Industrial Relations Commission of New South Wales CITATION: Wales & Wales -V- Nycon Protective Services [2005] NSWIRComm 1082 APPLICANTS Adam Gregory Wales & Terrance James Wales RESPONDENT PARTIES: Nycon Protective Services RESPONDENTS TO NOTICES OF MOTION Con Adams Nycon Security Group Pty Ltd 5401 FILE NUMBER(S): 5403 of 2004 CORAM: Cambridge C CATCHWORDS: Unfair dismissal - termination of employment - Notices of Motion seeking additional respondents - Corporations Law - Company in Administration - motions granted - respondents named. Industrial Relations Act 1996[NSW] LEGISLATION CITED: Corporations Act 2001 Anthony Geoffrey Matthews v Cool or Cosy Pty Ltd, Ceil Comfort Home Insulation Pty Limited, Citigroup Pty Ltd, (2003) Full Bench of Western Australian Industrial Relations Commission, [Sharkey P, Coleman CC & Gregor C], 2003 WAIRC 10388. Brian Rochford Ltd (Administrator Appointed) v Textile Clothing & Footwear Union of NSW, (1998) Supreme Court of New South Wales (Equity Division), [Austin J], 85 IR @ 332. CASES CITED: Oanh Nguyen and A-N-T Contract Packers Pty Ltd trading as A-N-T Personnel v Thiess Services Pty Ltd trading as Thiess Services, (2003) Industrial Relations Commission of NSW [McKenna C.], 128 IR @ 241. Smith and Ors v Trollope Silverwood & Beck Pty Ltd (2003) Full Commission of Australian Industrial Relations Commission [Giudice P Ross VP & Whelan C], (C2003/1885) Decision delivered 17 Nov 2003. Winter Star Pty Limited v Dixon, (1994) Full Commission of Industrial Relations Commission of NSW, [Glynn & Cullen JJ., Redman CC.], 55IR 187. HEARING DATES: 04/27/2005 DATE OF JUDGMENT: 06/01/2005 APPLICANTS Ms M Dulhunty, barrister LEGAL REPRESENTATIVES: RESPONDENTS TO NOTICES OF MOTION Mr C Hockey, solicitor DECISION: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES COMMISSIONER CAMBRIDGE 1 June 2005 Matter No IRC 5401 of 2004 Adam Gregory Wales -V- Nycon Protective Services Application by A Wales re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996. Matter No IRC 5403 of 2004 Terrace James Wales -V- Nycon Protective Services (Nycon Australia Protective Services) Application by T Wales re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996. DECISION [2005] NSWIRComm 1082 DECISION ON NOTICES OF MOTION 1 Most employees would probably be able to name their employer. However it can be extremely difficult to precisely identify an employer, particularly if such identification is made for the purposes of taking a claim for unfair dismissal. 2 The structure of modern corporations frequently involves the divestment of assets, liabilities and functions via inter-related entities. Often such divestments appear to include the exercise of functions usually associated with that of an employer. The resulting arrangements can present as a bewildering puzzle that would make identification of the employer very difficult for employees who are usually not highly trained in analysis of complex legal-corporate matters. 3 So it was quite understandable that when Terry and Adam Wales, (the applicants), filed their respective unfair dismissal claims they included two different names as answers to the question concerning the employer's name. The applicants also provided a covering letter that was included with the application in matter No IRC 5403 of 2004 which relevantly stated: "We would like our cases to be heard together as we are claiming against the same company with the commission's approval of course. Re the two company names At the time of our dismissal, there was talk of the company changing names, we do not know for sure which company we were dismissed under. We refused to sign any letter of dismissal because we were refused our entitlements Example: Pro Rata Long Service Leave, Annual Leave and in Lieu of Payment." 4 It should also be noted that the Industrial Registry staff have recorded a slightly different named respondent in each of the applications. Matter No. IRC 5401 of 2004 names the respondent employer as "Nycon Protective Services", and in the second matter, IRC 5403 of 2004, the additional terminology "(Nycon Australia Protective Services)", has been included. 5 The precise identification of the employer (or employers), of the applicants has become a matter of significance. This Decision involves Notices of Motion which seek to have two additional Parties named as respondents to the proceedings. In order to deal with the Notices of Motion, it is necessary to briefly set out the chronology of proceedings to date. Outline of Proceedings 6 The applicants filed their unfair dismissal claims on 7 September 2004. The claims were made pursuant to section 84 of the Industrial Relations Act 1996 [NSW], (the Act). 7 The initial proceedings in the matters were fixed by the Industrial Registry arrangements, such that the first matter (IRC 5401 of 2004) was listed for Conciliation and Directions at 2.00 pm on 24 September 2004, and the second matter (IRC 5403 of 2004), was listed at 3.00 pm on the same day. Although the matters were listed separately one hour apart, at approximately twenty minutes past two on 24 September 2004, the Commission commenced proceedings in respect of both matters concurrently. The transcript of proceedings from that day explains that Commission staff had attempted to contact the person named as the contact for the named employer, a Mr Con Adams. These approaches were made as a result of there being no appearance at the Commission by anyone for or on behalf of the respondent or respondents in the first matter. 