Industrial Relations Commission of New South Wales CITATION: Liquor, Hospitality and Miscellaneous Union v. John Kontos, trading as Impress Cleaning [2007] NSWIRComm 1086 APPLICANT Liquor, Hospitality and Miscellaneous Union PARTIES: FIRST RESPONDENT John Kontos SECOND RESPONDENT ISS Pty Limited FILE NUMBER(S): IRC 1839 of 2007 CORAM: Connor C CATCHWORDS: industrial dispute - failure to pay wages to an employee - small claim made - onus of proof for claims made - interest on wages - costs claim not pursued - order made LEGISLATION CITED: Industrial Relations Act 1996 Supreme Court Act, 1970 General Pants (Trading) Company Pty Limited v. Marie - unreported CASES CITED: Maldoc Pty Limited v. Bollard - unrepresented Park v. Berkery (1930) 25 Tas LR 67 HEARING DATES: 16/11/2007 EXTEMPORE JUDGMENT DATE : 16 November 2007 APPLICANT Noel Quinn Liquor, Hospitality and Miscellaneous Union LEGAL REPRESENTATIVES: FIRST RESPONDENT unrepresented SECOND RESPONDENT Joe Murphy Sparke Helmore DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Friday, 16 November, 2007 Matter No IRC 1839 of 2007 Liquor, Hospitality and Miscellaneous Union and John Kontos, trading as Impress Cleaning Dispute notification under S.130 of the Industrial Relations Act, 1966 re non-payment of wages and superannuation entitlements DECISION [2007] NSWIRComm 1086 1 Pursuant to the provisions of S.130 of the 1996 Industrial Relations Act, the Australian Liquor, Hospitality and Miscellaneous Union lodged a notification of an industrial dispute with Mr John Kontos, trading as Impress Cleaning. The LHMU alleges unpaid wage entitlements and superannuation on behalf of Mrs Iva Galic, a member employed by Mr Kontos. It has also recorded ISS Pty Limited as a respondent in the proceedings. Mr Kontos has a contract - a franchise - with ISS. 2 The LHMU claim is pursued as a small claim under Ss.379 and 380. In particular, S.380(1) provides as follows: "An industrial organisation may, during any proceedings before the Commission, make an application for an order under this Part and for the application to be dealt with under S.379 (small claims procedure)." That remedy is available only to an industrial organisation recognised under the 1996 Act, ie the LHMU in these proceedings. That position was confirmed by the Full Bench of the Commission (Glynn and Hungerford JJ and Connor C) in its unreported decision of Wednesday, 10 February, 1999 in Maldoc Pty Limited v. Bollard [Matter No. IRC 2710 of 1997]. The maximum amount of any order for a small claim is confined by S.379(3); it presently stands at $20,000.00 for each individual. 3 The claim under Ss.379 and 380 is directed against Mrs Galic's employer (Mr Kontos). Alternatively, under S.127(2) unpaid wage and superannuation entitlements may, in certain circumstances, be recoverable from any principal contractor engaging Mr Kontos (ISS), viz: "The principal contractor is liable for the payment of any remuneration of the relevant employees that has not been paid for work done in connection with the contract during any period of the contract unless the principal contractor has a written statement given by the sub-contractor under this section for the period of the contract." But, of course, primarily it is Mr Kontos who is responsible for the wages and superannuation entitlement of any of his employees and it is against him that the LHMU has addressed its claim. It is not intending to make any claim under S.127(2) against ISS at this time. 4 The S.130 notification was allocated to me and I set it down for a conference on Friday, 5 October, 2007, Friday, 12 October, 2007, Thursday, 18 October, 2007 and Friday, 26 October, 2007. Mrs Galic was employed under the terms of the Cleaning and Building Services Contractors (State) Award. Extraordinarily, at one time it had been assessed by the LHMU that Mr Kontos owed up to 17 weeks in wages together with superannuation entitlements to Mrs Galic. That is nothing short of an intolerable situation for any employee. Mr Kontos has appeared in the proceedings, on occasions, and made certain commitments to pay Mrs Galic and, in fact, she has now received part payment of her wage entitlements [$2,840.00] and her superannuation [$1,650.27]. 