Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales v. Suresh Chand [2010] NSWIRComm 1036 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Mr Suresh Chand FILE NUMBER(S): IRC 1733 of 2009 CORAM: Connor C CATCHWORDS: industrial dispute - transport industry - alleged underpayment of wages - small claim - challenge to legal representation upheld - obligations on an employer to provide proper time and wages records - order made for the recovery of underpayment of wages - any suggested argument concerning a set-off of alleged damage to a truck outside jurisdiction - payment of interest ordered - limited costs application awarded Industrial Relations Act 1996 State Industrial Relations (Commonwealth Powers) Act 2009 LEGISLATION CITED: Federal Workplace Relations (Work Choices) Act 2005 Federal Fair Work Act, 2009 Federal Fair Work Amendment (State Referrals and Other Measures) Act 2009 Pacific Publications Pty Limited v. Cantlon (1983) 4 IR 415 CASES CITED: Ray v. Radano (1967) AR 471 State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1 Transport Workers' Union of New South Wales v. Chand Transport Services [2010] NSWIRComm 1009 HEARING DATES: 28/05/2010, 2/07/2010 DATE OF JUDGMENT: 9 July 2010 APPLICANT Phillip Boncardo Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT appeared unrepresented DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Friday, 9 July, 2010 Matter No IRC 1733 of 2009 Transport Workers' Union of New South Wales and Suresh Chand Notification under S.130 of the Industrial Relations Act, 1996 re alleged unpaid wages DECISION [2010] NSWIRComm 1036 Preliminary 1 The Transport Workers' Union of New South Wales has lodged a notification of an industrial dispute with Mr Suresh Chand, trading as Chand's Transport Services, under S.130 of the 1996 Industrial Relations Act on Wednesday, 4 November, 2009. The issue in dispute is the alleged underpayments to TWU member, Mr Lenny Edwards, employed by Mr Chand under the terms of the Transport Industry (State) Award, which the TWU estimated at $3,630.35, based on an hourly rate of $16.89 prescribed in the State transport award. The TWU has mounted its claim on behalf of Mr Edwards as a small claim under Ss.379 and 380. In that respect, 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 to the TWU, ie an industrial organisation for the purposes of S.380(1). At present, the maximum amount of any order for a small claim is confined by S.379(3) at $20,000.00. 2 The S.130 notification was allocated to me and I set it down for a conference on Wednesday, 11 November, 2009. There was no appearance by Mr Chand in those proceedings. I adjourned the matter to Wednesday, 2 December, 2009, Thursday, 10 December, 2009, Thursday, 17 December, 2009 and Wednesday, 13 January, 2010. Conciliation failed to settle this dispute and I issued the certificate of attempted conciliation required by S.135, lodged it in the prescribed manner and programmed it for arbitration. 3 The amount of jurisdictional heat that has been generated in these proceedings is, in my opinion, out of all proportion to the rather modest TWU claim itself. The small claims jurisdiction provided by Ss.379 and 380 is designed to provide a speedy resolution with respect to claims for the underpayment of employee's entitlements where the amount of money sought is not large. It has proven not to have been achieved with the current TWU claim, however. 4 Initially, there was an issue of jurisdiction concerning the status of Chand's Transport Services - whether or not it was a trading corporation within the meaning of S.51(xx) of the Commonwealth Constitution or whether Mr Chand was a sole trader. That issue was fundamental to my jurisdiction since by virtue of the 2005 Federal Workplace Relations (Work Choices) Act and the 2009 Federal Fair Work Australia Act which replaced it, industrial issues affecting most employment conditions - including underpayments of entitlements under the Transport Industry (State) Award - fell outside the State industrial jurisdiction [State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1]. 5 That threshold issue was set down for hearing on Friday, 19 February, 2010 and in my ex tempora decision on that day, I concluded that Mr Chand was a sole trader. With the enactment of complementary Federal and State legislation - the State Industrial Relations (Commonwealth Powers) Act and the Federal Fair Work Amendment (State Referrals and Other Measures) Act - sole traders are effective from Friday, 1 January, 2010 also now excluded from the State industrial jurisdiction but that does not affect claims made prior to that date, ie the current TWU notification under S.130 on behalf of Mr Edwards. 