Cox v Daley [2001] ICQ 66 (2001) 168 QGIG 321

30 November, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 321 ########################################################################################################################### INDUSTRIAL COURT OF QUEENSLAND Industrial Relations Act 1999 – s. 341(2) – appeal against decision of industrial magistrate David Francis Cox AND Lesleigh Maree Daley (No. C53 of 2001) PRESIDENT HALL 20 November 2001 DECISION The respondent is the proprietor and operator of a shop known as Fico’s Boutique and Accessories situated at Ashmore City shopping centre. As the name suggests the shop is a retail clothing shop. From on or about 13 February 1997 to on or about 5 May 1999, Kathleen Phyllis Evans was employed by the respondent as a shop assistant on Sundays and on Thursday night. The engagement was regulated by the Retail Industry Interim Award – State. By s. 123(1)(b) of the Industrial Relations Act 1999 the Award has the force of law throughout the state. Omission by the respondent to discharge obligations cast upon her by the Award, including the obligation to pay wages at the rates prescribed by the Award, exposed her to the risk of conviction for a criminal offence, s. 666. Additionally, by s. 399, unpaid wages may be recovered by civil proceedings before an Industrial Magistrate. Such proceedings may be instituted by persons other than the employee to whom the monies are due and owing. Indeed, in this case, the proceedings were brought not by Ms Evans but by an inspector within the meaning of s. 399(2)(d). The proceedings failed. The Industrial Magistrate found that by agreement the respondent paid Ms Evans an amount which was less than the amount required to be paid by the Award by way of the cash-in-hand payment, and that no PAYE deductions were made and passed on to the Australian Tax Office. (Is not clear whether the Industrial Magistrate found that the arrangement formed part of a contract of employment or found that it was a collateral arrangement about how the obligations under the contract of employment might be discharged.) In those circumstances the Industrial Magistrate dismissed the proceeding on the ground of “illegality”. It may well be that if Ms Evans had taken proceedings against Ms Daley in the Magistrates Court (not the Industrial Magistrates Court) to enforce payment of the lower sum under the cash in hand arrangement, illegality may have been available as defence. However, in the proceeding in which the Industrial Magistrate was actually concerned, so far from attempting to enforce an illegal transaction the inspector was attempting to enforce the respondent’s statutory obligation to give affect to an award which had the effect of law. It was necessary for the inspector to prove the existence of the contract of employment. It was not necessary for the inspector to prove the terms of the contract. The cash in hand arrangement formed no part of the case mounted by the inspector. With respect to the Industrial Magistrate, the reality is that His Worship allowed the respondent to plead the illegal arrangement and gave full force and effect to that arrangement. The Industrial Magistrate seems to have entertained the view that it was the effect of the decision of Drummond J in Igaki Australia Pty Ltd v Coastmine Pty Ltd, No. QG 103 of 1991, unreported, 2 November 1994, that the contract of employment was void. With respect Igaki Australia Pty Ltd v Coastmine Pty Ltd, ibid, was not a contract case. The case involved an action for misleading or deceptive conduct within the meaning of s. 52 of the Trade Practices Act 1974. Drummond J held that the principles applicable where illegality was raised as a defence to such an action where analogous to those applicable in tort. The appeal, I should add, did not deal with the point, see (1995-1996) 34 IPR 37. I hasten to acknowledge that illegality may renderer a contract void or (more commonly) unenforceable, the generally Nelson v Nelson (1995) 184 CLR 538. However, whether a contract prohibited by statue is void is a matter of statutory construction. In Yangao Pastrol Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 at 423 Mason J observed: “It is perhaps more accurate to say that the question whether a contract prohibited by statue is void is, like the associated question whether the statue prohibits the contract, a question of statuary construction and that the principle to which I have referred does no more than enunciate the ordinary rule which will be applied when the statue itself is silent upon question. Primarily, then, it is the matter of construing the statue and in construing the statue the Court will have regard not only to its language, which may or may not touch upon the question, but also of the scope and purpose of the statue from which inferences may be drawn as to the legislative intention regarding the extent and effect of the prohibition which the statue contains.”. There is nothing in the Industrial Relations Act 1999 to indicate that a contract to pay less than the award rate is to be void. One the contrary, there is express indication at ss. 135 and 399(5)(b) that the award is simply to override the agreement and to be enforceable as previously described. That legislate intention is made manifest notwithstanding that in agreeing to accept less than the award rate the employee commits an offence, see s. 667(1). I note that the Industrial Magistrate refers in a general way to Federal Legislation about income tax. No particular section is identified. The respondent has not identified any particular section. It cannot be assumed that the Federal Legislation displays an intention to make an enforceable the obligations to observe awards arising under the Industrial Relations Act 1999. In any event, such an argument would raise issues arising under the Constitution or involving its interpretation. Since notice has not been given pursuant to s. 78(B) of the Judiciary Act 1903 neither the Industrial Magistrate nor this Court may lawfully consider the matter. The Industrial Magistrate was also of the view that because proper records of the monies paid to Ms Evans had not been kept, it was not possible to calculate the outstanding wages. It may be conceded that it is not possible to calculate the outstanding wages with any measure of precision. However, it seems to me that the evidence would allow an Industrial Magistrate to conclude that it could be safely said that Ms Evans worked x Sundays and y Thursdays (and an indeterminable number of additional Sundays and Thursdays) and to make findings about the number of hours worked which were safely within the actual hours worked whatever the actually hours might have been. In all the circumstances I set aside the decision of the Industrial Magistrate. I remit the Matter to the Industrial Magistrate Court to be heard and determined according to Law. -- 1 of 2 -- 322 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 30 November, 2001 Dated this twentieth day of November, 2001. D.R.Hall, President. Released: 20 November 2001 Appearances:– Mr C. Murdoch, instructed by Crown Law, for the appellant. The respondent in person. -- 2 of 2 --