Fair Work Act 2009

s.604 - Appeal of decisions

Appeal against decision [2024] FWC 1794 of Commissioner Lim at Perth on 8 July 2024 in matter number C2024/1630 - Stay application - Whether there was operative decision that could appropriately be subject of a stay - Determination of legal rights - No coercive order made - Stay not appropriate.

• [1] AIS Pub Group Pty Ltd T/A Paddy Malones (Paddy Malones or the appellant) has filed a notice of appeal in relation to a decision of Commissioner Lim of the Fair Work Commission (the Commission) handed down on 8 July 2024. In the notice of appeal, the appellant seeks a stay of the decision of the Commissioner as to the correct classification of Ms Madeline Doe (Ms Doe or respondent) during her employment with the appellant. This decision concerns the stay application. A hearing was conducted in relation to the stay application on 5 August 2024.

• [2] The decision concerns an application to deal with a dispute under s 739 of the Fair Work Act 2009 (Cth) (the Act) made by Ms Doe. The dispute was raised under the dispute resolution term of the Hospitality Industry (General) Award 2020 (the Award) and concerned Ms Does' employment classification under the Award. The parties consented to the Commissioner arbitrating the dispute. Ms Doe contended that her correct classification under the Award ought to have been as a Food and Beverage Supervisor. The appellant classified her as a Food and Beverage Attendant Grade 3. Ms Doe was relevantly employed as a Duty Manager.

• [3] The Commissioner determined that the correct classification of Ms Doe was as a Food and Beverage Supervisor as she had the appropriate level of training and had responsibility for the supervision, training and coordination of food and beverage staff.[1] The classification description for a Food and Beverage Supervisor in Schedule A to the Award is as follows:

Food and beverage supervisor (wage level 5) means an employee who has the appropriate level of training, including a supervisory course, and who has responsibility for the supervision, training and co-ordination of food and beverage staff or for stock control for one or more bars.

• [4] The Commissioner accepted the evidence of Ms Doe that, in her employment with the appellant, she supervised staff that were rostered on, trained bar staff and coordinated staffing levels and duties.[2] In addition, the Commissioner found that Ms Doe had an appropriate level of training to fall within the classification of Food and Beverage Supervisor by reason of having completed the Course in Management of Licenced Premises required to fulfil the function of an Approved Manager under the Liquor Control Act 1998 (WA).[3]

• [5] The decision of the Commissioner was made as a result of the parties consenting to the Commission arbitrating a dispute under clause 40 of the Award. As such, the Commissioner was performing the role of a private arbitrator. There is nothing to suggest that, in consenting to arbitration, the parties did not intend to take the Commission as they found it with the avenue of appeal available under s 604 of the Act.[4] Absent a contrary provision in agreement of the parties to arbitrate, the Commission has its usual powers on appeal, including to stay the decision subject of the appeal.

• [6] The power to grant a stay pending the hearing and determination of an appeal lodged under s 604 is contained in s 606(1) of the Act, which provides:

(1) If, under section 604 or 605, the FWC hears an appeal from, or conducts a review of, a decision, the FWC may (except as provided by subsection (3)) order that the operation of the whole or part of the decision be stayed, on any terms and conditions that the FWC considers appropriate, until a decision in relation to the appeal or review is made or the FWC makes a further order.

• [7] There is no prima facie position in favour of the granting of a stay and the grant of a stay is not to be regarded as the usual course.[5] An applicant for a stay must positively demonstrate that the balance of convenience weighs in favour of a stay being granted.

• [8] A commonly cited formulation of the principles applicable to the grant of a stay is found in the decision of the Australian Industrial Relations Commission in Kellow-Falkiner Motors Pty Ltd v Edghill [2000] AIRC 758 in which Ross VP (as his Honour then was) said:[6]

In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospects of success, in respect of both the question of leave to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted.

• [9] In that respect, assistance may also be derived from the approach adopted by the courts in relation to an application to a stay pending appeal.[7]

• [10] In this matter, the appellant submits that there is real uncertainty as to the correct application of the classifications in the Award in light of Western Australian legislation, particularly as to the role of Duty Manager. It says that this is a matter that has potentially significant implications for other employers and employees in the industry and that, properly understood, a person in the position of Ms Doe is not properly classified as a Food and Beverage Supervisor.