6 I set the matter down for mention and further programming on Wednesday, 31 March, 2010 and for hearing on Friday, 28 May, 2010, intending to address the substantive issue in dispute on that date. But my attempts to do so were frustrated and it became necessary for the hearing to be adjourned until Thursday, 10 June, 2010. There has been some confusion initially over whether or not Mr Chand was to be represented in the proceedings by a solicitor. He has been represented on some occasions in the past by a solicitor [Mr Johnson] and sometimes he has appeared unrepresented. A notice of appearance has now been lodged by Mr Johnson and he did appear in the proceedings on Friday, 28 May, 2010. However, Mr Boncardo, representing the TWU and Mr Edwards in the proceedings, opposed Mr Chand being represented by a legal practitioner. 7 In fact, in the proceedings on Wednesday, 31 March, 2010 the TWU had foreshadowed such a challenge to Mr Chand being represented by a legal practitioner and so Mr Chand was on notice that the TWU would oppose Mr Johnson appearing for him. But Mr Johnson still appeared in the arbitrated proceedings on Friday, 28 May, 2010 to argue that he should continue to appear and represent Mr Chand in the proceedings. The Question of Legal Representation 8 Mr Boncardo relied on S.379(5) in support of his argument to exclude Mr Johnson from the proceedings, viz: "A party to proceedings on a small claim application may be represented by an agent but is not entitled to be represented by an agent who is a practicing legal practitioner unless the industrial court so approves. That approval is not to be given unless: (a) all parties to the proceedings agree; and (b) the industrial court is satisfied that the parties (other than the party who applies for approval) or any of them will not be disadvantaged." 9 Mr Boncardo argued that S.379(5) provided me with no discretion to permit legal representation in small claims proceedings where there is objection. He highlighted the fact that, as the word "and" in S.379(5) suggests, both criteria must be met and, consequently, if the TWU remained opposed to Mr Chand being represented by Mr Johnson, I would not have any discretion to permit him to appear, even if I consider that Mr Chand would be disadvantaged without proper legal representation. 10 S. 379(6) provides exemptions to the restrictions in S.379(5) which is not relevant in these proceedings. S.379(6) reads: "The approval of the industrial court to be represented by a practicing legal practitioner is not required if the practitioner: (a) represents a corporation and is an officer of the corporation within the meaning of the Corporations Act, 2001 of the Commonwealth, or (b) represents an owners corporation constituted under the Strata Schemes Management Act, 1996 and is one of the proprietors or lessees constituting the owners corporation, or (c) represents a member of an industrial organisation and is an officer or employee of the organisation, or (d) represents a member of a State peak council and is an officer or employee of that council." S.379(7) also provides as follows: " The approval of industrial court to be represented by a practising legal practitioner may be given subject to such conditions as the court considers reasonable to ensure that any other party to the proceedings is not disadvantaged by the practitioner appearing in the proceedings." And, by virtue of S.379(8), proceedings for a small claim are not necessarily invalidated if there is contravention of Ss.379(5), (6) or (7). 11 Mr Boncardo submitted that S.379(7) had to be read in conjunction with S.379(5), ie any approval of Mr Johnson's representation of Mr Chand still depended upon the TWU agreeing under S.379(5)(a). That appears to me to be a persuasive argument, although it has to be considered in the context of S.379(8) which would appear to me to still ensure that, were I to proceed with Mr Chand being represented by Mr Johnson, any decision I subsequently made would not be invalidated by that fact alone. It is at least open to argue that, having regard to the provisions of S.379(8), I still may admit legal representation for a party in these proceedings, over objection, without necessarily invalidating the ultimate decision I make. 12 But surprisingly Mr Johnson did not argue that point at all. Indeed, he accepted without qualification Mr Boncardo's reasoning that if the TWU objects to his appearance on behalf of Mr Chand in these arbitrated proceedings, S.379(5) operated as a total bar to his appearance. Nevertheless, he claims that because of Mr Chand's poor language skills and education, difficulties in communicating in English and understanding the nature of these proceedings - curious in a person carrying out a business of the nature in which he is engaged and who has sometimes already appeared unaided in these proceedings - it would be unfair for him to proceed to arbitration without proper legal representation. 13 To that end Mr Johnson has made the novel and ambitious submission that S.379(5) is invalid legislation and I should regard it as such. Mr Johnson argues baldly in written submissions: "....In this case, the TWU is and has been well represented by agents who are articulate and who have knowledge and experience which in many cases, including this case, would exceed that of a legal practitioner... S.379(5) impermissibly directs the court how to exercise its jurisdiction contrary to the need for State courts to be independent to comply with Part III of the Constitution and is therefore invalid... The court should exercise its discretion unfettered by the unfair and injudicious constraints of S.379(5)..." 