Chan; Secretary, Department of Employment and Workplace Relations

[2006] AATA 1032

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 1032

ADMINISTRATIVE APPEALS TRIBUNAL          № V2006/728

GENERAL ADMINISTRATIVE DIVISION

Re:           SECRETARY,

DEPARTMENT OF EMPLOYMENT

AND WORKPLACE RELATIONS

Applicant

And:           MUN ONN CHAN

Respondent

DECISION

Tribunal:       Mr C. Ermert, Member

Date:1 December 2006

Place:Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) Mr C. Ermert

Member

SOCIAL SECURITY – newstart allowance – breach rate reduction – relief from activity test – approved voluntary unpaid work – approved organisation – approved work – combination of unpaid work and paid work up to 40 hours – whether relief from activity test – actively seeking paid work – willing to undertake paid work – meets terms of newstart activity agreement – complies with activity test

Employment Services Act 1994

Social Security Act 1991

Castleman v Secretary, Department of Social Security [1999] FCA 836

Gregory and Secretary, Department of Employment and Workplace Relations [2006] AATA 139

Secretary, Department of Employment, Education, Training & Youth Affairs v Fitzalan [2000] FCA 1061

REASONS FOR DECISION

1 December 2006  Mr C. Ermert, Member

INTRODUCTION

1.      Mr Chan is 55 years old.  He holds a Bachelor of Economics degree from the University of Otago in New Zealand.  He worked in the finance industry in Malaysia for ten years before migrating to Australia in 1990.  Since arriving in Australia he has applied without success for a great many accounting and clerical jobs.  To earn some money to live on Mr Chan did some occasional part-time work as a kitchen hand.  To overcome his lack of local experience, Mr Chan undertook voluntary work with the Australian Red Cross (the Red Cross) and Oxfam – Community Aid Abroad (Oxfam), working one full day a week for each organisation, doing book-keeping, inventory control and general clerical tasks.

2.      Mr Chan has received newstart allowance for about seven years.  On 4 August 2005 he entered into a participation agreement with Centrelink.  Centrelink acts as the service delivery agent of the Department of Employment and Workplace Relations (DEWR).  The agreement obliges Mr Chan to participate fully in the program, to make four job search contacts each fortnight and to record those contacts.  At all times he has complied with those requirements.

3.      On 15 December 2005 Mr Chan refused permission for his resume to be submitted for a position of kitchen hand because he believed that doing more kitchen hand jobs would prejudice his chances for more skilled positions.  At the time, in addition to his voluntary unpaid work for the Red Cross and Oxfam, Mr Chan was undertaking paid work for four to five hours a week as a kitchen hand for The House restaurant.  On 16 December 2005 an officer of Centrelink decided that Mr Chan’s refusal constituted a failure to accept a suitable job offer and sent a notice to Mr Chan advising him of a potential breach of the participation agreement.  On 23 December 2005 an officer of Centrelink decided to impose an activity test breach rate reduction of 18 per cent on his newstart allowance, for a period of 26 weeks.

4.      Mr Chan requested a review of the decision.  An Authorised Review Officer concluded that the decision should be affirmed.  Mr Chan sought review of the decision by the Social Security Appeals Tribunal (SSAT); which, on 25 May 2006, set aside the decision under review and substituted its decision that Mr Chan had satisfied the activity test and was therefore not liable for the breach rate reduction.  The Secretary to DEWR (the Secretary) applied for a review of the SSAT decision.  That review is the subject of this hearing.

The Hearing

5. At the hearing Mr Chan represented himself. The applicant was represented by Ms P. Heffernan, a senior lawyer with the Australian Government Solicitor. I had before me the documents lodged by the Secretary pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the T-documents), and the Statement of Facts and Contentions submitted by the applicant.  The applicant submitted into evidence copies of questionnaires completed by Oxfam (Exhibit A1) and the Australian Red Cross (Exhibit A2).  Mr Chan submitted a letter from him to this Tribunal dated 13 October 2006 (Exhibit R1).

