WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2018 WAIRC 00377

DELIVERED : WedNESDay, 20 JUNE 2018

FILE NO. : M 42 OF 2017

CLAIMANT

AND

Downer EDI Mining Pty Ltd

Respondent

CatchWords : Jurisdiction of Industrial Magistrates Court – Enforcement of, and powers of the Industrial Magistrates Court in, a contractual claim under the small claims procedure – Meaning of ‘to pay an amount’ and ‘pay the amount under this Act’ as it relates to an amount to be paid by the employer under s 545(3) and s 548(1A)(i) of the Fair Work Act 2009 (Cth).

Legislation : Fair Work Act 2009
Industrial Relations Act 1979 (WA)

Instrument : Downer EDI Mining – Surface Metalliferous Enterprise Agreement 2012

Case(s) referred to

in reasons : Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27

 Association of Professional Engineers, Scientists and Managers,               Australia v Wollongong Coal Limited [2014] FCA 878

Casey Grammar School v Independent Education Union of Australia (2010) 204 IR 52

 Commissioner of Taxation v Consolidated Media Holdings Ltd                (2012) 250 CLR 503

 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (No 2) [2010] FCA 652

Construction, Forestry, Mining and Energy Union & Ors v RGN Mining Services Pty Ltd & Anor [2017] FCCA 1546

 Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908

 Project Blue Sky Inc v Australian Broadcasting Authority (1998)               194 CLR 355

 Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry  Employees Union [2016] FCAFC 122

Thomson v Commonwealth of Australia [2013] FCCA 2168

Whitfield v One Key Resources Pty Ltd [2014] 553

Result : Claim dismissed for want of jurisdiction

Representation:

Claimant : Mr C. Young (industrial agent)

Respondent : Mr T. Caspersz instructed by Corrs Chambers Westgarth

REASONS FOR DECISION

1         On 9 March 2017, Colin Sharrock lodged a claim under the Fair Work Act 2009 (Cth) (FWA) electing to have the claim dealt with as a small claims procedure pursuant to s 548 of the FWA.

2         The initial claim was a failure by Mr Sharrock’s former employer, Downer EDI Mining Pty Ltd, to comply with a fair work instrument, Downer EDI Mining – Surface Metalliferous Enterprise Agreement 2012.  The particulars of the claim allege that after 27 August 2015 until mid-August 2016 Downer EDI Mining failed to pay Mr Sharrock the contractual amount for all work performed and any form of paid leave taken referred to in a letter of offer dated 7 July 2014 when Downer EDI Mining unilaterally reduced the flat hourly rate from $42.17 per hour to $39.65 per hour following a work place vote.

3         Mr Sharrock claims the difference between the flat hourly rate amount of $39.65 paid after the work place vote and the flat hourly rate amount of $42.17 referred to in the letter of offer for ordinary hours worked and various leave entitlements contained in the Downer EDI Mining – Surface Metalliferous Enterprise Agreement 2012.  He seeks an order for Downer EDI Mining to pay $7,569.83, the amount he says is owed under the terms of the letter of offer.

4         At the start of the hearing, Mr Sharrock advised that following the decision in Teys Australia Beenleigh Pty Ltd v Australasian Meat Industry Employees Union [2016] FCAFC 122, the nature of the claim was revised and was now limited to a contractual entitlement claim only.  That is, Mr Sharrock conceded the letter of offer did not form part of the enterprise agreement between he and Downer EDI Mining and he sought to enforce the terms of the agreement he says is contained in the letter of offer.

5         Downer EDI Mining objected to the Industrial Magistrates Court (IMC) hearing the revised claim saying the IMC lacked jurisdiction to make the order sought by Mr Sharrock in the small claims procedure when regard is had to the provisions of s 545(3) and s 548 of the FWA.

6         Mr Sharrock’s position is that failing to pay entitlements under a contract of employment is a contravention of s 323 of the FWA, a civil remedy provision, and a failure to pay in full contractual entitlements is a failure to pay an amount required to be paid under the FWA.

The Preliminary Issue

7         Thus, a preliminary issue was identified, namely: whether the IMC in a small claims procedure has jurisdiction to enforce payment arising solely from Mr Sharrock’s contract of employment under s 323 of the FWA?

