WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES GREG LOGAN-SCALES, DEPARTMENT OF CONSUMER &EMPLOYMENT PROTECTION

CLAIMANT

-v-

TICKET XPRESS PTY LTD

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

DATE WEDNESDAY, 14 SEPTEMBER 2005

CLAIM NO M 295 OF 2004

CITATION NO. 2005 WAIRC 02788

Catchwords Imposition of penalities, claim for pre-judgment interest, claim for recovery of disbursements.

Result Penalties imposed.  Claim for pre-judgment interest dismissed.  Order for unpaid wages, sick leave and accrued annual leave to be paid to the employee.  Disbursements properly incurred by the claimant recoverable.

Case(s) referred to in decision

Foy v Terraqua Pty Ltd (2003) WAIRC 0951

Representation 

Claimant Mr W Milward (of counsel) instructed by the Department of Consumer and Employment Protection appeared for the claimant

Respondent Mr M Stork (of Counsel) instructed by Solomon Brothers, Barristers, Solicitors, Attorneys appeared for the Respondent.

SUPPLEMENTARY REASONS FOR DECISION

(Given orally at the conclusion of the hearing, extracted from the transcript of proceedings and edited by His Honour)

The Claim

1         On 4 August 2005 I published reasons in this matter.  I found that the Respondent had contravened the provisions of the Minimum Conditions of Employment Act 1993 (the MCE Act).  Four separate contraventions were proved.  They related to the non-payment of minimum wages with respect to separate periods; the non-payment of sick leave and the non-payment of accrued annual leave.  I found that the Respondent had failed to pay its employee, Ms Kathryn King, a total of $2,515.28 to which she was entitled.  The Claimant contends that the actual underpayment was in fact $2,515.28 and not $2,391.28.  I accept that submission. Ms King’s correct entitlement is in fact $2,515.28.  The error resulted from the calculation made by the Claimant in paragraph C of exhibit 22 tendered in support of the claim.

Penalties

2         The Respondent is exposed to a maximum penalty of $2,000.00 for each contravention.  The Claimant seeks imposition of penalties at the higher end of the scale to bring home to the Respondent and others that the Court will regard any breach of the MCE Act seriously. The Claimant submits that the penalties imposed should have a personal and general deterrent effect.  In that regard the Claimant submits that it is important that the message be sent home not only to this Respondent but also other employers that the failure to pay employees their minimum entitlements it is not worth the risk. The employer should not view the financial risk of penalties as being part of the usual operating expense of the business.  Heavy penalties are accordingly needed.

3         Although I accept that the imposition of deterrent penalties and, in particular, a general deterrent penalty is a matter that the Court must have regard to, the Court must also have regard to other factors, particularly those matters raised in mitigation by the Respondent. In this instance, the Respondent has not previously committed breaches of the MCE Act or, indeed, any other breaches of employment law so far as I am aware.  The breaches did not occur over a long period of time and did not involve very significant amounts of money. Penalties approaching the maximum should be reserved for the worst cases involving deliberate breach where there is little or no mitigation, particularly where the person or the party who has committed the breach has a prior record for conduct of the same or similar type.  None of that exists here.  Furthermore, the Court should also have regard to the totality principle.  Although each individual breach ought to be looked at separately, the total affect should also be considered in determining the appropriateness of the penalties to be imposed.

4         Having taken those matters into account, I have concluded that the following penalties are the appropriate penalties.  I have regard to the quantum of underpayment involved in each instance together with the mitigatory factors to which I have referred.

5         Firstly, for the failure to pay sick leave, a penalty of $400.00 is imposed.  Secondly, for the failure to pay the minimum wage for the period ending 28 April 2004, a penalty of $600.00 is imposed.  Thirdly, for the failure to pay the minimum wage for the period ending 12 May 2004, a $300.00 penalty is imposed.  Fourthly, for the failure to pay annual leave a $700.00 penalty is imposed.  In my view, that last matter is the matter of most significance.  The totality of the penalties amounts to $2,000.00.

Interest

6         It is also appropriate that I order that the Respondent pay to Ms Kathryn King, $2,515.28 being the amount underpaid.  Interest is claimed on that sum.  The Claimant seeks interest calculated in accordance with the formula provided in regulation 54(2) of the Industrial Magistrates’ Courts (General Jurisdiction) Regulations 2000 (the Regulations) or, alternatively, a lesser amount calculated in accordance with regulation 54(1).  Prior to receiving oral submissions from the parties, I brought to their attention a decision in Foy v Terraqua Pty Ltd (2003) WAIRC 0951.  In that matter, His Honour the President of the Western Australian Industrial Relations Commission, determined that there is no express power conferred upon this Court to order interest on amounts underpaid.  His Honour expressed the view that regulation 54 might properly be argued to be ultra vires section 83 of the Industrial Relations Act 1979 (the Act).  His Honour concluded that because section 83(1) is a penal provision, regulation 54(4) does not apply. Such encompasses orders made pursuant to section 83A for the payment of amounts underpaid that follow findings against an employer pursuant to section 83 of the Act.

