 1996, including the decision of Barker J in Williams v MacMahon Mining Services Pty Ltd [2010] FCA 1321. A flat hourly rate was paid to the employee under a contract which provided: The rate of pay is all inclusive and takes into account all responsibilities, disabilities, allowances... and includes payment for all hours necessary to undertake your rostered duties, and as a casual employee, a loading in lieu of paid leave entitlements. The rate includes compensation for any necessary shift, public holiday and weekend work. 86. The Workplace Relations Act provided in s 173 that a term in a workplace agreement or a contract has no effect to the extent to which it purports to exclude the Australian Fair Pay and Conditions Standard [AFPCS] or any part of it. 87. Barker J held at [62]-[69] as follows: 62. Mr Williams, however, seeks to emphasise the following framework of the WR Act in relation to leave accrual. Section 232 entitled an employee to accrue a period of annual leave during his or her employment. Section 236 entitled the employee to take a period of annual leave, if authorised, and prohibited the employer from unreasonably refusing leave. Section 235(2) arose only if an employee had a period of accrued leave when the employment ended and entitled the employee to payment in that event. 63. The WR Act therefore did not permit the payment of an amount of money in lieu of a period of time off work on pay. Accordingly, a provision which seeks to substitute a payment in place of actual leave excludes that entitlement. Mr Williams submits that this is made clear by s 233 which permitted, subject to strict limitations, the cashing out of annual leave. An employee could forego a period of annual leave if he or she elected in writing to do so. A workplace agreement applying to the employment permitted an employee to forego annual leave. The employee was then entitled to pay in lieu of the annual leave of at least his or her basic periodic rate of pay for the period foregone and the maximum amount of leave foregone was two weeks in any 12 month period. Those restrictions would be for no purpose if, consistent with the AFPCS, an employer could simply nominate a rate of pay said to include payment and wherewithal paid annual leave. 64. Accordingly, Mr Williams submits that s 173 renders as having "no effect" any provision to the extent that it purports to exclude any part of the AFPCS. The section does not require that a contract that expressly seeks to exclude the AFPCS or even be intended to have that effect, although in this case the intention to exclude is clear. The ultimate question is whether the contractual provision is inconsistent with the statute. 65. I accept the respondent's submissions. 66. In my view, there is a real inconsistency between the contractual term and the entitlement that s 173 seeks to preserve. I accept the framework of the scheme of the WR Act provisions contended for on behalf of Mr Williams. Section 173 reflects a parliamentary intention that a person cannot, by one means or the other, contract out of their entitlement to be paid out annual leave and other leave entitlements at the end of a employment period, save for the particular provisions allowing for the sacrifice of annual leave. 67. In any event, as the Federal Magistrate found, the Contract does not attempt to make any particular allocation between different types of leave, which it contends have been provided for in advance. It simply asserts the hourly rate is inclusive. In doing so it simply purports to justify the payment of a more generous hourly rate by asserting it is inclusive of any of the nominated benefits. This is a plain attempt to contract out of the payment of those benefits without regard to whether or not they are actually payable at the time of payment of the hourly rate. 68. The intent of the statute is that there will be entitlements in accordance with the AFPCS. If it were open to an employer to make a contract of employment that included terms such as that the subject of consideration here, such a process could no doubt have a real impact on bargaining rights. While it may be correct to say that some attempt has been made in the contract here to pay an additional sum allocated to potential leave entitlements, the effect of such a contractual provision is, in fact, to exclude an entitlement to be paid annual leave and other forms of leave under the Act at the termination of the employment. In those circumstances, s 173 of the WR Act applies to render such a contractual provision of no effect. 69. For that reason, in my view, the Federal Magistrate was correct in the decision he came to and no error is revealed. 88. Barker J was dealing with several appeals from the Federal Magistrates Court. In the appeal to which those paragraphs relate, Mr Williams was the respondent. 89. It is not clear to me that any of the findings made by Barker J which I have set out in [87] is inconsistent with the remarks I have made about offsetting in these reasons. In particular, his Honour does not appear to suggest that, if any amount could be identified as a payment in advance of any particular award entitlement, the employee was entitled to be paid that amount again. Any assertion to that effect would in any event be inconsistent with the Full Court decisions to which I have referred in [84]. 90. In the first instance decision from which an appeal was brought to Barker J, reported as Williams v MacMahon Mining Services Pty Ltd (No.2) [2009] FMCA 763, the Federal Magistrate held at [87]-[89] that the provisions of the service contract could not be accurately quantified, that it was a term of no effect because of s 173 of the Workplace Relations Act and that the particular entitlement which was in issue, that is, annual leave, could not be singled out from the description of the loading involved. It seems to me that the same comment as I have made about Barker J's judgment in [89] also applies to the reasoning of the Federal Magistrate at first instance. That is, if the Federal Magistrate held that if any amount in the service agreement could be identified as a payment in advance of any particular award entitlement, the employee was entitled to be paid again, then such a holding would be inconsistent with the Full Court decisions to which I have referred in [84]. 91. At the further hearing which took place in these proceedings after I had prepared a draft of certain parts of these reasons, reference was made to the decision of the Full Court of the Federal Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131. I do not believe that anything said in that decision requires any amendment to these reasons. It is true that a provision for annual leave in an award may have more than a monetary purpose, but what is critical under s 19 of the Fair Entitlements Guarantee Act is whether the amount of a monetary entitlement has been paid. 54 The Tribunal then concluded that the reviewable decision should be set aside and that the matter should be remitted to the Secretary for reconsideration in light of the Tribunal's reasons. However, as I have indicated at [52] above, the Tribunal held that the need for reconsideration arose as a result of the Secretary's incorrect treatment of "severance pay" as referred to in clause 3.3 of the letter agreement, and not as a result of the Tribunal's acceptance of the applicant's principal arguments relating to whether or not payments of the casual loading could be attributable to the relevant entitlements.

The grounds of appeal 55 By his notice of appeal, the applicant advances three questions of law - 1. If, contrary to the provisions of the Fair Work Act 2009 (FW Act) and/or the industrial instrument applying to the applicant's employment, the applicant's contract of employment with the respondent erroneously purported to designate the applicant as a casual employee, and further provided for payment of a "casual loading" purporting to compensate for various paid leave entitlements, whether the basic amounts of any of the applicant's entitlements in s 19(1)(a) of the FEG Act, may be reduced pursuant to s 19(1)(b), 19(2) and 19(3) of the FEG Act. 2. Alternatively, if the applicant's contract of employment with his former employer provided for payment in advance, or cashing out, of the applicant's entitlements contrary to the National Employment Standards (NES) provisions of the FW Act and/or the industrial instrument made under the FW Act, whether the basic amount of the applicant's annual leave entitlement, calculated in accordance with ss 6(2), (4) and (5) and s 19(1)(a) of the FEG Act, may be reduced pursuant to s 19(1)(b), 19(2) and 19(3) of the FEG Act on the basis that payment of some or all of the entitlement has already occurred. 3. Further in the alternative, if the applicant's contract of employment with his former employer provided for a casual employment loading that included some of the applicant's employment entitlements but provided that the casual loading was an undissected percentage of an unidentified base rate, and was part of an undissected hourly rate which also included an unspecified "further loading" said to compensate for "other loadings, penalty rates and allowances", whether the basic amount for that person for any of the applicant's entitlements in s 19(1)(a) of the FEG Act may be reduced pursuant to ss 19(1)(b), 19(2) and 19(3) of the FEG Act. 56 The applicant relied on the following nine grounds of appeal, which in the case of the ninth ground, incorporated several sub-grounds - 1. The Black Coal Mining Award 2010 (Award) was an instrument made under the FW Act. 2. The FW Act and the Award was each a "governing instrument" for the purposes of calculating employment entitlements of the applicant under the FEG Act. 3. The contract of employment of the applicant with his former employer purported to provide that the appellant was a casual employee and that he was paid an hourly rate that included a casual loading and a further loading that included some of the applicant's employment entitlements but provided that the casual loading was an undissected percentage of an unidentified base rate, and was part of an undissected hourly rate which also included an unspecified "further loading" said to compensate for "other loadings, penalty rates and allowances". 4. In so far as the applicant's contract of employment designated him as a casual employee, the decision found, correctly, that it was contrary to the Award and therefore contrary to the FW Act. 5. The decision found, correctly, that the applicant was employed at all relevant times as a permanent employee. 6. Payment to the applicant of an amount for annual leave prior to his termination without annual leave being taken in reliance on the contract of employment, was contrary to the Award and the NES provisions in Div 6 of Pt 2-2 of the FW Act. 7. Cashing out of annual leave entitlements was restricted by ss 92 and 94 of the FW Act and the Decision correctly found that purported periodic payments to the applicant of a loading in lieu of annual leave entitlements did not conform with those legislative provisions. 8. Payment in lieu of notice and redundancy pay entitlements only arise under the Award, and Div 6 [sic] of Pt 2-2 of the FW Act, at the time of termination of an employee. 9. The decision erred in law in concluding that there was a basis for the reduction of the basic amounts in s 19(1)(a) of the FEG Act pursuant to ss 19(1)(b), 19(2) and 19(3) of the FEG Act because: (i) In so far as the applicant's contract of employment provided for employment to be on a casual basis, it was void and/or inoperative on the basis that it was unlawful and/or against public policy; and/or (ii) In so far as the applicant's contract of employment provided for payment in advance of termination of unused annual leave and/or payment in lieu of notice and/or redundancy pay, it was void and/or inoperative on the basis that it was unlawful and/or against public policy; and/or (iii) The applicant could not consent, as a precondition to there being a set off, to his employment being on a casual basis, his rate of pay including a loading based on casual employment and/or to payment in advance of termination of unused annual leave and/or payment in lieu of notice and/or redundancy pay; and/or (iv) It was not possible to accurately quantify the amount that the contract of employment attributed to any particular employment entitlement included in the casual employment loading because the rate of pay in the contract of employment did not attribute any amount to any particular employment entitlement and also included a further loading; and/or (v) The applicant's contract of employment, insofar as it purported to include in the hourly rate payable to the applicant a "casual loading of 25%" and "other loading", was void for uncertainty.

