Alexandra Mercuri v Green Castle Renmark Pty Ltd T/A Renmark Country Club
[2020] FWCFB 988
•27 FEBRUARY 2020
| [2020] FWCFB 988 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Alexandra Mercuri
v
Green Castle Renmark Pty Ltd T/A Renmark Country Club
(C2019/6793)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 27 FEBRUARY 2020 |
Appeal against decision [2019] FWC 7147 and Order PR713392 of Deputy President Anderson at Adelaide on 16 October 2019 in matter number U2018/12151.
[1] Ms Alexandra Mercuri (Appellant) seeks permission to appeal, and if granted, appeals a decision 1 of Deputy President Anderson (Decision) determining the Appellant’s application under s.394 of the Fair Work Act 2009 (Act) for an unfair dismissal remedy in relation to her dismissal by Green Castle Renmark Pty Ltd (Respondent).
[2] Having found the Appellant’s dismissal to have been unfair 2 the Deputy President concluded that reinstatement as a remedy was inappropriate,3 that an order for compensation was appropriate4 and ordered the Respondent to pay compensation to the Appellant in the gross amount of $4,477.13 together with a payment of $425.33 into the Appellant’s superannuation fund.5
[3] The lengthy procedural background to the unfair dismissal remedy application is summarised by the Deputy President at [6]-[12] of the Decision. Given this background we determined to deal with the application for permission to appeal and the merits of the appeal together in the same hearing.
Grounds of appeal
[4] The Appellant’s notice of appeal does not in strict terms contain appeal grounds but instead sets out in submission form the complaints made on appeal. The essential complaints may be distilled to the following two propositions:
[5] First, it is said the Deputy President erred in concluding that reinstatement of the Appellant was inappropriate because he wrongly took into account an irrelevant consideration, namely the impact on the relationship of trust and confidence of the history of litigation between the parties. 6 It is also said that taking into account the effluxion of time since the dismissal as a matter relevant to that assessment was an error.7 We later refer to this ground of appeal as the “reinstatement ground”.
[6] Secondly, it is said that the Deputy President erred in assessing the amount of compensation ordered in lieu of reinstatement because he failed to consider whether an amount calculated appears clearly inadequate and therefore not appropriate. It is said that the Deputy President should have but failed to reassess the assumptions made in reaching the amount. 8 We later refer to this ground of appeal as the “compensation ground”.
[7] We deal with these two broad grounds in turn below.
Consideration
[8] An appeal under s.604 of the Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 9 There is no right to appeal and an appeal may only be made with the permission of the Commission.
[9] This appeal is one to which s.400 of the Act applies. Section 400 of the Act provides:
“(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.”
[10] In Coal & Allied Mining Services Pty Ltd v Lawler and others, 10 Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 of the Act as “a stringent one.”11 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.12
[11] In GlaxoSmithKline Australia Pty Ltd v Makin, 13 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.” 14
[12] 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 appealable error. 15 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.16
Reinstatement ground – error in concluding reinstatement was inappropriate
[13] Trust and confidence is undeniably a necessary ingredient in any employment relationship and so it is accepted that whether there has been a loss of trust and confidence is a relevant consideration in determining whether an order for reinstatement is inappropriate. Of course, a conclusion that there has been a loss of trust and confidence must be soundly and rationally based.
[14] The Deputy President’s conclusion that reinstatement was inappropriate was wholly based on his conclusion that in the instant case there had been a loss of trust and confidence, which in the circumstances, had the result of a fundamental breakdown in the relationship between the Appellant and the Respondent.
