In Chinese Australian Services Society Limited v Sun [2022] FCA 1076, Snaden J of the Federal Court dealt with an interesting issue concerning entitlement of an employee to weekend loading. An interesting, and arguably legally important, issue arose as to the entitlement of the employee to weekend loading, in circumstances in which she received a salary in excess of the federal award.
“The appellant submitted that the respondent’s entitlement to Saturday Loading was discharged by what the appellant paid her: in other words, that the amounts that she received were received in satisfaction not merely of her salary or wage entitlements; but also in satisfaction of any entitlement that she had to Saturday Loading under the Award.”
The court concluded in the affirmative:
[1] The appellant, Chinese Australian Services Society Limited (“CASS”), operates a Chinese language school. Between February 2004 and December 2017, it engaged the respondent as the principal of the school’s Kogarah campus. Pursuant to that engagement (at least at the times that are presently relevant), the respondent oversaw the provision of language classes, which were held on Saturdays in lessons of three hours’ duration.
[2] By an application made to the Federal Circuit Court of Australia (the “FCCA”, as it was then known) in November 2018, the respondent alleged that the appellant had failed to pay her amounts that it was obliged under the Fair Work Act 2009 (Cth) (the “FW Act”) to pay her in connection with her employment. Specifically, she alleged that the appellant had failed to pay her weekend loading rates under the Social, Community, Home Care and Disability Services Industry Award 2010 (hereafter, the “Award”) and, upon the termination of her employment, had failed to pay out her accrued but untaken annual leave. Those failures were said to have been effected in contravention of, respectively, ss 45 and 44(1) of the FW Act. By a judgment dated 29 May 2020, the FCCA upheld those claims: Wei v Chinese Australian Services Society Ltd [2020] FCCA 1293 (hereafter, the “FCCA Judgment”; Judge Altobelli). The appellant now appeals from that judgment and the orders that were made subsequently in consequence of it.
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[14] In addition to the FW Act, several provisions of the Award assume some prominence in this appeal. Clause 14 of the Award is headed “Salary Packaging” and, at material times, provided as follows:
Where agreed between the employer and a full-time or part-time employee, an employer may introduce remuneration packaging in respect of salary, as provided for in clauses 15 to 17. The terms and conditions of such a package must not, when viewed objectively, be less favourable than the entitlements otherwise available under this award.
[15] The Saturday Loading requirements of the Award are contained within cl 26, which is headed “Saturday and Sunday work”. Throughout the respondent’s employment, that clause relevantly provided as follows:
26. Saturday and Sunday work
26.1 Employees whose ordinary working hours include work on a Saturday and/or Sunday will be paid for ordinary hours worked between midnight on Friday and midnight on Saturday at the rate of time and a half, and for ordinary hours worked between midnight on Saturday and midnight on Sunday at the rate of double time. These extra rates will be in substitution for and not cumulative upon the shift premiums prescribed in clause 29 — Shiftwork.
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[19] The first issue for this court to consider is whether the respondent was entitled to Saturday Loading under the Award — and if she was, whether the amounts that she was paid were paid and received in satisfaction (or partial satisfaction) of that entitlement.
“There was, however, no finding — nor any evidence sufficient to ground a finding — that those amounts were, by agreement, designated (or partly designated) toward satisfaction of the respondent’s entitlement to Saturday Loading.”
[20] The appellant’s primary submission was that the contractual arrangement between the parties was such as to “displace” the entitlement to Saturday Loading under cl 26 of the Award because it amounted to a salary packaging arrangement under cl 14.
[21] I do not accept that submission. Properly construed, cl 14 of the Award does not permit, via the means of an agreed salary packaging arrangement, the payment of Saturday Loading under cl 26. By its terms, the clause limits permissible “remuneration packaging” to “salary, as provided for in clauses 15 to 17”. The Saturday Loading entitlement, it is to be recalled, applies by operation of cl 26.
[22] Further, an arrangement entered into under cl 14 of the Award must be “agreed between the employer and a…part-time employee”. The existence of any such agreement must be proved in the usual way and, in this case, it wasn’t. The court below made no finding on that score and, in any event — appreciating that the application was determined on the papers and that the rules of evidence did not apply to the “small claim” procedure under which it proceeded — it is not apparent how such evidence as there was might be said to have established what the appellant needed to establish. I do not accept that it did.
[23] In the alternative, the appellant submitted that the respondent’s entitlement to Saturday Loading was discharged by what the appellant paid her: in other words, that the amounts that she received were received in satisfaction not merely of her salary or wage entitlements; but also in satisfaction of any entitlement that she had to Saturday Loading under the Award.
[24] Again, that submission cannot be accepted. In order that the amounts that the appellant paid to the respondent might be understood to have been paid (and received) in satisfaction of her entitlement to Saturday Loading, the appellant must demonstrate that they were paid with that agreed purpose in mind: WorkPac Pty Ltd v Rossato (2020) 278 FCR 179, 372–384 [983]–[1021] (Wheelahan J; Bromberg and White JJ concurring), citing (amongst others) Poletti v Ecob (No 2) (1989) 31 IR 321, 332–333 (Keely, Ryan and Gray JJ) and Ray v Radano [1967] AR (NSW) 471, 478–479 (Sheldon J).
[25] The primary judge below found — and it was not controversial between the parties — that the respondent was paid an agreed hourly rate for six hours per week, 52 weeks per year. There was, however, no finding — nor any evidence sufficient to ground a finding — that those amounts were, by agreement, designated (or partly designated) toward satisfaction of the respondent’s entitlement to Saturday Loading. Again, appreciating the evidential limitations that confronted the primary judge, it is simply not possible fairly to conclude that what was paid was paid partly with that presumed or agreed design.
[26] It follows that the primary judge was, with respect, correct to conclude that the appellant contravened cl 26 of the Award in the way that was found. This aspect of the appeal cannot succeed.
