Employsure Pty Ltd v Gorval (No 1)
[2016] FCA 422
•19 April 2016
FEDERAL COURT OF AUSTRALIA
Employsure Pty Ltd v Gorval (No 1) [2016] FCA 422
Appeal from: Gorval v Employsure Pty Ltd [2016] FCCA 231 File number: NSD 464 of 2016 Judge: PERRAM J Date of judgment: 19 April 2016 Cases cited: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Date of hearing: 19 April 2016 Registry: New South Wales Division: General Division National Practice Area: Employment and Industrial Relations Category: No Catchwords Number of paragraphs: 10 Counsel for the Appellant: Mr D Mahendra Solicitor for the Appellant: Wotton + Kearney Counsel for the Respondent: The Respondent appeared in person ORDERS
NSD 464 of 2016 BETWEEN: EMPLOYSURE PTY LIMITED
Appellant
AND: SERGEY GORVAL
Respondent
JUDGE:
PERRAM J
DATE OF ORDER:
19 APRIL 2016
THE COURT ORDERS THAT:
1.Orders 1 and 2 in SYG2524/2015 be stayed until the expiration of 28 days after determination of the appeal.
2.The matter be fixed for hearing on a date to be determined with an estimate of half a day.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
PERRAM J:
The question which arises is whether orders made by the Federal Circuit Court on 18 March 2016 should be stayed. The respondent to the application, Mr Gorval, commenced a proceeding in the Federal Circuit Court, Gorval v Employsure Pty Limited, in 2015. In that proceeding, he sought relief in relation to his employment relationship with Employsure. There were related proceedings before the Fair Work Commission relating to general protections.
A number of issues were canvassed in the Federal Circuit Court proceeding, but for present purposes only two are material. The first of these is Mr Gorval’s claim for a bonus payment under his contract of employment, and the second is his claim for back payment of wages. In respect of both of those matters the Federal Circuit Court determined that he was entitled to succeed and in consequence it made orders in his favour as follows:
1.Within 28 days, the Respondent pay to Sergey Gorval the sum of $2,700.
2.Within 28 days, the Respondent pay to Sergey Gorval an amount calculated as follows:
5000
365 x ‘y’ less relevant PAYG deduction Where ‘y’ = the number of days between 9 March 2015 and the date on which Sergey Gorval’s annual salary was increased to $70,000.00
It will be seen that the amounts of money involved are relatively modest. The respondent conducts a business as a provider of employment regulation and work health and safety advice, and is part of a large group of companies known as the Peninsula Group, which operates on a worldwide basis. It has, so I am told, 301 employees and around 8,000 clients in Australia. It now seeks a stay of the orders made by the Federal Circuit Court on two bases.
The first is that there is a risk that if it is required to pay the amounts which have been ordered but is ultimately successful in its appeal, Mr Gorval will be unable to repay them, and it will suffer prejudice thereby. The second is that by reason of the nature of the business in which it is involved, the actual decision of the Federal Circuit Court will cause it some embarrassment both in relation to its ongoing relationship with its own employees but also in relation to its clients. To put the matter another way, it is involved in the active provision of employment advice and it says that what the Federal Circuit Court has determined is contrary to the way it has structured its own business and also to some of the advice which it has provided its clients.
It seems to me that the sums of money involved are quite modest and I am not disposed to accept that the risk of non-repayment to the appellant is a real form of prejudice, at least in a case like this. Further, although the evidence suggests that Mr Gorval is presently on a modest income, I do not think that it establishes that he will be unable to repay. Given his profession as a lawyer, it seems to me that the more likely outcome is that if pressed for what is a relatively modest amount of money, he will probably disgorge it.
On the other hand, I am inclined to accept that the decision of the Federal Circuit Court does provide an interesting precedent in relation to how certain questions regarding bonus payments are to be determined. In relation to that I should say a little bit more. The Federal Circuit Court considered Mr Gorval’s claim for the bonus payment at paragraphs [38] to [46] of its reasons. It noted that the claim as pursued by Mr Gorval had been ostensibly framed in contract, and indicated its disposition not to accept the case so framed. It did that by reference to the material which was before it, but also to certain provisions of the Fair Work Act2009 (Cth) which it is not presently necessary to set out.
However, the Court went on at paragraph [43] and following to conclude that Mr Gorval had a restitutionary claim under the principles flowing from Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, which entitled him to a bonus payment. This was because the bonus was said to have been due in circumstances where Mr Gorval brought to his employer the benefit of a client, in this case Group 4 Securitas Pty Limited. The Federal Circuit Court reasoned that the bringing in of the client was the conferral of a benefit for the purposes of the law of restitution and accordingly that whilst he was not entitled to the bonus payment as a contractual entitlement, he was entitled to it on a restitutionary basis.
To put the matter perhaps a little differently, the proposition appears to have been that the appellant had become unjustly enriched by reason of having received the benefit of the new client but without disgorging the bonus payment. With respect to the Federal Circuit Court reasoning it seems to me that there is a respectable argument that that reasoning may well be wrong, and that that is not how the law of restitution operates in a case such as the present. It is not necessary to pursue that thought further. It does provide, however, two propositions which are relevant for the disposal of the present application.
The first of these is that as a result I am satisfied that the appellant has an arguable case on its notice of appeal. The second is that what the Federal Circuit Court has done is sufficiently adventuresome to require at this stage an indication from this court that its decision, at least on this aspect, ought not necessarily to be followed until its correctness has been determined in this Court.
For that reason I am satisfied that this is an appropriate case for a stay and I will make the following orders:
1.Orders 1 and 2 in SYG2524/2015 be stayed until the expiration of 28 days after determination of the appeal.
2.The matter be fixed for hearing on a date to be determined with an estimate of half a day.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate:
Dated: 26 April 2016
0
1
0