Chelvarajah v Global Protection Pty Ltd

· Should the Court grant a final injunction, pursuant to s 170JC(3) of the WR Act, to enforce the order of the Commission? · Should the Court impose a penalty on the respondent, pursuant to s 178(1) of the WR Act, for breach of the terms of the Commission's order? · Should the Court order the respondent to pay any, and if so what, amount of money lost by Mr Chelvarajah as a result of the termination? · Should the Court impose a fine, and if so of what amount, on the respondent for contempt of court in failing to comply with the interlocutory injunction?

The facts 7 Mr Chelvarajah began his employment with Kirwan Security Services as a casual security guard in October 2000. He was given casual work in Dandenong and Bayswater. He was then offered a full-time position at the Bayswater location on a roster, working rotating afternoon and night shifts. In early November 2002, Mr Chelvarajah was told that he was to be transferred to a location in Altona. This was a considerable distance from his home at Narre Warren, and he was concerned about the distance he would have to travel to and from work. He was having problems with his eyesight. Mr Chelvarajah was sent to Dandenong for a few days and then to Chelsea Heights for a few days. He then spent some time at a location in Port Melbourne. On 9 January 2003, he underwent eye surgery. On 14 January 2003, he was offered a position at West Footscray. He undertook a trial trip from his home to West Footscray by car and train and on foot. The trip took two and a half hours. As a consequence, Mr Chelvarajah rejected the position. He was then told that he had abandoned his employment and would receive a letter of termination. The letter arrived on 16 January 2003. 8 In his application to the Commission, Mr Chelvarajah gave the name of his employer as 'Kirwan Security'. An appearance was entered in the Commission proceeding. This gave the name of the employer as 'Kirwan Security Service'. It indicated that the proprietor of the business was a company, and gave the company's identifying number as ACN 078 956 519. That is the identifying number of the respondent, Global Protection Pty Ltd. The contact person was given as Barry Rumpf. The notice of appearance contained an admission that the named employer was the employer of the applicant at the time of termination. 9 In his reasons for decision, published on 13 August 2003, Commissioner Mansfield found that Mr Chelvarajah was employed as a security guard by 'Kirwan Security Services.' The Commissioner recorded that Kirwan Security Services was not represented at the hearing, quoting from a letter to the Commission, dated 31 July 2003: 'I confirm what was conveyed to you this morning in conversation that this company Finished in Business [sic] on 30th June, 2003 and it intends to take no further part in these proceedings.' 10 In his summary of the evidence, the Commissioner said: 'There is conflicting material before the Commission as to the legal status of the employer. Evidence from the applicant suggests that it is still an operating legal entity, material from the employer states that the company has been or is in the process of being liquidated.' 11 The relevant finding was: 'Advice to the Commission in correspondence from the company dated 31 July, 2003 was that Kirwan Security "Finished in Business (sic) on 30th June 2003...". Evidence from the applicant was that Australian Securities and Investments Commission [ASIC] records showed that the company remained in business as at 1 August, 2003 and, in addition, employees involved in security work for the company were believed to be continuing to receive wages with the business details of Kirwan Group Services showing on the pay slips.' 12 Whatever documents were before the Commission from the Australian Securities and Investments Commission ('ASIC') is not clear from the evidence before me. Nor is it apparent from the Commissioner's reasons where the name 'Kirwan Group Services' came from, or what its relevance was. It is now clear, from ASIC records tendered in evidence before me, that the respondent, Global Protection Pty Ltd ACN 078 956 519, was the proprietor of the registered business name Kirwan Security Services from 1 July 1997 until 10 July 2003. From 10 July 2003, the proprietor of the registered business name Kirwan Security Services has been Global Protection Holdings Limited ACN 105 449 349. At the time when the respondent was the registered proprietor of the business name Kirwan Security Services, the respondent's address was given as 11 Campbell Street, Yarraville. From 20 August 2003, it changed its registered office to 47 Hume Street, Mulwala, New South Wales. A week earlier, on 13 August 2003, the respondent registered 47 Hume Street, Mulwala, New South Wales as its principal place of business. This address was also given as the home address of the sole director and secretary of the respondent, Barry James Rumpf. The respondent has two registered shareholders. One, a natural person, is a former registered proprietor of the business name Kirwan Security Services. The other shareholder in the respondent is a company, which gives its address as 'Kirwan Group Services', 252 Hyde Street, Yarraville. Global Protection Holdings Limited is registered as a foreign company, originally registered in New Zealand. Its registered office is at 9 Kent Street, Yarraville. Barry James Rumpf of 47 Hume Street, Mulwala, New South Wales is one of two directors. 13 The information in the ASIC records, now available, lends some support to the letter to which the Commissioner referred in his reasons for decision, which asserted that the respondent finished in business on 30 June 2003. Ten days after that date, it ceased to be the proprietor of the business name by reference to which it is now sued. On the day of the Commissioner's decision, it moved its principal place of business to the home of its sole director and secretary in Mulwala. One week later, it moved its registered office to that address. 14 Under the heading 'ORDER' in his reasons for decision, Commissioner Mansfield said: 'Taking particular account of the evidence provided by the applicant related to the legal status of the company, Kirwan Group Services, I order as follows; · That the respondent appoint the Applicant to a position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination. The location of the position to be a reasonable distance and time to travel from his home in Narre Warren taking into account factors such as the practicability of public and private transport and the length of daily working hours. · That the respondent treat the applicant as if his employment was continuous between 14 January 2003 and the date of reinstatement. · That the respondent pay to the applicant the amount of remuneration lost due to the termination, being the amount the applicant would have earned with the respondent less the amount he earned during the period between termination and reinstatement. · The re-employment of the applicant is to commence from a date not later than August 22. This order shall come into force from today's date August 13, 2003.' 15 I repeat that the name 'Kirwan Group Services' is not the subject of any explanation or reference, other than the mention, to which I have already referred, in relation to payslips. The respondent named in the proceeding, and therefore presumably the subject of the Commission's order, is 'Kirwan Security' or 'Kirwan Security Service'. In general, in the reasons, the respondent is referred to as 'the employer'. On one occasion, it is referred to as 'Kirwan's Security Service'. On two other occasions, it is referred to as 'Kirwan Security'. On one occasion, it is referred to as 'the Company'. 16 The Commission's order was served on the respondent by ordinary pre-paid post and by facsimile transmission on 15 August 2003. The accompanying letter, dated 13 August 2003, was addressed to 'Global Protection Pty Ltd Trading as Kirwan Security Service'. The postal address was a locked bag number at Yarraville, the address given in the notice of appearance filed in the Commission proceeding. The facsimile number was also a number given in that notice of appearance. 17 Counsel for the applicants relied on two affidavits of organisers employed by the second applicant, Mark Bradley Russell and Dimos Hatziladas. Each spoke of a conversation he had had with a person called Darren Quix, described as 'the payroll/human resources person for the Respondent.' The purpose of tendering evidence of the conversation between Mr Russell and Mr Quix, on 22 August 2003, was to lead evidence of an admission that the respondent was refusing to reinstate Mr Chelvarajah. The conversation between Mr Hatziladas and Mr Quix, on 20 August 2003, was inconclusive in that respect. In the circumstances, having regard to the evidence now available as to the change in proprietorship of the business 'Kirwan Security Services', it is by no means clear that the statement of Mr Quix is to be taken as an admission by the respondent. 18 Section 87(1)(a) and (b) of the Evidence Act 1995 (Cth) ('the Evidence Act') require that it be 'reasonably open to find' that a person had authority to make statements on behalf of a party in relation to the matter with respect to which the representation was made, or that the person was an employee of that party or had authority otherwise to act for the party and the representation related to a matter within the scope of the person's employment or authority. I am by no means satisfied that, on 20 and 22 August 2003, Mr Quix was actually employed by the respondent or had the necessary authority from the respondent. Given that the proprietorship of the business had changed, it is unlikely that he was employed by the respondent, or that he had the necessary authority from the respondent. Although, in the conversation involving Mr Russell, specific reference was made to an instruction given by Barry Rumpf, this does not conclude the matter. Mr Rumpf was at that time a director of both the respondent and Global Protection Holdings Limited. Accordingly, the alleged admission is not admissible in evidence. In the circumstances of this case, this is of no moment, as I am more than satisfied that the respondent has not complied, and has no intention of complying, with the order of the Commission. 19 The affidavit of Mr Hatziladas also contains his evidence of conversations with 'union members' at the Bayswater location, at which Mr Chelvarajah formerly worked. According to Mr Hatziladas, the 'union members' said that 'Kirwans' still had the contract to provide security services at that site. The 'union members' did not advise Mr Hatziladas of 'any change to their employment.' Plainly, as a means of proving that the respondent was still operating a business and employing security guards, this evidence is both inadmissible and inconclusive. It falls foul of s 59(1) of the Evidence Act. It would only be admissible if it fell within s 62 of the Evidence Act, on the basis that the 'union members' might reasonably be supposed to have had personal knowledge, based on something that they saw, heard or otherwise perceived, but not on a representation made by another person. It is by no means clear that the 'union members' could reasonably be supposed to have had personal knowledge of the matters of which they spoke. It is highly likely that their statements were based on representations by such things as payslips, which contained a business name with the name 'Kirwan' as part of it. Even if it be supposed that this business name was 'Kirwan Security Services', as is now clear, the respondent was no longer the proprietor of that business name at the time when the statements were made, but Global Protection Holdings Limited was. In addition, no case was made for admitting first-hand hearsay, pursuant to s 64(2) on the basis that calling the persons concerned would cause undue expense or undue delay, or would not be reasonably practicable. The 'union members' were not identified. The relevant paragraph of the affidavit of Mr Hatziladas is too vague to warrant admission. 20 So far as the evidence before me goes, it establishes on the balance of probabilities that the respondent no longer carries on the business that it formerly conducted under the name 'Kirwan Security Services'. It has not carried on that business since 10 July 2003. There is no evidence tendered before me that the respondent engages in any business activity at all. 21 The order made by Merkel J on 22 September 2003, so far as relevant, is in the following terms: 'On or before 5.00 pm Friday 26 September 2003 the Respondent by its director Mr Barry Rumpf or by its other officers, servants or agents;

