City of Sydney RSL and Community Club Limited v Mrs Roxanna Balgowan
[2017] FWCFB 5537
•25 OCTOBER 2017
| [2017] FWCFB 5537 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Mrs Roxanna Balgowan
(C2017/4535)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 25 OCTOBER 2017 |
Appeal against decision ([2017] FWC 3798) and order (PR594678) of Commissioner Cambridge at Sydney on 27 July 2017 in matter U2017/4635 – arguable case of appellable error established; public interest enlivened – permission to appeal granted.
Introduction
[1] On 16 August 2017, City of Sydney RSL & Community Club Ltd (the Club) lodged an appeal, for which permission is necessary, against a decision 1 (Decision) and order2 (Order) of Commissioner Cambridge in which the Commissioner determined that Ms Roxanna Balgowan had been unfairly dismissed and ordered compensation be paid to Ms Balgowan in the amount of $13,566.00, subject to appropriate taxation, within 21 days.
[2] At the permission to appeal hearing (PTA hearing), the Club was represented by Mr Chris Mossman of the Registered Clubs Association of New South Wales. Ms Balgowan appeared on her own behalf and was granted permission to attend the PTA hearing via telephone.
Background
[3] Ms Balgowan commenced employment with the Club on 26 October 2015 and her Form F2 - Unfair dismissal application (Application) alleged she was dismissed on 28 April 2017. Ms Balgowan’s Application was received in the Fair Work Commission on 1 May 2017. The Club’s Form F3 – Employer Response to Unfair Dismissal Application stated that Ms Balgowan resigned her employment on 10 April 2017 and it raised the jurisdictional objection that Ms Balgowan had not been dismissed. 3
[4] Commissioner Cambridge determined it was the actions of the Club which brought the employment to an end and that Ms Balgowan was constructively dismissed. The Commissioner went on to state that the dismissal of Ms Balgowan had been assessed against all of the criteria contained in s.387 of the Act and there was a “compelling basis to establish that the dismissal of the applicant was harsh, unjust and unreasonable.” 4 The Commissioner ordered compensation be paid to Ms Balgowan as described in paragraph [1] above.
[5] In lodging its appeal, the Club sought a stay of the Decision and Order. A stay hearing was conducted by Deputy President Clancy on 22 August 2017. The parties consented to an order 5 staying the Decision and Order. The stay was granted on the condition that the sum of $13,566.00, which was otherwise to be paid to Ms Balgowan pursuant to the Order, was to be placed by the Club into an interest bearing account until the determination or disposition of the appeal.
Decision under appeal
[6] The Commissioner set out the factual background to Ms Balgowan’s employment in paragraphs [5] to [17] of the Decision.
[7] The Commissioner’s conclusion as to whether Ms Balgowan had been dismissed was as follows:
“[36] In the present case, the applicant rejected the changes to the employment that were imposed by Ms Faaui during the meeting held on 10 April. The basis for the applicant’s rejection of the changed employment circumstances was neatly summarised by the hand written notes that were made by Ms Faaui at the time, and which included; “Roxy resigned stating that she would not have enough shifts.”
[37] The change that Ms Faaui imposed upon the applicant’s employment involved her removal from all rostered shifts that involved work in the “change box”. This alteration was said to have been necessary because of the second instance involving a cash handling discrepancy, and the need to have the applicant undergo training to improve her cash handling procedure. However, this change would result in a reduction of at least about 75% in the applicant’s remuneration. Further, although there was contest as to whether any mention was made of having the applicant undergo training in cash handling, the reduction in remuneration was recorded by the notes made by Ms Faaui to be for a period of “up to 3 months”.
[38] As previously mentioned, if upon objective analysis, the actions of the employer which involved changes to the employment were so egregious as to represent the repudiation of the employment, then the applicant would be able to treat the employment to be at an end. On any reasonable and objective contemplation, an indefinite reduction in remuneration of at least 75% would represent a repudiation of the employment which the applicant could properly reject.
[39] Consequently, it was the actions of the employer which brought the employment to an end. The decision by the employer to remove the applicant from regularly rostered engagements in the “change box” resulted in a 75% reduction in remuneration for the applicant. The applicant was entitled to reject an alteration to the employment of such significance, and to treat the actions of the employer as a repudiation of the employment. Therefore the applicant was constructively dismissed.” (references omitted)
[8] As to whether the termination of Ms Balgowan’s employment was harsh, unjust or unreasonable, the Commissioner found:
“[42] Consequently, a careful analysis of the circumstances in this instance has established that it was the actions of the employer that operated as the real and effective initiator of the termination of the employment. The applicant was a person dismissed from employment, and the jurisdictional objection as advanced by the employer must be dismissed.