Effect of Determining the Preliminary Issue

8         If the answer to the preliminary issue is yes, the claim can be heard and determined.

9         If the answer to the preliminary issue is no, the claim must be dismissed for want of jurisdiction.

Parties’ Contentions

10      Downer EDI Mining’s contentions on the preliminary issue are:

1. on a proper construction of s 26 and s 27 of the FWA, a claim for payment under a contract of employment (without any reference to a fair work instrument or the FWA) is excluded from the application of the FWA in the IMC;
2. section 548(1A)(a)(i) of the FWA, when read with s 545(3), limits the powers of the IMC in small claim proceedings to making orders for the payment of amounts that are required to be paid under the FWA or a fair work instrument (cf. as opposed to an amount required to be paid under a contract of employment only); and
3. section 323 of the FWA does not enliven the IMC’s jurisdiction to enforce payment under a contract of employment.

11      Therefore, as I understand Downer EDI Mining’s contentions, it includes both an objection to the IMC having jurisdiction to hear the subject matter of the application (being the revised claim) as a small claims procedure and having the power to make the order sought by Mr Sharrock under s 548 of the FWA.

12      Mr Sharrock’s contentions on the preliminary issue are:

1. the operation of s 26 and s 27 of the FWA does not exclude the IMC’s jurisdiction to enforce payment under a contract of employment, as there is no inconsistency between the FWA and the Industrial Relations Act 1979 (WA) preventing a claimant from choosing the jurisdiction (state or federal) to enforce such a claim; and
2. the plain and ordinary meaning of the words in s 323 of the FWA, when read with s 548 of the FWA, enables the IMC to make an order for ‘an amount owing’ to an employee if the employer is required to pay the amount in full under the FWA.

Issues for Determination

13      Having regard to the preliminary issue, there are other secondary issues relevant to the preliminary issue:

1. what orders can be made by the IMC under s 545(3) and s 548(1) of the FWA?;
2. what is the meaning of ‘to pay an amount’ and ‘pay the amount under this Act (or a fair work instrument)’ as it relates to an amount to be paid by the employer under s 545(3) and s 548(1A)(i) of the FWA?; and
3. what is the character of Mr Sharrock’s claim and is this relevant to the order sought and capable of being made by the IMC in the small claims procedure?

Principles of Statutory Construction

14      The starting point to determine the meaning of a statutory provision is the text of the statute, having regard to context in which the text appears and the general purpose and policy of the legislation: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (No 2) [2010] FCA 652.

15      Extrinsic materials cannot be relied upon to displace the clear meaning of the language contained in the text of the legislation: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27.

16      Where only one meaning is reasonably open on the language of a provision, the court must adopt that meaning.  Even if a drafting error is suspected or the literal meaning gives rise to absurdity, that meaning must prevail unless an alternative interpretation is reasonably open on the language in fact used by the legislature: Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503.

17      Where more than one meaning is reasonably open, the court may adopt that meaning which best achieves the purpose or object of the statutory provision.  The court must always consider context and extrinsic material in the first instance regardless of whether ambiguity appears on the face of the legislation: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue.

Small Claims Procedure

18      Section 548(1) and (2) contain four conditions for proceedings to be dealt with under the small claims procedure:

1. the application is for an order (not a pecuniary penalty order) under Division 2, Part 4-1, Chapter 4 of the FWA from a magistrates court or the Federal Circuit Court;
2. the order relates to an amount referred to in s (1A) being (relevant to this case), an amount that an employer was required to pay to, or on behalf of, an employee:

2.1      under this Act or a fair work instrument; or

2.2      because of a safety net contractual entitlement; or

2.3      because of an entitlement of the employee arising under s 542(1);

3. an indication in the prescribed manner that the person wants the small claims procedure to apply to the proceedings; and
4. the award sought is not more than $20,000 or a higher amount if prescribed by the relevant regulations.

(emphasis added)

19      Subdivision A, Division 2, s 539(2) tabulates civil remedy provisions for which orders may be sought in respect of contraventions of certain provisions of the FWA.  In addition, the table in s 539(2) details the persons who may make the application and the court which may hear and determine the application.  It is clear from the table that in respect of some applications only certain persons may make the application and only certain courts may hear and determine the application.

