Filipczuk v Princess World Pty Ltd
[2007] FMCA 1883
•26 November 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FILIPCZUK v PRINCESS WORLD PTY LTD & ANOR | [2007] FMCA 1883 |
| INDUSTRIAL RELATIONS – Termination of employment – summary dismissal – penalty imposed – to be paid to the applicant – damages for loss of earnings – no damages for distress, disruption, or injured feelings. |
| Workplace Relations Act 1996 (Cth), ss.728, 792, 793, 807, 809, 841 Crimes Act1914 (Cth), s.4AA Evidence Act1995 (Cth), s.81 Industrial Relations Act 1996 (NSW), s.123 Industrial Relations (General)Regulation 2001 (NSW), reg.7 Federal Magistrate Court Rules 2001, r.9.03(5), 13.03A(e) |
| Seymour v Saint-Gobain Abrasives Pty Ltd (2006) 161 IR 9 McIlwain v Ramsey Food Packaging Pty Ltd (No. 4) (2006) 158 IR 181 Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v ACI Operations Pty Ltd (2006) 150 IR 179 Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 63 IR 1 Fryar v System Services Pty Ltd (1996) 137 ALR 321 Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462 |
| Applicant: | MAREE DAPHNE FILIPCZUK |
| First Respondent: | PRINCESS WORLD PTY LTD (ACN 087 873 354) |
| Second Respondent: | MARCO HWEZAWE |
| File number: | SYG 2351 of 2007 |
| Judgment of: | Turner FM |
| Hearing date: | 11 September 2007 |
| Date of last submission: | 11 September 2007 |
| Delivered at: | Sydney |
| Delivered on: | 26 November 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr I. Taylor |
| Solicitors for the Applicant: | Mr T. Gooch of Holman Webb Lawyers |
| Counsel for the Respondents: | Nil |
| Solicitors for the Respondents: | Nil |
ORDERS
The Court declares that:
The dismissal of the applicant from her employment with the first respondent contravened s.792(1)(a) of the Workplace Relations Act1996 (Cth) (“the WR Act”); and
The second respondent was involved in that contravention within the meaning of s.728(2) of the WR Act, and so is treated as having contravened that provision.
The Court orders that:
The second respondent pay a penalty of $4,950 to the applicant within 14 days of today; and
The second respondent pay to the applicant the sum of $9,729.46 less tax within 14 days of today, being the monetary loss suffered by the applicant as a result of the contravention.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2351 of 2007
| MAREE DAPHNE FILIPCZUK |
Applicant
And
| PRINCESS WORLD PTY LTD (ACN 087 873 354) |
First Respondent
| MARCO HWEZAWE |
Second Respondent
REASONS FOR JUDGMENT
Introduction
This is an application under the Workplace Relations Act 1996 (Cth) (“the WR Act”) for the imposition of penalties and for damages in relation to the underpayment of award entitlements to the applicant and the non-payment of superannuation contributions.
An administrator was appointed to the first respondent on 3 September 2006. The applicant therefore did not seek to proceed against the first respondent at the hearing, but proceeded against the second respondent. (If at some stage in the future the first respondent is no longer in administration, the applicant asserts that she would have a right to come back before the Court to seek relief in respect to that corporation).
Neither respondent has appeared at the hearing today. The solicitors who acted for both the first and second respondents have ceased to act. By Rule 9.03(5) of the rules of the Court, if the party’s lawyer withdraws from the record, the party’s last known residential or business address is the address for service until the party appoints another lawyer. The Court is satisfied that a notice listing the matter today in this Court was sent to the second respondent. Anthony Graham Gooch, solicitor for the applicant, in his affidavit sworn on
11 September 2007, states that he spoke with the second respondent on a mobile phone on 10 September 2007 and advised him that the matter was to be heard on 11 September 2007. The second respondent is said to have said to Mr. Gooch,
You can proceed as you like tomorrow. I am not a director of Princess World and I haven’t been for several months. The company is in the hands of the administrators and it may be that I need to file for bankruptcy. Tell Maree [the applicant] not to waste her money.
As a result, the Court ruled that it was satisfied that the second respondent has been properly notified of the hearing to commence on 11 September 2007 and has elected not to appear. The Court ordered pursuant to Rule 13.03A(e), that the Court would proceed with the hearing generally against the second respondent.