The parties' submissions 57 In addition to the argument presented on behalf of the parties at the hearing, the applicant filed three sets of written submissions: the primary submissions; submissions in reply; and submissions addressing the decision of the Full Court in WorkPac Pty Ltd v Rossato [2020] FCAFC 84; 378 ALR 585 (WorkPac v Rossato), which was decided after the hearing of this application, and which the parties were given leave to address. The respondent filed submissions in response to the applicant's primary submissions, and in response to the applicant's submissions addressing WorkPac v Rossato.

The applicant's submissions 58 Counsel for the applicant submitted that the primary issues were threefold - (1) First, whether there can be any reduction of the applicant's entitlements under the FEG Act as a result of the provision in the letter agreement for the payment of a casual loading. (2) Second, and in the alternative, it was submitted that an issue arose as to whether there could be any reduction of the applicant's entitlement to annual leave as a result of the term of the letter agreement providing for the payment of a casual loading prior to termination. (3) Third, and in the further alternative, it was submitted that an issue arose as to whether there can be any reduction to the applicant's entitlements as a result of the term of the letter agreement providing for the payment of the loadings in circumstances where, it was submitted, the casual loading was an undissected percentage of an unidentified base rate that was part of an undissected hourly rate which also included an unspecified "further loading" said to compensate for "other loadings, penalty rates and allowances". 59 The applicant advanced the following arguments. The applicant submitted that insofar as the letter agreement provided for his employment to be on a casual basis and excluded award and statutory entitlements, it was "void and/or inoperative on the basis that it was unlawful and/or against public policy". The applicant relied on the decision of Barker J in Williams v MacMahon, to which I referred at [50] above and to which the Tribunal also referred, which considered the effect of s 173 of the Workplace Relations Act upon a contractual term that provided for an all-inclusive flat hourly rate of pay of $40 per hour. In this regard, reference should be made to the reasons of Barker J at [66]-[68], which the Tribunal extracted in the passages which I have set out under [53] above. 60 The applicant relied on what Barker J stated at [66] and submitted that although s 173 of the Workplace Relations Act was not replicated in the Fair Work Act, the position is the same in relation to the relationship between contracts of employment and the National Employment Standards. The applicant relied on a passage at [207] of the explanatory memorandum to the Fair Work Bill 2008 (Cth), which stated - 207. No specific rule is provided about the relationship between the NES and contracts of employment. That relationship is governed by well established principles (e.g., a term in the contract of employment that is less favourable than a statutory entitlement is not effective) and does not require additional legislative elaboration. 61 The applicant also relied on what Barker J stated at [67] to support a submission that the 25% loading could not be attributable to the relevant entitlements because the loading was the consideration for excluding those entitlements. In written submissions that were filed with leave after the decision of the Full Court in WorkPac v Rossato, the applicant relied on the reasons of the members of the Court at [225], [910], [917], and [1020], and the reasons of Doyle CJ in TransAdelaide v Leddy (No 2) (1998) 71 SASR 413, in further support of that submission. The applicant submitted that if there was no close correlation between a loading and the entitlements that the letter agreement purported to exclude, then it followed by parity of reasoning that the loading was not attributable to payments on account of those entitlements. 62 The applicant referred to the principles under which a contract is void, or unenforceable on the ground of illegality that were referred to in Equuscorp Pty Ltd v Haxton [2012] HCA 7; 246 CLR 498 at [23], and submitted that the letter agreement contravened the Award because it purported to provide for casual employment, which in the case of the applicant was not permitted under the Award. The applicant submitted that for the purposes of the reduction of the basic amounts under s 19(2) of the FEG Act, an amount cannot be attributable to an entitlement if it was paid under an inoperative provision. It was submitted that it followed that in reducing the basic amounts by reference to the casual loading, the Tribunal had indirectly enforced the provisions of the letter agreement relating to casual employment that were in contravention of the Fair Work Act. 63 The applicant submitted in the alternative that the limitations on the cashing out of annual leave by s 92 and s 94 of the Fair Work Act had the consequence that there could be no reduction of the applicant's entitlement to annual leave by reference to the casual loading. The applicant pointed to s 87 and s 88 of the Fair Work Act which provided for leave with pay, and relied on statements in the reasons of the members of the Full Court in WorkPac v Rossato at [225]-[232], [913], [916] and [1021]. The applicant submitted that the letter agreement purported to be an agreement to forego paid leave. The applicant submitted that if a right of "set-off" was allowed, then a right to take annual leave would effectively be replaced by payment in lieu of annual leave, and that would also have the effect of excluding the right to accrue annual leave, and to be paid the value of accrued annual leave upon termination. 64 The applicant further submitted that it was not possible to quantify the amount that the letter agreement attributed to any particular entitlement that was represented by the casual loading. The applicant submitted that there were similarities in this respect between the current case and CEPU v CJ Manfield and Williams v MacMahon. The submission was put at two levels. First, it was submitted that it was not possible to ascertain the "base rate" referred to in clause 3.1, and second, it was submitted that within the 25% loading it was not possible to identify what amounts were attributable to the different types of entitlements that the letter agreement purported to exclude. It was submitted that the Tribunal was in error in finding that the base rate referred to in clause 3.1 of the letter agreement was the ordinary hourly rate for a full-time mineworker employee under the Award. As it was not possible to quantify any amounts that were attributable to the applicant's entitlements, it was submitted that there were no amounts that were capable of operating in reduction of the advance due to the applicant, as worked out under s 19 of the FEG Act. 65 Alternatively, the applicant submitted that insofar as the letter agreement purported to include in the hourly rate payable to the applicant a "casual loading of 25%" and "further loading", it was void for uncertainty, although it was also submitted that the applicant did not have to go this far: it was sufficient that there was an inability to calculate the amounts said to be attributable to the entitlements the subject of s 19 of the FEG Act. 66 The applicant submitted that "the common law set-off principles" were not engaged, because there was no close correlation between the payment of a "casual loading" prior to termination, and the applicant's entitlements to accrued annual leave, payment in lieu of notice, and redundancy pay, citing Poletti v Ecob (No 2) [1989] FCA 779; 31 IR 321 (Poletti (No 2)), and Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99; 240 FCR 578 (Linkhill). 67 Finally, the applicant submitted in reliance on WorkPac v Rossato at [794] that clause 3.4 of the letter agreement was ineffective because the parties could not lawfully contract on that basis. Relevantly, WorkPac v Rossato at [794] cites Construction, Forestry, Mining and Energy Union v Jeld-Wen Glass Australia Pty Ltd [2012] FCA 45; 213 FCR 549 (Jeld-Wen Glass) at [18]-[21] (Gray J).

