Elizabeth Ghali v Sutherland Shire Montessori Society (Inc) T/A Sydney Montessori School

[2014] FWCFB 5390

[2014] FWCFB 5390

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604—Appeal of decision

Elizabeth Ghali
v
Sutherland Shire Montessori Society (Inc) T/A Sydney Montessori School
(C2014/4083)

Susan Chahwan v Sutherland Shire Montessori Society (Inc) T/A Sydney Montessori School (C2014/4084)
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT SENIOR DEPUTY PRESIDENT HAMBERGER COMMISSIONER LEWIN	SYDNEY, 13 AUGUST 2014

Appeal against decision [2014] FWC 2060 of Commissioner Cambridge at Sydney on 28/4/2014 in matter numbers U2013/12744 and U2013/12649 - unfair dismissal - actual reasons for dismissal vs stated reasons for dismissal - whether Commissioner made a finding as to the real reasons for dismissal - whether decision to terminate employment had been made at the time of suspension - whether reasons for dismissal were “sound, defensible or well-founded” - no error in decision - permission to appeal refused.

[1] These are applications for permission to appeal and, if granted, appeals under s.604 of the Fair Work Act 2009 (the Act) against a decision of Commissioner Cambridge made on 28 March 2014. 1 In the decision, the Commissioner dismissed applications for unfair dismissal remedies made by Susan Chahwan and Elizabeth Ghali (the applicants) against their employer, Sutherland Shire Montessori Society (Inc) trading as the Sydney Montessori School (the employer).

[2] The employment of the applicants was terminated summarily by letters from the employer’s solicitors dated 7 August 2013. The dismissals occurred in the context of various developments and disputes concerning the governance and operation of the Sydney Montessori School which are referred to in the Commissioner’s decision and which were the subject of considerable attention in the submissions in the proceedings before the Full Bench.

[3] The factual background to the matters is described in the decision of the Commissioner as follows:

“[6] The applicants were engaged in senior executive positions with the employer. Specifically, Ms Chahwan was employed as the Acting Head of School or Acting School Principal, and Ms Ghali was employed as the Head of School Secondary.

[7] The employer is a not-for-profit incorporated association which, through a Board of Directors (the Board), relevantly conducts the operation of the Sydney Montessori School (the school), which has campuses located in the Sydney suburbs of Gymea and Sutherland. The employer has approximately 42 employees.

[8] Each of the applicants have held senior positions with the employer since at least, about 2008. At different times, each of the applicants participated as members of the Board and concurrently occupied senior educational and administrative roles at the school. The applicants are parents of students who attended the school in 2013 and are members of the incorporated association which forms the entity which is the employer. Hani Ghali, the husband of one of the applicants, Ms Ghali, had been the Principal/Chief Executive Officer of the school since about 2000.

[9] During the later part of 2012, ongoing tensions which had developed between certain members of the Board and, in particular, Mr Ghali, resulted in Mr Ghali resigning as Principal/Chief Executive Officer. In February 2013, the Board appointed Ms Chahwan as Acting Head of School to replace Mr Ghali. However, Mr Ghali continued in employment at the school in what may be described as a transitional and special projects role.

[10] Importantly, the school, as with all non-government schools in New South Wales, operated by virtue of certain registrations and accreditations which were ordinarily granted by the BOS on a reoccurring five yearly basis. Since 2008, the school had expanded to include secondary level educational courses. As this expansion continued toward the school providing its first Higher School Certificate (HSC) course in 2013, the accreditation and registration processes involved annual inspections by the BOS and year by year extensions of accreditation and registration approvals.

[11] Consequently, at the commencement of 2013, the school anticipated some significant challenges, most notably the BOS registration and accreditation process which, for the first time, would encompass the HSC. Further, there were the understandable and predictable transition management issues associated with the change of Principal from the long serving Mr Ghali to Ms Chahwan. In addition, the school had some serious underlying financial difficulties.