[43] Further, as the applicant was a dismissed employee and a person protected from unfair dismissal, the dismissal which involved circumstances of a second, but unexplained cash handling discrepancy, did not provide valid reason for dismissal. Further, the dismissal of the applicant has been assessed against all of the criteria contained in s. 387 of the Act.
[44] In summary, the dismissal of the applicant was without valid reason involving established misconduct or capacity inadequacy. Further, the dismissal was implemented by way of an unreasonable and unjust process. Consequently, upon analysis of the various factors that are identified in s. 387 of the Act, an objective and balanced evaluation of all of the relevant circumstances provides compelling basis to establish that the dismissal of the applicant was harsh, unjust and unreasonable.
[45] Therefore, the applicant’s claim for unfair dismissal remedy has been established.”
[9] In assessing remedy, the Commissioner stated:
“[48] Section 392 of the Act prescribes certain matters that deal with compensation as a remedy for unfair dismissal. I have approached the question of compensation having regard for the guidelines that were established in the Full Bench Decision in Sprigg v Paul’s Licensed Festival Supermarket and as commented upon in the subsequent Full Bench Decision in Smith and Ors v Moore Paragon Australia Ltd.
[49] Firstly, I confirm that an Order for payment of compensation to the applicant will be made against the employer in lieu of reinstatement of the applicant.
[50] Secondly, in determining the amount of compensation that I Order, I have taken into account all of the circumstances of the matter including the factors set out in paragraphs (a) to (g) of subsection 392 (2) of the Act.
[51] There was no evidence that an Order of compensation would impact on the viability of the employer’s enterprise.
[52] The applicant had approximately 18 months of service. The applicant would have been likely to have received remuneration of approximately $847.89 per week if she had not been dismissed.
[53] The employment of the applicant would not have continued beyond her anticipated resignation date of 31 July 2017.
[54] Following the dismissal, the applicant has attempted unsuccessfully to mitigate the loss suffered because of the dismissal.
[55] Thirdly, in this instance there was no established element of past misconduct of the applicant which can be said to have contributed to the employer's decision to dismiss.
[56] Fourthly, I confirm that any amount Ordered does not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt caused to the applicant by the manner of the dismissal.
[57] Consequently, for the reasons outlined above I have decided that an amount approximating with 16 week’s remuneration should be provided as compensation to the applicant. That amount is $13,566.00. Accordingly, separate Orders [PR594678] providing for remedy in these terms will be issued.” (references omitted)
Grounds of appeal and contentions
[10] The Club’s Notice of Appeal contains eleven grounds of appeal which we need not reproduce. 6 It is sufficient for present purposes to group the grounds under three broad descriptors; the ‘repudiation grounds’ (grounds 1-5), the ‘valid reason and process grounds’ (grounds 6-10) and the ‘compensation ground’ (ground 11).
The repudiation grounds
[11] The Club submitted in order to establish there had been a repudiation of the contract of employment, it would have been necessary to demonstrate that Ms Balgowan had a contractual entitlement to work change box shifts and/or a contractual entitlement to work 30 hours per week, neither of which were entitlements Ms Balgowan had as a casual employee. The Club submitted there can be no serious breach or repudiation unless it is clear there has been or will be a breach of a particular, identified and proven term and therefore, the Commissioner’s determination that there was a serious or egregious breach of the employment contract is a significant error of fact and inconsistent with established authority.
[12] In addition, the Club submitted the Commissioner made the following significant errors of fact:
(a) that Ms Balgowan would suffer an indefinite reduction of 75% in remuneration. The Club contends that although Ms Balgowan would only be performing one more shift (Anzac Day) in the particular roster, she would be offered bar shifts instead of cash box shifts while retraining from the commencement of the next shift roster and during her retraining;
(b) determining Ms Balgowan would suffer a reduction of 75% in remuneration did not take into account the fact she would be paid public holiday penalty rates when working on Anzac Day;
(c) Ms Elenoa Faaui’s notes do not say there would be a reduction in remuneration for up to 3 months, but rather state the retraining process is up to 3 months and then refer to the offer of bar shifts instead of cash box shifts;
(d) the Commissioner assumed the retraining would be unpaid; and
(e) the Commissioner did not have regard to the evidence that bar shifts would be offered to Ms Balgowan instead of cash box shifts during the retraining period.
