FEDERAL COURT OF AUSTRALIA

Shahin Enterprises Pty Ltd v Mathew [2020] FCAFC 57

ORDERS

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    The South Australian Employment Tribunal (SAET) sitting as the South Australian Employment Court (the SAEC) declared that the appellant (Shahin) had contravened s 323 of the Fair Work Act 2009 (Cth) (the FW Act) by underpaying one of its employees (Mr Mathew) in three respects. Subsequently, the SAEC, constituted by Lieschke DP, made orders that Shahin pay Mr Mathew the aggregate amount of the underpayments ($2,341.81) together with interest of $322. The Deputy President reserved for future consideration the question of whether any penalty should be imposed on Shahin by reason of its contraventions of s 323 constituted by the underpayments.

2    Shahin now appeals to this Court, pursuant to s 565(1) of the FW Act, against the judgment.

3    Although Mr Mathew is the respondent to the appeal, it is convenient in these reasons to continue to refer to him by his designation at trial, that is, as “the applicant”.

Factual setting

4    Most of the circumstances giving rise to the appeal were not in issue.

5    Shahin conducts a number of petrol station and convenience store businesses in South Australia known as “On The Run” or “OTR”.

6    Between 17 November 2015 and 4 December 2016, the applicant was employed by Shahin at its On The Run business at Fulham Gardens in suburban Adelaide. He was employed as a permanent part-time console operator, working 25 hours each week. Mostly he worked the midnight to 7 am shift but, on Fridays, he worked the shift commencing at 7 am. Although he was classified as a “trainee”, on the midnight to 7 am shift, he worked alone for the greater part of the shift. His duties included obtaining the payment for petrol sales, attending to the sale of products sold in the convenience store, replacing and replenishing stock, making coffees, keeping the store clean, and monitoring the activities of those who came into the store.

7    On the first three days of his employment in November 2015, the applicant underwent induction and training at Shahin’s head office.

8    After completing the induction, the applicant started at the Fulham Gardens premises. During his first three days there, he was allocated for the full shift to a “buddy”, namely, another team member to be shown what was required of him.

9    The trial in the SAEC proceeded on the basis that an undated document entitled “Shahin Enterprises Pty Ltd Employee Collective Agreement” (the Collective Agreement), which Lieschke DP described as “a recognised Work Choices instrument”, governed the applicant’s employment. It was also common ground in the SAEC that the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the Consequential Amendments Act) had the effect that the Collective Agreement could be enforced under the provisions of the FW Act. See Sch 3, Item 2 and Item 34 in the Consequential Amendments Act.

10    In his amended application to the SAEC, the applicant claimed that he had been required to be at work 15 minutes before the scheduled start time for each shift and that, during that 15 minute period, he had engaged in work, including handover activities with the employee who was completing his or her shift. His claim for payment with respect to that 15 minute period formed the first part of his claim in the SAEC.

11    Secondly, the applicant claimed an entitlement with respect to meal breaks. The Collective Agreement contained a provision of an unusual kind concerning meal breaks, namely:

[4.1.4]    The above ordinary hours are exclusive of any unpaid half hour meal breaks for (sic) which you are entitled to take where you work a shift portion in excess of six (6) hours. Where you are the sole employee on duty in a shop you will be required to take any meal break on the premises and interrupt your meal break to serve customers. Such time spent serving customers will count as time worked.

12    The applicant’s pleaded claim was that he had been directed to take the meal breaks while standing at the counter in the On the Run shop, ready to serve customers at any time, with the consequence that the meal breaks were not breaks in any real sense, and not of the kind envisaged by cl 4.1.4. Nevertheless, he had not been paid for the 30 minutes attributed to a meal break for all the shifts he had worked exceeding six hours. He sought payment with respect to each 30 minute period.

13    At the hearing in the SAEC, the applicant’s then counsel articulated his claim with respect to the meal break in alternatives. The first was the applicant’s pleaded claim. The second was that the applicant had not had meal breaks at all. The Deputy President upheld the claim on the basis of the second of these alternatives. On the hearing of the appeal, Shahin contended that it had been denied procedural fairness in the way the alternative claim had been presented.

14    The applicant’s third claim at trial concerned the overtime he had worked in the week commencing 25 January 2016. He claimed that he should have been paid the “50% loading” for the hours worked in that week which exceeded 38. He had not been paid any loading. The applicant claimed a total of $67.13, being 50% of $19.18 (his then applicable hourly rate) for each of the seven hours exceeding 38.

15    In this respect, the applicant relied upon cl 4.2 of the Collective Agreement which provided:

[4.2]    Overtime

An Employee may be required to work reasonable additional hours outside of the 38 ordinary hours per week from time to time. Hours worked at Our requirement in excess of the ordinary hours shown in [cl] 4.1 will be paid at the appropriate Australian Pay and Classification Scale for the classification You are employed at with a loading of 50%. An Employee will not be required to work more than three (3) reasonable additional hours per shift.

16    Shahin relied on the clause which immediately followed, concerning an employee working “voluntary overtime”. It provided:

[4.2.1]    Voluntary Overtime

This Agreement offers Employee’s (sic) a choice to work Voluntary Overtime.

[4.2.1.1]    “Voluntary Overtime” means overtime worked arising from an Employee’s voluntary overtime request at subclause 4.2.1.3. Voluntary Overtime can be provided if the Employee genuinely requests to work these hours at Their Ordinary Rate of pay.

[4.2.1.2]    There is no obligation on an Employee to work Voluntary Overtime, it is entirely voluntary in nature.

[4.2.1.3]    Any election to work Voluntary Overtime may be made in writing using the form in Schedule 2.

[4.2.1.4]    If an Employee has not elected the Voluntary Overtime and is directed to work overtime, the Employee will receive the applicable overtime rate from clause 4.2.

17    Shahin claimed that the applicant had worked the additional hours in the week of 25 January 2016 pursuant to a “genuine request” he had made to work those hours at his ordinary rate of pay.

