All Care Australia Pty Ltd v Fair Work Ombudsman

INTRODUCTION 1 This is an application made by the applicant, All Care Australia Pty Ltd, to stay this proceeding pending the hearing and determination of an application made to the Fair Work Commission. 2 All Care provides residential care services to children and young people. Those services are provided by care workers employed by All Care. Those care workers are said to be covered by the Social, Community, Home Care and Disability Services Industry Award 2010. 3 All Care has a practice of rostering its care workers to perform work immediately before and after a sleepover. A sleepover is defined in the Award as "when an employer requires an employee to sleep overnight at premises where the client for whom the employee is responsible is located…" (cl 25.7(a) of the Award). 4 At the heart of this proceeding is the manner in which care workers should be paid for the period immediately before and after a sleepover. All Care construes the Award such that each shift immediately before and after a sleepover can be a separate shift. The respondent, the Fair Work Ombudsman, construes the award such that the period immediately before, during and immediately after the sleepover is one shift. A consequence of the Ombudsman's construction is that the care workers are entitled to overtime and night shift allowances. 5 This proceeding involves a challenge to a compliance notice issued by the Ombudsman to All Care alleging that it was not paying three of its employees correctly during periods worked immediately before and after sleepovers. Such a compliance notice is issued by the Ombudsman under s 716 of the Fair Work Act 2009 (Cth). In this proceeding, All Care seeks a review of the compliance notice under s 717 of the Act. Amongst other matters, it seeks the cancellation of the compliance notice because it says, on its construction of the Award, it did not breach the Award. 6 On 2 November 2023, the Australian Industry Group made a Variation Application to the Commission to vary the terms of the Award. It said that the terms dealing with entitlements surrounding sleepovers are uncertain or ambiguous, and alternatively need to be varied to ensure that the Award complied with the Modern Awards Objectives provided for by the Act. All Care now seeks to stay this proceeding pending the hearing and determination of that application to the Commission. All Care contends that if the Australian Industry Group is successful in its Variation Application, and the Award is retrospectively varied, that will completely resolve the basis for this proceeding. 7 For the reasons that follow I make an order staying the further conduct of this proceeding pending the hearing and determination of the Variation Application in the Commission.

Evidence 8 All Care relies on two affidavits of Mr Dean Keep. Mr Keep is All Care's General Manager. Mr Keep's first affidavit was made in support of the originating application in this proceeding and the second affidavit in support of the stay application. The affidavits detail the operation and practices of All Care together with a chronology of relevant events; some of which are detailed below. 9 The Ombudsman relies on an affidavit of Ms Sevda Keremelevski, an Inspector appointed by the Ombudsman. Ms Keremelevski sets out the Ombudsman's position on the Award, compliance notices and the Variation Application. 10 No objections were taken to any of the material contained in the affidavits. I have had regard to that material.

