Financia Pty Ltd v Taglienti - [2023] SASCA 139

SUPREME COURT OF SOUTH AUSTRALIA
(Court of Appeal: Civil)
FINANCIA PTY LTD v TAGLIENTI
[2023] SASCA 139
Judgment of the Court of Appeal
(The Honourable Justice Doyle and the Honourable Justice Bleby)
20 December 2023
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - ERROR OF LAW - WHAT IS
INDUSTRIAL LAW - SOUTH AUSTRALIA - SOUTH AUSTRALIAN EMPLOYMENT TRIBUNAL AND ITS PREDECESSORS - POWERS
EMPLOYMENT LAW - TERMINATION AND BREACH OF CONTRACT
In July 2023, the Full Bench of the South Australian Employment Tribunal (the ‘SAET’) unanimously dismissed an appeal from a decision of an Auxiliary Deputy President Magistrate of the SAET. This is an application for leave to appeal against that decision.
The respondent was employed by the applicant, Financia, who is a mortgage broker. The respondent signed an employment contract in August 2021. The applicant and respondent also entered into a training contract in September 2021 pursuant to the South Australian Skills Act 2008 (SA) (the ‘SAS Act’).
The director of Financia, Mr Spadavecchia, advised the respondent that her employment was to be terminated on one week’s notice on 16 May 2022. It was contended the respondent had breached her obligations under the employment contract by making disparaging remarks about Mr Spadavecchia at a professional development day held some days earlier.
Mr Spadavecchia offered an alternative to the respondent that she resign, with four weeks’ notice paid in lieu as well as payment of outstanding commissions received by Financia up to 16 May 2022. The respondent provided her formal resignation that day.
The respondent instigated proceedings against Financia in the SAET seeking payment of outstanding commissions and that she be remunerated from June 2022 to October 2022.
The Deputy President at first instance found that Financia had constructively dismissed the respondent. Accordingly, it was found that Financia had breached its obligations under the training contract in contravention of s 51C of the SAS Act. It ordered that Financia pay outstanding commissions as well as compensation to the respondent pursuant to s 65(2)(h) of the SAS Act.
Financia appealed to the Full Bench of the SAET. The Full Bench dismissed the appeal. It held that the Tribunal’s powers under s 65(2) allowed for the provision of a remedy in respect of compensation for underpayment of wages. It further held that Financia’s act of terminating the training contract in the absence of the requisite authorisation was illegal, having regard to the offence provision in s 51C.
On this application for leave to appeal, Financia complained that the Full Bench erred in law in multiple respects.
The proposed grounds of appeal included, broadly, that:
1.the Full Bench applied the wrong ‘threshold question’ to enliven the discretion to enable a payment of compensation as the contract was determined by the SAET to be terminated on 15 May 2022;
2.the Full Bench did not consider material matters put to it in respect of the exercise of that discretion;
3.when assessing the quantum of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] SASCA 139
Decision Date: 20 December 2023

CaseChat Overview and Summary

Financia Pty Ltd applied for leave to appeal a decision of the South Australian Employment Tribunal concerning the termination of Ms Taglienti's employment. Ms Taglienti was employed by Financia as a mortgage broker under an employment contract and a training contract. Her employment was terminated on 16 May 2022, shortly after commencing, following alleged negative comments made about a principal of Financia. Ms Taglienti subsequently initiated proceedings in the Tribunal seeking various payments and an order to complete her diploma.

The primary legal issue before the Tribunal, and subsequently on appeal, concerned the lawfulness of the termination of Ms Taglienti's employment and training contract, and the appropriate remedy. Specifically, the Tribunal was required to consider whether the termination was valid and, if not, what compensation or orders were warranted. The appeal court was asked to determine if there was an error of law in the Tribunal's decision, particularly regarding the Deputy President's exercise of discretion and the significance of the termination of the training contract under the *South Australian Skills Development Act* (SAS Act).