20      For the purposes of this claim, an ‘eligible State or Territory court’ may hear and determine an application for orders in relation to an alleged contravention of s 323(1) and (3) of the FWA.  A ‘magistrates court’ is an ‘eligible State or Territory court’ and a ‘magistrates court’ means, relevantly, a court constituted by an industrial magistrate: s 12 of the FWA.  The IMC is a court constituted by an industrial magistrate.

21      However, notably, the Federal Court and Federal Circuit Court is also empowered to hear and determine the same type of application, albeit that in the small claims procedure an application may only be made to the Federal Circuit Court or a magistrates court.

What does this mean for the IMC in relation to s 323 of the FWA?

22      Section 323(1) of the FWA provides that:

An employee must pay an employee amounts payable to the employee in relation to the performance of work: (a) in full (except as provided by section 324); and (b) in money by one, or a combination, of methods referred to in subsection (2); and (c) at least monthly.

23      In Association of Professional Engineers, Scientists and Managers, Australia v Wollongong Coal Limited [2014] FCA 878, Buchanan J determined that the ordinary language of s 323 was sufficiently wide to enable an application that there have been breaches of s 323 through a failure to pay contractually obligated amounts (at [37]).  His Honour’s determination follows on from the decision in Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908 where Jessup J stated that a significant innovation introduced by the FWA was the imposition of an obligation upon a ‘national system employer’ to pay its employees amounts payable to them in relation to the performance of work in full at least monthly: s 323(1).  Accordingly, his Honour determined the legislation picks up entitlements arising under contracts of employment and gives statutory consequences to an employer’s failure to make good on them.  In that respect, s 323(1) is a civil remedy provision (at [142]).

24      Further, in Construction, Forestry, Mining and Energy Union & Ors v RGN Mining Services Pty Ltd & Anor [2017] FCCA 1546, Barnes J, referring to Murrihy and Professional Engineers, and as a matter of judicial comity, determined that a failure to pay a contractual obligation of two months’ payment in lieu of two months’ written notice contravened s 323 of the FWA.

25      There are a number of distinguishing features with respect to these three cases, as compared to Mr Sharrock’s claim. Each of these cases were commenced in the Federal Court or the Federal Circuit Court where the orders capable of being made are broader than that capable of being made by the IMC: s 545(1) and (2) of the FWA.

26      In Association of Professional Engineers, the applicant relied on s 323 to establish a breach of a civil remedy provision, but not as a foundation for recovery of any alleged underpayment of a bonus and incentive based payments.  Recovery of the unpaid amounts was sought pursuant to s 545 of the FWA, namely compensation for loss suffered as a result of contravention of a civil remedy provision.  Notably, at [38], the court stated that if the breach was established, it would have power to order compensation.  Buchanan J also considered, at [17], that contractual entitlements of the kind sought seemed to be a ‘safety net contractual entitlement’ having regard to s 139(1) of the FWA.

27      In Murrihy, the applicant relied on s 323 to establish the failure to pay commission under two commission agreements and sought compensation pursuant to s 545(2)(b) of the FWA and the imposition of a penalty for the alleged contravention of s 323.  Jessup J found the respondents were non-compliant with the commission agreements and the applicant was entitled to damages to be assessed.  I note that there was a further question as to whether damages should be awarded or compensation ordered under s 545(2)(b) of the FWA, the resolution of which may have had consequences for the power to award interest.  However, what was accepted is that under the commission agreements, commission ought to have been paid monthly (which it was not) and the failure to do so contravened the least frequent basis of payment under s 323(1).

28      In RGN Mining Services, the applicant (in a revised claim) relied on s 323 to claim the respondent failed to provide written notice of termination or payment in lieu of notice in accordance with his employment contract (the applicant also alleged other failures related to the FWA).  The applicant sought orders for compensation for breach of contract and the imposition of a penalty.  Barnes J, at [66] to [69], referred to Professional Engineers and Murrihy, and concluded that the application of s 323 was not limited to periodic payments and that a payment in lieu of notice was payable to the applicant as the respondent’s employee on termination of his employment and that it was in relation to the performance of work.  It was an amount that had ‘become payable’ and it was payable ‘in full’ under the applicant’s employment contract and the respondent failed to ‘make good’ on this entitlement.  I note reference was made that in the event a breach of s 323 was established, the court had power to order payment of compensation and, in fact, at [151] made an order for compensation for the loss arising from the particular contraventions of the FWA.

