Camilleri v Auto Recyclers Pty Limited & Anor

CATCHWORDS: Unfair contract - Interlocutory proceedings - Strike out motion by respondents - Claim that the Industrial Court of New South Wales was without jurisdiction because applicant's employment covered by a federal award - Held premature to strike out summons for relief.

Industrial Relations Act 1996 s 106 LEGISLATION CITED: The Constitution s 109 Workplace Relations Act 1996 (Cth) s 152(1)

Blackley v Devondale Cream (Vic.) Pty. Ltd. (1968) 117 CLR 253 Burgess v Mount Thorley Operations Pty Ltd (2003) 132 IR 400 Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Port Kembla Coal Terminal Limited [2007] NSWIRComm 296 CASES CITED: Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd and Others (1991) 28 NSWLR 443 Mt Thorley Operations Pty Ltd v Burgess and Others (2001) 103 IR 184 Scott v Piccone (2002) 117 IR 35 Telstra Corporation Limited v Worthing and Another (1999) 197 CLR 61 Thornwaite v Australian National Credit Union Ltd (2002) 116 IR 438

APPLICANT: Mr S A Gardiner of Counsel Solicitors: Ms M E Dorrough Dorrough Smart Solicitors & Attorneys LEGAL REPRESENTATIVES:

FIRST & SECOND RESPONDENTS: Mr J C Thompson of Counsel Solicitors: Mr P J Lander Lander & Lander Lawyers

CAMILLERI v AUTO RECYCLERS PTY LIMITED T/AS PICK & PAY LESS SELF SERVE AUTO PARTS & ANOR

Application under s 106 of the Industrial Relations Act 1996

1 Michael Camilleri was employed as a salesperson by the first respondent, Auto Recyclers Pty Limited trading as Pick & Pay Less Self Serve Auto Parts. On 27 May 2005, the second respondent, Garry Rush (managing director of the first respondent), terminated the applicant's employment. By summons (later amended), the applicant sought relief under the unfair contract provisions contained in Pt 9 of Ch 2 of the Industrial Relations Act 1996. 2 By notice of motion the respondents have sought orders that the applicant's amended summons for relief be struck out and costs. It was contended that the applicant's employment was covered by an award of the Australian Industrial Relations Commission and that, consequently, this Court was without jurisdiction to grant the relief sought. This interlocutory judgment deals with the respondents' strike out motion. 3 The following matters do not appear to be controversial between the parties: · The first respondent is a trading corporation that operates a motor vehicle parts-recycling ("wrecking") yard. The second respondent is the principal of the first respondent. · The applicant in the proceedings is a former employee of the first respondent. The applicant commenced employment with the first respondent in 1997, then aged about 42. His main duties were pricing and selling motor vehicle parts which had been removed from vehicles held in the yard of the first respondent. · In dispute is the applicant's contention that he was employed continuously from 1997 up to his termination in 2005. The respondents contend that the applicant's employment was broken by a resignation in August/September 2000 and subsequent re-employment. · Without notice to the applicant, on 27 May 2005 the second respondent terminated the employment of the applicant. The applicant was then 50 years of age. · The ground for termination was the applicant's serious misconduct in not accounting for all takings received from customers but taking some for himself. The applicant denies engaging in any misconduct. 4 Additionally, I note that as at the date of termination of the applicant it was asserted by the respondents that the first respondent was a member of the Motor Traders' Association of NSW ("the MTA"), a registered organisation of employers under the Workplace Relations Act 1996 (Cth). Further, that the MTA was a party to the Vehicle Industry - Repair, Services and Retail Award 2002 ("the Award") made under the Workplace Relations Act. 5 The main contentions of the respondents were that: (a) it was appropriate to deal with the respondents' jurisdictional challenge as a threshold issue because it could be demonstrated that no order can be made that would be within jurisdiction; (b) by operation of s 109 of the Constitution and s 152(1) of the Workplace Relations Act as in force as at 27 May 2005 (the date of termination), the Award had primacy over s 106 of the Industrial Relations Act and so the Commission does not have the jurisdiction to entertain the applicant's claims; (c) each of the applicant's claims for relief set out in the amended summons was inconsistent with a provision or provisions of the Award; and (d) the Award leaves no room for the exercise by this Court of its s 106 jurisdiction in the manner sought. 6 The material relied upon by the respondents in seeking to strike out the amended summons included the amended summons and the affidavits of: the applicant sworn 22 February 2007 (first sentence of paragraph 5 and paragraph 6); the second respondent sworn 20 April 2007 (paragraphs 3, 9 and 20(iii)); Maria Assunta Cheverton sworn 23 April 2007; Miles Todd sworn 6 September 2007; and the second respondent sworn 10 September 2007. 7 The applicant contended that it was inappropriate to dismiss proceedings under s 106 on the basis advanced by the respondents unless and until it became apparent that the orders actually made by this Court would involve some inconsistency with the Award: Mt Thorley Operations Pty Ltd v Burgess and Others (2001) 103 IR 184. The application was premature. This was so because no order of the Court had yet been made. It was not possible to consider and apply the constitutional cases until it was known which provisions were being compared: Thornwaite v Australian National Credit Union Ltd (2002) 116 IR 438 and Scott v Piccone (2002) 117 IR 35 at 50. With respect to those aspects of the claim that related to notice, severance and like matters that may be dealt with in the Award, it was to be noted that the Award was a minimum rates instrument. Nothing in it prevented the agreement by the employer and the employee to more beneficial terms and conditions. Nor did it prevent the making of orders by this Court for more beneficial terms and conditions. Consideration 8 In Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Port Kembla Coal Terminal Limited [2007] NSWIRComm 296 the Full Bench considered whether orders sought by the Construction, Forestry, Mining and Energy Union ('CFMEU') on behalf of members who had been employed by the Port Kembla Coal Terminal Limited ('PKCT') were inconsistent with a federal instrument known as a 'Preserved Collective State Agreement' ('PCSA'). It had been alleged by the CFMEU in an amended summons for relief under s 106 of the Industrial Relations Act that contracts of employment and employment arrangements between its members and their employer were unfair in relation to future superannuation benefits. 9 The employer, PKCT, contended that the orders sought would give rise to a direct inconsistency. It was submitted that an order that the employment contracts were unfair, in the manner asserted by the CFMEU in the amended summons, would involve making orders providing for greater superannuation entitlements than those the respondent was obliged to pay under the PCSA. Such an order, it was submitted, would involve making the employer "liable to pay [an amount] in circumstances 'beyond those specified in the Award as the basis for entitlement'" and further that, "The orders sought would have required the respondents to provide a benefit beyond, or in excess of, what the relevant Federal instrument prescribed": Burgess v Mount Thorley Operations Pty Ltd (2003) 132 IR 400 at [161]. Such an outcome, it was submitted, would give rise to a direct inconsistency between the relevant State law and the relevant Commonwealth law: Telstra Corporation Limited v Worthing and Another (1999) 197 CLR 61 at 76. 10 The Full Bench concluded (at [27]) that it was "inescapable" that an order under s 106 of the Industrial Relations Act, in the terms of what was sought in the CFMEU's amended summons, would be directly inconsistent with the provisions of the PCSA. It was held that if an order were to be made in such terms it would impose an obligation greater than that for which the federal law had provided: Blackley v Devondale Cream (Vic.) Pty. Ltd. (1968) 117 CLR 253 at 258-259. 11 However, after considering Majik Markets Pty Ltd v Brake and Service Centre Drummoyne Pty Ltd and Others (1991) 28 NSWLR 443; 39 IR 169, a decision of the Court of Appeal, the Full Bench in CFMEU v PKCT stated at [32]-[34]: [32] We have serious reservations about whether the Court could make orders in this matter that did not conflict with the relevant federal law. The CFMEU's whole case is centred on the allegation that its members were misled as to their future superannuation entitlements under the accumulation scheme operated by the respondent. What the applicant seeks in one form or another is, inter alia , an order that compensates for the shortfall between what its members are entitled to under the terms of the PCSA and what they would have been entitled to had the alleged representations made to them about their future superannuation entitlements been true and accurate. In other words, the relief, in whatever terms it might be framed, would seem to involve the making of orders imposing an obligation on the respondent to make payments in respect of superannuation in excess of the respondent's obligation under the PCSA. That such compensation might not be described in any amended claim as being connected with superannuation, runs the risk of it being regarded as a mere artifice. [33] Nevertheless, in order to succeed on the motion the respondent must establish that no order could be made that would not be inconsistent with the Commonwealth law. Given our observations in the preceding paragraph it is quite possible that no such order could be made. But as Handley JA noted in Majik Markets "the mere possibility that this could occur does not entitle the claimant to relief in these proceedings." Kirby P observed in the same case that as no orders had been made, the question of inconsistency was a matter for the future.