(references omitted)
[13] At the PTA hearing, the Club submitted there had been these abovementioned significant errors of fact, but in the alternative, if one accepted that there were no significant errors of fact, the finding of repudiation could still not stand because there have not been any breaches of any identifiable contractual terms. 7
[14] The Club also submitted the Commissioner did not go on to decide whether there was any other basis to conclude that Ms Balgowan had been dismissed within the meaning of s.386(1)(b) of the Act and had it done so, then scrutiny of the conduct of Ms Balgowan, particularly her refusal to engage in retraining or to take bar shifts, would be required. 8
The valid reason and process grounds
[15] The Club submitted a decision maker is under a duty to provide adequate reasons and non-compliance with this duty is a sufficient ground for permission to appeal to be granted. 9 It submitted the Commissioner did not provide adequate reasons for the determination there was not a valid reason for dismissal and/or that the dismissal was implemented by way of an unreasonable and unjust process, particularly having regard to the following:
(a) Ms Balgowan was given the opportunity to respond to the allegation of a cash discrepancy and was unable to provide a reasonable or adequate reason for the discrepancy;
(b) Ms Balgowan was notified of the reasons why the decision to temporarily remove her from change box shifts was taken;
(c) the past warning issued to Ms Balgowan in respect to cash discrepancy;
(d) the previous offer of retraining;
(e) Ms Balgowan’s refusal to undertake retraining;
(f) the Club’s renewed offer of retraining and the offer of bar shifts whilst the retraining was being conducted;
(g) Ms Balgowan’s prior admissions that the cash discrepancies were her fault;
(h) the seriousness of the discrepancies; and
(i) the prior notification given to Ms Balgowan that the Club viewed the issue of cash discrepancies as a disciplinary matter.
[16] The Club submitted the finding that there was no valid reason for dismissal amounted to a significant error of fact.
[17] The Club submitted further or in the alternative, the Commissioner did not have regard, or sufficient regard, to the matters referred to at [15] above in circumstances giving rise to a misapplication of s.387 of the Act, which the Club contends is a sufficient ground for the granting of permission to appeal. 10
The compensation ground
[18] The Club submitted the Commissioner gave no regard to and did not apply a contingency, as required by Sprigg v Paul’s Licensed Festival Supermarket. 11 It said the contingency the Commissioner ought to have regard to was that Ms Balgowan would have caused another cash discrepancy before the commencement of her leave, and the chance of that contingency was high, having regard to:
(a) had Ms Balgowan not resigned, she would have been issued with a second warning in relation to her conduct with the cash discrepancy;
(b) Ms Balgowan had refused all attempts by the Club to retrain her in cash handling procedure;
(c) the prior incidents of the cash mishandling occurred within a short period of time; and
(d) a further incident of cash mishandling would have likely brought Ms Balgowan’s employment to an immediate end.
[19] However, the Club conceded that the issue of a contingency applying was not raised before the Commissioner, and nor were the parties invited to make submissions in this respect.
[20] Nonetheless, the Club contended the Commissioner’s error in not giving any consideration and/or not applying a contingency to the calculation of the quantum of compensation is an error which caused a misapplication of Sprigg and a serious injustice to the Club, which supports a finding that permission to appeal should be granted.
Public interest
[21] The Club contends that there is an arguable case of one or more appellable errors raised by its various appeal grounds which disclose a misapplication of s.387 of the Act and Sprigg. It says therefore that the public interest is enlivened. It also contends that the decision manifests an injustice to the Club, that the result is counter intuitive and disharmonious when compared to previous decisions and the public interest is thereby enlivened.
Submissions - Ms Balgowan
[22] Ms Balgowan made oral submissions at the PTA hearing, which largely went to her dissatisfaction with the Club’s action in filing its appeal; that the Club had never raised retraining with her and that she “just wanted what was fair.” 12
Consideration – Permission to Appeal
[23] 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. 13 There is no right to appeal and an appeal may only be made with the permission of the Commission.
[24] This appeal is one to which s.400 of the Act applies. Section 400 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.
