Budalich and Secretary, Department of Employment and Workplace Relations
[2007] AATA 22
•16 January 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 22
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2005/404
GENERAL ADMINISTRATIVE DIVISION ) Re MARKO BUDALICH Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Ms L R Tovey, Member Date16 January 2007
PlacePerth
Decision The decision of the Social Security Appeals Tribunal dated 27 October 2005 is affirmed. .........(Sgd. Ms L R Tovey).................
Member
CATCHWORDS
FAMILY ASSISTANCE – newstart allowance – newstart activity agreement – failure to negotiate – whether person is unreasonably delaying entering into the agreement – activity test breach rate reduction period and rate
Social Security Act 1991, ss. 593, 604, 605, 606, 607, 625, 644AA, 644AB, 644AE
Dudzinski v Harris [2003] FCA 440
Re Hewitson and Secretary, Department of Family and Community Services (2002) 71 ALD 231; [2002] AATA 1178
Masciantonio v The Queen (1995) 183 CLR 58
Secretary, Department of Employment, Education, Training and Youth Affairs [1996] AATA 11524
Stingel v The Queen (1990) 171 CLR 312
Thornton v Repatriation Commission (1981) 35 ALR 485
REASONS FOR DECISION
16 January 2007 Ms LR Tovey, Member 1. This is an application by Mr Marko Budalich ("the Applicant") for review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 27 October 2005. The decision of the SSAT was to affirm the decision of the delegate of the Secretary, Department of Employment and Workplace Relations ("the Respondent") to impose an activity test breach penalty of an 18% reduction in the Applicant's newstart allowance for 26 weeks starting from 11 March 2005.
BACKGROUND
2. The Applicant has been in receipt of a newstart allowance since 1996. On 28 June 2004 the Applicant entered into a "Preparing for Work Agreement" with the Respondent, which was prepared by officers of Centacare Employment and Training ("Centacare"). Centacare is a provider of employment services engaged by contract with the Commonwealth as part of the "Job Network" system. Under that Preparing for Work Agreement, which was a Newstart Allowance Activity Agreement under the Social Security Act 1991 (Cth) ("the Act"), it was agreed that the Applicant would undertake certain job search activities up to 5 January 2005 and Centacare would provide specified support for that purpose.
3. In late 2004 and early 2005 delegates of the Respondent sought to enter into a new "Preparing for Work Agreement" with the Applicant. These attempts were not successful, and on 18 February 2005 an officer of Centrelink wrote to the Applicant advising that:
"This letter is about your Preparing for Work Agreement.
Recently your Job Network provider arranged for a meeting with you to discuss a new Preparing for Work Agreement or review your current agreement. However, you did not attend that interview and you did not contact them to make other arrangements.
This means that you have not entered into a Preparing for Work Agreement as required under social security law. Therefore you will incur an Activity Test breach penalty, which means that if you are receiving Newstart or Youth Allowance, your Allowance may be cancelled or reduced for a period of time."
The letter went on to explain the rights of review available to the Applicant. A second letter of the same date from Centrelink to the Applicant advised of the rates resulting from the Activity Test breach penalty and the rights of review available to the Applicant.
4. By letter dated 25 February 2005 Centrelink advised the Applicant that:
"Your Newstart Allowance has been stopped from 25 February 2005 because you delayed entering into a Preparing for Work Agreement with your Job Network member. This has resulted in an activity test breach. The breach occurred on 7 February 2005 and as you have had no other activity test breaches in the 2 years immediately prior to this date, your rate will be reduced by 18% from 11 March 2005 until 8 September 2005. You need to lodge your Application for Payment form by the due date or your Newstart Allowance will be stopped."
This letter also advised the Applicant of his rights of review.
5. On 12 May 2005 the Applicant sought review of that decision of 25 February 2005 by an Authorised Review Officer ("ARO") of the Respondent. The decision to apply an activity test breach to the Applicant's newstart allowance was affirmed by the ARO on 28 July 2005.
6. On 31 August 2005 the Applicant sought a further review of the decision by the SSAT which, on 27 October 2005, decided to affirm the decision, which the SSAT recorded as having been made by a Centrelink officer on 18 February 2005, to impose an activity test breach penalty of an 18% reduction on the Applicant's newstart allowance for 26 weeks starting from 11 March 2005.
7. On 24 November 2005 the Applicant sought a further review of that decision by this Tribunal.
LEGISLATION
8. Since the decision which is the subject of this review, some of the provisions of the Act relating to Newstart Activity Agreements have been amended by Schedule 7 to the Employment and Workplace Relations Legislation Amendment (Welfare to Work and Other Measures) Act 2005 (Cth), which took effect on 1 July 2006. In these reasons I shall refer to the provisions of the Act as they stood, prior to that amendment, at the time when the decision under review was taken.
9. Provision for the payment of a newstart allowance is made by Part 2.12 of the Act. Section 593 of the Act provides for the qualifications required for an unemployed person to receive a newstart allowance. Relevantly for present purposes, s 593(1)(e) of the Act provides that a person only qualifies for a newstart allowance in respect of a period where:
"if the person is required by the Secretary to enter into a Newstart Activity Agreement in relation to the period, the person enters into that agreement"
10. Section 604(1) of the Act provided that the Respondent may require a person in the position of the Applicant to enter into a Newstart Activity Agreement. Section 604(1C) of the Act provided that:
"A Newstart Activity Agreement is a written agreement in a form approved by the Secretary and the Employment Secretary. The agreement is between the person and the Secretary."