[12] Unfortunately, the tensions which had developed between some members the Board and Mr Ghali did not dissipate. The change of Principal and the move of Mr Ghali into a “non-Board” role, where he was to devote his working time almost exclusively to ensuring the BOS registration and accreditation process was successful, did not meet with general approval from the school staff. This disquiet surfaced at an early time in 2013.

[13] In February 2013, almost all members of the school staff signed a form letter which called on the President of the Board to “...dismiss the Board and reappoint two people, in consultation with the Executive Team, to establish an Interim Board...”, with the expectation “...that the transition to a completely independent board, without parents, will be in place by the beginning of Term 3, 2013, if not sooner.” This form letter was dated 13 February 2013, and it further included, “...we would like to hear a decision, in writing, by Friday 15 February.”

[14] A further letter dated 18 February 2013, was signed by 10 members of the incorporated association which is the employer entity and referred to as “the Society”. This letter called for a Special General Meeting of the Society to propose a Special Resolution in the following terms:

“To stand down current Members of the Board whom we believe are incapable of the following:

1. acting impartially with regards to governance of the School

2. In accordance with section 15.5(b) of the Objects and Rules

3. In the best interests of both the School and the Society.

The President to immediately set in process a transition to an Independent Corporate Board with a new Constitution as advocated by the AIS and MAF, in full consultation with and with assistance from the AIS and MAF.”

[15] It can be readily appreciated from the contents of the form letter of 13 February and the Special General Meeting letter of 18 February, that by late February, there was a concerted endeavour by school staff and certain members of the Society, to have the existing members of the Board removed and replaced with other persons. The situation represented an unambiguous challenge to the members of the Board and an overt move to depose them. It should be noted that the applicants signed both the form letter of 13 February and the Special General Meeting letter of 18 February.

[16] In the months following the February letters, something of a difficult stand-off appeared to occur. A Special General Meeting was not held, the Board continued to meet and at different times Ms Chahwan and Mr Hani Ghali attended Board meetings and provided executive reports which included reference to the BOS registration and accreditation process. These reports indicated that Mr Ghali had been working assiduously on issues related to the BOS registration and accreditation.

[17] The BOS conducted an inspection of the school on 21 and 22 May, as part of the registration and accreditation process. The Board met on Friday 24 May and the minutes of that meeting record that Mr Hani Ghali was in attendance. Further, the minutes make mention of the BOS registration and accreditation process in the following terms: “BOS audit - a number of issues raised. The main one was upgrading IT room. The worst case we have is a 12 month rego and then redo.”

[18] In early June 2013, the deterioration of the financial position of the school was identified to have reached crisis point and particular members of the Board met with the applicants and other teachers to discuss cost cutting measures that might assist with the financial difficulties. As a result of comments made during these meetings, the Board President, Mr Attridge, became concerned about issues that may have arisen from the BOS inspection which had occurred a few weeks earlier.

[19] Consequently, the Board President made a telephone inquiry with the BOS inspector who had visited the school on 21 and 22 May. The BOS inspector informed the Board President that the inspection had identified serious concerns involving the school’s non-compliance with various registration and accreditation requirements, including matters that the school had been warned about in the previous year. Further, these concerns had been conveyed to Ms Chahwan in a letter dated 28 May 2013. This news alarmed the Board President as he was unaware of the communication from the BOS.

[20] On 6 June, the BOS inspector sent the Board President copies of the letters which the BOS had earlier sent to Ms Chahwan, including a copy of the letter dated 28 May to which was attached a list of 69 items in respect of which the BOS required documentation or other evidence of compliance. This correspondence deeply concerned the Board President, particularly as it had not been provided to him by any of the executive staff of the school.

[21] The Board President sent copies of the 28 May letter from the BOS and its attachment to the other members of the Board. The Board met and considered the serious concerns which had been raised by the BOS letter of 28 May, including that the executive staff of the school had not provided the Board with any indication of these concerns. The Board considered taking disciplinary action against the executive staff and sought legal advice accordingly.

[22] On 14 June, the Board suspended the applicants (and Mr Ghali) from duty on the basis of alleged serious misconduct, which was particularised in six points contained in letters of suspension. The allegations of serious misconduct were to be the subject of further investigation. The letters of suspension also advised that the suspension from employment and associated matters were to be treated as confidential and any breach of that confidentiality would be treated as serious misconduct.