The application
It is alleged for the applicant that Part 16 of the WR Act makes it unlawful to terminate the employment of an employee because that employee has made enquiries as to her legal employment entitlements, or may make such enquiries. It also makes it unlawful to terminate an employee because the employee is entitled to the benefit of an industrial instrument or industrial law. The relevant provisions are as follows:
792 Dismissal etc. of members of industrial associations etc.
(1)An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
(a)dismiss an employee;
(2) ………
(3)………
(4)An employer does not contravene subsection (1) because of paragraph 793(1)(i) unless the entitlement described in that paragraph is the sole or dominant reason for the employer doing any of the things described in paragraphs (1)(a), (b), (c), (d) and (e) of this section.
(5)………
(6)Subsection (5) is a civil remedy provision.
793 Prohibited reasons
(1)Conduct referred to in subsection 792(1) or (5) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:
………
(i) is entitled to the benefit of an industrial instrument, an order of an industrial body or the Australian Fair Pay and Conditions Standard; or
(j) has made or proposes to make any inquiry or complaint to a person or body having the capacity under an industrial law to seek:
(i)compliance with that law; or
(ii)the observance of a person’s rights under an industrial instrument; or
………
807 Penalties etc. for contravention of civil remedy provisions
(1)The Court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil remedy provision of this Part:
(a)an order imposing a pecuniary penalty on the defendant;
(b)an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;
(c)any other order that the Court considers appropriate.
(3)The maximum pecuniary penalty under paragraph (1)(a) is 300 penalty units if the defendant is a body corporate and otherwise 60 penalty units.
………
809 Proof not required of the reason for, or the intention of, conduct
(1)If:
(a)in an application under section 807 relating to a person’s conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and
(b)for the person to carry out the conduct for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person proves otherwise.
………
841 Application of penalty
A court that imposes a pecuniary penalty under this Act (other than a penalty for an offence) may order that the penalty, or a part of the penalty, be paid:
(a)to the Commonwealth; or
(b)to a particular organisation or person.
The applicant’s claims
The applicant was employed by the first respondent on 8 September 2005 as a shop assistant in a jewellery store in Penrith. From early in her employment she raised with her store manager, Mr Ofy, concerns she had about not being provided with payslips. She also raised concerns about whether payment was being made in accordance with the relevant award, and made enquiries of her employer about superannuation contributions. This led to her writing a letter to her employer on 29 March 2006 indicating that she had made enquiries to the State Industrial Relations Department about the obligations to provide payslips, and to the Australian Taxation Office (“ATO”) about her superannuation entitlements. That letter indicated that the applicant considered she had been underpaid in accordance with the award entitlements for various shifts she had worked, and also that her superannuation entitlements had not been paid. Some thirteen days later she had a phone call with the second respondent about the roster for the Easter period of 2006. She asked the second respondent whether her superannuation was paid to date. Immediately after asking that question she was told by the second respondent to hand the phone to the store manager, whom she observed had a conversation with the second respondent. The store manager then said to the applicant words to the effect of “the second respondent wishes me to dismiss you on the spot”. She was then told to leave her employment immediately.
The applicant asserts that the termination of employment was contrary to the WR Act, which prohibits terminating employment either because someone has entitlements under an industrial instrument or because they have made enquiry as to their industrial rights to a body or person who has the power to enforce industrial laws.
The applicant alleges that the first respondent was an employer who for prohibited reasons defined in s.793, or for reasons that included one of those prohibited reasons, dismissed her from employment. The relevant prohibited reasons upon which this application relies are those found in s.793(1)(i) and (j). It is alleged that the employment was terminated because the applicant was entitled to the benefit of an industrial instrument, which up until 26 March 2006, was the state award known as the “Shop Employee State Award”. On 27 March 2006 that award became known as the “Notional Agreement Preserving State Award” under Schedule 8 of the WR Act, which preserved as a federal instrument the wages and conditions in the state award.
Section 792(4) provides that:
An employer does not contravene subsection (1) because of paragraph 793(1)(i) unless the entitlement described in that paragraph is the sole or dominant reason for the employer doing any of the things described in paragraphs (1)(a), (b), (c), (d) and (e) of this section.
That requirement for it to be “the sole or dominant reason” therefore does not apply to s.793(1)(i) or (j). If a reason for the termination of employment (not necessarily the sole or dominant reason, but a reason amongst others) was that the applicant had made an enquiry to a person of body having the capacity under an industrial law to seek compliance with the law, or the observance of her rights under an industrial instrument, then the act of dismissing her is unlawful under s.792.