11. Under s 604(1B) of the Act:
The Secretary is to give a person who is required to enter into a Newstart Activity Agreement notice of:
(a)the requirement; and
(b)the places and times at which the agreement is to be negotiated.
12. I also note that s 605(2) of the Act provides that:
Subject to this section, the Secretary may require a person who has entered into a Newstart Activity Agreement to enter into another such agreement instead of the existing one.
13. Section 605(3) of the Act reproduces the notice requirement contained in s 604(1B) of the Act.
14. Section 606(1) of the Act provides that:
A Newstart Activity Agreement with a person is to require the person to undertake one or more of the following activities approved by the Secretary:
(a)a job search;
(b)a vocational training course;
(c)training that would help in searching for work;
(d)paid work experience;
(e)measures designed to eliminate or reduce any disadvantage the person has in the labour market;
(ea)subject to section 607A, development of self‑employment;
(eb)subject to section 607B, development of and/or participation in group enterprises or co‑operative enterprises;
(ec)an approved program of work for income support payment;
(f)participation in a labour market program;
(fa)participation in a rehabilitation program;
(fb)participation in the PSP;
(g)another activity that the Secretary regards as suitable for the person and that is agreed to between the person and the Secretary.
15. Subsections 606(2) and (3) of the Act then provide that:
(2)The terms of an agreement, which include the specification of the activities that the person is to be required to undertake, are to be approved by the Secretary.
(3)In considering whether to approve the terms of an agreement with a person, the Secretary is to have regard to the person’s capacity to comply with the proposed agreement and the person’s needs.
16. Section 606(4) of the Act provides for matters which the Respondent is to take into account in having regard to a person's capacity to comply with an agreement.
17. Section 607 of the Act, which is the central provision in this case, provides for what is to occur if the Respondent is satisfied that a person is unreasonably delaying entering into the agreement, in the following terms:
Newstart Activity Agreements—failure to negotiate
607(1)
If:
(a)a person has been given notice under subsection 605(3) of a requirement to enter into a Newstart Activity Agreement; and
(b)because the person did not:
(i)attend the negotiation of the agreement; or
(ii)respond to correspondence about the agreement; or
(iii)agree to the reasonable terms of the agreement proposed by the Secretary;
or for any other reason, the Secretary is satisfied that the person is unreasonably delaying entering into the agreement;
then:
(c)the Secretary may give the person notice that the person is being taken to have failed to enter the agreement; and
(d)if the notice is given—the person is taken to have so failed.
Note: refusal to enter a Newstart Activity Agreement disqualifies a person for newstart allowance—see paragraph 593(e).
607(2)
A notice under paragraph (1)(c) must:
(a)be in writing; and
(b)set out the reasons for the decision to give the notice; and
(c)include a statement describing the rights of the person to apply for the review of the decision.
18. Section 625 of the Act provides for the consequences which flow from the issue of a notice under s 607(1)(c) of the Act, relevantly in the following terms:
625(1)
Subject to subsection (2), if:
(a)a person is required to enter into a Newstart Activity Agreement in order to qualify, or to continue to qualify, for a newstart allowance; and
(b)the person fails to enter into a Newstart Activity Agreement (the failure);
a newstart allowance is not payable to the person because of the failure.
625(1A)
If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:
(a)if the failure is the person’s first or second activity test breach in the 2 years immediately before the day after the failure—an activity test breach rate reduction period applies to the person …
19. Section 644AA of the Act provides that the period of an activity test breach rate reduction period is 26 weeks.
20. Subject to an exception which is not presently relevant, s 644AB(1) of the Act requires that:
… if an activity test breach rate reduction period applies to a person under this Part, the Secretary must give to the person a written notice informing the person of the commencement of the activity test breach rate reduction period applicable to the person.
21. Section 644AB(2) of the Act then provides that:
… the activity test breach rate reduction period starts on the 14th day after the day on which the notice is given to the person.
22. Section 644AE of the Act provides for the rate reduction applicable during a person's activity test breach rate reduction period. In a case where the activity test breach is the person's first breach in the 2 year period prior to the day of the activity test breach, the maximum payment rate is reduced by 18%.
ISSUES
23. At the hearing before me the parties agreed that the issues were:
(a)Did the Applicant unreasonably delay entering into a Newstart Activity Agreement in February 2005 (which is the matter of which the Respondent must be satisfied under s 607(1)(b) of the Act); and
(b)If so, has the 18% reduction to the Applicant's newstart allowance been correctly applied for the 26 week period from 11 March 2005?
CONSIDERATION OF THE ISSUES – UNREASONABLE DELAY
24. In referring to unreasonable delay, s 607(1)(b) of the Act is importing an objective test. I agree with the submission of the Respondent that the language of Fisher J in Thornton v Repatriation Commission (1981) 35 ALR 485, although taken from a somewhat different context, is apposite to the requirements of s. 607(1)(b) of the Act. In Thornton Fisher J noted that (at 490):
"In my opinion a delay is unreasonable if it can be said that no reasonable man acting in good faith would, in the circumstances, have approved the delay"
and that (at 490-1):
"In my opinion the reasonableness of the delay of the Commission is a matter for objective determination, the question whether a reasonable man acting in good faith could consider the decision to delay … as appropriate and justified in the circumstances, or whether it was capricious or irrational."
