APPEAL AGAINST A DECISION OF THE COMMISSION IN MATTER NO. B 155 OF 2017 GIVEN ON 21 DECEMBER 2018

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION  : 2019 WAIRC 00350

LAST SUBMISSIONS :  MONDAY, 1 JULY 2019

DELIVERED  : friday, 5 JULY 2019

FILE NO.  : FBA 1 OF 2019

Applicant

AND

 Ian Gregory Sampson

Respondent

CatchWords : Industrial Law (WA) – Appeal against a decision of the Commission – Claim of denied contractual benefits – Grounds of appeal are difficult to understand – Appeal book does not comply with the Industrial Relations Commission Regulations 2005 – Respondent seeks costs incurred for appeal and at first instance – Appeal dismissed – Application for costs dismissed

Legislation : Fair Work Act 2009 (Cth)

  Industrial Relations Act 1979 (WA): s 7; s 7(1); s 27(1)(c);

  s 29(1)(b)(ii); s 49(3)

    Minimum Conditions of Employment Act 1993 (WA): s 3

    Industrial Relations Commission Regulations 2005

    Minimum Conditions of Employment Regulations 1993

Result : Appeal dismissed

  Application for costs dismissed

Representation:

Appellant : Mr P Meyer (of counsel) appearing in person

Respondent : Ms M Saraceni (of counsel) for the respondent

Case(s) referred to in reasons:

House v The King (1936) 55 CLR 499

Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194

McCorry v Como Investments Pty Ltd (1989) 69 WAIG 1000

The Construction, Mining & Energy Workers’ Union of Australia – Western Australian Branch v The United Furniture Trades Industrial Union of Workers WA (1990) 70 WAIG 3913

Brailey v Mendex Pty Ltd t/as Mail and Co. Maylands [1992 WAIRC 10026]; (1993) 73 WAIG  26)

Reasons for Decision

SCOTT CC AND EMMANUEL C:

Background

1         This is an appeal against the decision of the Commission in a claim of denied contractual benefits made pursuant to s 29(1)(b)(ii) of the Industrial Relations Act 1979 (IR Act) dated 24 December 2018 [2018 WAIRC 00916].

2         In that matter the Commission at first instance issued the following declaration and orders:

(1)   DECLARES that the applicant has been denied contractual benefits by the respondent by way of remuneration and annual leave in the sums of $3,926.58 and $1,970.00 respectively.

(2)   ORDERS that the respondent pay to the applicant the total sum of $5,896.58 as contractual benefits less any amount payable to the Commissioner of Taxation pursuant to the Income Tax Assessment Act 1936 (Cth) and actually paid within 21 days of the date of this order.

3         Mr Sampson, the applicant at first instance, and the respondent to this appeal, had originally claimed that the appellant had unfairly dismissed him and that he was denied a range of benefits under his contract of employment.  The Commission decided that, contrary to Mr Meyer's argument, the relationship between the parties was that of employee and employer, not an independent contract arrangement [2018 WAIRC 00419].  The Senior Commissioner subsequently issued a decision, the subject of this appeal, in which he dismissed the claim that Mr Sampson had been unfairly dismissed but found that there were contractual benefits owed to the applicant and ordered that they be paid.

4         The learned Senior Commissioner examined the terms of the definition of employee in s 3 of the Minimum Conditions of Employment Act 1993 (WA) (MCE Act) and s 7(1) of the IR Act.  He noted that the arrangement between the parties was for the respondent to pay the applicant by way of a fee split, that this was not a salary, but payment based on a percentage of fees earned by the firm from a client.  He found that “it plainly was a ‘percentage reward’, as that phrase would be ordinarily understood, for the purposes of Schedule 1 of the MCE Regulations”.  He concluded in respect of the payment arrangements as follows:

I accept that it would be unusual for a person in the position of the applicant, as an employed restricted legal practitioner, to be remunerated in this way.  However, the employment of solicitors and their terms and conditions of employment, is principally a matter for the common law. No award or industrial agreement has application to their employment in this State. It is a matter of negotiation and agreement between the employer and employee, no doubt having regard to market forces. This is of course, subject to minimum entitlements prescribed by the MCE Act and the Fair Work Act 2009 (Cth), where applicable.  In my view, the MCE Act did not apply to the applicant’s employment by the respondent.  [48]