The respondent's submissions 68 The respondent accepted that several provisions of the letter agreement under which the casual loading was paid were inoperative. However, the respondent's submissions invited a different focus of attention, which was to look at the characterisation of the payments by reference to the text of s 19(2) of the FEG Act and to enquire whether the payments were "attributable to" the entitlements, rather than to examine whether they were made pursuant to any lawful, or enforceable contractual obligation. Furthermore, the respondent submitted that prior or contemporaneous attribution was not required for a payment to be attributable to an entitlement for the purposes of s 19(2) of the FEG Act. 69 As to the meaning of the word "attributable", the respondent cited the speech of Lord Reid in Central Asbestos Co Ltd v Dodd [1973] AC 518 at 533, where his Lordship stated in the context of construing the word "attributable" in a limitation statute - ["Attributable"] means capable of being attributed. "Attribute" has a number of cognate meanings; you can attribute a quality to a person or thing, you can attribute a product to a source or author, or you can attribute an effect to a cause. The essential element is connection of some kind. 70 The respondent relied on the citation of the above passage by McDougall J at first instance in Centennial Mandalong v Delta Electricity [2013] NSWSC 1505 at [63]. An appeal from that decision was dismissed: Delta Electricity v Centennial Mandalong Pty Ltd [2014] NSWCA 178. 71 The respondent submitted that in the context of s 19(2) of the FEG Act, in order for a payment made to an employee to be "attributable to" an employment entitlement, it must have the quality of being connected with, or referable to, the employment entitlement. The respondent submitted that one evident purpose of the FEG Act was to avoid double recovery where payment is received from other sources, and that this purpose would be hindered if the casual loading was not taken into account in reduction of the basic amount pursuant to s 19(2) of the Act. It was submitted that there must be sufficient connection between the amounts paid to the employee and the employment entitlements in issue to achieve the objective of s 19(2) of the FEG Act, being to avoid the Commonwealth paying amounts for employee entitlements which have already been paid from other sources. 72 The respondent submitted that s 19(2) of the FEG Act does not impose any restriction upon the identity of the person who makes the payment to the employee, the time at which the payment must be made, or the manner in which it is paid, whether by way of lump sum or instalment. Nor, it was submitted, does s 19 of the FEG Act contain any stipulation that amounts must be paid strictly in accordance with the procedures set out in the National Employment Standards, an Award, or any other statutory or contractual obligation in order to be characterised as being "attributable to the entitlement". The respondent submitted that the purpose of the provision is practical, being concerned with payments in fact, thus avoiding paying out taxpayers' funds where, and to the extent that, the justifying imperative for payment does not exist because the employee is not in fact out of pocket, regardless of how, why or when payment is received. In this respect, the respondent sought to distinguish WorkPac v Rossato on the ground that it was not concerned with attribution in fact for the purposes of s 19 of the FEG Act, and on the ground that the facts were materially distinguishable. In particular, the respondent pointed to the fact that there was no provision for any express set-off in the contracts of employment that were under consideration in WorkPac v Rossato. 73 It was submitted that the casual loading was intended to discharge the employer's obligations in respect of the entitlements, and in this respect the respondent relied on clause 3.4 of the letter agreement. The respondent sought to distinguish this case from WorkPac v Rossato on the further ground that the contracts in issue in WorkPac v Rossato provided for the payment of loadings "in lieu" of the relevant entitlements. It was submitted that the casual loading of 25% per hour that was paid to the applicant in the present case was therefore directly in connection with, or referrable to, the discharge of the employer's obligations with respect to the payment of paid annual leave and severance pay under the Award. 74 In response to the applicant's submissions that relied on the ineffectiveness of the contractual terms in the letter agreement, the respondent submitted that any unenforceability of those terms did not engage with the limitation in s 19 of the FEG Act itself. The respondent also relied on authorities such as Australian and New Zealand Banking Group Ltd v Finance Sector Union of Australia [2001] FCA 1785; 111 IR 227 (ANZ v FSU) (Black CJ, Wilcox and von Doussa JJ) and Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400 (Rares J) to support a submission that what was relevant was the purpose of the payments rather than the enforceability of any contractual provision pursuant to which the payments are made. For this reason, it was submitted that it is permissible to construe s 19(2) of the FEG Act to take account of payments that may have been made in a manner which did not conform with the Fair Work Act or industrial instruments. 75 The respondent pointed to the Tribunal's findings at [14]-[15] to submit that to the extent that the letter agreement contravened the Fair Work Act, including the prohibition in s 92 upon the cashing out of annual leave, the contravention of the Act did not amount to criminality, and did not render the letter agreement void. The respondent also submitted that attribution of the casual loading towards annual leave entitlements under s 19(2) of the FEG Act does not permit the unauthorised cashing out of annual leave entitlements, which continues to be expressly prohibited by s 92 of the Fair Work Act, but that such attribution prevents an employee from being paid twice for the same employment entitlement. 76 The respondent submitted that the casual loading is capable of being apportioned amongst the entitlements to which it relates, and supported the methodology referred to in the Tribunal's reasons. The respondent explained the Tribunal's methodology as follows - (1) calculate the total amount of the entitlements payable to the applicant which are referrable to the casual loading - these consist of annual leave, other forms of paid leave and severance pay (Amount A); (2) calculate the total amount of the casual loading by multiplying (the base rate for each year) × 25% × (hours worked per week) × (number of weeks worked in financial year) (Amount B); and (3) deduct Amount B from Amount A. 77 The respondent submitted that the base rate was capable of being ascertained, and was to be construed as a reference to the base rate used in the Award from time to time, in circumstances where the Award was referred to in clause 3.3 of the letter agreement. It was submitted that the process of attribution had both quantitative and qualitative elements to it. It was submitted that the present case was distinguishable from Williams v MacMahon because the casual loading was quantified at a particular percentage, being 25% as specified in clause 3.1 of the letter agreement. 78 In oral submissions, senior counsel for the respondent submitted that the casual loading was only attributable to two employment entitlements for which an advance was available under the FEG Act. First, the casual loading was said to be attributable to the applicant's annual leave employment entitlement, within the meaning of s 6(2) of the FEG Act. Second, the casual loading was said to be attributable to that part of the applicant's redundancy pay employment entitlement, within the meaning of s 6(5) of the FEG Act, that arose from the applicant's entitlement to severance pay under the Award. The respondent conceded that the "severance pay" component of the casual loading referred to in clause 3.3 of the letter agreement was limited to the applicant's entitlement to "severance pay" under clause 14.3 of the Award, and did not extent to payment in lieu of notice or retrenchment pay under clause 14.4 of the Award, as had been argued before the Tribunal. The respondent did not seek to establish that any payment was attributable to the applicant's entitlement to retrenchment pay under clause 14.4 of the Award, which was a "redundancy pay entitlement" within the meaning of s 6(5) of the FEG Act, or to his entitlement to payment in lieu of notice, within the meaning of the "payment in lieu of notice entitlement" defined in s 6(4) of the FEG Act. 79 Also in oral submissions, senior counsel for the respondent put an alternative submission as to how to calculate the reduction of the applicant's employment entitlements under s 19(2) of the FEG Act to take account of the attribution of the relevant components of the casual loading, namely the component for paid annual leave and the component for "severance pay…under the Award", but not the other components that were not attributable to employment entitlements under the FEG Act, namely the components for paid personal/carer's leave, paid compassionate leave and paid community service leave. That calculation involved the following steps - (1) calculate the whole of the casual loading paid to the applicant during the relevant period of employment; (2) calculate the amount of personal/carer's leave that had accrued, and remove that from the pool; (3) make an allowance for compassionate leave of two days per year (cf, Fair Work Act, s 105(2), but see s 105(3)); (4) make an allowance for jury service of, say, two days per year; (5) the balance is then attributable to annual leave and severance pay, and should be reduced from the advance payable to the applicant pursuant to s 19(2) of the Act. 80 The respondent accepted that, as the Tribunal had ordered that the matter be remitted for reconsideration in light of the Tribunal's reasons, then any material error of law in the Tribunal's reasons was amenable to review on appeal.

