Rocky Holdings Pty Limited v Fair Work Ombudsman

Federal Court of Australia|2013-11-28|Before: Yates J

REASONS FOR JUDGMENT 1 The applicants apply for an extension of time within which to file a notice of appeal. The application is made under r 36.05 of the Federal Court Rules 2011 (Cth) (the FCR). The judgment from which the applicants seek to appeal was given on 4 October 2013 by the Federal Circuit Court of Australia in which declarations of contravention of, amongst other provisions, s 44 and s 45 of the Fair Work Act 2009 (Cth) (the Fair Work Act) were made and penalties were imposed: Fair Work Ombudsman v Rocky Holdings Pty Ltd & Ors [2013] FCCA 1549. 2 The first applicant, Rocky Holdings Pty Limited, and the second applicant, Ahmed Mohamed, were the first and second respondents, respectively, in the proceeding below. They admitted the contraventions alleged against them. Those contraventions related to the first applicant's employment of a disabled employee in the period 15 February 2010 to 1 February 2012. In all, three contraventions of s 44 (dealing with contraventions of the National Employment Standards) and six contraventions of s 45 (dealing with contraventions of modern awards) of the Fair Work Act were found. Contraventions of s 351(1) and s 536 of the Fair Work Act were also found, but these can be put to one side for the moment because the applicants do not challenge the imposition of separate penalties for these contraventions. Under s 550(1) of the Fair Work Act, the second applicant and another were found to be involved in each of the first applicant's contraventions. 3 The Federal Circuit Court imposed three separate penalties in respect of the s 44 contraventions and six separate penalties in respect of the s 45 contraventions on the first applicant, on the second applicant, and on the other respondent in the proceeding below. 4 The applicants contend that this was an error. They submit that, under s 557(1) of the Fair Work Act, there should only have been one penalty imposed on each of them in respect of the s 44 and s 45 contraventions, not nine penalties (the applicants' principal contention). Alternatively, they submit that, under s 557(1), only one penalty should have been imposed on each of them in respect of the s 44 contraventions (not three penalties) and only one penalty should have been imposed on each of them in respect of the s 45 contraventions (not six penalties) (the applicants' alternative contention). 5 In this connection, s 557(1) of the Fair Work Act provides: For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if: (a) the contraventions are committed by the same person; and (b) the contraventions arose out of a course of conduct by the person. 6 Section 557(2) identifies s 44(1) and s 45 of the Fair Work Act as separate "civil remedy provisions" for the purposes of s 557(1) of the Fair Work Act, amongst other provisions of the Fair Work Act. Section 536 is also a civil remedy provision. Curiously, the applicants do not say that the primary judge was in error in imposing separate penalties in respect of that contravention. Section 557(3) of the Fair Work Act has no relevant application for present purposes.