25. Similarly, in Secretary, Department of Employment, Education, Training and Youth Affairs [1996] AATA 11524 the Tribunal considered that the test posed by s. 44 of the Employment Services Act 1994 (Cth), which was in materially the same terms as s 607 of the Act, "must be judged at an objective standard of what a reasonable person would do".
26. The importation of that objective standard does not necessarily mean that the personal characteristics of the particular person are to be left entirely out of account. For example, when applying the objective element of the defence of provocation in criminal cases, the personal characteristics or attributes of the particular accused may be taken into account for the purposes of understanding the implications and assessing the gravity of the wrongful act or insult upon the power of self control of a hypothetical "ordinary person": Stingel v The Queen (1990) 171 CLR 312; Masciantonio v The Queen (1995) 183 CLR 58 at 66-7. It may be the case that, in the context of s 607 of the Act, some account may need to be taken of some particular incapacity of the recipient of newstart allowance in determining the reasonableness of their conduct. To take an obvious example, a person confined to a wheelchair who cannot attend an appointment because of a lack of disabled access, or a difficulty in finding suitable transport, will not be taken to have unreasonably delayed entering into an agreement on the ground that a hypothetical "reasonable person" would not have had that incapacity. Similarly, a person with a mental illness or some other mental incapacity may need to be given greater latitude when assessing a failure to keep an appointment. However, in the present case the Applicant has not pointed to any personal incapacity of which particular account ought to be taken in assessing the reasonableness of any delay.
27. In Re Hewitson and Secretary, Department of Family and Community Services (2002) 71 ALD 231; [2002] AATA 1178 Mr Hewitson had agreed to abide by the terms of a Newstart Activity Agreement but had refused to sign the agreement. The Tribunal in that case found that there was no legislative requirement for a person to sign an agreement. The Tribunal also found that refusal to sign in circumstances where the person had agreed to abide by the agreement did not involve unreasonably delaying entry into the agreement. Whether or not that approach is correct, in the present case the Applicant did not contend that he agreed to be bound by the Agreement but simply refused to sign it. Rather, the Applicant's contention is that he wanted time to consider the draft agreement before deciding whether to accept its terms.
Appointment on 13 December 2004
28. By letter dated 30 November 2004 the Respondent's delegate advised the Applicant that an interview had been arranged for him at the offices of Centacare at 1.00pm on 13 December 2004. The letter advised that:
"The purpose of this interview is to negotiate a new Job Search Plan to help you reach your employment goals.
During this interview you may also be required to enter a Preparing for Work Agreement which is a Newstart Activity Agreement under the Social Security Act 1991. Your Job Search Plan is part of your Preparing for Work Agreement."
The letter further advised that:
"If you do not attend this interview your Newstart Allowance may be stopped or reduced for a period of time.
Under the Social Security Act 1991 if you do attend this interview but fail to negotiate a Preparing for Work Agreement, your payment may be stopped or reduced for a period of time.
If you are unable to attend the interview or want to talk about this letter, please call Centacare Employment on 08 92742725 before the interview. If necessary, another interview time can be made."
29. It appears from Centacare's file notes, which were made available to me, that the Applicant did attend the offices of Centacare at that time. The file note does not indicate that a Job Search Plan or a Preparing for Work Agreement were discussed on that occasion. It appears that the Applicant had refused to complete a form relating to a "Dynamic Job Search" requirement, which had led the Centacare officer to attempt to lodge a Participation Report (activity breach) with Centrelink. However, the officer was unable to do so because a previous Participation Report had not been dealt with by Centrelink at that time.
30. The Applicant informed me at the hearing that there was no Preparing for Work Agreement presented to him or discussed at this interview. His evidence in relation to that interview is not contradicted by any other evidence, and is consistent with the above file note. I find, on the basis of his evidence, that the Applicant did attend the interview on 13 December 2004, but that there was no discussion about any Newstart Activity Agreement at that time.
Appointment on 27 January 2005
31. By letter dated 14 January 2005 the Respondent's delegate advised the Applicant that an appointment had been made for him to attend the offices of Centacare at 10.45 am on 27 January 2005. The letter indicated:
"As part of your Job Search Plan you agreed to meet with your Job Network member again. This letter is to remind you that you have an interview with Centacare Employment. The purpose of this interview is to review your Job Search Plan.
During this interview you may also be required to enter a new Preparing for Work Agreement which is a Newstart Activity Agreement under the Social Security Act 1991. Your Job Search Plan is part of your Preparing for Work Agreement."
The letter continued:
"Under the Social Security Act 1991 you must attend this interview and, if asked to, enter into a new Preparing for Work Agreement. If you do not, your Newstart Allowance may be stopped or reduced for a period of time.
If you are unable to attend the interview or want to talk about this letter, please call Centacare Employment on 08 92742725 before the interview. If necessary, another interview time can be made."