[34] The Court has a wide discretion under s 106 and is not limited to making the orders sought. Moreover, it remains open to the applicant to seek leave to amend the summons for relief. We are not, at this stage, satisfied to the extent necessary that the respondent has discharged what Handley JA described in Majik Markets as a "heavy onus" that no conceivable order could be made that would be within jurisdiction. 12 In the present case, on the face of the material relied upon by the respondents, the applicant's employment was subject to the terms of the Award, most probably in the classification "automotive spare parts salesperson (experienced)". The Award deals reasonably comprehensively with matters concerning the employment relationship. For instance, there are provisions dealing with: Contract of Employment; Classification and Wage Structure; Payment by Results; Hours of Work; Hours of Duty; Meal Breaks; Rates for Saturday Work; Rates for Sunday Work; Overtime; Annual Leave; Personal Leave; Redundancy; Severance pay; and Dispute Resolution Procedure. 13 To illustrate the potential inconsistency between the orders sought and the terms of the Award, one of the claims (4(b)) in the amended summons for relief is that an order be made varying the contract ab initio or from some other time to include terms that: … (b) Upon termination for a reason other than serious and wilful misconduct the employee is to have 12 months' notice of termination or payment in lieu including but not limited to base salary, motor vehicle benefits and incentive scheme payments. … 14 On the other hand, the Award provides in cl 6(d)(i)(1): (d)(i)(1) In order to terminate the employment of an employee the employer must give to the employee the period of notice specified in the table below: Period of continuous service Period of notice

1 year or less 1 week Over 1 year and up to the completion of 3 years 2 weeks Over 3 years and up to the completion of 5 years 3 weeks Over 5 years of completed service 4 weeks

15 Whilst this Court understands that the decision of the Full Bench in CFMEU v PKCT is the subject of challenge, the approach taken by the Full Bench would seem to be presently binding upon me. That is to say, having regard to the orders sought in the amended summons, I do have reservations about whether the Court could make orders in this matter that did not conflict with the relevant federal law. However, based on the reasoning in CFMEU v PKCT, at this stage of the proceedings I cannot be satisfied to the extent necessary that the respondents have demonstrated that no conceivable order could be made that would be within jurisdiction. 16 Accordingly, I do not propose to dismiss the applicant's amended summons for relief. Orders

17 The Court makes the following orders: (1) The application by the respondents to strike out the applicant's amended summons for relief is refused. (2) Costs are reserved. ___________________________________________________

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