The requirement for leave 7 Save for some exceptions that are not presently relevant, an appeal lies to this Court from a judgment of the Federal Circuit Court exercising original jurisdiction under a law of the Commonwealth: s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth). Rule 36.03 of the FCR provides that a notice of appeal must be filed within 21 days after the date on which the judgment appealed from was pronounced or the order was made. 8 The applicants' notice of appeal should have been filed no later than 25 October 2013. In fact, the applicants' solicitors sought to file the notice of appeal on 1 November 2013, seven days out of time. Prior to seeking to file the notice of appeal, the solicitor acting for the applicants was advised by junior counsel that the time for filing an appeal was 28 days from the date the orders of the Federal Circuit Court were made. That advice was plainly wrong. 9 Rule 36.05 of the FCR provides, however, that application can be made for an extension of time within which to file a notice of appeal and that such an application can be made during or after the period stipulated in r 36.03. 10 In Dunlop v Fishburn (No. 3) [2012] FCA 315, Katzmann J (at [9] and [10]) said: 9 The Federal Court Rules 2011 (Cth) ("the Rules") retain the 21 day time limit for filing a notice of appeal and the discretion given to the Court in the former Rules to extend that period: r 36.03. The discretion is wide. It is constrained only by the interests of justice and the subject-matter and purpose of the legislation. Section 37M(1) of the Federal Court of Australia Act 1976 (Cth) ("FCA Act") provides that the overarching purpose of the civil procedure provisions of the Act and the Rules is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. That purpose includes the objective of disposing of all proceedings in a timely manner: FCA Act, s 37M(2). Section 37M(3) requires the Court to interpret and apply the Rules and exercise any power conferred by them in the way that best promotes the overarching purpose. Consequently, the discretion conferred by r 36.03 is to be exercised in that way. 10 The requirement in the former Rules (O 52 r 15(2)) that an applicant show "special reasons" has been removed. Despite the absence of a requirement for special reasons (which, in any event, only meant something out of the ordinary (Jess v Scott (1986) 12 FCR 187)), it seems to me that the considerations guiding the exercise of the Court's discretion set out by the Full Court in Parker v The Queen [2002] FCAFC 133 at [6] continue to apply: (a) Applications for an extension of time are not to be granted unless it is proper to do so; the legislated time limits are not to be ignored; (b) The applicant must show an "acceptable explanation for the delay"; it must be "fair and equitable in the circumstances" to extend time; (c) Other action taken by the applicant to challenge the decision is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished; (d) Any prejudice to the respondent in defending the proceedings that is caused by the delay is a material factor militating against the grant of an extension but the mere absence of prejudice will not justify the grant of an extension; (e) The merits of the appeal are to be taken into account. 11 In Ludowyk v Superannuation Complaints Tribunal [2013] FCA 1153, Griffiths J (at [25]) said: 25 For current purposes, the following matters are potentially relevant to the exercise or otherwise of the discretion under r 36.05. First, there is no requirement for the applicant to show any special circumstance, but the Court must be satisfied that it is proper to extend time. Prima facie, cases started outside the stipulated time period will not be accommodated. Secondly, the applicant must provide an adequate explanation for the delay. Thirdly, while prejudice to the respondent is a material factor weighing against an extension of time, the absence of such prejudice, as is the case here, is not enough to warrant the grant of an extension of time. Fourthly, and perhaps most significantly in the context of this case, the merits of the substantive application are a relevant consideration, while noting that some caution may be required, in particular cases, in assessing those merits at the interlocutory stage, particularly where questions of fact are involved. 12 Here, the respondent to the present application accepts that the applicants' delay was due to the error to which I have referred. The respondent does not suggest that prejudice will be caused to it by reason of the delay in filing the applicants' notice of appeal. The respondent submits, however, that the application to extend time should be refused because the applicants' case concerning the proper construction of s 557(1) of the Fair Work Act, which would be the essential focus of the appeal they seek to bring, is weak, particularly having regard to certain authorities to which I will make further reference.

The decision below 13 In the decision below, the primary judge noted (at [10]) that the proper construction of s 557 of the Fair Work Act in relation to the course of conduct engaged in by the first applicant was the significant point in contention between the parties. Her Honour noted (at [12]) that it was common ground that the contraventions arose out of "a course of conduct" engaged in by the first applicant. Her Honour identified (at [13]) the applicants' contention that, given that all the contraventions were committed by the first applicant in "a course of conduct" by the first applicant, all the contraventions should be taken to constitute a single contravention. At [15], her Honour said: 15. The respondents contend that a proper construction of s.557 of the FWA has the effect that each of the contraventions of ss.44, 45, 536(1), and 536(2) of the FWA are to be taken to constitute a single contravention where they are committed by the same person, in this case the first respondent, and arise from a course of conduct by the first respondent. 14 Her Honour rejected that contention. The applicants say that her Honour was in error in so deciding. This constitutes the first ground of appeal in the draft notice of appeal and reflects the applicants' principal contention. 15 The applicants also say that her Honour failed to address the applicants' alternative contention, which had been advanced at the hearing below. The applicants say that, although having failed to deal with their alternative contention, the primary judge nevertheless said (at [20]) when dealing with the applicants' principal contention: 20. I am not persuaded by the submissions of the respondents in relation to the proper construction of s.557 of the FWA. I am satisfied that the language is clear on its face. Moreover, I am satisfied that "two or more contraventions of a civil remedy provision referred to in subsection 2" is intended to refer to two or more contraventions of each of "the civil remedy provisions" identified in s.557(2) of the FWA relevant to the admitted contraventions by the first respondent and referred to above. 16 The applicants submit that the construction of s 557(1) of the Fair Work Act adopted by the primary judge in this passage should be read as marking an acceptance of the applicants' alternative contention, although that acceptance was not apparently appreciated by the primary judge at the time. The applicants submit that, having arrived at this particular construction of s 557(1), the primary judge thereafter failed to give expression to it, by imposing three separate penalties for the s 44 contraventions and six separate penalties for the s 45 contraventions. These submissions underpin the second ground of appeal in the draft notice of appeal. 17 Finally, the applicants submit that the primary judge failed to give adequate reasons for adopting the construction of s 557(1) of the Fair Work Act which her Honour actually applied. This constitutes the third ground of appeal in the draft notice of appeal.

