Industrial Relations Commission of New South Wales CITATION: Stevenson v. Dodd [2005] NSWIRComm 1222 APPLICANT Graeme Stevenson PARTIES: RESPONDENT Neil Dodd FILE NUMBER(S): 1484 of 2005 CORAM: Connor C termination of employment - employer ceasing to trade - failure of employer to appear in hearing - ex parte proceedings - failure to give reasons for dismissal - appropriate level of remuneration CATCHWORDS: Industrial Relations Act 1996 LEGISLATION CITED: Busways v. Johnson (1994) 55 IR 255 D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 Dima Homes Case (1989) 5 AILR Rep 4 Ferguson's Case (1988) 25 IR 148 General Pants (Trading) Company Pty Limited v. Marie - unreported Grimshaw v. Dunbar (1953) 1 All ER 350 CASES CITED: Little v. Commissioner of Police (No.2) (2002) 112 IR 212 London v. Smith - unreported Maldoc Pty Limited v. Bollard - unreported New South Wales Independent Teachers' Association v. St Aloysius College (1976) AR 91 Rochford v. Textile Clothing and Footwear Union of New South Wales (1998) 85 IR 332 Smith v. London - unreported HEARING DATES: 12/09/2005 EXTEMPORE JUDGMENT DATE : 12/09/2005 APPLICANT Angus Bucknell McClellands Lawyers LEGAL REPRESENTATIVES: RESPONDENT No appearance DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Friday, 9 December, 2005 Matter No IRC 1484 of 2005 Graeme Stevenson and Neil Dodd Application under S.84 of the Industrial Relations Act, 1996 DECISION [2005] NSWIRComm 1222 Introduction 1 Mr Graeme Stevenson was employed as a truck driver by Hirex Haulage Pty Limited which operates from Queanbeyan. Hirex was involved in the transport of items of machinery. His services were terminated on Tuesday, 15 March, 2005 after eight years of employment without, he claimed, having received any reason. He subsequently lodged an application under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act claiming that the termination of her services was unfair. The matter was allocated to me and I set it down for a preliminary hearing (in Sydney) on Thursday, 21 April, 2005 which was aborted and proceeded into a mention (also in Sydney) on Wednesday, 18 May, 2005. 2 There was no appearance by Hirex and some doubt was expressed that it was still continuing to trade. That status of Hirex has remained unresolved as far as I am concerned. If an administrator has been appointed for it or it has been placed in liquidation, Part 6 proceedings would be stayed. By virtue of S.440D of the 1996 uniform Corporations Law, there is a barrier placed on proceedings involving the company in administration 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…" 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 Commission, acting under Part 6, is a "court" for the purposes of SS.440D and 471B [ Rochford v. Textile Clothing and Footwear Union of New South Wales (1998) 85 IR 332 at p.338]. It is not known whether Hirex has been placed in administration or liquidation. I suspect not. However, the status of Hirex is no longer an issue in these proceedings. 3 I adjourned the proceedings for a further mention on Thursday, 9 June, 2005 and a hearing on a notice of motion on Thursday, 21 July, 2005 (in the Queanbeyan Court House) in which Mr Bucknell, representing Mr Stevenson in the proceedings, pressed for the name of the respondent to be changed to Mr Neil Dodd, who had been the director of Hirex Haulage. Mr Dodd, who appeared in the proceedings without counsel on Thursday, 21 July, 2005, had no objection to the change and I made the necessary correction. 4 The matter was the subject of further mentions (in Queanbeyan) on Wednesday, 17 August, 2005 (at which Mr Dodd was represented by a solicitor - Mr Herring) and Wednesday, 16 November, 2005 for programming (at which there was no appearances by or on behalf of Mr Dodd). Whilst I had received no formal advice from Mr Herring that he was withdrawing his brief, Mr Bucknell informed me that was, in fact, the position and, indeed on Thursday, 8 December, 2005 Mr Herring forwarded a notice that he was ceasing to act for Mr Dodd. At Mr Bucknell's request, I had set the matter down for arbitration in a hearing on Wednesday, 9 December, 2005 (in Sydney), intending to proceed ex parte on that day in the absence of Mr Dodd or his representative and I did so when there was no appearance by Mr Dodd or his representative. 5 In proceeding ex parte I must be satisfied that Mr Dodd was aware that the matter was set down for hearing. It is essentially a question of ensuring natural justice. A party to an action is prima facie entitled to have it heard in his presence. He is entitled to dispute his opponent's case, cross-examine any of his opponent's witnesses, call his own witnesses and give such other relevant evidence before the court. Common justice demands, so far as can be given effect to without injustice to the other party, that the litigant who is absent should be allowed to come to court and address issues in dispute [Grimshaw v. Dunbar (1953) 1 All ER 350 at p.355]. 