[23] Further investigation by the Board and solicitors acting on the Board’s behalf was undertaken. These investigations discovered inter alia, other matters which were alleged to involve serious misconduct. One such additional matter involved an application made on behalf of Ms Chahwan to the Australian Securities and Investments Commission (ASIC) for the registration of a Corporation of the name Australian Montessori Education Ltd (AME). The application to ASIC to establish AME was made on 14 June and was considered to be evidence of activity in breach of the applicants’ duty of fidelity to the employer.

[24] A further allegation emerged as a consequence of the applicants, together with their solicitor Mr McArdle, attending a school information meeting on the evening of 21 June. The attendance of the applicants at this meeting was alleged to have breached the confidentiality directives of the letters of suspension. Further, Mr McArdle addressed the meeting and the contents of his speech provided information about the activities of the applicants which was alleged to confirm misconduct involving the potential to cause significant damage to the school.

[25] During July and early August, solicitors for the employer and those for the applicants exchanged numerous documents which broadly involved particulars of allegations against the applicants and responses to those allegations. These communications culminated in letters of dismissal dated 7 August 2013, which advised that the employer was dismissing the applicants on the basis of serious misconduct, established on four particular grounds, which stated that the applicants:

“1. did not advise the Board about the serious concerns raised by the Board of Studies during the May 2013 inspection;

2. did not provide the board with a copy of the letter from the Board of Studies dated 28 May 2013 or advise the Board of the extent of the concerns raised by the Board of Studies and that the School was at real risk of losing its registration and accreditation;

3. failed to adequately prepare for the Board of Studies inspection in May 2013 and failed to ensure that the School was complying with the Board of Studies requirements with respect to accreditation and registration; and

4. breached her fiduciary duties to the School.”

[26] The letters of dismissal further advised that the applicants were summarily dismissed and their conduct was inconsistent with the continuation of the contract of employment as it had caused serious risk to the reputation, viability and profitability of the school.”

[4] In his decision, the Commissioner considered the criteria set out in s.387 of the Act to be taken into account in determining whether a dismissal is harsh, unjust or unreasonable. In particular, the Commissioner found that:

(a) three grounds of dismissal concerning the Board of Studies (BOS) registration and accreditation compliance requirements constituted valid grounds for dismissal; 2

(b) a fourth ground of dismissal involving an alleged breach of fiduciary duty in relation to the involvement of the applicants in the establishment of Australian Montessori Education Ltd (AME) also constituted a ground for dismissal; 3 and

(c) the applicants had been provided with written notification of the reasons for their dismissal 4 and an opportunity to respond to the allegations made against them.5

[5] The Commissioner also considered the applicants’ submissions to the effect that the stated reasons for dismissal in the termination letters were not the actual reasons for dismissal. It was submitted that the applicants were “victims of a factional fight amongst members of the school community” 6 and that this was the real reason for their dismissal. Although the Commissioner did not make findings as to whether the alleged actual reasons for dismissal were, in fact, the real reasons for dismissal, the Commissioner determined that such reasons also provided a valid basis for the dismissals.7 In this regard it was noted that the applicants openly displayed their opposition to the Board and were active participants in a campaign to depose the existing Board members and that such an open challenge to an employer from senior employees would usually result in irreparable disturbance to the employment relationship.8

[6] After considering the other criteria referred to in s.387, the Commissioner concluded as follows:

“[90] The applicants were dismissed for serious misconduct. The serious misconduct involved a number of aspects.

[91] Firstly, the extent and nature of the non-compliance concerns which arose from the May 2013 BOS inspection represented a manifest failure to perform a fundamental aspect of the senior management positions of the applicants. Secondly, a similar fundamental failure of duty arose from the non-disclosure to the Board of the BOS concerns, particularly including the 28 May letter from the BOS. Thirdly, the establishment of a Company (AME), which provided a means for the operation of the school if it was placed into voluntary administration, without advice to the Board, created a breach of fiduciary duty to the employer.