18    It seems that the applicant presented his claim on the basis that he was entitled to overtime only in respect of those hours which exceeded 38, rather than those which exceeded his contracted 25 hours.

The SAEC decision

19    The Deputy President heard evidence from two witnesses, the applicant and Mr Vezspeller, who was Shahin’s Site Manager at Fulham Gardens throughout the period of the applicant’s employment. The rest of the evidence in the trial was documentary.

The applicant’s starting time

20    With respect to the applicant’s starting time, the Deputy President found:

(a)    the applicant was told that he had to be at work prior to the nominated roster time, at [37];

(b)    Shahin’s own evidence indicated that, despite it requiring handover duties to be performed by the departing and commencing employees at the end/beginning of each shift, it had not provided paid time within which this was to occur, which necessarily required at least one of the employees at the change of shift to perform duties for no pay, at [38];

(c)    there was no evidence to support Shahin’s claim that the applicant’s work before his rostered commencement time was “unpaid voluntary work”, at [39];

(d)    both Shahin’s head office and Mr Vezspeller had instructed the applicant to start work 10 minutes before the nominated shift time, at [41]. This was confirmed by a statement in Shahin’s Induction Manual, at [14];

(e)    the applicant had genuinely believed that he was instructed to start 15 minutes early and had usually done so, at [42];

(f)    the applicant had gained his understanding that he was required to start 15 minutes early either from his “buddy trainer” (the person allocated by Shahin to work with him during the first days of his employment) or by another superior, at [42]; and

(g)    in the absence of precise records and making allowances for the applicant’s acknowledgement that he had sometimes not been at the premises 15 minutes before the start, the applicant had attended 15 minutes before his scheduled start time on 90% of his shifts, and 10 minutes before the start on all but two of the remaining shifts, at [42].

21    On these findings, the Deputy President found that the applicant was entitled to be paid for an additional 15 minutes of work for 90% of his shifts and for an additional 10 minutes for each of the remaining shifts, at [48]. On the hearing of the appeal, the Court was told that the entitlement for the whole of the early starts amounted to $850.15 before the superannuation loading and interest.

The meal breaks

22    With respect to the meal breaks, the Deputy President rejected an objection by Shahin’s counsel in the closing submissions concerning the alternative way the applicant presented this claim. As already noted, whereas the applicant’s amended application had claimed that the meal breaks he had taken had not been meaningful and not as envisaged by the Collective Agreement, his alternative claim at trial was that he had not taken any meal breaks at all. The Deputy President described this difference as “a pleading issue” which did not cause him any concern about the applicant’s credibility or reliability. He also noted that Shahin did not claim to be prejudiced in any way by the difference in the way the applicant articulated his claim at the hearing.

23    The Deputy President found as follows:

(a)    the applicant generally did not have time for a continuous meal break of 30 minutes which was meaningful to him, even anticipating short interruptions to serve customers, at [57]; and

(b)    the applicant had not taken any meal breaks, at [59].

24    Hence, the Deputy President concluded that Shahin should pay the applicant for all the time which it had wrongly treated as unpaid meal breaks. On the hearing of the appeal, the Court was told that this entitlement amounted to $1,424.53 before the superannuation loading and interest.

The overtime claim

25    With respect to the claim for overtime, the Deputy President found that the applicant did not “genuinely volunteer” to work overtime. He found that the applicant did not have a choice of the kind contemplated by the Collective Agreement as he could not genuinely request voluntary overtime (at his ordinary rate of pay) instead of overtime at the penalty rate. The Deputy President then found that the applicant was entitled to the claimed overtime penalty payment.

The appeal to this Court

26    Shahin’s Amended Notice of Appeal contains four grounds. The first complains of the findings of the Deputy President concerning the applicant’s commencement time. The second and third complain of the findings of the Deputy President concerning the meals breaks. The fourth complains of the Deputy President’s findings concerning the overtime claim.

27    We will consider each separately.

Ground 1 – the work commencement time

28    Shahin contended that the Deputy President’s findings concerning the applicant’s commencement time were affected by three errors:

(i)    the applicant’s subjective belief as to the required starting time was irrelevant;

(ii)    the finding as to the basis for the applicant’s belief was speculation unsupported by the evidence; and

(iii)    the finding was inconsistent with his acceptance that Shahin’s written instruction contained in the Induction Manual and the oral instruction from Mr Vezspeller had been that the applicant commence duties 10 minutes before his rostered shift start time.

29    For the first and second of the errors for which it contended, Shahin relied on passages in [41] and [42] of the Deputy President’s reasons:

[41]    Was the instruction to be there 10 minutes or 15 minutes before the nominated roster time? In determining this issue I note the difference between the accounts of the applicant and Mr Vezspeller. I also note the applicant’s expressed uncertainty as to the source of the 15 minute instruction when reminded of the training instruction as to 10 minutes. My impression was that both witnesses seemed conscientious and appeared to be trying to give truthful evidence. They both made appropriate concessions in their detailed testimonies. I also note that Mr Vezspeller’s stated long standing practice is consistent with the training instruction as to 10 minutes. In my view the difference in their accounts is most likely the result of the applicant’s faulty memory on this point as to the source of that aspect of the instruction. I find that the applicant was instructed by the respondent’s head office trainers and Mr Vezspeller to start work 10 minutes before the nominal shift time.

[42]    But I also accept the applicant’s evidence that he genuinely believed he was instructed to start 15 minutes early, and that he usually did so. I find it likely that he gained that understanding from either his ‘buddy’ trainer or another superior. I accept that he performed the required handover duties from when he attended work in accordance with this understanding …

(Emphasis added)

30    For the third error for which it contended, Shahin relied upon an aspect of the Deputy President’s reasons for rejecting its submission that, irrespective of any instruction given to the applicant concerning an early start time, its contract of employment with the applicant had required him to commence work only from the start of the hour and not 15, or for that matter 10, minutes before the start of the hour. In rejecting this submission, the Deputy President said:

[44]    In my view the fundamental flaw in the respondent’s position is that it disregards the nature of the instruction to the applicant to be at work prior to the nominal starting time rostered shift. This was an instruction that formed an obligation under the contract of employment. The early start requirement was always part of the terms and conditions of employment.

