Nguyen v Vietnamese Catholic Community in SA Inc trading as Dac Lo Vietnamese Ethnic School

Federal Court of Australia|2021-03-17|Before: Mr P, Lieschke DP, White J

The applications for extensions of time in which to commence an appeal are dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WHITE J: 1 This judgment concerns applications for extensions of time in which to commence appeals to this Court under s 565 of the Fair Work Act 2009 (Cth) (the FW Act). 2 The two applicants were formerly employed by the respondent, the Vietnamese Catholic Community in SA Inc, in the Dac Lo Vietnamese Ethnic School. The school is registered with the Ethnic Schools Association and teaches Vietnamese language and culture. The applicants worked on Saturdays only. 3 On 20 February 2018, the applicants commenced proceedings in the South Australian Employment Tribunal (the SAET) claiming payment of underpaid wages, superannuation contributions and long service leave. Their claims succeeded in part. In a judgment published on 16 April 2019 (Nguyen & Le v Vietnamese Catholic Community in SA Inc [2019] SAET 68), Lieschke DP, sitting in the South Australian Employment Court (which is part of the SAET): (a) found that neither the Education Services (Schools) General Staff Award 2010 (the General Staff Award) nor the Education Services (Teachers) Award 2010 (the Teachers Award) applied to the applicants' employments, at [34]-[35]; (b) found that the Social, Community, Home Care and Disability Services Industry Award 2010 (the Social Services Award) and its predecessor made by the Fair Work Commission (the FWC) did apply to the applicants' employments, at [40]; (c) reserved for further consideration the determination of the classification within the Social Services Award which was applicable to the applicants, at [45]; and (d) reserved for further consideration the quantification of the applicants' claims for underpayment, superannuation contributions and long service leave, at [57]. 4 In a second judgment published on 18 September 2019 (Nguyen and Le v Vietnamese Catholic Community in SA Inc [2019] SAET 192), Lieschke DP: (a) rejected the applicants' claims that they should have been remunerated at the rate of $48.80 per hour, at [6]; (b) held that the appropriate classification of the applicants in the Social Services Award was Level 4, at [8]; (c) found that the applicants had been underpaid for the period from 20 February 2012 until 1 July 2017, at [25]; (d) after giving the respondent credit for the allowances and an additional $920 which it had paid to each, found that Mr Nguyen (the first applicant) had been underpaid by $8,694 and that Ms Le (the second applicant) had been underpaid by $9,053, at [36]; (e) awarded Mr Nguyen and Ms Le the additional sums of $1,956 and $2,037 respectively for interest, at [37]; (f) found that, on the rates of pay applicable under the Social Services Award and its predecessor, each applicant was entitled to superannuation contributions of $3,672 together with interest of $1,469, at [42]-[48]; and (g) found that Mr Nguyen and Ms Le had been underpaid long service leave entitlements of $364 and $633 respectively, at [47]-[48], and that they were entitled to interest of $27 and $47 respectively in respect of the underpayment of those entitlements, at [49]. 5 The underpayments were calculated from 20 February 2012, as this was the date six years before the commencement of the applicants' proceedings - see s 544 of the FW Act. 6 The Deputy President made orders requiring the respondent to pay to the applicants the amounts to which he had found that they were entitled. 7 On 30 September 2019, each applicant filed a Notice of Appeal in the South Australian Employment Court (the SAEC) against the orders made by Lieschke DP. Their respective Notices of Appeal indicated that they were dissatisfied with the amounts which the Deputy President had ordered the respondents to pay to them. 8 The lodgement of the appeals in the SAEC was misconceived. The effect of s 565(1B) and (1C) of the FW Act is that the applicants' appeals lay only to this Court - see Republic of Italy (Ministry of Foreign Affairs and International Cooperation - Adelaide Consulate) v Benvenuto [2017] FCA 940 (Republic of Italy v Benvenuto) at [7]; Nguyen v Vietnamese Community in Australia SA Chapter Inc [2017] FCA 1517 at [11]. The SAEC had jurisdiction under s 565(1) of the FW Act only if Lieschke DP had been exercising summary jurisdiction and, for the reasons given in Shahin Enterprises Pty Ltd v Mathew [2020] FCAFC 57; (2020) 274 FCR 557, he was not. 9 The lack of jurisdiction in the SAEC to hear and determine the appeals initially went unrecognised by the SAEC and by the respondent. The Full Bench listed the appeals for hearing on 28 September 2020 and made directions with respect to the preparation of appeal books and outlines of submissions. It seems that it was not until the decision of this Court in Shahin Enterprises which was delivered on 31 March 2020 that it was recognised that the judgment of Lieschke DP could not be regarded as the judgment of a court exercising summary jurisdiction, with the consequence that the appeal from his judgment had to lie to this Court. 10 In any event, the Full Bench of the SAEC informed the parties on 28 September 2020 that it regarded itself as lacking jurisdiction with respect to their appeals (save with respect to the appeals against the long service leave awards - a matter to which I will return). 11 The applicants then decided to commence appeals in this Court but were well outside the 28 days fixed by r 36.03 of the Federal Court Rules 2011 (Cth) (the FCR) in which to do so. Accordingly, the applicants apply, pursuant to r 36.05 of the FCR, for extensions of time in which to file their respective notices of appeal.

