QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

Industrial Relations Act 1999 – s. 335 – application for costs

Patricia Spaull AND Reppals Pty Ltd trading as LJ Hooker Surfers Paradise (No. B1090 of 1999)

COMMISSIONER FISHER 18 May 2000

Application for Costs – Compensation awarded – Compensation not paid – Parties unable to agree – Act replaced – Total Compensation amount awarded – Costs Awarded – Registrar to prepare formal order encompassing Compensation and Costs.

DECISION

On 27 March 2000 I released a decision finding that Patricia Spaull had been dismissed harshly, unjustly or unreasonably from her position as Manager, Property Management Department with Reppals Pty Ltd. The Commission ordered the respondent to pay an amount equivalent to eight (8) weeks wages as compensation to Ms Spaull. This amount was additional to four (4) weeks wages which the Respondent had given an undertaking on transcript to pay to correct an error in Ms Spaull’s pay in lieu of notice on termination.

Neither amount has yet been paid to Ms Spaull. Mr O’Donoghue, who appeared for the respondent, explained the reason as being the parties disagreement over the value of a weeks wages. He advised once the figure had been determined, the amount ordered by the Commission plus the remainder of the notice would be paid promptly.

Ms Werder, who appeared for the applicant, contended the correct weekly wage rate is an amount of $800 being comprised of $673.08 for wages and $126 for car allowance.

Ms Werder relied on the decision of Blades C, in Nicholson v Steel Foundation Contracting Pty Ltd (21/6/99 QGIG…) as authority for the proposition that compensation for the lost opportunity for car allowance could be included in an award for compensation.

Mr O’Donoghue argued that only that amount which was paid as wages for work performed, viz, $673.08 could be awarded.

The decision in Nicholson was given under the Workplace Relations Act 1997 which permitted the Commission to award compensation based on remuneration (see s. 222(3)). In Mitchell v Australian Correctional Management Pty Ltd (1997) 157 QGIG 7, Hall CC (as he then was ) referred “to a line of authority which, while falling short of a definitive exposition on ‘remuneration’ at regulation 30 BD, does establish that superannuation contributions paid on an employees behalf by an employer and the benefit of private use of a motor vehicle form part of an employee’s ‘remuneration’.”.

Had this application been determined under the provisions of the Workplace Relations Act 1997, the Commission would have been sympathetic to the inclusion of the lost opportunity for car allowance in the calculation of compensation as this would have been consistent with the authorities. The difficulty is that when Ms Spaull was dismissed the Workplace Relations Act 1997 was no longer in operation. It had been replaced by the Industrial Relations Act 1999 (the Act). Thus compensation has to be assessed in accordance with s. 79 of that Act.

Reading of this section reveals that compensation is no longer assessed according to remuneration but to wages. This appears to be a deliberate change as the term “wages” has a different meaning to remuneration. As can been seen from the passage cited above “remuneration” is interpreted to include both cash and non cash benefits whereas “wages” in Schedule 5 of the Act is given as meaning “an amount payable to an employee for work performed by the employer.”. In my view the decision to change compensation from being based on “remuneration” to “wages” means that the car allowance can no longer be included in the calculation.

Accordingly, the Commission assesses compensation at 8 weeks at $673.08 per week, an amount of $5,384.64.

Mr O’Donoghue is agreeable to the Commission amending its order for compensation to include the additional pay in lieu of notice. The Commission therefore further orders the respondent to pay four weeks notice at $673.08 a week, an amount of $2,692.32. Combined, the total order for compensation is $8,076.96.

Some disagreement exists between the parties as to whether the applicant or respondent is responsible for paying the tax due on the amount. The Commission would simply order that the amount of $8,076.96 be taxed accordingly to Australian taxation law.

Although Mr O’Donoghue has committed the respondent to paying the compensation and additional notice promptly, I consider it prudent to further order that the amount of $8,076.96, taxed according to Australian taxation law, be paid immediately and certainly no later than three working days from the date of release of this decision. Only a small period of time has been permitted because, notwithstanding the disagreement over quantum, the period provided for the payment has expired.

COSTS

At the conclusion of my decision, the applicant was granted the opportunity to seek costs. Such notification was duly received by the Industrial Registrar’s Office.

Ms Werder has sought costs on two grounds, viz,

(1) the continued failure of the respondent to comply with the Directions Order issued in November 1999;

(2) an unreasonable act or omission on the part of the respondent.

In relation to the first ground, Ms Werder provided the Commission with the history of the respondent’s non compliance with the Directions Order and the consequential costs and delays experienced by her client in ensuring the order was ultimately met. Mr O’Donoghue conceded omissions on the part of his client but attempted to minimise the potential costs on the basis that his client was a small business which was heavily financially committed and extremely busy. In addition, Mr O’Donoghue argued that it was not until 17 January 2000, just more than a week before the scheduled hearing date, that a full statement of claim was received by the respondent’s Solicitors from the applicant’s Solicitors. Until that time the respondent was unclear about the details of the outcome sought by Ms Spaull.