Consideration 81 Standing back, the notice of appeal makes the following challenges to the Tribunal's decision based on alleged legal error - (1) to the extent that the letter agreement provided for employment to be on a casual basis, and for payment of entitlements in advance by way of a casual loading, it was void or inoperative on the ground that it was ineffective, or unlawful, or against public policy; (2) it followed that there was legal error in attributing any part of the casual loading to the entitlements in respect of which an advance was payable under the FEG Act; (3) alternatively, it was not possible to quantify the amount that the contract of employment attributed to any particular employment entitlement included in the casual loading because the base rate of pay was unknown, the casual loading in the contract of employment did not attribute any amount to any particular employment entitlement, and the hourly rate also included a further loading which was not quantified.

Section 19(2) of the FEG Act 82 I accept the submission of the respondent that the starting point is the text, context, and purpose of the FEG Act. I also accept the submissions of the respondent to the extent that the primary focus is on the phrase "attributable to" in s 19(2)(a) of the Act, rather than whether payments made, in this case by the employer, operated to discharge specific contractual or statutory obligations. Amongst other reasons, that is because s 19(2) of the FEG Act is not concerned with the identity of the payer, and therefore is necessarily not confined to payments made in discharge of a legal obligation. Section 19(2)(b) refers to the total of amounts "paid by anyone". These express words need no reinforcement, but the statutory right of restitution effected by s 34 of the FEG Act is consistent, because it contemplates payment of amounts for an employment entitlement by "someone" other than the Commonwealth, the liquidator or bankruptcy trustee of the employer, or the payee. However, the acceptance of these submissions does not render the identity of the payer, and the circumstances of payment, immaterial in determining whether a payment is "attributable to" a relevant entitlement. 83 The meaning of the word "attributable", where used in legislation, is sensitive to context. In Central Asbestos Co Ltd v Dodd [1973] AC 518, which was cited by the respondent, the House of Lords considered provisions of the Limitation Act 1963 (UK) that Lord Reid described at 529 as having "a strong claim to the distinction of being the worst drafted Act on the statute book". The effect of the Limitation Act was to enable a plaintiff, with leave of the court, to bring a proceeding for damages for personal injuries outside the limitation period where material facts had been outside the knowledge of the plaintiff. The term "material facts" was defined to include the fact that personal injuries resulted from a breach of duty, and further the fact that, and the extent to which, the personal injuries were "attributable to" the breach constituting the cause of action. The speeches of the members of the House must be appreciated having regard to the legislation in question. In that context, Lord Reid at 533 equated knowledge that the plaintiff's injuries were attributable to the defendant's negligence with knowledge that the plaintiff had a legal remedy or cause of action against the defendant. Lord Morris at 539 considered that attribution was a mental process that was different from causation. His Lordship likened attribution to ascribing the injuries to the defendant's negligence. The other member of the majority, Lord Pearson, referred at 543 to dictionary definitions of "attributable" and stated that "attributable to" referred to causation. The Oxford English Dictionary (1888) definition to which Lord Pearson referred was cited as follows - The Oxford English Dictionary (1888) vol. I, p. 556 says that "Attributable " means "Capable of being attributed or ascribed, especially as owing to, produced by," and, as one of the meanings of the verb "Attribute," gives "To ascribe, impute, or refer, as an effect to the cause; to reckon as a consequence of." 84 The second edition of the Oxford English Dictionary (1989) (OED) defines "attributable" as - Capable of being attributed or ascribed, esp. as owing to, produced by. 85 The verb "attribute" is defined by the OED as including as a mental act - 3. To ascribe to as belonging or proper; to consider or view as belonging or appropriate to. … 5. To ascribe as a quality or 'attribute' belonging, proper, or inherent. (To attribute wisdom to one = to hold that he is wise.) 86 The noun "attribute" is defined by the OED as including - 1. A quality or character ascribed to any person or thing, one which is in common estimation or usage assigned to him; hence, sometimes, an epithet or appellation in which the quality is ascribed. 87 In Centennial Mandalong v Delta Electricity [2013] NSWSC 1505, McDougall J was concerned with a dispute relating to the construction of a clause in a contract concerning the calculation of the price per tonne of coal, a component of which was royalties and levies imposed on or payable by the supplier by governments "to the extent attributable to coal sold by the Supplier and purchased by the Purchaser under this agreement". A dispute arose as to whether charges under the Clean Energy Act 2011 (Cth) and related legislation were attributable to the coal that was supplied under the agreement. McDougall J referred to dictionary definitions, and to the decision of the House of Lords in Central Asbestos Co Ltd v Dodd, and stated at [61] - It seems to me to be clear, both from the various dictionary definitions to which I have referred and from the authorities relied upon by counsel, that the relationship between two things, that one be "attributable" to the other, requires some form of connection between them. However, an understanding of the nature of the connection requires attention to the context in which the process of attribution occurs and, specifically, to why it is that one thing is required to be attributable to another. 88 And later at [69], McDougall J stated that "the answer to the question of whether one thing is attributable to another must depend on the reason why the question is asked." On the facts of the case, his Honour held at [89]-[90] that the charges that were levied under the legislation were an inevitable and unavoidable incident of coal production, and that there was an obvious link between coal production and the sale of coal such that the charges were attributable to the sale of that which was produced. This conclusion was substantially affirmed by the Court of Appeal, where Ward JA, with whom McColl and Barrett JJA agreed, stated that "[t]here is, in my opinion, sufficient connection to satisfy the requirement of attributability if the charge in question is referable to a necessary incident of the production of the Delta coal": Delta Electricity v Centennial Mandalong Pty Ltd [2014] NSWCA 178 at [114]. 89 There are other authorities where context has led courts to construe the phrase "attributable to" as denoting some causal connection, even if not the sole, dominant, direct, or proximate cause: Walsh v Rother District Council [1978] 1 All ER 510 at 514 (Donaldson J), affirmed on appeal at [1978] 3 All ER 881, and cited in Commissioner of Taxation v Sun Alliance Investments Pty Ltd (in liq) [2005] HCA 70; 225 CLR 488 at [80] (Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ); Repatriation Commission v Law (1980) 31 ALR 140 at 151 (Bowen CJ, Brennan and Lockhart JJ). 90 In the present case, the phrase "attributable to" in s 19(2) of the FEG Act denotes at least a link such that the payments to which it refers may be ascribed to the entitlements that are the subject of the calculations. What is involved is a judgment, within the bounds of the legislation, about the characterisation of amounts that have been paid. Sometimes, that judgment may be contestable on the facts, but s 15 of the Act imposes a duty on the respondent to make it. The judgment is to be made consistently with the terms and objects of the FEG Act, and may be informed by a range of surrounding circumstances. 91 The present case does not raise the question of attribution of payments made by third parties, which s 19(2) seeks to bring within its terms. The only payments to the applicant that are relied on by the respondent are those that were made by the employer during the term of the letter agreement. Therefore, of key relevance in determining whether the payments relied on are capable of being attributable to the entitlements in respect of which an advance is payable under the FEG Act are the terms of the instruments that governed the employment relationship, being the letter agreement, the Award, and the National Employment Standards in the Fair Work Act.

