Treasury Wine Estates Vintners Ltd v Pearson

Case [2019] FCAFC 21

FEDERAL COURT OF AUSTRALIA

Treasury Wine Estates Vintners Limited v Pearson [2019] FCAFC 21

Appeals from:

Pearson v Treasury Wine Estates [2017] SAET 182

Pearson v Treasury Wine Estates [2017] SAIRC 11

File numbers: SAD 74 of 2018
SAD 197 of 2018
Judges: RARES, PERRY AND CHARLESWORTH JJ
Date of judgment: 13 February 2019
Catchwords:

CONSTITUTIONAL LAW – Constitution Ch III – where eligible State court vested with federal jurisdiction under s 539(2) of Fair Work Act 2009 (Cth) to hear claims by employee against employer for underpayment of amount due under enterprise agreement in contravention of s 50 – where industrial magistrate of Industrial Court of South Australia heard matter using the small claims procedure under s 548 of Fair Work Act 2009 (Cth) – where s 565(1A)(a) of Fair Work Act2009 (Cth) provided for internal appeal to a judge of Industrial Court from judgment or order of industrial magistrate exercising summary jurisdiction – whether internal appeal lay under s 565(1A)(a) from judgment or order of industrial magistrate sitting as a court of summary jurisdiction when applying small claims procedure in s 548

CONSTITUTIONAL LAW – where s 565(1A)(a) Fair Work Act 2009 (Cth) gave right of appeal to Industrial Court as eligible State or Territory court to hear and determine appeal from judgment or order of eligible State or Territory court exercising federal jurisdiction – where State Act subsequently dissolved Industrial Court and replaced it with South Australian Employment Tribunal in Court Session – where State Act purported to transfer unresolved appeal in Industrial Court to Tribunal in Court Session – whether State had legislative power to transfer jurisdiction to hear instituted appeal in federal jurisdiction from Industrial Court to Tribunal in Court Session – whether Tribunal in Court Session had jurisdiction to decide appeal or appeal remained in dissolved Industrial Court

INDUSTRIAL LAW ­– Fair Work Act 2009 (Cth) – principles of construction of enterprise agreement
Legislation:

Acts Interpretation Act 1901 (Cth) s 2B

Conciliation and Arbitration Act 1904 (Cth)

Constitution Ch III

Fair Work Act 2009 (Cth) ss 12, 50, 186, 539, 545, 546, 548, 565

Fair Work and Other Legislation Amendment (South Australian Employment Court) Regulations 2017 (Cth) s 69

Fair Work Regulations 2009 (Cth) reg 1.05

Federal Proceedings Costs Act 1981 (Cth)

Judiciary Act 1903 (Cth) ss 38 and 39

Employment Tribunal Act 2014 (SA) s 67

Fair Work Act 1994 (SA) ss 14, 58, 187

Statutes Amendment (South Australian Employment Tribunal) Act 2016 (SA)
Cases cited:

Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251

Altintas v O’Dea Lawyers [2018] FCAFC 165

Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241

Baxter v Commissioner of Taxation (NSW) (1907) 4 CLR 1087

Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union [2018] FCAFC 146

Ex parte Mathews (1918) 18 SR (NSW) 316

Federated Sawmill, Timberyard and General Woodworkers’Employés’ Association v Alexander (1912) 15 CLR 308

Felton v Mulligan (1971) 124 CLR…

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Treasury Wine Estates Vintners Limited v Pearson [2019] FCAFC 21
Case
[2019] FCAFC 21
Decision Date

CaseChat Overview and Summary

In the matter of Treasury Wine Estates Vintners Ltd v Pearson, the Federal Court was tasked with addressing an appeal concerning the interpretation of an enterprise agreement between the employer and an employee, Mr Pearson. The dispute centred on whether the employee was entitled to additional pay for working outside of his scheduled hours, as stipulated in clauses 5 and 6 of the agreement. Specifically, the disagreement arose from whether a clause providing for additional pay for working outside ordinary hours applied to night shifts that were requested with less than 48 hours' notice.