Relevant matters 12 The exercise of the power to grant an extension of time in which to commence an appeal involves an exercise of discretion. In exercising that discretion, the Court generally has regard to five considerations: (a) the length of the extension of time sought; (b) the explanation for the appeal not having been commenced in time; (c) the prejudice to the respondent if the extension of time is granted; (d) the prejudice to the applicant if he or she is precluded from pursuing the appeal; and (e) the interests of justice more generally, including the purpose of the limitation period.

The length of the extension and the applicants' explanation 13 As is apparent from what has been said already, the applicants are just a little under one year out of time. The extension of time which they seek is accordingly substantial. 14 I accept that the reason why the applicants are out of time was their erroneous belief that they were able to pursue their appeals in the SAEC. The applicants may not be entirely blameless in relation to that misunderstanding because they had, for similar but not identical reasons, been out of time previously in attempts to commence appeals in this Court: Nguyen v Vietnamese Community in Australia SA Chapter Inc [2017] FCA 1517. The legal advice on which they said they relied had, on my understanding, been given to them in relation to previous proceedings so that it could be said that they should have learnt from that experience that that advice was not correct. However, I think it fair to take into account that the respondent had not raised any issue about the jurisdiction of the SAET to hear the appeal, and nor had the SAET itself until 28 September 2020.

The prejudice to the respondent 15 The respondent asserts that it will be prejudiced if the extensions of time are granted. The claimed prejudice lies in the circumstance that it will then have to defend the appeals, and will incur costs in doing so. The respondent expects that those costs will be irrecoverable, having regard to s 570 of the FW Act. It notes in this respect that it is "a small not-for-profit organisation, with limited funding, and operates on the basis that its teachers have agreed to teach as volunteers". 16 While I take account of those matters, I note that the "prejudice" in costs to a party in having to defend appeals which are otherwise time-barred, is not generally regarded as being, of itself, a relevant form of prejudice for present purposes. That is because there are "detriments" which the respondent would have suffered had the appeals been commenced in time. Furthermore, they were "detriments" which the respondent had to face, and was facing, in respect of the appeals commenced in the SAET.

The prejudice to the applicants 17 The applicants will be prejudiced by a refusal of the extensions of time if they are thereby precluded from pursuing grounds of appeal which are reasonably arguable. This requires attention to the applicants' proposed grounds of appeal. 18 The draft Notices of Appeal provided by the applicants are relevantly identical. That is to say, the substantive grounds of appeal are the same, save only that the monetary amounts shown in each ground are particular to each applicant. 19 I note at the outset that the applicants do not contend that Lieschke DP had been incorrect in finding that it was the Social Services Award which governed their employment or in his identification of the classification in that Award which was applicable in their case.

