Department of Employment Education Training & Youth Affairs v O'Connell, Joanna
[1997] FCA 396
•15 MAY 1997
CATCHWORDS
SOCIAL SECURITY - appeal from decision of Administrative Appeals Tribunal - failure to enter into a Case Management Activity Agreement resulting in cancellation of the respondent's allowance - reason for cancellation given pursuant to s 44 of the Employment Services Act 1994 and reliance on s 45(5)(a) of that Act - whether applicant entitled to act under s 45(5) of that Act - whether s 45(5) can apply only in respect of failure to comply with an agreement - applicant erred in circumstances in relying on s 45(5)(a) - appeal dismissed.
Employment Services Act 1994 ss 38, 44, 45 and 45(5)(a)
Social Security Act 1991 ss 608(1)(j)(ii) and (iii), 625, 626
and 660I
No VG 713 of 1996
SECRETARY, DEPARTMENT OF EMPLOYMENT EDUCATION TRAINING
AND YOUTH AFFAIRS v JOANNA O'CONNELL
Mansfield J
Melbourne
15 May 1997
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIAN DISTRICT REGISTRY ) No VG 713 of 1996
)
GENERAL DIVISION )
BETWEEN:
SECRETARY, DEPARTMENT
OF EMPLOYMENT EDUCATION
TRAINING AND YOUTH AFFAIRS
Applicant
- and -
JOANNA O'CONNELL
Respondent
MINUTES OF ORDER
CORAM: Mansfield J
PLACE: Adelaide
DATE: 15 May 1997
THE COURT ORDERS THAT:
The appeal be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
VICTORIAN DISTRICT REGISTRY ) No VG 713 of 1996
)
GENERAL DIVISION )
BETWEEN:
SECRETARY, DEPARTMENT
OF EMPLOYMENT EDUCATION
TRAINING AND YOUTH AFFAIRS
Applicant
- and -
JOANNA O'CONNELL
Respondent
REASONS FOR JUDGMENT
CORAM: Mansfield J
PLACE: Adelaide
DATE: 15 May 1997
The point of law in issue in this appeal is a short one. It involves the proper construction of ss44 and 45 of the Employment Services Act 1994 ("the ES Act").
The respondent Joanna O'Connell ("Ms O'Connell") registered as unemployed with the Commonwealth Employment Service ("the CES") on 23 December 1993. From 3 January 1994 she claimed, and then received, a newstart allowance under Part 2.12 of the Social Security Act 1991 ("the SS Act").
Ms O'Connell became a participant in the case management system established under the ES Act by Ministerial Determination, made under s25(1) of the ES Act, being a person continuously registered with the CES for fifty two weeks. The relevant Determination is the Employment Services (Participants) Determination, No. 1 of 1995. She remained a participant in the case management system throughout the period relevant to this appeal.
The ES Act has the aim of promoting full employment by providing employment services that are free of charge to job seekers, and one of its objects is to set up and regulate the case management system: ss3(1) and 3(2)(c). Chapter 4 of the ES Act establishes the case management system. As the outline in s24 indicates, so far as relevant, there is a process established whereby
.people registered with the CES may become participants in the case management system
.the CES will then refer such participants to case managers
.the case manager for a participant will provide case management services to the participant referred to that case manager
and the provisions include detail as to the consequences of a failure on the part of the job seeker to cooperate in those processes. The CES referral process involves an interview or interviews with the CES both initially, and if termination of the referral is contemplated: ss27 and 30. If a person refuses or fails to comply with a request for interview, ss28 and 31 provide that s630C of the SS Act has effect in relation to that person and on certain bases. The consequence of such a failure, in practical terms, includes that a newstart allowance is not payable to the person unless the Secretary of the Department of Social Security ("the Secretary") determines that the person had a reasonable excuse for not attending the interview.
Ms O'Connell was duly referred to a case manager under Part 4.3 of the ES Act. The case manager then was to provide case management services to Ms O'Connell: ss36(1) and 37(1) of the ES Act. That involved Ms O'Connell entering into a Case Management Activity Agreement: s36(2) of the ES Act. Section 38 sets out how that is arrived at:
"(1)This section applies to a person who has been referred to a case manager under Part 4.3.
