Acupuncture Australia Pty Ltd v Wendy Elton
[2015] FWCFB 2370
•6 MAY 2015
| [2015] FWCFB 2370 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Wendy Elton
(C2015/1797)
VICE PRESIDENT CATANZARITI | SYDNEY, 6 MAY 2015 |
Appeal against decision [2015] FWC 864 of Deputy President Asbury at Brisbane on 4 February 2015 in matter number U2014/7697.
[1] This is an appeal against a decision of Deputy President Asbury made on 4 February 2015, 1 which concerned an application by Miss Elton for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Cth) (the Act). The Deputy President found Miss Elton was unfairly dismissed and made an order for compensation.2
[2] The appeal was listed before us to determine whether permission to appeal should be granted. In the hearing, Mr Kwoh-Gain, the Managing Director of the appellant, appeared for the appellant. The respondent was self-represented. Each had also appeared before the Deputy President. Neither had been represented by any other person.
The Act - provisions relevant to this appeal
[3] The decision being appealed was made under Part 3-2 of the Act. Section 400(1) provides that permission to appeal must not be granted from such a decision unless the Fair Work Commission (the Commission) considers that it is in the public interest to do so. Further, in such matters, s.400(2) provides that appeals on a question of fact may only be made on the ground that the decision involved a “significant error of fact”. In Coal & Allied Mining Services Pty Ltd v Lawler, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as “a stringent one”. 3
[4] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 4 In GlaxoSmithKline Australia Pty Ltd v Makin, a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 5
[5] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of an appealable error. 6 However, the fact that the Commission Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.7
The Deputy President’s decision
[6] We have closely considered all of the Deputy President’s reasons for decision and the evidence that was led before her. We propose to summarise the key findings made by her.
[7] Ms Elton commenced employment with the appellant in January 2011. She worked 40 hours per week and was engaged as a casual and paid an hourly rate. At the time she was dismissed, her hourly rate was $35. The appellant had two other employees working in the business, as well as Mr Kwoh-Gain.
[8] Mr Kwoh-Gain said he summarily dismissed Ms Elton on 23 May 2014 on the basis that he had evidence that she had engaged in corporate theft and fraud involving cash, credit card, PayPal and direct deposits. Mr Kwoh-Gain had started to investigate this matter in early May 2014 and reported it to the police in June 2014. A copy of the written report that he had provided to the police was in evidence and the Deputy President referred to it.
[9] At the time of the hearing before the Deputy President, Mr Kwoh-Gain was not able to provide any advice about the progress of the report he had made to the police. Ms Elton had said that she had made enquiries with the Queensland Police Service and had been informed there was nothing in the system under her name, and that if there had been an investigation undertaken she would have been contacted. 8
[10] After summarising all of the evidence, the Deputy President considered whether the Small Business Fair Dismissal Code (the Code) applied to the dismissal. She observed that in the case of a dismissal for serious misconduct, an employer in a small business would have complied with the Code if they were able to establish they believed, on reasonable grounds, that an employee’s conduct was sufficiently serious to justify summary dismissal. 9
[11] The Deputy President found that the dismissal of Ms Elton was not undertaken in accordance with the Code. She said:
“... To the contrary, I am of the view that there is nothing reasonable about Mr Kwoh-Gain’s belief that Ms Elton engaged in conduct that was sufficiently serious to justify summary dismissal. There is also nothing reasonable about the grounds upon which that belief was based. It is difficult to conceive of a case where the employer’s belief that an employee has engaged in misconduct could be more unreasonable or could have a less reasonable basis.” 10
[12] The Deputy President gave detailed reasons why, in her opinion, the Code was not complied with. We think it appropriate to reproduce the key paragraphs of the Deputy President’s decision in which she comments upon this finding.
“[50] I do not accept that Mr Kwoh-Gain has established that there was any theft or fraud perpetrated against the Company. Mr Kwoh-Gain’s starting point was to assert that cash and credit card sales are down and that there have been invoices deleted. He provided no primary evidence in the form of business or accounting records upon which to base this assertion. He did not do so at that time that he dismissed Ms Elton or when he referred the matter to the Police. At the point this matter was heard, Mr Kwoh-Gain did not provide any primary or source material upon which his assertions about the reductions in cash and credit card revenue or about the numbers of deleted invoices
[51] Even if it is accepted that Mr Kwoh-Gain’s figures are correct, and can be substantiated, these matters are not of themselves sufficient to justify a suspicion of theft. There is nothing inherently suspicious about a retail business having reduced sales. Mr Kwoh-Gain operates a small business that sells acupuncture supplies and Chinese medicinal herbs to other small businesses and to members of the public. A reduction in the sales or income of such a business does not of itself provide a reasonable basis for a belief that staff are stealing from the business. It is equally probable that the reduction in Mr Kwoh-Gain’s sales is due to economic conditions impacting his customers. It is also equally probable that a reduction in cash or credit card sales may be because customers are buying on line.