14 It should go without saying that I am not at liberty to do so. Quite clearly, the policy behind legislative provisions like S.379(5) - and as Mr Johnson pointed out in submissions much of the Federal Fair Work Act which he also claims to be unfair - is to remove excessive legalisms from the industrial jurisdiction: having regard to the jurisdictional issues which have been raised in these proceedings, I have been singularly unsuccessful in this case in removing excessive legalisms from them. But these proceedings are not a forum to ventilate the concerns raised by Mr Johnson. I am obliged to act under all existing legislative provisions and it is not open to me to simply disregard them or to declare them invalid on a whim of a party appearing before me. 15 In the light of Mr Johnson's acceptance of Mr Boncardo's claim that he is excluded from the small claims jurisdiction, I concluded that he may not continue to represent Mr Chand in these proceedings and I did not permit him to continue appearing for Mr Chand. In those circumstances, I adjourned the hearing again until Thursday, 10 June, 2010 to permit Mr Chand to make alternative arrangements to defend his position. Mr Johnson wrote to me on Friday, 28 May, 2010 seeking that I publish the reasons for my decision to exclude him from appearing for Mr Chand. I declined to publish a separate decision on that matter, considering it more appropriate to address the issue in the subsequent hearing on the merits of the TWU claim. The Subsequent Proceedings 16 Mr Chand has not apparently made alternative arrangements for representation in the hearing and on Wednesday, 9 June, 2010 Mr Johnson wrote again to me to inform me of that fact. Mr Johnson also commented in that letter that Mr Chand "...will need to read all of the statements and try to understand the issues raised in them..." and that he should be ready in that respect by Thursday, 17 June, 2010. Mr Johnson wrote that in the proceedings scheduled for hearing on Thursday, 10 June, 2010 Mr Chand will ask (i) whether he may be assisted by Mr Johnson in the subsequent hearing or, alternatively (ii) whether the Commission "...would arrange for a Hindu speaking interpreter who is familiar with the Fijian Indian dialect to assist Mr Chand at the hearing of the proceedings...". Mr Johnson suggested a number of days convenient to witnesses Mr Chand proposed to call and days when he would be available. 17 Mr Boncardo represented the TWU in the hearing, calling Mr Edwards to give evidence. Mr Chand appeared unrepresented in the hearing, assisted by his daughter-in-law, Mr Johnson and an interpreter. Mr Chand gave evidence under oath. Mr Mark Thomas, a director of a company - Intertrans Freight Carriers Pty Limited - which supplies freight to Mr Chand from time to time was called to give evidence in the hearing by Mr Chand. A statement provided by Mr Chand's son was also admitted into evidence by Mr Chand without Mr Boncardo requiring him for cross-examination. The Evidence 18 Mr Edwards responded to an advertisement placed by Mr Chand for a job as truck driver and it is his evidence that he actually commenced working for Mr Chand on Monday, 3 November, 2008. He claimed that he picked up a truck at Mr Chand's Minto residence at approximately 5.30am and drove it to the Intertrans site at Campbelltown to pick up a load to deliver. He arrived at the Intertrans site at approximately 6.00am and loaded up some Christmas food hampers to deliver to warehouses. He was told by Mr Thomas that he wanted him there each morning at 6.00am or earlier if he was contacted by telephone on the previous night. He delivered the hampers and returned for more loads of hardware to stores in the Sydney metropolitan area. He stopped for lunch for an hour and completed his deliveries at 6.30pm, driving the truck to his residence. 19 That routine continued on other days. Sometimes he was called by Mr Thomas and instructed to come to work earlier and he did so, starting at the Intertrans yard between 3.30am and 4.00am on such occasions. He worked a five day week from Monday to Friday, driving two trucks over his employment with Mr Chand. He claimed that he worked for over 12 hours each day (but the TWU has confined its claim on his behalf to 12 hours because to do otherwise may lead to some further confusion). He received no pay slips. 20 Runs sheets provided by Intertrans Freight and completed by Mr Edwards cover only five days - Tuesday, 11 November, 2008, Wednesday, 12 November, 2008, Thursday, 13 November, 2008, Monday, 17 November, 2008 and Tuesday, 18 November, 2008 - and Mr Thomas argues that constitutes the total number of days that Mr Edwards actually carried loads for Intertrans Freight. But that is not necessary acceptable evidence to conclusively determine the actual days, or the times during those days, when Mr Edwards worked for Mr Chand - and running sheets are not the same thing as proper time and wage records. 