Melbourne College of Hairdressing Beauty and Natural Medicine Pty Ltd v Stefania Taverna
[2022] FWCFB 244
•20 DECEMBER 2022
| [2022] FWCFB 244 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Melbourne College of Hairdressing Beauty and Natural Medicine Pty Ltd
v
Stefania Taverna
(C2022/6190)
Melbourne College of Hairdressing Beauty and Natural Medicine Pty Ltd
v
Teresa Delfino
(C2022/6191)
Melbourne College of Hairdressing Beauty and Natural Medicine Pty Ltd
v
Karlee Hunt
(C2022/6192)
| VICE PRESIDENT CATANZARITI | SYDNEY, 20 DECEMBER 2022 |
Appeals against [2022] FWC 2181; [2022] FWC 2182; [2022] FWC 2177 of Deputy President Young at Melbourne on 18 August 2022 in matter numbers U2022/5358, U2022/5362, U2022/5353 – permission to appeal refused.
Background
Melbourne College of Hairdressing Beauty and Natural Medicine Pty Ltd (Appellant) has lodged Notices of Appeal for which permission to appeal is required, against the decisions of Deputy President Young issued on 18 August 2022 in three unfair dismissal applications lodged concurrently and heard jointly but decided in separate decisions (Decisions).[1] The Respondents to the appeals are former trainer/educators of the Appellant college: Ms Taverna, Ms Delfino and Ms Hunt.
At first instance, the Appellant raised jurisdictional objections to the Respondents applications contending that the Respondents did not meet the minimum employment period, had not been dismissed and, if they had been dismissed, that the originating applications were filed outside of the 21-day statutory time frame. The Decisions dealt with these jurisdictional objections and the Deputy President ultimately decided to grant an extension of time under s.394(3) for the lodgement of each of the Respondents applications.
The appeal was listed for permission to appeal only. We heard the appeals jointly on 10 October 2022. Both parties sought and were granted permission to be legally represented at the hearing.
For the reasons that follow, permission to appeal is refused.
The Decisions Under Appeal
The Deputy President issued three separate decisions for each of the Respondents, however the substance of each decision is almost identical so we will provide a single overview of all the Decisions.
Ms Delfino commenced employment with the Appellant in 2008, Ms Hunt commenced employment with the Appellant in 2015 and Ms Taverna commenced employment with the Appellant in 2011. It is uncontested that all the Respondents were continuously employed as casual employees from their commencement until their employment ceased. Both parties provided evidence regarding the Respondents working arrangements over the course of their employment, which in summary showed that each of the Respondents worked regular days and hours per week, other than during the period of lockdown in Melbourne.
In approximately 2018, there was a change of ownership of the Appellant by way of share acquisition, however the management of the business remained the same. It was uncontested that prior to 2022, with the exception of the Christmas period, the Respondent operated year-round without semester breaks. However, from 2022 the Respondent divided the year into semesters and students have set regular holiday breaks.
The Deputy President considered whether the Appellant is a small business employer for the purposes of the Act and found that the Appellant is a small business employer.
The Deputy President then divided the Decisions into three parts for determination:
1.whether the Respondents met the minimum employment period as required under s.383 of the Act;
2.whether the Respondents were dismissed for the purposes of s.386 of the Act; and
3.whether the applications were lodged within 21-day time period as required by s.394(2) of the Act, and if not, whether an extension of time ought to be granted under s.394(3) for the lodging of the applications.
Minimum Employment Period
In relation to the minimum employment period, the Appellant conceded that the Respondents were regular casuals, employed on a systemic and regular basis. The Deputy President then considered whether the Respondents had a reasonable expectation of continuing employment on a regular and systematic basis. The Deputy President found that the Respondents did have a reasonable expectation of continuing employment because:
· the Respondents worked regular days and hours with variation in the lockdown period;
· the Respondents worked for the entirety of each year; and
· the way their timetables were determined supported this finding.
The Deputy President rejected the Appellant’s submission that because they are an educational institution, reliant on enrolments, the Respondents could not have held a reasonable expectation of regular and systematic employment. Accordingly, the Deputy President found: Ms Hunt worked for a period of 6 years; Ms Delfino worked for a period of approximately 13 years; and Ms Taverna worked for a period of approximately 10 years.
The Deputy President concluded that the Respondents met the minimum employment period under s.383 of the Act and are persons protected from unfair dismissal for the purposes of s.382.
Whether the Respondents were Dismissed?