[92] In addition, although not stated by the employer as reasons for dismissal, the applicants were active participants in a campaign to depose the members of the Board. These actions may have been driven by an unfortunate convergence of obligations and interests arising from various relationships. However, a regrettable conflict of interests arose and the applicants’ opposition to the employer involved actions inimical to the employer’s interest and which irreparably disturbed the trust and confidence necessary to maintain the employment relationship.

[93] Upon full analysis, the reasons for the dismissals were valid, sound, well founded and defensible. The reasons constitute serious misconduct which justified the terminations of the employment. Consequently, there were proper and valid reasons for the dismissals of the applicants.

[94] Further, I am satisfied that the dismissals were implemented following due process and that there were no other relevant mitigating factors.

[95] Consequently, for the reasons stated above, I find that the dismissals of the applicants were not harsh, unjust or unreasonable.”

[7] In the amended notice of appeal, it was contended that the Commissioner made a variety of errors of law and fact in deciding the matters before him. The alleged errors mainly relate to the findings about the employer’s stated reasons for dismissal and the reasons which it was said by the applicants were the real reasons for their dismissal.

[8] It was submitted in the appeal proceedings that the Commissioner erred in that he did not make a finding as to the real reasons for the dismissals or a proper assessment as to whether those reasons were valid reasons for dismissal and whether the applicants were notified of the reasons for dismissal and given an opportunity to respond to those reasons (s.387(b) and (c)). It was said that the real reasons for the dismissals were the role of the applicants in the “political battle” to control the affairs of the Society; their association and alliance with the former CEO and Principal of the School who was blamed by the Board for the School’s difficulties; the Board’s strategic plan to restructure the operations of the School which, in part, involved changing the senior management team; and to avoid incurring costs otherwise associated with their removal such as redundancy pay. 9

[9] It was also submitted in the appeal that neither the stated reasons nor the actual reasons represented “sound, defensible or well founded” grounds for dismissal. In relation to their involvement in the political battles, the applicants submitted that, having regard to the nature of the Society and its history, they were entitled to participate in the governance of the School as concerned parents, teachers and interested members of the school community. There was nothing incompatible between the duty of good faith and fidelity owed by the applicants as employees and their activities in campaigning against the Board of Directors.

[10] In relation to the BOS concerns, it was said that the applicants were not given specific responsibility for ensuring compliance with the BOS requirements and, in any event, the timeframe set for the provision of evidence of compliance meant that the matters raised might have been satisfactorily addressed if the applicants had not been suspended. In relation to the incorporation of AME, it was said that the mere act of incorporation was not a proper basis for dismissal as the applicants had been candid in disclosing to the Board their interest in purchasing the business in the event of voluntary administration in order to keep the School open as a going concern.

[11] Finally it was submitted that the Commissioner also erred in not taking into account the absence of warnings under s.387(e). In this regard it was said that a range of “shortfalls” in school management referred to by the Board of Directors in the meeting of 12 June 2013, including the BOS matters, concern performance issues and not conduct issues and should have been the subject of warnings.

Appeal Principles

[12] An appeal under s.604 of the Act involves an appeal by way of rehearing, with the powers of the Full Bench being exercisable only if there is error on the part of the primary decision- maker. 10

[13] The majority of the High Court explained in the following passage how error may be identified where a discretionary decision is involved:

“Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process (See Norbis v Norbis (1986) 161 CLR 513 at 518-519). And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal.”  11

[14] The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King 12in these terms:

“If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so”; 13

and

“It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion...” 14

[15] An appeal under s.604 of the Act may only be pursued with the permission of the Commission. Section 604(2) requires the Commission to grant permission to appeal if it is satisfied that it is in the public interest to do so. However, there is a note following the subsection to the effect that this does not apply in relation to an application to appeal from an unfair dismissal decision. 15

[16] The effect of s.400 is twofold. Firstly, the Commission may only grant permission to appeal from an unfair dismissal decision where it considers it is in the public interest to do so (s.400(1)). 16 Secondly, an appeal of an unfair dismissal decision, to the extent that it is an appeal on a question of fact, may only be made on the ground that the decision involved a significant error of fact (s.400(2)).