(a) appoint the First Applicant to a position on terms and conditions no less favourable then those on which the First Applicant was employed immediately before his termination of employment on or about 14 January 2003; and (b) Give notice in writing of the appointment of the First Applicant by giving notice personally to the First Applicant at 19 Somerset Court, Narre Warren South, Victoria, 3805, or personally to Neill Campbell at 117-131 Capel Street, North Melbourne 3051 or by sending the notice by facsimile to the First Applicant, care of Neill Campbell at facsimile number 9235 7770.' 22 His Honour reserved liberty to apply for the discharge or variation of the order by either party on notice to the other. On 26 September 2003, his Honour varied the order, by substituting for the date '26 September 2003' the date '3 October 2003'.

A permanent injunction 23 The power exercised by the Commissioner, in making the order of 13 August 2003, is found in s 170CH(3) and (4) of the WR Act: '(3) If the Commission considers it appropriate, the Commission may make an order requiring the employer to reinstate the employee by:

(a) reappointing the employee to the position in which the employee was employed immediately before the termination.

(b) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination. (4) If the Commission makes an order under subsection (3) and considers it appropriate to do so, the Commission may also make: (a) any order that the Commission thinks appropriate to maintain the continuity of the employee's employment; and (b) subject to subsection (5) - any order that the Commission thinks appropriate to cause the employer to pay to the employee an amount in respect of the remuneration lost, or likely to have been lost, by the employee because of the termination.' 24 Section 170CH is in Pt VIA of the WR Act. In Div 4 of Pt VIA is found s 170JC, which is in the following terms: '(1) Part VIII has the same effect in relation to orders under this Part as it does in relation to awards. (2) For the purpose of applying Part VIII in that way, an order under this Part is, unless the order provides otherwise, taken to bind all employers and employees of the kind covered by the order (whether or not named or described in the order). (3) In addition to any other right that an employee covered by an order under this Part may have under Part VIII (as it applies in accordance with this section): (a) the employee may apply to the Court to enforce the order by injunction or otherwise as the Court thinks fit; and (b) if the order is an order under Subdivision B of Division 3 - the employee may apply to a court of competent jurisdiction as defined in section 177A to enforce the order by injunction.' 25 Section 412(1)(a) provides that the Court has jurisdiction with respect to matters arising under the WR Act in relation to which applications may be made to it under the WR Act. The word 'Court' is defined in s 4(1) to mean the Federal Court of Australia. This Court therefore has jurisdiction, through the combination of s 170JC(3)(a) and s 412(1)(a) of the WR Act to enforce the Commission's order of 13 August 2003 by injunction. Although there is no specific conferral on the Court of a power to grant an injunction in these circumstances, it may be assumed that the provisions to which I have referred carry with them such a power. It may also be assumed that the power is a discretionary one. If Parliament were to attempt to confer on the Court the function of granting an automatic 'injunction', on every occasion when an application is made for one, this would surely be beyond the constitutional competence of Parliament, as it would be an attempt to confer on this Court a power which would not be part of the judicial power of the Commonwealth. For that reason, as well as for the reason that the term 'injunction' is used, and an injunction is ordinarily a discretionary remedy, it should be concluded that the Court has a discretion whether or not to enforce an order of the Commission by injunction. See the remarks of Moore J, with whom Tamberlin and Goldberg JJ concurred, in Ramsey Butchering Services Pty Ltd v Blackadder [2002] FCAFC 20 (2002) 127 FCR 381 at [31] - [33] per Moore J and [56] per Tamberlin and Goldberg JJ. For the same reasons, the principles on which courts of equity act in determining whether the discretion to grant an injunction should be exercised are intended to be applicable to this form of statutory injunction. 26 The type of injunction sought, to enforce that part of the Commission's order requiring the respondent to appoint Mr Chelvarajah to a position on terms and conditions no less favourable than those on which he was employed immediately before the termination, would require positive action by the respondent. It is a true mandatory injunction, not one requiring that the respondent refrain from specified action. It is well established that a court of equity will not grant a mandatory injunction that is incapable of performance. In Attorney-General v Colney Hatch Lunatic Asylum (1868) LR 4 Ch App 146 at 154, Lord Hatherley LC said: 'No doubt there are cases where the Court will take care not to pronounce an idle and ineffectual order; for instance, the Court will not issue a mandatory injunction where it is impossible that the mandatory injunction can by any means be complied with. The simplest illustration of this is the case of cutting down timber. It would be idle when the trees have been cut down to make an order not to allow the trees to remain prostrate, and all that can be done in such a case is to leave the parties to their remedy for damages. Take another illustration. There might be a bank to prevent the influx of the sea, and that bank might be most improperly destroyed; the Court would restrain the performance of the act if it were in time to do so, but the act having been once done, and the sea admitted, the Court could only then leave the parties to their remedy for damages, considering it impossible to exclude the sea.' 27 In that case, the Court drew a distinction between a mandatory injunction, requiring the taking of action, and a negative injunction, such as an injunction to refrain from continuing to commit a nuisance, even though the latter kind of injunction might involve positive action on the part of the party enjoined to prevent the continuance of the nuisance. Such a distinction has no relevance to an injunction of the kind sought in the present case, which could not be made in a negative form. The question, therefore, is whether an injunction requiring the respondent to appoint Mr Chelvarajah to a position would require the respondent to do something that it cannot presently do. 28 The state of the evidence before me forces me to a finding that, on the balance of probabilities, the respondent does not presently carry out any business activity, and does not employ any security guards. Clearly, it does not conduct the business known as Kirwan Security Services, in which Mr Chelvarajah was employed prior to his termination. The respondent has not conducted that business since, at the latest, 10 July 2003. I therefore act on the assumption that, if the respondent were to appoint Mr Chelvarajah to a position, it would have to create that position. If it were to comply with the requirement that the position be on terms and conditions no less favourable than those on which Mr Chelvarajah was employed immediately before the termination of his employment, it would not be able to do so. Not having any contracts to provide the services of security guards, it would not have any capacity to provide work of the kind Mr Chelvarajah was performing prior to the termination of his employment. On the assumption that Mr Chelvarajah was paid for the hours he actually worked, and not simply for holding the position of security guard, which assumption appears to conform to the evidence, the respondent would be unable to provide sufficient hours of work (or indeed any hours of work) to enable Mr Chelvarajah to earn remuneration equivalent to that which he was earning prior to the termination. 29 Counsel for the applicants submitted that an injunction requiring the respondent to appoint Mr Chelvarajah to a position of the kind described in the Commission's order would be satisfied by the respondent merely entering into a contract of employment with Mr Chelvarajah, even if it then provided him with no work. Mr Chelvarajah would then have whatever rights the contract gave him and, in the event of further termination, whatever rights Pt VIA of the WR Act gave him in respect of that termination. The submission was based on the view of the majority, Tamberlin and Goldberg JJ, in Blackadder. To ascertain whether Blackadder supports the submission, it is necessary to examine that case in some detail. Mr Blackadder was employed as a boner in an abattoir operated by his employer. He worked in a particular boning room. His employer directed him to work in another section of the abattoir, which he refused to do because, having regard to a particular condition from which he suffered, he apprehended that he might increase the likelihood of his suffering from injury by performing work according to the method required in the other part of the abattoir. The employer dismissed him from his employment. The Commission ordered, pursuant to s 170CH(3)(a) of the WR Act that the employer reinstate Mr Blackadder by reappointing him to the position in which he was employed immediately before the termination. A single judge of the Court granted an injunction, expressly requiring the employer to reinstate Mr Blackadder to the position in which he was employed prior to the termination, as a boner in the boning room in which he had worked. His Honour went further and enjoined the employer, upon such reinstatement and for a period of 14 days thereafter, to furnish Mr Blackadder with his usual work in that position, excepting in case of shortage of stock to slaughter, and required the parties to refer any dispute as to Mr Blackadder's physical capacity to perform the work to a disputes committee established under an agreement binding the parties. The dispute on appeal was not about the reinstatement injunction, but about the further injunctions, requiring the furnishing of work and the resolution of disputes about Mr Blackadder's physical capacity. The employer was concerned that, if it furnished Mr Blackadder with work, he was likely to suffer injury as a result, and that this would give rise to liability for the employer, pursuant to occupational health and safety legislation. 30 After a thorough examination of authorities relating to powers of reinstatement under various industrial laws, Moore J at [53] expressed the view that a power to order reinstatement contemplated: 'the reinstated employee being permitted to resume work in a real and substantial way. That is, performing the work performed at the time of dismissal (if reinstated to the pre-existing position).' 