[15] After setting out the relevant principles derived from the authorities relevant to assessing the impact of a loss of trust and confidence on the appropriateness of an order for reinstatement, the Deputy President articulated a number of considerations which taken together, led him to conclude that reinstatement was inappropriate because of a loss of trust and confidence leading to a breakdown in the relationship. Based on the evidence, these were as follows:
• The breakdown is manifest by mistrust and disregard on the part of the Respondent and mistrust and wariness on the part of the Appellant; 17
• Cultural differences partly explain the damaged relationship, but only partly so. For example, Mr Last (the Respondent’s Manager and a Director) and Ms Qu (a Director) consider it to have been disrespectful for the Appellant to have included in her sworn evidence commentary of Ms Qu’s English-speaking skills; 18
• Whilst the breakdown has been exacerbated by this litigation and that occurring in the South Australian Employment Tribunal, it is not simply a product of the Appellant exercising those legal rights; 19
• The relationship was in free-fall in the weeks prior to the Appellant’s dismissal. The Appellant’s evidence was that whilst at work in those final weeks she was actively avoiding Ms Qu and Ms Tian (the Respondent’s Duty Manager) and then Mr Last even whilst on shift, in order to manage her anxiety and not engage in confrontation; 20
• There was high probability that a reinstatement order would result in fresh confrontation in the workplace, with consequent exacerbation of stress, anxiety and disruption to the business, staff and (being a service industry) possibly customers; 21
• A reinstatement order would require the Appellant to return to a business of small scale, and one where the owners (Mr Last and Ms Qu) are hand-on operators and where staff and owners work in close physical proximity front of house and back of house; 22
• The Appellant would be reporting to and taking instructions from the very owners and managers who she sought to avoid during her final weeks of work; 23
• This is not a business where the Appellant:
◦ could be relocated to a different geographical site; or
◦ could effectively perform her work answering solely to others or with the requisite element of mutual trust required of an employment relationship; 24 and
• There was no evidence of alternate positions in this business that would militate against a conclusion that the relationship had irreparably broken down. 25
[16] It is evident that the Deputy President took into accountthe effluxion of time since dismissal in his assessment of whether an order for reinstatement was inappropriate. 26 The Deputy President reasoned that the considerable passage of time since the Appellant’s dismissal “has exacerbated the practicality of a reinstatement order, not alleviated it”.27 This according to the Deputy President was because “[I]n the context of any business, let alone a business of small scale based in one location, that is a considerable passage of time to reasonably expect broken relationships to be restored so as to recreate an effective employment relationship.”28
[17] The Appellant contends the Deputy President erred because he wrongly considered and took into account the fact of and course of litigation and the effluxion of time between dismissal and the hearing and in light of these determined that reinstatement was inappropriate.
[18] We agree that the impact of the litigation on the relationship between the Appellant and the Respondent was irrelevant in considering whether an order for reinstatement was inappropriate. As the Full Bench in Nguyen v Vietnamese Community in Australia 29pointed out, a person who is exercising a workplace right (which the Appellant had done in relation to the litigation identified by the Deputy President) within the meaning of s.341(1)(b) of the Act is afforded protection from adverse action by an employer, inter alia, because the person has exercised that right. It would be incongruous if the exercise of a workplace right operated as a barrier to reinstatement in an unfair dismissal proceeding in circumstances where Part 3-1 of the Act prohibits an employer from terminating the employment of an employee who exercises a workplace right.30
[19] That the Appellant has pursued the unfair dismissal remedy application and the proceeding in the South Australian Employment Tribunal and that this has given rise to a degree of acrimony between the Appellant and the Respondent are not matters which should be taken into account in determining whether reinstatement is appropriate. 31
[20] However, although the Deputy President considered the litigation as relevant, it seems clear enough the consideration was neither weighty nor decisive. The Deputy President observed in relation to the litigation, that the breakdown in the relationship which he found had occurred “is not simply a product of Ms Mercuri exercising those legal rights”. 32 Reading the Decision fairly and as a whole, the Deputy President was merely expressing that the relationship breakdown he had found to have occurred by reason of the other matters he had identified, had been “exacerbated” by the litigation.33 There would thus be a breakdown of the relationship notwithstanding the litigation.
[21] Contrary the Appellant’s contention, the Deputy President did not conclude that in light of the litigation (and the effluxion of time, to which we will shortly turn) that reinstatement was inappropriate. The Deputy President concluded that the relationship had already broken down and the litigation merely exacerbated the breakdown. The relationship breakdown finding is capable of standing without the exacerbating factor identified. That conclusion was open on the evidence and was not materially affected by the irrelevant consideration.
[22] As to the second element of this appeal ground - that the Deputy President impermissibly took into account the effluxion of time between dismissal and the hearing as a factor in assessing whether a reinstatement order was inappropriate – we accept, without more, the effluxion of time between the dismissal and any consideration of remedy, generally has nothing to say about whether an order for reinstatement is appropriate. However, in this case the Deputy President considered the effluxion of time to be relevant in assessing whether the relationship breakdown that he had identified was irreparable. As already noted, the Deputy President reasoned that the effect of the considerable passage of time on the Respondent as a business of small scale based in one location, was that it could not be expected that the broken relationships could be restored so as to recreate an effective employment relationship. This was a conclusion that was open, and one with which we would not interfere.