The operation of the letter agreement 92 As I have detailed above, the letter agreement designated the applicant's employment as casual employment, however under the Award the applicant could not be engaged as a casual employee. Clauses 3.1 to 3.4 of the letter agreement provided for the applicant's rate of pay, which was expressed to include a casual loading and a further loading. Those clauses should be construed together, and with the other terms of the agreement, against necessary background context which includes the Award. 93 The primary terms of the letter agreement sought to exclude statutory entitlements to annual leave, other forms of paid leave to which the applicant was entitled under the National Employment Standards and the Award, and monies payable upon termination, such as pay in lieu of notice, redundancy pay, and severance pay. So much is clear from clause 3.3, the first sentence of clause 3.4, and clauses 6.1, 6.3, 7.1, and 7.2. However, as the Tribunal correctly held at [42], these provisions of the letter agreement were ineffective to exclude the statutory entitlements. That conclusion does not depend upon characterising the provisions of the letter agreement as being void for illegality, or as being contrary to public policy. Rather, the National Employment Standards and the Award have independent statutory force, non-compliance with which rendered the employer liable to a penalty. The terms of the letter agreement were not capable as a matter of law of modifying the employer's statutory obligations. That is because of the hierarchy of terms and conditions of employment referred to in WorkPac v Skene cited at [13] above, which has the National Employment Standards at the apex, beneath which are the terms of the Award, and then the contractual terms. To emphasise and elaborate on what I said at [9] above, contractual terms of employment may provide for additional benefits, but cannot be effective to derogate from the statute and the benefits that it confers, whether under the National Employment Standards, or under the Award: Fair Work Act, ss 44(1), 45, 61(1); Byrne v Australian Airlines Ltd [1995] HCA 24; 185 CLR 410 at 420-1 (Brennan CJ, Dawson and Toohey JJ), citing Josephson v Walker [1914] HCA 68; 18 CLR 691 at 700 (Isaacs J) and Kilminster v Sun Newspapers Ltd [1931] HCA 37; 46 CLR 284. See also, WorkPac v Rossato at [956]. The absence in the Fair Work Act of a provision that directly corresponds to s 173 of the Workplace Relations Act (see [49] above) is immaterial to this outcome. The combined operation of s 44(1) and s 45 of the Fair Work Act has the necessary consequence that no term of a contract of employment can be effective to exclude the statutory requirements for compliance with the National Employment Standards and a modern award. 94 The decision of Gray J in Jeld-Wen Glass, on which the applicant relied, illustrates the potential interaction between the National Employment Standards and instruments governing the employment relationship that are lower in the hierarchy. In Jeld-Wen Glass, at the time of the commencement of the Fair Work Act on 1 January 2010 there remained in operation a statutory individual employment agreement which provided specifically for an employee to receive an extra 1.5 hours of pay each week which was in lieu of any entitlement to any payment for 10 days of sick leave to which the employee was entitled. Gray J held that the effect of the relevant clause of the agreement was to provide that paid personal/carer's leave was to be cashed out. His Honour held that the provision was therefore unenforceable pursuant to s 61(1) of the Fair Work Act. This had the consequence that the employee had no entitlement to receive any monetary payment in substitution for personal/carer's leave, and the employer had no obligation to cash it out. However, his Honour held there had been no contravention of the National Employment Standards by the employer because the employee had not availed himself of any entitlement to personal/carer's leave, and therefore no occasion had arisen for the employer to make any payment. 95 In the present case, the employer's agreement to pay wages at the hourly rate specified in the letter agreement was ineffective to discharge its statutory liability to give the applicant any form of paid leave, such as annual leave and personal/carer's leave. The reasons for this conclusion include the nature of the leave entitlement, which is a composite entitlement to take leave as permitted by and in accordance with the National Employment Standards, and to be paid while on leave in accordance with s 323 of the Fair Work Act: see, WorkPac v Rossato at [226]-[228] (Bromberg J), [916] (White J), and [1012] (Wheelahan J). The purpose is augmented by the prohibitions on cashing out in s 92 and s 100 of the Fair Work Act. In WorkPac v Skene at [125] the Full Court referred to [378] of the explanatory memorandum to the Fair Work Bill 2008 (Cth), where the limitations on cashing out were said to be in "recognition of the importance of employees taking leave for the purposes of rest and recreation". In addition, the payment of wages at the hourly rate which was said by the letter agreement to incorporate loadings was not referrable to any leave actually taken, or accrued, or to any of the other benefits referred to that had actually accrued. Rather, clause 3.3 of the letter agreement provided that the payment of a casual loading of 25% was to compensate the applicant for benefits which the letter agreement purported to exclude. Thus, it was the absence of the benefits to which the loading was referrable and for which it purported to compensate: TransAdelaide v Leddy (No 2) (1998) 82 IR 391; WorkPac v Rossato at [917], [1020]. I do not accept the submission of the respondent that the present case is distinguishable from WorkPac v Rossato on the ground that the contracts in WorkPac v Rossato expressly provided for the payment of a loading "in lieu" of statutory entitlements. Although the letter agreement does not state expressly that the loadings were "in lieu" of statutory entitlements, that is the substance of clauses 3.1 to 3.3, 6.3, and 7.1 of the agreement. I shall return to consider clause 3.4. 96 As I noted earlier, the applicant relied on Equuscorp, and in combination with features of the Fair Work Act such as the prohibition on cashing out paid leave and the inability to have casual employment under the terms of the Award, submitted that the letter agreement was void for illegality, or void as being against public policy. Equuscorp concerned a claim for restitution. There were loan agreements that were entered into as part of an investment scheme in respect of which the promoter had failed to register a prospectus. This failure constituted an offence under s 170 of the applicable Companies Code, for which penalties of $20,000 or imprisonment for five years or both were prescribed. At [23], French CJ, Crennan and Kiefel JJ, citing Miller v Miller [2011] HCA 9; 242 CLR 446, identified three circumstances in which an agreement might be unenforceable on the ground of statutory illegality - (1) the making of the agreement or the doing of an act essential to its formation is expressly prohibited absolutely or conditionally by the statute; (2) the making of the agreement is impliedly prohibited by statute. A particular case of an implied prohibition arises where the agreement is to do an act the doing of which is prohibited by the statute; (3) where the agreement is not expressly or impliedly prohibited by a statute but is treated by the courts as unenforceable because it is a "contract associated with or in the furtherance of illegal purposes", citing Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd [1978] HCA 42; 139 CLR 410 at 432 per Jacobs J, and Nelson v Nelson [1995] HCA 25; 184 CLR 538 at 552 per Deane and Gummow JJ. 97 In relation to the third category of case, at [23] their Honours explained, citing Miller v Miller, that - [T]he court acts to uphold the policy of the law, which may make the agreement unenforceable. That policy does not impose the sanction of unenforceability on every agreement associated with or made in furtherance of illegal purposes. The court must discern from the scope and purpose of the relevant statute 'whether the legislative purpose will be fulfilled without regarding the contract or the trust as void and unenforceable'. 98 In Gnych v Polish Club Ltd [2015] HCA 23; 255 CLR 414 at [60], Gageler J referred to the tripartite classification in Equuscorp as being useful, but stated that "it is not a comprehensive description of agreements unenforceable for statutory illegality. To shoehorn a given agreement into one of its categories is to adopt an incomplete mode of analysis". 