(2)The person is to have a written agreement with the case manager. The agreement is to be known as a Case Management Activity Agreement. The agreement is to be in a form approved by the Employment Secretary.
(3)If the person is not a party to a Case Management Activity Agreement, the Employment Secretary must require the person to enter into such an agreement.
. . .
If the person is required to enter into a Case Management Activity Agreement under subsection (3) or (4), the Employment Secretary must give the person written notice of:
(a)the requirement; and
(b)the places and times at which the agreement is to be negotiated.
. . .".
The Employment Secretary is the Secretary of the Department of Employment Education and Training, now since Administrative Arrangement Order, Gazette 11 March 1996 the Department of Employment Education Training and Youth Affairs ("the Department"). Section 39 of the ES Act prescribes a number of matters which a Case Management Activity Agreement is required to encompass.
In the particular circumstances, no Case Management Activity Agreement was entered into.
On 11 September 1995, the case manager wrote to Ms O'Connell in the following terms:
"You are required to attend an interview to reach an agreement with me about ways which will help you obtain work.
At the interview we will complete a Case Management Activity Agreement which will include activities aimed at overcoming some of the problems you may be experiencing in finding work.
The interview will be held at:
[details set out]
Under the terms of the Employment Services Act 1994, if you do not attend this interview, your Newstart Allowance may be cancelled and case management services may be withdrawn.
If you have special needs for the interview, for example: an interpreter, special building access, etc, please contact me prior to the interview so that arrangements can be made.
If you are not able to attend this interview, please contact me on 521 1122 as soon as possible, so that another interview can be arranged. I look forward to seeing you.
Please bring any certificates, resumes, etc, with you to the interview."
Ms O'Connell forgot to attend that interview. Accordingly, on 18 September 1995, the case manager wrote to her again in the following terms:
"You did not attend your interview to complete your Case Management Activity Agreement.
Your interview has been rebooked for:
[details set out]
Under the terms of the Employment Services Act 1994, if you do not attend this interview you will be taken to have unreasonably delayed entering into your Case Management Activity Agreement and your Social Security Allowance will not be paid to you for a period of time and case management services will be withdrawn.
If you have special needs for the interview, for example: an interpreter, special building access, etc, please contact me prior to the interview so that arrangements can be made.
You must attend this interview if you do not want your allowance to stop."
Again, Ms O'Connell did not attend that interview. For the purposes of determining this appeal, I do not need to consider the validity or otherwise of her reasons for her having failed to attend those interviews. It has been determined by the Administrative Appeals Tribunal ("the Tribunal") on 31 October 1996 that her failure amounted to her unreasonably delaying entering into a Case Management Activity Agreement. That aspect of the Tribunal's reasons is not the subject of appeal to this Court.
On 2 October 1995 a delegate of the Employment Secretary determined to cancel Ms O'Connell's Newstart Allowance. That decision was based upon the authority of s660I of the SS Act, relying on a breach of s607(1) of the SS Act, and in turn asserting a failure to comply or a foundation laid upon ss38 and 45(5) of the ES Act. On 20 October 1995, an authorised review officer under the SS Act affirmed that decision. The letter of advice then given to Ms O'Connell included the following:
"In failing to attend the appointments on 18/9/95 and 28/9/95 you have unreasonably delayed entering into a CMAA with your case manager. As you unreasonably delayed entering a CMAA you have not satisfied the requirements set out in section 45(5) of the Employment Services Act.
In not satisfying the requirements of section 45(5) of the Employment Services Act you have consequently breached the Activity Test provisions, sections 601(4) and 601(5), of the Social Security Act.
If you breach the Activity Test provisions of the Social Security Act then the CES has the authority, under section 660I of that same Act, to cancel your Newstart Allowance.
I have therefore decided that the decision to cancel your allowance was correct and now affirm that decision. I have told the CES office of my decision. You should contact the CES if you want to know more about this matter."
It is of note that the reason given was an unreasonable delay in entering into a Case Management Activity Agreement, a concept contained within s44 of the ES Act.