[23] For these reasons, we are not persuaded that it is in the public interest to grant the Appellant permission to appeal on the reinstatement ground. Permission to appeal on the reinstatement ground is refused.
Compensation ground – failure to consider whether amount calculated appears clearly inadequate
[24] After setting out the relevant statutory provisions, 34 the Deputy President turned to consider each of the matters that must be taken into account in s.392(2) of the Act in determining an amount of a compensation order.35 The Deputy President set out his conclusion as to the amount of compensation to be ordered as follows:
“[182] The compensation order I will make will be based on seven weeks pay at 20 hours per week on Ms Mercuri’s usually rostered hours as a Food and Beverage Attendant Grade 2. Whilst Ms Mercuri occasionally was paid as a Grade 3 or Grade 4 (if she supervised staff or was the responsible person) I consider that the deterioration in the employment relationship would have rendered the employer unlikely to have given Ms Mercuri these higher duties over this period.
[183] Given that Ms Mercuri’s hours fluctuated, it is appropriate to construct an abstract but reasonably foreseeable casual roster for the projected period of future earnings. I will calculate compensation based on a roster of three shifts of four hours 5:00pm to 8:00pm Wednesday to Friday inclusive each week (being nine hours worked before 7:00pm and three hours worked after 7:00pm), one shift of four hours on each Saturday and one shift of four hours on each Sunday. This pattern has some broad regard to the pattern of work during Ms Mercuri’s ten weeks of work with RCC, adjusted for a roster of 25 hours per week becoming a roster of 20 hours per week. It is a likely 20 hours per week roster to have been worked by Ms Mercuri based on the evidence before me.
[184] Having regard to the provisions of the Hospitality Award and payslips in evidence (allowing for a dispute concerning the week of alleged underpayment) Ms Mercuri’s ordinary time (Monday to Friday) rate was $20.22 per hour. Under the Hospitality Award she was entitled to be paid a 25% casual loading ($25.28 per hour), with 10% penalties applying from 7:00pm to midnight. Her rate on Saturdays was 150% of her hourly rate and on Sundays it was 175%. I make no allowance for overtime as that is not worked on this roster.
[185] Ms Mercuri’s projected weekly earnings based on this pattern of 20 hours work per week equates to $639.59 per week. Across a period of seven weeks the compensation amount is $4,477.13.
[186] Tax will be payable on the compensation amount.
[187] Ms Mercuri would have been entitled to superannuation at the rate of 9.5% on these earnings, had she been so employed. I will further order that an amount of $425.33 be paid into the superannuation fund that RCC was making contributions on Ms Mercuri’s behalf at the date of dismissal.
[188] I consider these amounts to be reasonable in all of the circumstances including the circumstances in which Ms Mercuri found herself and the circumstances of this business.
[189] I take into account the potential cash flow consequences for a business of small scale such as RCC but do not conclude that the compensation order will adversely affect business viability.” 36 [Endnotes omitted]
[25] It is also apparent that in assessing the amount of compensation, the Deputy President applied the methodology for assessing compensation found in Sprigg v Paul Licensed Festival Supermarket 37 and in the context of the Act, as set out in Bowden v Ottrey Homes Cobram and District Retirement Villages38.39
[26] It is uncontroversial that when assessing the amount for an order of compensation, if the application of the Sprigg formula ‘yields an amount which appears either clearly excessive or clearly inadequate’ the Commission should reassess the assumptions made in reaching that amount. 40 An order for the payment of compensation must be appropriate having regard to all the circumstances of the case.41
[27] The essential point made on appeal is that the Deputy President erred because he failed to do that which is set out in the preceding paragraph.