The Deputy President then turned to consider whether the Respondents were dismissed in accordance with s.386 of the Act. The Deputy President had regard to the background of this issue, noting that the Respondents had a meeting with the Appellant in July 2021 to inquire about underpayment. The Respondents alleged that after reviewing the applicable award it appeared that they had been underpaid for the entirety of their employment. On 5 October 2021, the Appellant was contacted by the Fair Work Ombudsman (FWO) advising that the Respondents had made a claim for unpaid wages (claim). The Appellant and Respondents met on 12 October 2021 to discuss the claim where the Respondents advised they were not prepared to take on any more classes until they are paid the correct rate under the award. The Appellants evidence was that based on this communication they assumed that the Respondents had resigned. There were further meetings and correspondence between the parties about the claim throughout November 2021. On 9 December 2021, the Appellant emailed all students advising that the Respondents “will not be returning” because they had “decided to take another path in their lives”. On 16 December 2021, the Respondents emailed the Appellant to confirm their employment status. The Respondents evidence indicated that no response was received to this email and the claim remains unresolved.
The Appellant maintained that they did not dismiss the Respondents and rather they submitted that the Respondents resigned on 12 October 2021. The Respondents submit that upon the FWO issuing the Compliance Notice to the Appellant, they realised that the Appellant had no intention of continuing their employment. Accordingly, the Respondents submitted that their date of her dismissal was 17 May 2022.
The Deputy President rejected the Appellant’s submission that the Respondents resigned for the following reasons:
· the Respondents never expressly stated they resigned or wished to discontinue their employment and the Appellant “assumed” they had resigned;
· the statement that the Respondents were not prepared to take on any more classes until they were paid the rate they believed they were entitled to under the award did not amount to resignation. The Deputy President considered this to be a conditional statement indicating the Respondents were unavailable for work until they were paid in accordance with the award; and
· the Appellant’s email of 18 November 2021 was inconsistent with them believing that the Respondents reigned on 12 October 2021.
Accordingly, the Deputy President found that the Respondents did not resign from their employment.
In considering whether the Respondents were terminated at the initiative of the employer the Deputy President found that from at least 2018 for Ms Taverna and Ms Hunt and 2020 for Ms Delfino there were separate contracts of employment entered into between the parties. The Deputy President therefore accepted that there was no contract on foot between the parties following the completion of the Respondents’ last day of work. In determining whether an action of the employer was the principal contributing factor leading to the termination of the Respondents employment, the Deputy President rejected the Respondents submission that it was the issuing of the Compliance Notice by the FWO that terminated their employment. Finding that an action of the FWO does not meet this criterion as it is not an action of the employer. Rather, the Deputy President found that the action by the employer terminating the Respondents employment was the email sent by the Appellant to all students on 9 December 2021. The Deputy President considered the email reflected the fact that the Appellants proposals to resolve the Claim had been rejected by the Appellant. Further, the dismissal was taken to be communicated to the Respondents when they became aware of the email or had a reasonable opportunity to find out they had been dismissed, which is sometime between 9 – 16 December 2021.
The Deputy President therefore found that the Respondents employment was terminated at the initiative of the Appellant in accordance with s.386(1)(a).
Extension of Time
Given the above finding as to the date of dismissal, the Respondents original applications were therefore filed somewhere between 134 days and 141 days outside of the 21-day statutory time period. The Deputy President then turned to consider the factors in s.394(3) of the Act regarding whether to grant an extension of time.
Having regard to the reason for the delay (s.394(3)(a)), the Respondents each provided slightly different accounts as to why their application was not filed on time, however in essence they submitted that they were not aware that they had been dismissed and believed that they would resume employment when the underpayment claim was resolved. The Deputy President did not find that this constituted an acceptable reason for the delay as the claim is a separate distinct matter and after 9 December 2021 the Respondents could not have reasonably continued to believe their employment would continue, and found this weighed against granting an extension of time.
Turning to s.394(3)(b), the Deputy President found that the Respondents did have an opportunity to know their employment had ended but that it was uncontested that the dismissal was never communicated to them by the Appellant. This was found to weigh in favour of granting an extension of time.
In terms of s.394(3)(c), the Deputy President found there was no evidence that the Respondents took any action to dispute their dismissal and that this weighed against the grant of an extension of time.
In considering prejudice to the employer (s.394(3)(d)), the Deputy President noted that the delay is not insignificant, however there was no particular prejudice should an extension of time be granted. This was found to be a neutral consideration.
