Lei Xu v Pacific HVAC Engineering Pty Ltd
[2018] FWCFB 1270
•9 MARCH 2018
| [2018] FWCFB 1270 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Lei Xu
v
Pacific HVAC Engineering Pty Ltd
(C2018/645)
VICE PRESIDENT HATCHER |
|
Permission to appeal against decision [2018] FWC 272] of Deputy President Gooley at Melbourne on 18 January 2018 in matter number U2018/8994.
Introduction and background
[1] Mr Lei Xu has applied for permission to appeal a decision of Deputy President Gooley issued on 18 January 2018 1 (Decision). In the Decision, the Deputy President found that Mr Xu’s dismissal by Pacific HVAC Engineering Pty Ltd (Pacific HVAC) was not unfair, and dismissed his application for an unfair dismissal remedy. The crux of the Decision was that the Deputy President found, for the purpose of s 387(a) of the Fair Work Act 2009 (FW Act), that Mr Xu’s lack of progress in achieving a remedial work performance plan had been insufficient and that the lack of progress was evidence that Mr Xu was not able to meet the requirements of his position, with the lack of progress being a valid reason for his dismissal. Mr Xu contends that the Deputy President erred in several respects by failing to take account of his absence from the workplace during the final stages of employment; by failing to give greater weight to the fact that he had no opportunity to respond to the reason for his dismissal; as well as by failing to make greater enquiry of the effect of an absence of human resource expertise in the workplace, to consider the exercise of a claimed duty of care toward him, or to consider the impact of differential treatment including because of Mr Xu’s ethnicity.
Consideration
[2] An appeal under s 604 of the FW 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. 2 There is no right to appeal and an appeal may only be made with the permission of the Commission.
[3] This appeal is one to which s 400 of the FW 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.
[4] 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”. 3 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.4 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.” 5
[5] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 6 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.7
[6] 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. 8
[7] It is necessary, for the purposes of context to this decision, to provide a brief overview of Mr Xu’s circumstances and the Deputy President’s findings.
[8] Mr Xu’s employment with Pacific HVAC commenced on or around 8 August 2011 and ended on 31 July 2017 when his employment was terminated due to unsatisfactory work performance. Having started with the Pacific HVAC as a store-person, his employment had involved a promotion to production planner and, from November 2016, a promotion to warehouse supervisor. Mr Xu’s work and his work performance were the subject of some scrutiny from February 2017, which included one of his managers having formed the view that there had been a decline in the productivity and performance of the warehouse in which Mr Xu worked. On 11 April 2017, after Mr Xu was informed by Mr Scott, the Production Manager, and Mr Agar-Wilson, the General Manager, that he was not meeting expectations about the performance of the warehouse:
“[10]Mr Xu responded by saying that there was a lack of cooperation between warehouse staff and he had not been given enough manpower to complete day-to-day activities and work towards achieving his goals. Mr Xu said there was a lack of communication between himself and his team and they take time off without his knowledge. Mr Xu said he did not get enough support from management and that he needed a 3rd forklift.”
[9] The Deputy President found, with it not being in contention in these proceedings, that following this exchange some assistance was provided to Mr Xu which included a 15 week action plan being put in place. The Deputy President also found that Mr Xu was advised that there needed to be an immediate improvement in the identified areas or, in the absence of improvement there would be disciplinary action. She also found that Mr Xu had not been told that if he did not achieve the outcome set out in the plan he would be dismissed. 9
[10] Although it was contended by Mr Xu that some of the assistance committed to, in the form of daily meetings, did not occur the Deputy President found that Mr Xu accepted in cross examination that there had been regular informal discussions about his progress but that he did not understand that these discussions related to the assistance plan. 10
[11] The Deputy President then referred to the following progress in implementation of the action plan:
“[22] On 14 June 2017 Mr Scott conducted an audit of Mr Xu’s progress and found that Mr Xu had only address 18 items of the planned 50 items.
[23] Another meeting was held on 22 June with Mr Xu, Mr Scott and Mr Agar-Wilson. At that meeting Mr Scott advised there had not been much progress on the 15 week plan and Mr Xu was told that his performance was still lacking and that this might lead to his dismissal. Mr Scott said that Mr Xu was warned that the 15 week recovery plan was falling well behind schedule and that if he was unable to engage his team members to move up to one pallet per day to advance the progress of the recovery plan, he would fail to complete all agreed tasks by the agreed date. He was also warned that he cannot continue to avoid taking action to intervene to correct bad practice that is having an adverse effect on warehouse operations and that failure to improve in these areas could lead to further disciplinary action or dismissal.” 11 (references omitted)
[12] The Deputy President found that Mr Xu had been told in the meeting that he was at risk of being dismissed if his performance did not improve, with him in turn complaining about a lack of manpower and the increased workload from having to train casual staff. His request for additional staff was refused. 12
[13] The Deputy President found that Mr Xu was on carer’s leave on 12 and 13 July 2017 and that he took annual leave and 17 and 18 to July 2017; and that further:
“[29] On 28 July 2017 Mr Scott reviewed the 15 week plan and noted that 7 of 13 items in week one; 4 of 5 tasks from week two; 4 of 15 items from week three; and 7 of 17 tasks from week four had been completed. None of the items from the remaining weeks had been completed.