The Issues

6.      The issues in this case are:

·     Is Mr Chan entitled to relief from the activity test?

·     If not, did Mr Chan satisfy the activity test?

Is Mr Chan entitled to relief from the activity test?

7.      The Social Security Act 1991 (the Act) stipulates that a person must satisfy an activity test in order to receive a newstart allowance.  Under s 601(1) of the Act a person satisfies the activity test if they are actively seeking and willing to undertake paid work, other than paid work that is unsuitable.

8.      The relevant provisions for relief from the activity test are contained in s 603AA(1) of the Act:

Subject to subsection (3), a person who has reached 50 years is taken to satisfy the activity test in respect of a period (the relevant period) if the person:

(a)is engaged in approved full‑time unpaid voluntary work for an approved organisation for at least 32 hours in the period; or

(b)       is engaged, for at least 40 hours in the period in a combination of:

(i)approved unpaid voluntary work for an approved organisation; and

(ii)suitable paid work for another person.

9.      Before considering the main body of this subsection it is necessary to first consider the provisions of s 603AA(3) of the Act.  This section provided at the relevant time that s 603AA(1) does not apply to a person in respect of a day in a relevant period if, in respect of the person, having regard to the opportunities, or possible opportunities, for employment that become available to the person on or before the day, the Secretary considers that the subsection is not to apply to the person in respect of that day.

10.     Ms Heffernan made no specific submissions on this issue at the hearing.  However, she did refer to the written submissions that fairly encapsulate … the applicant’s position, on the appeal (Transcript p18).  The applicant’s written Statement of Facts, Issues and Contentions contains this statement on the issue:

… the applicant submits that subsection 603AA(3) applies to the respondent in that by seeking the respondent’s permission to forward his resume to a prospective employer, the Secretary considered that subsection 603AA(1) of the Act was not to apply to the respondent as at 15 December 2005.

Therefore the applicant submits that the respondent should not be taken to have satisfied the activity test by virtue of section 603AA(3) of the Act.

11.     The applicant’s submission on this point asks the Tribunal to find a direct connection between the Job Network Provider’s request for permission to forward a resume to a prospective employer and a determination by the Secretary that s 603AA(1) was not to apply to the respondent.  In the absence of any statements to such an effect by the Secretary or a party acting on behalf of the Secretary, I am unable to find such a connection.  Therefore, I find that s 603AA(3) is not satisfied in this case; and that it is open to me to consider whether the relief provisions of s 603AA(1) of the Act may apply to Mr Chan.

12.     The application of s 603AA(1) of the Act rests on the number of hours worked by Mr Chan in approved unpaid voluntary work for approved organisations and the number of hours of suitable paid work for others.  There is no dispute that in December 2005 Mr Chan was performing four to five hours per week of paid work as a kitchen hand.  He was also performing unpaid voluntary work for Oxfam and for the Red Cross.  There is no dispute that both organisations are approved organisations for the purposes of the Act.  It leaves me to determine, for the voluntary work for both Oxfam and the Red Cross, whether the work was approved and how many hours were involved.

13.     Dealing first with the work for the Red Cross, Ms Heffernan referred the Tribunal to the document titled Voluntary Work: Verification of approved voluntary work, dated 25 June 2002 (T4, p28).  That document records approval for Mr Chan’s voluntary work for the Red Cross between 25 January 2002 and 24 January 2003.  This approval period does not include the relevant period in December 2005.  Mr Chan’s submission on this point is contained in his letter (Exhibit R1) in which he states:

(B) The respondent’s voluntary work with the Australian Red Cross was approved by Centrelink in January 2002 and the respondent had been doing voluntary work with them until February 2006.

Although Centrelink staff was reminded and informed by the respondent that he was doing regular weekly voluntary work with the Red Cross during this period as part of the activity agreement, the respondent was never sent a new voluntary work form for the voluntary work with the Red Cross by Centrelink to complete annually nor was the respondent informed verbally or in writing by any written Centrelink reminder letters or officials that the respondent needs to resubmit a new voluntary form each year for the voluntary work with the Australian Red Cross. Therefore the respondent objects to the applicant’s claims that the voluntary work was approved by Centrelink only for the period between 25 January 2002 to 24 January 2003.