8 The Commission was advised that Ms M Dulhunty, barrister, appeared for the applicants in both the 2.00 pm and 3.00 pm proceedings and therefore the Commission called on both maters concurrently and the transcript of the proceedings confirms the difficulties associated with the absence of anyone for the respondent or respondents on that occasion. The transcript from 24 September, records the apparent difficulties that the Commission staff had in seeking to make contact with Mr Con Adams. The Commission recorded that there appeared to be a series of very confused and mixed messages about the non-attendance of Mr Con Adams, or any other person who might represent the respondent or respondents in the matters. Despite the difficulties and what the Commission described as a regrettable waste of time, further Conciliation proceedings were rescheduled for 28 September 2004. 9 On 27 September 2004, the Commission received facsimile correspondence from C D Darin and Co, Chartered Accountant. This facsimile correspondence advised of the appointment of C D Darin and Co as Liquidator of the Company identified as Nycon Protective Services (Australia) Pty Ltd, having an ACN 103084475, (Nycon Protective Services (Australia)). 10 On the next day 28 September 2004, the Conciliation proceedings in respect of both matters resumed. Ms Dulhunty continued her appearance for the applicants and once again there was no appearance by or on behalf of the respondent or respondents. 11 The transcript of proceedings from the 28 September records that the correspondence of the previous day from C D Darin and Co had been provided to Ms Dulhunty. Ms Dulhunty sought to have the Commission grant the applicants leave to amend their applications so as to join individuals and other Companies as respondents to the proceedings. In particular Ms Dulhunty mentioned that the employer of the applicants may have been Nycon Security Group Pty Ltd. 12 The Commission advised Ms Dulhunty that it would be inappropriate to name other entities or persons as respondents to the unfair dismissal proceedings without first providing those entities and or individuals with an opportunity to be heard about that proposition. Therefore the Commission suggested that if the applicants did seek to have alteration made to the respondents to the proceedings, then that should be pursued by way of Notice of Motion duly served upon the potentially effected Parties. 13 On 18 October 2004, Ms Dulhunty acting on behalf of the applicants, filed Notices of Motion in respect to both matters numbered IRC 5401 and IRC 5403 of 2004, and which involved adding further named respondents to the proceedings. 14 On 29 October 2004, the Commission listed both matters for Mention regarding the Notices of Motion. On 29 October 2004, Ms Dulhunty continued her appearance on behalf of the applicants and Mr J Mavrakis appeared for the respondents on the Notices of Motion being Phillip Gemelas, Nycon Security Group Pty Ltd and Con Adams. Mr J Chard announced an appearance for "the respondents". However it appeared that Mr Chard actually appeared for the Liquidator of Nycon Protective Services (Australia). 15 Mr Chard initiated debate about the status of the proceedings and suggested that "...the proceedings are stayed against the respondents pursuant to section 500 subsection (2) of the Corporations Act on the basis that the companies are under liquidation." Transcript of proceedings (29/10/04) @ page 1. Mr Mavrakis supported the submissions of Mr Chard and further indicated that the Parties that he represented opposed the Notices of Motion seeking to have those persons and the Company, Nycon Security Group Pty Ltd, named as additional respondents to the proceedings. 16 It is important to note that the transcript of proceedings of 29 October 2004, records that Mr Chard strongly objected to any requirement for his client to be involved in proceedings. However there was no precise identification as to who Mr Chard's client was, particularly as he appeared to suggest that he represented more than one Company. Nevertheless, the Commission advised Mr Chard that there would be no reason that he be required to attend further proceedings in respect to the Notices of Motion as the motions specifically impacted upon persons and a Company which he apparently did not represent. Consequently the Commission advised that Mr Chard could be excused from any requirement to attend in respect of the Notices of Motion proceedings. 17 Mr Mavrakis advised that the Parties that he represented opposed the Notices of Motion. Therefore the Commission fixed a timetable to allow for the respondents to the Notices of Motion to file and serve any material upon which they might seek to rely in opposition to the Notices of Motion. As part of this timetable the Commission scheduled further proceedings by way of a Mention regarding the Notices of Motion for 29 November 2004. 