Chronology of events 11 Since around November 2016, the Ombudsman has published guidance on its website about the operation of clause 25.7 of the Award which deals with sleepovers. It does this in its capacity as a regulator whose functions include promoting compliance with the Act by providing education, assistance and advice to employees and employers (s 682(1)(a) of the Act). 12 Between June and November 2022, the Ombudsman and the Australian Industry Group exchanged email correspondence regarding their conflicting interpretations of how the sleepover clause interacts with other entitlements in the Award. 13 On 11 September 2023, Ms Keremelevski issued a first compliance notice to All Care under s 716 of the Act. Such a notice is issued where, relevantly, an Inspector reasonably believes that a person has contravened a term of a modern award. Ms Keremelevski issued that first notice because she had a reasonable belief that All Care had not paid overtime and night shift entitlements under the Award to three employees. Those underpayments were said to arise from shifts worked contiguously with a sleepover. After email correspondence with the solicitors for All Care, the Ombudsman withdrew that first notice on 3 November 2023. 14 As set out above, on 2 November 2023, the Australian Industry Group filed the Variation Application in the Commission. The Variation Application submits that cl 25.7 of the Award should be varied retrospectively under s 160(1) of the Act because it is ambiguous or uncertain regarding the treatment of hours worked in shifts contiguous with a sleepover. Alternatively, it seeks to vary the Award to meet the Modern Award Objectives under s 157(1)(a). The alternative ground under s 157 would not result in a retrospective variation. 15 On 16 January 2024, Ms Keremelevski issued a second compliance notice to All Care (the Second Notice). The Second Notice also alleged non-payment of entitlements to the same three employees arising from shifts worked contiguously with a sleepover. The Second Notice is the compliance notice that is the subject of this proceeding. 16 On 13 February 2024, All Care filed an originating application in this Court seeking a review of the Second Notice under s 717 of the Act. It sought, as final relief, the cancellation of the Second Notice or alternatively a declaration that the Second Notice is invalid. 17 All Care seeks that relief on the basis that: (a) All Care did not commit the contraventions alleged in the Second Notice because on the proper construction of the sleepover clause those employees were not owed those entitlements; (b) The Second Notice provides that All Care must identify and calculate the amounts owed to the employees in relation to the alleged contraventions. All Care submits that this requirement is not compliant with the Act because it is not properly a requirement to "take specified action to remedy the direct effects of the contravention" (see s 716(2) of the Act); and (c) The Notice does not set out the "brief details of the contravention" as required by the Act (see s716(3)(c) of the Act). 18 In its originating application, All Care also seeks interlocutory relief in the form of two stays: (a) First, a stay of the operation of the Second Notice pursuant to s 717(2) of the Act; and (b) Second, a stay of this proceeding pending the hearing and determination of the Variation Application. 19 The Ombudsman consented to a stay of the Second Notice, and Hespe J ordered that stay by consent on 21 February 2024. 20 The Ombudsman does not agree to stay the proceeding. On 6 March 2024, I made timetabling orders for All Care's application to stay the proceeding. The hearing of the application to stay the proceeding took place on 29 April 2024. 21 On 25 March 2024, President Hatcher of the Commission heard from interested parties and issued directions in the Variation Application. Those directions included: (a) Any party supporting the application shall file their written submissions and evidence by 27 May 2024; (b) Any party opposing the application file written material and evidence by 22 July 2024; (c) Any party supporting the application file reply material by 19 August 2024; and (d) There be a further directions hearing before President Hatcher on 26 August 2024. 22 By s 616(3C) of the Act the Variation Application is to be heard by a Full Bench of the Commission, save that the President may direct that it be heard by a single Commission member (s 616(3D)). The parties before me both submitted that it was likely that the matter would be heard by a Full Bench of the Commission. 23 Counsel for All Care submitted that he expected the Variation Application would be heard in September and determined in October or November. Counsel for the Ombudsman was not willing to speculate. I assume that the Commission, consistent with its usual practices, will list and determine the matter as soon as practicable after 26 August 2024.

THE Principles 24 Section 23 of the Federal Court Act 1976 (Cth) empowers the Court, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, as the Court thinks appropriate. Such orders include granting a stay of the Court's proceedings. 25 The parties were largely in agreement as to the relevant principles in the present circumstances. Those principles can be summarised as follows: (a) The consideration of whether to grant a stay is a matter for the Court's discretion, to be exercised where it is in the interests of justice to do so: Websyte Corporation Pty Ltd v Alexander (No 2) [2012] FCA 562, [53], Dodds-Streeton J citing Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16 at [19] and [21] per Sugerman ACJ (with whom Holmes and Mason JJA agreed). (b) The Court's task is to balance justice between the parties, having regard to all relevant factors, where each case is to be judged on its own merits, and it would be wrong to attempt to define in the abstract the relevant factors: Jefferson v Bhetcha [1979] 2 All ER 1108 at [1113] cited with approval in ResMed Limited v Australian Manufacturing Workers' Union (No 2) [2015] FCA 537; (2015) 243 FCR 366 per Perry J at [48]-[52]. (c) The Court should not lightly take any step to delay the resolution of any matter properly brought before it for resolution: National Tertiary Education Industry Union v Monash University [2022] FCA 1368 per Snaden J at [24]. (d) The Court should consider the overarching purpose of civil practice and procedure provisions; relevantly whether the stay would facilitate the just resolution of the dispute, according to law, and as quickly, inexpensively and efficiently as possible: Federal Court Act 1976 (Cth), s 37M and ResMed per Perry J at [48]-[52]. 26 To those matters I add three considerations in the present circumstances. First, it will not normally be in the interests of justice to stay proceedings in this court in order to permit a party to first pursue relief in an application made elsewhere. However, that general proposition might be displaced when the application made elsewhere has some prospects of success (or might succeed) and will have a retrospective effect that if granted will bear upon (or resolve) questions to be determined in the proceedings in this court: Financial Services Union of Australia v Australia and New Zealand Banking Group Ltd [2005] FCA 62 at [4] per Finkelstein J; Warramunda Village Inc v Pryde [2002] FCAFC 58; (2002) 116 FCR 58 at [61] per Finkelstein J; and to similar effect, Monash per Snaden J at [25]. 27 Second, unusually in this application All Care is seeking to stay its own proceeding. It is the applicant in the application for review of the Second Notice. It is its action that will not be tried in the ordinary course of the procedure and business of the Court. However, the Ombudsman submits, and I accept, that I should have regard to all relevant factors, including that the employees the subject of the Second Notice will, subject to the proper construction of the Award, suffer a delay in the payment of entitlements identified in the notice. 28 Third, timeliness and delay may be a consideration on the stay. That might include the timeliness or delay of any application for the stay and the delay caused by the stay. 29 In the present circumstances there can be no suggestion that All Care did not make their application for a stay in a timely manner. That stay application was included in its originating application seeking review of the Second Notice. As to the delay caused by the stay, in Commonwealth Bank of Australia v Finance Sector Union of Australia [2003] FCAFC 212; 124 IR 453 at [11] per Wilcox J, and at [31] per Marshall J, the Full Court considered that where there was no "immediate prospect" of the Commission dealing with a variation application the primary judge could not "responsibly have come to any other conclusion" than to dismiss the stay application. All Care submitted, and I accept, that that proceeding is distinguishable from the present circumstances because there the Commission had adjourned the variation application indefinitely. Here, whilst the Variation Application does not yet have a hearing date, it is clear that the Commission intends to hear the application and it has made directions for doing so.