31 At [43], his Honour would have allowed the appeal in part, setting aside the injunction about the settlement of disputes and deleting from the other disputed injunction the requirement to furnish work for a period of 14 days. Tamberlin and Goldberg JJ disagreed. Their Honours went further in allowing the appeal, stating at [56] that they would delete from the reinstatement injunction the requirement that Mr Blackadder be reinstated as a boner performing a particular type of boning work in a particular part of the employer's premises. Their Honours would have set aside the whole of the injunction requiring the furnishing of work, as well as the injunction about the resolution of disputes. At [65], their Honours said: 'At common law there is no obligation upon an employer under a contract of employment to provide work to an employee unless the contract specifically requires that such work be provided, or unless it is necessary for the employee to continue to be employed in order to maintain a particular profile, such as an actor, or unless the nature of the work for which the employee is employed is such that the employee's career and future prospects depend upon the employee working in a particular way, or unless the level of the employee's remuneration depends upon the extent of the work the employee is able to undertake. There is nothing in the legislation, nor in the accompanying Explanatory Memorandum or Second Reading Speech, which suggests that s 170CH(3)(a) is intended to furnish employees with a right to work which, prior to instituting a proceeding in respect of an unlawful termination of employment, they would not have.' 32 At [73], their Honours said that if the employer were obliged, on the reinstatement of Mr Blackadder, to provide him with work, Mr Blackadder would be obtaining a benefit or advantage to which he was not entitled prior to the wrongful termination of his employment. At [81], their Honours said: 'We consider that where the terms of employment of the position in which a reinstated person was previously engaged entitled that person to require that work be given, then he or she could take appropriate action after reinstatement to assert any such right. If, under the terms of employment, the person was not entitled to be given work then the employer is entitled simply to appoint the person again to the position without providing work. The existence of an obligation to reinstate by reappointment does not require the conferral of any additional entitlement to work.' 33 To those familiar with the area of statutory powers to reinstate dismissed employees, there is no doubt much to be said for the view expressed by Moore J in Blackadder. The view expressed by the majority is far from uncontroversial. Indeed, the case has since been the subject of a grant of special leave to appeal to the High Court on 30 April 2004. The appeal was argued on 30 September 2004 and the judgment of the High Court is reserved. 34 These considerations may be left aside for present purposes, however. There are many points of distinction between Blackadder and the present case. Blackadder concerned an employer which was still conducting its business to the same extent, and in the same manner, as the business had been conducted at the time of the termination of Mr Blackadder's employment. The present case is one in which the respondent has ceased to operate any business at all. In Blackadder, the Commission had exercised the power given by s 170CH(3)(a) of the WR Act, reinstating Mr Blackadder to the position in which he was employed immediately before the termination. In the present case, the Commission exercised the power in s 170CH(3)(b), requiring the respondent to reinstate Mr Chelvarajah to another position on terms and conditions no less favourable than those on which he was employed immediately before the termination. (The attempt by the Commission to specify what those terms and conditions might be, so far as they concern the location of the position, might raise questions as to whether the power extends so far, but those questions are not at the heart of the present proceeding.) Blackadder was a case in which there was no question that a position, being the position previously occupied by Mr Blackadder, existed and no doubt that Mr Blackadder could be reappointed to that position. The only question was whether reappointing him to that position required the employer to furnish him with work, or whether the obligation to reappoint him could be satisfied simply by paying him. The case is certainly not authority for the proposition that, where no position exists to which a dismissed employee can be reinstated, because the employer no longer conducts the business in question, the employer is nevertheless obliged to create such a position for the purpose of appointing the dismissed employee to it, on the basis that no work, but only an obligation to pay, attaches to the position. 35 I am of the view that the present case is one in which an injunction should not be granted. It is not impossible for a company, still in existence, to carry out the order of the Commission. For it to do so, however, the respondent would be required to embark upon the conduct of a business which it does not conduct presently. It would have to enter into a contract or contracts with a person or persons unknown to provide the services of one or more security guards. It would then be required to administer those contracts, and to do all that is necessary to continue to operate such a business, if it were to respect the right of Mr Chelvarajah to continue in employment, once he was appointed. It would be required to do these things to avoid being found to be in contempt of court and being punished by a fine or by sequestration of its assets. Such a burden is too great to impose. From the tenor of the Commissioner's reasons, it is plain that he would not have made the orders he did had he found that the respondent had ceased to conduct the business known as Kirwan Security Services. I have not the least doubt that Merkel J would not have granted an interlocutory mandatory injunction had he been aware of that fact. An injunction should not be granted just because the case has gone as far as it has. 36 I do not take the view that the powers given by s 170CH(3) are applicable only to cases in which there already exists a position to which the dismissed employee can be reappointed or appointed. The power is undoubtedly much broader than that, and will be enforced by injunction in circumstances that are more varied than that. In my view, the Full Court of the Industrial Relations Court of Australia described the position appropriately in Anthony Smith and Associates Pty Ltd v Sinclair (1996) 67 IR 240. The court was dealing with provisions of the then Industrial Relations Act 1988 (Cth), which have since been repealed, but which then gave to the Industrial Relations Court a power, expressed in similar terms to that now found in s 170CH(3), to order reinstatement. The court was required by those provisions to consider whether reinstatement was 'impracticable'. That required consideration of factors similar to those to be considered by a court when it is asked to grant a mandatory injunction. The Full Court said at 244: 'We have already set out the terms of s 170EE(1)(a)(ii) of the Act. The subparagraph empowers the Court to require the employer to reinstate the employee by appointing him or her "to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination". This might be a specific position, the availability and suitability of which is revealed by the evidence. On other occasions, the Court will not specify a particular position. Provided that the Court is satisfied that reinstatement is practicable and appropriate, it is open to the Court to make an order in terms of par (a)(ii), leaving it to the employer to choose the position and to comply with the Court's order to provide terms and conditions that are no less favourable than those on which the employee was employed immediately before the termination. If this course is taken, the employer may select an existing position, or he or she may create a new position for the purpose. If the latter, contrary to the submission of counsel for the employer, it will not be to the point that, in the absence of the order, the employer might not have created the position. We appreciate that creation of a new position may occasion a cost, or other disadvantage, to the employer. Where there is evidence that this will be so, that evidence may be relevant on the issues of practicability and appropriateness. But it would be contrary to principle to treat such evidence as necessarily determinative. The occasion for the order arises because the employer has acted unlawfully in terminating the employee's employment. A reinstatement order is akin to an injunction compelling a wrongdoer to restore the position of the innocent party. In considering whether to grant an injunction, a court will always take into account the consequences of an order to the wrongdoer but the existence of adverse consequences has never been regarded as excluding the possibility of an order being made. The employer submitted that an order that might require an employer to create a position involved something other than the exercise of judicial power. Reference was made to Queen Victoria Memorial Hospital v Thornton (1953) 87 CLR 144 esp at 150 in which the High Court declared invalid a provision in a Commonwealth Act conferring on a magistrate the power to require an employer to engage an employee. However that case is far removed from the present. An order made under s 170EE(1) of the Act is a remedy ordered after the determination of whether there had been a termination in contravention of the Act. The power to mould a remedy, if authorised by statute, is not inconsistent with the exercise of judicial power even if it imposes on the person bound by the order an obligation to take steps to effectuate it. In the present case there was clear evidence of positions to which the respondent might be appointed by operation of an order for reinstatement.' 37 It is therefore easy to accept that there may be many cases in which an employer may be required to create the position to which it is ordered to appoint a dismissed employee. Such cases will be those in which the employer continues to conduct the same, or a similar, business to that conducted at the time of the termination of employment. They will be cases in which the position created will have attached to it duties on the employee to perform work, provided that there is no impediment to the employee performing work. They will not be cases such as the present, in which the employer would have to create not only the new position, but an entire new business, in which the position could be located. 38 For these reasons, I am of the view that a permanent injunction should not be granted in the present case.

