Marylou George v Park Trent Properties Group Pty Ltd T/A Park Trent Properties Group

[2013] FWC 4739

[2013] FWC 4739

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Marylou George
v
Park Trent Properties Group Pty Ltd T/A Park Trent Properties Group
(U2013/1559)

COMMISSIONER MACDONALD SYDNEY, 2 AUGUST 2013

Termination of employment - representation by lawyers.

[1] This Decision arises out of an application for unfair dismissal remedy made pursuant to s.394 of the Fair Work Act 2009 (the Act). The application was made by Marylou George (the Applicant). The Company is Park Trent Properties Group Pty Ltd t/a Park Trent Properties Group (the Employer).

[2] This Decision concerns whether the Fair Work Commission (the FWC) should grant permission for the Employer to be represented by lawyers (barrister with instructing solicitor).

BACKGROUND

[3] The unfair dismissal application was filed on 14 May 2013.

[4] The Employer’s Response was filed on 7 June and included the name of a solicitor (Mr Willis) as the representative. It advised that the Applicant had been dismissed from her employment as Chief Financial Officer following an investigation into certain financial transactions conducted by her. She was dismissed for engaging in gross and wilful misconduct. The Applicant denied the allegations of financial impropriety.

[5] The unfair dismissal application was the subject of conciliation held on 13 June but was unsuccessful. No jurisdictional issue was raised by the Employer as to any future hearing of the matter.

[6] The unfair dismissal application was allocated to myself (Macdonald C) as a file to be determined in Wollongong, given that the Applicant’s place of work for the Employer came within the Wollongong area.

[7] In the process of setting down this file for a hearing, the Applicant objected to the Employer being represented by a lawyer. The FWC put in place a filing programme for determining the issue of legal representation on the papers.

[8] The submissions put forward by the Employer included an AMENDED Employer’s Response, filed on 11 July, which raised for the first time a jurisdictional issue: the Applicant was paid over the salary cap and was therefore barred from sustaining her unfair dismissal application. Further, the Employer filed on 12 July its submissions on legal representation surrounding section 596 of the Act.

[9] The Applicant put forward her written submissions on 12 July on the legal representation issue and as well, denied that her salary was over the cap).

[10] My analysis of all of the material caused me to convene a telephone conference of the parties, at very short notice, on 15 July. Amongst other things, I raised with the parties that perhaps there was another jurisdictional issue afoot: Employee versus Contractor. I directed the parties to put on written submissions - including documentary evidence - in light of the responses made by the parties over the telephone to that issue.

[11] At the conclusion of the telephone conference, I advised I would grant legal representation. This Decision sets out my reasoning.

CONSIDERATION

[12] The question of representation in proceedings before the FWC is governed by section 596 of the Act which is in the following terms:

“596 Representation by lawyers and paid agents

(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.

(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

Note: Circumstances in which the FWC might grant permission for a person to be represented by a lawyer or paid agent include the following:

(a) where a person is from a non-English speaking background or has difficulty reading or writing;

(b) where a small business is a party to a matter and has no specialist human resources staff while the other party is represented by an officer or employee of an industrial association or another person with experience in workplace relations advocacy.

(3) The FWC’s permission is not required for a person to be represented by a lawyer or paid agent in making a written submission under Part 2-3 or 2-6 (which deal with modern awards and minimum wages).

(4) For the purposes of this section, a person is taken not to be represented by a lawyer or paid agent if the lawyer or paid agent:

(a) is an employee or officer of the person; or

(b) is an employee or officer of:

(i) an organisation; or

(ii) an association of employers that is not registered under the Registered Organisations Act; or

(iii) a peak council; or

(iv) a bargaining representative;

that is representing the person; or

(c) is a bargaining representative.”

[13] The foregoing extract demonstrates the following:

(i) The FWC may grant permission for a person to be represented by a lawyer or paid agent, only if, at least one of the criteria listed in section 596(2) is satisfied; and

(ii) Even if one of the criteria is satisfied, the FWC must then decide if it should exercise its discretion to grant permission for a lawyer or paid agent to appear. This discretionary criterion arises from the use of the word “may” in the opening words to section 596(2).

[14] There have been a number of decisions by members of Fair Work Australia and now Fair Work Commission on the legislative intention of section 596. One decision in particular, sets out a comparison of the legislative intention to the issue of legal representation between the Fair Work Act 2009 and its predecessor, the Workplace Relations Act 1996: see Decision of Lewin C in Chris Lekos v Zoological Parks and Gardens Board t/a Zoos Victoria[2011] FWA 1520.

[15] Recently, section 596 was also the subject of consideration as to legislative intention by Flick J of the Federal Court of Australia in: Warrell v Walton [2013] FCA 291, given on 4 April 2013. (The Respondent’s correct title is Watson as in Senior Deputy President Watson of the FWC.)