Ground 1 - the hourly rate 20 In Ground 1, each of the applicants contends that Lieschke DP erred by not calculating their underpayments by using an hourly rate of $48.88 per hour. They put forward two justifications for that hourly rate: (i) a Court order of 25 October 2016; and (ii) the following calculation "$26.0711 (Level 6.2) x 25% (casual job) x 50% (Saturday work) = $48.88/hour". 21 In my view, these grounds are not reasonably arguable. The first justification seeks to rely upon the hourly figure accepted by a different employer in the settlement of a previous wage claim brought by Mr Nguyen. The applicants' reliance on this rate was rejected by Lieschke DP who said: [5] The applicants correctly concede this rate is not derived from the Social Award or from any other Award. They submit this is the correct hourly rate because it was submitted by them as a component of calculations used in consent orders to resolve a previous legal dispute with a different employer about their pay rate while performing similar work. Because that rate was not challenged by the other party or the Court, and the consent order was signed by a Judge of this Court, it somehow has the force of law and should be adopted as their current pay rate in this dispute. The applicants said the rate was given to them by an advisor, to take account of their experience as experienced Vietnamese language teachers. [6] As I explained to the applicants in the hearing, the rate of $48.80 (sic) is not relevant to their present claim. It is not an Award derived rate. The rate is not consistent with my previous ruling. The fact they managed to have that rate accepted without challenge in previous proceedings against a different employer, and for the rate to have become a component of calculations of entitlements that were formalised in a consent order, is irrelevant. The fact a Judge signed the consent order without independently scrutinising the rate, does not make that hourly rate relevant to the current dispute. Upon being advised of a consent position the Judge had no reason, and no obligation, to review each component of the arrears calculation. [7] The applicants' rates of payment at the relevant dates of the claimed wages are set by the Social Award … (Citation omitted) 22 It is plain that the applicants cannot rely in their present claims on a rate which a different employer accepted for the sake of obtaining a negotiated settlement of a wage claim in other proceedings. 23 The applicants' attempt to justify the rate of $48.88 by the second derivation is also inappropriate. It assumed that the applicants were entitled to a constant hourly rate throughout the six years which is the subject of their claim. It is plain that that was not the fact, as the rates under the Social Services Award increased progressively over time. Moreover, the starting figure of $26.0711 in the applicants' calculation has no relationship with any of the hourly rates applicable to their classification under the Social Services Award at any time. Further, as Lieschke DP noted, with the commencement of the Social Services Award on 1 August 2013, the Saturday loading of 50% was "in substitution for and not cumulative upon" the casual loading of 25%. I note that at [20]-[32] and in Annexure A to his reasons, Lieschke DP took account of the loadings to which the Social Services Award and its predecessor entitled the applicants and, further, took account of the transitional provisions in the Social Services Award concerning the application of those loadings. The applicants have not pointed to any error in the Deputy President's reasoning in that respect. 24 Accordingly, I am not satisfied that Ground 1 is reasonably arguable. The applicants will not be prejudiced by a refusal of an extension of time permitting them to argue that ground.

Ground 2 - the amounts for which the respondent was given credit 25 In Ground 2, each of the applicants complains of the aggregate amount which the Deputy President found had been paid to them during the period of their claim and which he offset against the entitlement he had found. In the case of Mr Nguyen, the Deputy President found that he had been paid a total of $14,086 in the period of his claim and in the case of Ms Le, that she had been paid a total of $13,727 in the period of her claim. The applicants submit that the correct figures should have been $12,159.75 and $11,749.25 respectively. The consequence is that they should have been found to have been underpaid $11,540 and $11,951 respectively. 26 On my assessment of the evidence at trial and of the Deputy President's reasons, these grounds are reasonably arguable as the Deputy President's calculation of the loss appears to be affected by two errors. First, in calculating the amounts for which the respondent should be given credit for the payments it had made, his Honour took into account the amounts paid to the applicants in the 2017-2018 financial year event though he was assessing the loss for the period ending on 30 June 2017. 27 Secondly, the amounts paid by the respondent in the 2017-2018 year which the Deputy President included in the "set off" ($2,070 in each case) were not paid in respect of unpaid wage entitlements. Part of the $2,070 ($1,150) was the amount of $1,150 which the FWC had, as I understand it, ordered to be paid to each applicant under s 392 of the FW Act in compensations for their dismissals. As to the balance of the $2,070 ($920), the respondent had not adduced any evidence in the SAEC showing that it was paid in respect of the applicants' entitlements in the period between 20 February 2012 and 30 June 2017. It must have known the purpose for which the $920 was paid, but it did not adduce evidence about it. 28 Had it not been for the matters to which I refer below, I would have been willing to find that the applicants would be prejudiced by an inability to argue this ground.

Ground 3 - giving the respondent credit for the $920 post-termination payment 29 By Ground 3, the applicants complain that the Deputy President had been incorrect in crediting the respondent with the sum of $920 which it had paid following the termination of their employment. I have addressed the matters bearing on the arguability of this ground when considering the arugability of Ground 2. For the reasons given, this ground is reasonably arguable.

Ground 4 - Fair Work Commission 30 As already noted, the applicants commenced proceedings in the FWC concerning their dismissal from employment. This resulted in an award of compensation to the applicants. 31 In the proceedings before Lieschke DP, the applicants sought an adjustment of the amount ordered to be paid by the FWC. Lieschke DP addressed that claim by saying: [35] The dismissal compensation is not to be adjusted as requested by the applicants. The compensation was the product of orders of the Fair Work Commission, which is a different tribunal. 32 Ground 4 does not challenge that conclusion. It is instead more in the nature of an explanation for the applicants pursuing Ground 1. Each of the applicants says that they had requested the FWC to "establish what the correct hourly rate would be" and that a Commissioner had advised them "to bring this situation to the High Court to solve". As is apparent, a ground expressed in those terms does not add to the effect of Ground 1 which, for the reasons given above, is not reasonably arguable. 33 To the extent that Ground 4 may be directed to the amount of compensation ordered to be paid by the FWC, it is not reasonably arguable that the Deputy President erred by declining to "adjust" the compensation ordered by the FWC. That was not a matter over which the South Australian Employment Court had jurisdiction.