18 At the Mention regarding the Notices of Motion held on 29 November 2004, Ms Dulhunty continued her appearance on behalf of the applicants. Mr Mavrakis is recorded as appearing for Nycon Protective Services, and Nycon Protective Services (Nycon Australia Protective Services). This appears to be incorrect and simply a repetition of the two names that have been attached to the respective applications in these matters. 19 At the proceedings on 29 November, Ms Dulhunty advised that the Notices of Motion were not pursued against the individual named as Phillip Gemelas. Ms Dulhunty clarified that the Notices of Motion were confined to seeking to have two additional Parties joined as respondents in the proceedings, those Parties being; (1) Con Adams; and (2) Nycon Security Group Pty Ltd. Mr Mavrakis indicated that he represented Con Adams and Nycon Security Group Pty Ltd, and that he was instructed to advise that they resisted the Notices of Motion. Consequently the Commission fixed further proceedings providing for a Hearing in respect of the Notices of Motion which ultimately occurred on 27 April 2005. Hearing Re Notices of Motion 20 At the Hearing on the Notices of Motion Ms Dulhunty continued her appearance on behalf of the applicants, and Mr C Hockey, solicitor, appeared for Con Adams and Nycon Security Group Pty Ltd. Ms Dulhunty commenced to advance the case in support of the Notices of Motion and she tendered four Exhibits all of which were admitted without objection. 21 Mr Hockey advised that there was no evidence that the respondents to the Notices of Motion sought to place before the Commission. Ms Dulhunty then started to make submissions in support of the Notices of Motion. At this stage of the proceedings Mr Hockey requested to be heard on the issue of the alleged invalidity of the proceedings. 22 Mr Hockey made detailed submissions about the operation of Corporations Law and, in particular, he sought to rely upon the Judgment of the Supreme Court of New South Wales, in the case of Brian Rockford Ltd V. Textile Clothing and Footwear Union, (Rockford). Brian Rochford Ltd (Administrator Appointed) v Textile Clothing & Footwear Union of NSW, (1998) Supreme Court of New South Wales (Equity Division), [Austin J], 85 IR @ 332. 23 Mr Hockey submitted that the Decision in Rockford meant that the proceedings in these matters were invalid or at least permanently stayed unless and until either the Supreme Court or the Liquidator of Nycon Protective Services (Australia), granted leave so as to permit the proceedings to continue. Mr Hockey noted that the firm of Chartered Accountants, C D Darren and Co had been appointed as Administrator of Nycon Protective Services (Australia) on 30 August 2004, a date which pre-dated the filing of the claims for unfair dismissal made by the applicants. Therefore according to Mr Hockey, the proceedings had been commenced after "Nycon" had been placed into Administration and without the consent of the Administrator or leave of the Supreme Court. Therefore Mr Hockey said the proceedings had not been validly commenced and should be struck out or permanently stayed. 24 Ms Dulhunty made submissions which opposed the suggestion of the proceedings being stayed or struck out as a consequence of the operation of Corporations Law. Ms Dulhunty sought to rely upon a Decision of the Full Commission of the Australian Industrial Relations Commission (AIRC) in the matter of Smith And Others V. Trollope Silverwood & Beck Pty Ltd (In liquidation), (Trollope) Smith and Ors v Trollope Silverwood & Beck Pty Ltd (2003) Full Commission of Australian Industrial Relations Commission [Giudice P Ross VP & Whelan C], (C2003/1885) Decision delivered 17 Nov 2003.. Ms Dulhunty submitted that the Decision of the Full Bench of the AIRC in Trollope specifically permitted the AIRC to continue to deal with applications for a remedy in relation to termination of employment in circumstances where the respondent employer was in liquidation. 25 Ms Dulhunty submitted that the more recent approach as adopted by the Full Bench of the AIRC in the Decision in Trollope should be preferred over the Decision of the New South Wales Supreme Court in Rockford. 26 During the proceedings on 27 April, and following the submissions made in respect of the alleged operation of Corporations Law regarding the invalidity or stay of proceedings, the Commission noted that proceedings in respect of the Notices of Motion had particularly excused the Liquidator of Nycon Protective Services (Australia) from being required to attend. In addition, the imprecision with which the respondent or respondents to the proceedings had thus far been identified established considerable prospect that the Company in Liquidation, Nycon Protective Services (Australia) may have incorrectly nominated itself as respondent to the proceedings. Therefore the Commission invited the Parties to make submissions in respect to the substantive issues that underpinned the Notices of Motion. 