where is the balance of justice between the parties?

The relevant Award clauses 30 Clause 25.4 of the Award relevantly provides: 25.4 Rest breaks between rostered work (a) An employee will be allowed a break of not less than 10 hours between the end of one shift or period of work and the start of another; (b) Notwithstanding the provisions of subclause (a), by agreement between the employee and the employer, the break between: (i) the end of a shift and the commencement of a shift contiguous with the start of a sleepover; or (ii) a shift commencing after the end of a shift contiguous with a sleepover may not be less than eight hours. 31 Clause 25.7 of the Award relevantly provides: 25.7 Sleepovers (a) A sleepover means when an employer requires an employee to sleep overnight at premises where the client for whom the employee is responsible is located (including respite care) and is not a 24 hour care shift… … (c) The span for a sleepover will be a continuous period of 8 hours... (d) The employee will be entitled to a sleepover allowance of 4.9% of the standard rate for each night on which they sleep over. (e) In the event of the employee on sleepover being required to perform work during the sleepover period, the employee will be paid for the time worked at the prescribed overtime rate with a minimum payment as for one hour worked. Where such work exceeds one hour, payment will be made at the prescribed overtime rate for the duration of the work. (f) An employer may roster an employee to perform work immediately before and/or immediately after the sleepover period, but must roster the employee or pay the employee for at least four hours' work for at least one of these periods of work. The payment prescribed by 25.7(d) will be in addition to the minimum payment prescribed by this subclause. 32 Clause 29.4 of the Award provides: 29.4 Shifts are to be worked in one continuous block of hours that may include meal breaks and sleepovers, except where broken in accordance with clause 25.6. 33 Clause 28.1 of the Award provides for overtime rates for all work done in addition to an employee's ordinary rostered hours. Alternatively, cl 28.2 provides that if there is agreement between the employee and employer, the employee can take time off instead of receiving overtime payments. 34 Clause 29.2(b) of the Award defines a 'night shift' as any shift which finishes after midnight or commences before 6:00am Monday to Friday. Clause 29.3(b) of the Award provides that any employee who works a night shift will be paid a 15% loading of their ordinary rate of pay for the whole of the night shift.