14.     In his oral evidence on this point Mr Chan stated that in 2002 he submitted a form to Centrelink and thereafter he was not given additional form, or reminded by any of the officials at Centrelink that I need to resubmit a volunteer form for the records for each year so I was unaware of that aspect (Transcript p9).

15.     Ms Heffernan’s submission on this point was that:

just because he wasn’t aware that he had to seek ongoing approval … doesn’t change the fact that approval was required for voluntary work and even if he was carrying out work at the Red Cross, it doesn’t mean that it was approved voluntary work for the purposes of the Act and we say the SSAT erred on that issue (Transcript p18).

16.     In regard to the number of hours worked by Mr Chan for the Red Cross, I had regard to Exhibit A2, which records that Mr Chan worked at the Red Cross from 25 January 2002 to 7 February 2006, for approximately seven hours a week.  Mr Chan submits that he worked for one day a week and that an hour for lunch should be included in addition to the accepted seven hours per day.  In his letter (Exhibit R1) Mr Chan stated:

For the voluntary form concerning the Australian Red Cross the number of hours listed is 7 hours, but this did not include the 1 hour off for lunch. If you do include the lunch hour, then this becomes 8 hours, unless the applicant wants to stick to third world country hours of work laws, but this is Australia. Here you are paid for 8 hours, although you may only work for 7 hours. …

17.     On this point Ms Heffernan referred only to the Voluntary Work: Verification of approved voluntary work document which records that Mr Chan worked seven hours a day (T4, p28).  She added that even if the extra hour were included in the calculations it would not meet the 40 hour requirement.

18.     Dealing next with Oxfam, there is no question that the work was approved. The approval is contained in the document titled Voluntary Work: Verification of voluntary work, dated 23 September 2005 (T6, p37).  In regard to the hours of work performed by Mr Chan, Ms Heffernan referred to Exhibit A1.  This shows that from 13 July 2005 to 8 February 2006, including the relevant period in December 2005, Mr Chan worked seven hours per week.  Mr Chan again submitted that an extra hour for lunch should be included in the calculations for the sum of his paid and unpaid work.

19.     In considering the evidence and submissions on the provisions of s 603AA(1) of the Act, it is clear that the deciding issue will be whether Mr Chan’s unpaid voluntary work for the Red Cross was approved.  While I have sympathy for Mr Chan’s position, that he was not aware of a requirement to periodically re-apply for approval of his work for the Red Cross, I feel bound to accept Ms Heffernan’s submission that Mr Chan’s lack of awareness does not alter the fact that the work was not approved for the relevant period.  This means that the only approved unpaid voluntary work was that performed for Oxfam, which amounted to 14 hours for the relevant fortnight period; or 16 hours if a one hour period for lunch is included.  Neither period meets the requirement of 32 hours approved unpaid voluntary work contained in s 603AA(1)(a) of the Act.  Furthermore, neither period, when combined with the eight to ten hours per fortnight of paid work meets the requirement of 40 hours of combined paid and approved unpaid voluntary work required by s 603AA(1)(b) of the Act.  As a result Mr Chan is not entitled to the relief from the activity test contained in s 603AA(1) of the Act.

20.     My findings on this issue differ from those of the SSAT.  I must now consider the question of whether Mr Chan satisfies the activity test.

Does Mr Chan satisfy the activity test?

21.     The test is contained in section 601(1) of the Act which relevantly provides:

Subject to subsections (1A) and (5), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is:

(a)     actively seeking; and

(b)     willing to undertake;

paid work in Australia, other than paid work that is unsuitable to be undertaken by the person.

22.     Section 601(1A) relates to an obligation to undertake particular paid work notified by the Secretary to the person. In this case there was no such notification and so this subsection does not apply.

