Industrial Relations Commission of New South Wales in Court Session CITATION: Khouzame and Feras Karam t/as Kensington Pharmacy & Newsagency v Lynette Donovan [2005] NSWIRComm 168 APPELLANT George Khouzame & Faras Karam T/as Kensington Pharmacy & Newsagency PARTIES: RESPONDENT Lynette Donovan FILE NUMBER(S): IRC 2096 of 2005 CORAM: Boland J CATCHWORDS: Appeal - Application for leave to appeal and appeal - Decision of Chief Industrial Magistrate re underpayment of wages - Stay application - Application to extend time to appeal - Delay - Insufficient reason for delay in filing appeal - Prospects of success on appeal not high - Prospects of obtaining leave not high - Extension of time refused Cavacuiti v Toyota Motor Corporation Australia Ltd (2002) 122 IR 247 CASES CITED: Knowles v Anglican Property Church Trust (No 2) (1999) 95 IR 380 WorkCover Authority of NSW (Inspector Salmon) v Parkes Council (1996) 70 IR 298 HEARING DATES: 05/09/2005 DATE OF JUDGMENT: 05/30/2005 APPLICANT Solicitor: Mr E Khouzame Oxford Legal LEGAL REPRESENTATIVES: RESPONDENT Ms L Donovan In Person JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Boland J Monday 30 May 2005 Matter No IRC 2096 of 2005 GEORGE KHOUZAME AND FERAS KARAM T/AS KENSINGTON PHARMACY & NEWSAGENCY v LYNETTE DONOVAN Application by George Khouzame and Feras Karam t/as Kensington Pharmacy and Newsagency to extend time to appeal and leave to appeal and appeal against a decision of Chief Industrial Magistrate Miller given on 3 February 2005 and 1 April 2005 in Matter No CIM 58450/04 JUDGMENT [2005] NSWIRComm 168 1 Mr George Khouzame and Mr Feras Karam t/as Kensington Pharmacy & Newsagency ("the appellants") have applied for leave to appeal and, if leave is granted, to appeal from decisions of Chief Industrial Magistrate Miller given on 3 February 2005 and 1 April 2005 in which his Honour determined that Ms Lynette Donovan, an employee of the appellants, was properly classified as a pharmacy assistant grade 2 under the Pharmacy Assistants' (State) Award and that she had been underpaid wages. His Honour ordered that the appellant pay to Ms Donovan outstanding monies in an amount of $3,636.36 plus interest and costs. 2 The appellants have sought an extension of time to appeal and a stay of the Chief Industrial Magistrate's orders. 3 In relation to the extension of time application the appellants submitted: 1 The Chief Industrial Magistrate's decision of 3 February 2005 should be regarded as an interlocutory decision pursuant to r 45 of the Industrial Relations Commission Rules 1996 and should therefore be taken for the purposes of the appeal to have been made on the same date as the date of the CIM's final decision on 1 April 2005. 2 The time for appeal in relation to the final decision expired on 22 April 2005. 3 The appellants were not advised of the final decision until 4 April 2005. Mr Khouzame and Mr Karam work 70 to 80 hours per week. Their busy work schedule contributed to the delay in making a decision to appeal. 4 The appellants instructed their solicitors to file an appeal at approximately 2.00 pm on 22 April 2005. The appellants solicitors sought to file the appeal by facsimile by 4.00 pm on 22 April 2005 but were advised by the Industrial Registry that the documents could not be filed by way of facsimile transmission. 5 The application for leave to appeal and appeal and an application to extend time to appeal was filed on 26 April 2005. 6 The extension of time is effectively for one day. The delay is not significant. 7 The appeal has merit and there is a reasonable prospect of success 8 There is no prejudice to the respondent. 9 The need for a proper determination of the matter by allowing it to be heard on appeal is in the best interests of justice. There would be an injustice to the appellants if the extension was not granted. 4 As to the stay application, it was contended for the appellants that a failure to stay the proceedings might in practical terms render the appeal nugatory and the stay would not prejudice the respondent. 5 In Cavacuiti v Toyota Motor Corporation Australia Ltd (2002) 122 IR 247, Walton J, Vice President considered the relevant principles to be applied to an application to extend time to appeal. In doing so, his Honour referred to the Full Bench decision WorkCover Authority of NSW (Inspector Salmon) v Parkes Council (1996) 70 IR 298, which summarised the relevant principles (at 299-301) as follows: The proper approach to adopt in a consideration of the application was common ground between the parties. Reference was made in that respect to the decision of the Full Commission ( Peterson and Schmidt JJ, and Connor CC) of the former Industrial Relations Commission of New South Wales in Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3 at 5-6 as followed by the Full Commission ( Cahill VP, Maidment J and French CC) in Brookes v Watling (1995) 61 IR 163 at 166-167. In those two cases the Full Commission cited recent authorities formulating the way in which the grant of an extension of time for the filing of an appeal should be considered: see Gallo v Dawson (1990) 64 ALJR 458; Jess v Scott (1986) 12 FCR 187; and Salter Rex & Co v Ghosh [1971] 2 QB 597 at 601. From those cases, the following propositions may be drawn: (1) The grant of an extension of time is not automatic and the object of those rules which fix times for doing acts is to ensure they do not become instruments of injustice; the discretion to extend time is given for the sole purpose of enabling justice to be done between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. (2) The discretion can only be exercised in favour of an extension of time upon proof that compliance with the rules will work an injustice upon the applicant therefore which necessarily requires regard be had to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant or refusal of the application to extend time: see Avery v No 2 Public Service Appeal Board [1978] 2 NZLR 86 at 92; and Jess v Scott at 194-195. (3) An application for an extension of time in which to file an appeal always requires consideration of the prospects of the applicant succeeding in the appeal see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-264; and Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. (4) Upon the expiration of the time for appealing, the respondent has "a vested right to retain the judgment" unless the application is granted: see Vilenius v Heingar (1962) 36 ALJR 200 at 201. (5) There must be material upon which it can be satisfied that to refuse the application to extend time would constitute an injustice: see Ratnam v Cumarasamy [1965] 1 WLR 8 at 12; [1965] 3 All ER 933 at 935. (6) "The difference between two weeks and four weeks is not much (by which the time is to be extended) … We never like a litigant to suffer by the mistake of his lawyers": per Lord Denning in Ghosh at 601. In accepting the approach inherent in the above propositions, the Full Commission observed in Skelly (at 6): "The Commission's Rules require an appeal to be filed within 28 days of a decision. There is a public interest in the prompt institution and prosecution of litigation before the Commission. Indeed the Act is designed with this as a feature. It follows that a successful litigant before the Commission is generally entitled to proceed on the basis that a decision in its favour will stand, in the absence of an appeal being filed within the time prescribed. There is a discretion in the Commission to extend the time for filing an appeal. Such a discretion will not however be lightly or automatically exercised, particularly if the application is made after the time for appeal has expired. The fact that there will be no prejudice to a respondent party by an extension of time being granted is one factor which the Commission will take into account, but will not be solely determinative of the matter. In this context the cost and inconvenience of litigation not brought within the limitation period prescribed is a matter to which regard may properly be had when an application for extension of time is made. The Commission in taking all relevant matters into account must endeavour to do justice between the parties having regard to all the circumstances before it." 6 After referring to these authorities Walton J, in Cavacuiti, stated: 42 In applying those principles to this matter I note some particular points of emphasis: 1. The exercise of the Commission's discretion to extend time to appeal is not constrained by the requirement of some court rules that special circumstances be demonstrated: Brady v Kennedy t/as "Sardines" (at 264). 2. There is a wide discretion to extend time where the justice of a particular case requires that outcome: Brady v Kennedy t/as "Sardines" (at 264); Tadic v Beslic at [22]. In exercising the discretion to extend time the Commission may consider a number of factors, such as the length of delay (see Jess v Scott (1986) 12 FCR 187 (at 195); Gallo v Dawson (1990) 64 ALJR 458 (at 481); and Salter Rex & Co v Ghosh [1971] 2 QB 597 (at 601); whether any prejudice would be suffered by the respondent by reason of the granting of the extension of time (see Skelly v Prouds Jewellers Pty Ltd (1994) 53 IR 3 (at 6) and LEP International v Caine (at [57]); whether there is a reasonable explanation for the failure to file the appeal within time (see LEP International v Caine (at [50]); whether the delay was due to an error or mistake by a legal advisor (see Brady v Kennedy t/as "Sardines" (at 269) and Skelly v Prouds Jewellers (at 6) and the prospects of the appellant succeeding in the appeal (see WorkCover Authority of New South Wales (Inspector Salmon) v Parkes Council (at 299). However, the ultimate exercise of discretion is governed by the requirements of justice in a particular case. In Skelly v Prouds Jewellers it was held (at 6): "The Commission in taking all relevant matters into account must endeavour to do justice between the parties having regard to the circumstances before it." 7 The delay in this case is minimal but I note the principal reason given for the delay was the appellants' busy work schedule. That is a reason that carries very little weight. The appellants failed to take appropriate and timely action to ensure that they protected their rights with regard to a possible appeal given that they had known from 3 February that the only outstanding issue was the quantum they would be required to pay the respondent. Further, notwithstanding ready access to legal advice the appellants failed to issue instructions in relation to the appeal until the Friday afternoon when the time period for filing the appeal expired. The solicitor appearing for the appellant, Mr Khouzame, was Mr Khouzame's brother, in respect of whom there was ready access. 8 The appellants' failure to take appropriate and timely action was not attributable to any fact or circumstance beyond their control or due to other pressing commitments which prevented them from attending to the appeal. 9 As to the likelihood of success of any appeal, I note that the Chief Industrial Magistrate determined, against the submissions of the respondent, that she was employed under the Pharmacy Assistants' (State) Award and not the Shop Employees' (State) Award as claimed. His Honour found that on information supplied by the appellants to the NSW Pharmacy Guild, the Guild classified the respondent's duties as falling within the classification of pharmacy assistant grade 2. His Honour found the respondent was entitled to be classified at grade 2 throughout the period of her employment with the appellants on the basis of her prior experience as a drug company representative. 10 The respondent's claim involved not only underpayment of the wages for the relevant classification but also underpayment because the respondent was required to work for more than five hours without a meal break. The Pharmacy Assistants' Award provides in cl 8(iii) that where an employee is required to work for more than five hours without a meal break, the employee shall be paid at overtime rates until a meal break is allowed unless there is an agreement to the contrary. The respondent claimed, and his Honour apparently accepted, there was no contrary agreement. 11 The appellants submitted that his Honour erred in law in accepting that Ms Donovan was engaged at grade 2 level for the whole of her employment and that he erred in law in relation to his finding that the respondent was entitled to overtime rates under cl 8(iii) because she was engaged as a casual employee under cl 13(iii) of the Award. It was contended the casual loading of 25 per cent (for work by a casual on Sundays) displaced any obligation on an employee to pay overtime rates in the circumstances provided by cl 8(iii). 12 Whether the respondent was engaged at a grade 2 level for the period of her employment with the appellants would seem to me to be a mixed question of fact and law. In that respect, the respondent was employed by the appellants from approximately August 2002 to 5 July 2004 mainly working weekends. The Chief Industrial Magistrate described her duties as "wide and diverse" and that a lot of her time was spent as the sole employee working with the pharmacist in the store. 13 Up to June 2003 the Award defined a Pharmacy Assistant grade 2 as "an employee who performs duties and responsibilities at a higher level than a Pharmacy Assistant, Grade 1 through the acquisition of high levels of competency and skills in all front-of-shop areas" and that the grade 2 employee "will have comprehensive product knowledge acquired though the successful completion of formal structured training programmes or on-the-job instruction over a period of two years." The Award prescribed the areas of training to be undertaken. The Chief Industrial Magistrate noted in his decision on quantum that the appellants had not provided training to Ms Donovan and "as such it is trite that it should not receive a benefit for such breach." 14 In June 2003 the Award was varied to provide new work standards and classification arrangements for Pharmacy Assistants. Transitional provisions applied so that a Pharmacy Assistant, Grade 2 under the old structure was to be classified as Pharmacy Assistant Competency Level 2. An Assistant at Level 2 was one who had acquired the competencies listed in the Award for that Level and who was required by the employer to work at the Level. 15 The Chief Industrial Magistrate was aware of the appellants' contention that for part of her employment the respondent was classified as a Pharmacy Assistant, Grade 1 but it is clear that his Honour took the view on the evidence of the duties performed by the respondent during her period of engagement and the advice from the Pharmacy Guild that the respondent was entitled to be classified at Grade 2. In advising the Chief Industrial Magistrate of the advice from the Pharmacy Guild regarding Ms Donovan's classification it was open to the appellants to contend that the classification of Grade 2 did not apply for the whole period of the respondent's employment. The appellants failed to convince his Honour as to the merits of that contention. There is nothing I can see in the relevant Award provisions that applied during the period of the respondent's employment that prevented the Chief Industrial Magistrate from taking the view he did and it seems to me his finding was open to him. Accordingly, I am not convinced that the appellants' chances of success on appeal are good. 16 In relation to the appellants' contention that the casual loading paid to the respondent displaces any requirement for the employer to observe the provisions of cl 8(iii), there may be an arguable case based on the wording of cl 13(iii), which refers to the loading as compensating employees "for all incidents of their employment". But it seems to me that the provisions of cl 8(ii) are designed to discourage employers from having employees work more than 5 hours without a meal break by providing for a penalty payment if the break is not taken. I do not consider that the reference to compensation for "all incidents of employment" can be taken literally because it would deprive casuals of the right available to other employees to take meal breaks and rest breaks and to access other benefits to which one would expect they may be entitled under the Award. Taken literally, the Award in relation to casuals would mean that by paying them a loading the employer could require casual employees to work 24 hours per day without a break. 17 It does not seem to me an employer bound by the award would be entitled to require a casual employee to work without a proper break for a meal without being required to pay the prescribed penalty. It follows that I do not consider the appellants' prospects of success on this point are high. 18 A further consideration is whether the appellant is likely to be granted leave. Having regard to the principles in Knowles v Anglican Property Church Trust (No 2) (1999) 95 IR 380 I do not consider the prospects of obtaining leave are high. And I note in this respect, the sum in issue is only $3,636.36. 19 I am of the opinion that, taking all relevant matters into account and in an endeavour to do justice between the parties having regard to the circumstances, I should not grant leave to extend the time to appeal. On the basis of that conclusion it is unnecessary for me to consider the application for a stay of the Chief Industrial Magistrate's orders. 20 By order, the appellants' application to extend time to appeal is refused. _______________________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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