Ms O'Connell sought review of that decision by the Social Security Appeals Tribunal ("the SSAT"). On 29 February 1996, it determined to set aside the decision and substitute the decision that a newstart allowance be reinstated from the date of its cancellation. The SSAT concluded that, as no notice under s44(3) of the ES Act had been given, there could be no failure on Ms O'Connell's part to have entered into the Case Management Activity Agreement. It is clear that a notice under s44(3) of the ES Act, if required, was not given.
The issue on this appeal, and the issue before the Tribunal to which the applicant then sought review, was whether the applicant was entitled to act in the circumstances under s45(5) of the ES Act, as it did, or whether it was obliged to act under s44 of the ES Act.
On 31 October 1996 the Tribunal reached a similar conclusion to the SSAT as to the interaction of ss44 and 45 of the ES Act. It therefore decided that the applicant could not rely upon s45 of the ES Act in the circumstances to terminate the entitlement to the newstart allowance. Unlike the Social Security Appeals Tribunal, however, it then went on to determine in terms of s44 of that Act that Ms O'Connell had unreasonably delayed entering into a Case Management Activity Agreement, and directed compliance with ss44(3) and (4) of that Act by giving appropriate notice. Upon that compliance, the decision would otherwise be upheld.
This appeal seeks to assert that, in the particular circumstances, the applicant was entitled at the option of the Secretary of the Department (or the delegate) to cancel the newstart allowance under s45 of the Act, rather than having to act under s44 of the ES Act.
The relevant provisions of s44 are as follows:
"(1)This section applies if:
(a)a person has been given notice under subsection 38(5) of a requirement to enter into a Case Management Activity Agreement; and
(b)the Employment Secretary is satisfied that the person is unreasonably delaying entering into the agreement.
(2)The Employment Secretary may be so satisfied:
(a)because of the person's failure to:
(i)attend the negotiation of the agreement; or
(ii)respond to correspondence about the agreement; or
(iii)agree to terms of the agreement proposed by the case manager; or
(b)for any other reason.
(3)The Employment Secretary may give the person a written notice stating that the person is being taken to have failed to enter into the agreement. If such a notice is given, the person is taken to have failed to have entered into the agreement.
(4)A notice under subsection (3) must:
(a)set out the reasons for the decision to give the notice; and
(b)include a statement describing the rights of the person to apply for a review of the decision."
and of s45:
"(1)This section applies to a person who is a participant in the case management system throughout a particular period (the participation period).
(2)For the purposes of this section, the person's case management period is the period:
(a)beginning on the first occasion during the participation period when a decision under Part 4.3 referring the person to a case manager took effect; and
(b)ending at the end of the participation period.
. . .
(5)The person is not qualified for a newstart allowance or a youth training allowance in respect of a period unless (in addition to meeting any other requirements set out in the Social Security Act 1991 or Part 8 of the Student and Youth Assistance Act 1973, as the case may be):
(a)when the person is required under section 38 to enter into a Case Management Activity Agreement in relation to the period, the person enters into that agreement; and
(b)while the agreement is in force, the person satisfies the Employment Secretary that the person is taking reasonable steps to comply with the terms of the agreement; and
(c)at all times during the period when the person is a party to the agreement, the person is prepared to enter into another such agreement instead of the existing agreement if required to do so under section 38.
(6)For the purposes of paragraph (5)(b), a person is taking reasonable steps to comply with the terms of a Case Management Activity Agreement unless the person has failed to comply with the terms of the agreement and:
(a)the main reason for failing to comply involved a matter that was within the person's control; or
(b)the circumstances that prevented the person from complying were reasonably foreseeable by the person."
The contention of the applicant is that the cancellation effected under s660I of the SS Act, was one which the applicant was entitled to effect, because under s45(5)(a) of the ES Act Ms O'Connell was at the time not qualified for a newstart allowance as she had not then entered into a Case Management Activity Agreement, having been required to do so under s38 of the ES Act. Although the original decision maker, in reaching that conclusion, appears to have tied it to Ms O'Connell's unreasonable delay in entering into the Case Management Activity Agreement, if that argument is correct, there is no reason why that should be a ground necessary to be established for the making of such a decision. There is no provision requiring that matter to be considered when making a decision under s45(5) of the ES Act. It is a concept derived from s44 only, and so is expressly limited to the purposes of s44 of the ES Act.