Consideration

[17] The main submissions for the applicants in the appeal relate to the reasons for the dismissals. It was submitted that the “actual” reasons for dismissal were not those set out in the termination letters of 7 August 2013 but are revealed in the decisions of the Board of Directors and from the circumstances relating to the political battles which were taking place at the time regarding the operations, management and future of the School.

[18] Considerable reliance was placed by the applicants in their submissions on the decisions and resolutions of the Board of Directors in dealing with the issues relating to the financial challenges facing the School and the actions needed to be taken in relation to management and staffing in addressing those challenges. It was said that these are the critical factor in determining the real reasons for the dismissals.

[19] In particular it was submitted on appeal that a definite decision to dismiss the applicants was made at the meeting of the Board on 12 June 2013. In that meeting, the Board considered the BOS concerns, the School’s financial situation and the performance of the school management and passed a resolution to remove the current management as soon as possible. It was submitted that the reason for the dismissals as shown by the minutes of the Board meeting was the decision to change the senior management of the School and that there is no evidence of any further Board meeting having been held after 12 June 2013.

[20] The relevant part of the minutes of the Board meeting held on 12 June 2013 is as follows:

“4 Performance of School Management

Further to previous discussion about shortfalls in the current school management it was agreed that it was essential to the progress of the school that it’s current management be removed as soon as possible. With the legal advice received by DA from AIS there was some debate about summary dismissal as the mechanism to achieve that.

Resolution: Board to issue 4 weeks notice for HG and 5 weeks notice for LG and SC taking us to 11 July and 18 July respectively. They will be required to leave the premises immediately and not be around, effectively taking leave (suitable handover of keys). Agreed that at the end of that period they may be due their entitlements pending investigations into conduct relating to school risk re child protection, BoS shortfalls and financial viability. DA to check with AIS lawyer tomorrow.

DA to send a draft dismissal letter to AIS for legal review with letters to be delivered lunchtime on Friday (MA & BA) with a Staff meeting Friday afternoon to answer relevant concerns. After this meeting, to speak to Dianne and Simone about covering Susan’s class in the short term.

Notice to go to all parents Fri evening notifying that management removed, interim business manager employed and plans to cover Susan’s class, with a community meeting offered on Sat to discuss. At this meeting we will advise that we have a revised business plan for discussion at the AGM.

Unanimous.”

[21] Although the minutes of the Board meeting of 12 June 2013 may be taken as recording the decision of the Board at that time, it is clear from the decision itself that other steps were contemplated to be taken before the dismissal of the applicants. It is also evident that other developments occurred and other decisions were made by the employer before the applicants were dismissed on 7 August 2013.

[22] In this regard, we note in particular the following:

• The Board’s resolution of 12 June refers to the need for further consideration to be given to the dismissals, including the legal review of draft dismissal letters;

• Although the minutes of the 12 June meeting refer to the dismissal of the applicants, the notices given to them on 14 June 2013 suspended their employment pending an investigation of alleged serious misconduct listed in the notices;

• The suspension letters include allegations that the applicants had engaged in ongoing practices that are in serious breach of BOS requirements, had misled the Board regarding breaches of BOS requirements, had provided incorrect management reports and acted in conflict of interest with their obligations to the School;

• Australian Montessori Education Ltd (AME) was incorporated on 14 June 2013;

• The applicants attended and participated, together with their solicitor, in a school community information meeting on 21 June 2013;

• On 11 July 2013 the applicants were provided with the details of the matters and allegations that they were required to respond to;

• On 22 July 2013 the applicants’ solicitor provided responses to the matters and allegations;

• On 31 July 2013 the solicitors for the employer wrote to the applicants’ solicitor, the letters being “focussed on the two issues which each separately provide the basis for the School’s view that (the applicants’) employment should be summarily terminated”, namely the BOS concerns and the establishment of AME, and giving the applicants an opportunity to respond to the matters; and

• On 5 August 2013 the applicants’ solicitor provided a further response.