5 Mr Kontos' accountant also wrote to me on Friday, 26 October, 2007 in the following terms: "...Mr Kontos has provided our firm with a copy of receipts for payment to Australian Super for the sum of $1,650.27 to Account No. 3027824 and this money will be transferred to Mrs Galic's ARF Super Fund... Mr Kontos has advised that he will be paying the amount of $2,820.00 [ sic ] for the arrears of August, September and October by end of business today by cheque..." 6 But, notwithstanding commitments made by Mr Kontos, the balance due to Mrs Galic [$6,222.32] has not to date materialised. Mr Kontos provided a cheque of $480.00 to Mrs Galic on Monday, 10 September, 2007 but it was dishonoured and returned to Mrs Galic with the notation "refer to drawer". The tender of a cheque, whether or not it is subsequently honoured by a bank, is sufficient acknowledgment of a debt [Park v. Berkery (1930) 25 Tas LR 67 at p.83]. But, of course, a dishonoured cheque is of no benefit to Mrs Galic. 7 I note that the letter from Mr Kontos' accountant refers to the sum of $2,820.00 as having been provided by Mr Kontos to Mrs Galic. The LHMU calculations are based on a part payment of outstanding wages of $2,840.00, ie $20.00 greater. I nevertheless propose to rely on the calculations provided by the LHMU as the more reliable in the circumstances, albeit that in doing so, Mrs Galic receives a lesser sum in settlement of the claim. The letter from Mr Kontos' accountant is less reliable in that sense - what the accountant claimed Mr Kontos told him. 8 Mr Kontos also wrote to me under the letterhead of NuCentury Facility Services (under which I understand that Mr Kontos now trades in place of Impress Cleaning) on Friday, 19 October, 2007. That letter apparently went astray but he supplied a copy of that letter by e-mail on Wednesday, 7 November, 2007, viz: "...After our conference...I have since discussed this matter with my accountant in Liverpool and have decided to pay Iva Galic in full which is both her wages and super. I am finalising Iva's pay slips and have already paid $1,650.00 into her super on Wednesday, 17 October, 2007 Iva's pay slips will be forwarded to her address by my accountant which, as stated, needed all adjusting to bring the pay slips correctly with her super. After leaving the court...I had discussions with my cleaning company, ISS Facility Services, and have agreed that after paying Iva Galic they are to pay me my monies outstanding, which is in excess of $50,000.00, including contacts [ sic ] owed to me of $124,000.00 which has now been 6 months. I have a contractual agreement with ISS Facility Services for a 12 month period from Tuesday, 1 May, 2007 until 2008 in which they have not honoured the full amount of my contracts and have left me in arrears for a substantial period of time. My negotiations with ISS is limited as there have been many changes to management and [I have been] unable to communicate to finalise what my agreement was since Tuesday, 1 May, 2007. I will be advising you...of this progress and wish to apologise in regards to this matter with my employee, Iva Galic. I will be paying Iva the balance of monies owed to her immediately once I have received my monthly pay from ISS by Friday, 26 October, 2007 and, hopefully, the arrears that I have stated to you earlier in my letter. I have forwarded this letter advising also ISS Facility Services of this arrangement at their head office in Lane Cove..." 9 Mr Murphy, representing ISS in the proceedings (with a watching brief), asserted that, contrary to what Mr Kontos wrote in his letter to me, there is, in fact, no money owing by ISS to Mr Kontos. But, in any event, even if there were such money owing, that is a matter strictly between Mr Kontos and ISS. It should be of no concern of Mrs Galic - or me in these proceedings. It is trite to say that there should be no restrictions of that nature imposed on her receiving her wages from Mr Kontos for work she has actually performed for him. It is Mr Kontos' unqualified obligation to pay Mrs Galic for the work she performs for him and Mrs Galic's entitlement under her contract of employment with Mr Kontos to receive payment for such work. 10 Mrs Galic has been extremely patient in waiting for her