Industrial Relations Commission of New South Wales CITATION: Kerr v. Elite Professionals Pty Limited [2004] NSWIRComm 1121 APPLICANT Australian Liquor, Hospitality and Miscellaneous Workers' Union, New South Wales Branch PARTIES: RESPONDENT Elite Professionals Pty Limited FILE NUMBER: IRC 2288 of 2004 CORAM: Connor C CATCHWORDS: unfair dismissal - ex parte proceedings - flat rate payments - award breaches - underpayments LEGISLATION CITED: Industrial Relations Act 1996 Grimshaw v. Dunbar (1953) 1 All ER 350 Smith v. London - unreported London v. Smith - unreported General Pants (Trading) Company Pty Limited v. Marie - unreported Dima Homes Case (1989) 5 AILR Rep.4 South Sydney City Council v. Federated Municipal and Shire Council Employees' Union (1989) 28 IR 363 CASES CITED: Busways v. Johnson (1994) 55 IR 255 Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 CCH Australia Limited v. Bowen (1998) 79 IR 206 Oswald v. New South Wales Police Service (1999) 90 IR 42 Hollingsworth v. Commissioner of Police (No.2) (1999) 88 IR 341 Little v. Commissioner of Police (No.2) (2002) 112 IR 212 D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 HEARING DATES: 12/07/2004 EXTEMPORE JUDGMENT DATE: 12/07/2004 APPLICANT Stanley Koulouris Australian Liquor, Hospitality and Miscellaneous Workers' Union REPRESENTATIVES: RESPONDENT No appearance DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Tuesday, 7 December, 2004 Matter No IRC 2288 of 2004 Kerr and Elite Professionals Pty Limited Application by the Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch under S.84 of the Industrial Relations Act, 1996 DECISION [2004] NSWIRComm 1121 Preliminary 1 Mr James Kerr was employed as a security officer - a static guard - with Elite Professionals Pty Limited, trading as ESP Security. He was engaged under the terms of the Security Industry (State) Award, although it appears that it has not always been followed by ESP. Mr Kerr commenced employment on Monday, 1 April, 2002 and his services were terminated on Thursday, 1 April, 2004. He is a member of the Australian Liquor, Hospitality and Miscellaneous Workers' Union which lodged an application on his behalf under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90], of the 1996 Industrial Relations Act. 2 The matter was allocated to me and Registry staff set the matter down for a conciliation and directions hearing on Friday, 28 May, 2004 but adjourned at the request of the parties for a mention on Wednesday, 16 June, 2004. Conciliation failed to settle the matter. I programmed it for arbitration. There were further mentions of the matter for programming purposes - on Thursday, 19 August, 2004, Thursday, 2 September, 2004 and Friday, 24 September, 2004. The LHMWU filed a statement of contention and its evidentiary material on Thursday, 2 September, 2004 in the course of the proceedings. ESP was to provide its formal response on Monday, 20 September, 2004. It failed to do so. Nor did it appear in the proceedings on Friday, 24 September, 2004. I adjourned the proceedings for a hearing on Tuesday, 7 December, 2004, indicating an intention to proceed ex parte if necessary. 3 Mr Koulouris represented Mr Kerr and the LHMWU in the hearing, calling Mr Kerr to give evidence. There was no appearance on behalf of ESP. Mr Scott Baker, the managing director of ESP, wrote a brief letter to me on Tuesday, 7 December, 2004 and forwarded it to me by facsimile transmission, viz: "...I am unable to attend today's proceedings due to illness. I sincerely apologise for any inconvenience..." No medical certificate accompanied that letter and Mr Koulouris doubts strongly that Mr Baker's illness is genuine. He has formed that view because he saw Mr Baker, accompanied by Mr Andrew Curnick, the ESP operations manager, in another hearing before the Commission on Monday, 6 December, 2004, and he appeared to be well. Moreover, he had spoken to Mr Curnick in the office immediately before the hearing on Tuesday, 7 December, 2004. As Mr Koulouris indicated, if Mr Baker was ill, it would at least have been a courtesy to me and Mr Koulouris for Mr Curnick to appear in the proceedings. Mr Koulouris has pressed that I hear the matter ex parte , as I indicated in the proceedings on Friday, 24 September, 2004 that I intended to do. 4 I must be satisfied that ESP was aware that the matter was set down for hearing before it would be open to me to proceed ex parte. ESP has been informed of these proceedings; Mr Baker's letter to me on Tuesday, 7 December, 2004 confirms that fact at least. That having been said, it is essentially a question of ensuring natural justice. A party to an action is prima facie entitled to have it heard in his presence. He is entitled to dispute his opponent's case, cross-examine any of his opponent's witnesses, call his own witnesses and give such other relevant evidence before the court. Common justice demands, so far as can be given effect to without injustice to the other party, that the litigant who is absent should be allowed to come to court and address issues in dispute [Grimshaw v. Dunbar (1953) 1 All ER 350 at p.355]. 