[23] The letters of termination are dated 7 August 2013 and state that the employer had carefully considered all the matters raised by the applicants but that these matters did not change the preliminary view as set out in the letters of 31 July that the applicants should be summarily terminated.

[24] To the extent that the arguments of the applicants on appeal largely rely upon the Board minutes of 12 June 2013 as providing evidence of the actual reasons for the dismissals, the arguments cannot be sustained having regard to the other evidence and material before the Commission. Clearly, as listed above, there were a range of developments relevant to the dismissals between 12 June and 7 August 2013. It is more than likely that these events and circumstances would have been taken into account in making the ultimate decision to dismiss the applicants.

[25] In the proceedings before the Commissioner four members of the Board of Directors gave evidence to the effect that the Board had instructed its solicitors in relation to the reasons for summarily dismissing the applicants and the letters of termination sent to the applicants’ solicitors. During cross examination of these witnesses by the applicants’ solicitor, it was never put to them that the actual reasons for the dismissals were not the reasons set out in the termination letters and in fact were the reasons now alleged by the applicants.

[26] In this regard, it is relevant to refer to the principle known as the “rule” in Browne v Dunn. 17 The rule is conveniently described in the recent decision of the Federal Court in Ashby v Slipper18 as follows:

“[74] The principle known as the “rule” in Browne v Dunn (1893) 6 R 67 has two aspects. First, it is a rule of practice and procedure designed to achieve fairness. The rule requires that a party or cross-examiner who intends to invite the court to disbelieve an opposing witness put to the witness in cross-examination the grounds upon which the evidence is to be disbelieved. The rule is designed to “achieve fairness to witnesses and a fair trial between the parties”.

[75] The rationale of the rule was explained by Lord Herschell at 70-71 as follows:

...it seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as perhaps he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit. My Lords, I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and as it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses.

[76] Similarly, Lord Halsbury at 76-77 stated:

To my mind nothing would be more absolutely unjust than not to cross-examine witnesses upon evidence which they have given, so as to give them notice, and to give them an opportunity of explanation, and an opportunity very often to defend their own character, and, not having given them such an opportunity, to ask the jury afterwards to disbelieve what they have said, although not one question has been directed either to their credit or to the accuracy of the facts they have deposed to.

[77] The second aspect, critical to this appeal, relates to the weight or cogency of the evidence: that is, as a general proposition, evidence, which is not inherently incredible and which is unchallenged, ought to be accepted: Precision Plastics Pty Limited v Demir (1975) 132 CLR 362 at 370-371 (per Gibbs J, Stephen J agreeing, Murphy J generally agreeing). The evidence may of course be rejected if it is contradicted by facts otherwise established by the evidence or the particular circumstances point to its rejection.

[78] As Samuels JA observed in Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 at 587-588, it may be “wrong, unreasonable or perverse to reject unchallenged evidence” and if an appellate court concludes that it were so, in the particular circumstances of a given case, it may overturn the decision of the primary judge on the basis of an error of fact, rather than an error of law. However, as his Honour observed at 588, there is no rule of law in this country that a Court must accept unchallenged evidence.”

[27] The ‘rule’ in Browne v Dunn 19 is a fundamental rule of fairness. The evidence given in the proceedings at first instance by members of the Board included evidence to the effect that the correspondence from the employer’s solicitors outlined the Board’s concerns and that the termination letters were sent on instructions from the Board. It was never put to the members of the Board that the “real” reasons for dismissing the applicants were not the reasons set out in the termination letters. It was not suggested that the reasons given in the termination letters were a sham and the Commissioner was not asked to make any such finding.

[28] In these circumstances the Commissioner was entitled to proceed on the basis of the evidence and submissions before him and to make relevant findings having regard to that evidence. It has not been shown that there was any error in the approach of the Commissioner in considering whether the reasons stated by the employer in the letters of termination were valid reasons for dismissal (s.387(a)) and, having regard to those reasons, whether the applicants had been notified of the reasons and given an opportunity to respond to them (s.387(b) and (c)). The Commissioner made findings to this effect and we consider that those findings were properly made having regard to the evidence before him.