• [11] In relation to the balance of convenience, the appellant submits that, whilst it accepts that there are underpayments owed to Ms Doe, it is unable to calculate the amount of backpay payable until the appeal process is complete. Ms Doe, for her part, accepted that the total amount required to be paid could not be determined until the outcome of the appeal was known and that Mr Alexander "had a fair point". Ms Doe also indicated that she had obtained advice and sent a letter to the appellant demanding that she be paid the amount of backpay owed.

• [12] For the purposes of the stay application and without expressing any view about the ultimate prospects on appeal, I am prepared to accept that there are arguable grounds of appeal. The grounds set out in the notice of appeal refer, in part, to alleged errors in factual findings made by the Commissioner. However, on hearing of the stay application, the grounds were described as raising a more fundamental issue as to whether the responsibilities of an Approved Manager in Western Australia attract a supervisor rate under the Award. I am not presently able to determine whether the appeal necessarily raises such an issue, rather than a more limited question as to the evidence concerning Ms Doe's work. However, the grounds are sufficient to suggest there may be arguable grounds of appeal.

• [13] The more basic issue that arises with respect to the stay application is whether the Commissioner's decision is one that could appropriately be subject of a stay. The application of the principles in relation to a stay application is necessarily subject to it being demonstrated at the outset by the applicant for a stay that there is an operative decision with ongoing or future effect capable of being stayed under s.606(1).[8] A stay order must have some practical effect in the sense that it stays an operative order or decision.

• [14] The Commissioner was asked to determine a question as to the proper interpretation and application of the Award to Ms Doe's employment, namely, her correct classification under the Award. As such, the effect of the decision of the Commissioner was to adjudicate the legal rights of the parties in a binding manner. That is something the Commission is able to do when acting as a private arbitrator by reason of the consent of the parties even though it would otherwise involve the exercise of judicial power.[9] The effect of the decision is equivalent to a declaration of right made by a court albeit that the power to make the determination derives from a different source.

• [15] The courts have generally adopted the approach that, in contrast to an executory judgment, a declaratory order cannot, or at least ordinarily will not, be stayed.[10] The rationale is that once a declaration has been made, the legal rights or obligations of the parties which were litigated in the proceedings are, subject to appeal, settled and that, once a declaration had been made, the order had "done its work".[11] In XL Insurance Company SE, trading as Brooklyn Underwriting v Kerembla Pty Ltd [2023] FCA 1038, Lee J explained the distinction between a declaratory and executory judgment as follows (at [5]):

The distinction between declaratory and executory judgments is explained by Lord Woolf and Woolf J in Zamir & Woolf: The Declaratory Judgment (Sweet & Maxwell, 4th ed, 2001) (at [1.02]) where it is said (see also Macks v Viscariello [2017] SASCFC 172; (2017) 328 FLR 115 (at 187-188 [659]-[660] per Lovell J, Corboy and Slattery AJJ)):

A declaratory judgment is a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs. It is to be contrasted with an executory, in other words coercive, judgment which can be enforced by the court. In the case of an executory judgment, the courts determine the respective rights of the parties and then order the defendant to act in a certain way, for example, by an order to pay damages or to refrain from interfering with the plaintiff's rights; if the order is disregarded, it can be enforced by official action ... A declaratory judgment, on the other hand, pronounces upon a legal relationship but does not contain any order which can be enforced against the defendant ... In other words, the declaration simply pronounces on what is the legal position.

• [16] The Commissioner's decision determined the rights of the parties in a manner that is binding on them, subject to any appeal. That is, the Commissioner determined the classification at which Ms Doe was entitled to be paid during her employment. Unless set aside on appeal, the decision means that the appellant contravened the Award to the extent it paid her at a lower rate and Ms Doe is entitled to recover the amount of the underpayment. However, the Commissioner did not make (and maybe could not have made) a coercive order directly requiring the payment to be made or, at least, payment to be made by a particular date.