Section 809 provides as follows:
809 Proof not required of the reason for, or the intention of, conduct
(1)If:
(a)in an application under section 807 relating to a person’s conduct, it is alleged that the conduct was, or is being, carried out for a particular reason or with a particular intent; and
(b)for the person to carry out the conduct for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings under this Division arising from the application, that the conduct was, or is being, carried out for that reason or with that intent, unless the person proves otherwise.
(2)This section does not apply in relation to the granting of an interim injunction.
It is submitted for the applicant that once it is claimed she was dismissed for a prohibited reason, s.809 means that it is presumed that the conduct was carried out for that reason unless the person against whom the allegation is made proves otherwise. The Court asked counsel for the applicant whether it was contended that the Court should have regard to the material in the affidavit filed by the second respondent on 19 February 2007. Counsel responded that the Court should not have regard to that material; the Court agrees with that contention. Therefore there is no material before the Court contesting the allegation that the termination of employment of the applicant was for a prohibited reason.
The applicant seeks the imposition of a pecuniary penalty on the second respondent, and an order requiring the second respondent to pay a specified amount to the applicant as compensation for damage suffered by her, being income that the applicant lost from the time of termination until the time that she obtained alternative employment, plus a sum by way of general damages. The applicant also seeks an order under s.841(b) that such penalty be paid to the applicant.
The applicant claims that the maximum penalty that can be awarded against the second respondent is sixty penalty units, which when s.4AA of the Crimes Act1914 (Cth) is applied means a maximum penalty of $6,600.
The applicant tendered paragraphs of the defence pursuant to s.81 of the Evidence Act1995 (Cth) which were admissions made by the second respondent. The applicant tendered admissions that:
·the second respondent was at all material times the director and secretary of the first respondent;
·the second respondent was at all material times responsible for managing the first respondent’s business, including the shop;
·the applicant was continuously employed by the first respondent to work at the shop as a full-time shop assistant from 8 December until 12 April 2006, and during that period was an employee within the meaning of s.792(1) of the WR Act;
·the first respondent dismissed the applicant from her employment on 12 April 2006;
·that in early February of 2006 the applicant asked Mr Ofy (the store manager) why no amounts had been paid into her superannuation account (paragraph 9(a) of the Defence);
·that the NSW State Government was a person or body which had the capacity under the relevant state award to seek observance of a person’s rights under a state award, and secondly, had the power to seek enforcement of the duty to provide payslips (paragraph 11 of the Defence);
·that the bodies which the applicant wrote to (as indicated in her letter of 29 March 2006) have a capacity under the relevant laws to enforce compliance with those laws;
·that the applicant wrote to the second respondent on 29 March 2006 stating that she had contacted the relevant state and federal government departments in respect of her employment entitlements, and that she was claiming the benefit of entitlements under the award and superannuation legislation; that she was claiming the first respondent had not provided the entitlements pursuant to the award and superannuation legislation, and requesting payments to be rectified and superannuation contributions to be made, and providing contact details to the relevant government bodies so that the information could be checked;
·that about 1pm on about 12 April 2006, the second respondent phoned the shop and spoke to the applicant and they discussed the hours the applicant was rostered to work. In the same telephone conversation the applicant asked the second respondent about the outstanding superannuation contributions to be paid and the second respondent admits that he replied that he thought all such payments had been made;
·that after the subject of the superannuation contributions and the question about backdating had been raised, the second respondent’s voice became agitated and he asked the applicant to hand the phone to the store manager, Mr. Ofy;
·that the applicant had claimed to be entitled to the benefit of an industrial law, particularly the NSW payslips legislation (s.123 of the Industrial Relations Act 1996 (NSW) (or “the State Act”) and the superannuation legislation, and that the applicant had claimed to be entitled to the benefit of an industrial instrument, namely the relevant award and notional federal agreement;
·that he was the person who made the decision on behalf of the first respondent to dismiss the applicant, or was a person who was directly involved in making that decision. The applicant submits that the second respondent was the moving mind of the first respondent in terminating the employment of the applicant.
Section 728 of the WR Act provides as follows:
728 Involvement in contravention treated in same way as actual contravention
(1)A person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.