29      Giving proper regard to those decisions, a failure to pay a contractual entitlement is capable of contravening s 323 of the FWA.  Given such a contravention of s 323 is capable of being heard and determined in an eligible state or territory court as a civil remedy provision, it follows that it is open for an application for an order relevant to a contravention of s 323 (as it relates to a breach of a contractual entitlement) to be made to eligible state or territory court (the IMC).  Nothing in the decisions or the language of the text relevant to the IMC otherwise appears to limit or exclude the application of s 323 as it relates to a failure to pay a contractual obligation. 

30      Therefore, it seems that Mr Sharrock’s revised claim, meets the first condition in s 548(1) of the FWA, being the application of a contravention of a civil remedy provision capable of being heard in a magistrates court or the Federal Circuit Court.

31      The third and fourth conditions are uncontentious in this case because Mr Sharrock properly indicated that he wanted the small claims procedure to apply to the proceedings and the amount sought is less than $20,000.

32      Thus, the secondary issues for determination, which form the basis of the second condition, are seminal to determining the preliminary issue.

What orders can be made by the IMC in the small claims procedure?

33      The small claims procedure sits within Division 3 of Part 4-1.  A reasonable reading of Division 3 is that it does not confer any additional powers on the IMC with respect to the orders that can be made, but is directed towards a simplified court procedure for mostly self-represented litigants.

34      The only relevant order that can be made is that which relates to an amount referred to in s. 548(1A); an amount required to be paid under the FWA or a fair work instrument (Mr Sharrock conceding that the reference to fair work instrument is not applicable in his case).  While Mr Sharrock’s claim involves the alleged failure to pay a contractual entitlement, it does not relate to a safety net contractual entitlement, as that term is defined in s. 12 of the FWA, because it relates only to the difference between applicable hourly rates of pay in the letter of offer and not to any subject matter in s 61(2) or s 139(1) of the FWA (there being no applicable modern award).

35      The wording in s 548(1A)(i) mirrors that in s 545(3) of the FWA being an eligible state or territory court can order an employer to pay an amount to or on behalf of an employee if the court is satisfied that:

a)      the employer was required to pay the amount under this Act or fair work instrument; and

b)     the employer has contravened a civil remedy provision by failing to pay the amount.

36      This order is contrasted with the scope of orders open to the Federal Court and Federal Circuit Court, which may make ‘any order the court considers appropriate’ if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision: s 545(1).  Further, the Federal Court and the Federal Circuit Court may make an order granting an injunction, awarding compensation for loss that person has suffered because of the contravention, or an order for reinstatement of the person: s 545(2).

37      The difference in scope of orders capable of being made in the IMC as compared to the Federal Circuit Court must have significance with respect to the subject matter of the application the IMC and Federal Circuit Court can hear and determine in the small claim procedure (noting the small claims procedure is applicable in the Magistrates Court or Federal Circuit Court).

38      In oral submissions the parties each submitted that the differing orders in s 545 do not apply to the small claims procedure in s 548 of the FWA.  As I understood the parties’ submissions the Federal Circuit Court and the IMC can only make orders in a small claim procedure in relation to the payment of an amount of money and no other order.

39      I do not wholly agree with the parties’ submissions that s 545 does not apply to s 548, but that may be a matter of misunderstanding about what, in fact, the parties meant.  If the parties meant the Federal Circuit Court could not make an order for an injunction in the small claim procedure, then I tend to agree.  However, if the parties meant the Federal Circuit Court could not make an order for compensation, then I do not agree.

40      Mr Sharrock provided two cases regarding the small claims procedure heard and determined in the Federal Circuit Court: Whitfield v One Key Resources Pty Ltd [2014] 553 and Thomson v Commonwealth of Australia [2013] FCCA 2168.   In both of those cases the court assumed the orders in s 545 applied to the small claim procedure because they were prepared to countenance an order made under s 545(2)(b) being an order for compensation ‘for loss that a person has suffered because of the contravention’.  In addition, in Whitfield Lucev J considered the limitation period in s 544 of the FWA applies to the small claim procedure under s 548.