entitlements in that respect but she should not have to wait any longer. I issued the certificate of attempted conciliation required by S.135, lodged it in the prescribed manner and set the LHMU claim down for hearing on Friday, 16 November, 2007. In the hearing Mr Quinn represented Mrs Galic and the LHMU. Mr Kontos did not appear in the proceedings until 20 minutes after those proceedings were scheduled to commence and I had, in fact, commenced the hearing, intending to proceed ex parte. However, Mr Kontos appeared in the proceedings late with assurances that he would make good his wages debt to Mrs Galic. Mr Murphy continued to represent ISS with a watching brief. 11 Mr Quinn carries the onus of establishing the substance of the claim made on behalf of Mrs Galic in this hearing. In that respect, 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 P, Schmidt J and Murphy CC) commented (at p.18) that the employee in that case: "…had still to discharge the onus placed on her by the Act…" 12 Mr Kontos' correspondence to me confirms to my satisfaction the substance of the claim made against Mr Kontos by the LHMU on behalf of Mrs Galic. He has conceded failure to pay her the wages due both in that correspondence and in the past undertakings he has given in the proceedings which he has not honoured. The calculations made by the LHMU are set out in some detail in a document which I made an exhibit in the proceedings. According to the LHMU, a net balance of wages (less tax) of $6,222.32 remains due to Mrs Galic. Mr Kontos has disputed that sum but he has brought nothing to the hearing to throw any doubts on those LHMU calculations. As I see it, Mr Kontos' arguments do not really centre on those calculations at all but on the alleged failure of ISS to pay him a sum of money before he may pay Mrs Galic her wages - a claim disputed by Mr Murphy. But in any event, as I indicated earlier in this decision, Mr Kontos cannot escape any liability to pay Mrs Galic her wages on that basis. 13 The LHMU claim on behalf of Mrs Galic also includes interest and costs. Interest may be payable at the prescribed rate for a small claim under S.372(1), viz: "An industrial court may order that there is to be included, an amount ordered to be paid under this Part (except under S.368), interest at the prescribed rate on the whole or any part of that amount for the whole or any part of the period from when the amount became due to the date of the order." An "industrial court" is defined in S.364(1)(b) as including: "…in the case of proceedings under S.380 (small claims during other Commission proceedings) - the Commission whether or not in Court Session…" In other words, when S.130 matters proceed to the arbitration of a small claim under Ss.379 and 380, my role is converted to that extent into the role of an "industrial court". The "prescribed rate" in S.372(1) is the rate of interest set from time to time in for the purposes of S.95(1) of the 1970 Supreme Court Act - under Schedule J of the Supreme Court Rules, which I understand presently stands at 9%. 14 Also costs may apply in these S.130 proceedings. Applications for costs in these proceedings fall under S.181(2)(d), viz: "...The Commission may award costs in proceedings for a breach of an industrial instrument or the recovery of money under Chapter 7, as provided by Ss.357 and 373." The LHMU initially advanced a claim in that respect on behalf of Mrs Galic but is no longer pursuing that claim, although Mr Quinn proposed to reserve his position in that respect should there be any further complications in the resolution of this matter. Moreover, I have to say that actual costs by Mrs Galic in pursuing her claim through the LHMU may well prove to be difficult to assess, in any event. For instance, Mrs Galic is able to retain the services of the LHMU as part of her membership - a general fee for the benefits of trade union membership, rather than a specific fee for this particular hearing. ORDER 1. Mr John Kontos shall pay to Mrs Iva Galic (a) the sum of $6,222.32; and (b) interest at the prescribed rate in accordance with S.372; within 14 days. 2. This order shall take effect on and from Friday, 16 November, 2007. 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.