[45]    The respondent cannot decide that it will not pay for the performance of some duties, as was the case here. Its rostered start times were always associated with the requirement to attend work before that time. The rostered time was never the start of the shift. The true start time of the shift was always required to be 10 minutes before the time nominated on the roster. The instruction given during training, and reinforced by the site manager, was an unambiguous direction to the applicant for him to be at work before the rostered shift time. There is no dispute that he was also required to, and did, perform handover work duties during that time. I find the required attendance before the rostered shift start time was a duty of the employment and the applicant should have been paid for all that time.

(Emphasis added)

31    Counsel for Shahin submitted that the Deputy President had erred in holding that the applicant’s genuine belief that he had been instructed to start 15 minutes earlier together with his attendance in accordance with that belief was sufficient to establish an entitlement to further pay. Counsel submitted that this approach “decoupled” the analysis from the Deputy President’s later finding in [45] that “the true start time of the shift was always required to be 10 minutes before the time nominated on the roster”.

32    In our opinion, [40]-[42] should be understood having regard to the way in which the issues were framed at trial. A review of the pleadings and of the trial transcript indicates that the principal issue with respect to the commencement time at trial was that of whether the applicant had been required to be at the Fulham Gardens premises before his rostered starting time. Shahin disputed that there was any such requirement, claiming that there had been only an “expectation” that he would do so. It disputed the applicant’s claim that he had been required to attend either 10 or 15 minutes before each shift. The Deputy President noted the issues to which this defence of Shahin gave rise in [36] of his reasons:

This issue requires a finding as to what instructions the applicant was given as to when he should start work. Was it merely an encouragement to volunteer for free for 10 minutes, as the respondent maintained in its closing submissions, or was he required to be there 15 or 10 minutes before the nominated roster time? And what was his practice.

33    The Deputy President then found that “the evidence consistently demonstrates that the applicant was told he was required to attend work prior to the nominated roster time”, at [37]. Having elaborated that finding, the Deputy President then turned to the question of whether the instruction had been for the applicant to attend 10 minutes or 15 minutes before the nominated roster time. Paragraphs [40]-[42] formed part of the Deputy President’s consideration of that question.

34    In [41], the Deputy President made the finding that the applicant had been instructed by Shahin’s head office trainers and by Mr Vezspeller to start work 10 minutes before the nominal shift time. However, that finding was not a rejection of the applicant’s evidence that he had been given an instruction to start work 15 minutes before the nominal shift time. The Deputy President made this plain by his statement in [41] that the applicant’s faulty memory on this topic had been as to the source of that aspect of the instruction.

35    The Deputy President did not make the rather elementary mistake, which Shahin’s submissions attribute to him, of finding that the applicant’s genuine belief that he had been instructed to start 15 minutes early was sufficient to give rise to the legal entitlement which he claimed. Instead, the reference in [42] of the reasons to the applicant’s genuine belief was a step in the Deputy President’s reasoning process. Having found as a fact that the applicant did have that genuine belief, the Deputy President then considered the source of that belief, and made the finding that the applicant had gained it either from his “buddy” trainer or another superior. Of these alternatives, its seems that it must have been the “buddy” trainer who was the source as counsel for the applicant conceded that, whilst there was evidence of other supervisors having dealings with the applicant, that evidence did not indicate any instruction by such supervisors on the topic of the applicant’s starting time.

36    The Deputy President’s inference that it was a “buddy” trainer who had given the instruction cannot be regarded as mere speculation on his part. Mr Vezspeller had given evidence of new team members being given three days training with a buddy, saying that that entailed the new team member working with another team member for the full shift “going through the basics, being shown what to do”.

37    The plausibility of the Deputy President’s finding that a source of the instruction was the buddy trainer is supported by consideration of the tasks which Shahin expected the applicant to carry out in the period before nominal commencement time. It is implicit that the manner of performance of these tasks and the time at which they were to be performed had been explained by the buddy trainer. An important task was to “do the dips”, that is, physically dipping each fuel storage tank to ascertain the volume of fuel remaining. This involved opening the lid to each tank, inserting a steel scale and noting on the scale the level of the remaining fuel. That level was then noted in a book and, at midnight, also entered electronically. There was a difference between the applicant and Mr Vezspeller as to the time taken “to do the dips”, with the applicant saying that it took the full 15 minutes whereas Mr Vezspeller said that the task took between 7-10 minutes. The Deputy President did not resolve that difference.

38    Mr Vezspeller also said that the finishing and commencing employees had to engage in the process of handover. This involved balancing the money in the till and ensuring that it held no more than a modest fixed amount, and the incoming employee being informed of any developments, new policies or new procedures, incidents which had arisen including incidents involving the police, new promotions and the like. Mr Vezspeller said that normally, this handover process did not take more than 10 minutes.

39    When the time for the dipping of the tanks is added to the time for the handover, it is apparent that, even on Shahin’s own evidence, the time required of the applicant before the nominated commencement time must have been, at the least, of the order of 15 minutes. Given this evidence, it was plausible that it was the buddy trainer who had told the applicant to be at work 15 minutes beforehand in order to have sufficient time to attend to the required tasks. Accordingly, the Deputy President’s finding that the applicant gained his understanding that he had to be at work 15 minutes before the nominated starting time from a buddy trainer had a sound basis.

40    There was a faint suggestion on the appeal that the buddy trainer may not have had Shahin’s authority to give the applicant a direction as to the time which he should start work. However, that submission was not developed. Moreover, the actual (if not apparent) authority of the buddy trainer to explain to the applicant what was required of him does not seem to have been an issue at the trial.