6 I am satisfied that Mr Dodd was aware of these proceedings on Friday, 9 December, 2005. Mr Dodd has apparently contacted this office and informed my assistant that the hearing of Friday, 9 December, 2005 coincides with a time when he would be hospitalised with a hip replacement operation. She informed him that he should prove some proof of his hospitalisation. He has failed to do so, although he has written to me on Thursday, 8 December, 2005 to inform me that he was: "...currently waiting for surgery to my left hip joint and am unable to travel long distances or negotiate stairs. I am presently scheduled for surgery at St Vincent's Hospital on an urgent list. I request that I be excused from attendance and have the hearing rescheduled for early March, 2006..." Mr Dodd's letter therefore conflicts with what he told my assistant, ie that he would be hospitalised on Friday, 9 December, 2005. Mr Bucknell opposes any further adjournment of this matter and, in the circumstances, his attitude is not unreasonable, especially since Mr Stevenson has had to travel from Tasmania where he is temporarily working at present to attend the proceedings on Friday, 9 December, 2005. 7 As I indicated in my unreported decision in Smith v. London [Matters No. IRC 1204, 1205 and 1206 of 1994 at p.9]: "…Ultimately, I am faced in this hearing with balancing the conflicting interests of the parties - (the respondent employer) and the three employees he dismissed. Concern over (the employer's) mental fitness to present a proper case in defence of the allegations made against him should be balanced against the interests of the three dismissed employees whose services have been terminated under the circumstances I have described earlier in this decision and who have a right…to pursue a claim for relief over their unfair dismissal without it being frustrated by factors over which they have no control…" An appeal against that decision was dismissed by a Full Bench of the Commission (Fisher P, Hungerford J and Buckley CC) in its unreported decision of Friday, 16 December, 1998 in London v. Smith [Matter No. IRC 1796 of 1998]. 8 There are outstanding entitlements that Mr Bucknell claims are due to Mr Stevenson by Mr Dodd. He was paid his wages and payment in lieu of notice of termination. He has not received his annual leave and long service leave entitlements. Nor has Mr Dodd provide him with his superannuation benefits extending from 1999. There is also a possible entitlement that Mr Stephenson has to redundancy payments which Mr Bucknell has advanced. Mr Dodd has consistently indicated that he proposes to make good those debts but that has not occurred after over six months. They are legal entitlements which I do not believe that it is appropriate to absorb in these Part 6 proceedings which I believe should be confined to the question of fairness or unfairness in the dismissal alone. 9 It may be open to the an industrial organisation, ie a trade union to press a small claim - less than $10,000.00 - under Ss.379 and 380 in Part 6 proceedings. But as the Full Bench of the Commission (Glynn and Hungerford JJ and Connor C) indicated in its unreported decision of Wednesday, 10 February, 1999 in Maldoc Pty Limited v. Bollard [Matter No.IRC 2710 of 1997], it is not open to an individual employee in Part 6 proceedings and such claims will need to be mounted in the local courts or before an industrial magistrate. I understand that Mr Bucknell intends to do so. The Evidence 10 In these ex parte proceedings Mr Bucknell still carries the onus of establishing the unfairness in Mr Stevensons' dismissal. 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 J - President, Schmidt J and Murphy CC) commented (at p.18) that where an employer does not appear in proceedings in response to a Part 6 application, the dismissed employee: "…had still to discharge the onus placed on (the employee) by the Act..." To use the words of the Full Bench of the former State Industrial Commission (Bauer J, Varnum DP and Sheils C) in the Dima Homes Case (1989) 5 AILR Rep 4, there must be "...sufficient particulars to regulate the decision making process…". 11 Mr Bucknell was content to rely on an affidavit Mr Stevenson had signed and which Mr Bucknell had already filed. Mr Bucknell also called Mr Stevenson to speak to that affidavit. The facts of this matter are fairly straightforward, in my opinion. Mr Stevenson had initially approached Mr Dodd and requested him to provide him with the superannuation entitlements. Mr Stevenson claimed in his evidence that Mr Dodd expressed concern over that issue, describing it as "...a lot of money..." and Mr Stevenson noted a cooling of his relationship with Mr Dodd from that time, with him receiving less work than had formerly been provided to him and being given older vehicles to drive. 12 On Tuesday, 15 March, 2005 Mr Dodd telephoned Mr Stevenson on his mobile telephone and was informed that he was dismissed. Mr Dodd said: "I am paying you 4 weeks notice and I will be putting you off. Your long service leave will be fixed up and the superannuation that is owing." Mr Stevenson indicated in his affidavit that he was shocked by this unexpected decision by Mr Dodd. He responded: "Okay." But ten minutes later, when he gathered his thoughts, he called Mr Dodd back on his mobile telephone and reminded him that he was owed annual leave. Mr Stevenson stated: "I thought you were more of a man than that. You could have done this face to face and told me." Mr Dodd's reply was: "It's better hearing it from me than someone else." And Mr Dodd added words to the following effect: "The trucks are run down and no-one wants to drive them. I have had enough. I am getting out." Mr Stevenson continues to be owed superannuation entitlements from Mr Dodd going back to 1999. Mr Dodd has not made good other entitlements of Mr Stephenson - for annual leave and long service leave. Conclusion 13 Mr Stevenson has received no prior warning concerning the termination of his employment. Nor did he receive any real reason for his dismissal. When assessing the fairness or unfairness of a dismissal I am directed by S.88(a) to take into account: "...whether a reason for the dismissal was given to the applicant..." And by S.88(c) to take into account: "...whether a warning of unsatisfactory performance was given before the dismissal..." 