Industrial Relations Commission of New South Wales in Court Session CITATION : Sisley v Ellenberger t/as GEB Security [2004] NSWIRComm 341 APPLICANT Nellie Sisley PARTIES : RESPONDENT Gustav Ellenberger t/as GEB Security FILE NUMBER: 3566 of 2002 CORAM: Marks J CATCHWORDS : Exparte judgment - unfair contracts and arrangment - employer refused to employ security guard as employee - paid less than award - contract varied to provide payment of all amounts entitled as employee at law - order for compensation made based on amended schedule of entitlement calculations. LEGISLATION CITED : Industrial Relations Act 1996 ss 105 106 Legal Profession Act HEARING DATES: 11/05/2004 DATE OF JUDGMENT: 11/19/2004 APPLICANT Solicitor: Mr R Mitchell Employment Lawyers LEGAL REPRESENTATIVES: RESPONDENT No appearances JUDGMENT: - 5 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: MARKS J Friday 19 November 2004 Matter No IRC 3566 of 2002 NELLIE SISLEY v GUSTAV ELLENBERGER t/as GEB Security Application under s 106 of the Industrial Relations Act 1996 JUDGMENT 1 In these proceedings the applicant, Nellie Sisley, seeks relief against the respondent, Gustav Ellenberger trading as GEB Security, under s 106 of the Industrial Relations Act 1996 ("the Act"). Sections 105 and 106 of the Act are in the following terms: 105 Definitions In this Part: contract means any contract or arrangement, or any related condition or collateral arrangement, but does not include an industrial instrument . unfair contract means a contract: (a) that is unfair, harsh or unconscionable, or (b) that is against the public interest, or (c) that provides a total remuneration that is less than a person performing the work would receive as an employee performing the work, or (d) that is designed to, or does, avoid the provisions of an industrial instrument . 106 Power of the Commission to declare contracts void or varied (1) The Commission may make an order declaring wholly or partly void, or varying, any contract whereby a person performs work in any industry if the Commission finds that the contract is an unfair contract. (2) The Commission may find that it was an unfair contract at the time it was entered into or that it subsequently became an unfair contract because of any conduct of the parties, any variation of the contract or any other reason. (3) A contract may be declared wholly or partly void, or varied, either from the commencement of the contract or from some other time. (4) In considering whether a contract is unfair because it is against the public interest, the matters to which the Commission is to have regard must include the effect that the contract, or a series of such contracts, has had, or may have, on any system of apprenticeship and other methods of providing a sufficient and trained labour force. (5) In making an order under this section, the Commission may make such order as to the payment of money in connection with any contract declared wholly or partly void, or varied, as the Commission considers just in the circumstances of the case. (6) In making an order under this section, the Commission must take into account whether or not the applicant (or person on behalf of whom the application is made) took any action to mitigate loss. 2 In brief, the applicant alleges that she was engaged by the respondent under a contract to perform work as a static security guard. The engagement was the subject of a number of documents. The applicant commenced work on 3 December 1990 and continued to perform work as directed by the respondent until 6 October 2000. It is alleged by the applicant that she was required by the respondent to perform work in connection with the respondent's security business as an independent contractor and that the respondent refused to engage her as an employee. The applicant complains that the monies payed to her by the respondent were less than she would otherwise have earned pursuant to the provisions of the relevant industrial instrument, the Security Industry (State) Award. She asserts that the arrangement and contracts pursuant to which she performed work were relevantly unfair in this regard and seeks variation of the working arrangements accordingly so as to provide for the payment to her in accordance with the provisions of the industrial instrument and, in addition, to provide for payment of annual leave, long service leave and superannuation contributions which the respondent would have been required to make to an employee. The applicant claims additional relief in the nature of interest and costs. 3 The respondent did not defend the proceedings in the sense that he did not file any affidavit material or otherwise put into evidence any matter or document to resist the applicant's claim. By letter dated 12 May 2004 the respondent denied any liability to compensate the applicant but said that he was unable to afford a solicitor. The respondent did not participate in the hearing. I am satisfied, however, that the applicant's solicitor advised the respondent that the matter was set down for hearing on 4 November 2004 and that it would proceed on an ex parte basis if the respondent did not appear. This was established through affidavit material sworn by the applicant's solicitor which became evidence in the proceedings. 