[25] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as “a stringent one”. 14 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.15 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 16
[26] It will rarely be appropriate to grant permission to appeal unless an arguable case of appellable error is demonstrated. This is so because an appeal cannot succeed in the absence of appellable error. 17 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.18
[27] An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal. 19
[28] We consider that an arguable case of error has been established and the public interest is enlivened by the appeal. Our reasons for this conclusion follow below.
[29] As earlier noted the Club advances eleven appeal grounds in its Notice of Appeal. We need only deal with two of the grounds which form part of the “repudiation grounds” for the purposes of determining this application for permission to appeal.
[30] The Commissioner held that the actions of the Club changed the employment of Ms Balgowan by imposing an indefinite reduction in her remuneration and this represented the repudiation of the employment. The Commissioner found that the Club’s action had brought the employment to an end, as Ms Balgowan was forced to resign because of it. In ground 4, the Club contends that the Commissioner erred in concluding that there was an indefinite reduction in Ms Balgowan’s remuneration of at least 75%. The findings of the Commissioner at paragraphs [37]-[39] and [41] of the Decision appear to us to be arguably inconsistent with the matters set out at [12] above. In particular, the evidence before the Commissioner that bar shifts would be offered to Ms Balgowan during her period of retraining appears to us to be arguably inconsistent with his conclusion. We are therefore satisfied it is arguable there was a failure by the Commissioner to take this evidence into account. That relevant considerations are not taken into account is an appellable error. We are persuaded it is arguable that ground 4 of the Notice of Appeal raises an arguable case of appellable error.
[31] Ground 2 of the Notice of Appeal contends that the Commissioner erred in concluding that the alleged breach of the contract of employment was an egregious or serious breach which represented a repudiation of the said contract of employment. The Club submits this finding is a significant error of fact and inconsistent with established authority.
[32] The Club submits that in order to repudiate a contract of employment, a contractual term must be breached and Ms Balgowan, as casual employee, had no contractual entitlement to work change box shifts and/or a contractual entitlement to work 30 hours per week. In the absence of such contractual terms, it is submitted, there can be no serious breach or repudiation.
[33] We consider it is arguable that the Commissioner erred in finding there was a contractual entitlement to work change box shifts and/or a contractual entitlement to work 30 hours per week. This conclusion appears to us to be arguably inconsistent with the evidence that “Ms Balgowan was rostered an average of approximately 30 hours per week. However, this fluctuated dependent on the operational needs of the Club as well as the nature of the casual employment”. 20 The conclusion is also arguably inconsistent with the Commissioner’s characterisation of Ms Balgowan’s duties which he set out in the Decision as follows:
“The work that the applicant performed involved a variety of general hospitality duties including bar attendant, café, cash box and gaming floor services. As part of her role, the applicant often performed cash handling duties.” 21
[34] We are therefore persuaded that ground 2 of the Notice of Appeal raises an arguable case of appellable error.
[35] Having regard to the Commissioner’s ultimate findings and award of compensation to Ms Balgowan the nature of the arguable appellable errors identified, if made good on appeal, would likely result in a different outcome. We therefore consider that there is an arguable case of injustice sufficient to enliven the public interest.
Conclusion
[36] For the reasons given, permission to appeal is granted. The parties will be separately advised as to the further conduct of the appeal.
DEPUTY PRESIDENT
Appearances:
Mr C Mossman for City of Sydney RSL & Community Club Ltd
Ms R Balgowan on her own behalf
Hearing details:
2017.
September 7.
Melbourne via VC to Sydney.
1 [2017] FWC 3798.
2 PR594678.
3 Fair Work Act 200, ss 385 & 386.
4 [2017] FWC 3798 at [44].
5 PR595529.
6 Form F7 – Notice of Appeal dated 16 August 2017 at 2.1.
7 Transcript PN 87 (7 September 2017).
8 See Pawel v Advanced Precast Pty Ltd S5904 at [13].
9 Dianna Smith T/A Escape Hair Design v Sally-Anne Fitzgerald[2011] FWAFB 1422.
10 Aperio Group (Australia) Pty Ltd T/A Aperio Finewrap v V Sulemanovski[2011] FWAFB 1436.
11 Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21.
12 Transcript PN 152 (7 September 2017).
13 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
14 (2011) 192 FCR 78 at [43].
15 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46].
16 [2010] FWAFB 5343, 197 IR 266 at [27].
17 Wan v AIRC (2001) 116 FCR 481 at [30].
18 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
19 Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82].
20 Exhibit 4 at paragraph (6), cited in the Decision at [5].
21 [2017] FWC 3798 at [5]
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