32. The file notes of Centacare provided to me indicate that the Applicant did not attend this interview. The note indicates that, after a number of attempts, on 1 February 2005 Ms Colleen Penny, a case manager at Centacare, contacted the Applicant and arranged for an appointment at 1.00pm on 7 February 2005. The Applicant did not take issue with the fact that he was notified of the interview on 27 January 2005 but did not attend this interview, and no explanation was given to me for his failure to attend this appointment or make arrangements for it to be rescheduled.
33. It was put to me by the Applicant's brother, who represented the Applicant at the hearing, that the Applicant did not have to attend because the Applicant was "no longer contracted to Centacare" as his previous Preparing for Work Agreement had expired. I do not accept that submission. The letter was sent to the Applicant by the delegate of the Respondent, who was authorised by ss. 604 and 605 of the Act to require the Applicant to enter into a Newstart Activity Agreement regardless of whether or not an existing agreement is in place.
34. However, the requirement to enter into a Newstart Activity Agreement in the letter of 14 January 2005 was contingent on the Applicant being asked to do so at the interview. Because he did not attend the interview, the contingency was not satisfied at that time. Therefore, the failure to attend this interview does not of itself amount to an unreasonable delay in entering into a Newstart Activity Agreement, although it provides some context in which the reasonableness of the Applicant's subsequent conduct is to be judged.
Appointment on 7 February 2005
35. As noted above, following the failure of the Applicant to attend the appointment at Centacare on 27 January 2005 another appointment was made, at the instigation of Centacare, on 7 February 2005. It is common ground between the parties that the Applicant did attend this appointment. It is also common ground that, at that time, an officer of Centacare indicated that the Applicant was required to enter into a new Preparing for Work Agreement and prepared a draft of that agreement for the Applicant to sign. However, there is some difference between the accounts of the Applicant and the Centacare officers as to what subsequently occurred at that interview.
36. The evidence of the Applicant was in the following terms:
"MR M. BUDALICH: Well, she [Ms Penny] wouldn't - at this - I asked time to read it on myself and contemplate it and find the best - what I wanted to do, my options. I believed it was my option to choose what I wanted to do, not theirs to force me into it. And when I asked to read the contract, she went and got the manager and then they tried to force me to signing by bullying me into it and threatening me. And that is when I had to get out of there. You know?
MS TOVEY: And when you left, did you take the document with you, or did you leave it behind?
MR M. BUDALICH: No. She didn't let me touch the document.
MS TOVEY: She didn't let you take it.
MR M. BUDALICH: When I asked her to - for the document to read it - I says: I will read it myself, thanks. And she wouldn't give me the document. I didn't get to touch the document. She went off and got the manager. Then they tried to get me - to bully me into signing it, both of them. And that is far as it got. I didn't actually - they didn't even give me the contract to take with me. Like, they all said: No way are you going to get time to read this. You just sign it. That is why I am here."
37. Later the Applicant said:
"MR M. BUDALICH: Well, she - I tried to negotiate with her as she was typing it up. I asked to turn the computer around so I can see what she was doing, but she wouldn't even talk to me. She just typed the contract up. So, I sat there, waited. And as I was looking around, the manager was in the lounge chair behind me, and she was waiting to come in. So, anyway, once she wrote the contract up and she started explaining it to her, we got to the point where she wrote down I had to do mutual obligation at Anglicare which was work for the dole. And then I says to her: I need time to read this contract myself and contemplate it, because I want to pick the best situation for myself. And that is when she just walked off and got the manager who was sitting in the lounge chair just behind me. And then they came straight over. And I had no - I couldn't negotiate nothing.
MS TOVEY: So, you are saying ‑ ‑ ‑
MR M. BUDALICH: It was then they were pushing me to just signing the contract."
38. The Applicant accepted that he had initially asked Ms Penny if he could take the agreement home for a week. However, he gave evidence that:
MR M. BUDALICH: I actually - when she says a week was too long, I asked for two days. And then she said: No. Then I asked for half an hour over in the corner and she said: No.
MS TOVEY: That is not Lydia. This is the person that ‑ ‑ ‑
MR M. BUDALICH: No, this is Sanya Banovic, the manager from Centacare and Colleen [Penny]. They were both - by then they were both onto me.
39. Later, when cross-examined by Ms Conlon who appeared before me representing the Respondent, the Applicant indicated as follows:
"MS CONLON: Okay. When you went in on 7 February to discuss your job search plan, Miss Penny went through them on the computer with you.
MR M. BUDALICH: No.
MS CONLON: Did she?
MR M. BUDALICH: No, she didn't. She - I asked to go through as she is writing on the computer but she didn't. She just kept on writing on the computer and I had to sit there until she finished.
MS CONLON: Okay. So, when she finished, did she explain them to you then?
MR M. BUDALICH: She got down to the work for the dole on that list and that is when we - I asked, I needed time to read through it myself and she didn't complete - explain the contract. I didn't see the contract again until I was called to the Centrelink office.
MS CONLON: Okay.
MR M. BUDALICH: So, no, she didn't explain the full contract.
MS CONLON: So, were you given it to read at that stage or ‑ ‑ ‑
MR M. BUDALICH: At no time did she give me the contract. At no time. She went just to get Sanya with the contract with her. So, no, I did not see the contract.