41    It is true, as counsel for Shahin submitted, that the applicant did not say expressly that he had been told by the buddy trainer that he had to commence 15 minutes before the rostered commencement time. But that did not preclude the Deputy President from finding that his only mistake was to the source of the direction. There were after all only a limited number of possibilities.

42    We agree with counsel for Shahin that there is an apparent inconsistency between the finding in [42] and the finding concerning “[t]he true start time” in [45]. In the first, the Deputy President found that, irrespective of the direction given in the Induction Manual and orally by Mr Vezspeller, the applicant believed that he had been directed by his buddy trainer or some other person with authority to attend 15 minutes before the nominated commencement time for each shift. In the latter, the Deputy President described the “true” start time as being 10 minutes before the nominated time. Obviously enough, there can have been only one “true start time”.

43    However, we are not persuaded that the inconsistency warrants this Court’s intervention. It is to be remembered that, in [45], the Deputy President was addressing Shahin’s submission concerning the content of its contract with the applicant. In particular, the Deputy President was rejecting the contention that the contracted commencement time was the rostered time for the start of each shift. One of the reasons for its rejection was that it was inconsistent with Shahin’s own evidence. In that context, the submission of counsel for the applicant that the Deputy President’s statement that “[t]he true start time of the shift was always required to be 10 minutes before the time nominated on the roster” is to be understood as though it was prefaced with the words “on [Shahin’s] own evidence” has force. Understood in that way, the inconsistency for which Shahin relies does not arise.

44    Shahin also complained of the Deputy President’s finding that the applicant had attended work 15 minutes before the hour on 90% of his shifts and 10 minutes before the hour on the remaining two shifts. It submitted that there was no evidence supporting that finding.

45    In our opinion, this complaint should be rejected. The Deputy President had noted that there was no time recording system provided by Shahin and that it was not possible to be precise as to all times, at [42]. But the Deputy President did have evidence from the applicant that on “most of the days” he had started at 6.45 am. Moreover, the applicant’s evidence concerning the occasions when he had not been there 15 minutes before the start suggested that they were isolated. Shahin has not shown any basis on which this Court could conclude that the Deputy President’s assessment that “most of the days” equated to 90% is erroneous.

46    It follows that Ground 1 fails.

Ground 2 – denial of procedural fairness with respect to the meal break finding

47    Shahin contended that the case it went to meet at trial was the allegation that the applicant’s meal breaks “were not breaks in any meaningful sense” and that it had wrongly deducted 30 minutes pay for each shift “despite not affording [the applicant] any meaningful meal breaks”. In the opening submissions, counsel for the applicant had described this as the primary basis for the claim, with an alternative (and secondary basis) being that, by reason of the press of his work, the applicant had never taken a meal break of any description. As already seen, this was the basis on which the President upheld the applicant’s claim with respect to meal breaks.

48    Shahin submitted that it had been wrong of the Deputy President to find that there was no prejudice to it from this revised claim. It contended that, as the applicant had raised the alternative for the first time in the opening submissions at trial, it had been deprived of the opportunity to consider the alternative properly, to provide informed instructions to its counsel, and to call further witnesses.

49    Counsel for the applicant accepted that there was a difference between the way in which the applicant had pleaded his entitlement with respect to meal breaks and the argument which trial counsel had presented at trial and which had been accepted by the Deputy President. He disputed, however, that this change had caused Shahin any prejudice or that it had been denied procedural fairness.

50    The relevant principles are not in doubt. Procedural fairness requires that a person who may be affected by a decision be informed of the case made against him or her and given a reasonable opportunity to answer it: Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 at [40].

51    Two decisions of the Full Court of this Court have emphasised the importance of a proper articulation of the applicant’s case in proceedings seeking the imposition of a civil penalty. In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2015] FCAFC 25; (2015) 230 FCR 298, the Full Court (Logan, Bromberg and Katzmann JJ) said:

[63]    Even so, a civil suit for the recovery of a pecuniary penalty is a proceeding of a penal nature … In this class of case, it is especially important that those accused of a contravention know with some precision the case to be made against them. Procedural fairness demands no less. Furthermore, although the civil standard of proof applies, where (as here) the resolution of an issue exposes a respondent to a penalty, satisfaction on the balance of probabilities is not achieved by “inexact proofs, indefinite testimony, or indirect inferences” … The Evidence Act 1995 (Cth) now requires that the court take into account the nature of the cause of action in deciding whether it is satisfied that a party’s case has been proved on the balance of probabilities …

[64]    Litigation is not a free for all. The overarching purpose of the civil practice and procedure provisions that apply in this Court is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (Federal Court of Australia Act 1976 (Cth) (“FCA Act”), s 37M). It would not be just to decide a case on a different basis than the way it was conducted. Nor would it be just to permit an applicant to change the nature of its case after the evidence has closed and its weaknesses pointed out, at least not without a formal application and the grant of leave, on terms if necessary.

[65]    The long and the short of it, then, is that, in a civil proceeding of a penal nature, a statement of claim must allege a contravention known to law and with a sufficient statement of material facts to alert a respondent to the case to be met. Nevertheless, where an applicant’s pleading is ambiguous but a respondent has nonetheless meaningfully engaged with it in its defence, that engagement and the manner in which an applicant’s case is consequentially opened and the trial conducted and defended can and ought to be considered in deciding whether a respondent has suffered any procedural unfairness. That is so even if there has been no formal application to amend the pleading. The obligations imposed on the Court and the parties by Pt VB of the FCA Act do not lead to any different conclusion.