(2)For this purpose, a person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
The applicant alleges that the second respondent is a person “who is involved in a contravention of a civil remedy provision” as he “aided, abetted, counselled or procured the contravention”. The applicant alleges that the second respondent procured the termination by being the person who directed the termination or induced the contravention, or by direct act was knowingly concerned in the contravention. It is claimed that pursuant to s.728 a person who is involved in contravention of a civil remedy provision is treated as having contravened that provision. The Court accepts those submissions.
It is alleged that during the applicant’s employment there was an ongoing failure to comply with the relevant industrial instruments. The affidavit of David John Bliss (sworn on 21 December 2006) was relied on for this purpose. Annexure B to that affidavit is a letter from the “Branch Secretary – Treasurer” of the “Shop, Distributive & Allied Employees’ Association, New South Wales Branch” to the second respondent, that sets out details of the underpayment, and summarized the amount outstanding at $2,622.02. The Court was advised that that amount less tax has been paid to the applicant by the first respondent.
The affidavit of Elliot Sabbah (sworn on 21 December 2006), who is the “National Manager, Client Services” of the relevant superannuation fund, attests that there were no superannuation payments made in respect of the applicant until 18 April 2006, which was some six days after the termination of her employment. Mr. Sabbah states that the first respondent having made a one-off contribution on 18 April 2006, meant that the December 2005 contribution was almost three months late; the January contribution was two months late; and the February contribution was one month late. He recalls that the first respondent had been sent reminders for being late, including two reminders for being more than 100 days late. It is stated that the superannuation guarantee scheme requires payments to be made within 28 days of the quarter ending, and so the superannuation payments that should have been made for December, should have been made within 28 days of 31 December.
Mr. Taylor, counsel for the applicant, summarized key parts of the evidence upon which the applicant relies:
·Paragraph 1 of the affidavit of the applicant (sworn on 18 December 2006) alleges that the applicant commenced employment on 8 December 2005. That fact has been admitted.
·Paragraph 3 states that she was interviewed by the second respondent. It said that that is consistent with the admission that the second respondent was in effect running the business.
·The applicant states in paragraph 8 that after the very first pay period she was handed a piece of paper on which was printed an internet banking receipt, which simply recorded a sum of money having been deposited into her bank account. She asked the manager of the shop whether she would be receiving a pay slip and she was told ‘no’.
·In paragraph 10 this subject was raised again between the applicant and the store manager, Mr. Ofy (the applicant having checked that she had a right under s.123 of the State Act to have payslips provided to her).
·In paragraph 14 of the applicant’s affidavit, she states that she again had a conversation with Mr. Ofy about the failure to provide payslips.
·
In paragraph 16 she indicates that on 16 March 2006 she received her first payslip for the week ending 15 March 2006; she also received payslips for the weeks ending 23 March 2006 and
30 March 2006: so she received during her employment three payslips for those weeks. Some days after her employment was terminated, a set of payslips for the full employment term was sent to the applicant.
Mr. Taylor referred to s.123(1) of the State Act which provides that
An employer must, when paying remuneration to an employee, supply the employee with such written particulars regarding the payment as are prescribed by the regulations.
Regulation 7 of the Industrial Relations (General)Regulation 2001 (NSW) provides particulars of remuneration to be supplied to employees and includes:
(f)the gross amount of remuneration (including overtime and other payments),
(g)the amount paid as overtime or such information as will enable the employee to calculate the amount paid as overtime,
(h)the amount deducted for taxation purposes,
(i)the amount deducted as employee contributions for superannuation purposes,
(j)the particulars of all other deductions,
(k)the net amount paid.
It is alleged that there was thus an obligation on the applicant’s employer to provide her with a pay slip setting out that information, instead of simply a document which records the lump sum paid into her bank account.
Mr. Taylor also relies on the following evidence as contained in the affidavit of the applicant (sworn 18 December 2006):
·In paragraph 9 the applicant deals with the question of failure to provide breaks during employment.
·In paragraph 11 the applicant’s attests to the enquiries that the applicant made about her superannuation. That detail continues through until paragraph14.
·In paragraphs 17 and 18 the applicant attests to the enquiries she made with the NSW State Government body known as the “Office of Industrial Relations” as to her entitlements under the awards and in respect to payslips. The second respondent has admitted that this body has the power to enforce the applicant’s rights under the legislation.
·In paragraph 18 the applicant attests that she called the ATO and made enquiries about her superannuation and the obligation for those superannuation payments to be made on a regular basis.