5         The learned Senior Commissioner then went on to deal with the implication of terms into the contract.  He found that a term was to be implied into the applicant’s contract of employment, that the applicant was entitled to four weeks’ annual leave per annum.  He noted that the applicant took some 36 days of leave out of the entitlement of 40 days but was not paid for those days.  He found that the applicant should be paid and that a contractual benefit of 40 days’ annual leave had been denied to the applicant.  In dealing with the claim for pay in lieu of notice, The Senior Commissioner found that there was no capacity for the Commission to order any payment.

6         As to remuneration, the learned Senior Commissioner noted that the respondent admitted that there was a debt owed to the applicant of $3,926.58 for work done and that that would be the subject of an order.  He calculated, as best he could, an amount for the payment of the 40 days of annual leave and concluded that the sum of $1,970.00 was appropriate.  This led him to award to the applicant a total amount of $5,896.58.

The grounds of appeal

7         The appellant’s grounds of appeal are:

Order (1)

The Commissioner erred in fact.  At no time before, during or since the hearing has the Respondent denied payments due to the Applicant.

The Commissioner erred in law.  He ruled that the applicant was at all material times protected and subject to the Minimum Conditions of Employment Act 1993 and in same judgement decided to ignore the provision that employees are not entitled to annual leave if they are paid by commission only.

Order (2)

The payment method of remuneration was not part or an issue in the proceedings.  Thames Legal and Sampson Investments Pty Ltd had a contractual relationship.  Sampson Investments Pty Ltd is in breach of their agreement.  Mr Sampson instructed Paul Meyer that he wished to commence and continue with this contractual relationship until his application for unfair dismissal was instituted.

The legality of the contractual relationship was never disputed or an issue.  The payments were always subject to Mr Sampson providing Thames Legal with an invoice.  Mr Sampson failed to provide the last invoice despite several requests from Thames Legal.”

Consideration and conclusions

8         The role of the Full Bench in dealing with an appeal against a discretionary decision such as this matter, is by reference in particular to House v The King (1936) 55 CLR 499 and Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194.  We do not intend to set out all of the law in that matter, save to say that the Full Bench is required to establish that there has been error in the exercise of discretion by acting upon a wrong principle; allowing extraneous or irrelevant matters to guide or affect the decision; if there are mistakes of fact or if the Commission at first instance does not take into account some material consideration.  A decision-maker has some latitude as to the decision to be made.  It can only be challenged by showing error in the decision-making process.  The appellate body is to proceed with “caution and restraint”.  It is not simply a matter of the appellate body disagreeing with what might be a range of reasonable outcomes.

Grounds of appeal – Order 1

9         In respect of the first order, the appellant says that he has not denied that payment is due.  Rather, he is waiting for the respondent to provide him with an invoice in accordance with their arrangement.  Further, on one hand he says that he employed Mr Sampson but on the other, says that Mr Sampson was not an employee. 

10      It is difficult to understand the basis of this ground of appeal.  It appears that the appellant is seeking to argue the matter that was decided by the Senior Commissioner as the preliminary jurisdictional point, that is, the contractual relationship.  However, the appeal is clearly in relation to the final disposition of the matter.  There is no reference, in the Notice of appeal or in the appellant’s submissions, to the preliminary matter.  It is therefore, not in issue that the respondent is not required to provide an invoice to the appellant.  Payment of the amount due does not rely on an invoice being issued by the respondent.  It relies on compliance with an order of the Commission.  The appellant is simply required to comply with the order and make the payment required in the order.  This overtakes and replaces any purported sub-contractual relationship or invoicing arrangement whereby Mr Sampson, through Sampson Investments Pty Ltd, was required to submit an invoice to receive payment.  The appellant acknowledges that payment is due, the Commission has ordered that it be paid, and therefore, the appellant is simply required to make the payment.  This ground of appeal is misconceived. 

11      As to the second matter raised under the heading “Order 1” in the grounds of appeal, the appellant says that the learned Senior Commissioner erred in law in that he ruled that the applicant was at all material times subject to the MCE Act, but then is said to have ignored the provision that employees are not entitled to annual leave if they are paid by commission only.