5 Whilst Mr Baker has asserted that he is ill on Tuesday, 7 December, 2004, he has provided no proof of that illness and the strong suspicion remains in my mind, as it does in Mr Koulouris', that his purported illness is nothing more than a ruse to avoid the hearing. As I indicated in my unreported decision in Smith v. London [Matters No. IRC 1204, 1205 and 1206 of 1994 at p.9]: "…Ultimately, I am faced in this hearing with balancing the conflicting interests of the parties - (the respondent employer) and the three employees he dismissed. Concern over (the employer's) mental fitness to present a proper case in defence of the allegations made against him should be balanced against the interests of the three dismissed employees whose services have been terminated under the circumstances I have described earlier in this decision and who have a right…to pursue a claim for relief over their unfair dismissal without it being frustrated by factors over which they have no control…" An appeal against that decision was dismissed by a Full Bench of the Commission (Fisher P, Hungerford J and Buckley CC) in its unreported decision of Friday, 16 December, 1998 in London v. Smith [Matter No. IRC 1796 of 1998]. 6 There are outstanding amounts due to Mr Kerr and the LHMWU is pursuing a claim in that respect before an industrial magistrate at present. It would have been open to an industrial organisation, ie the LHMWU in this hearing, to press a claim for entitlements under Ss.379 and 380 in Part 6 proceedings; the amount allegedly claimed by the LHMWU for Mr Kerr would fall within the $10,000.00 ceiling for such small claims. But I do not believe that it is appropriate for Mr Koulouris to amend his claim in these Part 6 proceedings to include such a claim. To do so would constitute an ambush to ESP since it would have no knowledge of any such amended claim. The LHMWU should continue to pursue the outstanding claim for underpayments before an industrial magistrate and restrict its claim made in these Part 6 proceedings on behalf of Mr Kerr to what it has always asserted to have been the issue in dispute - and with respect to which ESP was clearly aware. The Evidence 7 In these ex parte proceedings Mr Koulouris still carries the onus of establishing the unfairness in Mr Kerr's dismissal. In its unreported decision of Thursday, 8 September, 1994 in General Pants (Trading) Company Pty Limited v. Marie [Matter No. IRC 3123 of 1993] the Full Bench of the Commission (Fisher J - President, Schmidt J and Murphy CC) commented (at p.18) that where an employer does not appear in proceedings in response to a Part 6 application, the dismissed employee: "…had still to discharge the onus placed on (the employee) by the Act..." To use the words of the Full Bench of the former State Industrial Commission (Bauer J, Varnum DP and Sheils C) in the Dima Homes Case (1989) 5 AILR Rep 4, there must be "...sufficient particulars to regulate the decision making process…". 8 Mr Kerr commenced employment with ESP on a casual part-time basis working two 12 hour shifts each week at a site at 55 Pyrmont Bridge Road, Pyrmont - formerly WorldCom but now the MCI site - which was on the fourth floor of the Citiwest Centre. ESP also holds a security contract for the rest of the Citiwest Centre and its security office is on the ground floor. The WorldCom and Citiwest security contracts were separate but, according to Mr Kerr, security officers from both sites routinely worked on both site to fill in gaps which arose in the roster. 9 Mr Kerr was initially paid on an agreed flat rate of $17.00 per hour on two 12 hour shifts from 7.00pm to 7.00am on Saturday and Sunday. According to Mr Kerr there was initially no annual pay or shift penalties paid for the shifts worked when he commenced working for ESP. He accepted employment on that basis - not knowing, he claimed, that such arrangements were contrary to the State security industry award. Those hours of work were to be the subject of frequent changes during the course of his employment. 