21 S.129(1) sets out the obligations on every employer to provide proper records of remuneration and the actual hours of work of employees, viz: "An employer must ensure that the following daily records are kept in relation to employees of the employer: (a) records of remuneration paid and hours worked by the employees; and (b) any other prescribed records relating to conditions of employment set by the industrial relations legislation or industrial instruments." And S.129(6) makes it an offence if there is a contravention of S.129(1). Mr Chand's records fall substantially short of what would be expected in that respect. And the running sheets provided to Mr Edwards by Intertrans Freight and completed by Mr Edwards do not fill the gap in those records. 22 Mr Edwards was paid $200.00 in cash after his first week of employment with Mr Chand. Mr Chand's son claimed that at this time he paid $400.00 to Mr Edwards as an advance on his wages. Mr Edwards denies that he received anything more than $200.00 initially but he did receive a subsequent amount of $200.00 from Mr Chand's son at the end of his second week of employment. The contest between Mr Edwards and Mr Chand's son is only over whether two payments of $200.00 was made to Mr Edwards or whether only one payment of $400.00 was paid - not an issue which really affects the TWU claim on behalf of Mr Edwards in this hearing. 23 Mr Edwards claimed that he then had a conversation with Mr Chand in which he requested that he be paid what he was owed as wages and was told by Mr Chand: "I'm broke. I can only get $300.00 from the ATM. That's all I can pay you." Mr Chand gave Mr Edwards a further $300.00. Mr Edwards complained that was not enough and he decided to resign. He then approached Mr Chand and asked him for the money he was owed. He claimed that Mr Chand replied: "I haven't got any money and you're not getting any money because you damaged the truck." That claim that Mr Edwards damaged the truck - cigarette burns on the upholstery - has not been further developed in these proceedings by Mr Chand. In any event, I understand that Mr Edwards denies that he caused any damage to the upholstery in the truck. 24 Mr Edwards pressed for payment of the outstanding wages due to him. He claimed that Mr Chand responded: "I paid your tax, you send me a tax file number and I'll sort it out, but you'll be paying your own tax. Not me." Mr Edwards subsequently provided Mr Chand with his tax file number but no payment was made to him. Mr Boncardo has sought to inspect the time and wages records to confirm Mr Edward's entitlements. Mr Chand has not supplied them: Mr Boncardo suspects that they do not exist. 25 All up, Mr Edwards claims that Mr Chand paid him a total of $700.00 - the sum of $400.00 which Mr Edwards received from Mr Chand's son and the sum of $300.00 which he subsequently received from Mr Chand. Mr Edwards claimed that he worked for three weeks for Mr Chand but Mr Chand disputes that claim. He also appears to be suggesting that he actually paid Mr Edwards $728.00. In the written statement which formed the basis of his evidence, Mr Edwards concludes: "...I believe it would be abhorrent that an employer in Australia were able to get away with paying third world wages to its employees..." Conclusion 26 Underpayments, especially where the contract of employment has concluded, are often bitter disputes over factual matters. The Full Bench of the former State Industrial Commission (Richards, Sheehy and Sheldon JJ) dealt with this matter in Ray v. Radano (1967) AR 471, with Sheldon J commenting (at p.480) that: "...In this case, the parties were poles apart as to the amount of wages paid and this is certainly not due to accidents of memory. No doubt in the house of perjury there are many mansions, but few would be as frequented as the courts in which embittered parties contest claims for past remuneration after severance of employment. An employer who neglects to keep the statutory records which, in their probative effect, are as much a protection to himself as to the employee, deserves little sympathy if he loses in a battle reduced to oath against oath…" That is the case here. I really must rely on what Mr Edwards claimed because Mr Chand and Mr Thomas have not produced any reliable records which would refute Mr Edwards claim. I am satisfied that Mr Boncardo has established the underpayment of wages by Mr Chand to Mr Edwards. 