[16] The decision of Lewin C and the judgment of Flick J refer to extrinsic material in eliciting the legislative intention of section 596. Both refer to the Explanatory Memorandum to the Fair Work Bill 2008 but Lewin C also refers to the regulatory analysis of the Explanatory Memorandum as to legislative intention. The relevant extrinsic material of the Explanatory Memorandum as to legislative intention on the issue of legal representation from the decision of Lewin C is set out below:

“2291. FWA is intended to operate efficiently and informally and, where appropriate, in a nonadversarial manner. Persons dealing with FWA would generally represent themselves. Individuals and companies can be represented by an officer or employee, or a member, officer or employee of an organisation of which they are a member, or a bargaining representative. Similarly, an organisation can be represented by a member, officer or employee of the organisation. In both cases, a person from a relevant peak body can be a representative.

2292. However, in many cases, legal or other professional representation should not be necessary for matters before FWA. Accordingly, clause 596 provides that a person may be represented by a lawyer or paid agent only where FWA grants permission.

...

2296. In granting permission, FWA would have regard to considerations of efficiency and fairness rather than merely the convenience and preference of the parties.

...

2298. Subclause 596(4) provides that a person is taken not to be represented by a lawyer or paid agent if the lawyer or paid agent is a bargaining representative, or an employee or officer of the person, organisation, peak council or bargaining representative. The effect of this subclause is that in these circumstances FWA’s permission is not required. For example, an officer or employee of a registered organisation or peak council who is legally qualified will be able to represent that body without having to have permission from FWA under this clause.”

In addition, the regulatory analysis section of that Explanatory Memorandum contains the following:

“r.335. FWA will move away from formal, adversarial processes, with legal representation and intervening parties. There will also be a higher bar set for representation. Permission for representation will only be granted to parties (including the Minister) where it would enable the matter to be dealt with more efficiently or fairly. 57 (Currently, the Minister may intervene in full-bench and public sector matters be advising the Registrar, and parties may be represented by counsel, solicitors or agents where both parties agree and the AIRC grants leave). It is envisaged that in most cases legal representation will not be necessary.”

[17] The Employer’s submission on legal representation was prepared by Mr Ian Latham, barrister, who put forward reasoning in support of all three criterion set out in s.596 for the granting of permission for legal representation by FWC. The Applicant’s submission opposed legal representation. The Applicant is representing herself in the proceedings. I set out below my consideration of the submissions on the three criteria.

More Efficiently/Complexity - subsection 596(2)(a)

[18] The Employer’s submissions advised that this unfair dismissal application involves a jurisdictional objection which is the claim that the Applicant was paid beyond the high income threshold. That jurisdictional question it was said, will involve the FWC needing to examine an arrangement whereby the Applicant funnelled her income through a company that provided no services to the Employer who, as well, did not know what tax (if any) was paid in relation to those payments by the Applicant.

[19] If that jurisdictional objection was not accepted by the FWC, then, in the alternate, the substantive hearing would require an analysis as to what resources belonging to the Employer, were used by the Applicant for her private benefit without the Employer’s authorisation. That analysis may show a breach of criminal law. That substantive hearing will then involve questions as to the meaning of serious and wilful misconduct and how onus should be determined.

[20] The forgoing issues are complex legal matters and hence the proceedings would be more efficiently dealt with by legal representatives.

[21] The Applicant’s submissions denied that the jurisdictional question of high income threshold was complex.

[22] I uphold the Employer’s submission as to complexity and that the case would proceed more efficiently through legal representation. Apart from accepting the submission of the Employer on this point, the Applicant’s submissions of 12 July 2013 (emailed at 10.01pm) at paragraph 4 state, in part, “I am responsible for my taxes and reporting of earnings to the ATO, and so is everyone (fellow employees of the Employer - Macdonald C) who are paid in this manner (salary packaging - Macdonald C).”

[23] Not only did this submission of the Applicant support the Employer’s submissions about complexity but it caused me to raise with the parties as to whether there was another jurisdictional objection - employee versus contractor.

[24] I also raised with the parties that I needed to be addressed on another jurisdictional issue: industrial instrument coverage. The Employer had previously advised, by way of mere assertion, that the Applicant’s work was not covered by an industrial instrument. I required that the Employer and thence the Applicant put on written submission on the applicability or otherwise of two modern awards named by myself. This jurisdictional issue was also reasoning for the granting of legal representation given the circumstances of the case set out above and below.

Represent Effectively - subsection 596(2)(b)

[25] The Employer’s submission put that the complexity of the legal issues was such, that it is not easy to see how the Employer could represent itself, effectively.

