Powell v Simple Computing Australia Pty Ltd
[1997] IRCA 111
•06 February 1997
DECISION NO:111/97
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - INTEREST is payable subject to the limitations set by section 482 of the Workplace Relations Act, on any sums ordered to be paid by way of COMPENSATION or DAMAGES under section 170EE of the Act.
Workplace Relations Act, 1996; sections 170 DB, 170EE, 430, 482
Federal Court Act; section 51A
Federal Court Rules; Order 35 Rule 8
Rules of the Supreme Court of NSW; Schedule J
POWELL v SIMPLE COMPUTING AUSTRALIA PTY LIMITED
NI 1977 of 1996
Before: PATCH JR
Place: SYDNEY
Date/s of hearing: 6 &7 FEBRUARY 1997
Date of judgment: 9 APRIL 1997
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 1977 of 1996
BETWEEN:
NEIL CASEY POWELL
Applicant
AND
SIMPLE COMPUTING AUSTRALIA PTY LTD
Respondent
BEFORE: PATCH JR
PLACE: SYDNEY
DATE: 9 APRIL 1997
MINUTES OF ORDERS
THE COURT ORDERS THAT:
The respondent is to pay interest to the applicant in the sum of $260.00 within 21 days of today.
Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 1977 of 1996
BETWEEN:
NEIL CASEY POWELL
Applicant
AND
SIMPLE COMPUTING AUSTRALIA PTY LTD
Respondent
BEFORE: PATCH JR
PLACE: SYDNEY
DATE: 9 APRIL 1997
REASONS FOR DECISION
Supplementary Judgment
On 7 February 1997 I delivered judgment in respect of the substantive issues involved in the trial of this matter. During oral argument after the conclusion of the evidence, counsel for the applicant had indicated that a claim for interest would be made in respect of any orders for the payment of monies which might be made by the Court.
Accordingly, the applicant having made an application for interest, it is necessary for the Court to deal with that matter.
An order was made establishing a timetable for written submissions on the question of interest, which timetable was complied with by both parties.
Insofar as it is relevant, section 482 of the Workplace Relations Act, 1996 (“the Act”) is as follows:
482 (1) In proceedings for the recovery of money (including debt or damages) in respect of a cause of action that arose after 21 November 1984, the Court or a Judge must, on application, unless good cause is shown to the contrary, either:
(a) order that there be included in the sum for which judgment is given interest at such rate as the Court or Judge thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or
(b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum instead of any such interest.482 (2) Subsection (1) does not:
(a) authorise the giving of interest on interest or of a sum instead of such interest; or
(b) apply in relation to a debt on which interest is payable as of right whether because of an agreement or otherwise; or
(c) affect the damages recoverable for the dishonour of a bill of exchange; or
(d) limit the operation of any enactment or rule of law that, apart from this section, provides for the award of interest; or
(e) authorise the giving of interest, or a sum instead of interest, except by consent, on a sum for which judgment is given by consent.
482 (3) If the sum for which judgment is given (“the relevant sum”) includes, or the Court or a Judge in its or his or her absolute discretion determines that the relevant sum includes, an amount for:
(a) compensation in respect of liabilities incurred that do not carry interest as against the person claiming interest or claiming a sum instead of interest; or
(b) compensation for loss or damage to be incurred or suffered after the date on which judgment is given; or
(c) exemplary or punitive damages;
interest, or a sum instead of interest, must not be given under subsection (1) in respect of such an amount or in respect of so much of the relevant sum as in the opinion of the Court or Judge represents such an amount.
Section 482 (4) is, for present purposes, not relevant.
The respondent was ordered to pay the applicant the sum of $6,500 (gross) as compensation for the unlawful termination of the applicant’s employment. As damages for breach of contract for unpaid pay in lieu of notice, the respondent was also ordered to pay to the applicant the sum of $3,317.74 (gross).
The first order was made in respect of an application by the applicant alleging that the termination of his employment was unlawful, and seeking compensation.
The second order was made as a result of a Statement of Claim filed by the applicant, in the associated jurisdiction of the Court, pursuant to section 430 of the Workplace Relations Act, 1996 (“the Act”). The order made by the Court was an order for damages for the respondent’s breach of the contract of employment between the respondent and the applicant.
The proceedings in which that second order was made were clearly, in the terms of section 482 (1) of the Act, “proceedings for the recovery of money (including a debt or damages)”.