The submissions 18 As noted, the applicants' principal contention is that, properly applied, the effect of s 557(1) of the Fair Work Act is that, if two or more contraventions are found in s 557(2), they are to be treated as a single contravention. The applicants submit: … The section is focused on contraventions being "grouped" not as having offending acts being grouped around contraventions. 19 The applicants submit that "there is nothing repugnant" in collapsing a number of contraventions into a single contravention, when it is realised that s 557(1) will only apply when the contraventions are committed by the same person and arise out of a course of conduct by that person. 20 The applicants argue that the position under s 557(1) of the Fair Work Act is to be contrasted with the predecessor provision in s 178 of the Industrial Relations Act 1988 (Cth) (the Industrial Relations Act). 21 Section 178 of the Industrial Relations Act relevantly provided: (1) … where an organisation or person bound by an award or an order of the Commission breaches a term of the award or order, a penalty may be imposed by the Court or, except in the case of a breach of a bans clause, by a court of competent jurisdiction. (2) Subject to subsection (3), where: (a) 2 or more breaches of a term of an award or order are committed by the same organisation or person; and (b) the breaches arose out of a course of conduct by the organisation or person; the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term. 22 The applicants point to what they say is the "markedly different" wording of s 178 of the Industrial Relations Act with its focus on breaches of a term of an award or order. 23 The difficulty confronting acceptance of the applicants' principal contention is that the construction of s 557(1) on which it is based has been twice rejected in this Court. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (No 2) [2010] FCA 652, Logan J considered the penalties to be imposed where one respondent had contravened 12 transitional instruments (industrial agreements) to which it was a party, the second respondent had contravened seven such instruments, and the third respondent had contravened one such instrument. The respondents argued that s 557(1) operated so that each should be taken as having engaged in only one contravention: see at [8]. 24 In rejecting that operation of s 557(1) of the Fair Work Act, Logan J (at [16]-[20]) said: 16 In my view, the course of conduct must be associated with the particularised term of the particularised instrument. That is the contravention of the term of the transitional instrument. One does not look at course of conduct for the purposes of s 557 at a level of abstraction divorced from the contravened provision as particularised (ie the term in question and the transitional instrument in question). 17 Were s 557 to be read at the level of abstraction for which the QR respondents contend (in other words, the same provision, just looking at item 2(2) in its generality, a provision which is applicable to different terms in different instruments in particular cases) the result would be that different terms in different instruments, or different terms in the same instrument perhaps embracing quite different forms of conduct would all be assimilated as one. Each would just be a civil remedy provision. If the overall conduct gave rise to breaches of different terms, they would be treated as but one contravention. 18 That seems an odd result to me. 19 Especially that is so in light of s 557(3). That renders the otherwise beneficial effects of s 557 inapplicable if a penalty has already been imposed for a breach of a civil remedy provision. On the construction for which the QR respondents contend, if a person had contravened item 2(2) in respect of a term quite unrelated to consultation and in but one of the applicable transitional instruments, that person would be denied the beneficial effects of s 557(1). That seems to me to be a result contrary to the intendment of the provision concerned. 20 I note that like considerations would apply in respect of s 45 of the Fair Work Act in relation to terms of modern awards and in respect of s 50 of that Act in relation to terms of enterprise agreements. Again, it would seem an odd result to assimilate the outcomes of different terms in awards or enterprise agreements, one with another. In short then, the submissions of the QR respondents, as to the construction of s 557, would be subversive of the intendment of that provision, in my opinion. 25 His Honour reasoned that the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) provided some assistance in confirming the operation of s 557(1) which his Honour had found. His Honour said (at [25]): 25 There is no hint in the explanatory memorandum of any intention on the part of Parliament to cause any break with the past in relation to the operation of the course of conduct provision, s 557 in the Fair Work Act. Of course, it may be just that such a break occurred inadvertently. In this case, though, I doubt that there is any break with the past. One might have expected, given the age of course of conduct provisions, if there were to have been an intended break with the past, for there to have been express reference to that in the explanatory memorandum. One may trace the course of conduct provisions back to the insertion of s 119 (1A) into the Conciliation and Arbitration Act 1904 (Cth) (Conciliation and Arbitration Act) in 1970. 26 His Honour made specific reference to cases arising under s 178 of the Industrial Relations Act, particularly the observations of Gray J in Gibbs v The Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216 at 223. His Honour also referred to decisions arising under s 719 of the Workplace Relations Act 1996 (Cth), in particular, Kelly v Fitzpatrick (2007) 166 IR 14 and Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357. In that connection, his Honour said (at [28]): 28 … The language of that Act in s 719, and the reference therein to "applicable provision" (as to which, see s 718) is very similar to s 557, s 546 and s 539 of the Fair Work Act. Tracey J in Kelly v Fitzpatrick and Gray J in Plancor v LHMU were each well aware of the differences in language as between s 719 and earlier course of conduct provisions, yet each regarded the approach to construction of those provisions as relevantly a continuum. So do I, in relation to the present s 557 of the Fair Work Act. 27 On appeal, in QR Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142, Keane CJ and Marshall J at [47]-[48] (Gray J agreeing at [67]) said: 47 It seems to us, as it seemed to the primary judge, that the difficulty with the appellants' argument is that item 2(2) provides: "A person must not contravene a term of an agreement based transitional instrument that applies to the person". The note to item 2(2) states that it is a civil remedy provision. 48 There may be one course of conduct in respect of each agreement associated with the relevant term of each of many agreements. There are, for the purposes of s 557(1), contraventions of multiple terms of multiple agreements. Accordingly, s 557(1) does not avail the appellants. 28 Recently, in Murrihy v Betezy.com.au Pty Ltd (No 2) [2013] FCA 1146, Jessup J considered the question of penalties in relation to two contraventions of s 323(1) and one contravention of s 536(1) of the Fair Work Act, amongst other contraventions. Sections 323(1) and 536(1) are each civil remedy provisions. In that case, the respondents submitted that s 557(1) produced the result that there was only one contravention by each of them (aside from contraventions of other provisions not captured within the legislation as civil remedy provisions). His Honour (at [33]) said: 33 … I do not accept that submission. Section 557(1) refers to "2 or more contraventions of a civil remedy provision" [emphasis added]. … In this context, I take the view that the reference to a civil remedy provision in the singular was a conscious, specific, one. The section should not, in my view, be given a broader operation than that for which the legislature expressly provided. The outer limits, therefore, of the operation of s 557 in the present case are set by the statutory provisions under which the various contraventions arose. … 29 It is to be noted that the decisions in QR and Murrihy dealt only with the applicants' principal contention. These decisions did not deal, in terms, with the applicants' alternative contention. As I have noted, the applicants contend that the primary judge also did not deal with this contention, at least explicitly. 30 For its part, the respondent submits that, although the earlier decisions of this Court to which I have referred did not deal with the applicants' alternative contention, the reasoning, particularly in QR at first instance and on appeal, would support a rejection of that construction. The respondent submits that, given that the operation of s 557(1) has been given recent judicial consideration - certainly adverse to the principal contention advanced by the applicants - their case is weak and would not warrant the granting of an extension of time. 31 In response, the applicants submit that, if time is extended, they would seek to argue, possibly before a Full Court, that the decisions in QR and Murrihy are wrong and that, to the extent that the Full Court's decision in QR might stand as a rejection of their alternative contention, that decision should not be followed.