The imposition of a penalty 39 Section 178(1) of the WR Act relevantly provides: 'Where an organisation or person bound by an award...breaches a term of the award...a penalty may be imposed by the Court'. 40 Section 178 is found in Pt VIII of the WR Act. Section 170JC(1) provides that Pt VIII has the same effect in relation to orders under Pt VIA as it does in relation to awards. Accordingly, the Court is empowered by the combination of s 170JC(1) and 178(1) to impose a penalty for breach of a term of an order made pursuant to s 170CH. The conferral of jurisdiction on the Court to deal with such an application is effected by s 412(1)(e) of the WR Act, which provides that the Court has jurisdiction with respect to matters arising under the WR Act in relation to which penalties may be sued for and recovered under the WR Act. 41 Section 178(1) was enacted as s 178(1) of the Industrial Relations Act 1988 (Cth). The subsection has since been amended. In turn, it was derived from s 119 of the Conciliation and Arbitration Act 1904 (Cth) (repealed). The wording 'a penalty may be imposed by the Court' has been consistent throughout the provisions. Since the coming into operation of s 33(2A) of the Acts Interpretation Act 1901 (Cth) ('the Acts Interpretation Act'), on 18 December 1987, as a consequence of the Statute Law (Miscellaneous Provisions) Act 1987 (Cth), it has been clear that the enactment of a statute conferring a power, and using the word 'may' confers a discretionary power. It might be an interesting question, in the case of a provision re-enacted from earlier legislation, in which the word 'may' had been interpreted as non-discretionary, whether its meaning was changed by the re-enactment. The question is not of importance in the present case, because it had been recognised that s 119 of the Conciliation and Arbitration Act 1904 (Cth) conferred a discretionary power. See Parkinson v Grazcos Co-Operative Ltd (1958) 1 FLR 90 at 96 per Spicer CJ and 97 - 98 per Dunphy J and Municipal Officers Association of Australia v Shire of Wanneroo (Federal Court of Australia, Toohey J, 19 June 1985, unreported). 42 The discretionary factors that have determined my decision not to grant a permanent injunction against the respondent appear to me to be relevant also to the question whether I should impose a penalty on the respondent. The reasons that dictate that the respondent should not be compelled to do something that it is not reasonably able to do also suggest that it should not be penalised for failing to do that very same thing. 43 The power given by s 178(1) of the WR Act, construed in the light of s 170JC(1), is a power to impose a penalty for breach of a term of the Commission's order. There are four terms of the Commission's order. The first requires the respondent to appoint Mr Chelvarajah to a position of the kind specified. The second requires the respondent to treat Mr Chelvarajah as if his employment was continuous between 14 January 2003 and the date of reinstatement. The third requires the respondent to pay Mr Chelvarajah the amount of remuneration lost due to the termination, calculated in the manner specified. The fourth term specifies the date before which the first term is to be carried out. 44 As I have found, the respondent lacked the capacity in practical terms to comply with the first term of the Commission's order, by appointing Mr Chelvarajah to a position. For the same reasons as led to the conclusion that it would be wrong to enforce that term by means of an injunction, it would be wrong to penalise the respondent for not doing what it was ordered to do, but could not reasonably do. There should therefore be no penalty for breach of that term. The second term of the Commission's order is related directly to the first term. On the assumption that Mr Chelvarajah is to be appointed to a position, the second term requires the respondent to treat him as if his employment was continuous between the date of termination and the date of appointment to that position. Given that, at the date of the Commission's order, appointment to a position could not be effected, no penalty should be imposed for breach of this term. The same considerations lead to the same result in relation to the fourth term of the Commission's order, which fixes the date by which the first term is to be carried out. 45 The third term of the Commission's order is of a different kind. It is an order requiring the respondent to pay to Mr Chelvarajah a sum of money, to be calculated by deducting from the amount he would have earned with the respondent his actual earnings elsewhere. The period in respect of which the sum is to be calculated is fixed by the order to begin at the date of termination and to end on his appointment to a position, as required by the first order. In [49] - [58] of these reasons for judgment, I reach the conclusion that the respondent has an obligation to pay Mr Chelvarajah, but only in the period between the date of termination of his employment and the date when the respondent ceased to be registered as the proprietor of the business name 'Kirwan Security Services'. For reasons that I give in those paragraphs, I order the respondent to make that payment. 46 The question therefore arises whether, in the exercise of my discretion, I should impose on the respondent a penalty for its failure to pay that sum in accordance with the third term of the Commission's order. A number of considerations suggest that I should do so. Other than by means of its letter to the Commission, stating that it had ceased business, the respondent took no part in the proceeding in the Commission. It has taken no part in the proceeding in this Court. It could so easily have made plain to the applicants the true position with respect to its cessation of activities. The Commission's order was served at the address the respondent gave to the Commission. Even if it did not reach the respondent by that means, because the respondent had by then ceased to conduct business as 'Kirwan Security Services', service on the respondent of the subsequent documents at its current registered office was more than sufficient to acquaint it with the existence of the Commission's order. In the course of attempting to effect service of the interlocutory injunction, a process server received communications from Mr Rumpf suggesting that he was well aware of the Commission's order and had no intention of procuring the respondent's compliance with it. There can be little doubt that, as the sole director, Mr Rumpf is the directing will and mind of the respondent. The case must therefore be viewed as one of deliberate disregard of the Commission's order. As such, the respondent's failure to pay the sum which it is obliged to pay, in breach of the third term of the Commission's order, is deserving of a penalty. 47 At the date when the Commission made its order, at the date when this proceeding was commenced, and at the date when I reserved judgment, s 178(4)(a)(ii) of the WR Act provided for a maximum penalty of $10 000 for a body corporate. Since that time, on 10 August 2004, the maximum amount of the penalty has been increased to 300 penalty units, as defined in the Crimes Act 1914 (Cth) (a penalty unit is currently $110). See item 14 in Sch 3, and item 3 of the table in s 3(1) of the Workplace Relations Amendment (Codifying Contempt Offences) Act 2004 (Cth). The maximum penalty under the legislation as it now stands is therefore $33 000. There appear to be no transitional provisions, so there is no statutory guidance as to how the increased level of maximum penalties is intended to affect existing cases. Although it might be said that an obligation to pay money, pursuant to the third term of the Commission's order, is a continuing obligation, I regard it as a safer course to apply the maximum level of penalty that prevailed throughout the conduct of this proceeding. The respondent should not suffer greater potential liability in consequence of the effect of the other business of the Court on the length of time taken for this proceeding to be determined. 48 Regarding the maximum penalty as $10 000, therefore, and taking into account the factors to which I have referred, it seems to me that the appropriate penalty to impose on the respondent for its non-payment of money to Mr Chelvarajah, pursuant to the third term of the Commission's order, is $2000. Pursuant to s 356(b) of the WR Act, the order should be that the penalty be paid to the second applicant, which has no doubt financed the proceeding for the benefit of Mr Chelvarajah, and which has an interest in securing the observance of the terms of orders of the Commission in respect of its members. See s 178(5)(d) of the WR Act, which gives an organisation, any of whose members are affected by the breach, standing to sue for a penalty.