41      It is difficult to see why, without express exclusion, that s 548 stands alone from the other sections in Part 4-1 when it is so closely tied to Division 2.  Further, there is no indication that some sections in Part 4-1 should apply, such as the limitation period, and other should not.

42      Further, s 548 does no more than establish an informal procedure for certain claims under $20,000 (or as prescribed in the regulations).  It does not prescribe the actual order or orders to be made, save that the order relates to an amount.  Therefore, recourse must be had to s 545 for the actual order or orders that can be made by the Magistrates Court or the Federal Circuit Court in the small claim procedure.

43      The only order capable of being made by an eligible state or territory court in the small claim procedure is that referred to in s 545(3), namely that ‘an employer to pay an amount to, or on behalf of, an employee’, but only if the court is satisfied: (a) the employer was required to pay the amount under this Act or a fair work instrument; and (b) the employer has contravened a civil remedy provision by failing to pay the amount.

44      The Federal Circuit Court may make an order for compensation under s 545(2) of the FWA, which for reasons detailed below is also ‘an amount’.

What then is meant by ‘to pay an amount’ and ‘an amount that an employer was required to pay’ in s 545(3) and s 548(1A) of the FWA?

45      In oral submissions the parties submitted the character of Mr Sharrock’s claim was largely irrelevant; that is, from Downer EDI Mining’s perspective whether the character of Mr Sharrock’s claim was for a debt for non-payment of wages or a claim for liquidated damages did not change the fact that the claim was not for an amount payable under the FWA.  However, from Mr Sharrock’s perspective the character of his claim was irrelevant because an amount payable in full was not confined to a debt or damages, but was referable to an amount to be paid under s 323 of the FWA.  My understanding of Mr Sharrock’s submission, and consequently claim, is that s 323 grounds not only the order sought in the application (being the alleged contravention of a civil remedy provision) but also the remedy claimed being the payment of an amount in full required to be paid under the letter of offer.

46      I agree, in part, with the parties’ submissions that the character of Mr Sharrock’s claim is irrelevant, but only to the extent that it goes to the meaning ‘to pay an amount’ and ‘an amount that an employer was required to pay’ in s 543(3) and s 548(1A) of the FWA, respectively.

47      ‘An amount’ is not defined in the FWA.  Giving ‘amount’ its common meaning, having regard to its context in the FWA and, more specifically, s 545(3) and s 548, ‘amount’ must mean an amount of money.  However, the FWA is also silent as to how this amount is ascertained.  Having regard to the orders that can be made by the Federal Circuit Court and Magistrates Court relevant to Part 4-1, it seems that in the small claims procedure the amount can be ascertained by reason of a debt or by an assessment of damages or some other method, provided the amount relates to one of the three items in s 548(1A)(i), (ii) or (iii).  In that sense, for the purposes of demonstrating the claim is capable of being dealt with as a small claim procedure, relevant to s 548(b) and s 548(1A)(a), at first instance a person need do no more than establish that an amount of money was required to be paid by the employer, howsoever this arises.

48      Thereafter, to continue in the small claims procedure the amount of money must relate to one of the three items in s 548(1A)(i), (ii) or (iii).

49      Relevant to Mr Sharrock’s revised claim, the amount must relate to what Downing EDI Mining was required to pay under the Act.

What is meant by what the employer is required to pay under this Act?

50      Mr Sharrock contends that s 323 of the FWA is broad enough to encompass the payment of contractual entitlements and the words ‘amount payable in full’ is a right or requirement to be paid in full under the FWA.  Further, Mr Sharrock says he is not claiming enforcement of a contractual term but an order to be paid an amount in full under the FWA.

51      Downer EDI Mining submits the FWA was never intended to include claims for a denial of a contractual benefits claim (that is, a ‘non-excluded matter’ without any other reference to the FWA) and Mr Sharrock’s contentions are too broad where the words ‘under this Act’ must relate to Division 2 and reflect the powers of the IMC to make orders with respect to money payments.

52      Downer EDI Mining contrasted the situation with respect to safety net contractual entitlements where a breach of a safety net contractual entitlement is not a civil remedy provision and pursuant to s 543 of the FWA an employee can apply to the Federal Court or Federal Circuit Court, rather than the IMC, to enforce an entitlement under s 542(1) (being a safety net contractual entitlement).