(Citations omitted)

52    In Australian Building and Construction Commissioner v Hall [2018] FCAFC 83; (2018) 261 FCR 347, the Full Court (Tracey, Reeves and Bromwich JJ) referred to the well-known statement in Banque Commerciale SA (en liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286-7 concerning the important role of pleadings in ensuring the provision of procedural fairness and continued:

[50]    In our view, these observations apply with even more force in a proceeding such as this where declarations of contravention of the FWA were sought against the respondents and civil penalties were sought to be imposed on them. Faced with those serious consequences, the respondents were entitled to be told clearly and precisely in the Commissioner’s ASOC what case it was they had to meet and, unless they deliberately chose to allow the case to be conducted on a different basis, to direct their evidence and arguments to that case and that case alone. Plainly, this latter exception did not permit the Commissioner to make a significant addition to, or departure from, the pleaded case, in counsel’s opening or closing submissions and then seek to justify that course by pointing to the respondents’ failure to object as evidence of their acquiescence in that course. If that were the test, this departure from the basic requirements of procedural fairness would not occur by the deliberate choice of the party entitled to fair notice but rather at the self-serving behest of his or her opponent. If such an approach were permitted, the requirement to give fair notice would be made redundant, trial by ambush would become a legitimate tactic, and the issues in dispute at trial would become a movable feast. As well, the ability of a trial judge to manage the trial to ensure it fairly addressed the issues in dispute would be significantly eroded, if not entirely destroyed. So, too, would be the capacity of the trial judge to identify the issues he or she needed to decide.

53    Counsel for Shahin emphasised the statement in ABCC v Hall that respondents to civil penalty proceedings are entitled to be told “clearly and precisely” the Commissioner’s case and that, other than in limited circumstances, the Commissioner should not be permitted to make a significant addition to, or departure from, the pleaded case.

54    We do not wish anything in these reasons to be understood as qualifying the propositions stated in CFMEU v BHP Coal or in ABCC v Hall.

55    The determination of whether a person has had the required opportunity to know and answer the case presented against it is a practical and not abstract question. In Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [37], Gleeson CJ said of this element of procedural fairness:

Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.

56    To similar effect, the Full Court stated in TCL Airconditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83; (2014) 232 FCR 361 at [86]:

The required content of fairness in any particular case will depend on context: constitutional, statutory and human, on all the circumstances of the case … The fairness required relates principally to the procedure employed in dealing with the party in question. That may involve the exercise of state or governmental power over the individual, who may be vulnerable and powerless, or a great corporation. The terms of any statute will be critical. The common element is that, generally speaking, the exercise of power should be fair. That exercise will always have a human context. That is why, as Gleeson CJ said in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at 14, fairness is not an abstract concept, but essentially practical. The concern of the law is to avoid practical injustice. Fairness is normative, evaluative, context-specific and relative.

(Citation omitted)

57    In our opinion, a number of matters indicate that Shahin was not prejudiced in a practical way. In the first place, it is to be noted that the trial of this action occurred over two days, on 5 April 2019 when the evidence was taken, and on 30 April 2019 when the Deputy President heard counsels’ closing submissions. It was not until the closing submissions that counsel for Shahin raised any concern that the secondary case presented by the applicant for the meal break entitlement was outside his pleading:

So the secondary submission, as it was framed, or an alternative allegation, is when the applicant opened for the first time with what was framed as this alternative. As I said at the start, allegations need to have clarity in this jurisdiction. This is [a] civil penalty proceeding with quasi-criminal allegations and our primary submission is that this alternative allegation should not be allowed to be ventilated. The alternative is not part of the further amended application, despite this final form of the document being amended on two separate occasions.

58    As is apparent, Shahin’s trial counsel did not claim then that Shahin had been prejudiced by the manner in which the applicant had raised the alternative claim. On the contrary, counsel then went on to address the alternative in some detail.

59    Moreover, as counsel for the applicant on the appeal submitted, trial counsel for Shahin had not, until that closing submission, made any objection to the alternative claim being pursued. In particular, counsel had not raised any objection concerning the alternative claim in the oral opening submissions made immediately after the applicant’s oral opening submissions and before any evidence had been led, had not (subject to one matter to which we will refer shortly) objected to evidence being led from the applicant in support of the alternative, and had in fact cross-examined the applicant on that evidence. Furthermore, trial counsel for Shahin led evidence from Mr Vezspeller with respect to the alternative articulation of the applicant’s claim. He did not seek an adjournment of the trial because of the new way in which the claim was put. Moreover, counsel had had the period between 5 and 30 April 2019 in which the matter could have been investigated further, had that been thought necessary or desirable. Shahin could have made an application for leave to re-open its case or even for leave to cross-examine the applicant further had the further investigations indicated that that was appropriate. Counsel for Shahin on the appeal accepted, quite fairly, that that was so.

60    Shahin did not seek to lead evidence on the appeal of any additional evidence or material which may have been available to it had the applicant’s alternative case been part of his pleaded case. Counsel did, however, point to the following passages in the Deputy President’s reasons:

[56]    I accept the applicant was given an instruction to eat before he attended work and that he should not go to the toilet while at work because the toilet was outside. However due to his evidence of attributing this instruction to both the night shift manager and Mr Vezspeller, I do not accept that instruction was given by Mr Vezspeller. I find it also likely that the applicant took literally what was meant as a goal, but not an absolute rule, by the manager. …

[57]    I also accept the applicant did not generally have time for a continuous meal break of 30 minutes that was meaningful to him, even anticipating short interruptions to serve customers. I accept that the broad range of duties to be completed, together with his belief that he should avoid going to the toilet during a shift, influenced his decision to eat before he went to work and not to take a meal break during the course of a long shift.

61    Counsel submitted that Shahin had been denied the opportunity to take instructions and the opportunity to identify and question the night shift manager referred to in these passages concerning the instructions which the applicant alleged.

62    We do not regard that submission as persuasive. In the first place, the evidence appears relevant to both of the alternative ways in which the applicant presented his claim and Shahin could, if it wished, have sought instructions from the night shift manager in relation to the first way in which the claim was formulated. In the second place, the Deputy President did not attach significance to the instructions from the night shift manager, finding that the applicant had treated as an absolute rule what was intended only as an aspiration. Thirdly, as already noted, Shahin could in the period between 5 and 30 April 2019 have sought and taken instructions from the night shift manager if it had wished.