Payment of lost remuneration 49 In respect of his claim for money, pursuant to the third term of the Commission's order, Mr Chelvarajah relied on two provisions of the WR Act. The first is s 178(6), which provides: 'Where, in a proceeding against an employer under this section, it appears to the court concerned that an employee of the employer has not been paid an amount that the employer was required to pay under an award, order or agreement, the court may order the employer to pay to the employee the amount of the underpayment.' 50 The second provision was s 179(1), which provides: 'Where an employer is required by an award, order or certified agreement to pay an amount to an employee, the employee may, not later than 6 years after the employer was required to make the payment to the employee under the award, order or agreement, sue for the amount of the payment in the Court or in any court of competent jurisdiction.' 51 Both of these provisions are found in Pt VIII of the WR Act. They are therefore brought into operation in relation to orders made pursuant to the powers given in Pt VIA by s 170JC(1), on the basis that they have the same effect in relation to orders under Pt VIA as they do in relation to awards. 52 The two provisions, however, have fundamental differences. Section 178(6) confers on the Court a power, using the word 'may'. Section 178(6) has a legislative lineage similar to that of s 178(1) (as to which see [41] above), so that the power is to be construed as probably discretionary. If so, its exercise would turn upon the discretionary considerations that I have already seen as relevant to the exercise of the powers to grant a permanent injunction and to impose a penalty. In addition, before the Court is empowered by s 178(6) to make an order for payment, it must appear that 'an employee of the employer has not been paid an amount'. On the face of s 178(6), a question might arise as to whether a subsisting employment relationship is required before the necessary order can be made. 53 Section 179(1) of the WR Act is not a discretionary provision. It provides an entitlement to sue for the amount which the employer is required to pay. Pursuant to s 412(1)(b) of the WR Act, the Court has jurisdiction with respect to matters arising under the WR Act in relation to which actions may be brought in it under the WR Act. There can be no doubt that the Court has jurisdiction to entertain a suit under s 179(1). Nor can there be any doubt that the third term of the Commission's order of 13 August 2003 creates an obligation to pay. The amount is not fixed by the order, but it can be calculated. The combination of s 179(1) and s 170JC(1) requires that the Commission's order be treated as if it were an award. 54 Section 179(1) does not require that a person suing for an amount of a payment due under an award be 'an employee of the employer'. In this respect, it differs from s 178(6). Section 179(1) does require, however, that the person suing be an 'employee' and the person being sued be an 'employer'. For present purposes, the inclusive definition in s 179(3), which deals with the situation of independent contractors and those engaging them, is of no assistance. More help is gained by referring to the inclusive definitions of 'employee' and 'employer' in s 4(1) of the WR Act. Under those definitions, 'employee includes any person whose usual occupation is that of employee', and 'employer includes...a person who is usually an employer'. There is no difficulty about finding that Mr Chelvarajah is an employee in the sense that his usual occupation is that of employee. The evidence is that he continues to obtain employment, when he can find it, as a security guard. Given that the evidence in the present case does not suggest that the respondent currently employs anybody, it is much more difficult to find that the respondent is usually an employer. There is no evidence to show that its cessation of business is temporary. There is evidence to the effect that a person other than Mr Rumpf was present at the premises which are now the registered office of the respondent in Mulwala. Counsel for the applicants invited me to infer that that person was an employee of the respondent. I am not able to draw such an inference. The premises concerned are apparently a dwelling house. There is no reason to suppose that the person concerned is not a family member, or someone employed by another entity. For this reason, I cannot find that the respondent is usually an employer. 55 This is not the end of the matter. Section 15AA of the Acts Interpretation Act requires that, in the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act shall be preferred to a construction that would not promote that purpose or object. Part VIA of the WR Act is concerned with empowering the Commission to make orders of various kinds in favour of employees whose employment has been terminated. Those orders do not necessarily require any form of reinstatement. Accordingly, by definition, the intention is that former employees ought to be entitled to recover sums of money from their former employers. It would produce absurd results if, when s 179(1) is imported into the process by s 170JC(1), its importation were to be completely ineffective if either the former employer has ceased usually to be an employer, or the former employee has ceased to have the usual occupation of an employee. Such absurdity is avoided if the words 'employer' and 'employee' in s 179(1) are construed to include persons between whom the relationship of employer and employee existed previously. That is a construction that would promote the object underlying these provisions of the WR Act. It is a construction that, in my view, should be adopted. 56 Accordingly, pursuant to s 179(1), Mr Chelvarajah has a right to sue for the amount of the payment due to him under the third term of the Commission's order. It remains to assess the amount of the payment required.