[52] Mr Kwoh-Gain also failed to establish that a larger than usual number of invoices had been deleted. Even if this was the case, Ms Elton also provided an explanation of the reasons for the deletion of invoices and the circumstances in which this occurs. That explanation was both credible and reasonable. Particularly given that there was a new employee undertaking invoicing. Further, as Ms Elton’s evidence (which was not contradicted) establishes, there were three employees who undertook invoicing, cash sales, credit card sales and on-line sales.
[53] The basis for Mr Kwoh-Gain concluding that Ms Elton was responsible for the theft he believed had occurred was also unreasonable. Mr Kwoh-Gain did not establish that Ms Elton printed and took home daily sales sheets. Ms Prasad’s evidence is that the only work related document that Ms Elton was printing out was the weekly sales report. It is also apparent that Ms Elton was printing out personal material relating to the construction of her house. Ms Elton agreed that she printed out weekly sales reports and put them into her bag to retain for her personal records.
[54] It is evident from emails and the bank statement annotated by Mr Kwoh-Gain and tendered by Ms Elton, that he was monitoring her level of sales and had advised her that if she did not achieve 12 sales per day, her employment may be in jeopardy. Ms Elton was also able to produce weekly sales sheets that pre-dated the implementation of the bonus system and dated from the time when the requirement to make 12 sales per day was communicated to her. In short Ms Elton provided a comprehensive, credible and reasonable explanation for printing and taking home the weekly sales reports and I accept it.
[55] That Ms Elton also printed out documents relevant to the construction of her house was not a reasonable basis to conclude that she had engaged in theft and fraud. It is also a reasonable explanation for the behaviour viewed by Ms Prasad as suspicious as it probably explains Ms Elton’s eagerness to get documents from the printer before other employees saw them given the documents related to the construction of her house. In any event, Ms Elton was not dismissed for printing out personal documents on the Company’s printer.
[56] Mr Kwoh-Gain’s theories about Ms Elton’s involvement with VK are also ludicrous. It is only necessary to quote Mr Kwoh-Gain’s report to the Police to see that this is so. He has not a scintilla of evidence upon which to base his hypothesis and has nonetheless documented it and provided a report to the Queensland Police Service. Unsurprisingly, there is no evidence that there has been any action taken in relation to Mr Kwoh-Gain’s report. It is also apparent from Mr Kwoh-Gain’s evidence that even at the point that this application was heard, he is continuing to attempt to make a case that Ms Elton engaged in the conduct he alleges.
[57] Mr Kwoh-Gain had no reasonable basis for his belief that Ms Elton had engaged in misconduct sufficiently serious to justify immediate dismissal when he dismissed her, and that situation continues. Accordingly, I find that Ms Elton’s dismissal was not consistent with the Small Business Fair Dismissal Code and turn to consider whether it was otherwise unfair on the grounds in s. 387 of the Act.”
[13] The Deputy President then considered each of the matters to which she was required to have regard, as provided for in s.387 of the Act. The most significant findings made were:
● That there was no valid reason for Ms Elton’s dismissal. She was not satisfied that Ms Elton had engaged in the misconduct which Mr Kwoh-Gain had alleged. She concluded that, in fact, the basis upon which Mr Kwoh-Gain had proceeded to form the view that Ms Elton had engaged in serious misconduct was capricious and fanciful. None of the allegations made by him were found to have any substance. 11
● Ms Elton had been notified in the dismissal meeting of the reason Mr Kwoh-Gain had decided to dismiss her. She was given no real opportunity to respond to the serious allegations he made. As she had no notice of the meeting, Ms Elton had made no request for a support person to be in attendance.