The Deputy President found that Financia had unlawfully terminated the training contract, an act which is an offence under section 51C of the SAS Act. While the Deputy President ordered Financia to pay compensation equivalent to 16 weeks' pay, the appeal court considered whether this decision involved an error of law. The court noted that even if an error of law was identified, it was unlikely to be of general importance or result in a substantial injustice to Financia, given the relatively modest sum involved and the discretionary nature of the remedy.

Consequently, the Full Court of the Supreme Court of South Australia refused Financia's application for leave to appeal. Financia was ordered to pay Ms Taglienti's costs of the application.

Orders

Orders of the court

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Background

Background to the litigation

This is an application for leave to appeal against that decision.Background Financia is a mortgage broker. By an employment contract dated 17 August 2021, Financia employed Ms Taglienti. The employment contract specified that Ms Taglienti’s employment was to commence on 6 September 2021. It provided that Ms Taglienti was employed on a full-time basis, working Monday to Friday. She would be remunerated with a base salary of $56,000 per annum, plus superannuation, with an entitlement to commissions. The contract set out the commission structure. It further specified that as the base salary was above the provision in the relevant award, any further increase was solely at the discretion of Financia. On 15 September 2021, Financia also entered into a training contract with Ms Taglienti, pursuant to the provisions of the SAS Act. The training contract nominated 31 August 2021 as the commencement date of the traineeship. It specified that it was on a full-time basis, for a duration of 24 months, with a two‑month probationary period. At the time the contracts were entered into, the principals of Financia were Mr Leon Spadavecchia and Mr Angelo Benedetti. By the time of the events in May 2022 that led to the present proceedings, Mr Benedetti had left the business. On Friday 13 May 2022, Ms Taglienti, together with other employees of Financia, attended a professional development day organised by an entity called AFG (an acronym of ‘Australian Finance Group’). AFG is a mortgage aggregator which provides support services to Financia. Mr Spadavecchia did not attend this event. The Deputy President found that during the course of the development day, Ms Taglienti made negative comments about Mr Spadavecchia. On the morning of Monday 16 May 2022, Mr Spadavecchia called Ms Taglienti into a meeting. Mr Spadavecchia advised Ms Taglienti that her employment was to be terminated with one week’s notice, due to her comments at the development day, which had been reported back to him. Following further discussion, Mr Spadavecchia gave Ms Taglienti the option of resigning instead, with four weeks’ notice paid in lieu and payment of outstanding commissions received by Financia up to 16 May 2022. Ms Taglienti provided her resignation by email that day, while still at the premises of Financia. Mr Spadavecchia acknowledged her resignation by return email. Ms Taglienti commenced proceedings in the Tribunal. She sought payment of outstanding commissions, remuneration from 15 June 2022 to 5 October 2022, being the date she secured alternative employment, and an order that she be allowed to complete the Diploma of Finance and Mortgage Broking. The Deputy President made the orders set out above. It was not ultimately in dispute that she should make the first of those orders terminating the training contract pursuant to s 65(2)(f) of the SAS Act. Section 51C of the SAS Act makes it an offence to purport to terminate a training contract without authorisation:51C—Offence to terminate etc training contractA person who, without being authorised to do so under this Act—(a) terminates or purports to terminate a training contract; or(b) suspends or purports to suspend a training contract,is guilty of an offence.Maximum penalty: $5 000.Expiation fee: $315.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Deputy President ordered that Financia pay compensation representing 16 weeks’ pay. On a base salary of $56,000, that equates to a sum of a little over $17,000, less any amount required to be deducted under Australian taxation laws. This is not a large sum. Even if Ground 3 can be said to raise a question of law, to the effect of whether the Deputy President was required to give greater assistance than she did, it is not one of general importance. Further, an answer in favour of Financia might, at best, result in a marginal improvement to it in the re‑exercise of the discretion under s 65(2)(h) in the order of a few thousand dollars. In those circumstances, it cannot be said that there is a prospect that Financia has suffered a substantial injustice.Conclusion We refuse leave to appeal. Financia should pay Ms Taglienti’s costs of the application.

Ratio Decidendi

Legal Principle Established

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