Industrial Relations Commission of New South Wales CITATION : Russell and Another v Traders Workshop Pty Ltd [2002] NSWIRComm 122 APPLICANTS Mr Nigel Russell PARTIES : Mr Mark Warwick RESPONDENT Traders Workshop Pty Ltd FILE NUMBER: IRC 5834 IRC 5986 of 2001 CORAM: Harrison DP CATCHWORDS : Unfair dismissal - summary dismissal as device to avoid redundancy and termination payments - Held - termination harsh, unreasonable and unjust - compensation awarded LEGISLATION CITED : Industrial Relations Act 1996 Australian Corporations Act 1990 HEARING DATES: 05/21/2002 DATE OF JUDGMENT: 06/03/2002 APPLICANTS Ms Denise Gardner LEGAL REPRESENTATIVES: RESPONDENT No Appearance JUDGMENT: - 4 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Monday, 3 June 2002 Matter No IRC 5834 of 2001 NIGEL RUSSELL AND TRADERS WORKSHOP PTY LTD Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 Matter No IRC 5986 of 2001 MARK WARWICK AND TRADERS WORKSHOP PTY LTD Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION [2002] NSWIRComm 122 1 These matters were first subject to proceedings for the purpose Conciliation and Directions in Port Macquarie on 18 September 2001 at which time it was established that the applicants wished the matters to be heard together, accordingly the matters were joined. 2 It was further established that the respondent employer had entered a period of administration pursuant to the Australian Corporations Act ('the Corporations Act'). Advice was received from Knights Insolvency Administration ('Knights') invoking S 440D, Stay of proceedings of the Corporations Act which states: (1) During the administration of a company, a proceeding in a court against the company or in relation to any of its property cannot be begun or proceeded with, except: (a) with the administrator's written consent; or (b) with the leave of the Court and in accordance with such terms (if any) as the Court imposes. (2) Subsection (1) does not apply to: (a) a criminal proceedings; or (b) a prescribed proceeding. 3 The administrators sought adjournment of the proceedings pending completion of the respondent's administration. 4 The matters were stood over to 21 May 2002 in Newcastle. Ms Gardner appeared with and on behalf of each of the applicants. Advice was received from Knights, tendered by Ms Gardner (exhibit 1), allowing proceedings to continue against the respondent, advising that the administration had now proceeded to liquidation, that the liquidator was without funds to incur costs in the matter, and accordingly would not attend or defend the applications. 5 Ms Gardner pressed for a determination of the applications ex parte. 6 Ms Gardner noted the advice from the liquidator that funds do not exist to meet or comply with any Order arising out of these proceedings. Ms Gardner put that these circumstances do not render the proceedings a futility, submitting that a determination by the Commission is a prerequisite for payment of entitlements from the General Employee Entitlement and Redundancy Scheme (GEERS), and accordingly pressed for a determination of the applications. 7 Ms Gardner brought evidence from the applicants and tendered signed depositions from Mr A Cameron, employed by the respondent as a foreman at the time of the termination of the applicants' employment; Mr R Duck, also employed by the respondent as a foreman at the time of the terminations; and Mr G Buckridge, the Manager of furniture production for the respondent. 8 The evidence establishes that both the applicants were instantly dismissed on allegations of conduct and poor work performance, incapable of substantiation, as a subterfuge by the respondent to avoid payments of statutory and award entitlements arising in the event of a genuine redundancy due to poor trading and financial difficulties. 9 Mr Warwick was employed with the respondent from 11 April 1994 to the termination of that employment on 15 August 2001. He seeks compensation of $13,082.20, particularised as entitlement denied as a consequence of the termination of employment. 10 Mr Russell had been employed with the respondent from August 1999 to the termination of that employment on 13 August 2001. He seeks compensation of $12,640.96 , which he contends is entitlement denied as a result of the termination of his employment. 11 The evidence provided satisfies the requisite standard of proof that allows the Commission to form the view that the termination of employment of both applicants was harsh, unreasonable and unjust; and that compensation should be ordered. It is appropriate in these circumstances that the standard of compensation should be linked to the loss of entitlements the respondent deliberately sought to avoid. 12 Accordingly, I determine compensation in respect to Mr Russell's application in the amount of $15,000; and in Mr Warwick's application, the amount of $16,500. oo0oo INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Monday, 3 June 2002 Matter No IRC 5834 of 2001 NIGEL RUSSELL AND TRADERS WORKSHOP PTY LTD Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 Matter No IRC 5986 of 2001 MARK WARWICK AND TRADERS WORKSHOP PTY LTD Application re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 ORDERS 1. Pursuant to s 89(5) of the Industrial Relations Act 1996 Traders Workshop Pty Ltd is ordered to pay Mr Nigel Russell the sum of $15,000 (fifteen thousand dollars) within 21 days of the date of this decision. 2. Pursuant to s 89(5) of the Industrial Relations Act 1996 Traders Workshop Pty Ltd is ordered to pay Mr Mark Warwick the sum of $16,500 (sixteen thousand five hundred dollars) within 21 days of the date of this decision. I so order. The Hon. R W Harrison Deputy President 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.