27 The question of the alleged damage to the upholstery of the truck Mr Edwards drove was not really pressed in this hearing but there is a suggestion by Mr Boncardo that Mr Chand may intend to set that off against any order I make in favour of Mr Edwards. He may not do so. Set offs are restricted to matters which are referable, expressly or by implication, to particular industrial obligations, identified as being related to the claim being made [Pacific Publications Pty Limited v. Cantlon (1983) 4 IR 415 at p.421]. If Mr Chand remains committed to obtaining some compensation from Mr Edwards for the alleged damage to the upholstery in the truck, he would need to establish that as the fault of Mr Edwards and pursue any such claim independently through the local courts. These proceedings can only be concerned with a discrete issue - the alleged underpayment of Mr Edward's wages for the brief period of his employment. 28 Mr Boncardo has also pressed for interest to Mr Edwards. 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…" The "prescribed rate" in S.372(1) is the rate of interest set from time to time in Schedule J of the Supreme Court Rules [S.272(4)] - presently 10%. 29 Mr Boncardo has also argued for costs against Mr Chand, viz: * costs incurred by Mr Edwards - essentially loss of his wages - in attending the hearings on Friday, 19 February, 2010 and on Friday, 28 May, 2010 which Mr Boncardo regarded as unnecessary delays in the matter and which he has assessed at $389.12; and *costs actually incurred by Mr Boncardo in attending the hearings on those days, which he has assessed at $270.00. 30 Costs are at the discretion of the member of the Commission hearing the matter but are available only where the State IR Act authorises it. S.181(2) reads as follows: However, the Commission when it is not in Court Session may award costs only in the following cases: (a) the Commission may award costs against an applicant if it considers that the application to it was frivolous or vexatious, or (b) the Commission may award costs against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause, or (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals), who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious, or (c1) the Commission may award costs against an industrial agent representing an applicant or employer in proceedings under Part 6 of Chapter 2 if: (i) the industrial agent fails to file a certificate as required by S.90A, or (ii) the Commission finds that the industrial agent has filed a certificate under that section certifying that the agent has reasonable grounds for believing, on the basis of provable facts, that the applicant's claim or employer's response to the claim had reasonable prospects of success when the agent did not have reasonable grounds for believing, on the basis of provable facts, that it had reasonable prospects of success; or (d) 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." And S.373 provides as follows: "In any proceedings under this Part, the industrial court may award costs to either party and assess the amount of those costs." 31 As the opening words to S.181(2) indicate - "...the Commission...may award costs only in the following cases..." - applications for costs before single members of the Commission are confined to the specified situations described. It appears to me that the TWU application for costs falls under Ss.181(2)(d) and 373. In written submissions provided on behalf of Mr Chan by Mr Johnson it is argued that there is no evidence before me in this hearing to indicate that Mr Edwards has suffered any loss of wages by his frequent appearances in these proceedings. Consequently he argues that there was no basis for a costs application against Mr Chan. I am nevertheless satisfied that Mr Edwards has been put to considerable and unnecessary expense and inconvenience in the pursuit of his legitimate claim through the TWU by the conduct of Mr Chand and those who have been advising him. The costs of $389.12 that Mr Boncardo has assessed as losses incurred by Mr Edwards for the unnecessary expense he has incurred appears to me to be reasonable, in all the circumstances. 32 But I am not prepared to order costs on the part of Mr Boncardo's activities on behalf of Mr Edwards. Costs are invariably directed towards a party in proceedings. The TWU has acted for Mr Edwards with its claim in this hearing and, whilst it is therefore strictly a party to these proceedings, the action it took was at all times on behalf of Mr Edwards. An agent may legitimately advance a claim for reasonable expenses incurred on behalf of his client in litigation that would ultimately be billed against that client and paid by him. But in this case Mr Edwards, as a member of the TWU, has received Mr Boncardo's services gratis as a benefit of his membership. I therefore do not believe that a legitimate claim for costs can be made with respect to Mr Boncardo's activities on behalf of Mr Edwards in these proceedings and I dismiss that part of Mr Boncardo's application for costs against Mr Chand. Order I therefore make the following order: . ORDER 1. Mr Suresh Chand shall pay to Mr Lenny Edwards: (a) the sum of $3,630.35; (b) interest at the prescribed rate according to S.372; and (c) costs assessed at $389.12. within 21 days. 2. This order shall take effect on and from Friday, 9 July, 2010. 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.