57 The difficulty is that the third term of the Commission's order requires the amount to be calculated for the period between termination and reinstatement. As I have found, the respondent lost the capacity to reinstate Mr Chelvarajah when it disposed of its proprietorship of the business name 'Kirwan Security Services'. Unless the situation changes, reinstatement will not occur. I have taken the view that I should not compel it to occur, by means of a permanent injunction, and that I should not impose on the respondent a penalty for not making it occur. It would be wrong if, having taken that view, I were to take the view that the obligation to pay remained on foot. There can be little doubt that, if the Commission had been aware of the true facts, it would not have made an order in the form of the first, second and fourth terms of the order it made. Instead of the third term, it would have made a different order, pursuant to s 170CH(6), requiring the respondent to pay Mr Chelvarajah an amount ordered by the Commission in lieu of reinstatement. It is not open to me to convert the order actually made into an order of that kind. As the Commission recognised, however, the power it had was the power pursuant to s 170CH(4)(b), to require the respondent to pay Mr Chelvarajah the amount of remuneration lost because of the termination. In the circumstances, that was the amount that the respondent would have paid to Mr Chelvarajah, if the termination had not occurred and he had continued in his employment with the respondent, would have been calculated up to the time when the respondent ceased to be the proprietor of the business conducted under the name 'Kirwan Security Services'. As I have said, that time was 10 July 2003, when the change of proprietorship of the business name was registered. Beyond that time, the respondent could no longer reinstate. It should not therefore have any obligation to pay beyond that time, at which its obligations would have ceased in any event. The amount of the remuneration lost by Mr Chelvarajah because of the termination was the amount he would have been paid from the date of termination until 10 July 2003. 58 Mr Chelvarajah's evidence is that he earned $721 per week while employed by the respondent. The period from 14 January 2003, when the employment was terminated, until 10 July 2003, when the respondent ceased to conduct the business, was 177 days. At the rate of $721 per week, this means that Mr Chelvarajah would have earned $18 231. There is no evidence as to the precise amount Mr Chelvarajah earned in other employment in this period. The only evidence is that, between 14 January 2003 and 6 August 2003, he received $8176 from other employment. Averaging that amount over the 204 days during that period, and multiplying the result by the 177 days in the period up to 10 July 2003, I have arrived at a notional figure of $7094, earned by Mr Chelvarajah during the shorter period. When this figure is deducted from $18 231, the result is $11 137. The figures have been rounded to the nearest dollar. This is the amount that I should order the respondent to pay to Mr Chelvarajah, pursuant to s 179(1) of the WR Act. 59 Mr Chelvarajah sought interest on this amount, pursuant to s 179A of the WR Act. That section empowers the Court to include in the sum for which an order is made or judgment given, interest 'at such rate as the Court...thinks fit'. Although the calculation of the amount required to be paid is in reference to the period from 14 January to 10 July 2003, the obligation to pay only arose from the making of the Commission's order on 13 August 2003. I should therefore order interest to be paid from 13 August 2003 until the date of judgment. That is a total of 495 days. 60 In most cases, s 51A of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act') requires the Court to add interest to money judgments. Under that provision also, it is necessary for the Court to select a rate of interest. Order 35 r 8, which provides for a rate of 10.5 per cent, is applicable to judgment debts, pursuant to s 52 of the Federal Court Act, and not to interest awarded up to the time of judgment, pursuant to s 51A. In the present case, pursuant to s 179(1) of the WR Act, Mr Chelvarajah had the option of suing in this Court or in a State court of competent jurisdiction. He would have been entitled to sue in Victoria, and to effect service on the respondent at its registered office in New South Wales, pursuant to s 9 of the Service and Execution of Process Act 1992 (Cth). As the facts of this case occurred in Victoria, and Mr Chelvarajah is resident in Victoria, it is appropriate to assume that he would have made use of a Victorian court. In that event, he would have been entitled to interest at the penalty interest rate, fixed from time to time by the Attorney-General for Victoria, pursuant to the Penalty Interest Rates Act 1983 (Vic). For the period relevant for present purposes, that rate was fixed at 11.25 per cent. Accordingly, interest in the sum of $1699.16 will be added to the amount for which judgment is given.