The legal issues before the court included determining the applicability of the additional pay clause to night shifts requested with less than 48 hours' notice, and whether the court had the jurisdiction to hear the appeal. The court had to interpret the relevant clauses of the enterprise agreement and assess whether the State court, now replaced by the Employment Tribunal in Court Session, had the authority to hear the appeal from the industrial magistrate.

The court held that the additional pay clause did not apply to the night shifts worked by Mr Pearson, as he had agreed to the change in his working hours. The court further found that the appeal from the Employment Court decision was incompetent as the Employment Tribunal in Court Session did not have the jurisdiction to hear the appeal. The court reasoned that the jurisdiction to hear the appeal was vested in the Federal Circuit and Family Court of Australia under the Fair Work Act 2009 (Cth), and not in the Employment Tribunal in Court Session.

Consequently, the court dismissed the appeal from the Employment Court decision as incompetent and also dismissed Mr Pearson's appeal from the Industrial Court because its construction of the agreement was correct. The court made a declaration that the Employment Court's orders were made without jurisdiction and were of no force or effect.

In summary, the Federal Court dismissed both appeals and declared that the Employment Court's orders were invalid, affirming the lower court's interpretation of the enterprise agreement and the jurisdictional limitations of the Employment Tribunal in Court Session.

Orders

Orders of the court

2. The appeal be dismissed.

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

Background

Background to the litigation

Section 2 of the agreement covered South Australian wine and spirit industry employees. Clauses 5 and 6 dealt with wage rates and hours of work. Unlike Pt 6 of section 1, cll 6.1.11 and 6.4.4 in section 2 provided that, unless agreed between Treasury and the employees, no change in a weekly employee’s ordinary or shift starting time could be made unless the employee affected was given 7 days’ notice. Background Mr Pearson’s work roster for the week beginning 12 January 2015 scheduled him to work day shifts between 6.30am and 3.00pm. However, following rain over the weekend of 10 and 11 January 2015, on 12 January 2015 Treasury’s assistant manager, Tim Malone, asked Mr Pearson whether he would work night shifts between 14 to 16 January 2015 to treat the vines with a chemical spray in order to counter any risk of botrytis infection developing from the rain. Mr Pearson gave unchallenged evidence in chief of his conversation with Mr Malone on 12 January 2015:In the morning time, he came to us and asked us if we would be prepared to work, if the direction was made to do the spray round, and I said yes. He said he would confirm later that day and he confirmed in the afternoon. (emphasis added) Mr Pearson said that he understood, as a result of those conversations, that his working hours on each of 14, 15 and 16 January 2015 would start “at 7pm and go through to 6am the following morning”. That evidence suggests Mr Pearson had agreed with Mr Malone to the change in his starting time for the 3 days commencing on 14 January 2015 for the purposes of cl 36. Treasury appears to have given Mr Pearson the benefit of payment under cl 34.7 on the basis that it had required the change on less than 48 hours’ notice. Thus, the dispute between the parties is limited to whether cl 34.7 applied to govern Mr Pearson’s entitlements to payment for 15 and 16 January 2015.The proceeding before the industrial magistrate Before the industrial magistrate, Mr Pearson submitted that the natural and ordinary meaning of the words in cl 34.7 was that where a shift did not operate for five consecutive starts, cl 34.7 was triggered. He contended that, therefore, if an employee worked part or all of his or her shifts outside the span of ordinary hours during that week (i.e. outside 6.00am to 6.00pm Monday to Friday (cl 31.1)), those hours should be paid at the rate of time and a half for the first two hours and double time thereafter. Clause 34.7, he argued, was not subject to, or affected by, the notice requirements in cl 36. Treasury submitted that the requirement to give 48 hours’ notice under cl 36 alleviated the need to pay the “onerous penalties” prescribed in cl 34.7 and that “such a construction is unremarkable” when interpreting industrial instruments. It contended that once it was accepted that Treasury had the power to allocate night shifts to employees, subject to the provision of adequate notice under cl 36, the span of Mr Pearson’s “ordinary hours” in the non-vintage period to which cl 34.7 referred changed from 6.00am to 6.00pm Monday to Friday (as set out in cl 31.1) to 12.00 midnight Sunday to 12.00 midnight Friday (as set out in cl 6.4.2.1 of section 2).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

