Needlework Tours Pty Ltd v Ms Amanda Olesen

[2017] FWC 6022

[2017] FWC 6022

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 604 - Appeal of decisions

Needlework Tours Pty Ltd
v
Ms Amanda Olesen
(C2017/6100)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 16 NOVEMBER 2017

Unfair dismissal found - application for stay of compensation order pending appeal – grounds of appeal assert misapplication of evidence – principles applicable to stay applications – arguable case – balance of convenience – stay granted

[1] This decision concerns an application by an employer Needlework Tours Pty Ltd (Needlework) for a stay of an order of the Fair Work Commission pending the hearing and determination of Needlework’s appeal.

[2] The order sought to be stayed is an order made by Commissioner Ryan on 17 October 2017. In his order the Commissioner ordered pursuant to section 392(1) of the Fair Work Act 2009 (the FW Act) that Needlework pay Amanda Olesen “the amount of $12,550 gross, to be taxed at the appropriate rate, as compensation in lieu of reinstatement. The amount is to be paid within 21 days of the order. This order is effective on and from 17 October 2017.”

[3] The primary application before the Commissioner was an application by Ms Olesen under section 394 of the FW Act in which she claimed that her dismissal on 10 March 2017 was harsh, unjust or unreasonable. The Commissioner heard the matter on 13 September 2017, at the conclusion of which he reserved his decision. His decision of 17 October found that:

•  the dismissal was not consistent with the Small Business Fair Dismissal Code;

•  there was no valid reason for dismissal having regard to the capacity or conduct of Ms Olesen;

•  Ms Olesen was given no opportunity to respond to any concerns Needlework had concerning her employment;

•  the dismissal was harsh, unjust and unreasonable.

[4] In relation to remedy, the Commissioner concluded that:

•  reinstatement was inappropriate but a compensation order would be made;

•  Ms Olesen had been regularly employed as a casual employee and could have reasonably been expected to have been employed for a further nine months at 15 hours per week at $30 per hour had she not been dismissed ($17,550);

•  the amount of compensation would be reduced by $5,000 being the amount the Commissioner estimated Ms Olesen had earned between the date of dismissal and the date compensation is payable;

•  no evidence of the effect of a compensation order on the viability of the employer’s enterprise was put to the Commission;

•  no other deduction would be made;

•  the compensation order would be that $12,550 be payable within 21 days.

[5] Needlework’s appeal is made under section 604 of the FW Act. It is listed for hearing and determination by a full bench of the Commission on 1 December 2017. It is to be noted that an appeal can only be considered if the full bench is minded at that time to grant permission to appeal.

[6] Without limiting the circumstances in which permission of appeal may be granted, the grant of permission generally involves the Commission having to be satisfied that a significant issue of principle or law emerges for determination or warrants review, or an error of law or a significant error of fact appears on the face of the decision.

[7] The grounds of appeal advanced by Needlework are summarised by the appellant as follows:

“This appeal has been caused by what we believe to be and that is all the evidence and material presented at the hearing has not been considered resulting in a substantial injustice in relation to the financial remedy imposed on Needlework Tours Pty Ltd. There has been significant errors made by the Commissioner…” 1

[8] I conducted a hearing of the application for a stay of the compensation order by video conference on 14 November 2017. I reserved my decision. I now deliver my decision.

[9] Relevant to the consideration of the stay application is the following:

•  the Commissioner’s decision was made on 17 October. Written reasons were published and made available to the parties at that time;

•  Needlework received the decision on 17 October;

•  Needlework had 21 days to lodge a notice of appeal against the decision. The 21 day period expired on 7 November. It lodged its appeal on 7 November;

•  The day Needlework lodged its appeal (including its request for a stay) was the same day it was required, by order of the Commission, to pay the compensation amount to Ms Olesen;

•  Needlework’s appeal only concerns the compensation order;

•  to date, Needlework has not complied with the Commissioner’s order to pay the compensation amount.

[10] Needlework is a very small business. It is operated by its owners Mr and Mrs Laughlin. It employs one casual employee working about 15 hours per week. In support of the stay application Mr Laughlin submitted:

•  the Commissioner had no reasonable basis for concluding that Ms Olesen would have been employed for a further nine months by the business. He contends four months is what the Commissioner should have decided. As a result, he overestimated her loss;

•  the Commissioner failed to take into account relevant evidence about earnings Ms Olesen received or was projected to receive from her own business activities. As a result the Commissioner failed to make a sufficiently large deduction from the amount payable. As a result he ordered an excessive amount of compensation;

•  the amount of compensation that should have been ordered was $6,350 not $12,550;

•  Needlework is in severe financial constraint and unable to comply with the order without adverse impact on cash flow and going further into debt and overdraft;

•  Mrs Laughlin has been diagnosed with cancer and the Commission hearings and the order has placed stress and pressure on the owners;

•  Mr and Mrs Laughlin were overseas on 17 October when the Commissioner’s decision was delivered. Although they read it on 18 October they were unable to attend to it until returning to Australia about a week prior to lodging the appeal;

•  the compensation order has not been paid because the employer is awaiting the outcome of its stay application.