MS CONLON: Okay. And what was her reaction when you said that you weren't going to sign it?
MR M. BUDALICH: Well, I didn't say I wasn't going to sign it. I said that I needed to read it. I says: I want to read it and contemplate the contract.
MS CONLON: Yes.
MR M. BUDALICH: I didn't refuse to sign the contract.
MS CONLON: So, did she say that she wouldn't give you time to do that?
MR M. BUDALICH: She went and got her boss. And when I asked for the week, she said that was out of the question. And then I asked for two days. She says: No. And I says: Half an hour in the corner over there. She says: No. She says: Sign that contract.
MS CONLON: Did she give you - sorry.
MS TOVEY: Sorry, can I just interrupt. Who is saying at this point, no? Is it ‑ ‑ ‑
MR M. BUDALICH: I don't know if it was - well, they were there together. Colleen went to get Sanya. And they were both there with Sanya starting to do the talking.
MS TOVEY: All right. So, was it Sanya who was saying ‑ ‑ ‑
MR M. BUDALICH: It was Sanya, the manager. No. Yes, she said no.
MS TOVEY: So, was it Sanya who was saying no, you can't have two days?
MR M. BUDALICH: Yes."
40. That account of the Applicant is consistent with the written account given by the Applicant when he lodged his application for review of the decision by an ARO on 12 May 2005.
41. When the ARO conducted her interview of the Applicant for the purposes of her review, she noted having asked the Applicant whether he had had time to read the agreement and recorded the Applicant's response to this question as "yes". The ARO also noted that this response was different from what the Applicant had said in his letters. However, in his evidence before me the Applicant indicated that when answering this question he was referring to a time after 7 February 2005 when the Applicant did read the agreement.
42. Ms Penny's evidence before me in relation to the interview on 7 February 2005 was somewhat sparse. In an affidavit sworn on 19 July 2006 she said:
"I only remember having two interviews booked with him [the Applicant], but can’t remember the specific dates of them. I remember being late for the first one and it was at the second one that Mr Budalich said that he wouldn’t sign his agreement. I told him that as far as I knew he had to sign it and when he wouldn't I referred him to the manager. I don't know what happened after that. … I don’t remember talking to him [the Applicant] after I referred him to the office manager for not signing his agreement."
43. In her oral evidence before me Ms Penny said:
"…and the other occasion, which may have been the 7th also, was when we discussed an agreement; came in and when I asked him to sign the agreement, he asked if he could take it home and have a look at it. I then asked the manageress, which was Sanya at the time, and because he still didn't want to sign it, I asked her to talk to Mr Budalich, and that was it.
MS CONLON: Did you go through the terms of the agreement with Mr Budalich?‑‑‑Yes, yes.
And explain what each term involved?‑‑‑Yes.
And did he have an option to negotiate any part of that agreement?‑‑‑Yes, we go through the agreement with the client or customer and just choose. I think there's - I can't remember - multiple choices or - not multiple choices, but the terms, and he was quite happy. I mean, he didn't disagree at the time. He did say he would like to take it home and sign it - have a look at it first.
Did he say what his concerns were, why he wanted - was there anything in particular he wanted to discuss?‑‑‑No, not at that stage. Because he didn't agree to sign it, I then referred him on to the manager.
What was your reaction after seeing Mr Budalich? Were you upset at what happened?‑‑‑I wasn't."
44. Later in her evidence-in-chief Ms Penny said:
"On the day of the 7th, because I saw Mr Budalich and because he didn't want to sign the agreement or didn't feel he wanted to sign the agreement at that stage, he - I referred him straight to the manager, so I didn't really have much to do with him on that day."
45. The materials provided to me include a file note apparently written by Ms Penny in relation to the interview on 7 February 2005:
"PR lodged today for the following reasons:
* WDF – client stated "I will need to think about WFD details before I decide".
* Client refused to sign WFD agreement & stated the following "I want to take agreement home to contemplate agreement for one week or more before signing".
* Client would not listen to reason, so I asked the Site Manager to discuss with client.
* Client also stated "Go ahead knock yourselves out breaching me, it hasn't worked yet".
* Client would still not listen to reason from Site Manager or myself.
* Advised client breach will be lodged & client said to me he was aware and left without signing agreement or taking WFD appt reminder with him although client was explained & aware of WFD appt details."
46. I take the references to "WFD" in this file note to be to be to the proposed requirement to do work for Anglicare, referred to in the Applicant's evidence. I also take the reference to "PR" to be to a "Participation Report", which was the means by which Centacare referred alleged breaches of the requirements of the Act to Centrelink.
47. It is significant that Ms Penny did not give evidence reflecting this file note before me. In particular, the file note suggests that both Ms Penny and her manager spoke to the Applicant about signing the agreement, while her evidence before me was to the effect that she had no further contact with the Applicant after referring the matter to her manager. In that respect the file note is more consistent with the evidence of the Applicant than Ms Penny's oral evidence. Further, the file note suggests that the Applicant asked to be able to take the agreement home to consider it before signing the agreement and this request was refused by Ms Penny and her manager.