7         Mr Milward seeks to distinguish this matter from the matter in Foy (supra) because of the differing factual circumstances.  With respect I do accept that they can be distinguished.  In my view, His Honour’s comments have equal application to this matter as they did to the matter His Honour was considering.   His Honour’s comments have general application to any matter falling under section 83(1) of the Act.  Mr Milward also argues that the His Honours’ comments are not those of the Full Bench and therefore are obiter because the Commissioners did not expressly agree with him.  I note however that Commissioners Scott and Wood did not expressly disagree with the decision of His Honour, President Sharkey.  I take the view that the decision of the Full Bench is binding upon me.  That decision expressly disallows interest claimed in respect of section 83(l) matters, which this is.  It follows therefore that in the light of the decision in Foy (supra), I cannot allow interest and I will dismiss the application for interest.

Disbursements

8         Turning to the claim for disbursements, I take the view that section 83(2) of the Act permits the recovery of disbursements properly incurred and should be viewed differently to costs incurred for representation by an agent or legal practitioner.  Although costs are generally understood to include disbursements that is not the case for matters dealt with pursuant to section 83 of the Act because the provision only specifically refers to the cost of representation as not being recoverable.  Such is akin to the situation in other jurisdictions where certain allowable costs (disbursements) are recoverable whereas costs incurred for representation are not recoverable.  In my view, section 83(2) is the same.

9         The history of this matter dictates that the Claimant initially insisted that the matter be heard in Carnarvon however the Clerk of the Court, in accordance with regulation 9 of the Regulations determined that the matter could most conveniently and fairly be conducted in the Industrial Magistrate’s Court sitting at Geraldton.  Later the Claimant sought that the matter be transferred to Perth but by that time the Respondent had made all necessary arrangements for travel and accordingly opposed such application.  In the end this Court determined that the matter should be heard in Geraldton and indeed the matter was heard in Geraldton.  Had the matters been dealt with in Perth as the Respondent had initially desired, I would have thought that the cost to both parties would have been less. Be that as it may the Clerk having determined the place of trial, which neither party sought to review, the matter necessarily was heard in Geraldton with consequent costs to both parties.  As a result the Claimant did incur costs in pursuing this matter in Geraldton.  Such costs included disbursements for airfares, accommodation and meals.  In my view, some of the accommodation and meal costs were unnecessarily incurred and I accept the submissions made by the Respondent in that regard.  With respect to the proofing of witnesses, for example, that could have occurred by way of telephone from Perth and not necessarily in Geraldton.  If that was the case, given that the matter was listed for one day and proceeded for one day, the parties could have travelled to Geraldton on the day of the hearing and returned there from the same day.  That, of course, would have where possible been the situation with their witnesses. It would have resulted in lower accommodation and meals costs.  The only people, who could fly from Perth to Geraldton and return on the same day, were Ms King and Ms Moore.  They made their way to Geraldton from Carnarvon.  I accept that the flight schedules would not have enabled them to make the return trip in one day.  I accept therefore that it was appropriate for each of them to have made their way to Geraldton prior to the hearing.  I accept also that, although Ms Moore was a witness, because of the way in which the hearing transpired she was not ultimately called to testify.  The claims made, with respect to her, are nevertheless appropriate.

10      In view of the foregoing I take the view that deductions to the amounts claimed should be made with respect to accommodation and meals.  The Claimant seeks to recover the cost of accommodation for eight nights.  In my view, Mr Milward’s accommodation is not recoverable because such constitutes part of the provision of legal services that are not recoverable unless the Court were to conclude that the proceedings were frivolously or vexatiously defended, which is not the case.  Accordingly I will not allow the accommodation costs for Mr Logan-Scales and Mr Grayson.  I will however allow the accommodation cost of four nights for the witnesses King and Moore.  Given that the costs incurred for eight nights were sought and only four nights are recoverable, only half of the total amount claimed is allowable.

11      So far as the meals are concerned the same approach should be taken and a substantial reduction in allowances for meals is made.  I accept that the claim for Ms King and Ms Moore is appropriate.  I would have thought that an amount of $40.00 per day for each of the two days ought to be allowed.  Accordingly a total of $160.00 is allowable with respect to disbursements incurred for meals.

12      With respect to the airfares, I will disallow Mr Milward's airfare for the same reasons as previously stated.  In my view such ought to be considered as part his provision of legal services.  Accordingly I will deduct his airfare of $461.74 from the total amount sought.  I will allow the remainder of the claim for airfares.

13      The following disbursements are allowed:

• $405.00 for the accommodation;
• $160 for the meals; and
• $1,716.12 for the airfares

14      The aforementioned disbursements were properly incurred in order to enable the Claimant to prove its claim.  The disbursements allowed total $2281.12.

Orders

15      I make the following orders:

1. The Respondent shall pay to the Claimant the following penalties totalling $2,000.00  constituted as follows:

(i) For the failure to pay sick leave, the amount of $400.00.

(ii) For the failure to pay minimum wages for the period ending 28 April 2004 the amount of $600.00.

(iii) For the failure to pay minimum wages for the period ending 12 May 2004 the amount of $300.00.

(iv) For the failure to pay accrued annual leave, the amount of $700.00.

2. The Respondent is to pay Kathryn King $2515.28.

3. The claim for interest is dismissed.

4. The Respondent is pay to the Claimant the disbursements properly incurred in bringing the  claim fixed at $2281.12.

G Cicchini

Industrial Magistrate