● Despite the fact the appellant is a small business employer, it had taken no advice about dismissing Ms Elton, nor about any procedures that might be appropriate to have been followed. Even allowing for the fact the employer is a small business and had no human resource management specialist, the manner in which Mr Kwoh-Gain had carried out the dismissal was inexcusable. It should have been obvious to him that his allegations could not be substantiated. 12
[14] The Deputy President found that Ms Elton had been unfairly dismissed. She then turned to consider the remedy that might be appropriate to order. She said she was satisfied that reinstatement was not appropriate. She considered whether an order for compensation was appropriate. She referred to each of the relevant factors contained within s.392(2) of the Act. She found that Ms Elton would have remained in employment for a period of no more than eight months. In this respect we note that Mr Kwoh-Gain had said that, but for her misconduct, Ms Elton would have remained in employment for 3 to 5 years. The Deputy President took into account Centrelink payments Ms Elton had received. An adjustment was made for contingencies which were identified in her reasons. She found that Ms Elton’s conduct had in no way contributed to her dismissal so no adjustment to any compensation order on that account was appropriate. An order for compensation for $29,070, less taxation, was made.
[15] A stay of the decision of the Deputy President was sought by the appellant. In his reasons for refusing to grant a stay order, Senior Deputy President Richards observed the appeal grounds are largely directed at matters that do not attack the core findings of fact which had been made. He found that no arguable case had been made out that the Deputy President was in error in the findings she had made. In so far as the appeal challenged the basis upon which the Deputy President had assessed compensation, it did not reflect error. The Deputy President had not ordered an amount equivalent to 8 months’ payment. The reference the Deputy President had made to 8 months was in the context of assessing how long it was likely Ms Elton would have remained in employment. That figure had then been subject to appropriate deductions. The amount ordered did not exceed the statutory “compensation cap” of 26 weeks’ payment as referred to in s.392(5) of the Act. Senior Deputy President Richards found that the appeal did not appear to have any reasonable prospect of success either in relation to the grant of permission to appeal or on its merits. He declined to grant the stay order. 13
[16] We note that, subsequently, the appellant applied to Deputy President Asbury for a variation to the order for compensation so that it could be paid in instalments. The Deputy President varied the order and provided that the amount was to be paid in three instalments. 14
The grounds of appeal and submissions made on the appeal
[17] We commence by observing that no application was made by the appellant after the decision of Senior Deputy President Richards to amend the grounds of appeal. The grounds are largely in the form of submissions. However, it would appear that the key challenges may be summarised as follows:
● A number of significant errors of fact had been made, principally in relation to the manner in which the Deputy President dealt with the weekly sales reports and the weight she placed on them.
● The Deputy President had not properly dealt with the appellant’s submissions about the importance of Ms Elton’s printing out, and taking home, copies of the weekly sales reports.
● The Deputy President did not give weight to the increased volume of deleted invoices in the period prior to September 2013 and the period September 2013 to April 2014.
● The Deputy President misunderstood the employee bonus system.
[18] Under the heading of “Other matters in relation to appeal”, the appellant raised the following matters:
● It submitted that there were reasonable grounds to find that Ms Elton’s conduct was sufficiently serious to justify immediate dismissal and that the dismissal was not harsh, unjust or unreasonable.
● It expressed concern about the manner in which its decision-making process had been criticised by the Deputy President.
● The compensation order was said to be “excessive and unreasonable”. The appellant sought for the compensation amount to be “reassessed for 6 months of pay and not 8 months of pay”.
● The decision of the Deputy President had been published outside of the Commission’s timeliness benchmarks.
[19] In so far as the public interest was addressed in the grounds of appeal, the appellant submitted that it was to be expected that the Commission would act fairly and reasonably. The appellant believed it had been wronged by an ex-employee and had now been wronged by the Deputy President. It submitted that the Full Bench owed it a duty of care in dealing with the appeal. It submitted the decision was biased and against common sense. For these reasons, it was said it was in the public interest for the Commission to grant permission to appeal.
[20] In the hearing before us, the appellant relied on two written submissions it had filed. The first, dated 18 March 2015, is titled “Introductory Speech by Appellant at Appeal Hearing”. The second, dated 3 April 2015 is titled “Main Speech by Appellant at Appeal Hearing”. We have considered all of the matters contained in those two documents.
[21] In the document dated 18 March 2015, the appellant addresses some of the matters that are contained in its notice of appeal. The document largely contains submissions about the appellant’s expectations of the outcome of the hearing below and the expectations of the community at large. To the extent the submission contains any matters that might be said to be relevant to the identification of appealable error, we have taken it into account.