Section 44 of the ES Act relates specifically to the failure to enter into a Case Management Activity Agreement. It sets
out the circumstances in which a person is taken to have failed to have entered into the agreement. In that event, s45(11) comes into play. It provides that during a person's case management period, certain sections including ss608, 625 and 626 of the SS Act have effect in relation to that person as if they contained a reference to a Case Management Activity Agreement. Section 608 of the SS Act thus provides:
"(1)A newstart allowance is not payable to a person for a period during which the person is qualified for a newstart allowance (see section 593) if during that period:
. . .
(j)a period of non-payment has been imposed because:
. . .
(ii)the person had previously ceased to be qualified for newstart allowance for failure to enter into a [Case Management Activity Agreement] (see section 625); or
(iii)the person had previously ceased to be qualified for newstart allowance for failure to comply with a [Case Management Activity Agreement] (see section 626); or
. . ."
and s625 then relevantly provides:
"(1)Subject to subsection (2) [not applicable], a newstart allowance is not payable to a person for the activity test deferment period if:
(a)the person is required to enter into a [Case Management Activity Agreement] in order to qualify, or to continue to qualify, for a newstart allowance; and
(b)the person fails to enter into a [Case Management Activity Agreement]."
and s626 then relevantly provides:
"(1)Subject to subsection (2) [not applicable], a newstart allowance is not payable to a person for the activity test deferment period if:
(a)the person is required to take reasonable steps to comply with the terms of a [Case Management Activity Agreement] in order to qualify, or to continue to qualify, for a newstart allowance; and
(b)the person fails to take reasonable steps to comply with the terms of the [Case Management Activity Agreement]."
The activity test deferment period is prescribed by s630A of the SS Act. It provides a "tariff" of periods, depending upon the period of time the person has been unemployed and upon whether a previous activity test deferment period has applied to that person. The final step in the process is s660I of the SS Act which provides that, if the Secretary is satisfied that a newstart allowance is being paid to a person to whom it is not payable under the Act, the Secretary "is" to determine that the allowance is to be cancelled or suspended.
That legislative framework, for present purposes, is significant in that it sets up almost parallel, but different, streams for decision making depending upon whether the failure is to enter into a Case Management Activity Agreement or whether the failure is to comply with the terms of a Case Management Activity Agreement. Both streams culminate in s660I of the SS Act. It is nevertheless the submission of the applicant that the stream originating in s45(5) of the ES Act can itself flow through s625 to s608(1)(j)(ii) to s660I of the SS Act.
In my view that submission should be rejected. It is my view that in a case where the real complaint is that the recipient of the newstart allowance has failed to enter into a Case Management Activity Agreement, the appropriate procedure to identify the consequences is through s44 of the ES Act rather than s45 of that Act.
There are a number of reasons for that conclusion. First, I note the structure of the legislation referred to above. It is not simply the two streams setting out the process for decision making in respect of a failure to enter into a Case Management Activity Agreement on the one hand, and of a failure to comply with the terms of such an agreement on the other. It is also that there is a very significant coincidence of wording along those two separate streams. The wording of s45(5)(a), even if able to stand in isolation from the other parts of subs(5), does not fit with such facility into the expressions in ss608(1)(j)(ii) and 625 of the SS Act; on the other hand, it does do so in respect of ss608(1)(j)(iii) and 626 of the SS Act. As I have indicated, if s45(5)(a) of the ES Act is capable of doing the work for which it is contended, there is no expression contained within it as to why its operation should be limited to circumstances of unreasonable delay in entering into a Case Management Activity Agreement. It would apply on its face simply by virtue of the fact that there is no such agreement. That is contrary to the scheme of the Act which, although it contemplates a prompt reaching of such an agreement, does provide through ss38 and 44 a process for reaching such an agreement. It is not consistent with the legislation that, during the period that process takes, the person should be ineligible for payment of the newstart allowance because there is no Case Management Activity Agreement. That is the more so because, unlike s626 of the SS Act, s625 of that Act does not contain within it any element of reasonableness (that is, in my view, because s44 of the ES Act accommodates such issues at that point), and because s660I of the SS Act also does not leave the Secretary with a discretion once the particular state of facts, i.e. non-payability of the allowance, is made out. Furthermore, it is difficult to see what work s44 could usefully perform if s45(5)(a) could be used for the purpose contended. It is clear however that s44 is intended to have a meaningful operation. In my view its period of operation will be as a vehicle to ensure that the process towards a Case Management Activity Agreement can be insisted upon. It is consistent with that view that the failure to comply with s44 of the ES Act, through ss608(1)(j)(ii) and 625 of the SS Act, does not necessarily lead to the cancellation of the entitlement to the allowance but simply its suspension for a period, and in the light of any persistent failure a more prolonged period of the suspension. I note also that ss149 and 155 of the ES Act provides specifically that, in the event of an application for review of a decision based upon the giving of the notice under s44(2)(a)(iii) of the ES Act, payment of the allowance is to be made pending the determination of the review. It would be surprising if the legislature had made such specific provision in a context where its intent so expressed could readily be avoided by the vehicle of a determination made under s45(5)(a) rather than the giving of a notice under s44 where the circumstances are, as they were here, clearly amenable to s44 of the ES Act.