[29] It is understandable that the Commissioner also had regard to the circumstances surrounding the dismissals, which included the acute financial problems which threatened the viability of the School and the protracted disagreements between various members of the Board, the executive staff of the School and some members of the school community as to appropriate actions. In so doing, the Commissioner recognised the political dimension of the circumstances in which the dismissals occurred and sought to deal with the submissions of the applicants that the actual reasons for dismissal related to their involvement in the factional fight among members of the school community. The Commissioner took the view that the involvement of the applicants in the political battle involved actions inimical to the employer’s interest and which irreparably disturbed the trust and confidence necessary to maintain the employment relationship. 20 The Commissioner considered that this would also provide a valid basis for dismissal.21 On our examination of the evidence before the Commissioner, it was open to him to reach such a conclusion.

[30] It is well established that an appeal can only succeed if there is error shown on the part of the primary decision maker. In the present matter, the applicants have sought on appeal to raise matters that were not fully advanced in the proceedings before the Commissioner and have invited the appeal bench make evidential findings which are not supported having regard to the evidence, material and conduct of the case before the Commissioner.

[31] It has been submitted that the Commissioner erred in that he failed to make a finding that the actual reasons for dismissal were as disclosed by the Board minutes of 12 June 2013 and not those reasons set out in the termination letters. However it was not put to the Commissioner that the reasons given in the termination letters were a sham or that the Board minutes of 12 June meeting established that the real reasons for the dismissals were different from those in the termination letters. Little reliance was placed on the Board resolution and minutes in the proceedings before the Commissioner. These arguments were only fully developed on appeal and underpinned most of the grounds of appeal.

[32] In effect the appeal bench in this matter is being asked to review the evidence and material before the Commissioner and to make findings about the reasons for dismissal that the Commissioner was not asked to make. Any finding of the kind sought by the applicants would have to be made by inferential reasoning based upon the Board minutes and related documents and contrary to evidence and testimony presented by the employer in the first instance proceedings. Such a finding would also need to discount the events and circumstances in the period after the Board resolution on 12 June 2013 and before the applicants were dismissed on 7 August 2013 which might have influenced the Board in regard to its reasons for the dismissals.

[33] In our view the evidence and materials relied upon by the applicants do not provide a sufficient basis to establish that the reasons for dismissal were other than those stated in the termination letters. It has not therefore been demonstrated that the Commissioner erred in the approach which he adopted in the consideration of the matter or in the conclusions reached. It follows that, to the extent that many of the grounds of appeal are dependent upon the submissions regarding the reasons for the dismissals, those grounds cannot be made out.

[34] Several grounds of appeal would seem to be little more than an attempt to get the appeal bench to adopt different views and reach different conclusions than the Commissioner having regard to the evidence and submissions presented in the case. Clearly there were different perspectives between the parties as to a range of matters relevant to the determination of the applications, e.g. the seriousness of the BOS issues and the ways in which they might have been addressed, and the involvement of the applicants in the disputes and developments relating to the current problems and future direction of the School. In reaching his decision the Commissioner had to make judgements and findings in relation to such matters. In doing so, the Commissioner had the benefit of having heard the evidence and submissions and on that basis being able to making an assessment of the strengths and weaknesses of the opposing cases. It is not the function of an appeal bench to interfere with such a discretionary decision as the Commissioner was called upon to make in determining the applications before him unless some error has been shown to have occurred in the decision-making process.

[35] We now turn to some of the other grounds relied upon by the applicants in the appeal.

[36] It was submitted that to the extent that the employer’s reasons for dismissal concerned, in part, allegations of unsatisfactory performance, no warnings were given to the applicants on these matters. In this respect it was said that the Commissioner erred in not taking into account the absence of warnings under s.387(e) of the Act. 22 The submission was not developed at any length in the appeal. On the evidence before the Commissioner regarding the events and circumstances surrounding the dismissals and the reasons for the dismissals, we consider that it was open to him to take the view that the dismissals related to the conduct of the applicants rather than to any unsatisfactory performance by them. In any event, the absence of warnings is only one of the considerations required to be taken into account under s.387 of the Act and would, on the applicants’ submissions, only relate to some of the alleged reasons for the dismissals. In the circumstances of the present matters and given the findings made in relation to other relevant considerations, any failure to give warnings about unsatisfactory performance would be likely to have little weight in the overall assessment as to whether the dismissals were harsh, unjust or unreasonable.