63    On the appeal, counsel for Shahin referred to one objection taken by Shahin’s trial counsel concerning the evidence in chief being led from the applicant concerning the duties he performed in the course of a normal midnight to 7 am shift. The following exchange occurred:

Shahin’s counsel:    Can I just raise a point of relevance here? I don’t understand [how] any of these questions go to any of the three discrete allegations in this case?

His Honour:    I think Mr McCabe opened on saying that in the alternative argument on the meal break is that, irrespective of where he may have been allowed to be, he didn’t have time for a meal break. Is that right?

Mr McCabe:    That’s right, yes.

His Honour:    So it’s relevant, thank you.

64    We consider it pertinent that, when the Deputy President indicated that he regarded the evidence concerning the applicant’s duties as bearing on the alternative case, trial counsel for Shahin did not then and there protest that that alternative case was outside the applicant’s pleading. Accordingly, we do not consider that this objection can be regarded as an objection to the presentation of the alternative case.

65    In these circumstances, the complaint of a denial of procedural fairness at trial has an abstract quality about it. Shahin did not suffer any practical injustice. Ground 2 is rejected.

Ground 3 – the finding that the applicant worked through his meal breaks

66    In this ground, Shahin submitted that the Deputy President had been in error in finding that the applicant was entitled to be paid “for all the time wrongly treated as meal breaks”.

67    Counsel submitted that the Deputy President had been in error in finding that the alternative way in which the applicant made his claim with respect to meal breaks did not raise an issue of credibility or reliability. He emphasised the difference between the applicant’s evidence that he had always worked throughout the shift and could never take a break and his pleaded claim that his meal breaks “were not breaks in any meaningful sense”. Counsel also noted that during the initial months of his employment, the applicant had signed time books indicating that he had received the 30 minute meal break. He also referred to the Deputy President’s acceptance of evidence that the applicant had usually been able to take a number of shorter breaks during a shift which, in the aggregate, totalled 30 minutes within a 1½ hour time span, at [54].

68    As noted earlier, cl 4.1.4 is a clause of an unusual kind. It created an entitlement in employees to an unpaid meal break of 30 minutes when working a shift in excess of six hours. It can be taken that there was, correspondingly, an obligation on Shahin to provide the meal break.

69    Generally, meal breaks have an identified commencement and finishing time. The provision following immediately after cl 4.1.4 confirms that this was intended by the Collective Agreement:

[4.1.5]    We may require you to change the timing of a scheduled meal break or rest break to meet operational needs. We will not unreasonably do so …

(Emphasis added)

70    In our view, cl 4.1.4 required that, during the period of a scheduled meal break (that is, a meal break for which provision was made in the work arrangements), a sole employee on duty in a shop interrupt their meal break to serve customers. The time spent serving the customer would count as time worked and, by inference, would have the effect that the period of the meal break would be extended to that extent.

71    There was no evidence in the present case that the applicant had any time scheduled for a meal break, let alone an identifiable period for a meal break. Instead, Shahin’s defence seemed to be that the applicant had been able to aggregate periods totalling 30 minutes without active work and that these constituted meal breaks. For example, Mr Vezspeller gave evidence that the applicant could have taken a number of shorter breaks which, in the aggregate amounted to 30 minutes over a period of 1½ hours. Contrary to Mr Vezspeller’s belief, this was not the kind of “meal break” required by cl 4.1.4, and the Deputy President was correct to so hold.

72    The other matters on which counsel for Shahin relied on the appeal were not overlooked by the Deputy President. He referred to each. It was for the Deputy President to assess the evidence and the credibility of the witnesses who gave it. As already seen, the Deputy President assessed the evidence of both the applicant and Mr Vezspeller as “conscientious” and said that he regarded both as having been trying to give truthful evidence, at [41]. The Deputy President was not required to regard the applicant’s evidence as unreliable merely because it departed from his pleaded case, any more than he was required to regard Mr Vezspeller’s evidence as unreliable because of his admission, apparently made for the first time at trial, that he had directed the applicant to attend work 10 minutes before the rostered commencement time. Shahin does not point to an error in the Deputy President’s assessment merely because he came to a view of the evidence which was adverse to that for which it contended. This was not a case in which the Deputy President’s findings can be regarded as perverse or inconsistent with objectively established facts: Fox v Percy [2003] HCA 22; (2002) 214 CLR 118.

73    The question of whether the applicant did have a meal break of the kind contemplated by cl 4.1.4 is, at its heart, a question of fact. Shahin has not shown a basis on which this Court could interfere with the Deputy President’s finding of fact.

74    In our view, Ground 3 is not made out.

Ground 4 – the overtime claim

75    By Ground 4, Shahin complained of a finding which requires it to pay to the applicant a total of $67.13 together with the superannuation loading and an interest entitlement in respect of unpaid overtime.

76    Earlier in these reasons, we set out cl 4.2 and cl 4.2.1 of the Collective Agreement concerning overtime.

77    Shahin’s claim was that the applicant had requested voluntary overtime within the meaning of cl 4.2.1.1, with the consequence that he was entitled to payment for the overtime at his ordinary rate of pay only.

78    The term “voluntary overtime” is defined in cl 4.2.1.1. It means “overtime worked arising from an Employee’s voluntary overtime request at subclause 4.2.1.3”. Even then, overtime can be regarded as voluntary only if the employee “genuinely requests” to work the requested hours at his or her ordinary rate of pay.

