FEDERAL COURT OF AUSTRALIA

Pryde v Warramunda Village [2001] FCA 350

INDUSTRIAL LAW – underpayment of wages – interpretation of applicable awards - breach or non-observance of award –– calculation of payment for “sleepover shifts” – imposition of penalties - appropriate amount of interest payable

Workplace Relations Act 1996 (Cth) ss 178, 179A, 356(b)

Health Service Union of Australia (Victoria - Private Sector) Interim Award 1993

Health and Allied Services – Private Sector – Victoria Consolidated Award 1995

Penalty Interest Rates Act 1983 (Vic)

Pryde v Warramunda Village [2000] FCA 1374 referred to

Ardelle v Spastic Society of Victoria Ltd [2001] FCA 220 followed

DIANNE PRYDE and BERYL ANDERSON v WARRAMUNDA VILLAGE

V 100 OF 1999

MARSHALL J

MELBOURNE

3 APRIL 2001

THE COURT ORDERS THAT:

1.                  Pursuant to s178(1) of the Workplace Relations Act 1996 (Cth) (“the Act”), a penalty of $400 be imposed on the respondent in respect of the breaches of the Health Services Union of Australia (Victoria - Private Sector) Interim Award 1993 identified in the reasons for judgment delivered today and in the reasons delivered on 15 September 2000.

2.                  Pursuant to s178(1) of the Act, a penalty of $3,600 be imposed on the respondent in respect of the breaches of the Health and Allied Services – Private Sector – Victoria Consolidated Award 1995 identified in the reasons for judgment delivered today and in the reasons delivered on 15 September 2000.

3.                  Pursuant to s178(6) of the Act, the respondent pay the first applicant the sum of $35,034.10.

4.                  Pursuant to s178(6) of the Act, the respondent pay the second applicant the sum of $44,444.36.

5.                  Pursuant to s179A(1) of the Act, the respondent pay interest on each sum referred to at paragraphs 3 and 4 of this order at the rate of 6.5% from the date of the commencement of each underpayment until 15 September 2000.

6.                  Pursuant to s356(b) of the Act, the respondent pay each applicant the sum of $2,000 in respect of the penalties ordered to be paid by it pursuant to paragraphs 1 and 2 of this order.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     These reasons for judgment should be read together with the reasons for judgment in Pryde v Warramunda Village [2000] FCA 1374 (“the previous judgment”). The previous judgment was delivered on 15 September 2000. The substantive application before the Court sought the imposition of penalties upon the respondent pursuant to s178 of the Workplace Relations Act 1996 (Cth) (“the Act”). Relief was also sought pursuant to s178(6) of the Act in the form of payment of underpaid award obligations, and pursuant to s179A of the Act in the form of interest on such payments.

2                     In the previous judgment I found that the respondent had failed to pay the applicants for work performed on sleep over shifts in accordance with the relevant awards. The relevant awards are:

•     the Health Services Union of Australia (Victoria - Private Sector) Interim Award 1993 (“the 1993 Award”); and

•     the Health and Allied Services - Private Sector - Victoria Consolidated Award 1995 (“the 1995 Award”)

3                     In the previous judgment I considered that work performed on sleepover shifts obliged the respondent to make payments under the 1993 Award and the 1995 Award under the parts of the Awards which dealt with:

•     ordinary time rates of pay

•     week day ordinary hours

•     week day overtime

•     weekend ordinary hours

•     weekend overtime

•     public holidays

4                     Based on the assumption that my conclusions in the previous judgment are correct, the parties have reached agreement on the quantum of the relevant underpayments and the method of their calculations. The calculations in respect of each applicant have been set out in a document that has been submitted to the Court. The document is on the Court file and is indexed as document 60. I incorporate that document in these reasons by reference.

5                     Having regard to the agreed calculations of underpayments, I am satisfied that it is appropriate to make orders pursuant to s178(6) of the Act that the respondents pay:

            (a)        the first applicant $35,034.10; and

            (b)        the second applicant $44,444.36.