23.     Section 601(5) relevantly provides:

If a person fails to comply, throughout a period, with the terms of a Newstart Activity Agreement between the Secretary and the person, the person cannot be taken to satisfy the activity test in respect of the period in spite of any compliance of the person with subsection (1).

24.     The issues arising from these sections of the Act are:

On 15 December 2005:

·was Mr Chan actively seeking paid work,

·was Mr Chan willing to undertake that work, and

·was Mr Chan in compliance with the terms of his newstart activity agreement?

Was Mr Chan actively seeking paid work?

25.     At the hearing Ms Heffernan made no submissions on this issue.  Mr Chan gave undisputed evidence that he was complying with the obligations to undertake four job searches weekly and performing the other activities listed in the job search plan (T5, p32).  From the evidence I find that during the relevant period Mr Chan was actively seeking paid work.

Was Mr Chan willing to undertake paid work?

26.     Ms Heffernan submitted that Mr Chan’s refusal to permit his resume to be forwarded to a prospective employer led to the conclusion that Mr Chan was not willing to undertake paid work that was not unsuitable.  She submitted that Mr Chan’s refusal was because he considered the work unsuitable in that it was menial and Mr Chan considered that he was qualified for work requiring higher qualifications.  Ms Heffernan submitted that it may be the case that Mr Chan was qualified to do other work, but that did not mean that the work was objectively unsuitable within the meaning of the Act.  She added that Mr Chan had been unemployed for a number of years, that the work being offered was within the range of his skills and it was suitable for the purposes of the Act.

27.     In support of her submissions Ms Heffernan referred the Tribunal to a recent decision of this Tribunal in the matter of Gregory and Secretary, Department of Employment and Workplace Relations [2006] AATA 139. Paragraph 50 of the reasons for decision states:

The Tribunal accepts that situations may arise where a person may actively sabotage interviews to ensure that a job offer was not made, however, the Tribunal does not accept that is what has occurred in this case. The Tribunal also comments that the legislation is sufficiently broad to cover such a situation. A person who regularly “sabotaged” interviews in an attempt to remain a benefit recipient, would fail to fulfil the requirements set out is s 601(1) of the Act.

28.     Ms Heffernan was not contending that Mr Chan sabotaged an interview. Rather, she submitted that Gregory encompasses situations where a person’s conduct ensures that an offer of employment  will not be made:

and we say that is what happened here. Mr Chan was asked to forward his resume to a prospective employer for work which was suitable for the purpose of the Act and yet by refusing it he ensured that the position was not – or could not be offered to him. And we say that was in breach of section 601 of the Social Security Act (Transcript p 21).

29.     Ms Heffernan also referred the Tribunal to the decision of the Federal Court of Australia in  Secretary, Department of Employment, Education, Training & Youth Affairs v Fitzalan [2000] FCA 1061; where, at paragraph 27, Burchett J said:

… there is an overriding purpose of overcoming, so far as possible, a long term inability to obtain suitable employment, in the interests both of the unemployed person and of the community. It would be entirely contrary to both of these interests, the two interests represented in the negotiation of the agreement, to construe “suitable” in an unduly restrictive sense. The intention is to enable the unemployed person to take a place alongside the generality of the community, who are employed.

30.     Ms Heffernan submitted that, although that decision related to the now repealed Employment Services Act 1994, the provisions of that act were identical to the provisions of s 601 and s 601(2A) of the Act and that the principle enunciated by Burchett J is equally applicable to the present case.

31.     Mr Chan gave evidence that he refused permission for his resume to be forwarded for a kitchen hand job because such a job would not help him to get back into the job market.  He said that the Job Network Provider should take into consideration his education, skills and experience and that it was inappropriate for him to continue doing such unsuitable work.  Mr Chan also said that it was not a real vacancy …It was just submitting my CV that is all. And without any further explanation the next thing I knew I was being breached without any discussion with respect to that (Transcript p7).  Mr Chan submitted that the Tribunal should look at the logic and the fairness of the case and apply the elements of the Employment Services Act 1994; and that by insisting that the applicant to do such a work as a kitchen hand would hamper his prospective employment (Transcript p7).