Contempt of court 61 By their notice of motion, filed on 16 December 2003, the applicants sought to have the respondent punished by a fine for contempt of court by failing to comply with the interlocutory injunction, granted by Merkel J on 22 September 2003 and amended by his Honour on 26 September 2003. Since Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, there has been no doubt as to the power of the Court to punish contempt of court, constituted by wilful disobedience to one of its orders, by means of the imposition of a fine. In addition, since Witham v Holloway (1995) 183 CLR 525, there has been no doubt that the old distinction between civil and criminal contempts of court has been abolished, and punishment for contempt of court is only permitted when the contempt has been established beyond reasonable doubt. 62 In Mudginberri at 112 - 113, Gibbs CJ, Mason, Wilson and Deane JJ said: 'lying behind punishment for a contempt which involves wilful disobedience to a court order, is the very substantial purpose of disciplining the defendant and vindicating the authority of the court. In our view the reasons supporting the recent decisions are compelling and they should be accepted by this Court. It follows that a deliberate commission or omission which is in breach of an injunctive order or an undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional.' 63 In Witham at 533, Brennan, Deane, Toohey and Gaudron JJ said: 'proceedings for breach of an order or undertaking have the effect of vindicating judicial authority as well as a remedial or coercive effect. Indeed, if the person in breach refuses to remedy the position...their only effect will be the vindication of judicial authority.' 64 In Re Bramblevale Ltd [1970] Ch 128, the English Court of Appeal recognised the futility of punishing for contempt of court in a case where the alleged contemnor was not shown beyond reasonable doubt to have had the capacity to comply with the court's order. In that case, the managing director of a company had been ordered by a court to produce the company's books to its liquidator. He was found to have had the books on a particular date, but could not be presumed still to have had them more than a year later, for the purpose of punishing him for contempt of court. Bramblevale was cited with approval in Witham at 529 - 530 per Brennan, Deane, Toohey and Gaudron JJ. Consistently with these authorities, the Court would not punish for contempt of court unless the alleged contemnor is shown beyond reasonable doubt to have had the capacity to comply with the order, wilful disobedience of which is alleged. 65 In the present case, as I have found, the respondent had ceased to conduct the business of Kirwan Security Services by 10 July 2003. It was not shown to be conducting any business involving the provision of security guards. It was not shown that it had, or could create, any position to which Mr Chelvarajah could be appointed, in accordance with Merkel J's order. 66 There is evidence that, when Mr Rumpf was contacted by a process server attempting to serve the order of Merkel J on him, he indicated that he had no intention of causing the respondent to comply with the Commission's order. This evidence would justify a finding that the respondent had acted with contumacy in relation to the Court's order. Such an attitude might well increase the penalty for contempt by disobeying a court order, but punishment for contempt of court is not imposed simply for discourtesy or arrogance towards the court. 67 To punish the respondent for contempt of court in these circumstances would be futile. Punishment would have no coercive effect, because the respondent cannot be coerced to do what it cannot do. The punishment would not be remedial, because the situation is beyond remedy. Nor would the punishment vindicate the authority of the Court. Indeed, it would tend to diminish that authority if the Court were seen to be imposing a punishment for contempt of one of its orders that could not be carried out.