[26] The Applicant’s submissions put that the Employer can represent itself effectively, because it has a dedicated Human Resources person (Ms Johnston) and a Chief Executive Officer (Mr Ron Cross). The latter, it was inferred, could deal with the financial issues raised in the proceedings - just as the Applicant could do so as she is an Accountant by profession.

[27] I accept that there is some merit to the Applicant’s submission but the complexity of the issues before me are such as to go beyond calculating monetary items shown on a pay slip or elsewhere to see if the Applicant is paid above the high income threshold.

[28] Accordingly, I accept the weight of the Employer’s submission on this criterion.

Unfair - subsection 596(2)(c)

[29] The Employers’ submission said this criterion raised the issue of resources of the respective parties. Their submission referred to material sent by the Applicant to the Employer which shows that she has close to $$$ in bank deposits and that she owns houses. Given her apparent level of resources, the Employer submitted it was astonishing that the Applicant had not sought legal representation. (The actual quantum as to bank deposits and number of houses has been with-held from this Decision by me - Macdonald C). The Applicant responded to this submission that she had monetary commitments to meet and was not rich.

[30] I reject this submission by the Employer as a ground for allowing legal representation. To allow this submission would result in FWC members needing to have knowledge about any party’s finances and then deciding if that party was rich enough, well-off enough and so forth, to afford obtaining legal representation.

[31] But in any event, the over-riding reason for rejecting this submission, is that it applies the wrong statutory test for determining the issue of legal representation. Whether a person can or cannot afford legal representation is not the statutory test. It has to be emphasised that under s.596, the test is for a party to prove why it should have legal representation. The test is not whether the opposing party can afford legal representation.

[32] The Applicant made a submission that it would be unfair for the Employer to be legally represented when she is not. Such legal representation would create an imbalance against her own layperson representation. The Employer had a dedicated Human Resources person who could represent the Employer and the Chief Executive Officer could deal with the alleged financial irregularities. That submission has weight but in considering the case overall, there are legal issues as to three jurisdictional matters and the Employer’s contention of possible criminal proceedings arising out of the alleged financial irregularities which outweigh the Applicant’s submission on fairness.

Findings as to Section 596

[33] I have considered the submissions of the parties as to the operation of s.596 and found that the Employer has made out its case for legal representation in respect of the two criteria: (a) and (b). The pecuniary argument advanced by the Employer for s.596(c) was rejected. I accepted that the Applicant’s submission on fairness had merit but on a consideration of the case overall, I found that the circumstances of the case outweighed the Applicant’s submission.

[34] Under s.596, the Employer only needs to satisfy one of the three criteria - (a) or (b) or (c) - in order to satisfy the first limb of the two limb test for the Employer being able to be legally represented. The second limb is the discretionary power that resides in the FWC as to whether permission should be granted to have legal representation - despite a party satisfying one, two or all three criteria of s.596. That discretion comes from the preamble to s.596(2): “The FWC may grant permission ...”.

The Discretionary Criterion

[35] Having considered the case overall as set out above, and in particular the fairness criterion, I have decided to exercise my discretion to allow the Employer to be represented by lawyers.

[36] In coming to that decision, I have also taken on board an issue raised by the Applicant prior to the legal representation issue being considered. The Applicant had raised the allegation that employees (and hence her potential witnesses) had been advised by a person(s) employed by the Employer not to appear as witnesses in the Applicant’s case against the Employer.

[37] I dealt with this allegation of the Applicant during a telephone conference with the Applicant and Mr Willis, solicitor for the Employer. Mr Willis advised that he had spoken to his client about this allegation and that employees could not be advised or instructed not to appear for the Applicant. I accept Mr Willis’ assurance as to his giving advice to his client on this important issue of not interfering with potential witnesses.

[38] Given the foregoing issue, I take the view that the Applicant’s prosecution of her case through the summonsing of witnesses is better served by the presence of lawyers appearing for the Employer. And the Employer, by being legally represented, allows the FWC to be satisfied that the Employer’s case, and the case overall, will be presented to the FWC by way of following established legal principles of calling the relevant witnesses and presenting the relevant evidence.

Future Conduct of the Case

[39] For the record, I am required to decide the jurisdictional objections before I can deal with the substantive hearing: section 396.

[40] The parties are in agreement that I am to consider the jurisdictional issue at the start of the two day hearing scheduled in Wollongong. If I do not uphold the jurisdictional objection raised by the Employer, then the substantive hearing will immediately follow my decision on the jurisdictional objections. That approach is being adopted in order to minimise the inconvenience and costs associated with a reserved decision on the jurisdictional objections, and then retuning later for the substantive hearing, in the event that I do not uphold those objections. The parties have provided written submissions for my consideration on the jurisdictional objections, in order to assist me in making an ex-tempore decision - albeit my reasoning may be given later.

COMMISSIONER

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