48. The manager in question was Ms Sanya Banovic, who also gave evidence before me. Her account of her involvement in the interview was as follows:
"MS CONLON: Can you explain your involvements on the day of 7 February 2005 when Mr Budalich came to sign his agreement?‑‑‑I was asked by Colleen to come and explain to Mr Budalich to explain to him the obligations of the job search plan and to assist her.
And were you able to do that?‑‑‑No, I wasn't.
Why was that?‑‑‑Because I was dismissed after 10 seconds when Mr Budalich told me that he didn't invite me to talk to him, and he left.
Do you know whether he had a copy of the contract with him or not or?‑‑‑I can't recall that.
No, no. That's fine. Did Mr Budalich ask you to give him more time in which to consider signing the contract?‑‑‑No, he hasn't.
Did he give you any reasons as to why he wouldn't sign it?‑‑‑No, not to me.
Okay. If he had have asked you for time to sign the contract, would you have given him time to sign it or did he really need to sign it that particular day?‑‑‑We would have given him time to sign it. "
49. When questioned by the Applicant's brother, who represented him at this hearing, about how much time the Applicant would have been allowed Ms Banovic responded as follows:
"MR G. BUDALICH: Ms Banovic, in your - what she just said then. You said that the client would be allowed to have time to consider the contract. How much time would there be? How much time do you feel is appropriate?‑‑‑48 hours.
Was Marko given 48 hours that day to sign that contract?‑‑‑Every job seeker is given 48 hours.
Well, if we examine the T documents the PR went in on the same day?‑‑‑Mm.
Say, I put it to you that he wasn't given 48 hours?‑‑‑As I have already said, he was given 48 hours. Every job seeker is given 48 hours."
50. In re-examination, Ms Banovic said:
"MS CONLON: You said previously that every client has time to consider the contract and they would normally be given 48 hours?‑‑‑Yes.
Did Mr Budalich ask you for time to consider signing the contract?‑‑‑No.
If he had have done, would you have allowed him the time?‑‑‑Yes, I would have. "
51. That evidence is not consistent with the account of the Applicant or the file note prepared by Ms Penny. Nor is it consistent with the Participation Report which was sent in to Centrelink by Centacare on 7 February 2005. In particular that report stated:
"Client would not listed to reason from Case Manager or Site Manager, he continued to state "I do not have to sign without taking it home to contemplate for a week or more"
52. That suggests that the Applicant did ask Ms Banovic for time to consider the agreement. While Ms Banovic said she did not complete the Participation Report, it remains documentary evidence which was produced on the day of the interview. That document is a formal statement of the position of Centacare as to what occurred at the interview.
53. The Participation Report was dealt with by Ms Lydia Dennis, a Job Network Contact Officer of Centrelink. She contacted the Applicant and decided that the Applicant's request to consider the agreement as reasonable but that the request for a week to do so was excessive. She arranged for the Applicant to attend an appointment at Centacare on Friday 11 February 2005, and advised the Applicant of the consequences of not signing an agreement at that time.
54. I regard Ms Dennis' evidence as to Centalink's reaction to her decision as of assistance in considering whose account of the interview to prefer. Ms Dennis gave the following evidence in relation to that reaction:
"MS CONLON: Yes. And when you rang Centacare up to arrange another appointment, were they willing to give him more time?‑‑‑Yes, they were. I - they were not happy about my giving him more time but I felt that it was important that we gave as much opportunity to Mr Budalich to make that choice himself without having the threat of a penalty hanging over him. And I thought that was the right thing to do.
Did Centacare give ‑ sorry.
MS TOVEY: Sorry, who did you speak to when you had that conversation about giving him more time?‑‑‑I think I initially spoke to the consultant. And then I was put through to the manager.
So, you might have spoken to both of the witnesses ‑ ‑ ‑ ?‑‑‑Yes.
‑ ‑ ‑ who have given testimony today?‑‑‑Yes.
MS CONLON: Did they give you the reasons why they were unwilling to give Mr Budalich more time to consider?‑‑‑From memory, their position was he was required to sign an agreement and in their opinion the time he had been given to read the document was sufficient."
Ms Dennis also gave evidence that Ms Banovic made a complaint to Ms Dennis' supervisor at Centrelink about Ms Dennis' decision to give the Applicant more time to consider the agreement.
55. That reaction of Ms Penny and Ms Banovic to the decision is, in my view, more consistent with the evidence that the Applicant requested and was refused an opportunity for more time to consider the agreement than it is with the evidence of Ms Banovic that there was no request for more time to consider the agreement.
56. I find that on 7 February 2005 the Applicant made a request to both Ms Penny and Ms Banovic for more time to read and consider the agreement which had been prepared by Ms Penny, and that this request was refused. I find that, while the Applicant initially requested a week to consider the agreement, he subsequently asked for two days or half an hour and that all these requests were refused. That account of the Applicant, which I accept, is supported to some extent by the file note prepared by Ms Penny and the Participation Report, and explains the reaction of Ms Penny and Ms Banovic to the decision of Ms Dennis to give the Applicant until Friday 11 February 2005 to consider the agreement.
57. I also find that the request of the Applicant for more time to consider the agreement was reasonable, although the initial request for a week to consider the agreement may have been for an excessive time. I am therefore not satisfied that the Applicant's conduct on 7 February 2005 amounted to his unreasonably delaying entering into the agreement.