The Deputy President then took into account the merits of the application (s.394(3)(e)), noting that while the merits have not been fully tested on the material before her, the Respondents contention that they were unfairly dismissed was found to have substantial merit and a significant prospect of success. The reasons for this conclusion are identical in each of the decisions. Paragraph [79] of the Decision relating to Ms Delfinois set out below:
“[79] Whilst the merits have not been fully tested, on the material before me I consider Ms Delfino’s contention that she was unfairly dismissed to have substantial merit and a significant prospect of success. I have not made this finding lightly. This is essentially an interlocutory matter. All of the evidence is not necessarily before me, nor has it been fully heard or tested in the context of a hearing as to the merits of the Application. However, for the following reasons I consider that the Application has considerable merit. Firstly, that Ms Delfino raised with the Respondent that she did not believe she was being paid the relevant rate of pay under the Award is not contested. Secondly, that she was not paid the correct rate of pay under the applicable Award nor provided with her correct superannuation entitlements appears, prima facie, to be supported by the issuing of a Compliance Notice by the FWO in respect of these matters. Thirdly, the Claim was on-going and unable to be resolved. Fourthly, I have found that Ms Delfino did not resign or withdraw her services unconditionally in the manner contended for by the Respondent. Fifthly, there is a strong chronological nexus between Ms Delfino raising these matters and the Respondent ceasing to offer her further work. Sixthly, it is uncontested that the Respondent did not notify Ms Delfino of her dismissal; rather, it advised students that she was not returning and informed them, incorrectly and without any basis, that Ms Delfino had decided to take another path in her life. Seventhly, the Respondent’s complete failure to respond to the 16 December Email and confirm its view that Ms Delfino had resigned in October 2021.”
Accordingly, the Deputy President found this weighed in favour of the grant of an extension of time.
Finally, having regard to s.394(3)(f), the Deputy President noted that the parties have not drawn her attention to any persons or cases that would be relevant in relation to the question of fairness between the Respondents and persons in a similar position. This was therefore found to be a neutral consideration.
In conclusion, the Deputy President was satisfied exceptional circumstances existed for the grant of an extension of time and decided the matter would then be further programmed.
Ground of Appeal and Submissions
Appellant
The Appellant filed three separate F7 – Notice of Appeal applications in respect of each of the Respondents. The substance of the F7 applications are the same. The Appellant raises two main grounds of appeal, namely:
1.insufficient exceptional circumstances for extension of time by 141 days; and
2.significant error of fact – facts do not indicate any dismissal.
In terms of Ground 1, the Appellant submits that the Deputy President’s consideration and conclusion regarding the factors in s.394(3) were unreasonable or insufficient. Specifically, the Appellant submits that the Respondents were in fact provided with an opportunity to know that their employment had ended. The Respondent also submits that it was unreasonable for the Deputy President to conclude that prejudice to the Appellant was a neutral consideration because the Appellant was part-way through semester and needed to replace the Respondents. Further, they allege inconsistency in that there are other cases in the Commission which are out of time by a much shorter duration and an extension of time has not been granted. They say there is no other reported decision where an extension of time has been granted after 141 days. The Appellants also take issue with the fact that the predominant factor seeming to justify the extension of time was the Deputy President’s consideration of the merits of the application. The Appellant submits that if merits alone can justify the grant of an extension of time, there seems to be no point in having a statutory time limit.
In relation to Ground 2, the Appellant alleges they did not dismiss the Respondents. This is because the Respondents indicated they would not take on more classes until they were paid the rate they believed they were entitled to under the award. To this end, the Appellant says that the Respondents indicated they were “unavailable” for work and that this evidences the choice casuals have, to either accept or refuse work. The Appellant submits that they put to the Deputy President that they offered the Respondents more casual work, paid under the correct award rates, while the parties negotiated the claim, however the Respondents rejected this offer. Further, the Appellant submitted that the award rates sought by the Respondents were in excess of the legal award minimum and this was not presented in detail to the Deputy President as the matter was interlocutory in nature. The Appellant also provided further detail about the nature of the claim and contends that this evidence was not provided to the Deputy President as the proceedings were interlocutory but given the Deputy President placed significant weight on the merits of the application, such evidence should have been considered.
As to why the appeal is in the public interest, the Appellant submits that an extension of time of 141 days is “unprecedented and destabilising”. They submit that this creates uncertainty for employers who could be faced with claims that that are significantly out of time, especially where reinstatement is the primary remedy and employers may be concerned about replacing dismissed employees. Further, the Appellant submits that merits alone should not be the only “genuinely weighing” factor in granting an extension of time as this undermines the purpose of statutory time limits.
