Category: Entitlements

According to the NSW Long Service Leave Act (s 4(2)(a)(iii)), a worker who has completed at least five years of service with an employer and whose services are terminated by the worker on account of illness, incapacity or “domestic or other pressing necessity” may be entitled to pro-rata long service leave entitlement on termination.

But what could amount to such a necessity?

A decision of the Chief Industrial Magistrate’s Court is instructive on this point.

The Case:

A company was charged by the Department of Industrial Relations with a breach of the relevant section of the Long Service Leave Act for failing to pay pro-rata long service leave entitlements.  An employee had resigned after the employer failed to transfer him from night shift to “usual day time hours”. The employee requested the transfer because the “nightshift created domestic problems” for him and his family.

In his decision, the Chief Industrial Magistrate relied on a number of cases to support his view that the employee was entitled to a pro-rata entitlement due to “domestic or pressing necessity”.

What is the Legal Test?

The test the Courts will apply in attempting to assess the validity of “domestic or other pressing necessity” claims will involve the following questions:

• Is the reason claimed for termination of employment one which falls within section 4(2)(a) of the Act?
• Is the reason “genuinely held” by the worker and not simply a rationalisation?
• Although the reason claimed may not be the only ground which led the worker into deciding to resign, is it the “real or motivating” reason?
• Is the reason such that a reasonable person in similar circumstances to the worker might feel compelled to terminate their employment?

Guide for Employers:

As a general guide for employers, examples of cases where it has been held by the Court that a worker has terminated their services because of a “domestic or pressing necessity” include (but are not limited to) situations where:

• the worker terminated their service because their wages were insufficient to meet their rising financial commitments;
• the worker terminated their service because their spouse’s medical condition, coupled with a lengthy journey to and from work and prolonged absences from home, made it impractical to continue in the job;
• the worker terminated her services because she was pregnant;
• the worker terminated their service because of the ill health of their son.

Cases where it has been held that a “domestic or pressing necessity” situation does not apply have included situations where:

• the worker terminated their service because their domestic circumstances would have been affected by an interstate transfer;
• the worker resigned because the employer transferred the business;
• the worker terminated their service in order to get another job that would lead to a full tradesman’s qualification and licence.

Please note, however, that the judgement for each case will ultimately depend on the individual facts and circumstances of the case.

The full Federal Court has rejected a Qantas challenge to a Federal Magistrates Court decision that it coerced and took adverse action against an aircraft engineer who complained about being underpaid while on an overseas posting.

The full court found that Federal Magistrate Raphael was correct in his findings and rejected the Qantas’ contention that it was denied procedural fairness.

Federal Magistrate Raphael found the Qantas employee, a licensed aircraft engineer and ALAEA member, was subjected to adverse action after returning to his home base of Brisbane from working a six weeks posting at Japan’s Narita International Airport (Narita).

The engineer made a claim for time off in lieu and payment for additional hours worked while at Narita.  Qantas rejected the claim and the engineer sought to commence the dispute resolution clause of the Enterprise Agreement.   One day later, Qantas suspended all overseas postings of Brisbane-based engineers.

The ALAEA took action in response to the suspension and to a subsequent heated phone call between the engineer and a Qantas manager in which the manager allegedly said that future postings would only be granted to engineers who did not make time off in lieu claims.

The full court found that Federal Magistrate Raphael was correct in his findings and that Qantas had not been denied procedural fairness during, or as a result of correspondence after, the case.  The full court decision is significant in clarifying that altering a person’s position to their prejudice is a ‘broad concept’.  Even though there were no fixed future overseas postings, the decision by Qantas meant there were no ‘possible’ postings at all, which was a detriment to the engineer.

The case also considered that the phone conversation with the senior manager demonstrated an attempt to intimidate the engineer and make him withdraw a legitimate complaint.

The full court said Qantas bore the onus “of proving that it did not suspend the overseas posting for a reason which included the reason that [the engineer] had made the claims for payment or invoked the dispute resolution procedure.”  It said that Qantas made “no attempts” during the appeal hearing to demonstrate that Federal Magistrate Raphael’s conclusion was erroneous, “glaringly improbable or contrary to compelling inferences“.

Qantas Airways Limited v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63 (4 May 2012)

This is a warning to employers to be careful when deducting monies from an employee’s wages, especially in the absence of any specific provision permitting such action under the applicable industrial instrument, federal or state legislation or the contract of employment.

Generally, in the absence of a specific statutory provision, an employer is prohibited from making any deduction of monies from an employee’s wages without the employee’s specific authorisation.

The Fair Work Act 2009 (Cth) identifies the circumstances when an employer may be able to make deductions from an employee’s wages. Section 324 of the Act provides that an employer may deduct an amount from an amount payable to an employee if:
• the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or
• the deduction is authorised by the employee in accordance with an enterprise agreement; or
• the deduction is authorised by or under a modern award or a Fair Work Australia order; or
• the deduction is authorised by or under a law of the Commonwealth, a state or a territory, or an order of a court.

Further, an authorisation must specify the amount of the deduction, and it may be withdrawn in writing by the employee at any time. Any variation in the amount of the deduction must be authorised in writing by the employee.