10 In late 2003 his hours of work were altered without consultation. He still worked two shifts each week but his Saturday night shift had been changed from a 12 hour shift to a 10 hour shift - from 10.00pm to 8.00am. That was to only be for a short time, however. In early 2004 Mr Kerr was offered employment - 42 hours per week. His new hours of work were to be on Friday night from 10.00pm to 8.00am (10 hours), on Saturday and Sunday night from 6.00pm to 6.00am (12 hours) and on Monday afternoon from 2.00pm to 10.00pm (8 hours). Mr Kerr accepted that arrangement of hours and commenced working them but a complaint from another employee that he was being short-changed and that Mr Kerr was getting the choice shifts led to a further substantial change in Mr Kerr's shifts - 5 fixed afternoon shifts of 8 hours from 2.00pm to 10.00pm on Monday to Friday. 11 Mr Kerr recorded in a statutory declaration which formed the basis of his evidence that at the end of 2002 "...things came unstuck..." for ESP when a fellow employee complained to the New South Wales Department of Industrial Relations over being short-changed on his leave entitlements upon the termination of his services and the LHMWU approached ESP employees on both the WorldCom and Citiwest sites, including Mr Kerr, who joined it. The LHMWU then commenced action for the recovery of remuneration allegedly due to Mr Kerr and three other employees before an industrial magistrate. 12 Mr Kerr also recorded in his statutory declaration that in early 2004: "...rumours began circulating...that ESP was planning to move back to an Australian Workplace Agreement with a flat rate of $17.00 per hour for all its workers. If true, this meant a substantial drop in income for many (if not most) ESP's guards, as most were working some kind of rotating shift covering weekends and public holidays. It was my understanding that such an agreement would offer less than the State security industry award and was therefore not legal. I actively cautioned the other workers...to read any documentation very carefully and to consult both the LHMWU and the DIR before signing. In the first week in March, 2004 the rumours proved true and it was announced that the guards at the Citiwest Centre would be moved to a flat rate AWA of $17.00 per hour. Those who refused to sign were told that they would be placed on day shift, Monday to Friday, and therefore be worse off than the $17.00 flat rate being offered. At that time, the new AWA did not affect those of us working upstairs at WorldCom, but it was strongly rumoured that our time would come... I spoke to several of the guards stationed on the ground floor and it was quite clear to me that most were deeply upset by both the low flat rate and the fact that they were being shoe-horned into an AWA they wanted no part of..." 13 On Friday, 12 March, 2004 Mr Kerr was summoned to the ESP head office and informed that he was to be moved to a site in Villawood which was under a short-term lease to the State Electoral Office for vote-counting in an upcoming local government election. He was given three 12 hour shifts from Monday and Wednesday from 6.00am to 6.00pm. Mr Kerr understood that the site would close down within several weeks and Mr Kerr would at that time be moved to a new site. 14 Mr Kerr apparently struck up a conversation with an SEO officer who had hired ESP to handle the security at the site. He asked him why he had chosen ESP and had been told by him that the ESP's signs were still hanging on the fence so he "...just gave them a call...". ESP had been engaged to handle security for a former tenant and several signs were still on the walls and perimeter fence. That seemed to me to be a fairly innocuous conversation but on Wednesday, 31 March, 2004 Mr Andy Curnick, the operations manager for ESP arrived at the Villawood site and informed Mr Kerr that he had been dismissed for defaming ESP as a result of what he had said to the SEO officer. Conclusion 15 In the course of the conciliation proceedings before me on Wednesday, 16 June, 2004, Mr Scott Baker, the director of ESP had represented it and informed me that Mr Kerr had been dismissed for his use of offensive language and for neglect of duties. There was no mention of any defamation by Mr Baker. There is no evidence before me concerning Mr Kerr's alleged neglect of duties and I reject it as a reason for his dismissal. Mr Kerr concedes that he may have sworn on one occasion - hardly grounds for dismissal, I would think. I accept that