6                     The next issue to consider is the amount of interest properly payable on the above amounts pursuant to s179A of the Act. Counsel addressed me orally on this issue on 5 March 2001. Leave was also given for brief written submissions to be filed within a reasonable time after the delivery of reasons for judgment in Ardelle v Spastic Society of Victoria Ltd [2001] FCA 220 (“Ardelle”). Ardelle concerned breaches of similar awards to those in this matter, and I consider that the circumstances referred to in Ardelle are not relevantly distinguishable from the circumstances of this matter.

7                     As in Ardelle, the current matter presents competing factors that must be considered in awarding an appropriate amount of interest on the above amounts. I am mindful that the applicants should be compensated for being kept out of their money. I am also mindful of the fact that the applicants did not raise the issue of their underpayment for work performed during sleepover shifts until a significant time after such work had commenced. In balancing  similar competing factors in Ardelle I held that:

8                      

“An appropriate way to recognise the respondents’ valid concern and to avoid a potential injustice to the applicants is for the Court to depart from its usual practice, and order a percentage rate of interest which is lower than the rate which would ordinarily be imposed. A fair interest rate in the circumstances would be the rate of 6.5% rather than the rate applied by the Supreme Court of Victoria under the Penalty Interest Rates Act 1983 (Vic). The rate of 6.5% represents a “half way house”…”

9                     As in Ardelle, I consider that a fair interest rate in the circumstances is a rate of 6.5% on the money which the applicants have been kept out of up until 15 September 2000.

10                  On the question of penalty, I consider that a mid to low range penalty should be ordered. The respondent considered that it was conforming to what it believed to be industry practice in making a $40 payment for each sleepover shift. However, there is no evidence of the respondent taking such a position on advice from any legal or industrial source. The respondent was obliged to take greater care in its observance of the two relevant awards.

11                  The maximum penalty that can be imposed for breach of the 1993 Award is $1,000. I consider that the appropriate penalty is $400 in respect of the breaches of the 1993 Award. The maximum penalty for breach of the 1995 Award is $10,000. I would ordinarily order a penalty at $4,000 in respect of the breaches of the 1995 Award. However, as I consider the conduct in breach of the 1995 Award to be conduct adjunct to the breaches of the 1993 Award, I will discount the penalty by the sum of $400 and order that a penalty of $3,600 be awarded in respect of the breaches of the 1995 Award.

12                  I will take the usual course and order that the total sum of $4,000 in penalties be made payable to the applicants, with $2,000 being payable to each applicant.

13                  I will order as follows:

1.                  Pursuant to s178(1) of the Workplace Relations Act 1996 (Cth) (“the Act”), a penalty of $400 be imposed on the respondent in respect of the breaches of the Health Services Union of Australia (Victoria - Private Sector) Interim Award 1993 identified in the reasons for judgment delivered today and in the reasons delivered on 15 September 2000.

2.                  Pursuant to s178(1) of the Act, a penalty of $3,600 be imposed on the respondent in respect of the breaches of the Health and Allied Services – Private Sector – Victoria Consolidated Award 1995 identified in the reasons for judgment delivered today and in the reasons delivered on 15 September 2000.

3.                  Pursuant to s178(6) of the Act, the respondent pay the first applicant the sum of $35,034.10.

4.                  Pursuant to s178(6) of the Act, the respondent pay the second applicant the sum of $44,444.36.

5.                  Pursuant to s179A(1) of the Act, the respondent pay interest on each sum referred to at paragraphs 3 and 4 of this order at the rate of 6.5% from the date of the commencement of each underpayment until 15 September 2000.

6.                  Pursuant to s356(b) of the Act, the respondent pay each applicant the sum of $2,000 in respect of the penalties ordered to be paid by it pursuant to paragraphs 1 and 2 of this order.

Associate:

Dated:              3 April 2001