99 The applicant relied on the second and third categories of case referred to in Equuscorp as being applicable to the letter agreement. The applicant submitted that the letter agreement contravened the Award because it purported to provide for casual employment, which was not permitted under the Award in the case of the applicant. The applicant also submitted that for the purposes of the reduction of the basic amounts under s 19(2) of the FEG Act, an amount cannot be attributable to an entitlement if it was paid under an inoperative provision. It was submitted that it followed that in reducing the basic amounts by reference to the casual loading, the Tribunal had indirectly enforced the provisions of the letter agreement relating to casual employment that were in contravention of the Fair Work Act. 100 In Equuscorp, the loan agreements were held to be unenforceable, and the loan monies were held to be irrecoverable by way of restitution. French CJ, Crennan and Kiefel JJ held at [45] that the case before them was "a clear case in which the coherence of the law, and the avoidance of stultification of the statutory purpose by the common law, lead to the conclusion that [the lender] did not have a right to claim recovery of money advanced under the loan agreements as money had and received". Gummow and Bell JJ held at [111] that to permit recovery on the actions for money had and received would stultify the statutory policy evident in the relevant provisions of the Companies Code. 101 In any analysis of whether terms of a contract are unenforceable on the ground of illegality, or inconsistency with statute, it is necessary to identify the terms of the obligation, and the public policy or statutory provision or purpose with which it is alleged to collide, rather than fastening upon labelling the contract as void, or illegal as the first step. In Equuscorp, Gummow and Bell JJ at [94] referred with approval to the following passage from the reasons for judgment of Windeyer J (dissenting) in Brooks v Burns Philp Trustee Co Ltd [1969] HCA 4; 121 CLR 432 at 458, which was also cited with approval in Hollis v Vabu Pty Ltd [2001] HCA 44; 207 CLR 21 at [37], in which Windeyer J cautioned against commencing with a label as a conclusion - The words used do not matter if the actual legal result they are used to express be not in doubt or debate. But it has always seemed to me likely to lead to error, in matters such as this, to adopt first one of the familiar legal adjectives - "illegal", "void", "unenforceable", "ineffectual", "nugatory" - and then having given an act a label, to deduce from that its results in law. That is to invert the order of inquiry, and by so doing to beg the question, and allow linguistics to determine legal rights. That need not happen if words be used, as Hobbes said that by wise men they should be, only as counters to reckon with; but reckoning becomes difficult if the values of counters are not constant. 102 In the present case, the letter agreement was not directed to any immoral or illegal object such that the agreement as a whole should be sterilised under general law principles on the grounds of public policy. As to inconsistency with statute, in Gnych v Polish Club Ltd at [36], French CJ, Kiefel, Keane and Nettle JJ stated that "the consequence of illegality is a matter of statutory construction whatever category of illegality is involved". I discern no implied legislative purpose in the Fair Work Act to invalidate the legal relationship of employment and all the contractual terms of employment because some of the terms do not mirror the statutory obligations under the Act. For this reason, I do not accept the applicant's case in the precise terms raised by ground 9(i) of the notice of appeal that the applicant's contract of employment was "void and/or inoperative" insofar as it provided for employment to be on a casual basis. Rather, the Fair Work Act, and in particular s 44(1) and s 45, deny operation to those terms of the letter agreement that would displace the employer's statutory obligations. Otherwise, the letter agreement, despite purporting to exclude many statutory entitlements, remained effective to create an employment relationship, and to supply some terms of the employment agreement, such as the applicant's agreement in clause 2.3 honestly and faithfully to serve the employer, and the applicant's obligations of confidence in clauses 10.1 to 10.3. The employer's promise to pay wages at the agreed rate was enforceable by the applicant as a contractual obligation that was concurrent with the employer's superior statutory obligations to pay various allowances in addition to wages, and to give the applicant paid leave. The superincumbent nature of the employer's statutory obligations had the consequence that the letter agreement was simply ineffective to displace the statutory obligations: cf, Gnych v Polish Club Ltd at [65] (Gageler J). That is the substance of ground 9(ii) of the applicant's notice of appeal. As Jeld-Wen Glass illustrates, the contravention of the statute may lie not in the making of the employment agreement, but in the employer's failure to comply with its statutory obligations to comply with the National Employment Standards and the Award, as and when the occasion for compliance arises. 103 In the case of cashing out annual leave and personal/carer's leave, the prohibitions on cashing out are found in s 92 and s 100 of the Fair Work Act, which I have set out under [16] and [19] above. Those sections are within Divisions 6 and 7 respectively of Part 2-2 of the Fair Work Act, and form part of the National Employment Standards: s 61(3). A contravention of those standards is proscribed by s 44(1), which is a civil remedy provision in respect of which a contravener is liable to a penalty: s 539(2), Item 1. 104 As to what constitutes cashing out, this was considered by Gray J in Jeld-Wen Glass. His Honour held at [18], in the context of s 100 of the Fair Work Act, that there was nothing to indicate that the phrases "cashed out" and "cashing out" have anything other than their ordinary meaning, which in that case corresponded with the dictionary meaning "to take in monetary form". His Honour stated that s 100 provides that paid personal/carer's leave must not be taken in monetary form, as distinct from in the form of leave, otherwise than in accordance with terms included in a compliant modern award or enterprise agreement. At [20], Gray J rejected an argument that the prohibition on cashing out applied only to entitlements that had accrued, and held that the prohibition applied equally to entitlements that had yet to accrue, stating, "[t]he mere fact that money was paid in advance would not render the payment any less a payment in substitution for the entitlement than if the payment were made after the entitlement had accrued". In my view, Gray J's reasoning in relation to s 100 applies equally to s 92 and the cashing out of annual leave. 105 Returning to s 19(2) of the FEG Act, as McDougall J remarked in Centennial Mandalong v Delta Electricity [2013] NSWSC 1505 at [69], the answer to the question whether one thing is attributable to another must depend on the reason for which the question is asked. In this case, the reason the question is asked is in order to give effect to the terms and purposes of the FEG Act, the main objects of which include for the Commonwealth to pay advances "on account of unpaid employment entitlements of former employees of employers in cases where the employers are insolvent or bankrupt": s 3(a). In this case a question arises as to whether upon termination of the applicant's employment the employer could have relied on the payments of wages made to the applicant, and upon clauses 3.1 to 3.4 of the letter agreement, to establish that it had discharged its statutory obligation to pay the relevant entitlements to the applicant, namely monies due upon termination on account of annual leave owed under clause 25.7 of the Award and s 90(2) of the Fair Work Act, and severance pay owed under clause 14.3 of the Award. That question needs to be asked because it informs the answer to the question raised by s 19(2) of the FEG Act, which is whether any person had paid amounts to the applicant that were attributable to the entitlements in respect of which an advance is payable. If the employer did not discharge its statutory obligation to pay the relevant statutory entitlements, then they remained unpaid by the employer to the applicant, and in this case, there is no question of payment from any other source being attributable to the applicant's entitlements.

Applying s 19(2) to the applicant's employment entitlements at issue 106 That leaves for consideration the application of s 19(2) of the FEG Act to the applicant's employment entitlements in issue. 107 As I have mentioned, there are two employment entitlements in issue in respect of which the respondent seeks to attribute the wages paid by the employer to the applicant to effect a reduction of the basic amount payable pursuant to s 19(2) of the Act. The first is the applicant's entitlement to annual leave, which was due upon termination pursuant to s 90(2) of the Fair Work Act, and which is an annual leave entitlement within the meaning of s 6(2) of the FEG Act. The second is the applicant's entitlement to a severance payment under clause 14.3 of the Award, which is a redundancy pay entitlement within the meaning of s 6(5) of the FEG Act. 108 The respondent does not seek to rely upon s 19(2) of the FEG Act to reduce the basic amount payable for the applicant's employment entitlement of payment in lieu of notice, or to reduce the basic amount payable for the redundancy pay employment entitlement to the extent that it relates to retrenchment pay owing pursuant to clause 14.4 of the Award. Clause 3.3 of the letter agreement, which is set out at [11] above, provided that the casual loading of 25% was inclusive of, inter alia, "severance pay", but made no express reference to the other entitlements of a like nature, such as payment in lieu of notice and retrenchment pay. As I have mentioned, clause 14.3 of the Award provided expressly for a severance payment, and was in the following terms - 14.3 Severance payment Except where clause 14.5 applies, when terminations occur due to redundancy the employees terminated are entitled to severance pay equal to one ordinary week's pay for each completed year of employment. 109 Counsel for the applicant submitted that the Tribunal had accepted the applicant's argument before the Tribunal that, of those entitlements, it was only the severance payment under clause 14.3 of the Award to which the casual loading was referrable. Counsel for the applicant pointed to the fact that no notice of contention had been filed. Counsel for the respondent accepted that the respondent had been unsuccessful before the Tribunal in arguing that payment in lieu of notice and retrenchment pay fell within the term "severance pay" in clause 3.3 of the letter agreement, and accepted that therefore no question of attribution arose, because clause 3.3 was the relevant basis of attribution on which the respondent relied.