On each of 15 and 16 January 2015, Mr Pearson worked on night shift, and Treasury paid him as he would have been entitled had he been a weekly employee working night shift under cl 34.2. In our opinion, in so deciding, for the reasons above, the industrial magistrate correctly found that Treasury had not contravened the agreement and that Mr Pearson’s claim failed. Conclusion We will dismiss Treasury’s appeal as incompetent. We will also dismiss Mr Pearson’s appeal from the decision of the Industrial Court because its construction of cl 34.7 of the agreement was correct, and make a declaration that the Employment Court’s orders were made without jurisdiction and are of no force or effect.

Ratio Decidendi

Legal Principle Established

The parties filed a joint submission that argued that Treasury’s appeal from the Employment Court decision was competent under s 565(1B) of the Fair Work Act (Cth). They contended that Kronen [2018] FCAFC 136 and Qantas [2018] FCAFC 154 did not apply here because in both those cases the Industrial Court “was exercising original [scil: State] and federal jurisdiction”. They submitted that Altintas [2018] FCAFC 165 did not apply here because the Full Court had not considered the effect of (the now repealed) s 187 of the State Fair Work Act that, they argued, had conferred “original and federal” jurisdiction on the Industrial Court to hear an appeal from an industrial magistrate’s decision. They argued that because Mr Pearson had appealed under s 187 to the Industrial Court before 1 July 2017, s 69(13) of the Amendment Act had the effect of deeming that his appeal had been transferred to the Employment Court. The jurisdictional issue – consideration When Mr Pearson filed his appeal from the Industrial Court decision in the Industrial Court, he did so under s 187 of the State Fair Work Act. However, he could only have done so if the industrial magistrate was sitting as a court of summary jurisdiction within the meaning of s 565(1A)(a) of the Fair Work Act (Cth). The Fair Work Act (Cth) does not define a court of summary jurisdiction or otherwise deal with such courts beyond what s 565(1A)(a) provides. However, s 2B of the Acts Interpretation Act 1901 (Cth) defines “court of summary jurisdiction” as “any justice of the peace, or magistrate of a State or Territory, sitting as a court of summary jurisdiction.” The latter definition has the following features: first, it applies only to justices of the peace and magistrates; secondly, the justice or magistrate must be sitting as a court – that is, he or she must be exercising the judicial power of the Commonwealth invested in a court as such under s 77(iii) in Ch III of the Constitution; and thirdly, the nature of the proceeding must be that of a court “exercising summary jurisdiction”. In John L Pierce Pty Ltd v Kennedy (2000) 104 FCR 225 at 232 [24], Whitlam J, with whose reasons O’Connor J (at 226 [2]) and Madgwick J (at 232 [26]) agreed, said that summary proceedings within the meaning of the expression “a court of summary jurisdiction”, in the now repealed s 26(d) of the Acts Interpretation Act, are not confined to summary proceedings that are criminal in nature but also “extend to proceedings under statute for the payment of money” in the exercise of civil jurisdiction. In his additional reasons, with which O’Connor J also agreed, Madgwick J said (104 FCR at 237 [46]) (at a time before s 2B was inserted into the Acts Interpretation Act with the current definition (and that in s 26(d) repealed)) that the expression should be “understood as including any court for the giving of civil relief which operates by way of summary, that is to say, relatively informal procedures”.