The question arises whether an application alleging the unlawful termination of employment and seeking a remedy under section 170EE of the Act is a proceeding “for the recovery of money (including a debt or damages)”.
In my opinion, insofar as an application alleging an unlawful termination of employment seeks compensation under section 170EE(2), or damages under section 170EE(5), for contravention of section 170DB of the Act, such an application is a “proceeding for the recovery of money (including a debt or damages)” within the meaning of section 482 (1) of the Act.
It is to be noted in this respect that the words “including a debt or damages” are not expressed to be exclusive, and that there may be other types of proceedings contemplated under section 482 (1) of the Act “for the recovery of money” apart from proceedings relating to a debt or damages. In my opinion, an application alleging an unlawful termination of employment, and seeking compensation under section 170EE (2) or damages under section 170EE(5), is just such a proceeding.
Section 482 (1) of the Act provides that the Court must, on application, unless good cause is shown to the contrary, make an order for interest.
The rules of the Industrial Relations Court of Australia do not prescribe a rate of interest. However, subsections 482 (1) to 482 (3) of the Workplace Relations Act mirror section 51A of the Federal Court Act.
Order 35 rule 8 of the Federal Court Rules prescribes 12% as the appropriate rate of interest or orders made under the analogous section of the Federal Court Act.
Furthermore, the current rate of interest prescribed by Schedule J of the Rules of the Supreme Court of NSW is also 12%.
In my opinion, 12% would be an appropriate rate of interest to be used as the starting point for the calculation of interest in this case.
An element of the amount ordered to be paid by way of compensation for the unlawful termination of the applicant’s employment was the sum of $4,000 for “ongoing economic loss from 2 September 1996”.
That sum of $4,000 included an allowance for the likely future economic loss of the applicant from the date of judgment, which was 7 February 1997.
Section 482 (3) of the Act prohibits an order for interest in respect of any amount for “compensation for loss or damage to be incurred or suffered after the date on which judgment is given”.
However, insofar as that $4,000 related to the economic loss of the applicant from 2 September 1996 to 7 February 1997, there is no prohibition on interest being paid.
The relevant part of the applicant’s remuneration package, in respect of which his ongoing economic loss was calculated, came to a total of $31,621 per annum. The applicant commenced a new job on 2 September 1996, earning the sum of $28,950 per annum.
The applicant was, therefore, up to 2 September 1996, suffering an ongoing economic loss per annum of $2,670.
From 2 September 1996 until 7 February 1997 was a period of 159 days. The applicant’s actual economic loss for that period is calculated as follows: I divide 2670 by 365 to reach the daily rate. I multiply that by 159 to give the figure for the relevant period. That results in an amount of $1,163.10. The applicant is entitled to interest, at 12% per annum on that sum, as it accrued from 2 September 1996 until 7 February 1997. Although the applicant provided written submissions, in which his counsel submitted that interest should be payable, no assistance was provided, except for a submission that 12% was the appropriate rate, as to how that interest should actually be calculated.
By way of illustration only, if the entire sum of $1,163.10 were due and owing on 2 September 1996, (which it was not), at the rate of 12% per annum the interest to be paid by the respondent would amount to $60.80.
The liability of the respondent to pay the applicant pay in lieu of notice arose upon the termination of his employment - which occurred, by way of letter dated 4 July 1996, on 5 July 1996.
It follows that the applicant is entitled to interest on the sum to be paid in lieu of notice ($3,317.74) at 12% per annum from 5 July 1996 to 7 February 1997, a period of 218 days.
I divide $3,317.74 by 365 (to give the daily rate) and multiply that by 218 (for the relevant period). 12% of that is $237.79.
In my opinion, given the difficulties of calculating the interest on the applicant’s economic loss for the period 2 September 1996 until 7 February 1997, and given the very small sum involved, the appropriate way to deal with the question of interest is to simplify matters by making an order for the payment of a lump sum under section 482 (1) (b) of the Act. That lump sum should be in the amount of $260.00.
ORDER
The order that the Court makes is as follows:
The respondent is to pay interest to the applicant in the sum of $260.00 within 21 days of today.
I certify that this and the preceding 8 pages
are a true copy of the reasons for decision of
Judicial Registrar Patch
Associate: Debra Scott
Dated: 9 April 1997
APPEARANCES
Counsel appearing for the applicant Mr C R Burge Solicitors for the applicant Peter O’Neill & Associates Counsel appearing for the respondent Mr R F Crow Solicitors for the respondent Holman & Webb Dates of hearing: 6 & 7 February 1997
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