·
At paragraphs 19 and 20, reference is made to the letter of
29 March 2006. Page 17 (Annexure “F”) is a copy of the applicant’s letter to the second respondent, indicating in the first paragraph discrepancy in her wages, such information having been confirmed by the relevant state and federal government departments. She goes on to include contact details so the second respondent can check that the information set out in the balance of her letter is correct. The applicant alleges that this behaviour led to the termination of her employment.
·In paragraph 23 the applicant states that the second respondent said he had not read her letter yet, but he would do so and get it fixed up. That conversation took place on 31 March 2006, some twelve days before the date of termination.
·On page 6 the applicant attests that Mr. Ofy indicated to her that the second respondent said she had to “…finish now. He wants you to leave immediately”. The applicant stated that she was entitled to two weeks pay in lieu of notice. No explanation was given by the employer as to why she was dismissed. It is said that the obvious overwhelming inference is that she was dismissed for having the temerity to raise again her employment entitlements, in particular her roster and hours over the Easter period and her superannuation entitlements. At paragraph 21 of the Defence, paragraph 34 of the Statement of Claim is admitted. That is an admission that the second respondent was the person who made the decision on behalf of the first respondent to dismiss the applicant, or was a person who was directly involved in making that decision.
·In paragraphs 32 and 33 the applicant attests that she received a letter dated 28 April 2006 from the Office of Workplace Services (Annexure “I”) where a workplace inspector informs the applicant that he is investigating an alleged contravention of the WR Act and that he needed information from her. The letter of 1 June 2006 (Annexure “J”) advises that the first respondent had contacted the Office of Workplace Services and made an offer to settle the claim with the net figure of $1,185.09.
·The applicant’s affidavit then attests that she involved the union, which identified a higher sum that was owing; the union took carriage of that aspect of the matter which ultimately led to the payment being made in full of the sum that the union had indicated.
·The letter of 13 June 2006 (Annexure “L”) to the affidavit of the applicant indicates that it had been established that the applicant had not been paid her full entitlements under the Notional Agreement Preserving State Awards.
An affidavit in reply was also filed by the applicant (sworn on 23 May 2007). In paragraph 5 of that affidavit, the applicant sets out evidence as to her alternative employment. She found another job on 17 July 2006, and between the date her employment was terminated and that date, she had no income other than the Newstart Allowance.
In summary, Mr. Taylor contends that the applicant was dismissed from her employment (which is conduct set out in s.792(i)) for two prohibited reasons. It is said that the applicant has proved that she was employed and dismissed, and that the sole or dominant reason was that she was entitled to an industrial instrument, and secondly or in the alternative, that she was dismissed for a reason being that she had made an enquiry or complaint to a body with the power to enforce her rights under the industrial laws. Those industrial laws include the Industrial Relations Act1996 of New South Wales, specifically the obligation to provide payslips, and enforcement of a state industrial award (see Chapter 7 of the State Act which deals with enforcement and breach of industrial instruments).
Findings of the Court
Chapter 7 in the State Act (in particular Part 4 under the heading “Inspectors and Their Powers”) provides express power to inspectors to enforce those statutory obligations. There is also evidence that the applicant made an enquiry to the ATO which is responsible under the superannuation legislation for enforcing that legislation, and it is admitted by the second respondent in the Defence, that the ATO is a body which has power to enforce rights under superannuation legislation.
As to the second respondent’s involvement, s.792 is a civil remedy provision and as such, under s.728 of the WR Act (the Court being satisfied that the second respondent was involved in the contravention within the meaning of that section, which is established by the admissions in the Defence), the second respondent is to be treated as having committed the same contravention. The Court is satisfied that the second respondent was involved in the contravention. That enables orders to be made under s.807.
It is alleged by the applicant that the respondent bears the onus, on the balance of probabilities, of excluding a conclusion that the applicant was dismissed for a prohibited reason. The applicant refers to the decision of Justice Buchanan in Seymour v Saint-Gobain Abrasives Pty Ltd (2006) 161 IR 9; [2006] FCA 1452 and the passage in the headnote which summaries the decision accurately as follows:
Because the respondent must exclude the prohibited reasons as a reason for termination normally sworn evidence denying any such reason is necessary and, in most cases, an explanation of the reason for dismissal consistent with the absence of the prohibited reason is, in a practical sense, also necessary.
Those conclusions are found in paragraphs 27–31 of the decision (pp.13-14). At pp.13-14, his Honour summarises the effect of s.809, namely, that the respondent bears an onus to exclude the conclusion that the applicant’s were dismissed in contravention of the Act.