Additionally, the Appellant contends that this appeal is in the public interest as the interpretation of the minimum employment period for casual employees was unreasonable, they submit:
“It cannot be the legal position under 384 that a casual employee who earlier in employment had a reasonable expectation of regular and systematic casual employment but has no longer had a reasonable expectation of regular and systematic casual employment during a significant period (longer than the equivalent of the minimum employment period) prior to dismissal, still meets the test of being a regular casual employee at the time of dismissal and is therefore entitled to pursue an application for an unfair dismissal remedy.
Section 384 should be interpreted so that the employee is required hold a reasonable expectation of regular casual employment at the time immediately prior to dismissal.
In this case, the casual employees had not performed any work since September 2021, were dismissed on 9 December 2021 and lodged their unfair dismissal claims on 19 May 2022. The casual employees conceded that they had not performed regular and systematic casual employment for many months, since March 2020.”
Respondent
In summary, the Respondents submit that the appeal has not met the threshold required to enliven the public interest, especially noting the requirement of s.400(1) of the Act. Further, the Respondents submit that there is no error in the Decision as the Deputy Presidents stayed within her discretion as envisaged by the Act, providing well-detailed reasons for her findings. They contend there is no error of the House v King[2] type and that plainly the Appellant’s submission act to distract from the fact that the findings were discretionary and open to the Deputy President. The Respondents submit that no error of fact has been demonstrated and that it was within the Deputy President’s power to grant an extension of time. In response to the Appellant’s public interest contentions, the Respondents submit that the circumstances of this case are specific to the parties involved and therefore the matter does not have any issues of importance. Therefore, it is the Respondents position is that the appeal be dismissed.
Principles on Appeal
An appeal under s.604 of the 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.[3] There is no right to appeal and an appeal may only be made with the permission of the Commission.
This appeal is one to which s.400 of the 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.”
In Coal & Allied Mining Services Pty Ltd v Lawler and others,[4] a Full Court of the Federal Court characterised the test under s.400 as “a stringent one”. Where the task of assessing whether the public interest test is met is a discretionary one, involving a broad value judgment.[5] A Full Bench of the Commission, in GlaxoSmithKline Australia Pty Ltd v Makin, 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.”[6]
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.[7] 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.[8]
Relevantly, the decision under appeal is of a discretionary nature. Such a decision can be successfully challenged on appeal only if it is shown that the discretion was not exercised correctly.[9] It is not open to an appeal bench to substitute its view on the matters that fell for determination before the Commissioner in the absence of error of an appealable nature in the decision at first instance. As the High Court said in House v The King:
“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. 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. 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. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”[10]
Consideration
Ground 1
As to Ground 1, the matter before the Deputy President was whether, pursuant to s.394 of the Act, the Respondents ought to be granted an extension of time for the lodgement of their originating applications. The matters the Deputy President was required to take into account are set out in s.394(3)(a)-(f). In the Decision, the Deputy President gave consideration to each of those matters both individually and collectively. We reject the Appellant’s submissions that it was not open to the Deputy President to find that the Respondents were not notified of their dismissal and that prejudice to the Appellant should not have been a neutral consideration. The Deputy President’s consideration of these factors was reasonable and open to her in the circumstances.
As to the Appellant’s submission that the Deputy President’s emphasis on the merits of the application undermines the purpose of the statutory time limit, we reject this proposition. The Act has strict time frames for the lodging of applications but clearly envisions situations where such time frames should be extended. Relevantly, the existence of the exceptional circumstances test under s.394(3) provides a framework for this situation by setting out the factors in which an extension of time can be justified. Further, we note that a decision as to whether to extend time under s.394(3) involves the exercise of a broad discretion. This will require the identification of error of the type described above in House v The King. Considering the submissions and evidence in this matter, we are not satisfied that the Appellant has established that the Deputy President acted on a wrong principle, has mistaken the facts, has taken into account an irrelevant consideration or failed to take into account a relevant consideration, or has made a decision which is unreasonable or manifestly unjust. The Deputy President considered each of the relevant factors and then weighed up whether an extension of time should be granted. We are satisfied that the Deputy President’s findings and approach were within her discretion and open to her on the evidence before.