The competing constructions 35 All Care says that the sleepover allowance provided for by cl 25.7(d), and the overtime rates for work during sleepovers provided for by cl 25.7(e), suggest that the sleepover is something other than work. It contends that a sleepover is not work and is not standby (as considered in Warramunda); it describes a sleepover as a "hybrid category" that results in work shifts being broken. 36 All Care says further that cll 25.4 and 25.9 "appear to contemplate sleepovers constituting breaks between shifts, rather than themselves constituting shifts or the performance of work". As I understand that submission, cl 25.4(b), by its references to shifts contiguous with sleepovers, is said to suggest that sleepovers are not always included as part of a shift and therefore the shifts immediately before and after a sleepover can be considered separate shifts. Similarly, it says, cl 29.4, by reference to a shift that may include a sleepover, suggests that an employer can either structure an employee's roster such that shifts immediately before and after a sleepover are two distinct shifts or alternatively arrange them in a manner that the whole period is a single shift including overtime. 37 The Ombudsman says that the period immediately before, during and immediately after a sleepover is one shift. The Ombudsman also draws on cl 25.4 to submit that clause draws a distinction between a rest break and a sleepover, meaning that a sleepover is something other than a rest break between shifts. The Ombudsman was content to adopt All Care's notion of a sleepover as a "hybrid category" of shift but submitted that it did not result in a break between shifts. The Ombudsman says cl 29.4, which states that shifts "are to be worked in one continuous block of hours that include … sleepovers," supports its construction.

Consequences of the Variation Application 38 The Ombudsman accepts that if the Variation Application is successful and the Award varied retrospectively, then it will "in a practical sense" resolve this proceeding. Namely, there will no longer be a need for All Care to review the Second Notice on the basis that it breached the Award, because the retrospective variation will mean that it did not. I understand that All Care would not, and would not need to, maintain its other objections to the Second Notice in circumstances where it can no longer be said that it breached the Award. All Care submits that the relief sought in the Variation Application, "if ordered, would completely resolve the basis for the present proceeding". This is a factor in favour of the stay sought by All Care: see FSU v ANZ, [4] per Finkelstein J; Warramunda, [61] per Finkelstein J; and to similar effect, Monash per Snaden J at [25]. 39 It is not for me to determine the correct construction of cl 25.7 of the Award. However, I need to be satisfied that the Variation Application has some prospects of success or that it might succeed. In Warramunda, Finkelstein J said (when considering the principle that the Court must determine a case in accordance with the present state of the law) at [55]: I will put to one side for the moment the question whether the decision to make an "award varying application" can amount to a good reason to put off a trial and assume, in the appellant's favour, that it can be. Even in that circumstance it is not sufficient for a party wishing to resist the fixing of a particular trial date merely to assert his intention to make such an application. Surely it must be necessary for the party to place before the court some material to show the application might succeed. (Emphasis added.) 40 He said further at [61]: If the principle applies not only to statute law but to whatever law is recognised as governing the rights of the parties (a proposition that may be doubted), then an application for a retrospective variation of an award, provided it has some prospects of success, should be regarded as an exception to the rule. (Emphasis added.) 41 The Commission in assessing ambiguity or uncertainty, must make an objective judgment about whether the relevant provision is susceptible to more than one meaning. It will not be enough that there are rival contentions. However, the Commission "will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions and an arguable case is made out for more than one contention" (Original emphasis): Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50; (2020) 275 FCR 385 at [70] per Flick, White and Perry JJ, citing with approval Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 - 2004 [2002] AIRC 531 at [49] Per Ross VP, O'Callaghan SDP and Foggo C, as cited by Snaden J in Monash at [35]. 42 I have considered the question of whether the Variation Application might succeed or has some prospects of success in the context of the retrospective relief sought. Namely, whether there is some prospect that that relief will be obtained or whether the application for that relief might succeed. 43 All Care submits that I should be satisfied that the Variation Application "might succeed" (Original emphasis). The Ombudsman submits that there is scant evidence the application will succeed. All Care did not lead evidence about the circumstances surrounding the making of the Award. Rather, it submits that the construction "is primarily to be resolved on documents and constructional principles". The Award does not, in express terms, identify the effect of the sleepover on the shift duration. There are arguments to be drawn from at least the text, context, purpose, and documents before the Commission on the making of the Award. The arguments before me were limited to the text. I am satisfied on the submissions and material before me that the Variation Application meets the modest threshold of "might succeed" or "some prospects of success". As I say above, when considering success, I have taken into account the prospect of retrospectivity (under that part of the application made under s 160 of the Act and alleging ambiguity or uncertainty). All Care acknowledged that the Australian Industry Group faces some difficulties in obtaining retrospectivity, but again I am satisfied that it might succeed on retrospectivity. 44 All Care further submits that even if the Commission decides against their interests in the Variation Application, the prospect of this proceeding continuing is "fairly low". I understand that to mean that in those circumstances, All Care may only be left with its technical objections to the Second Notice and that it may not continue with that part of its challenge. That is a matter in favour of the granting of the stay.

