The presiding member is about to retire - and the court says that's exactly why penalties can't wait
A South Australian court has refused to halt penalty proceedings against Chemist Warehouse pharmacy operators, despite accepting there may be arguable grounds for their appeal against an underlying underpayment decision.
The ruling, handed down on October 15, 2026, dealt with a stay application. In plain terms, the operators wanted to press pause on one set of proceedings - the financial penalties phase - while they fought a separate appeal in the Federal Court.
Here is how it got to that point.
In 2022, the Shop, Distributive and Allied Employees' Association (SDA) brought representative proceedings against operators of Chemist Warehouse pharmacies in South Australia on behalf of multiple pharmacy assistants. Each had been classified and paid at Level 2 under the Pharmacy Industry Award. Each had also obtained a Certificate III in Community Pharmacy - a qualification that, the union argued, entitled them to Level 3 classification and the higher pay that comes with it.
The operators disagreed. Their position, broadly, was that the work their staff actually performed was Level 2 work, regardless of the certificate. The written employment contracts said Level 2. The duties on the ground were Level 2. The Certificate III did not change that.
The monetary claims went to trial over eight sitting days in August 2023. The central question: what does it mean to be "required by the employer to work at this level" under the Award's classification criteria?
The Tribunal sided with the union. On October 2, 2026, it ordered the operators to make various monetary payments covering underpaid wages and superannuation contributions.
Four days later, the operators appealed to the Federal Court. On the same day, they applied to the South Australian Employment Court to stay the related penalty proceedings - listed for hearing on December 1, 2026 - until the appeal was resolved.
Their argument had two limbs. First, they said they had an arguable case on appeal - that the Tribunal got the Award's classification provisions wrong and made factual errors along the way. Second, they said the balance of convenience favoured waiting, pointing to the cost, inconvenience, and reputational harm of proceeding with penalties when the underlying findings might be overturned.
The Court gave them half of what they wanted. It accepted there was at least an arguable case that the Tribunal made "significant errors in construction of the relevant provisions of the Award and significant errors of fact." By way of example, the Court pointed to the Tribunal's reasoning on customer advice - specifically, whether it adequately addressed the evidence from the operators' own witnesses about the scope of advice staff were expected to give.
But arguability alone was not enough.
On the balance of convenience, the Court was not persuaded. Six factors told against a stay.
The SDA held a final order in its favour and was entitled to move promptly on penalties. Proceeding now meant any appeal from the penalty decision could be bundled with the existing Federal Court appeal, estimated for August 2027 - saving time and resources for everyone. The penalty hearing was listed for just one day, with evidence expected by affidavit. The presiding member who ran the eight-day trial was due to retire at the end of 2026 and plainly intended to resolve the matter before she left. A stay would have meant handing the case to someone starting cold. The public interest in finality weighed against delay. And because the operators had committed to paying the monetary orders regardless, a successful appeal would not be undermined by the penalty hearing going ahead.
As for reputational harm, the Court noted the operators already had a published judgment finding underpayment of multiple employees. If they could point to specific harm from the penalty proceedings, the Court had broad powers under the South Australian Employment Tribunal Act to restrict publication.
The stay application was refused.
Chemist Warehouse is one of Australia's largest pharmacy chains, operating more than 500 stores nationally and now listed on the ASX through its parent company, Sigma Healthcare.
For HR teams managing award-covered workforces, the underlying dispute carries a practical lesson: when employees gain higher qualifications, the question of whether they are "required" to work at that level does not turn on what the employment contract says. It turns on what actually happens on the shop floor.