Appointment on 11 February 2005
58. It is common ground that the Applicant did not attend the appointment at Centacare which Ms Dennis had arranged for 11 February 2005. The Applicant and his brother indicated that the brother, who was also in receipt of a newstart allowance, had heard while at the offices of Centacare that the Applicant had behaved inappropriately. The Applicant therefore wanted his brother to attend the next interview with him, so he would have a witness if any further allegations were made.
59. The Applicant and his brother gave evidence that the Applicant telephoned the offices of Centacare on 11 February 2006, prior to the interview, and asked for the appointment to be rescheduled to the following Monday, when the Applicant's brother was available to attend as well. The Applicant gave evidence that he went through reception and spoke with Ms Penny and arranged for an interview at 1.00pm on 14 February 2005.
60. I have not been provided with any records of Centacare to show either that there was an appointment on 11 February 2005 or that the appointment was rescheduled to 14 February 2005.
61. Ms Penny's evidence was that she could recall neither the appointment on 11 February 2005 nor its rescheduling to 14 February 2005. She gave evidence that she would expect to remember if a person on her printout of appointments for the day did not show up, and her usual practice would be to contact the person to find out why they did not attend. The fact that Ms Penny did neither of these things in relation to the Applicant suggests that this practice was not followed, either on the 11 or 14 November 2005. Ms Penny said that while she didn’t recall the Applicant telephoning to change the appointment:
"I'm not saying he didn’t phone and I'm not saying he did because I don’t recall."
62. Ms Penny accepted that it was possible that the Applicant had telephoned her to change the appointment, and said that if he had she would have "put it in the system". However, there is no evidence before me to show whether or not an appointment for the Applicant on 14 February 2005 was entered onto Centacare's system.
63. The Applicant's evidence that he telephoned to change the appointment to the next Monday is supported by the evidence of his brother. It is also supported by a telephone record produced to me which shows a call to have been made from the Applicant's telephone to Centacare's number at 11.46am on 11 February 2005. I note that the duration of the call is only 36 seconds, which is a short period but possibly sufficient to change an appointment time.
64. In light of the difficulty of Ms Penny in recalling whether or not the Applicant called to change his appointment, and the corroboration of the Applicant's account by his brother's evidence and the telephone records, I accept the Applicant's evidence that he changed the time of his appointment to 14 February 2005. It follows that I do not regard the Applicant's failure to attend the offices of Centacare on 11 February 2005 as amounting to an unreasonable delay in entering into the agreement.
Appointment on 14 February 2005
65. The Applicant and his brother gave evidence that they arrived at the offices of Centacare on 14 February 2005, and notified the receptionist. After waiting about 15 minutes they reminded the receptionist that they were still there. At one point they saw Ms Perry and waved at her. When they had waited at least half an hour without being seen, they both left.
66. Ms Penny accepted that the Applicant may have been in the offices of Centacare on that day, but she could not recall seeing them or whether she was expecting them. I note that Ms Penny gave evidence of one occasion on which she was running late for an appointment with the Applicant due to an interview with another client taking longer than expected, seeing the Applicant in the office but finding that the Applicant had left by the time she was ready to see him. While Ms Penny thought that this occurred prior to the interview on 7 February 2005, she was not very clear with dates and may have transposed the missed appointment on 14 February 2005 to an earlier occasion.
67. In the absence of any evidence to the contrary I accept the evidence of the Applicant and his brother that they attended the offices of Centacare at 1pm on 14 February 2005 and, having waited about half an hour, left without telling anyone at the office or arranging for another appointment.
68. However, in the context in which it occurred, I do not regard this conduct as reasonable. The Applicant had already missed an appointment to discuss the job plan which formed part of the Newstart Activity Agreement on 27 January 2005. He had been the subject of a Participation Report to Centrelink as a result of what occurred on 7 February 2005, and knew from that time that he was required to enter into a new agreement. He had been informed by Ms Dennis of the consequences of failing to enter into the agreement at the appointment which she had made on 11 February 2005. To walk out of Centacare's offices after waiting only half an hour against that background was not, in my view, the conduct of a reasonable person who ought to have appreciated the importance of the discussion about the agreement scheduled to occur on that day. I do not regard half an hour as an unreasonable time to wait for such an appointment. To simply have walked out of Centacare's offices without informing anyone, and without then or subsequently making any arrangement for a further appointment, does, in my view, amount to a failure to attend the negotiation of the agreement in a manner that involved unreasonably delaying entering into the agreement.
Content of the Agreement
69. There was considerable debate before me as to the reasonableness of the terms of the agreement which was prepared by Ms Penny on 7 February 2005. I do not consider that debate to be critical to my conclusion, as the problem which the Applicant had, at and prior to 14 February 2005, was with entering into an agreement he had not had an opportunity to consider rather than the terms of the agreement. There was subsequent debate between the Applicant and the Respondent's delegates as to the reasonableness of the terms of the agreement, but this followed once the Applicant had an opportunity to consider the agreement and had not occurred at the time I am required to consider.