Delay 45 All Care submits that a stay will not cause a significant disruption and only cause a minor delay to this proceeding. The Ombudsman says that the stay will result in a significant delay. I do not know when the Variation Application will be heard by the Commission. I accept that timetabling steps have been made to facilitate the hearing of the application. I have no reason to conclude that the matter will not be heard as soon as the business of the Commission permits.

Costs 46 All Care says that it will be prejudiced if a stay is not granted because it will incur substantial legal costs of $90,000 - $110,000 in continuing to pursue this proceeding. It says those costs may be wasted. All Care also submits that it will be put to the cost of addressing two issues simultaneously in separate jurisdictions. However, I note that All Care is not a party to the Variation Application, although they "support" it and say Mr Keep, and other All Care employees, will give evidence in it. The Ombudsman submits that the costs the parties will incur are low. They submit that they will only incur $30,000 in legal costs to run this proceeding to judgment. 47 The prospect that costs may be wasted in the conduct of the proceeding in this court is a factor that weighs in favour of the grant of the stay. Even accepting the Ombudsman's figures those costs are not insignificant.

Other considerations 48 The Ombudsman submits that a stay will impede its regulatory functions, including by being unable to seek compliance with the Second Notice. All Care respond to that submission in two ways. First, it says that submission assumes the Ombudsman's construction is correct. Second, it says that the Ombudsman has already agreed to stay the operation of the notice. Even accepting those propositions, the delay to this proceeding (assuming the Commission proceeding does not resolve it) does at least delay the Ombudsman's ability to conduct its functions with respect to the Second Notice. However, as I have no reason to question the Commission's ability to hear and determine the matter, this does not weigh heavily against the grant of a stay. 49 All Care submits that there is another variation application made to the Commission, to the same effect as the Australian Industry Group application. That application is made by Parkerville Children and Youth Care Inc. That application is to be heard together with the Variation Application. All Care raises that matter in support of the submission that the issue of the payment for shifts contiguous to sleepovers is an industry wide issue. It submits that such an industry wide issue is best served by an industry solution; namely, a solution that resolves the terms of the Award for the whole industry. I accept that submission. That weighs in favour of the grant of a stay. 50 The Ombudsman submits that a stay of these proceedings will extend the time that the employees in the Second Notice will have outstanding entitlements. It says that interest is not recoverable on amounts recovered under a compliance notice (unlike a court ordered underpayment) and therefore a delay affects the employees the subject of the Second Notice. All Care says that, again this assumes the Ombudsman's construction is correct. Further, in circumstances where the amounts due to the employees are unknown, and the length of the delay is not certain, it is not possible to put a value on any lost interest. This matter does not weigh heavily against a stay. 51 The Ombudsman submits that the proceeding in this court is not the enforcement of an underpayment. The Court's only present role is to decide whether to cancel, vary or amend the Second Notice (in contrast to Warramunda or Monash). This, the Ombudsman submits, means that the continuation of this proceeding does not prejudice All Care in a way that it might in underpayment proceedings. All Care submits that such a submission ignores the practical realities involved with a repayment to employees. It says it will have to pay monies that it may not recover and, in a practical sense, would have to assess any potential underpayments to other employees. I do not weigh that matter heavily in the balancing exercise. 52 Lastly, the Ombudsman submits that there is another proceeding in this Court, involving a review of another compliance notice concerning the same Award provisions. The Ombudsman says that in those circumstances, where similar issues will be dealt with the by Court in any event, a stay would be otiose. All Care says, and I accept, that other proceeding does not change the test to be applied in the present circumstances, and that work may still be wasted if the Commission proceeding is able to resolve the basis of the proceeding in this Court.

Disposition 53 In all of those circumstances, and considering the interests of justice, the justice between the parties, and the quickest, most inexpensive, and most efficient resolution of the dispute, I grant the stay sought by All Care. I am hopeful that the matter will be heard and determined by the Commission, consistent with All Care's estimate, before the end of the year. If new events mean that timetable is not achievable, the parties have liberty to return to me to seek any necessary orders. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Dowling.