12      The appellant has misunderstood the Reasons for Decision of the learned Senior Commissioner.  At [48] of the Reasons for Decision, the Senior Commissioner concluded that the MCE Act did not apply to the applicant’s employment by the respondent.  He then went on to consider whether terms ought to be implied in the contract.  He did not rely upon the MCE Act as having application to the applicant’s (respondent’s) employment, but rather implied a term into the applicant’s contract of employment taking account of “notoriously well-known entitlements of all employees in Australia” by reference to the MCE Act, the Fair Work Act 2009 (Cth), and “a universal entitlement in awards and industrial agreements across the land”  [51].

13      Therefore, the learned Senior Commissioner found that the applicant (respondent) had an entitlement to annual leave.  It was not by reference to the legislated, binding nature of the MCE Act, but by virtue of the implication of a term taken from, amongst other things, the MCE Act.

Grounds of appeal – Order 2

14      As to the grounds of appeal dealing with Order 2, once again the issue that the appellant has not accepted, but does not appear to appeal, is that the learned Senior Commissioner found that the relationship between the applicant and respondent was as employee and employer, not a sub-contract arrangement.  This affects the issue of the method of payment.  It appears, too, that the appellant's concern is that the order requires the deduction of any amount payable to the Commissioner of Taxation.  He says that because they were in a contractual relationship that was not one of employer and employee, and the Senior Commissioner has “retrospectively” changed that, he is unable to comply with the order because Mr Sampson is not registered with the Australian Taxation Office (ATO) as an employee.

15      Firstly, as noted above, there is no obligation upon Mr Sampson to provide an invoice.  The learned Senior Commissioner found there were amounts owing to Mr Sampson and ordered the appellant to pay them. 

16      Secondly, the issue that the appellant raises about the ATO is not a matter properly the subject of this appeal.  It is a matter of practicality for him to seek advice about, and to with deal the ATO. This ground of appeal is also misconceived.

17      Also, in his Outline of submissions, the appellant refers to a finding of the Legal Practitioners’ Complaints Committee (LPCC) which is said to have investigated a complaint brought by Mr Sampson against Mr Meyer and is said to have been dismissed.  The submission contains what purports to be an extract from a letter from the LPCC, however the letter has not been provided to the Full Bench.  Further, the submission appears to misunderstand that the Commission at first instance did not find that the MCE Act applied to the employment.  That is what the letter from the LPCC appears to confirm.  What it does say is that there was no entitlement to minimum rates of pay, superannuation and leave entitlements under that Act.  That is entirely what the Commission at first instance found.

Other matters

18      It is with some concern that we note what appears to be a tardy approach on the part of the appellant.  There is either a lack of courtesy or considerable inefficiency on the part of the appellant in the way in which he has dealt with this matter.  The Appeal Book is less than satisfactory in that the appellant has not complied with the Industrial Relations Commission Regulations 2005 in a number of instances.

19      Further, on 1 May 2019, the Commission emailed Mr Meyer seeking his response to points raised in an email from the respondent addressed to the Registrar, identifying a number of difficulties with the Appeal Book.  One such matter was that the Appeal Book did not contain the transcript of the hearing at first instance, nor did it identify the page numbers to which reference would be made.  No reply was received from Mr Meyer.  When asked about these matters at the hearing of the appeal, Mr Meyer said that he did not respond to the Commission’s email of 1 May 2019 because he did not intend to rely on the transcript.

20      The appellant’s outline of submissions and list of authorities were due to be filed by 11 June 2019.  By 17 June 2019, just over a week before the hearing of the appeal, and nearly a week after they were due, they had not been received. A further enquiry was made of him by email and no reply was received by the Commission.

21      By email dated Sunday, 23 June 2019, two days before the hearing of the appeal, Mr Meyer sought to file his outline of submissions.  In his email, he said that his office was no longer in use and that on Monday, 10 June 2019, he discovered that the roof was damaged that weekend, the ceiling had collapsed, and his business premises were flooded.  He said that he was forced to work from home, he only came “online” the previous Friday and had no access to his computer or files, so he was unable to draft his submissions any earlier. 