4 The applicant swore two affidavits which became evidence in the proceedings and in addition she have supplementary oral evidence. I am satisfied on the basis of the applicant's evidence that she originally approached the respondent for work as a security guard and that she then knowingly entered into an arrangement whereby she was appointed to carry out work as a security guard on an independent contractor basis. The applicant worked consistently for the respondent over 12 hour shifts until she ceased work on a site in Burke Road Alexandria. The applicant also worked on an irregular basis on weekends at another site in Huntley Street Alexandria, that work being carried out mostly on weekends. 5 During all of this time the applicant worked exclusively for the respondent and for no-one else. She did not employ others and she worked as directed by the respondent. She commenced working at $11 per hour which was later increased on several occasions and at the time that she ceased performing her work was at the rate of $14 per hour. However the applicant was not afforded any sick leave, annual leave, long service leave or other allowances nor any contributions made on her behalf to any superannuation fund, either statutory or otherwise. The respondent did not deduct tax from monies paid to the applicant and she was responsible for making her own arrangements for the payment of taxation. 6 The applicant was given record books to complete which set out the starting and finishing time on each day that she performed work at the Burke Road site. The applicant also kept and produced into evidence invoice books containing copies of all invoices which she submitted to the respondent for work carried out at the Burke Road site. However the applicant has no such records with respect to work carried out at the Huntley Street site and alleges that she was told by the respondent not to submit invoices for that site. Nevertheless, the applicant was paid for work which she performed at the Huntley Street site, allegedly less than money she would otherwise have earned as an employee under the relevant industrial instrument. 7 I am satisfied on the basis of the evidence that the contract or arrangement entered into between the applicant and the respondent was unfair for the purpose of s 106 of the Act. It was unfair in the sense that the applicant performed personal services work of the same kind and in the same circumstances as would have been performed by an employee of the respondent. Nevertheless, she was paid less than the monies that the respondent would have been required to pay her if she was an employee at law, including entitlements to annual holidays, long service leave, sick leave and superannuation. 8 Having found that the contract pursuant to which the work was performed was unfair, it should be varied so as to provide that notwithstanding any provision to the contrary, the respondent is to make payment to the applicant of all amounts that would have been payable to the applicant at law if she were an employee at law. 9 When the matter first came on for hearing on 5 November 2004 the applicant's solicitor sought to tender into evidence a schedule of calculations to justify the monetary order which the applicant sought to be made in her favour against the respondent. I was not satisfied that the schedule of calculations was in a form which was admissible into evidence and which could in fairness to the respondent form the basis of an order for monetary compensation. The proceedings were adjourned to allow the applicant's solicitor to file a certified calculation sheet with explanation as to the manner in which the calculations have been carried out. That calculation sheet was filed on 12 November 2004. It shows the following amounts claimed to be owing by the respondent to the applicant, namely: 1. Underpayment of award wages $63,663 .34 2. Amount payable by way of long service leave on cessation of engagement $6,827 .72 3. Amount payable by say of superannuation contribution charge $13,218.96 4. Interest calculated on outstanding amount of superannuation charged in accordance with the Supreme Court Act $7,771.47 10 I am satisfied that the amounts shown in the amended schedule are properly due and owing and may form the basis of an order for the payment of monetary compensation under s 106 of the Act. 11 Consequent upon the finding of unfairness which I have made I hereby vary the contract pursuant to which the applicant performed work for the respondent by providing that notwithstanding any other provision the applicant will make payment to the applicant of all amounts that would have been payable to the applicant at law if she were an employee at law. 12 I order the respondent to pay to the applicant monetary compensation in the amount of $91,481.49. 13 The respondent is to pay the applicant's cost of the proceedings in an amount assessed under the Legal Profession Act in default of agreement. 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