[11] Ms Olesen opposed the stay application. She submitted:

•  the evidence Needlework claims the Commissioner failed to take into account about her earnings was not evidence of earnings but merely a projection to an insurance company of turnover. As such, the decision is not in error;

•  she is earning only a small and variable amount of income from her business as well as a government payment for her small business;

•  she is facing severe financial difficulties of her own.

[12] The principles to be applied by the Commission to the granting of a stay application were summarised in Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited 2:

“The principles concerning whether a stay application will be granted are well-established. They are as stated in Edghill v Kellow-Falkiner Motors Pty Ltd 3:

“In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospect of success, in respect of both the question of leave to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted.”

Prospects of Success

[13] The decision by the Commissioner to estimate that Ms Olesen could have reasonably been expected to have been employed for a further nine months at 15 hours per week at $30 per hour had she not been dismissed involved discretionary judgements. At paragraph 33 of the Commissioner’s decision he describes his calculation of $17,550 as “its best guesstimate” based on the formula of 15 hours x $30 per hour x 39 weeks. The reasonableness of the 39 week figure and the 15 hour figure is brought into question on the appeal by Needlework.

[14] In relation to the deduction for earnings by Ms Olesen the Commissioner relied on material supplied to him by Ms Olesen at the hearing. The Commissioner also said that “the Commission is also unaware of the amount of income reasonably likely to be earned by Ms Olesen during the period between the making or an order for compensation and the actual compensation” (paragraph 34 of the Commissioner’s decision). The insurance certificate Needlework says was in evidence dated 28 June 2017 refers to “turnover of $50,000”. Given that it appears agreed that Ms Olesen only commenced trading her own business in early June 2017, it is reasonable to conclude that, at best, this was evidence of a projection rather than a statement of actual earnings. The Commissioner went on to say that he “must guess a figure”.

[15] No doubt the Commissioner was in a difficult position given the inadequacy of evidence before him. In circumstances where the appeal concerns a challenge to the level of a compensation order and in circumstances where, despite the inadequacy of the evidence, the Commissioner has variously described his conclusion as based on a “guesstimate” or a “guess”.

[16] Aspects of a decision relating the a compensation order do involve the difficult task of the Commission making estimates, particularly those concerning projected length of future employment had dismissal not occurred, and projected future earnings from alternative work. Those estimates must be objectively made and based on best available evidence or set of conclusions drawn from the evidence that can reasonably be relied upon.

[17] I consider there to be an arguable case with some prospect of success that an appealable error may have been made. The appeal may also disclose an issue of procedure, being the circumstances in which a member of the Commission should determine a compensation order on less than adequate evidence rather than relist the matter for further evidence and submission on that point, or deal with the matter by reference to where the onus of proof sits on bringing forward the relevant evidence. These are matters which may, depending on their further consideration, found a basis for permission to appeal.

Balance of Convenience

[18] In this matter the small business appellant and Ms Olesen the former employee (now a small business respondent) each assert serious financial difficulties to support their contentions. I consider the alleged financial consequences of granting or not granting a stay (as the case may be) to be a neutral factor given that both parties assert broadly comparable impacts on their day to day circumstances.

[19] Weighing against a stay is the fact that Needlework have not complied with the order made by the Commissioner. As a matter of principle, a party should not secure a benefit from the Commission as a consequence on non-compliance with an order. However, in these circumstances Needlework considers the quantum it has been ordered to pay to be significant for a small business and likely to prejudice it should the monies be paid prior to its application for a stay being considered. The delay between the date the order was required to be complied with and the date the stay application was heard was relatively short (one week). There was no period of time in which the order should have been complied with and a stay was not being sought. Although Needlework lodged its appeal on the last day available to it, in the circumstances of Mr and Mrs Laughlin only arriving back to Australia from overseas a week earlier I do not consider that it, as a self-represented party, was unduly slow in deciding to appeal and lodging its Notice of Appeal.

[20] In this case, I consider that maintaining the pre order status quo, which continues to be the status quo, to be where the balance of convenience more weightily rests.

Conclusion

[21] This is a very small business which has been ordered to pay a not insignificant amount of compensation to a former casual employee. Whilst Ms Olesen is entitled to the fruits of her success at first instance, the reality is that an appeal is underway. The appeal is not frivolous though an appeal which concerns matters of evidence must, under the FW Act, identify a “significant error of fact” 4. It is an arguable case but only if the appellant can establish that there was material evidence before the Commissioner that he did not take into account or misapplied. The appeal is to be heard relatively soon. I consider it prudent to avoid a circumstance where the compensation ordered is paid only to create a risk that the whole or a portion of it is then ordered to be returned should the appeal be successful in whole or in part.

[22] For these reasons I consider that, on balance, the order of Commissioner Ryan should be stayed pending the hearing and determination of the appeal. An Order giving effect to this decision is made.

DEPUTY PRESIDENT

Appearances:

Mr S. Laughlin for the Appellant.

Ms A. Olesen for the Respondent.

Hearing details:

2017.

Adelaide and Melbourne; by video-link

14 November.

 1   Notice of Appeal 7 November 2017 at paragraph 2.2

 2   [2014] FWC 4276 at [10]

 3   [2000] AIRC 785

 4 Section 400(2) FW Act

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