27 Ms Dulhunty advanced submissions in support of the Notices of Motion by reference to the evidentiary material that had been included by way of Exhibits 1 through to 4. Ms Dulhunty submitted that in respect to the person sought to be named as an additional respondent, that being Con Adams, there was evidence to establish that he had a real and direct connection with the employment of the applicants. Ms Dulhunty submitted that Con Adams had hired both applicants, and that he had run the day to day operation of the business for which the applicants had performed work. In addition Ms Dulhunty submitted that the evidence demonstrated that Mr Con Adams actually dismissed the applicants and he was the Director, Secretary and shareholder of the Company that was sought to be named as the second respondent in the Notices of Motion. 28 Ms Dulhunty made further submissions which stressed that the respondents to the Notices of Motion had not advanced any evidence as to indicate that neither Con Adams or Nycon Security Group Pty Ltd were not directly and relevantly connected to the employment of the applicants. Ms Dulhunty said that the evidence provided proper basis for the Notices of Motion to be granted and therefore Con Adams and Nycon Security Group Pty Ltd should be named as additional respondents to these proceedings. 29 Mr Hockey submitted that there was no evidence of pay slips or group certificates that had been provided by the applicants such as to demonstrate a connection with the two entities that were being sought to be named as additional respondents. Mr Hockey submitted that the Commission had insufficient evidence and would therefore be unable to make any determination as to who was the correct employer of the applicants. 30 Mr Hockey submitted that the Commission did not have jurisdiction to join another Party to unfair dismissal proceedings unless that Party was the employer of the applicants. Mr Hockey said that the applicants had been employed by Nycon Protective Services (Australia), and that as that Company had appointed an Administrator and subsequently gone into Liquidation, the applicants now sought to find some other entity or person that would answer to their unfair dismissal claims. Mr Hockey stated that this was simply inappropriate, and that the applicants had not properly identified that Con Adams, or Nycon Security Group Pty Ltd, were the employer. Therefore according to Mr Hockey the Notices of Motion should be dismissed. CONSIDERATION 31 The circumstances of this case present some interesting aspects of Employment Law. The identification of the actual employer (or employers), of the applicants is anything but straightforward. It appears that the ambiguity surrounding the actual employer (or employers), of the applicants may have been something that was not entirely accidental. 32 The difficulties associated with the identification of the actual employer (or employers), of the applicants was raised at the initiation of the proceedings where the applicants sought to include two separate Company names together with a covering letter advising of the uncertainty as to which Company they had been dismissed from. 33 As the proceedings unfolded there was an unfortunate absence of attendance by anyone that may have considered themselves to have been the employer of the applicants. In due course the Chartered Accountants, C D Darin and Co (the Accountants), came forward to nominate themselves as representing "the respondents", as it was described by Mr Chard. The involvement of the Accountants arose by virtue of their appointment as Administrators to the Company named Nycon Protective Services (Australia). However whether that particular Company was the employer of the applicants is a matter that has not been determined. 34 There is considerable evidence to suggest that the applicants were employed by Nycon Security Group Pty Ltd. However that position is not clear either. There were at least six different corporate entities that appeared to relate broadly to Nycon Security Group Pty Ltd, including; Nycon Protective Services (Australia) Pty Ltd; Nycon Electronic Group Pty Limited; Nycon Paring Pty Limited; and Electronic Services. This array of corporate entities created understandable confusion on the part of the applicants. It would seem that the interests of justice would be best served if some clarification be made of the Corporation(s) and or person(s) that would be responsible for matters relating to the employment of the applicants at least for the purposes of answering their unfair dismissal claims. 35 In respect to the contest regarding the operation of Corporations Law and in particular the apparent divergence in outcomes arising from comparison of the Decisions in Rockford and Trollope, in the present circumstances, it would seem that it is unnecessary, and undesirable to have the Company named Nycon Protective Services (Australia) (ACN103084475) identified as a respondent in these proceedings. If Nycon Protective Services (Australia) is not identified as a respondent in these proceedings then there appears to be no impediment to the applicants unfair dismissal claims at least commencing some attempted Conciliation, something which regrettably has not occurred long before now. 36 The imprecision with identification of the respondent (or respondents) to the proceedings thus far must be recognised, and that ambiguity has, perhaps fortunately for the applicants, operated so as to circumvent the need for any present contemplation of application of the relevant Corporations Law