32.     Mr Chan also referred to his letter (Exhibit R1), drawing attention to the barriers he faces in getting work, such as discrimination against employees of mature age and also prejudice against migrants:

Many migrants are forced to do unsuitable work, like taxi drivers or washing dishes because they couldn’t find suitable work, so they are compelled to do unsuitable work and that is a situation similar to mine (Transcript p8).

33.     In considering this issue I had regard to the decision in the Federal Court of Australia by Branson J in Castleman v Secretary, Department of Social Security [1999] FCA 836. Mr Castleman was a qualified accountant who was making written attempts to find employment in his particular field of expertise but was not prepared to seek work that he considered unsuitable. Paragraph 11 of the judgement quotes the position of the Tribunal in its determination of the issue:

… Yet he should have realised that he was required to apply for jobs for which he was overqualified for the position. As a qualified accountant, it may have been galling to be employed, for example, behind the counter of a bookshop, but the taxpayer is not required to support a job seeker in his or her search for preferred employment when other jobs within that person’s capability are available.

34.     The Tribunal determined that the applicant failed to satisfy the activity test because he was not prepared to seek work that he considered unsuitable.

35.     In his consideration of the issue Branson J said:

18.      … However, nothing in s 601(1) creates an obligation on a person required to satisfy the activity test to seek every kind of paid work which is not unsuitable for him or her to undertake, or even a range of such work.

19.      The requirement of s 601(1)(a) is that the person satisfy the Secretary that he or she is “actively seeking” paid work. In this context the adverb “actively” imports a requirement of active effort as opposed to indolence or procrastination. What the person is required to make an active effort about is the seeking of paid work which is not unsuitable for him or her to undertake – not the seeking of any particular class of such work, nor the seeking of any particular mix of such work.

20.      If a person were to so limit the categories of work which he or she sought that, although the work being sought was not unsuitable for him or her to undertake, the chance of work being obtained was low, the Secretary (or as the case may be, the Tribunal) might not be satisfied that the person was genuinely seeking paid work.

36.     In this case there is no evidence that Mr Chan was not making an active effort as opposed to indolence or procrastination.  Mr Chan was continuing to meet his obligations of four job applications per week.  There is also no evidence that Mr Chan was so limiting the categories of work which he sought, that the chance of work being obtained was low.  From the evidence it is clear that Mr Chan considered that employment as a kitchen hand would not assist his chances of finding paid work in a field more suited to his qualifications.  To some extent this could be considered as Mr Chan limiting the categories of work sought.  However, I do not consider that the limitation of one specific category of work, namely kitchen hand, from the wide range of employment open to a person as qualified as Mr Chan is so limiting the categories of work … that the chance of work being obtained was low.  In line with the reasoning of Branson J, I find that Mr Chan does not fail the activity test because he has failed to seek every kind of paid work that is not unsuitable for him … to undertake (emphasis added).

37.     In considering the application of Gregory to this case, I understand the contention of Ms Heffernan that Mr Chan’s refusal to allow his resume to be forwarded to a prospective employer could be considered analogous to the sabotaging of an interview to ensure that a job offer was not made.  However I also note the Tribunal’s statement in paragraph 50 of its reasons for decision that a person who regularly “sabotaged” interviews in an attempt to remain a benefit recipient, would fail to fulfil the requirements set out in s 601(1) of the Act.  In this case there is no suggestion that Mr Chan has regularly refused the forwarding of his resume.  Ms Heffernan agreed that this was the first time that Mr Chan had done so.  The findings of the Tribunal in Gregory align with the judgement in Castleman, in that regular acts of interview sabotage could well be considered as a device to limit the categories of work.  In this case the one act of not allowing his resume to be forwarded cannot be considered to be analogous to regularly sabotaging interviews.  I find Gregory to be sufficiently differentiated from the present case that it is not helpful in reaching my decision.