[30] On 31 July 2017 Mr Xu attended another meeting with Mr Scott and Mr Agar-Wilson and was told that he had failed to complete the 15 week plan and that his employment was terminated. Mr Scott said he told Mr Xu that he had only completed 18 out of 50 task and that he had failed to use the checklist to assist him monitor areas under his supervision; he had failed to ensure existing operating procedures were followed; and he failed to engage with his team to provide guidance and structure. Mr Xu was terminated with immediate effect and he was paid 4 weeks’ pay in lieu of notice plus his entitlements.” 13
[14] In her decision the Deputy President considered the central question of whether Mr Hughes dismissal was harsh, unjust or unreasonable taking into account the criteria within s 387 of the FW Act. In that regard the Deputy President accepted in respect of s 387(a) Pacific HVAC’s evidence that the reason Mr Xu was dismissed was because he had not made sufficient progress on the remedial action plan, not because he did not finish the plan. The Deputy President was further satisfied that the lack of progress was evidence that Mr Xu was not able to meet the requirements of his position and that this was a valid reason for his dismissal. 14 The Deputy President accepted this was the case, notwithstanding that because of Mr Xu’s absences after 21 July 2017 he did not have sufficient time to improve, because all the issues had been raised before his dismissal. There was also evidence that after Mr Xu’s dismissal there had been considerable improvement in the warehouse, with some of the remaining tasks having been completed within 6 months and some not.15
[15] Also relevant is that the Deputy President found in relation to ss 387(b) and (c) of the FW Act that Mr Xu had been told that if he did not improve his performance that he risked being terminated, and that when he was told of the company’s decision to dismiss him on 31 July 2017 he had not been provided with an opportunity prior to that time to put forward any reasons why he should not be dismissed. 16 The Deputy President also found, with respect to s 387(g) that the absence of human resources staff within the Respondent impacted on the procedures it followed.17
[16] The Deputy President was also asked to consider in respect of s 387(h) whether Mr Xu may have been treated differently to other employees who variously had been demoted instead of dismissed as result of their performance or had been provided with assistance in meetings if they were union members. The Deputy President found there was no evidence before her of other employees in a like situation being treated differently and that Pacific HVAC had regard to Mr Xu’s personal circumstances. 18
[17] In her overall conclusion the Deputy President balanced the valid reason for Mr Xu’s dismissal against the procedural defects in the way the dismissal was effected and concluded that, while the procedures followed were flawed, Mr Xu had been placed on notice that unless there was an improvement in his performance his employment was at risk and Pacific HVAC’s expectations of him were not unreasonable. The Deputy President concluded that had Mr Xu been afforded procedural fairness his employment would still have been terminated, and Mr Xu’s personal circumstances did not render the dismissal harsh. On that basis Mr Xu’s application was dismissed. 19
[18] In his notice of appeal and subsequent submissions Mr Xu advanced five matters in support of his contentions about the Decision, namely;
• That there was a failure to consider Mr Xu was not in the workplace between 21 July 2017 and the date of his dismissal, 31 July 2017;
• That the findings that Mr Xu had not been given an opportunity to respond to any reason for his dismissal related to his capacity or conduct should have weighed more significantly in his favour in the Decision;
• That the absence of human resource expertise in the workplace should have been the subject of greater enquiry;
• That there was a failure to consider what amounts to a duty of care on the part of Pacific HVAC to Mr Xu in two respects in making its decision to terminate his employment; namely his “mental illness of depression and anxiety” as well as the stress his dismissal caused him and his then pregnant wife;
• That there was a failure to take into account that Mr Xu was treated differently in the workplace being an Asian migrant to Australia.