79    As is apparent, the definition of the “voluntary overtime” incorporates the employee’s request being made pursuant to cl 4.2.1.3. That subclause indicates that an election to work voluntary overtime may be made in writing using the form in Sch 2. The applicant’s request was made using the Sch 2 form. It provided (relevantly):

Peregrine Corporation

EMPLOYEE VOLUNTARY REQUEST TO WORK ADDITIONAL HOURS

In accordance with the provisions of our Employee Collective Agreement, I wish to work voluntary overtime for such hours as I request, subject to the Employer finding me such work and approving this request. I understand that this will be paid at the applicable hourly rate.

My preference(s) for voluntary overtime are …

(Emphasis added)

80    The applicant then ticked boxes indicating that he was willing to work overtime at any location, on any date or time that was available and for any duration.

81    Considered objectively, the request form was an indication of a general willingness by an employee to work voluntary overtime. It cannot reasonably be understood as a request to work particular hours of overtime, let alone to work the particular hours at the ordinary time rate. So much is indicated by the printed words “I wish to work voluntary overtime for such hours as I request” (emphasis added). Moreover, the applicant’s statement of understanding that “this” would be paid at the applicable hourly rate is to be understood as a reference to the hours which he would request. The impression that the request must be made as a separate step is confirmed by the second sentence in cl 4.2.1.1, namely, the proviso that the employee genuinely requests to work “these hours” at his or her ordinary time rate of pay.

82    In other words, the Sch 2 form contemplated at least two actions by the employee. The first was the statement of general availability or willingness to work voluntary overtime. The second, to occur later, would be the request for particular hours.

83    Shahin did not contend that the applicant had made any request other than that contained in the Sch 2 form. Accordingly, there had been no request for particular hours as contemplated by that form. The consequence is that the applicant was entitled to be paid overtime at the rate provided for in cl 4.2, that is, at his ordinary time rate with a loading of 50%.

84    Accordingly, the decision of the Deputy President on this claim was correct, although for reasons which are different from those given by him.

Conclusion on the appeal

85    For the reasons given above, we consider that all grounds fail and that the appeal should be dismissed.

The composition of the Court for the hearing of the appeal

86    It is appropriate to refer briefly to an issue concerning the hearing of the present appeal by the Full Court. Section 25(5) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) provides:

(5)    Subject to any other Act, the jurisdiction of the Court in an appeal from a judgment of a Court of summary jurisdiction is to be exercised by:

  (a)    a single Judge; or

(b)    if a Judge considers that it is appropriate for the jurisdiction of the Court in relation to the appeal to be exercised by a Full Court—a Full Court.

87    As is apparent, s 25(5) contemplates that an appeal to this Court from a judgment of a court of summary jurisdiction will be heard by a single judge unless a judge considers that it is appropriate for the appellate jurisdiction of the court in relation to the appeal to be exercised by a Full Court.

88    Both parties in the present case made helpful submissions concerning the question of whether the present appeal is from a judgment of a court of summary jurisdiction and therefore as to whether s 25(5) is engaged. However, that is no longer a live issue because, on 25 September 2019, the Chief Justice determined that it was appropriate in any event for the appellate jurisdiction of the Court in relation to the appeal be exercised by the Full Court. Neither party contended that it was inappropriate for the appeal to be heard by the Full Court.

89    In these circumstances, it is unnecessary for this Court to express a view on the question of whether the present appeal is an appeal to which s 25(5) of the FCA Act applies. However, as both parties made submissions concerning the issue at the Court’s earlier invitation and because it may be of assistance in the future, we express our view that a judgment of the SAEC when constituted by a Deputy President should not be characterised as a judgment of a court of summary judgment. That is so for the following reasons.

90    Section 2B of the Acts Interpretation Act 1901 (Cth) (the AI Act) defines the term “court of summary jurisdiction” to mean:

[a]ny justice of the peace, or magistrate of a State or Territory, sitting as a court of summary jurisdiction.

91    This definition involves three elements: a person holding a particular office; that person sitting as a court; and that court sitting as a court of summary jurisdiction. The first element is that the person be a justice of the peace or a magistrate.

92    In the present case, it was common ground between the parties that Lieschke DP has had a substantive appointment as a magistrate since at least 17 October 2005. We have said “since at least 17 October 2005” because there was some doubt as to whether an earlier appointment of the Deputy President as a magistrate had been effectual – see the South Australian Government Gazette of 21 July 2005 (p 2498).

93    The South Australian Employment Tribunal Act 2014 (SA) (the SAET Act) establishes the SAET and provides for there to be a part of the Tribunal in Court Session known as “the South Australian Employment Court”, at s 5. It provides for the Tribunal to be comprised of members in the following categories: the President, the Deputy Presidents, Magistrates, Commissioners, and supplementary panel members. Section 13 provides for the appointment of Deputy Presidents:

(1)    A Deputy President will be—

(a)    a judge of the District Court appointed by the Governor, by proclamation, to be a Deputy President of the Tribunal; or

(b)    a magistrate appointed by the Governor, by proclamation, to be a Deputy President of the Tribunal.

(2)    The appointment of a judge of the District Court as a Deputy President of the Tribunal under subsection (1)(a) does not affect—

  (a)    the judge's tenure of office or status as a judge; or

(b)    the payment of the judge's salary or allowances as a judge (subject to the operation of subsection (5)); or

(c)    the ability of the person to do anything in the person's capacity as a judge (including as to the exercise of the jurisdiction of the District Court); or

(d)    any other right or privilege that the judge has as a judge of the District Court.

…

(7)    The appointment of a magistrate as a Deputy President of the Tribunal under subsection (1)(b) does not affect—

  (a)    the magistrate's tenure of office or status as a magistrate; or

(b)    the payment of the magistrate's salary or allowances as a magistrate (subject to the operation of subsection (10)); or

(c)    the ability of the person to do anything in the person's capacity as a magistrate; or

(d)    any other right or privilege that the magistrate has by virtue of the office of magistrate.

(8)    Service in the office of Deputy President of the Tribunal by a magistrate is taken, for all purposes, to constitute service as a magistrate.