Consideration 32 Although there are significant obstacles in their path, particularly in relation to an acceptance of their principal contention, I am not persuaded that extending time to appeal would result in an appeal that would be hopeless. For example, the applicants' alternative contention, reflected in ground 2 of their draft notice of appeal, has not been specifically addressed. It seems to me that that construction is certainly open to be argued. It was not explicitly addressed by the primary judge. I would also accept that, on one reading of [20] of the primary judge's reasons, her Honour appeared to accept the substance of the applicants' alternative construction of s 557(1) of the Fair Work Act, although her Honour did not give effect to that construction. It may well be that the reasoning in QR both at first instance and on appeal, and perhaps the reasoning in Murrihy, applies to defeat the applicants' alternative contention. That, however, is not a matter for me to decide at the present time. It seems to me that, if time is extended, the resulting appeal would be advanced on genuine grounds and proceed on arguments that reasonably can be put. 33 In these circumstances, it does not appear to me to be an appropriate exercise of discretion to refuse the application to extend time when regard is had to the reason why the applicants' notice of appeal was not filed within time, the short period of resulting delay, and the lack of prejudice suffered by the present respondent. In that last connection, I accept that a lack of prejudice is not a reason, itself, for extending time. Nevertheless, a lack of prejudice is a relevant consideration to be taken into account. 34 I have given consideration to whether, in extending time, leave should only be granted to file a notice of appeal raising the applicants' alternative contention. I have decided that leave should not be limited in that way. The central question will be the proper construction of s 557(1) of the Fair Work Act and the better course, in my view, is to permit the applicants the freedom to develop their arguments having regard to their principal contention and their alternative contention (that is, grounds 1 and 2 of the draft notice of appeal). Ground 3 of the draft notice of appeal really seeks to attack the primary judge's reasoning, or at least the sufficiency of that reasoning, on the question of the construction of s 557(1). The considerations informing that proposed ground of appeal seem to me to be inseparable from the matters proposed to be raised by grounds 1 and 2 of the draft notice of appeal.

Disposition 35 In the circumstances, I propose to extend the time in which the applicants can file their notice of appeal until 4.00 pm on 29 November 2013. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.

Industrial Relations Act 1988(Cth)

Conciliation and Arbitration Act 1904(Cth)

Workplace Relations Act 1996(Cth)

Fair Work Act 2009(Cth)ss 44, 45, 536, 550, 557

Federal Court Rules 2011(Cth)rr 36.03, 36.05

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