Cavallaro v Russo
[1997] IRCA 157
•7 Apr 1997
DECISION NO:157/97
TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - Review of Judicial Registrar's decision that employee dismissed without procedural fairness or a valid reason - Concession by employer that employee was dismissed without a valid reason - Implications of that concession in relation to a submission that employee would probably have been dismissed anyway, after providing procedural fairness - Assessment of compensation.
Workplace Relations Act 1996, ss 170DC, 170DE and 170EE.
No. NI.1897/96
MARIA-GRAZIA CAVALLARO v DI GIULIO SZYSZKA RUSSO
CORAM; WILCOX CJ
PLACE: SYDNEY
DATE: 7 APRIL 1997
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. NI.1897/96
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN:MARIA-GRAZIA CAVALLARO
Applicant
AND:DI GIULIO SZYSZKA RUSSO
Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 7 APRIL 1997
MINUTES OF ORDER
THE COURT ORDERS THAT:
The order made by Judicial Registrar Patch on 13 December 1996 be varied by substituting, for the figure in paragraph 1 of the order, the figure of $9,000.
Note:Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS COURT)
OF AUSTRALIA ) No. NI.1897/96
NEW SOUTH WALES DISTRICT REGISTRY)
BETWEEN:MARIA-GRAZIA CAVALLARO
Applicant
AND:DI GIULIO SZYSZKA RUSSO
Respondent
CORAM: WILCOX CJ
PLACE: SYDNEY
DATE: 7 APRIL 1997
EXTEMPORE REASONS FOR JUDGMENT
WILCOX CJ: This is an application for review of a decision by a Judicial Registrar awarding compensation in the sum of $9,600 to the applicant, Maria Grazia Cavallaro.
Ms Cavallaro was dismissed from her employment with the respondents, J. Di Giulio, Walter Szyszka and Ross Russo on 1 April 1996. The respondents carried on a practice as accountants. Ms Cavallaro was a qualified accountant and had been employed by them for some 16 months prior to her termination. She alleged that the termination was unlawful because it was in breach of ss 170DC, 170DE(1) and 170DF(1)(a) of the Workplace Relations Act 1996. At the trial, the claim under s 170DF(1)(a) was not pressed. The Judicial Registrar found breaches of both ss 170DC and 170DE(1) and awarded compensation in the sum of $9,600.
When the review came on for hearing, I was informed by the representatives of the parties that the only issue for my determination was the quantum of compensation. They told me it was common ground that the termination had been effected in breach of ss 170DC and 170DE(1) of the Act, as found by the Judicial Registrar.
The parties had discussed the calculation of quantum and were able to give more precise figures than those given to the Judicial Registrar. In particular, it appeared that the earnings of the applicant, between the date of her termination by the respondents and the time when she commenced a new permanent full-time job as an accountant with one John Karasmanis, amounted to $4,204. The Judicial Registrar had been told the relevant amount was only $3,000. Furthermore, the applicant conceded that there needed to be taken into account a sum of $1,192.30 that was received by Ms Cavallaro at the time of her termination as wages in lieu of notice.
The effect of this is that the actual loss of earnings, between the date of the termination on 1 April 1996 and the date when she commenced employed with John Karasmanis on 17 June 1996, came to $1,762. This is an agreed figure and is significantly less than the figure the Judicial Registrar had determined on the basis of rather imprecise evidence.
Evidence was given by Ms Cavallaro today that she is still employed by John Karasmanis. Her annual salary is at the rate of $29,900. When she was working for the respondents, she was remunerated at the rate of $33,500. There is, therefore, an ongoing loss of $3,600 per annum. The major issue between the parties is what amount, if any, should be awarded in respect of this loss.
The submission put on behalf of the respondents is that nothing should be allowed because Ms Cavallaro would probably have been dismissed in any event. The statement is made that her employers were unhappy about her work and would have dismissed her lawfully. However, Ms Oag, on behalf of the respondents, concedes that there is no evidence that they ever considered doing this and I have difficulty in understanding how they could have dismissed Ms Cavallaro lawfully, having regard to the terms of s 170DE(1) of the Act. The grounds that were advanced as justifying her termination were either abandoned at the hearing before the Judicial Registrar or found not to be made out. It seems these are the same grounds that Ms Oag has in mind when speaking of the possibility of a lawful termination.
Moreover, it is inherent in the respondent's concession of failure to comply with s 170DE(1) that these grounds would not have been available, or at least would not have provided a valid reason for termination. It would be inconsistent with that concession to give effect to the submission by Ms Oag.
On behalf of the applicant, Mr Smallbone says I should allow a sum for the ongoing loss calculated at three years' loss at the rate of $3,600 per annum. That would come to $10,800. Ms Oag says that this is too high. It is a matter of judgment as to what should be allowed. The Judicial Registrar noted an ongoing economic loss at the rate of $3,600 per annum. He was of the opinion that the ongoing loss would continue for some time, and events between the date of his decision and today have vindicated his prediction.
The Judicial Registrar also pointed out that the applicant is a young woman - she is apparently aged 24 years at the present time - and is at the beginning of a professional career. He expressed the opinion that her earning capacity would increase, and increase fairly rapidly as her experience grew. He was therefore of the opinion that any ongoing economic loss would gradually disappear over the next year or two. On that basis he allowed $5,000 for future economic loss.
I am in general agreement with the Judicial Registrar's approach. It is incorrect to say, as suggested by Ms Oag, that the Court can only look at the earnings lost by a terminated employee in the six months immediately following the termination. The effect of the limit imposed by s 170EE(2) is that the Court is bound by a statutory cap as to the amount of compensation, not the period involved. In this case that amount would be one-half of $33,500, namely, $16,750. It is incorrect to say that, in determining how much shall be granted up to the maximum permitted by this statutory cap, the Court must disregard any loss of earnings after the first six months. This has been said in many decisions of the Court.
I am of the opinion that there will be an ongoing economic loss for some time. It is difficult to say how long it will continue. I agree with the Judicial Registrar that it is likely gradually to fade away. I think Mr Smallbone's contention that I should allow three years from 17 June 1996 is on the high side. This would involve an assessment that there will be a continuing loss in the order of $3,600 per annum until June 1999. I think this is unlikely.
On the other hand, I think the loss is significant. I am of the opinion that the Judicial Registrar's figure of $5,000 is a little low. My view is that something like two years' loss is nearer the mark. I would approach the matter by adding a sum of $7,200 to the agreed figure put on the loss immediately following termination, that is to say, $1,762. This totals $8,962 and I would round that off at $9,000.
Accordingly, the order I make is that I vary the order made by Judicial Registrar Patch on 13 December 1996 by substituting, for the figure of $9,600 in paragraph 1 of the order, the figure of $9,000.
I certify that this and the preceding five (5) pages
are a true copy of the Reasons for Judgment
of Chief Justice Wilcox.
Associate:
Dated:7 April 1997
APPEARANCES
Counsel for the Applicant: D A Smallbone
Counsel for the Respondent: B Oag
Date of hearing: 7 April 1997
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