[28] This contention is unsustainable. As noted above the Deputy President said in his conclusion as to compensation that:
“[188] I consider these amounts to be reasonable in all of the circumstances including the circumstances in which Ms Mercuri found herself and the circumstances of this business.” 42
[29] The endnote numbered “44” to [188] of the Decision cites “Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]”, a decision of a Full Bench of the Australian Industrial Relations Commission. Paragraph [32] of that decision is in the following terms:
“[32] It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act.29 By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers “appropriate” having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion “if the Commission considers it appropriate in all the circumstances of the case” to “make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement” subject to the Commission having regard “to all the circumstances of the case including” the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the “cap” provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard “to all the circumstances of the case” including the matters listed in s.170CH(7) and subject to the “cap” provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.” [Endnote omitted]
[30] More recently in McCulloch v Calvary Health Care Adelaide 43a Full Bench of the Commission said:
“[29] Finally, as observed by a previous Full Bench, if the application of the Sprigg formula ‘yields an amount which appears either clearly excessive or clearly inadequate’ than the Commission should reassess the assumptions made in reaching that amount. The order for the payment of compensation must be appropriate having regard to all the circumstances of the case (see s.390(3)(b) and s.392(2)). The circumstances in this case were that the applicant had been employed by the respondent for 7 ½ years; he had never previously been the subject of any disciplinary process and had not previously engaged in conduct similar to that which led to his dismissal; and, because of his age and limited education, he had little likelihood of obtaining other employment. In such circumstances an award of 8 weeks compensation appears to be clearly inadequate.” 44 [Endnote omitted]
[31] The decision in Smith v Moore Paragon Australia Ltd is cited by the Full Bench in McCulloch as authority for the proposition contained in the first sentence of the above passage.
[32] Having regard to the above it is plain from [188] of the Decision that the Deputy President made the assessment the Appellant contends was not made. No error is apparent. The Appellant’s real complaint is that a different amount should have yielded. This is not a complaint about appealable error but rather a plea that we arrive at a different conclusion to that reached by the Deputy President. That is not the role of an appellate Full Bench.
[33] For these reasons, we are not persuaded that it is in the public interest to grant the Appellant permission to appeal on the compensation ground. Permission to appeal on the compensation ground is refused.
Disposition
[34] Permission to appeal the decision in Alexandra Mercuri v Green Castle Renmark Pty Ltd[2019] FWC 7147 and Order in PR713392 is refused.
DEPUTY PRESIDENT
Appearances:
A Wright, solicitor for the Appellant
G Last for the Respondent
Hearing details:
2019
Melbourne
9 December 2019
Further written submissions:
Respondent, 23 December 2020
Appellant, 17 December 2020
Printed by authority of the Commonwealth Government Printer
<PR716982>
1 Alexandra Mercuri v Green Castle Renmark Pty Ltd[2019] FWC 7147
2 Ibid at [92]-[138]
3 Ibid at [140]-[152]
4 Ibid at [153]
5 Ibid at [157]-[189], [195]; PR713392
6 Transcript PN134, PN137
7 Appellant’s Outline of Submissions at [43]-[44]
8 Transcript PN135, PN137
9 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2) of the Act; see Coal and Allied v AIRC [2000] HCA 47, 203 CLR 194, 74 ALJR 1348, 174 ALR 585, 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ
10 [2011] FCAFC 54, 192 FCR 78, 207 IR 177
11 Ibid at [43]
12 O’Sullivan v Farrer [1989] HCA 61, 168 CLR 210, 64 ALJR, 89 ALR 71 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506, 85 ALJR 398, 275 ALR 408 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [44]-[46]
13 [2010] FWAFB 5343, 197 IR 266
14 Ibid at [27]
15 Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [30]
16 Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089, 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78, 207 IR 177; New South Wales Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office[2014] FWCFB 1663, 241 IR 177 at [28]
17 Alexandra Mercuri v Green Castle Renmark Pty Ltd[2019] FWC 7147 at [148]
18 Ibid
19 Ibid
20 Ibid
21 Ibid
22 Ibid at [149]
23 Ibid
24 Ibid
25 Ibid at [151]
26 Ibid at [150]
27 Ibid
28 ibid
29 [2014] FWCFB 7198
30 Ibid at [37]
31 Ibid at [38]
32 Alexandra Mercuri v Green Castle Renmark Pty Ltd[2019] FWC 7147 at [148]
33 Ibid
34 Ibid at [154]
35 Ibid [157]-[181]
36 Ibid at [182]-[189]
37 (1998) 88 IR 21
38 [2013] FWCFB 431; (2013) 229 IR 6
39 Alexandra Mercuri v Green Castle Renmark Pty Ltd[2019] FWC 7147 at [155]
40 See McCulloch v Calvary Health Care Adelaide[2015] FWCFB 873 at [29] and Smith v Moore Paragon Australia Ltd (2004) 130 IR 446 at [32]
41 Fair Work Act 2019 (Cth), ss.390(3)(b) and 392(2); see also McCulloch v Calvary Health Care Adelaide[2015] FWCFB 873 at [29]
42 Alexandra Mercuri v Green Castle Renmark Pty Ltd[2019] FWC 7147 at [188]
43 [2015] FWCFB 873
44 Ibid at [29]
1
11
0