The applicant contends that there is no obligation or need for an applicant to afford a reasonable hypothesis that the termination was for the reasons prohibited in order for the applicant to succeed. The Court accepts that submission.
The applicant contends that on the basis of the decision in McIlwain v Ramsey Food Packaging Pty Ltd (No. 4) (2006) 158 IR 181; [2006] FCA 1302 the applicant in these circumstances is entitled to general damages in addition to compensation for economic loss. It is contended that Justice Greenwood there found that the provisions empowered him to order general damages in addition to economic loss, albeit in modest amounts. In that case one applicant was awarded $3,000 and the other applicant $4,000 for general damages. It is noted that the provisions are not identical to the Work Choices provisions, but it is submitted that they are not relevantly different when it comes to compensation. The consideration of the question of compensation begins at p.204 in paragraph 58. At paragraph 60, his Honour concluded that:
The consequence in this case of conduct of that character is that 12 individuals suffered a fracturing of the employment relationship, lost the right to derive a gross income from the relevant abattoir entity comprised of the components making up that remuneration and 11 of them were refused re-engagement when the re-engagement process commenced.
At paragraph 64, his Honour found that:
the economic loss flowing from the contravening conduct to be awarded to each individual is the amount set out at [380]…
In paragraph 65 his Honour considered the question of general damages, and in paragraph 66, his Honour sets out the section (s.298U(c) of the previous Act) that allowed the Court to award “compensation of such an amount as the Court thinks appropriate”.
The current provision is in s.807(1)(b) of the WR Act, which gives the Court power to order a person to pay another person “compensation for damage suffered by the other person as a result of the contravention.” It is contended that the words “damage suffered” are not limited to economic loss, but would extend to damage in the widest sense known to law, which would include general damages. At paragraph 68 of McIlwain (ante) his Honour says:
Analytically, the starting point is to examine the conduct in contravention of the Act. The second step is to determine those things that have occurred in the lives of the individuals affected by the conduct that bear at least some relation to the contravening conduct. The third step is to determine whether those things arise in respect of the contravening conduct. The fourth step is to determine whether it is appropriate in all the circumstances to make an order that the affected individuals be compensated for the relevant events. If so, the fifth step is to determine ‘such amount as the Court thinks appropriate’.
It is submitted that Justice Greenwood was dealing with a case of summary termination without reason, which is the same situation as in this case. It is alleged that being asked to leave immediately would upset any reasonable person. Application is made for what might be referred to as general damages for distress and injured feelings. In paragraph 87 his Honour referred to the early authority of Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144 at 156, where the Court held that compensation must be confined within reasonable limits and that restraint is required.
Justice Greenwood also refers to the decision of Justice Marshall in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v ACI Operations Pty Ltd (2006) 150 IR 179 at [11], where Justice Marshall concluded that something more than the usual elements of distress must be demonstrated. It is submitted that the decision of Justice Marshall must be read in light of other decisions, including the decision of Justice Lee in Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 63 IR 1 at 9. Justice Greenwood summarised Justice Lee’s position at 213 as follows:
As a matter of general principle, Lee J considered that the court would have regard to ‘what is reasonable in the circumstances’ and would consider ‘the detriment occasioned to the employee by the employer’s contravention of the Act’ and the extent to which ‘it is reasonable to compensate the employee for such consequences’. In some cases, it may be appropriate to include in the measure of compensation a sum ‘sufficient to compensate an employee for mental distress or injured feelings caused by a harsh, unjust or unreasonable termination of employment’.
The Court is disinclined to award compensation for mental stress etc because from what follows below, the applicant will obtain payment for all the award shortfalls and her superannuation contribution entitlements. In addition, she was not out of employment for a protracted period, she did not seek re-employment with the first respondent and was refused, she did not lose entitlements accrued over a long period of employment, and there was no indication of any particular or unusual level of stress or anxiety.
His Honour Justice Greenwood also refers to the decision of Justice von Doussa in Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 330-331, where his Honour noted over a number of paragraphs that economic loss is not necessarily confined to loss of wages. There are other benefits which accrue to an employee which are not paid out and are lost on termination, such as sick leave, leave credits, long service leave credits, and further, that there is compensation appropriate in taking into account inconvenience and hardship.
