Industrial Relations Commission of New South Wales in Court Session CITATION: Rayner v Guthega Apline Pty Ltd & ors [2006] NSWIRComm 347 APPLICANT: Glenn Rayner FIRST RESPONDENT: Guthega Alpine Pty Ltd (ACN 107 366 923) PARTIES: SECOND RESPONDENT: Angela Jane Dickinson THIRD RESPONDENT: Mathew Deane FILE NUMBER(S): IRC 2257 of 2005 CORAM: Marks J CATCHWORDS: Unfair contract - ex - parte hearing- failure to make provision for proper and appropriate notice on termination - 2nd & 3rd respondents involved in management and controlling mind of 1st respondent. HELD: Employment contract varied to include 6 months notice - appropriate to make order for the payment of monies against 2nd & 3rd respondents including interest & costs. LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: Brown v Retzitis (1970) 127 CLR 157 HEARING DATES: 01/11/06 EXTEMPORE JUDGMENT DATE: 11/01/2006 APPLICANT: Mr C Magee of counsel SOLICITOR: Mr A Campbell LEGAL REPRESENTATIVES: Shanahan Tudhope Solicitors RESPONDENTS: No Appearance JUDGMENT: - 5 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Marks J Wednesday, 1 November 2006 Matter No IRC 2257 of 2005 Glenn Rayner v Guthega Alpine Pty Ltd & ors Ex - Tempore Judgment on Ex - Parte Application JUDGMENT (ex tempore) [2006] NSWIRComm 347 1 These are proceedings brought by the applicant Glenn Rayner against 3 named respondents seeking relief under s 106 of the Industrial Relations Act 1996. The first respondent is Guthega Alpine Pty Ltd, a company which is now in liquidation and against which the applicant has filed a notice of discontinuance. The second respondent Angela Jane Dickinson and the third respondent, Matthew Deane are sought to be made liable under the well known principle established in the High Court of Australia in Brown v. Retzitis (1970) 127 CLR 157. It is claimed by the applicant that the second and third respondents were involved in the management of and were the controlling minds of the first respondent which was his employer. 2 The background factual material established during the course of the proceedings indicates that the applicant had been employed for about nine years at the Thredbo Alpine Hotel undertaking a variety of tasks most recently, as a stores supervisor. He was in employment with that Hotel when he was approached by the second and third respondents to commence employment with the first respondent, they having through the first respondent, recently acquired or had been in the course of acquiring the Guthega Alpine Hotel. The second respondent, Miss Dickinson, is the applicant's cousin. I should indicate that although the second and third respondents were served with the summons and have subsequently been given notice of all of the interlocutory proceedings including the mandatory conciliation and have been given notice of today's hearing, they have not participated at all in the proceedings. It follows that the proceedings have been conducted today on an ex - parte basis. 3 The evidence is that the applicant commenced working at the Hotel in about March 2004 on a casual basis. He assisted in a variety of tasks which were designed to have the hotel ready for the skiing season which was to commence in June of 2004. During this time he carried out a range of managerial type activities and it seems from his evidence that the second and third respondents had had no prior experience in operating a hotel. During this period the applicant was paid wages at a minimal rate presumably to help out his cousin and her husband in connection with this new venture. The applicant worked in effect as general manager of the hotel during the forthcoming ski season which commenced in June of that year and concluded on the 26 September 2004. During that period I am satisfied on the evidence which included documentary material, that the second respondent was the sole director of the first respondent and that the third respondent proclaimed himself to be and conducted himself as though he were the manager of the hotel. I should add also that in conversations with the applicant, the second and third respondents indicated to him that they were both the purchasers of the Hotel. After the ski season finished in September 2004 arrangements were made for the applicant to undertake work in the nature of a care taker and to ensure the security of the hotel. 4 Arrangements were made for the applicant to be paid remuneration in return for performing these duties. However, the payments were habitually late and some payments were in fact not made at all. Furthermore, the applicant communicated with the second and third respondents not only concerning the non payment of his wages but also, because increasing demands were being made by third party creditors of the hotel for payments of outstanding accounts. 5 I conclude from the available evidence that at that stage, the first respondent and the second and third respondents were in some financial difficulties. The applicant's employment ceased on 1 February 2005 following allegations made by the second and third respondents to the effect that he had not been carrying out his duties in a proper and appropriate manner. The applicant rejected these assertions and I infer that they were made by way of an excuse to bring about the termination of his employment. 6 The applicant submits that the contract of employment with the first respondent was unfair in a number of respects. Firstly, there was no provision in the contract specifying any notice period for termination and indeed, when his contract was eventually terminated no monies were paid by way of notice. This is said to be particularly unfair in that as a result of representations made by the second and third respondents, one of whom is a cousin as I have said, he gave up secure long term employment with prospect of promotion in order to assist them in connection with their venture. Furthermore, he assisted them by agreeing to work initially on a casual basis. He requested a written contract of employment on several occasions which was promised to him by the third respondents but which was never forthcoming. 7 My impression of the evidence is that the second and third respondents in a personal sense on behalf of the first respondent, treated the applicant poorly in terms of the work which he performed and the way in which he performed it by way of lack of recognition, and by way of lack of proper and appropriate remuneration. Furthermore, he ought to have been informed if there were financial difficulties and that there were prospects that the project would have come to an end. It has been strongly submitted on behalf of the applicant by his counsel Mr Magee that in all the circumstances the contract of employment should be found to be unfair and it should be varied so as to include a specific provision requiring the giving of 6 months notice by way of termination or the payment of appropriate monies in lieu. There is also evidence that the applicant has not been paid certain monies in accordance with the contract of employment, the calculations for which are set out in his affidavit evidence. 8 It is appropriate in my opinion to make orders for the payment of these outstanding monies in conjunction with the finding of unfairness which I am satisfied should be made in these proceedings and in association with the payment of monies which ought properly to be ordered in conjunction with and pursuant to the variations to the contract of employment which I determine should be made. 9 Having regard to the matters to which I have referred, I find that the contract of employment between the applicant and the first respondent was unfair in that in all the circumstances there was a failure to make a provision for proper and appropriate notice on termination or the payment of monies in lieu. I determine in all the circumstances that a proper and appropriate period of notice is 6 months. 10 Pursuant to the finding of unfairness which I have made I hereby vary the contract of employment between the applicant and the first respondent ab initio so as to include within its terms a provision that in the event that the first respondent wishes to terminate the employment of the applicant, he will be given 6 months notice of such event or be paid monies in lieu. As a consequence of the variations which I have made I am satisfied that it is appropriate to make an order for the payment of compensation to the applicant in the sum of $35, 500 being the equivalent payment of 6 months notice. Furthermore I am satisfied as a matter of fairness, and by way of assessment of just compensation in all the circumstances, that the applicant should have in his favour orders for the payment of $16,796 for outstanding salary and annual leave and $2,623 for superannuation payments not made. 11 I am satisfied that the second and third respondents are persons who were involved in the management of the first respondent's business, that they benefited from the operation of that business through the efforts of the applicant and that they were the controlling mind of the first respondent. In all the circumstances I am satisfied that it is appropriate that an order for the payment of the monies to which I have referred should be made against them. Accordingly, I order that the second and third respondents pay to the applicant the sum of $54,919. Furthermore, the second and third respondents should pay interest on that amount as sought by the applicant. Such interest is to be calculated in accordance with the Civil Procedure Act from 25 February 2005 to this date. 12 The applicant has sought an order for costs. The second and third respondents are to pay the applicant's costs in and of these proceedings in an amount assessed under the Legal Profession Act in default of agreement. 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.