53      Claims for breach of a contractual entitlement against a national system employer may be commenced in more than one jurisdiction.  While Downer EDI Mining argues that s 26 and s 27 of the FWA limits the Federal jurisdiction, in my view, this is not necessarily the case.

54      Section 26(1) of the FWA provides that the FWA is intended to apply to the exclusion of all state or territory industrial laws so far as they would otherwise apply in relation to a national system employee or a national system employer.  In Western Australia this includes the Industrial Relations Act 1979 (WA) (IR Act).  However, s 26(1) of the FWA does not apply to a common law claim for breach of contractual entitlements.

55      Section 27 of the FWA enables or preserves the application of certain state and territory laws from the operation of s 26, including at s 27(1)(c) ‘non-excluded’ matters which includes at s 27(2)(o) ‘claims for enforcement of contracts of employment, except so far as the law in question provides for a matter to which paragraph 26(2)(e) applies’.  Again, this says nothing relevant to a common law claim for breach of contractual entitlements.

56      The effect of this in Western Australia is that s 29(1)(b)(ii) of the IR Act enables the referral of an industrial matter to the Industrial Relations Commission by an national system employee against a national system employer for claim of a denial of a contractual benefit, provided the claim is not excluded from being determined under s 29AA(4) of the IR Act.

57      Therefore, in Western Australia, a national system employee and national system employer has at least three avenues to pursue a claim for breach of a contractual entitlement:

1. Federal Court and Federal Circuit Court (subject to the breach being a civil remedy provision via s 323);
2. State courts; and
3. Industrial Relations Commission (subject to certain conditions in s 29AA(4) of the IR Act).

58      However, dealing with the established three avenues, none can reasonably be said to encroach on the other.  That is, an employee or employer can, in effect, make an election as to what jurisdiction they wish to pursue the claim for breach of contractual entitlement, subject to certain requirements contained in the FWA (as it relates to the federal courts) and the Industrial Relations Commission (as it relates to the Western Australian Industrial Relations Commission) and state courts.

59      Having regard to my earlier comments, in my view, the IMC may have jurisdiction to hear a claim for breach of contractual entitlement in the small claim procedure, depending on the basis of claim as it relates to the order sought where the IMC may not be able to order the particular remedy claimed.

60      By way of example, if the application for an order is a contravention of a civil remedy provision by reason of a of a contravention of s 323 (relevant to a breach of a contractual entitlement) and the amount sought to be paid in full (which is less than $20,000) is because of a failure to pay an amount under a contract entitlement more than otherwise required for the minimum standards for annual leave (by definition an amount required to be paid because of a safety net contractual entitlement: s 61(2)), there appears to be no barrier to the IMC hearing the application and making the order.

61      That is, the application is for an order capable of being heard by the IMC as it involves a contravention of s 323.  The amount required to be paid in the example is an amount the employer was required to pay because of a safety net contractual benefit (in this example, annual leave over the required minimum standard) and how the amount is calculated (damages for breach of contract or a debt) appears not to matter.

62      But does this example apply to Mr Sharrock’s claim where it is solely referrable to the letter of offer and where Mr Sharrock relies upon a purported contravention of s 323 to not only apply for the order but also to ground the order for the remedy sought?

What is Mr Sharrock’s claim about?

63      Mr Sharrock claims the difference between the flat hourly rate of $42.17 contained in the letter of offer and flat hourly rate of $39.65 he says was unilaterally reduced by Downer EDI Mining on or around 15 August 2015.  The claim includes an amount for all work performed and any form of paid leave taken.

64      Mr Sharrock concedes the letter of offer is no longer referrable to the Downer EDI Mining – Surface Metalliferous Enterprise Agreement 2012 to which he and Downer EDI Mining were parties, and the letter of offer is a stand-alone document upon which he relies to ground his claim.

65      Accordingly, if the IMC has jurisdiction to hear Mr Sharrock’s claim, he will be required to prove on the balance of probabilities the following:

• the existence of an agreement between him and Downer EDI Mining;
• the terms of the agreement;
• there has been a breach of one or more terms of the agreement; and
• a remedy exists for the breach (in Mr Sharrock’s case he claims an amount of money he says is owed under the terms of the contract).