14 Prima facie, an employer who does not to give an employee reasons for his dismissal will be presumed to have acted unfairly [New South Wales Independent Teachers' Association v. St Aloysius College (1976) AR 91 at p.97]. Bauer J addressed the circumstances where an employer fails to give a reason for a dismissal more comprehensively in Ferguson's Case (1988) 25 IR 148 at p.154, viz: "…An employer may, except where required by award or legislation, refrain from giving reasons for dismissal; that the failure to provide an explanation is not sufficient by itself to call for reinstatement; that all the circumstances of the dismissal must be examined; that the failure to provide an explanation is part of those circumstances; that if on facts such a prima facie case of the dismissed employee being treated unfairly is made out an explanation is called for; that in the absence of such explanation it is open to the tribunal to conclude that the employee's dismissal was unfair…" 15 I suspect - as does Mr Stevenson - that the termination of his employment was due to no more than the decision of Mr Dodd to avoid the expense of continuing to employ him, especially his obligation to provide him with his superannuation entitlements which he had let develop until they had reached an excessive amount. But Mr Stevenson, with eight years of apparently satisfactory employment with Hirex Haulage, was entitled to be treated with considerably more courtesy than simply being informed of his dismissal at such short notice over the mobile telephone, especially since he still remains waiting for his legal entitlements to annual leave, long service leave and superannuation. I am satisfied that Mr Stevenson's dismissal was unfair - "harsh", "unreasonable" or "unjust", to use the actual language of S.84(1) [Busways v. Johnson (1994) 55 IR 255]. 16 In his Part 6 application Mr Stevenson had primarily sought his reinstatement [S.89(1)] or, alternatively, monetary compensation [S.89(5)]. Reinstatement has consistently been described as the preferred remedy for an unfairly dismissed employee [eg Little v. Commissioner of Police (No.2) (2002) 112 IR 212 at p.243]. But, in the circumstances described to me in the evidence, reinstatement is simply not an option for Mr Stevenson. Mr Dodd is no longer trading. I do not believe that Mr Stevenson has any job with Mr Dodd to which he may return. Mr Stevenson, appreciating that fact, is no longer pressing for his reinstatement. His claim is therefore confined to monetary compensation. 17 The upper limit for monetary compensation is set by S.89(5) as: "…an amount of compensation not exceeding six months' remuneration of the applicant at the average rate received over the period of six months immediately before being dismissed…" And Mr Stevenson's claim in this hearing must also be considered bearing in mind the provisions of S.89(6), viz: "When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration that would have been payable if the applicant had succeeded in obtaining alternative employment." Five weeks after he was dismissed Mr Stevenson obtained alternative work and has continued to be employed since that time on a wage comparable or greater than what he had earned when he worked with Mr Dodd. 18 Whilst S.89(5) is concerned with loss of income, not any assessment of damages, there remains a certain amount of speculation in determining the appropriate level of compensation. In D and R Commercial Pty Limited v. Flood (2002) 113 IR 344 the Full Bench of the Commission (Wright J - President, Walton J - Vice President and Tabbaa C) alluded to that when (at p.363) it commented that: "…the power in the Commission to make a money order, subject to the limitation on the quantum of compensation and the matters required to be taken into account by S.89(6), is nevertheless within the Commission's discretion. Whilst the Commission is required to take into consideration the matters identified in S.89(6), those matters are not necessarily to be reflected in any particular, arithmetic or definitive way in the money order for compensation made…" 19 S.89(6) does not provide a simple mathematical formula - a sum representing the amount of income over the period of six months immediately prior to dismissal minus a sum representing the earnings after that date equals the amount of compensation available. The direction in S.89(6) is to "…take into account…" those factors: what is actually to be done with that information is still a matter for my discretion, provided always that I do not exceed the six month ceiling in S.89(5). 20 In the circumstances, based on the figure of $992.31 which is recorded in Mr Stevenson's Part 6 application as his average weekly remuneration when he worked for Hirex, I propose to order that Mr Dodd pay to him the sum of $5,500.00. O R D E R 1. Mr Neil Dodd shall pay the sum of $5,500.00 to Mr Graeme Stevenson within 21 days. 2. This order shall take effect on and from Friday, 9 December, 2005. 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.