• [17] In those circumstances, there does not appear to be any operative decision or order that would appropriately be subject to a stay. In the same way as a declaratory order has done its work upon being made, the decision of the Commissioner as to the legal rights of the parties is complete upon its pronouncement. If it is necessary that it be enforced, that would need to be done by way of enforcement proceedings arising from the underlying contraventions of the Award by the appellant.

• [18] There is authority that, in an appropriate case, a court may make orders having the effect of staying the exercise of rights which have been declared to exist and which are challenged or sought to be impugned on appeal or grant a stay in respect of consequential orders made to give effect to a declaratory order.[12] That would appear to be outside the powers of the Commission. The powers of the Commission, under s 606(1) of the Act at least, are limited to making an order to stay the operation or the whole or part of the decision subject of an appeal or review.

• [19] The concern of the appellant that prompted it to seek a stay is understandable. It does not wish to calculate and pay an amount with respect to an underpayment until the scope of its liability is finally determined. Its concern is, however, misplaced. The Commissioner determined the dispute as to the correct application of the Award, but no coercive orders were made requiring payment by any time. If the appellant has contravened the Award by failing to pay Ms Doe the correct rate, that is an historical event which cannot be altered by a stay order. The consequence is that there is no decision that could appropriately be subject of a stay.

• [20] I would finally add that this does not necessarily mean an order staying a decision pending appeal will never be appropriate in the case of a decision arising from an arbitration under s 739 of the Act. There may well be cases in which an arbitration under s 739 of the Act gives rise to an operative decision having immediate coercive effect upon the parties which could, in an appropriate case, be subject of a stay order. This is not such a case.

• [21] For these reasons, the application for a stay is refused.

S Alexander, Director, appearing for the Appellant.

[1] [2024] FWC 1794 at [26].

[2] [2024] FWC 1794 at [18].

[3] [2024] FWC 1794 at [25].

[4] DP World Brisbane Pty Ltd v Maritime Union of Australia [2013] FWCFB 8557, 237 IR 180 at [47]- [48]; Clinical Laboratories Pty Ltd T/A Australian Clinical Labs v Health Services Union [2024] FWCFB 296 at [14]- [17].

[5] Supreme Caravans Pty Ltd v Pham [2013] FWC 4766 at [11] citing Edwards v Telstra Corporation Limited [1998] AIRC 679, Print Q2467.

[6] Kellow-Falkiner Motors Pty Ltd v Edghill [2000] AIRC 758 at [5].

[7] See, for example, Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694 and Powerflex Services Pty Ltd v Data Access Corporation [1996] FCA 460; (1996) 67 FCR 65 at 66 as summarised in Re Transport Industry - Waste Collection and Recycling (State) Award [2000] NSWIRComm 236; (2000) 102 IR 192 at [19].

[8] Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited [2014] FWC 4276 at [11]; Krcho v University of New South Wales (t/as UNSW Sydney) [2020] FWC 4926 at [12]; Australian Manufacturing Workers' Union (AMWU) v Opal Packaging Australia Pty Ltd [2022] FWC 2448 at [14]; Woodside Energy Ltd v The Australian Workers Union [2022] FWC 2573 at [14].

[9] Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission [2001] HCA 16, 203 CLR 645 at [31]- [32]; Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87, 203 FCR 371 at [41] (Buchanan and Katzmann JJ); Linfox Australia Pty Ltd v Transport Workers' Union of Australia [2013] FCA 659, 213 FCR 479 at [31] (Rares J).

[10] Bunnings Forest Products Pty Ltd v Bullen [1994] FCA 1526; (1994) 54 FCR 342 at 347 (Carr J); Arnhem Land Aboriginal Land Trust v Northern Territory [2007] FCAFC 31, 157 FCR 255 at [5]- [7] (French, Finn and Sundberg JJ); Shop, Distributive and Allied Employees' Association of Western Australia v Gance (t/as Chemist Warehouse Perth) [2020] WASCA 36 at [33] (Buss JA).

[11] Bunnings Forest Products at 347 (Carr J).

[12] Bunnings Forest Products at 347 (Carr J); Stellar Call Centres Pty Ltd v Community & Public Sector Union [1999] FCA 1236 at [12] (Katz J); Smolarek v McMaster [2006] WASCA 216 at [30] (Buss JA).

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