38.     I also considered the applicability of Fitzalan to the present case.  The major consideration in Fitzalan was the close alignment between the qualifications of the applicant and the requirements of the job being offered.  In this case there is no such alignment.  Mr Chan is a qualified accountant with long experience in the finance industry.  The job in question was that of a kitchen hand.  I find Fitzalan also to be unhelpful in reaching my decision.

39.     After considering the evidence and the cases referred to me, I find it unreasonable to conclude that Mr Chan was not willing to undertake paid work that was not unsuitable, merely because he refused on one occasion to allow his resume to be forwarded for a position of kitchen hand.  Using the reasoning in Castleman, Mr Chan is not obliged to seek every kind of work that is not unsuitable.  Furthermore, I do not consider that this refusal constitutes such a limitation on his categories of work that the chances of work being obtained are low.  There is no evidence that this action is a regular action on his part, such that the reasoning of Gregory would apply.  There is also no close match of qualifications and job requirements such that the reasoning of Fitzalan would apply.  I find in this case that Mr Chan was willing to undertake paid work that was not unsuitable.

40.     As a result of my findings that Mr Chan was actively seeking paid work and that he was willing to undertake paid work I find that, during the relevant period, Mr Chan satisfied the requirements of s 601(1) of the Act.

Was Mr Chan in compliance with the terms of his newstart activity agreement?

41.     Section 601(5) of the Act provides that if the person has not complied with the terms of his newstart activity agreement he cannot satisfy the activity test in spite of compliance with the requirements of s 601(1).  Mr Chan’s newstart agreement is the Centrelink participation plan (T5).  The agreement obliges Mr Chan to:

·contact DOME (Don’t Overlook Mature Expertise) (T5, p29);

·work with the support of Employment Plus program to market Mature jobseekers (T5, p30);

·maintain contact with DOME (T5, p30);

·fully participate in Intensive Support after discussing it with his Job Network member (T5, p31); and

·from 4 August 2005 make 4 job search contacts each fortnight and record these job search contacts on the application for payment forms.  These job search contacts are to include all types of suitable work, including part-time, casual and full-time.  Of the 4 contacts at least one contact per fortnight will be made through a Job Network member (T5, p31).

42.     There was no evidence that Mr Chan did not at all times comply with those requirements.  In answer to my questions, Mr Chan gave evidence that he did comply with all the requirements, including making four job search contacts each fortnight and recording those contacts.  Ms Heffernan did not question that evidence.

43.     From the evidence I find that at all times Mr Chan did comply with the terms of his newstart activity agreement.  Accordingly, in this case the effect of s 601(5) of the Act cannot act to override Mr Chan’s compliance with s 601(1) of the Act.

Summary of findings

44.     From the above reasoning I find that:

·Mr Chan was not engaged in approved unpaid voluntary work for an approved organisation for at least 32 hours in the relevant period; and

·he was not engaged in a combination of approved unpaid voluntary work for an approved organisation and suitable paid work for at least 40 hours in the relevant period;

As a consequence, Mr Chan is not entitled to relief from the activity test.  I note that this finding is contrary to the finding by the SSAT on this issue.

45.     In considering the application of the activity test I find that during the relevant period Mr Chan:

·     was actively seeking paid work; and

·     he was willing to undertake paid work; and

·     at all times he complied with the terms of his newstart activity agreement.

As a result Mr Chan attracts no penalty for failing to satisfy the activity test and Centrelink was incorrect in applying a breach rate reduction to Mr Chan.

46.     Therefore, although my reasoning differs from that of the SSAT, the end result for Mr Chan remains the same, in that he is found to satisfy the activity test and is not subject to a breach rate reduction.

Decision

47.The reviewable decision of the SSAT dated 25 May 2006 is affirmed.

I certify that the forty-seven [47] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr C. Ermert, Member

Signed: Ursula Noyé
                 Clerk

Dates of Hearing  20 October 2006
Date of Decision  1 December 2006
Representative for the Applicant       Ms P. Heffernan, Australian Government Solicitor
Representative for the Respondent   Self-represented