such as would arise from the Rockford Decision. It appears that the Accountants have assumed a role of "respondents" because of their appointment as Administrators to Nycon Protective Services (Australia), as opposed to the role of any one or more of the other entities that have the Nycon name included or have some other relevant connection to the Nycon group of Companies. It may be that in due course Nycon Protective Services (Australia) is established to have been the employer of the applicants, and in such circumstances it would seem very likely that the applicants unfair dismissal claims may be incapable of proceeding further. Although this is clearly not a matter of settled Law. 37 In the alternative, there is considerable prospect that one or a number of the corporate entities, and, or, the individual Con Adams, may be jointly and or severally held properly as the respondent employer for the purposes of answering the applicants unfair dismissal claims. 38 There is significant potential that the actual employer of the applicants may be determined to have been one or more of the corporate entities that have been identified as trading broadly under the Nycon banner. It may be that the Commission could be deposed to make Orders, if the applicants were successful, to be jointly and severally taken against either one or more of the corporate entities and the individual Con Adams. Support for such a proposition is obtained from the Decision of the Full Commission in the case of Winter Star Pty Ltd V. Dickson (Winter Star) Winter Star Pty Limited v Dixon, (1994) Full Commission of Industrial Relations Commission of NSW, [Glynn & Cullen JJ., Redman CC.], 55IR 187. . In Winter Star, the Full Bench of the Commission varied an earlier Award made by Harrison CC (as he then was), such that a corporation and an individual were made jointly and severally liable for payment in respect of the Orders of compensation that were made in that instance. 39 Further, it is relevant to mention that there is prospect for more than one entity being held to be jointly the employer of one or both of the applicants. Employment arrangements are changing and consequently the prospect that dual or multiple employers may exist in respect of one individual is becoming increasingly more likely. In this regard the following extract from a Decision of the Full Commission of the West Australian Industrial Relations Commission provides a pertinent observation: "This situation was, it should be understood, not a traditional employment situation but was a contemporary situation now not uncommonly encountered in the business world so that new and involving techniques require the law to continually evaluate its approach to the characterisation of relationships and rights and obligations which may flow from them." Anthony Geoffrey Matthews v Cool or Cosy Pty Ltd; Ceil Comfort Home Insulation Pty Limited; Citigroup Pty Ltd , (2003) Full Bench of Western Australian Industrial Relations Commission, [Sharkey P, Coleman CC & Gregor C], 2003 WAIRC 10388. 40 The development of the concept of dual or multiple employers for one employment relationship is also discussed by McKenna C in Oanh Nguyen and A-N-T Contract Packers Pty Ltd trading as A-N-T Personnel and Thiess Services Pty Ltd trading as Thiess Services. Oanh Nguyen and A-N-T Contract Packers Pty Ltd trading as A-N-T Personnel v Thiess Services Pty Ltd trading as Thiess Services, (2003) Industrial Relations Commission of NSW [McKenna C.], 128 IR @ 241. CONCLUSIONS 41 In this instance the Commission has been required to Determine Notices of Motion which seek to include two additional respondents to these proceedings. One of the entities sought to be named as an additional respondent is a corporation, and the other entity is an individual. Having carefully considered the evidence advanced in support of the Notices of Motion, the Commission is prepared to grant those aspects of the Notices of Motion that seek to include the two additional respondents to the proceedings. 42 The evidence provided on behalf of the applicants establishes that there is sufficient connection and proper basis for including the two additional respondents as named in the Notices of Motion. In particular the Commission is minded that, pursuant to section 170(1) of the Act, the interests of justice would be best served by granting the Notices of Motion to include the named respondents, Con Adams and, Nycon Security Group Pty Ltd (ACN 072352106). Further those two entities will be named as the only respondents to the proceedings for present purposes. Consequently the Commission makes the following Orders in this matter at this time. ORDERS In accordance with the Act and the Commission's Rules, the Commission hereby Orders that: 1. Con Adams of 203 Victoria Street, Ashfield, NSW is named as first respondent to proceedings in matters Nos. IRC 5401 of 2004 and IRC 5403 of 2004. 2. Nycon Security Group Pty Ltd, (ACN:072352106) is named as the second respondent to proceedings in matters Nos. IRC 5401 of 2004 and IRC 5403 of 2004. Further proceedings in these matters are fixed by way of Conciliation Conference for 2.15 p.m. on 16 June 2005. oooOOOooo - 15 - DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.