Ground 5 34 Ground 5 is consequential upon Grounds 2 and 3 and is, strictly speaking, unnecessary. The applicants submit that the effect of adjusting for the errors which they impute to Lieschke DP in Grounds 2 and 3 is that they were unpaid wages of $11,540 and $11,951 respectively. Account can be taken of this "Ground" in the matters to which I refer below.

Ground 6 - interest 35 In relation to the underpayment of wages, the Deputy President said: [37] Interest on these amounts accrues from the date the correct wages should have been paid. In each case that is an average period of 4.5 years ago, based on a best approximation approach. At 5% pa simple interest this results in interest to Mr Nguyen of $1,956 and to Ms Le of $2,037. (Emphasis added) 36 It can be inferred that in adopting this approach, the Deputy President had sought (by the averaging) to take account of the fact that the applicants' underpayment entitlements had accrued progressively from 20 February 2012. Nevertheless, there do appear to be a number of errors in his approach. 37 First, for the reasons given above, the Deputy President appears to have miscalculated the extent of the underpayments. 38 Secondly, as the applicants contend, the Deputy President's use of a period of 4.5 years appears to be an error because the period between 20 February 2012 and 30 June 2017 (the period of their claims) was 5.5 years and the period between 20 February 2012 and the judgment on 18 September 2019 was seven years and seven months. It is accordingly unclear how the Deputy President could have derived an "average period" of 4.5 years from either of those periods. 39 Thirdly, the Deputy President does not appear to have made any allowance for interest in respect of the period between 1 July 2017 and the date of his judgment on 18 September 2019. 40 I conclude therefore that this ground is reasonably arguable.

The interests of justice more generally 41 Apart from the particular matters to which I have referred above, the exercise of the discretion to extend the time for the commencement of an appeal requires consideration of the interests of justice more generally. In this way, the Court takes account of broader considerations bearing on whether it is appropriate for the extension of time to be granted. 42 The discretion to extend time must be exercised having regard to the overarching purpose of the Court's civil practice and procedure provisions - see ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) (the FCA Act). That overarching purpose is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (s 37M(1)). Section 37M(2) elaborates the objectives included in the overarching purpose: (2) Without limiting the generality of subsection (1), the overarching purpose includes the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. 43 In the present case, regard to the interests of justice more generally requires account to be taken of the steps which the respondent has taken to resolve the issues between the parties. These include the respondent's open offer to the applicants expressed in the affidavit of its solicitor made on 9 December 2020. The solicitor deposed: Open offer to Applicants [9] To address all proposed grounds contained in the Applicants' draft notices of appeal (with the exception of the claim to $48.88 per hour), I am instructed by the Respondent to make an open offer of settlement to the Applicants in the terms set out below, which is conditional upon the Application being dismissed such that the Respondent does not need to incur the costs of defending the proposed appeal. [10] The Respondent offers to pay a total of $19,992.25 to Mr Nguyen and $21,565 to Ms Le consisting of: (a) an additional $2,890.25 to Mr Nguyen and an additional $3,734 to Ms Le above the monetary amounts ordered by DP Lieschke. (b) an additional $920 to each Applicant to avoid disputing over whether or not the Respondent should receive a credit of $920 for each Applicant for such payments being made after 1 July 2017. [11] These payments can be made within fourteen (14) days. [12] The Respondent's position is that this open offer removes any prejudice to the Applicants in their Application being dismissed, because there is no reasonable prospect that they could achieve a more favourable outcome on their proposed appeal. 44 The solicitor confirmed the offer at the hearing of the applications for the extension of time on 17 December 2020. Further, on 10 February 2021, the respondent, by its solicitor, sent to each of the applicants a cheque for, in effect, additional amounts with a view to satisfying their claims which the submissions on 17 December 2020 and at the second hearing on 28 January 2021 had indicated may be reasonably arguable. In the case of Mr Nguyen, the cheque was for $22,866.30. The solicitor's letter identified the composition of that amount as follows: (a) The amount ordered to be paid by Lieschke DP comprising: (i) unpaid wages $8,694.00 (ii) interest on unpaid wages $1,956.00 (iii) compensation for unpaid superannuation contributions $3,672.00 (iv) interest on unpaid superannuation contributions $1,469.00 (v) unpaid long service leave $364.00 (vi) interest on unpaid long service leave $27.00 Total $16,182.00 (b) An additional amount comprising: (i) an additional entitlement to unpaid wages $2,846.25 (ii) interest on the additional unpaid wages $1,217.55 (iii) additional unpaid long service leave $715.00 (iv) additional interest on unpaid long service leave $53.90 Total $4,832.70 (c) Further payments comprising: (i) additional compensation for the unfair dismissal $810.80 (ii) additional payment for unpaid notice $1,040.80 Total $1,851.60