In that context, we are unable to see the relevance of the fact that the extension of time granted in this case was for a duration of 141 days. The Act gives discretion to the decision-maker to make a finding as to whether time should be extended and therefore this finding was within the Deputy President’s discretion. The matters to be considered do not specifically include the length of the delay. Rather, this consideration is implicit in the other matters the Commission is required take into account, and to weigh, before deciding whether to exercise the discretion. The length of the delay alone is not a basis to either grant or refuse to exercise the discretion in s.394(2). There may be cases where a lengthy delay is reasonably explained and balancing all the criteria, a further period is granted. Relevantly in the present case the Deputy President acknowledged the length of the delay at [76] of the Delfino Decision, stating that: “There is not insignificant delay between the dismissal and 19 May 2022 when the Application was lodged.”
We note that the Appellant described this extension as “unprecedented” and asserted that there are no reported decisions of the Commission where an extension of time has been granted after 141 days. A perusal of the Fair Work Commission Unfair Dismissal Benchbook contains a reference to a Decision of a Full Bench of the former Australian Industrial Relations Commission, which on appeal reheard an application for a further period and granted an extension of 21 months for an applicant to file an unfair dismissal application. There is no relevant distinction in the provisions of the then Act under which the Commission decided that case.[11]
Accordingly, Ground 1 discloses no appealable error, and we dismiss this ground of appeal.
Ground 2
In Ground 2 the Appellant takes issue with the Deputy President’s finding that the Respondents were dismissed in accordance with the Act. Here the Appellant raises the same arguments as those which were put to the Deputy President at first instance, namely that because the Respondents indicated they were unavailable for classes, they were in effect refusing to work for the Appellant. This submission was put to the Deputy President and rejected at first instance. At [55] of the Delfino Decision and in relevant paragraphs relating to the other Respondents, the Deputy President found that the Respondents did not resign and provided reasons for this conclusion. This finding was open to the Deputy President based on the evidence before her and does not disclose any appealable error.
The Appellant also submits that they offered the Respondents more work which would be paid under the correct award rates while the parties negotiated the claim, however the Respondents rejected this offer. This submission is inconsistent with the position of the Appellant at first instance, that being, that they assumed the Respondents resigned after the 12 October 2021 meeting. Similarly, we note that in both the transcript and the Decisions the Respondents confirmed they were never offered classes after their last day of work and that they were certainly not offered additional classes at the correct award rates. We therefore reject this submission.
Finally, the Appellant provided submissions about the nature of the claim and specifically that the award rates sought by the Respondents were excessive. We note that the Deputy President did not make any findings on the merits of the claim, she plainly considered it in the context of the events surrounding the Respondents dismissal and noted that it was being pursued by the FWO. We similarly will not be making any findings on the merits of the claim.
Overall, we have considered the Deputy President’s findings on the Respondents dismissal, and we are satisfied that such findings were orthodox and open to the Deputy President on the evidence before her. Therefore, Ground 2 discloses no arguable case of appealable error.
Public Interest
We have considered the Appellant’s submissions on why a grant of permission to appeal is in the public interest and we have addressed these submissions in our consideration of Ground 1. In terms of the Appellant’s submissions regarding the minimum employment period, we reject that the Deputy President’s interpretation of the relevant legislation was unreasonable. Accordingly, we are not satisfied that any of the matters raised by the Appellant enliven the public interest and justify the grant of permission to appeal. We do not consider that the appeal raises any issue of importance or general application. Nor do we consider that it is arguable that the Decision manifests an injustice, or that the result is counterintuitive or unjust.
Conclusion
Permission to appeal is refused.
VICE PRESIDENT
Appearances:
Mr S Kollmorgen, for the Appellant.
Mr S Dryley-Collins, for the Respondents.
Hearing details:
2022.
Sydney (via Microsoft Teams Video).
10 October.
[1] [2022] FWC 2181; [2022] FWC 2182; [2022] FWC 2177.
[2] House v King [1936] HCA 40; 55 CLR 499.
[3] This is so because on appeal the Commission has power to receive further evidence, pursuant to s 607(2); see Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194, 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
[4] [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [43].
[5] O’Sullivan v Farrer [1989] HCA 61, 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [44]-[46].
[6] [2010] FWAFB 5343, 197 IR 266 at [27].
[7] Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [30].
[8] Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089, 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78, 207 IR 177; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office[2014] FWCFB 1663, 241 IR 177 at [28].
[9] Wingate v Monadelphous[2014] FWCFB 5913.
[10] House v King (1936) 55 CLR 499 at [504]-[505] per Dixon, Evatt and McTiernan JJ.
[11] A Poulton v Rail Infrastructure Corporation PR966972 per Watson SDP, Hamberger SDP and Richards C.
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