66      Thus, notwithstanding Mr Sharrock’s submission the amount of the claim is capable of certainty his revised claim is for breach of contract, the remedy for which is damages (if the breach is proven).

67      Absent the letter of offer, based on Mr Sharrock’s revised claim, he has no other cause of action against Downing EDI Mining and if successful any amount payable will result because of Downing EDI Mining’s failure to pay an amount owed under the letter of offer.

68      In RGN Mining, Professional Engineers and Murrihy, the court considered the appropriate remedy in analogous claims to be damages for breach of contractual entitlement for which it was open to the Federal Court and Federal Circuit Court to make an order for compensation.  Of course, none of these claims were commenced as a small claims procedure and the orders made were not confined due to any jurisdictional issue.

69      Downer EDI Mining’s contention is where enforcement of a safety net contractual entitlement is limited to the Federal Court or the Federal Circuit Court, it cannot have been Parliament’s intention to enable an application involving a broader contractual entitlement to be made to the IMC under the small claims procedure: see s 542(1) and 543 of the FWA.

70      Mr Sharrock contends that s 323 of the FWA not only enables the application for an order, but is also the statutory basis under the FWA requiring Downer EDI Mining to pay the contracted amount in full in relation to the performance of work.

71      Buchanan J in Professional Engineers briefly discusses this issue where he notes the applicant does not rely on s 323 as a foundation for recovery of any underpayment, but relies upon the section to establish a breach of a civil remedy provision (at [31]).  Recovery of the underpayments were sought under s 545 as compensation for loss suffered as a result of the contravention.

72      Section 323 of the FWA reinforces a legal obligation to pay an amount in full for performance of work for which there are additional consequences on the employers if they do not pay their employees in full.  It does not provide the remedy or create an ‘underlying legal obligation pay’ for which the employer is responsible: Casey Grammar School v Independent Education Union of Australia (2010) 204 IR 52.

73      The words required to pay the amount ‘under this Act’ in s 545(3) of the FWA must have work to do or meaning in the context of the amount required to be paid by the employer.  These words in effect qualify what amount the employer is required to pay.  Otherwise the section could merely have referred to any amount the employer might be required to pay without reference to the FWA or any other federal instrument.

74      Therefore, Mr Sharrock’s claim needs to be referrable to another section of, or obligation under, the FWA over and above the legal obligation to pay in full in s 323 in order for any amount sought to be paid by Downer EDI Mining.  No other section or requirement has been established by Mr Sharrock.

75      The IMC is not empowered under s 545(3) or s 548(1A) to make an order for compensation and the order sought by Mr Sharrock is an amount for damages for an alleged breach of contract and not one which is referrable to any amount required to be paid by Downer EDI Mining under the FWA.

76      While s 323 of the FWA opens the door to a claim under the FWA by placing a legal obligation on the employer to pay in full amounts owed, it does not, of itself, empower the IMC to make the order sought by Mr Sharrock by: (1) providing a remedy; or (2) specifying an obligation on the employer as to what the employer is required to pay under the FWA.

77      Contrast this with the Federal Circuit Court which is empowered to make an order for compensation, albeit that in Mr Sharrock’s case the same issue may arise with respect to the basis of the amount claimed, being one which is capable of meeting the second condition in s 548(1A) of the FWA.

78      If the Federal Circuit Court determined that it similarly did not have jurisdiction to hear the application, it is open to Mr Sharrock to commence a claim in a state court (e.g. the minor case jurisdiction of the Magistrates Court) or in the Industrial Relations Commission.  The point being is that Mr Sharrock is not locked out from making any claim in any forum.

79      Therefore, in my view, there may be circumstances where the IMC can hear and determine a claim for breach of contractual entitlements in the small claim procedure, however in the case of Mr Sharrock’s revised claim it cannot.

80      Accordingly, Mr Sharrock’s revised claim is not a proceeding which can be dealt with under s 548(1) of the FWA and his claim is dismissed for want of jurisdiction.

81      I will hear from the parties in respect of the order and any further application.

D. SCADDAN

INDUSTRIAL MAGISTRATE