[22] In so far as the appellant’s submission of 3 April 2015 is concerned, it, like the grounds of appeal, addresses the weekly sales reports and the deleted invoices. It covers matters the appellant raised in the hearing before the Deputy President. It largely comprises a submission that, at first instance, the Deputy President should have agreed with all of the adverse inferences Mr Kwoh-Gain had asserted should have been drawn against Ms Elton.
Consideration of the matters raised by the appeal grounds and submissions
[23] We have closely considered all of the matters raised by the appellant in its notice of appeal and written submissions. The matters raised are largely those which were raised before the Deputy President and, in our opinion, properly considered by her. On the key issue of the findings made by the Deputy President about whether Mr Kwoh-Gain had any reasonable basis to form the view that Ms Elton had engaged in acts of fraud and theft, the appellant raised no new arguments of any merit. No arguable case of appealable error was established. We respectfully agree with the Deputy President that there was no adequate evidence led by the appellant which established, on the balance of probabilities, that Ms Elton had engaged in the conduct which was alleged.
[24] The grounds of appeal did not specifically identify or assert error in the Deputy President’s findings that the dismissal was not consistent with the Code. As the submissions are not entirely clear as to whether the appellant does challenge this finding, we should indicate our ruling on it. We are not persuaded that the Deputy President was in error in her finding in this respect.
[25] None of the appellant’s submissions persuade us that the weight the Deputy President gave to the evidence about the weekly sales reports and the deletion of invoices were findings not reasonably open to her. There was no identification of any particular evidence that she did not properly take into account. The appellant’s case is that the Deputy President should have been persuaded, as it had submitted, that all of the inferences it drew adverse to Ms Elton should have also been adopted below. We do not agree. The allegations made by Mr Kwoh-Gain were not supported by reliable and relevant evidence.
[26] The manner in which the Deputy President assessed compensation reflects no error. The Deputy President did not make an assessment of compensation equivalent to 8 months’ wages. The relevance of 8 months was that it was the Deputy’s President’s assessment as to how long Ms Elton would have been likely to have remained in employment. In fact, as we have earlier noted, Mr Kwoh-Gain had said that, but for misconduct, she would have stayed in employment for a much longer period. The Deputy President did not make an assessment of compensation in excess of the amount calculated in accordance with s.392(5) of the Act. That this ground of appeal reflected no error should have been clear to the appellant after Senior Deputy President Richards had published his reasons for refusing the stay order.
[27] The appellant submitted that the Deputy President had published her decision outside of the Commission’s timeliness benchmarks. Having made that submission, the appellant does not identify what its relevance might be to our consideration of whether to grant permission to appeal. It is not suggested that the timing of the decision impacted in any way the manner in which the witness evidence was dealt with. The appellant does not identify any reason why the delay, which we observe is short, raises any issue that may be relevant to the public interest or the identification of appealable error.
[28] The matter before the Deputy President was decided upon its own peculiar facts. The appellant does not identify any error of law in the manner in which the Deputy President applied the relevant provisions of the Act. Despite alleging bias on the part of the Deputy President in reaching her decision, no attempt was made to make out that allegation. In our opinion, it has no merit.
[29] We are not persuaded that the Deputy President’s reasons for decision raise issues of importance or general application. Neither the grounds of appeal nor the submissions establish any public interest considerations. Accordingly, s.400 of the Act provides that permission to appeal must not be granted. We decline to grant permission. The appeal is dismissed.
VICE PRESIDENT
Appearances:
Mr I Kwoh-Gain for Acupuncture Australia Pty Ltd.
Ms W Elton in person.
Hearing details:
Sydney.
2015.
April 8.
1 [2015] FWC 864.
2 PR560752.
3 [2011] FCAFC 54 at [43].
4 O’Sullivan v Farrer (1989) 168 CLR 210 at 216-7 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54 at [44]-[46].
5 [2010] FWAFB 5343 at [27].
6 Wan v AIRC [2001] FCA 1803 at [30].
7 Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54 at [43]; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
8 [2015] FWC 864 at [17].
9 Ibid at [38]. See also the terms of the Code under the heading “Summary Dismissal”.
10 Ibid at [47].
11 Ibid at [59]-[60].
12 Ibid at [66]-[69].
13 [2015] FWC 1394.
14 [2015] FWC 1674.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR562813>
8
0