45 In Ms Le's case, the respondent's cheque was for $23,678.30. The solicitor's letter of 10 February 2021 to Ms Le explained the composition of this amount as follows: (a) The amount ordered to be paid by Lieschke DP comprising: (i) unpaid wages $9,053.00 (ii) interest on unpaid wages $2,037.00 (iii) compensation for unpaid superannuation contributions $3,672.00 (iv) interest on unpaid superannuation contributions $1,469.00 (v) unpaid long service leave $633.00 (vi) interest on unpaid long service leave $47.00 Total $16,911.00 (b) An additional amount comprising: (i) an additional entitlement to unpaid wages $2,897.75 (ii) interest on the additional unpaid wages $1,249.45 (iii) additional unpaid long service leave $715.00 (iv) additional interest on unpaid long service leave $54.10 Total $4,916.30 (c) Further payments comprising: (i) additional compensation for the unfair dismissal $810.80 (ii) additional payment for unpaid notice $1,040.80 Total $1,851.60

46 The solicitor annexed to the affidavit copies of the cheques for these amounts which had been sent to the two applicants. Each of the letters also informed the applicants that their banking of the cheques was not conditional on them accepting the cheques in full and final settlement of their disputes with the respondent. The solicitor noted that the applicants could, even if banking the cheques, press their applications for an extension of time. 47 The respondent had previously provided cheques to the applicants for the amounts ordered to be paid by Lieschke DP but they had not accepted them, apparently because of an apprehension that doing so would compromise their ability to pursue their respective appeals. For this reason, the cheques provided on 10 February 2021 included the amounts ordered to be paid by Lieschke DP. 48 I note that the aggregate of the mount to be paid to Ms Le as per the solicitor's letter of explanation is $23,678.90, which is $0.60 more than the cheque sent to Ms Le. However, for present purposes the $0.60 difference cannot be regarded as material. 49 It is evident that the additional amounts paid by the respondent would satisfy the amounts of the underpayments asserted by each of the applicants, apart from their complaint about the hourly rate, these being the subject of Grounds 1 and 4 in the respective draft Notices of Appeal. That is to say, if the applicants accept the cheques, their claims with respect to all other Grounds would become moot. More particularly, they would not suffer prejudice by reason of a refusal of the extensions of time. 50 There is no identified impediment to the applicants accepting the cheques. They will continue to be able to do so after the delivery of this judgment. 51 The applicants provided responsive affidavits on 26 February 2021. Those affidavits did not indicate whether they had banked the respondent's cheques. The applicants did, however, make counter offers. These offers were based on hourly rates for the period from 20 February 2012 to 30 June 2017 which are different from those for which they contended in the SAET and different from that for which they contend in Ground 1 of their respective draft Notices of Appeal. The origins of the rates used in the applicants' open offers are unclear. So far as can be ascertained, they do not have a basis in the evidence adduced in the SAET. Accordingly, the Court cannot be satisfied that the rates in the applicants' open offers are reasonably arguable. 52 In my opinion, these circumstances described above indicate that it would not be appropriate for the Court to grant the applicants extensions of time so that they may argue Grounds 2, 3, 5 and 6 in their respective Notices of Appeal. As Grounds 1 and 4 do not have reasonable prospects of success, the applicants will not suffer prejudice by refusal of the grant of extensions of time to argue those Grounds.

Conclusion 53 For the reasons given above, each of the applications for an extension of time in which to commence the appeal in this Court is refused. I note again that the applicants continue to be able to bank the cheques provided to them by the respondent on 10 February 2021. 54 There is one further matter to mention. The order of the Full Bench of the SAET of 28 September 2020 seemed to reflect an understanding that the Tribunal would have jurisdiction to hear and determine that part of the appeal commenced in the Tribunal concerning the claim for unpaid long service leave. In that respect, I respectfully draw attention to the reasons in Republic of Italy v Benvenuto at [12]-[24]. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice White.

Fair Work Act 2009(Cth)ss 392, 544, 565, 570

Federal Court Rules 2011(Cth)rr 36.03, 36.05

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