22      We note, firstly, that this unfortunate incident is said to have occurred over the weekend before Monday, 10 June 2019.  It was not until nearly two weeks later that the appellant contacted the Commission to advise of the difficulty he was faced with.  He did not seek an extension of time in which to file his submissions, nor did he contact the respondent to the appeal to advise of his difficulties.  He merely left the matter until he could get around to it.  The absence of access to his own files should not have prevented him from applying to the Commission to examine the Commission’s records to assist him or to apply for an extension of time in which to file his submission.  One would have thought that for a legal practitioner, who as a party to the matter, who is appealing against a decision of the Commission, the matter would have had some priority. 

23      Further, we note that the order issued on 24 December 2018 and the appellant was required to comply with it within 21 days, nearly 5 months ago.  He did not, nor did he make an application to stay the operation of the order.  Given that the appellant is a legal practitioner, the failure to either comply with an order of the Commission or seek to have it stayed pending the outcome of the appeal is no trivial matter.

24      One further matter is that the Notice of appeal sought leave to file the appeal out of time.  No leave is required.  To assume that leave was required misunderstands s 49(3) of the IR Act.  An appeal to the Full Bench is against the decision of the Commission.  A decision is defined in s 7 of the IR Act as including “an award, order, declaration or finding”.  The Reasons for decision do not constitute the decision - the order of the Commission constitutes the decision (see McCorry v Como Investments Pty Ltd (1989) 69 WAIG 1000; The Construction, Mining & Energy Workers’ Union of Australia – Western Australian Branch v The United Furniture Trades Industrial Union of Workers WA (1990) 70 WAIG 3913).  In this case, the appeal was lodged within 21 days of the date of the order (the decision) against which the appeal was brought.

25      The appeal will be dismissed

Costs

26      The respondent seeks that the Full Bench award his costs and expenses (excluding legal fees) for defending the appeal and for his costs and expenses (excluding legal fees) incurred at first instance.

27      The respondent filed a schedule of costs. The appellant was to have responded by close of business on Thursday, 4 July 2019, however, no response has been received.

28      In respect of the appeal to the Full Bench, it is very clear that the appeal had no prospect of success.  The appeal grounds are both obscure and entirely misconceived.  The appellant has acknowledged a debt but has refused to pay it and continued to do so even up until the day of the appeal, relying on an arrangement that was found by the Commission at first instance not to be valid.  Yet there is no appeal against that particular finding.  The respondent has been forced to defend the appeal and to spend time and resources in doing so. 

29      However, the schedule of costs submitted by the respondent contains only one item with a date occurring after 24 December 2018, which was the date of the decision that is the subject of the appeal. The date of this item is said to be 24 September 2019, which has not yet occurred.

30      The Commission may award costs, but no costs are to be allowed for the services of any legal practitioner or agent (s 27(1)(c) of the IR Act).

31      The general policy in industrial jurisdictions is that costs ought not to be awarded except in extreme cases, for example, when proceedings have been instituted without reasonable cause (see Brailey v Mendex Pty Ltd t/as Mair and Co. Maylands [1993 WAIRC 10026]; (1993) 73 WAIG 26).

32      If costs are awarded, it may only be in relation to the appeal rather than the proceedings at first instance (see Brailey v Mendex (supra)). Therefore, costs will not be awarded for those first instance matters.

33      If the Full Bench were able to consider costs for the matter at first instance, whilst we have some sympathy for the respondent in that part of his claim was for a debt that has been acknowledged but not paid, the case at first instance also involved a claim of unfair dismissal.  That application was dismissed.  The matters that were determined by the Commission at first instance were not without controversy and required consideration and determination.  It could not be said that, apart from the debt being agreed as owing, the remainder of the matters did not require determination.  These circumstances do not meet the test of being an extreme case. We would dismiss the application for costs for the hearing at first instance. As there is no claim for costs on the appeal, the claim for costs will be dismissed in its entirety.

MATTHEWS C:

34      I have read the Reasons for Decision of the Chief Commissioner and agree that the appeal should be dismissed and that no order for costs should be made.