In the case before Justice Greenwood, his Honour found that one applicant should receive $3,000 and others $4,000 by way of general damages. The applicant here tendered a schedule setting out figures to determine economic loss; the Court accepts those calculations which show that:
·The average earnings of the applicant while employed at Princess World Pty Ltd was $909.20 per week;
·The applicant was unemployed for a period of 13.57 weeks, which means that she would have earned a taxable income of $12,339.21 since for that period if her employment had not been terminated;
·That during that period the applicant received and income of $2,609.75 from New Start payments.
Deducting that amount of $2,609.75 from the total after tax income that would have been earned if her employment had continued for the 13.57 weeks, the applicant claims to have suffered an economic loss of $9,729.46. The applicant seeks an order for that amount plus such amount as the Court considers appropriate by way of general damages.
As to the assessment of penalty, the applicant refers to the decision in McIlwain (ante) where at paragraph 92 Justice Greenwood summarizes the factors that should be taken into account when considering the penalty for breach of freedom of association provisions. In that case his Honour held in paragraph 94 that “it cannot be contended that the contraventions are merely technical or trivial”. It is contended that the contraventions here cannot be said to be technical or trivial, rather they are serious and at the mid-point of seriousness. It is contended that losing one’s job is a very significant thing to happen. The WR Act makes it clear that an employee should not be dismissed for a prohibited reason. It is submitted that termination of employment is the most significant or serious sort of conduct which the legislation is intended to prohibit.
The decision of Justice Merkel in the Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462 at [41]-[42] is referred to, where Justice Merkel concluded
the factor of greatest significance in relation to penalty in the present case is the need to impose a penalty that will constitute a general deterrent to others who may be disposed to engage in proscribed conduct of a similar kind….for a penalty to have the desired effect, it must be imposed at a meaningful level and therefore must be such that a potentially offending corporation will see the penalty as not worth the prospect of gain.
His Honour Justice Merkel continues at [72] that the “legislature has, over time, also moved to increase the penalties that may be imposed in respect of unlawful industrial conduct”, which assist the Court in concluding that the Parliament intends higher penalties to be imposed than might have been imposed in the past. It is said that Justice Greenwood discounted the total maximum penalty by 30%. In that case the maximum penalty was $120,000, which resulted in a total penalty of $84,000. Here the maximum penalty is $6,600. It is said that the respondents have chosen not to come before the Court and show any contrition or deal in any way with the proceeding. It is said there is no reason why a significant penalty reduction should be given, although it is accepted that some discount would in the manner of Justice Greenwood apply.
It is said the Court has the power to determine to whom the penalty should be paid pursuant to s.841(b) of the WR Act. That section was numbered s.356(b) in the old Act. Justice Greenwood deals with the question at p.218 of his decision. It is said that Justice Greenwood was dealing with the same provision. It is said that Justice Greenwood noted that it is considered by many to be a usual order that the penalty be paid to the applicant or a body that has brought the proceedings.
Application is made under s.841(b) to order payment of a penalty to the applicant. Justice Greenwood noted that such an order is not made where there is some suggestion that it would result in a windfall gain to the applicant. There is no suggestion here that order of the penalty to the applicant would result in a windfall gain to the applicant. It is true that the applicant has received payment for her award entitlements and for her superannuation contributions, however, the amount set by the Court as a penalty is not considered to be such that would be described as a windfall gain to the applicant.
The Court declares that:
(a)the dismissal of the applicant from her employment with the first respondent contravened s.792(1)(a) of the WR Act; and
(b)the second respondent was involved in that contravention within the meaning of s.728(2) of the WR Act, and so is treated as having contravened that provision.
The Court considers the breach to be in the higher percentile of seriousness, but is prepared to discount the maximum penalty of $6,600 by 25%, because the employer paid the applicant her award entitlements and superannuation contributions when alerted to the fact, resulting in a penalty of $4,950. That penalty is to be paid to the applicant by the second respondent within 14 days.
The Court assesses the monetary loss suffered by the applicant to be $9,729.46 less tax. The Court orders that the second respondent pay to the applicant within 14 days, the sum of $9,729.46 less tax.
The Court declines to award an amount of damages for non-transferable employment credits as, owing to the short period of employment, these would not be significant and a figure has not been put to the Court by which to calculate that loss.
No award is made of general damages for inconvenience, distress, injured feelings, disruption and dislocation, as no more than the usual elements of these have been demonstrated.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Turner FM
Acting Associate: M Giang
Date: 26 November 2007
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