conversations between groups of men may frequently be conducted in colourful language but unless that language reflects an excessively hostile or belligerent attitude or uttered to, or in the presence of, a member of the public, it is not, to my mind, sufficient grounds for dismissal [South Sydney City Council v. Federated Municipal and Shire Council Employees Union (1989) 28 IR 363 at pp.365 and 366]. That does not appear to have been the case with Mr Kerr. 16 It is Mr Kerr's belief that his dismissal flowed entirely out of his "...preparedness to fight ESP and to rally others to do the same...", as he has described it in his statutory declaration. That appears to me to be an accurate reflection of the evidence adduced in this hearing of the background to Mr Kerr's dismissal. Since his dismissal the WorldCom site employees have also been placed on an AWA, as Mr Kerr believed would be the case. That acts to confirm Mr Kerr's belief - and mine. And it must mean that Mr Kerr's dismissal was unfair - or to use the words of S.84(1), on which any Part 6 application relies, "harsh", "unreasonable" or "unjust" [Busways v. Johnson (1994) 55 IR 255 at p.261]. 17 In its Part 6 application the LHMWU had primarily sought Mr Kerr's reinstatement under S.89(1). That has consistently been described as the preferred remedy for an unfairly dismissed employee [Leeds and Northrup Australia Pty Limited v. Hull (1992) 46 IR 11 at p.15, CCH Australia Limited v. Bowen (1998) 79 IR 206 at pp.217 and 218, Oswald v. New South Wales Police Service (1999) 90 IR 42 at pp.67, Hollingsworth v. Commissioner of Police No.2 (1999) 88 IR 282 at pp.341 and 342 and Little v. Commissioner of Police (No.2) (2002) 112 IR 212 at p.243]. But, in the circumstances described to me in the evidence, I do not believe that reinstatement to his position with ESP remains a viable option for Mr Kerr. Moreover, he has now found alternative employment on Friday, 30 July, 2004 and, whilst he does not earn as much as he had formerly earned whilst he worked for ESP, he is content to remain in his present work. His claim is therefore confined to monetary compensation under S.89(5) alone. 18 The upper limit for monetary compensation is set by S.89(5) as: "…an amount of compensation not exceeding six months' remuneration of the applicant at the average rate received over the period of six months immediately before being dismissed…" And the LHMWU claim on behalf of Mr Kerr in this hearing must also be considered bearing in mind the provisions of S.89(6), viz: "When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration that would have been payable if the applicant had succeeded in obtaining alternative employment." 19 Whilst S.89(5) is concerned with loss of income, not any assessment of damages, there remains a certain amount of speculation in determining the appropriate level of compensation. In D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 the Full Bench of the Commission (Wright J - President, Walton J - Vice President and Tabbaa C) alluded to that when (at p.363) it commented that: "…the power in the Commission to make a money order, subject to the limitation on the quantum of compensation and the matters required to be taken into account by S.89(6), is nevertheless within the Commission's discretion. Whilst the Commission is required to take into consideration the matters identified in S.89(6), those matters are not necessarily to be reflected in any particular, arithmetic or definitive way in the money order for compensation made…" Therefore S.89(6) does not provide a simple mathematical formula - a sum representing the amount of income over the period of six months immediately prior to dismissal minus a sum representing the earnings after that date equals the amount of compensation available. The direction in S.89(6) is to "…take into account…" those factors: what is actually to be done with that information is still a matter for my discretion, provided always that I do not exceed the six month ceiling in S.89(5). 20 In the circumstances, based on the figure of $900.00 which is recorded in the Part 6 application as his average weekly remuneration when he worked for ESP, and bearing in mind the requirements of Ss.89(5) and (6), I propose to order that it pay to him the sum of $18,500.00. O R D E R 1. Elite Professionals Pty Limited shall pay the sum of $18,500.00 to Mr James Kerr within 21 days. 2. This order shall take effect on and from Tuesday, 7 December, 2004. P J CONNOR Commissioner 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.