In my view a measure of costs ought to be awarded against the respondent for the non compliance of the Directions Order. This would seem to fall within the provisions of s. 335(1)(b) of the Act. Directions Orders are not issued as a guide or for parties to elect whether or not they might comply at their convenience. They have a purpose in ensuring the orderly and timely conduct of litigation. Failure to comply affects not only the parties to the action but other parties who are waiting for their matters to be processed.

The second aspect of the claim for costs related to an unreasonable act on the part of the respondent in not only providing its witness statements after the prescribed time (and after having the date extended) but also in raising damaging allegations about Ms Spaull’s conduct. The statements were delivered with only one business day then available for preparation of responses. Consequently, the first scheduled hearing date had to be vacated and the applicant was required to prepare a detailed statement in response as well as obtaining several other witnesses and having them prepare affidavits countering the damaging allegations. A hearing initially scheduled for one day was scheduled for two days as a result.

Mr O’Donoghue conceded costs for the conference held on 21 January 2000 but argued against costs being awarded for the hearing. He contended that the amount of compensation awarded by the Commission was consistent with the offer made by the respondent. Its offer contained a component for long service leave and a component ($5,300) for compensation.

I am unclear about whether the compensation component was considered to have included the residual pay in lieu of notice which was owing or whether it was an amount offered in settlement of the dismissal action. It seems however, that total offer made by the respondent was made in full and final settlement of any and all matters arising out of the employment. Acceptance of that offer would have prevented Ms Spaull from pursuing her entitlement to proper notice, had that amount not been included in that part of the respondent’s offer relating to compensation. In any event Ms Spaull would have received an amount of approximately $2,500 less than was finally available if she accepted the respondent’s offer.

In the dismissal conference outcome form, which both parties authorised me to consult, the Vice President recorded that costs might be awarded should her recommendation not be accepted that the respondent pay redundancy in accordance with the TCR provisions for service from 1982. Although comment was not specifically made about notice, the TCR provisions give a graduated scale of notice (consistent with s. 84 of the Act). In my view it is not unreasonable to think the recommendation of the Vice President included payment in lieu of notice.

Was then the respondent’s offer such as to warrant an award of costs being made under s. 335(1)(b) of the Act? Given the respondent’s offer was consistent with my award of compensation it is inappropriate to award costs on this ground. Even if it is correct that notice was omitted from the offer and terms of settlement prevented any further claims being pressed, I do not consider these factors to be of such significance that costs ought to be contemplated. This view is even more compelling taking into account the costs of proceedings. In any event Ms Werder did not press a claim for costs based on the settlement offer by the respondent.

In my view Ms Werder’s submissions for costs for the reason of disruption to proceedings have merit. I accept Ms Werder’s submissions that this matter should have been disposed of on the first scheduled day of hearing (27 January 2000). The inclusion in the witness statements of damaging allegations about Ms Spaull’s conduct, none of which had been previously raised at the conciliation conferences, caused not only an adjournment to be sought and granted but the preparation of a substantial number of extra witness statements and two days to be scheduled for the hearing. The allegations made by the respondent’s witnesses were not considered by the Commission because they did not bear upon the decision to dismiss. Nonetheless, it was essential for the applicant to respond to the belated case made against her.

In these circumstances, I think some costs should be awarded to the applicant. The actions of the respondent would again meet the provisions of s. 335(1)(b) of the Act.

The costs order which I have decided to make encompasses:

·  partial costs for the adjourned date of hearing

·  the respondent’s non compliance with the Direction Order

·  costs for a second day of hearing which was unnecessary

·  costs for the conference on 21 January 2000, as conceded by the respondent.

I am not prepared to award costs for preparation for hearing in light of my comments regarding settlement offers nor for the first day of hearing. These were necessary expenditures on the part of an applicant proceeding to a hearing and could not be attributed to an unreasonable act or omission on the part of the respondent.

I have had regard to the Schedule of Costs submitted by Ms Werder which detailed costs related to the hearing and costs arising as a result of the non compliance of the Directors Order by the respondent. I have also had regard to the Magistrates Court Scale E in respect of the matters relating to the hearing including the adjournment and note that only the Supreme Court Scale provides costs for the types of matters identified in regard to the failure to comply. I am not however bound by any scale. An award of costs involves an exercise of discretion. Bearing in mind that I have to arrive at a figure which is just and reasonable I determine costs to be in the amount of $1 400. I order that Reppals Pty Ltd pay costs in the amount of $1 400 to Patricia Spaull within 22 days of the date of release of this decision.

The Registrar is directed to prepare a formal order encompassing the order for compensation and the order for costs.

Order accordingly.
G.K. FISHER, Commissioner.
Released: 18 May 2000 / Appearances:–
Ms S. Werder of Bernard Ponting for the applicant.
Mr J. O’Donoghue of John Neive O’Donoghue Solicitors for the respondent.