(9)    Subject to subsections (7) and (8), an appointment under subsection (1)(b) may be subject to conditions determined by the Governor.

(10)    Without limiting subsection (9), in the case of an appointment under subsection (1)(b), the Remuneration Tribunal may determine that a Deputy President's salary or allowance as a magistrate will have an additional component on account of holding office under this Act (and the jurisdiction to make such a determination is conferred on the Remuneration Tribunal by this Act).

(11)    A person ceases to be a Deputy President of the Tribunal if—

(a)    in the case of an appointment under subsection (1)(a)—the person ceases to be a judge of the District Court; or

(b)    in the case of an appointment under subsection (1)(b)—the person ceases to be a magistrate; or

(c)    the person resigns as Deputy President by written notice to the Attorney-General; or

  (d)    the person dies.

(12)    Nothing in subsection (11)(c) affects a person's tenure or status as a judge (in the case of an appointment under subsection (1)(a)) or as a magistrate (in the case of an appointment under subsection (1)(b)).

(13)    Before the Governor makes a proclamation under this section, the Attorney-General must consult with—

  (a)    the Chief Justice; and

(b)    in the case of an appointment under subsection (1)(a)—the Chief Judge; and

(c)    in the case of an appointment under subsection (1)(b)—the Chief Magistrate.

94    Section 14 of the SAET Act provides for the functions of Deputy Presidents:

(1)    A Deputy President of the Tribunal has the functions conferred on the Deputy President under this Act or any other Act.

  (2)    The functions of a Deputy President include—

  (a)    participating as a member of the Tribunal; and

(b)    assisting the President in the management of the business of the Tribunal; and

(c)    assisting the President in managing the members of the Tribunal, including in connection with the training, education and professional development of members of the Tribunal; and

  (d)    other functions assigned by the President.

(3)    A Deputy President may do all things necessary or convenient to be done in the performance of the Deputy President's functions.

(4)    A Deputy President is subject to the direction of the President in performing the Deputy President's functions, other than adjudicating in the Tribunal.

95    It seems to have been thought by some that, when a Deputy President is a magistrate (s 13(1)(b)), the exercise of judicial power by the Deputy President is sufficient to attract the first limb in the definition of “court of summary jurisdiction” in s 2B of the AI Act. We doubt that that is so.

96    Section 13(1) of the SAET Act has a number of effects: it provides for persons to be appointed as Deputy Presidents; it provides for the manner of the appointment (by the Governor and by proclamation); and it contains a statement of the necessary qualifications for appointment as a Deputy President of the SAET. An appointee must, before the appointment, be either a District Court judge or a magistrate.

97    However, on the appointment, the appointee has a new office, as the subsequent provisions in ss 13 and 14 make plain. Subsections (8) and (10) refer expressly to the “office” of Deputy President, and subss (2) and (7) provide for the inter-relationship between the holding of the office of Deputy President and the holding of the person’s substantive office. Section 14 indicates the functions of the office. Neither s 13 nor s 14 can reasonably be understood as providing, in effect, that a District Court judge or a magistrate may be assigned to the SAET and thence carry out its functions. Instead the person is to be appointed to the office and by virtue of that appointment to carry out the identified functions. In short, an appointee who qualified for appointment by virtue of being a magistrate is, for so long as the appointment continues, no longer a magistrate simpliciter. He or she has the new office, additional status and additional functions for which ss 13 and 14 provide.

98    The Deputy President in the present case, although obtaining his appointment by virtue of being a magistrate, was in relation to the hearing and determination of the applicant’s claim, exercising the office of Deputy President of the SAET, not that of a magistrate.

99    This means that the first limb of the definition of court of summary jurisdiction is not satisfied. That makes it unnecessary to consider the remaining limbs. Accordingly, there was no occasion for the application of s 25(5) in the present case.

The bringing of the appeal to this Court

100    It has to be said that the amounts resulting from the respondent’s contraventions of s 323 of the FW Act in the present case are modest and, in the case of the overtime, miniscule. Subject to the matters to be addressed next, it is not easy to see how Shahin, acting with a sense of proportion, could have thought it appropriate to bring the appeal.

101    As noted at the commencement of these reasons, the Deputy President has not yet dealt with the applicant’s claim for the imposition of civil penalties. That is unfortunate. For a number of reasons, it is desirable in the interests of the administration of justice for applications for the imposition of civil penalties in circumstances of the present kind to be addressed at the same time as the quantum of the underpayments, or very soon thereafter.

102    First, it enables appeals with respect to all matters arising from the one proceeding to be determined at the same time. As things stand in this case, there is now the possibility of a second appeal to this Court if either party is dissatisfied with the Deputy President’s decision concerning the imposition of penalties.

103    Secondly, it is desirable for the issues concerning penalties to be dealt with, so far as practical, contemporaneously with other issues. That is when the details of the issues are fresh in everyone’s mind, including that of the Tribunal member. This can usually be achieved by having the penalty hearing shortly after the delivery of the liability judgment.

104    Thirdly, the decision on the penalties may well have influenced the decision of Shahin to bring an appeal. For example, had the decision been that no penalties be imposed, Shahin may well have decided that the very modesty of the orders made against it indicated that an appeal was inappropriate.

105    As things stand, it is a sobering reflection that this Court has had to deal with one ground in which the underpayment is only $67.13 and another in which the difference between payment for an additional 15 minutes instead of 10 minutes involves an amount of a little more than $300. This is especially so as it was not suggested that the present proceedings were in the nature of a test case and so determinative of other proceedings on foot in the SAEC. Counsel for Shahin referred to it operating a large number of businesses with the possibility that the outcome of the applicant’s claim may have implications for others. The Court has no knowledge of whether that may be so.

Summary

106    For the reasons given above, we dismiss the appeal. As there was no application by the applicant for an order for costs under s 570 of the FW Act, the Court does not have to consider that question. We make no order as to costs.

Associate:

Dated:    31 March 2020