Annual leave 110 During the term of the applicant's employment, the applicant accrued an entitlement to take a period of paid annual leave. For the reasons that I have given at [95] above, no part of the wages and loadings that the employer paid to the applicant was capable of discharging the applicant's statutory entitlement to paid leave. The first sentence of clause 3.4 of the letter agreement (see [11] above), which provided that the applicant agreed that the payment of the casual and over-award loadings fully discharged the employer's obligations, at least to the extent that it referred to annual leave, could be of no effect. Upon termination of the applicant's employment, the applicant had an accrued period of untaken paid annual leave. That is not in dispute, and in the respondent's decision under review the delegate calculated that the period of annual leave that had accrued and which was owing to the applicant at the time of termination was 783.469 hours. Importantly, s 90(2) of the Fair Work Act, which I have set out at [15] above, required the employer to pay to the applicant "the amount that would have been payable to [the applicant] had [the applicant] taken that period of leave". That amount was necessarily in addition to whatever amounts had been paid to the applicant as wages, which were said to incorporate the loadings. 111 For two reasons, the employer's statutory obligation to make the payment to the applicant under s 90(2) of the Fair Work Act upon termination could not be avoided or discharged by relying on the terms of the letter agreement, including the attempt at clause 3.4 of the letter agreement to apply the loaded wages against the amount payable under s 90(2). The first reason is that it would be contrary to the terms of s 90(2) itself, which requires payment of the amount that would have been payable had the applicant taken the leave: see, Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FCAFC 100; 231 FCR 298 at [42] (Tracey, Flick and Katzmann JJ). That entitlement was in addition to the wages that had been paid, including the loadings which I find were not capable of being applied to paid annual leave. The second reason relates to the prohibition on cashing out in s 92 of the Fair Work Act. To permit the employer to set-off the loadings that were said to be included in the wages against the amount due to the applicant under s 90(2) would be to give effect to an agreement to cash out the annual leave, and would give rise to a legally incoherent result. 112 For these reasons, there is no issue of double recovery in relation to the annual leave entitlement. Upon termination, the applicant had a statutory entitlement to be paid the amount that he would have been entitled to receive had he taken the annual leave that accrued. That statutory entitlement was in addition to the wages that had been paid. I therefore respectfully consider that the Tribunal was in error at [83] of its reasons in deploying the idea of double payment as a basis for rejecting the applicant's submissions "based upon cases decided under earlier legislation", which I take to be a reference to Williams v MacMahon and CEPU v CJ Manfield. While it is true that those cases were decided by reference to the relevant provisions of the Workplace Relations Act, and in particular s 173, for the reasons I have given at [93] above, the absence of a corresponding provision in the Fair Work Act is not material to my analysis that the terms of the letter agreement were ineffective to exclude the statutory entitlements under the Fair Work Act. 113 The reasons of Barker J in Williams v MacMahon at [67]-[68], which were set out by the Tribunal in the passages extracted under [53] above, lend support to the conclusion that the employer's payment of wages including the casual loading could not be effective to discharge the employer's statutory liability to pay the annual leave entitlement pursuant to s 90(2) of the Fair Work Act. Williams v MacMahon involved a similar issue, namely whether an employer's payment of an all-inclusive flat hourly rate could discharge an employee's entitlement to annual leave under the Workplace Relations Act, and elements of the reasoning can be adapted to the present circumstances. In this case, for the reasons I have given, the employer could not, at the time of the applicant's termination, rely on what was in effect an earlier attempt to pay an amount in lieu of annual leave by way of loaded wages in discharge of the separate and different statutory liability that arose under s 90(2). 114 The Tribunal, at [84] of its reasons (see [53] above), referred to the decisions of the Full Court in ANZ v FSU and Linkhill and stated that "offsetting" produced a result that was consistent with those cases. Both ANZ v FSU and Linkhill, together with other authorities including the decision of the Full Court in Poletti (No 2), were the subject of review by the Full Court in WorkPac v Rossato: see [221] (Bromberg J); [824]-[870] (White J); [986]-[1003] (Wheelahan J). Those cases concern the circumstances in which payments made under a contract of employment for a specific purpose may be treated as satisfying statutory or award obligations. They are instances of the application of general common law principles relating to the appropriation of payments made by a debtor to a creditor: see, Poletti v Ecob (No 2) at 333-334 (Keely, Ryan and Gray JJ); Linkhill at [53] (North and Bromberg JJ); WorkPac v Rossato at [256]-[257] (Bromberg J), [866]-[867] (White J), and [987]-[989] (Wheelahan J). In the seminal reasons of Sheldon J of the Industrial Commission of New South Wales in Ray v Radano [1967] AR (NSW) 471 at 478, his Honour framed the issue as being whether the payment made to the employee was "properly attributable" to the award entitlement. In ANZ v FSU, the Full Court held that a payment under a contract of employment may satisfy a statutory or award obligation where there is a "close correlation" between the contractual purpose and the statutory or award obligation, to which the Tribunal referred at [84] of its reasons. 115 In the case of the applicant's annual leave entitlement, for all the reasons that I have given above, the regular payment by the employer of wages was not capable of being properly attributable to the statutory entitlement to paid leave, or as having any correlation such that any part of the wages discharged the employer's statutory obligation to afford the applicant paid leave, and in consequence the annual leave entitlement that was payable under s 90(2) of the Fair Work Act. Accordingly, in the circumstances of this case, application of the principles referred to in ANZ v FSU, Linkhill, and more recently in WorkPac v Rossato, would not have resulted in the employer being able to appropriate any portion of the wages that were paid to the applicant in discharge of the obligation to make a payment to the applicant on account of annual leave upon termination. To the extent that the Tribunal's reasons at [83] and [90] assumed that in that event the applicant would be entitled to be paid twice, that assumption was incorrect, because the applicant's entitlements to wages and to paid annual leave were distinct, and the letter agreement was ineffective to appropriate any part of the wages to the annual leave entitlement, which I have concluded was an additional entitlement. 116 So in these circumstances, was it open to the Tribunal to treat wages, to the extent that they included loadings, as being attributable to the applicant's entitlement to a payment pursuant to s 90(2) of the Fair Work Act? The submissions advanced on behalf of the respondent are unpersuasive. Once it is recognised that the payments of wages by the employer do not have a sufficient connection with the statutory entitlement to a payment under s 90(2) to affect the employer's liability to make that payment upon termination, it is difficult to see how, for the purposes of s 19(2) the FEG Act, the wages paid by the employer are capable of being attributable to the entitlement. The respondent's submission that s 19(2) should be construed broadly and in a practical way does not overcome the difficulty for the respondent that the relevant object of the FEG Act is to provide for advances on account of unpaid employment entitlements in the event of the employer's insolvency. In relation to the annual leave entitlement, the effect of the respondent's submissions is to undermine that object of the FEG Act by reducing the applicant's entitlement to an advance by a process of dissection and attribution which the employer would not have been permitted to undertake to reduce its liability to pay that entitlement. As to another submission advanced by the respondent, being that the assistance provided by the FEG Act should be seen as constrained, the answer is that these constraints are found in the provisions of the Act to which I referred at [28] above, such as the limitations on the entitlements that may be the subject of advances, and in relation to wages, the limitations on monetary amounts. I do not consider that there is any implied object of parsimony in the FEG Act that should override the express object that there should be advances on account of unpaid entitlements in the event of the insolvency of an employer such that a process of attribution can be permitted to have the effect for which the respondent contends. The effect of the respondent's submissions is to reduce the applicant's claim by treating the applicant's unpaid annual leave entitlement as having been paid by the employer, when this did not occur. 117 For the above reasons, the Tribunal made an error of law in directing the Secretary to reconsider the working out of the applicant's entitlements in light of the Tribunal's reasons to the extent that the Tribunal reasoned that any part of the wages that the employer paid to the applicant was attributable to the annual leave entitlement. While the statutory question raised by s 19(2) of the FEG Act involves a factual inquiry, that inquiry must be undertaken subject to the constraints that it is not based upon a misdirection in law, that it leads to a legally coherent outcome, and that it is consistent with the express and implied purposes of the FEG Act. The Tribunal's decision was necessarily based upon a legal misdirection as to the nature of the entitlement under s 90(2) of the Fair Work Act, the critical feature being that the annual leave entitlement was in addition to the wages that had been paid to the applicant, which were not capable of being applied by the employer to discharge the statutory liability under s 90(2). It was legally incoherent, because it gave effect to a cashing out arrangement. And it had the consequence that the applicant was deprived of the financial assistance which the FEG Act afforded him in respect of his annual leave entitlement under s 90(2) of the Fair Work Act in the event of the employer's insolvency, because it had the effect of treating that entitlement as having been paid by the employer. It follows that to find that any part of the wages paid to the applicant was attributable to the annual leave entitlement was outside the "zone" of permissible factual decision-making: cf, Haritos v Federal Commissioner of Taxation [2015] FCAFC 92; 233 FCR 315 at [201] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ). Therefore, in relation to the applicant's annual leave entitlement, the applicant has succeeded in his appeal in relation to the substance of the first and second questions of law referred to in the notice of appeal.