70. The failure of the Applicant which I have identified was a failure to attend to negotiate an agreement, rather than a failure to enter into an agreement which the Respondent could require the Applicant to enter into. I do note, however, that I am of the view that the terms of the agreement were reasonably open to the Respondent to determine under s 606 of the Act and the difficulties which the Applicant later had with the agreement were a result of a misunderstanding by the Applicant of its terms. For example the Applicant thought that the agreement would require him to apply for 54 jobs per fortnight, when it clearly did not. Had the Applicant acted reasonably, his concerns ought to have been able to be addressed either by explanation of the terms of the agreement or and amendment to clarify what the obligations were.
Conclusion as to Unreasonable Delay
71. For these reasons, I find that on 14 February 2005 the Applicant did unreasonably delay entering into a Newstart Activity Agreement. Therefore, I find in favour of the Respondent in relation to this issue.
CONSIDERATION OF THE ISSUES – HAS THE BREACH BEEN CORRECTLY APPLIED
Notice of Requirement to Enter into Newstart Activity Agreement
72. So far I have considered whether the Requirements of s 607(1)(b) of the Act are satisfied and have concluded that they are. It remains necessary to consider whether the requirements of s 607(1)(a) of the Act were satisfied. That is, was the Applicant a person who had been given notice under s 605(3) of the Act of a requirement to enter into a Newstart Activity Agreement?
73. I am satisfied that the Applicant had been given that notice by the time of the interview which he attended at the offices of Centacare on 7 February 2005. Centrelink's letter of 14 January 2005 gave notice that the Applicant may be required to enter into a Newstart Activity Agreement at the interview scheduled for 27 January 2005, which was rescheduled to 7 February 2005. The Applicant was asked to enter into such an agreement at the meeting of 7 February 2005.
74. Section 605(3) of the Act does not require that the notice to which it refers be in writing. This was recognised in Dudzinski v Harris [2003] FCA 440 at [20] where Dowsett J noted that ss 604 and 605 of the Act did not require any particular period of notice, or that such notice be in writing. In that case a notice was found to have been given under s 604(1B) of the Act by the giving of a letter requiring attendance at an appointment (which did not mention an agreement) and a verbal requirement at the interview.
75. Centrelink's letter of 14 January 2005 did contain a requirement for the Applicant to enter into a Newstart Activity Agreement, subject to the contingency of his being required to do so by the Centacare officer at his appointment. That contingency was satisfied when Ms Penny required the Applicant to enter into a Newstart Activity Agreement at the interview on 7 February 2005.
76. I therefore find that the Applicant had, by 7 February 2005, been given notice under s 605(3) of the Act of a requirement to enter into a Newstart Activity Agreement.
Notice under s 607(1)(c) of the Act
77. Section 607(1)(c) of the Act requires that the Respondent has given notice to the Applicant that he is being taken to have failed to enter into the agreement. Section 607(2) of the Act requires that the notice be in writing, give reasons for the decision and include a statement as to the rights of review. I am satisfied that the letters sent by Centrelink to the Applicant on 18 February 2005, the material parts of which are referred to above, meet these requirements, so that a proper notice was given to the Applicant under s 607(1)(c) of the Act.
78. The consequence of that notice being given, under s 607(1)(d) of the Act, is that the Applicant is taken to have failed to enter into a Newstart Activity Agreement from that date. A consequence of that deemed failure, under s 625(2)(a) of the Act, is that an activity test breach rate reduction period applies to the Applicant, who had not had any activity test breaches in the two years prior to the failure.
Duration of the Activity Test Beach Rate Reduction Period
79. As noted above, under s 644AA of the Act the length of the activity test breach rate reduction period in this case is 26 weeks. Under s 644AB(2) of the Act that period of 26 weeks starts on the 14th day after notice under s 644AB(1) of the Act is given to the person. In this case, notice under s 644AB(1) of the Act was given to the Applicant by Centrelink's letter dated 25 February 2005, the material parts of which are referred to above. The activity test breach rate reduction period therefore started on 11 March 2005, which was 14 days after the giving of that notice.
80. I note that the letter of 25 February 2005 identified the date of the breach as being 7 February 2005. On the view I have taken the date of the breach is 14 February 2005. However, nothing turns on this difference as the commencement of the activity test breach rate reduction period is calculated from the date on which notice under s 644AB(1) of the Act was given, rather than the date of the breach.
81. Therefore I find that the activity test breach rate reduction period applicable to the Applicant was a period of 26 weeks commencing on 11 March 2005.
Amount of the Reduction
82. In the present case, where the activity test breach is the Applicant's first breach in the two-year period prior to the date of the activity test breach, the applicable rate of reduction is 18% under s 644AE of the Act.
Conclusion as to Application of the Reduction
83. For the above reasons, I am of the view that the Act required an 18% reduction in the maximum payment rate of the Applicant's newstart allowance for a period of 26 weeks commencing on 11 March 2005.
DECISION
84. For the above reasons, the decision of the SSAT dated 27 October 2005 is affirmed.
I certify that the eighty four [84] preceding paragraphs are a true copy of the reasons for the decision herein of Ms LR Tovey, Member
Signed: .............(Sgd. Ms R Riberi).................................
AssociateDate of Hearing 19 July 2006
Date of Last Written Submissions 28 August 2006
Date of Decision 16 January 2007
Representative for the Applicant Mr G BudalichRepresentative for the Respondent Ms M Conlon
Centrelink Legal Services
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