[19] The first contention by Mr Xu is without merit, since it is clear that the Deputy President took into account Mr Xu’s absence from the workplace for part of the period of his work performance plan. The Decision noted that he was absent on carer’s leave on 12 and 13 July 2017 and annual leave on 17 and 18 July 2017 and that “when he returned from leave he said that Mr Scott complained about him taking time off due to his carer’s role. On 24 July 2017 Mr Xu only worked a half day as he was sick and he did not return to work until 31 July 2017”. 20 Such is consistent with the evidence given by Mr Xu in his written witness statement.21 In relation to the period of his absence, the Deputy President accepted Pacific HVAC’s evidence that another worker had sorted out certain items of Mr Xu’s work plan in a day and a half while still completing his own work and that when on 28 July 2017 a review was conducted of the 15 week action plan, numerous items had not been completed.22 A fair reading of the Deputy President’s decision is that she had regard to Mr Xu’s period of absence as well as the fact that critical decisions on the part of the Pacific HVAC about his future employment were made during the period of his absence. No arguable case of error is disclosed in relation to the Deputy President’s reasoning in these regards.
[20] It is also clear that the Deputy President had regard to the fact that Mr Xu was not given an opportunity to respond to the reasons held by Pacific HVAC for his dismissal, and weighed this against the valid reason for dismissal in determining whether the dismissal was unfair. In this respect the Deputy President said:
“… In circumstances where a properly conducted process may have altered the outcome of the disciplinary process the procedural defects must outweigh the valid reason. To do otherwise would render the need for an employee to be given an opportunity to respond to any reason of little value. While the procedures followed were flawed Mr Xu was on notice that unless there was an improvement in his performance his employment was at risk. Even accepting the difficulties faced by Mr Xu due to staff shortages and his own personal circumstances, Pacific was not unreasonable in expecting him to work with the staff he had and make more progress on the tasks. Mr Xu was terminated with notice for poor performance. There was a valid reason for the dismissal.” 23
[21] It was within the discretion exercised by the Deputy President to find in totality that Mr Xu’s dismissal was not unfair, notwithstanding that he had not been given an opportunity to respond to the reason held for his dismissal. No arguable case of error is disclosed in this regard. Appealable error in the exercise of a discretion may not be demonstrated by a contention that a matter that was properly considered ought to have been assigned greater weight than it was by the first-instance decision-maker. 24
[22] Likewise, no arguable case of error is shown in respect of the finding by the Deputy President about the absence of human resource expertise in the workplace being a contributing factor to the procedures Pacific HVAC followed in effecting Mr Xu’s dismissal. The weight to be given to each of the factors in s 387 of the FW Act will depend on the particular facts and circumstances in each case. While such a finding may potentially weigh in favour of a finding of unfair dismissal, it does not automatically lead to the result that dismissal for valid reason is nonetheless unfair.
[23] In relation to the final two matters put forward by Mr Xu as being factors which the Commission should have taken into account in making its decision, we are satisfied that the Deputy President properly took into account all relevant matters raised for consideration before her. Mr Xu did not point to any evidence indicating that Pacific HVAC was aware he had a mental illness at the time of the dismissal such as to give rise to the putative “duty of care”. The Deputy President expressly considered the question of whether Mr Xu may have been treated differently to other employees and found no evidence of such. 25 The Deputy President also found that Pacific HVAC took into account his personal circumstances during his employment including by allowing him to have time off to meet his family responsibilities and to care for his wife. The Deputy President also had regard to the fact that Mr Xu had been through a difficult time due to his wife’s difficult pregnancy.26 No arguable case of error is disclosed in respect of these matters.
[24] We do not consider that any of the appeal grounds are reasonably arguable. Nor do we consider that the appeal raises any issue of potentially wider application. The Decision was one confined to its particular facts.
[25] For the reasons stated, we do not consider that it would be in the public interest to grant permission to appeal. Therefore, as required by s 400(1) of the FW Act, permission to appeal is refused.
VICE PRESIDENT
Appearances:
L. Xu on his own behalf.
B. Scott on behalf of Pacific HVAC Engineering Pty Ltd.
Hearing details:
2018.
Melbourne;
5 March.
<PR600809>
1 [2018] FWC 272
2 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.
3 (2011) 192 FCR 78 at [43]
4 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]
5 [2010] FWAFB 5343, 197 IR 266 at [27]
6 Wan v AIRC (2001) 116 FCR 481 at [30]
7 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]
8 Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]
9 Decision at [11] – [12]
10 Decision at [14]
11 Decision at [12]
12 Decision at [25]
13 Decision at [25]
14 Decision at [45]
15 Decision at [31] - [32]
16 Decision at [47] - [48]
17 Decision at [52] - [53]
18 Decision at [54] - [57]
19 Decision at [59] - [61]
20 Decision at [27]
21 Exhibit A1, Applicant’s Statement of Evidence, [60] - [63]
22 Decision at [28] – [29]
23 Decision at [59]
24 Restaurant and Catering Association of Victoria [2014] FWCFB 1996, 243 IR 132 at [57]-[58]
25 Decision at [54], [61]
26 Decision at [39], [55] – [57]
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