68 For these reasons, the application by notice of motion for punishment for contempt of court must be dismissed. The proceeding having reached its conclusion, and the decision having been made not to grant a permanent injunction, the appropriate course is to discharge the interlocutory injunction.

Conclusion 69 The applicants have therefore succeeded only on the issue of the payment of arrears pursuant to the third term of the Commission's order, between 14 January 2003 and 10 July 2003. That success justifies an order for payment to Mr Chelvarajah of the sum of $12 836.16, including $1699.16 by way of interest from 13 August 2003 to the date of judgment. It also justifies an order that a penalty be imposed in the sum of $2000, and that the penalty be paid to the second applicant. The applicants have failed to establish their case in respect of any penalty for the respondent's failure to comply with the first, second and fourth terms of the Commission's order. The applicants have also failed to establish their case for a permanent injunction, enforcing those terms of the Commission's order. Apart from the aspects on which the applicants have succeeded, the application must be dismissed. Similarly, the application by notice of motion to punish the respondent for contempt of court in failing to comply with the interlocutory injunction must be dismissed. 70 No issue of an order for costs arises, because the case falls squarely within s 347 of the WR Act. 71 These orders leave the matter involving the applicants and the respondent in an unsatisfactory state. The Commission's order remains on foot. Although, for the most part, not enforced by this Court, the Commission's order will continue to impose obligations on the respondent. In part, the difficulties are of the applicants' creation. It would have been easy for them to obtain evidence of the change of registration of the business name 'Kirwan Security Services' before commencing this proceeding, or at an early stage of it, when pursuing the interlocutory injunction. Their failure to do so has led to substantial expenditure in costs, which might have been avoided. It should be noted that the solicitor on the record by the time of the hearing was not the solicitor involved in the early stages of the matter. To some extent, blame must also attach to the respondent, which could easily have participated in the proceeding and informed the Court of the true situation at an early stage. The Court has no power to set aside the Commission's order. Regrettably, that order must subsist. I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Counsel for the applicants: W Friend

Solicitor for the applicants: B Redford

The respondent did not appear and was not represented

Date of Hearing: 30 June 2004

Date of Judgment: 21 December 2004