Industrial Relations Commission of New South Wales CITATION: Silvestro v. Blast Vac Engineering Pty Limited [2005] NSWIRComm 1175 APPLICANT Paul Silvestro PARTIES: RESPONDENT Blast Vac Engineering Pty Limited FILE NUMBER(S): 7188 of 2004 CORAM: Connor C termination of employment - company placed in liquidation - court order made - official liquidator appointed - proceedings stayed - application dismissed for want of prosecution CATCHWORDS: Industrial Relations Act 1996 Uniform Corporations Law LEGISLATION CITED: 1996 Liquor, Hospitality and Miscellaneous Workers Union v. Home Care Transport Pty Limited (2002) 117 FCR 87 Miller v. University of New South Wales (2003) FCATC 180 R v. Kirby, ex parte Boilermakers' Society of Australia (1957) 95 CLR 529 CASES CITED: Rochford v. Textile Clothing and Footwear Union of New South Wales (1998) 85 IR 332 Smith, Ovearic, Hose and Farragher v. Trollope Silverwood and Back Pty Limited - unreported HEARING DATES: 11/01/2005 EXTEMPORE JUDGMENT DATE : 11/01/2005 APPLICANT No appearance LEGAL REPRESENTATIVES: RESPONDENT No appearance DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Tuesday, 1 November, 2005 Matter No IRC 7188 of 2004 Paul Silvestro and Blast Vac Engineering Pty Limited Application under S.84 of the Industrial Relations Act, 1996 DECISION [2005] NSWIRComm 1175 1 Pursuant to the provisions of Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act, Mr P J Silvestro has lodged an application concerning the termination of his services as national sales manager with Blast Vac Engineering Pty Limited. Mr Silvestro commenced employment on Monday, 23 February, 2004 and his services were terminated on Friday, 26 November, 2004 following a work related injury. In his Part 6 application he has sought monetary compensation. 2 The matter was allocated by Registry staff and set down for a conciliation and directions hearing on Monday, 17 January, 2005. Mr Silvestro's legal representative was not available at that time. I adjourned the proceedings until Tuesday, 1 February, 2005 and ultimately programmed the matter for arbitration, setting the matter down for further mentions for that purpose on Wednesday, 6 April, 2005 and Friday, 20 May, 2005 and Thursday, 30 June, 2005. Ultimately, the hearing of this matter was scheduled for Tuesday, 1 November, 2005. 3 Mr Silvestro recorded in his Part 6 application that he suffered major injuries in a car accident whilst working for Blast Vac and he remains unfit for work. However, Blast Vac does not have workers compensation insurance. It paid Mr Silvestro occasionally whilst he remained absent from work but Mr Silvestro did not receive all his entitlements in that respect and on Friday 26 November, 2004 he received a letter from Blast Vac stating that it was not able to pay him at all. His services were terminated. 4 This, of course, is a most unsatisfactory situation. But Blast Vac has informed me in the proceedings on Monday, 17 January, 2005 that it was presently insolvent and was likely to be wound up and on Thursday, 27 October, 2005 I received a memorandum from Mr S J Sherman who had been appointed official liquidator of Blast Vac on Thursday, 31 March, 2005. Attached to the memorandum is a copy of an order made in the Federal Court to that effect. Mr Sherman informed me in the memorandum that there were no funds and, therefore, as Mr Sherman indicated, any order I made in favour of Mr Silvestro would rank as an unsecured claim. 5 More importantly, as Mr Sherman has indicated in his memorandum, if an administrator has been appointed for a company employer or it has been placed in liquidation, Part 6 proceedings would be stayed. In the case of administration, by virtue of S.440D [Part 5.3A] of the 1996 uniform Corporations Law, there is a barrier placed on proceedings involving the company without the leave of the State Supreme Court, the Federal Court or with the administrator's consent. S.440D provides that 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 with the administrator's written consent or with the court's leave…" 6 Similarly, with a company placed in liquidation, S.471B provides as follows: "While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with: (a) a proceeding in a court against the company or in relation to property of the company; or (b) enforcement process in relation to such property; except with the leave of the court and in accordance with such terms (if any) as the court imposes." The disposition of this particular matter is therefore dependent upon the Federal Court. 7 In Rochford v. Textile Clothing and Footwear Union of New South Wales (1998) 85 IR 332 Austin J of the State Supreme Court concluded that the Commission, when considering an unfair dismissal claim, was a "court" for the purposes of S.440D. His Honour commented (at p.338) that: "....it is true, as a general proposition, that Part 5.3A imposes a moratorium on the security enforcement, recovery and legal proceedings to which it applies, not extinguishing rights but generally suspending their exercise. That being so, it is essential in the interests of those whose rights are suspended that the period of moratorium be the minimum period necessary for the efficient and effective achievement of the objectives of the administration..." I have no doubt that his Honour's comments would be equally applicable for Part 6 proceedings caught by S.471B(a). 8 In its unreported decision of Monday, 17 November, 2003 in Smith, Ovearic, Hose and Farragher v. Trollope Silverwood and Beck Pty Limited [Matter No C 1885 of 2003] the Full Bench of the Australian Industrial Relations Commission (Giudice, J - President, Ross J - Vice President and Whelan C) took a contrary view as far as the Federal unfair dismissal regime was concerned. It concluded that the Australian Commission was not a "court" for the purposes of S.440D. It stated (at p.2) that: "…it is beyond argument that the Commission is not a body capable of exercising the judicial power of the Commonwealth: R v. Kirby; ex parte Boilermakers' Society of Australia (1957) 95 CLR 529 and Miller v. University of New South Wales (2003) FCAFC 180. If the term 'court' is to be given its defined meaning, it excludes the Commission. Therefore the Commission is not a court within the definition of that term... This was the conclusion reached by Liquor, Hospitality and Miscellaneous Workers Union v. Home Care Transport Pty Limited (2002) 117 FCR 87 at pp.89 and 90. We respectfully agree..." 9 But that begs a larger question, in my opinion. If the State unfair dismissal regime is an exercise of a judicial function by a "court", as was decided in Rochford v. Textile Clothing and Footwear Union of New South Wales, why is not the Federal unfair dismissal regime and exercise of judicial power by a court? In any event, it is the decision of Austin J in Rochford v. Textile Clothing and Footwear Union of New South Wales on which I believe I am obliged to rely. If the Australian Commission, unlike the State Commission, is not a "court" for the purposes of S.440D - or S.471B(a) - it arguably is excluded from exercising any judicial functions at all. 10 Therefore, these Part 6 proceedings by Mr Silvestro are stayed by virtue of S.471B. They do not become a nullity as a result of S.471B but the progress of the matter is dependent upon the Federal Court and is out of my hands. It seems to me that the Part 6 proceedings are something of a futility for Mr Silvestro. In fact, there was no appearances in the hearing by either Mr Silvestro or Blast Vac. Attempts to contract Mr Silvestro were unsuccessful. I delayed the hearing for some little time but ultimately proceeded ex parte, bringing the matter to a conclusion by dismissing Mr Silvestro's Part 6 application for want of prosecution but I reserved his right within one month of this hearing to seek the re-listing of the matter if he wished. 11 Nevertheless, it seems that the more appropriate course is for him in the first instance is to contact Mr Sherman. He would also be wise to seek legal advice before he proceeds further, in my opinion. 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.