Severance payment 118 The next question is whether the employer's payments of wages, which were inclusive of the casual loading, were capable of being attributable to the severance payment to which the applicant was entitled upon termination under clause 14.3 of the Award. 119 If clauses 3.1 to 3.3 of the letter agreement sat by themselves, then it would be difficult to conclude that a payment made by way of compensation for the absence of entitlements, including to severance pay under the Award, could for the purposes of s 19(2) of the FEG Act be attributable to those entitlements: cf, TransAdelaide v Leddy (No 2) (1998) 71 SASR 413. But clause 3.4 of the letter agreement is significant. As its terms indicate, it was intended to cover the contingency that the benefits that the letter agreement sought to exclude would become due and payable. A relevant purpose of clause 3.4 was to designate some part of the wages, to the extent that they incorporated a casual loading, in discharge of the employer's liability to make a severance payment, if it became payable. 120 The issue remains, could the payment of wages throughout the applicant's employment, in combination with clause 3.4 of the letter agreement, be effective to discharge the employer's statutory liability to make a severance payment under the Award? I have set out the terms of clause 14.3 of the Award in full at [108], above. It provided that "when terminations occur due to redundancy the employees terminated are entitled to severance pay" (emphasis added). 121 In the case of the severance payment due under the Award, there are not the same issues as those that arise in relation to annual leave and personal/carer's leave, such as the composite nature of those entitlements, and the statutory prohibitions on cashing out. The entitlement to a severance payment under clause 14.3 of the Award is an entitlement to a money sum. More precisely, it is a contingent entitlement to a money sum, which arises in the event that an employee's employment is terminated due to redundancy, and where the quantum of the sum payable is calculated by reference to the duration of the employee's employment with the employer. 122 In my view, the employer's payment of wages could not be effective to discharge the employer's statutory liability to pay a severance payment under the Award. That is because the terms of clause 14.3 of the Award had a temporal dimension in relation to the employer's obligation to pay a severance payment. It was when the termination occurred that the applicant, then being a terminated employee, became entitled to severance pay, and correspondingly the employer became obliged to make the severance payment. That temporal focus of the obligation to make a severance payment upon an employee's redundancy under clause 14.3 of the Award accords with the generally recognised purpose of severance payments "as compensation for the loss of non-transferable credits and entitlements that have been built up through length of service such as sick leave and long service leave, and for inconvenience and hardship imposed by the termination of employment through no fault of the employee…[that] includes the disruption to an employee's routine and social contacts and the competitive disability to long term employees arising from opportunities foregone in the continuous service of the employer": Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 331 (von Doussa J), cited by the Full Court in Telstra Corporation v Keen [2005] FCAFC 195; 146 IR 31 at [11] (Tamberlin, Finn and Conti JJ). See also, the Termination, Change and Redundancy Case (1984) 8 IR 34 at 69-76. In my view, the proper construction of clause 14.3 of the Award requires an employer to make a severance payment to a former employee upon that former employee being terminated due to redundancy. That construction is dictated by the well-establish principles of award construction: see, King v Melbourne Vicentre Swimming Club [2020] FCA 1173 at [122]-[130]. It focusses attention on the words actually used in the Award, and gives effect to the objective, expressed intention gathered from those words in light of their context and purpose: Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 at [2] (Gleeson CJ and McHugh J). Further, it produces a sensible and practical industrial result: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59; 269 FCR 262 at [5] (Allsop CJ). It is sensible and practical that a severance payment, which becomes due on the contingency that an employee's employment is terminated due to redundancy, and which bears a recognised purpose of compensating the former employee for loss, inconvenience and hardship imposed by that redundancy, must be paid upon that redundancy. 123 The reasons of Barker J in Williams v MacMahon at [67]-[68] to which I referred earlier also support the conclusion that the employer's payment of wages including the casual loading could not be effective to discharge the employer's statutory liability to pay a severance payment under the Award. In this case, the employer could not, at the time of the applicant's termination, rely on what was in effect an earlier attempt to pre-pay by way of loaded wages any future conditional liability for severance pay, when at the time those wages were paid, the applicant's employment had not been terminated due to redundancy and therefore the employer's statutory liability had not arisen. The intent of the Fair Work Act is that an employee will enjoy entitlements in accordance with, inter alia, any modern award that applies to the employee's employment. While the employer and the applicant by the letter agreement agreed that the employer would pre-pay any severance pay that may become payable to the applicant upon termination due to redundancy, the consequence of giving effect to that agreement would be to exclude the Award entitlement to severance pay that arises when the termination occurs due to redundancy. In Williams v MacMahon at [67], Barker J held that the payment of the purportedly all-inclusive hourly rate was "a plain attempt to contract out of the payment of those benefits without regard to whether or not they are actually payable at the time of payment of the hourly rate." That conclusion applies with force in the present circumstances. Throughout the applicant's employment, the employer paid the wages, inter alia, primarily as consideration for not having to make a severance payment, and alternatively to discharge any future liability for severance pay, when the parties did not know whether or not that liability would arise. Principally because of the temporal dimension of clause 14.3 of the Award I consider that there was not a sufficiently close correlation between the agreed purpose for which the payment of wages including the casual loading was made, and the liability to pay the severance payment under the Award, for the employer's payment of wages to discharge that statutory liability. 124 So was it open to the Tribunal to treat wages, to the extent that they included the casual loading, as being attributable to the applicant's entitlement to a severance payment for the purposes of s 19(2) of the FEG Act? Again, as with annual leave, there is no issue of double recovery of the severance pay entitlement. Once it is recognised that the employer's payments of wages do not have a sufficient connection with the statutory entitlement to a severance payment under the Award, for the purposes of s 19(2) of the FEG Act it follows in the circumstances of this case that the payments of wages are not capable of being attributable to the entitlement. As I have already stated, the constraints on the assistance to be provided to former employees of insolvent employers are to be found in the provisions of the Act. In relation to the redundancy pay employment entitlement, which in this case included the applicant's entitlement to severance pay under the Award, s 23(b)(i) of the Act limits the Commonwealth's liability to a maximum of four weeks' pay for each full year of service with the employer for which the employer was required to pay redundancy pay by the governing instrument for the employment. As I stated earlier, that limit does not apply to or affect the applicant's eligibility for an advance in respect of redundancy pay, comprising his entitlements to severance pay and retrenchment pay under the Award. As with annual leave, the effect of the respondent's submissions is to reduce the applicant's claim by treating the applicant's unpaid severance pay entitlement as having been paid by the employer, when that did not occur. For those reasons, the Tribunal was in error in accepting that the payment of the casual loading could be attributable to the severance pay entitlement for the purposes of s 19(2) of the FEG Act.

Other issues 125 Having regard to my conclusions above, the issues relating to the third question of law advanced by the applicant do not arise. I do not offer any views about that question, because they would depend upon hypotheses that I have rejected.

Conclusion 126 The Tribunal's decision should be set aside and the case remitted to the Tribunal to be reheard. Upon a rehearing, the Tribunal will be able to receive any further evidence necessary to resolve the calculations of the applicant's entitlement to an advance under the FEG Act should the parties be unable to agree. I certify that the preceding one hundred and twenty-six (126) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan.