Industrial Relations Commission New South Wales Medium Neutral Citation: Notaras v Knight [2012] NSWIRComm 69 Hearing dates: 28 May 2012; 12 June 2012; 22 June 2012 Decision date: 04 July 2012 Jurisdiction: Industrial Court of NSW Before: Walton J, Vice President, Haylen J Backman J Decision: (a)leave to appeal on all grounds is refused; (b)the stay of the orders of his Honour the Chief Industrial Magistrate Hart is dissolved. (c)the amount of $36,709.15 paid into Court is released to the respondent or her authorised representative; (d)the applicant for leave to appeal is to pay the appeal costs of the respondent as agreed or assessed but excluding the costs orders of the President where the parties have reached an agreement. Catchwords: APPEAL - Industrial Relations Act 1996 - s 197, s 365 - claims of underpayment of award provisions and breach of Long Service Leave Act 1995 - alleged denial of procedural fairness in refusing adjournment - decision and orders made by CIM reasonably open on evidence - leave to appeal refused Legislation Cited: Entertainment and Broadcasting Industry - Cinema (State) Award Fair Work (Transitional and Consequential Amendments) Act 2009 Fair Work Act 2009 Industrial Relations Acts 1996 Long Service Leave Act 1955 The Broadcasting and Recorded Entertainment Award 2010 Cases Cited: Federated Clerks Union of Australia WA Branch v Cary (1977) WAIG 585. Merchant Service Guild of Australia v J Fenwich and Co Pty Ltd (1973) LB Current Review 5 Stead v State Government Insurance Office (1986) 161 CLR 141 Ware v O'Donnell Griffin (Television Services) Pty Ltd [1971] AR (NSW) 18 Category: Principal judgment Parties: Irene Notaras (Appellant) Stephanie Knight (Respondent) Representation: C Magee of counsel (Appellant) Ms K Nomchong of counsel (Respondent) Segal & Associates, Solicitors (Appellant) File Number(s): IRC 1725 of 2011 Decision under appeal Citation: Stephanie Knight v Irene Notaras Before: Chief Industrial Magistrate File Number(s): CIM 88537 of 2008 Judgment BACKGROUND 1The appellant, Ms Notaras, seeks leave to appeal and if leave be granted, seeks to appeal against decisions of the Chief Industrial Magistrate arising from an application for recovery of award entitlements pursuant to the provisions of s 365 of the Industrial Relations Act 1996 ("the Act"). 2The relevant facts can be shortly stated. Ms Notaras operated a small regional theatre trading as The Saraton Theatre in Grafton ("the cinema"). The respondent, Ms Knight, was employed to work in the cinema and did so between September 1995 to December 2005. Ms Knight's work was covered by the provisions of the Entertainment and Broadcasting Industry - Cinema (State) Award ("the award). 3Ms Knight alleged a number of underpayments of her award entitlements in proceedings before the Chief Industrial Magistrate, succeeding in a number of respects but also failing in a small number of matters. A major issue before his Honour, Magistrate Hart, was the proper classification of Ms Knight's work under the award. At all relevant times Ms Knight had been employed as a level 1 cinema worker ("CWI") but claimed the nature of her work and the scope of her duties brought her within the higher award classification of cinema worker, level 3 (CW3). His Honour concluded that, having regard to the evidence before him, Ms Knight was properly classified as a CW3 and therefore had been underpaid. His Honour also determined that pursuant to cl 22 of the award, on days when Ms Knight worked for three hours in the morning, ceased work and then resumed work later in the day for a further three hours, this was a broken shift and required a 10-hour break between shifts and if the breaks were not given, the award provided for the payment of certain penalties. 4Apart from these two award matters there were two further issues that were sought to be raised on appeal. The first issue regarded Ms Knight's entitlement to long service leave having regard to the fact that, during her seventh year of employment, she had resigned but shortly thereafter had been re-employed. Before his Honour it was argued for Ms Notaras that the act of resignation broke the continuity of Ms Knight's employment and therefore disentitled her to long service leave under the provisions of the Long Service Leave Act 1955. His Honour held that the evidence disclosed that Ms Knight had become upset with the scrutiny of her duties undertaken by a friend of Ms Notaras who visited the cinema and observed Ms Knight working. That person was not an employee of the cinema and had no employment relationship with Ms Knight. His Honour accepted that the evidence established that after Ms Knight resigned in frustration at this level of outside scrutiny, Ms Notaras contacted her and asked her to resume employment in circumstances where outside scrutiny of her work would cease. Ms Knight agreed to this suggestion and resumed duties, missing approximately two or three sessions at the cinema. 5His Honour found that the effect of this agreement was that the resignation was withdrawn and Ms Knight resumed her normal duties but did not do so under a new contract of employment and did not lose any continuity of her employment: she was not paid out any entitlements that had accrued, there was no new contract entered into and that there was no other indication in the administration of the cinema to support a finding that the employment had been treated as broken rather than continuous on the resumption of her duties in the cinema. 6The last matter sought to be raised on appeal was that, by refusing an adjournment to Ms Notaras two or three days before the hearing was to commence, his Honour had denied Ms Notaras procedural fairness and had prevented her from filing and relying on evidence that would have assisted her case against Ms Knight's claims. 7On the application for leave to appeal it was submitted for Ms Knight that since the matter had been determined by his Honour, the Chief Industrial Magistrate, the state award had ceased to exist and had been replaced in July 2011 by a new and expanded Federal award entitled The Broadcasting and Recorded Entertainment Award 2010. This new, modern Federal award made by Fair Work Australia covered a number of categories of work besides that of cinema workers and included the work of television and radio broadcasting, journalism, acting, musicians and motion picture production. In recognition of this wider coverage of the Federal award a new wage structure appeared in the award although the classifications of CW1, CW2 and CW3 as found in the previous State award, continued. 8It was submitted for Ms Notaras that leave should be granted in relation to all of these grounds for the following reasons: (a)the appeal raised important questions as to the interpretation of the classification clause of the State award and the work required before an entitlement to the rate of CW3 arose. In addition, there was a conflict between the present Chief Industrial Magistrate and the previous Chief Industrial Magistrate in relation to the same clause where previously it was held that each indicative task outlined in the award had to be performed before an entitlement to the award rate of CW3 arose. It was also pointed out that the same classification structure of CW1, CW2 and CW3 remained in the new modern Federal award and the determination of the issue would be significant in providing guidance to the operators of small rural and regional cinemas as to the proper classification of their work under the new Federal award; (b)the proper interpretation of cl 22 of the award dealing with penalties for broken shifts had particular importance as to how the same clause or similar provision in the new modern Federal award would be interpreted. Again, it was submitted that the determination of this issue would be significant in providing guidance to the operators of small rural and regional cinemas; (c)the issue concerning the Long Service Leave Act claim raised a general issue of the approach to adopt in determining whether there was a real and effective cessation of employment such as to amount to a break in continuity of service for the purposes of qualifying for benefits under the Long Service Leave Act; (d)the failure to grant an adjournment and allow the later filing of evidence raised important questions as to the principles applicable in such circumstances, especially where costs were an adequate remedy to any delay or inconvenience. A QUESTION OF JURISDICTION RAISED 9At the commencement of the hearing the Full Court raised with the parties the question of its jurisdiction to hear the appeal having regard to the fact that the State award had been terminated and that the current award was a modern Federal award, following the 2010 transfer of the industrial jurisdiction from the State to the Commonwealth. Of particular concern to the Full Court was the reach of s 26 of the Fair Work Act 2009 and the apparent clear expression that the Fair Work Act was to apply to the exclusion of all States and Territory industrial laws insofar as they would otherwise apply in relation to a national system employee or employer. Further, item 60(4) of Sch 3A of the Fair Work (Transitional and Consequential Amendments) Act 2009 appeared to preserve only "proceedings" that had commenced before the referral of power. A significant question therefore arises as to whether the proceedings in this Court (filed and commenced after the referral of power) were preserved or whether such appeal rights as existed were to be taken in the Federal jurisdiction. 10At the hearing both parties addressed the issue of jurisdiction, in short form, with both adopting the view that the Court had jurisdiction to deal with the appeal although the position of the respondent was somewhat equivocal. At the request of the Court further detailed submissions were requested: those submissions continued in the vein of the earlier submissions. Unfortunately, the issue remains one of considerable complexity, especially having regard to the numerous provisions of the Fair Work Acts that may be relevant to a determination of the question. 11It is in those circumstances and the fact that the Long Service Leave Act claim it is within State jurisdiction that the Court has decided to accept the arguments for the parties and to treat proceed on the basis that these applications are within jurisdiction. In adopting this approach the Court has formed a firm view as to the disposition of the applications. That view, in a practical sense, renders it unnecessary for the Court to determine the complex issue of the circumstances in which appeals from the Chief Industrial Magistrate may continue to be heard in this jurisdiction. LEAVE TO APPEAL CONSIDERED 12The arguments on the question of the granting of leave to appeal were fully articulated in extensive written submissions augmented by oral submissions on the hearing of the application. Having regard to the cessation of the State award and the context in which the classifications and broken shift provisions now appear in the greatly expanded Federal award, the Court is unable to conclude that the two award provisions sought to be contested raise issues of such significance that, in the public interest, leave to appeal should be granted. Having regard to the primacy of the Federal award it is undesirable to attempt to use the present proceedings in relation to a redundant State award to seek to give guidance or control over similar previsions appearing in a very different context in the modern Federal award. In addition, the approach adopted by his Honour, the Chief Industrial Magistrate, appeared open to him on the evidence. 13In relation to the CW3 classification his Honour noted the detailed evidence of the parties but appears to have embraced in substance (without direct reference) the principle of the major and substantial nature of those duties to determine that Ms Knight's work fell within CW3. Counsel for the appellant accepted that the "major and substantial" test was appropriate to apply in the context of determining which award classification applied to the work of an employee covered by the award. In industrial matters the test has been used to determine award coverage where there are contesting awards but has also been used in a wider context in resolving demarcation disputes, for example. The scope of the "major and substantial" test was set out by Sheldon J in Ware v O'Donnell Griffin (Television Services) Pty Ltd [1971] AR (NSW) 18 at 19 where, in relation to the principle, his Honour stated: It seems to me that this is clearly a case to which this principle is applicable. This principle is almost as old as industrial arbitration and it makes a practical approach to determining the application of awards where duties are of a mixed character and contain elements which if taken alone would be covered by more than one award. This is not an appropriate occasion on which to discuss the method by which this test should be applied except to say that it is not merely a matter of quantifying the time spent on the various elements of work performed by a complainant: the quality of the different types of work done is also a relevant consideration. 14A similar approach had previously been adopted in Federated Clerks Union of Australia WA Branch v Cary (1977) WAIG 585. At 586 the following appears: Of course one has regard to the substantial nature of the employment in terms of the purpose to be achieved by it, the question being, I think, very much controlled by the difference, which is not always accepted by philosophers but which serves the purposes of practical men, between ends and means. If in substance the worker's job is to write and the job is done when the writing has been done, he is a clerk, but if in substance the writing done by the worker is but a step taken in the doing by him of something extending beyond it then he is not. The "substance" of work identifies the question as being one of degree and it indicates the answer to it will be, or may be, very much the product of a value judgement. 15Similarly, in Merchant Service Guild of Australia v J Fenwich and Co Pty Ltd (1973) LB Current Review 5, Ludeke J, speaking in the Commonwealth Conciliation and Arbitration Commissioner stated a p 6: In my opinion, not only the nature of the work done by the class of employee be examined but is equally relevant to consider the circumstances in which they are employed to do the work; if a worker is required by the employer to carry out diverse duties, the enquiry should be directed to ascertain the principal purpose for which the worker is employed. The application of the "major and substantial" principle, therefore, requires an assessment to be made of the substance of the position. Thus, if the substance of the position is a CW3 then that is the rate that should be paid to such an employee. 16The broad picture presented by his Honour's judgment shows that, while receiving directions from Ms Notaras, in effect Ms Knight was running the cinema when she was on duty, performing all that that was necessary at the time to keep the cinema running. That included the banking, calculating wage rates and recording hours of work, assisting with promotions as well as doing a number of tasks that might have been performed at CW1 and CW2 level. The overall impression conveyed the evidence was that Ms Knight did whatever was necessary at all times to keep the cinema operational from the most menial tasks to quite important and significant tasks that would not be appropriate for a CW1 or a CW2 employee. In substance, her work was that of a CW3. In the circumstances of this case this approach renders nugatory the argument for the appellant that all the duties of a CW3 had to be undertaken in order to qualify for that rate. This aspect of the case was heavily relied upon to warrant the grant of leave, however, no such question of significance arises. 17The decision of his Honour, Magistrate Hart, to refuse an adjournment of the hearing occurred against a background of repeated failures by Ms Notaras and her legal representatives to comply with timetables for the filing of evidence. The hearing dates for 8, 9 and 10 December 2008 were set at a mention before his Honour on 12 August 2008. That time was chosen to accommodate Ms Notaras' travel arrangements for December 2008 and her concern that she should be required to participate in the hearing under the disability of jet lag. A timetable was set for the filing of evidence by both parties. Because of her hearing disability his Honour sat at the Bar Table with the parties and ensured that Ms Notaras fully understood the steps in the timetable, including the hearing dates. She was instructed to make sure that she informed her legal representatives of the timetable for the hearing. 18The time for the filing of Ms Notaras' evidence passed without any document being filed or served. There was some evidence that Ms Notaras' legal advisors were of the opinion that nothing was needed for the December 2008 hearing because of related proceedings in this Court: there was, however, no stay of the December 2008 hearing dates and no reasonable basis for the legal advisors to conclude that the December 2008 hearing could not proceed. In early October and early November 2008, Ms Knight's representatives wrote to solicitors acting for Ms Notaras pointing out that they had not complied with the timetable for filing evidence and no reply was received. On 19 November 2008 solicitors for Ms Notaras sent a facsimile to his Honour requesting that the hearing dates be vacated. That application was dealt with on 28 November 2008 where his Honour refused to vacate the hearing dates. Again, nothing had been filed in Ms Notaras' case when the December hearing dates arrived. 19The further adjournment application was dealt with by his Honour on 4 December 2008 with the following Monday, 8 December 2008 being the first hearing day. It was accepted on behalf of Ms Notaras that many of the problems with her case were of her own making although there were suggestions that documents had not been dealt with by her solicitors then engaged. It was submitted that Ms Notaras was not in a position to put on any affidavit by the hearing date and the situation could be met by a costs order with Ms Notaras willing to provide $15,000 towards costs thrown away by the adjournment. The evidence before his Honour was that, as late as the previous day, requests had been made of the solicitors then acting for Ms Notaras as to whether Ms Knight's witnesses would be required for cross-examination and was informed that they would all be required. On that basis arrangements had been made for airline flights and accommodation bookings. There was also evidence of Ms Notaras' failure to pay previous costs orders and therefore there was real concern that the offer by Ms Notaras to pay costs thrown away may ultimately be of little comfort. 20His Honour concluded that it would be inappropriate to grant the adjournment although he invited the parties to continue discussions so that if, by the first day of the hearing, there was an application to vacate the proceedings by consent, he would be happy to do so but not otherwise. He had formed the view that in the interests of justice the matter should not be adjourned again. His Honour pointed out that the conduct of Ms Notaras was not "a single isolated event" giving rise to the adjournment application but had been in the context in which the proceedings appeared to have been conducted over some time. It appeared that, on the material placed before his Honour by Ms Notaras, her previous solicitor adopted a "cavalier attitude" to directions of the court that was bordering on contempt. Ms Notaras had been personally very closely involved in the matter and had experience appearing for herself in proceedings. The case was able to proceed on the first and following hearing days when Ms Knight's case would be presented first. Importantly, his Honour held that Ms Notaras had not at any stage developed a response to the claim that indicated an intention to meet the merits of the case. Instead, the court had been faced with one step after another "apparently calculated to cause delay. Whether that strategy has arisen from Ms Notaras herself or from Mr Naggs, I am not in a position to say. However, it has caused a considerable delay and it has caused this matter to be adjourned previously and I do not propose to adjourn it again." 21When the matter commenced on the first hearing day, as scheduled, the parties were able to inform his Honour that despite Ms Notaras not having filed any affidavits in accordance with the timetable, Ms Knight would not object to affidavits used in related proceedings being tendered again for the purpose of the current proceedings and that course was followed. His Honour noted, when informed of that agreement, that he was pleased they were able to overcome the difficulties raised in the adjournment application. Ms Notaras' legal representatives, however, did not inform his Honour that the denial of the adjournment still left the respondent in a position where she would be denied procedural fairness. Importantly, the matter was able to proceed on the basis of an Agreed Statement of Facts. 22On appeal there was no material before the Court to indicate the nature of the evidence that could be brought forward for Ms Notaras that might now throw doubt on the findings made his Honour. The argument was a bare argument of a denial of procedural fairness with no indication given during the hearing as to what other material would assist Ms Notaras' case having regard to the cross-examination of Ms Knight and the scrutiny of her duties. It also has to be remembered that Ms Notaras was not present on a regular basis at the cinema to observe what duties were performed by Ms Knight and that the majority of Ms Notaras' directions regarding duties were made by telephone from Sydney. Having regard to all those factors the Court cannot conclude that Ms Notaras was denied procedural fairness when his Honour refused the second adjournment application following a time table being set some months earlier for the filing and serving of evidence in the proceedings. The Court accepts the argument for Ms Knight that Ms Notaras had failed to identify evidence that would have made a difference to the outcome thus rendering a re-hearing futile. (see Stead v State Government Insurance Office (1986) 161 CLR 141 at 145). 23In further written submissions the respondent requests this Court to award her costs of the appeal and to assess the level of those costs. This request appears to arise from difficulties said to be experienced by the respondent in obtaining her costs in a timely manner in related proceedings. While the Court expects costs orders to be promptly complied with, it is potentially inefficient and inappropriate for the Full Court to be drawn into the minutia of such an open-ended exercise. The Court will therefore make the usual order for the applicant to pay the costs of the respondent. The costs order shall not encompass the costs ordered by the President where it is understood the parties have reached an agreement. ORDERS 24The Court makes the following orders: (a)leave to appeal on all grounds is refused; (b)the stay of the orders of his Honour the Chief Industrial Magistrate Hart is dissolved. (c)the amount of $36,709.15 paid into Court is released to the respondent or her authorised representative; (d)the applicant for leave to appeal is to pay the appeal costs of the respondent as agreed or assessed but excluding the costs orders of the President where the parties have reached an agreement. ********* Amendments 05 July 2012 - Against the category 'Decision' at (c) the amount of "$36,709.50" amended to now read as "$36,709.15". Amended paragraphs: Coversheet 05 July 2012 - The amount of "$36,709.50" amended to now read as "$36,709.15" Amended paragraphs: 24 (c) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 July 2012