That view is firmly fortified by looking to the construction of s45(5) itself. Sub-clause (a) is but one of three conjunctive circumstances, specifying a state of facts in which a person is not qualified for a newstart allowance. It is premised on its face upon the person having entered into the Case Management Activity Agreement. It then contemplates a failure to take reasonable steps to comply with that agreement. That construction is reinforced not simply by the use of the conjunctives between sub-clauses (a), (b) and (c), but also by the explanatory or elucidating provision in subs(6) as to what may constitute or may not constitute the taking of reasonable steps to comply with the terms of the agreement. Further, it does not fit readily with the words in subclauses (a), (b) and (c) to apply them at the point of time before there is a Case Management Activity Agreement at all. To do so, it would involve qualifying the word "while" at the start of sub-clause (b), bearing in mind the conjunctive, to
read "if and while the agreement, once entered into, is in force ..." and similarly sub-clause (c) would have to be qualified by adding the words "if an agreement is entered into then ...". In my view that is simply unnecessary and inappropriate in the light of s44 of the ES Act. I do not think the use of the permissive expression "may" in subss(2) and (3) of s44 diminishes that conclusion. The primary element upon which s44(1) operates is the giving of a notice under s38(5) and the satisfaction of the Employment Secretary that the recipient is unreasonably delaying entering into the agreement. Subsection (2) prescribes some circumstances in which the Secretary may be so satisfied. It is appropriate that subs(2)(b) be expressed as it is; there may be a range of circumstances upon which such a conclusion could be reached which do not fall within the specific criteria of subs(2)(a). The fact that subs(3) is also expressed in a permissive rather than mandatory term simply, in my view, leaves the decision to the Secretary as to whether, in the event of an apparently recalcitrant recipient of a newstart allowance, the Secretary wishes to take that step either at that time or at all or to take some other step of a less coercive nature to encourage the entry into the Case Management Activity Agreement.
I have not addressed the question which was briefly canvassed during submissions whether, in the circumstances, the decision to cancel the allowance rather than suspend it for the period specified under s630A of the SS Act for the activity test deferment period was a legally appropriate one. That question was not ventilated at any earlier stage of the review process.
Accordingly, in my view, this appeal should be dismissed.
I note that certain provisions of the Employment Services Act 1994 (Act No 176 of 1994) were amended by the Student Assistance (Youth Training Allowance - Transitional Provisions and Consequential Amendments) Act 1994 (Act No 184 of 1994) and by the Employment Services Amendent Act 1995 (Act No 148 of 1995). The relevant amendments effected by that last mentioned Act commenced on 20 September 1996: see s2(2). Those amendments were consequential upon the repeal of provisions relating to the Job Search allowance in the SS Act. Although those amendments occurred during the course of review of the decision in question, they do not relevantly alter any of the provisions to which I have referred.
I certify that this and the preceding pages are a true copy of the Reasons for Judgment of the Honourable Justice Mansfield.
Associate:
Dated:
Counsel for the Applicant : Mr C Gunst
Solicitors for the Applicant : Australian Government
Solicitor
No appearance by or on behalf
of the Respondent
Hearing Date : 12 May 1997
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