Frank Romanin v University Co-operative Bookshop Limited

JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION

Matter Number IRC 2567 of 2000 FRANK ROMANIN v UNIVERSITY CO-OPERATIVE BOOKSHOP LIMITED Application under section 106 of the Industrial Relations Act 1996 JUDGMENT

1 Judgment in this matter was given on 25 November 2003. The orders made were: 1. The parties' contract is varied ab initio to require the Co-op to give Mr Romanin 12 months' notice of termination or payment in lieu thereof.

2. The Co-op is to pay Mr Romanin: (i) a sum calculated by reference to the value of his total package, for a period of 12 months, including salary, motor vehicle, superannuation and insurance, less any salary and other earnings achieved by Mr Romanin in any alternative employment or consultancy undertaken in that period, plus

(ii) interest on that sum, calculated from the date of termination of his employment, to the date of judgment.

The usual order as to costs would be that the Co-op bear Mr Romanin's costs, as agreed or assessed. If the parties are unable to agree on that question, or on the calculation required by the order made, the matter may be restored to the list. That liberty should be exercised within 28 days of the date of judgment.

2 A disagreement emerged between the parties as to the calculation of the value of the motor vehicle component of the applicant's package. The applicant contended that it was worth $20,000 to $24,000 and the respondent contended that it was worth $6,000. While the parties had otherwise agreed on the calculation of the money sum ordered to be paid, the respondent had paid the applicant nothing, when the matter came on for hearing in February 2004. The applicant accordingly sought a further order for interest, to the date of this judgment, which the respondent opposed.

3 The disagreement as to the value of the car involved consideration of the parties' negotiations. At [29] of the earlier judgment, I noted that Mr Howard had been authorised to offer Mr Romanin up to $250,000 plus a vehicle. The evidence showed that on 14 August, Mr Howard told Mr Romanin that the selection committee did not want to offer him $250,000 plus a vehicle, but only $250,000. On 19 August, Mr Romanin proposed using his own car and seeking reimbursement for office use. Mr Howard rejected this proposal as not presenting 'the right image'. It was accordingly agreed that the cost of the vehicle which the applicant was to drive was $20,000 to $24,000 per annum and that the Co-op should bear the 'lions share of the cost' and that $6,000 would represent Mr Romanin's private use of the car. On 20 August, Mr Romanin was offered, amongst other things, '$244,000 pa salary' and 'provision of a fully maintained appropriate vehicle'.

4 The applicant's case was that given that the cash component of his salary had been reduced by $6,000, the proper assessment of the value of the car was $20,000 to $24,000, as the parties had agreed. Had Mr Romanin been given notice, this would have been part of the package which he received. If the value was assessed at $6,000, reflecting the foregone personal use of the car, this would ignore both that his salary had already been reduced by this amount and would pay no regard to the respondent's obligation to provide that part of his package during the notice period. It was argued that the applicant's approach ignored that Mr Romanin had foregone $6,000 salary, in order to obtain a car with an annual value of $20,000 to $24,000.

5 The respondent's case was that the amount referable to the business use of the car was not part of the employees' remuneration. The agreed value of the private use of the car was $6,000. It followed that the loss suffered by the applicant was measurably $6,000, not the claimed sum of $24,000, which included business use and for which there was no evidentiary basis in any event.

6 Reliance was placed upon the approach adopted by the Commission in assessing an employee's level of remuneration, for purposes of s83 of the Industrial Relations Act 1996 ('the Act'). See Coghlan v Tweed Shire Women's Services Inc [2002] NSWIRComm 21 and Kagan & Primus Telecommunications (Aust) Pty Ltd (No 2) [2000] NSWIRComm 185 at [12].

7 The issue to be determined is not the level of the applicant's 'remuneration', as that term is used in the unfair dismissal provisions of the Act, but rather the value of a component of his package, referred to in the orders made on 25 November. That part of the package was described as a 'fully maintained appropriate vehicle' in the letter of offer of 20 August.

8 The issue is one which has arisen late in the respondent's case and in reality, was not one explored in the evidence in any detail.

9 The evidence, such as it was, showed that the respondent required the applicant to drive such an appropriate vehicle. The parties negotiated the amount of the applicant's salary downwards by $6,000, having regard to that requirement and an acceptance that given the requirement imposed, that the respondent should 'bear the lion's share of the cost' of the provision of the vehicle, it not being prepared to provide the vehicle on top of a salary of $250,000. The annual cost of the vehicle was assessed by the parties as falling between $20,000 and $24,000.

10 There was no evidence as to how much use of the vehicle the applicant made for business, as opposed to private use. The evidence rather was that the respondent required the applicant to drive the vehicle, in order that he present the right image. The applicant accepted a $6,000 reduction in his salary, he having earlier been told that the selection panel did not wish both to pay him a salary of $250,000 plus the vehicle. This was inconsistent with the evidence as to what had, in fact, been decided by the selection committee. That, however, is not to the point. What was agreed was that the applicant would have a package which included a salary of $244,000, plus the vehicle which the respondent required him to drive.

11 This evidence cannot leave open the conclusion that the value of the car component of the package was $6,000. That was the sum agreed for the reduced salary, not what the value of private, as opposed to business use of the car would in fact involve or cost. Indeed, it may well have been the case that most use of the car was in fact private rather than business. That was what the evidence, such as it was, suggested. The issue was not explored in the evidence, understandably, given the requirement imposed by the respondent that the applicant drive the vehicle and the basis upon which the salary was agreed, so as to ensure that the bulk of the cost of the vehicle was born by the respondent.

12 It follows that the value of the vehicle must be assessed having regard to the range of value discussed by the parties at the time. There was no evidence as to the actual value of the vehicle provided on a 'fully maintained' basis. In those circumstances, given well established authority that the Court must adopt a cautious approach to questions such as this, I am satisfied that the lower figure of $20,000, rather than the higher figure of $24,000 must be adopted. I am also satisfied that adoption of the figure of $6,000, in light of all of the evidence I have referred to, could not result in an assessment of the value of this component of the applicant's package, just in the circumstances of this case.

13 As to interest, I am satisfied that it is appropriate now to order that the respondent pay interest on the sum outstanding, to the date of this judgment. There was no doubt that the Court has a discretion to make such an order in these circumstances. Given that the respondent has made no payment of any part of the amount dealt with in the November judgment, despite the limited compass of the disagreement lying between the parties, I can see no basis upon which the exercise of the discretion should be refused. Indeed, the respondent did not dispute that were I not to make the order sought, in the ordinary way, the applicant would be entitled to seek payment of interest on the judgment debt, in any event, from the date of the earlier judgment.

14 It follows that it is in the parties' interests to bring these matters to a final conclusion.

15 The parties should file the final terms of the orders reflecting this judgment within 7 days. I order accordingly. ------------------------

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