[37] It was also submitted that the Commissioner erred in finding that the incorporation of AME created a breach of fiduciary duty to the employer. 23 In his decision, the Commissioner considered the evidence regarding the applicants’ involvement in the establishment of AME and concluded that there was “compelling support for a finding that the applicants were acting against the interests of their employer and in breach of their fiduciary duty.”24 It is clear that the Commissioner did not accept the applicants’ claims that the establishment of AME was an action motivated by good intentions to provide a means by which the School could continue to function in the event that the employer was placed in voluntary administration. It has not been demonstrated in the appeal proceedings that the findings made and the conclusion reached regarding the applicants’ involvement with AME were not open and appropriate having regard to the evidence before the Commission.

Conclusion

[38] We have considered the matters raised in the grounds of appeal and in the submissions presented in the proceedings before us. In our view it has not been demonstrated that there is any error of law or significant error of fact in relation to the approach taken by the Commissioner in determining the applications before him or in the conclusions reached by him.

[39] In many ways, the appeals are little more than an attempt to reargue the case which was before the Commissioner in the hope of getting a different result. In some respects the appeal bench is being asked to consider a different case to that which was put to the Commissioner and to discount evidence not challenged in the first instance proceedings and on that basis to make findings different to those of the Commissioner. These are matters which could and should have been raised in the first instance proceedings and which would have been able to be tested and considered in those proceedings. It is not appropriate or in the public interest for an appeal bench to embark upon such a course, or to set aside a discretionary decision made, unless there is some demonstrated error in the decision-making process at first instance.

[40] For the reasons given, we do not consider that the applicants have demonstrated that there is any error of law or significant error of fact in relation to the Commissioner’s decision. Further, in the circumstances of the present matters and given the nature of the case advanced by the applicants on appeal, we do not consider that it is in the public interest that permission to appeal from the decision be granted (s.400(1)).

[41] Accordingly, we have decided not to grant permission to appeal.

SENIOR DEPUTY PRESIDENT

Appearances:

M Seck of counsel for the appellants.

S Meehan of counsel for the respondent.

Hearing details:

2014.

Sydney:

June 19.

 1   Susan Chahwan and Elizabeth Ghali v Sutherland Shire Montessori Society Incorporated trading as Sydney Montessori School [2014] FWC 2060; PR549051.

 2  [2014] FWC 2060 at [56] - [63], [79].

 3  [2014] FWC 2060 at [64] - [69], [79].

 4  [2014] FWC 2060 at [80].

 5  [2014] FWC 2060 at [82].

 6  [2014] FWC 2060 at [70].

 7  [2014] FWC 2060 at [79].

 8  [2014] FWC 2060 at [71] - [73].

 9   See Appellant’s Outline of Submissions (Exhibit S1) at [30].

 10   See Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 205.

 11   Ibid at [21].

 12   (1936) 55 CLR 499

 13   Ibid at 505.

 14   Ibid at 504-505.

 15   See s.400 of the Act.

 16   The way in which the public interest requirement in s.400(1) may be attracted has been described as follows in GlaxoSmithKline Australia Pty Ltd v Colin Makin[2010] FWAFB 5343 at [27]:

“...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.”

 17   (1893) 6 R 67.

 18   [2014] FCAFC 15 at [74] - [78] per Mansfield and Gilmour JJ.

 19   (1893) 6 R 67.

 20  [2014] FWC 2060 at [92].

 21  [2014] FWC 2060 at [90].

 22  [2014] FWC 2060 at [84].

 23  [2014] FWC 2060 at [91].

 24  [2014] FWC 2060 at [64] - [69].

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