Nigel Smith v Buick Holdings Pty Ltd T/A DVG Automotive Group - Midland City
[2016] FWCFB 1795
•23 MARCH 2016
| [2016] FWCFB 1795 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Buick Holdings Pty Ltd T/A DVG Automotive Group - Midland City
(C2015/7245)
VICE PRESIDENT WATSON | MELBOURNE, 23 MARCH 2016 |
Appeal against decision [2015] FWC 6900 of Commissioner Riordan at Perth on 21 October 2015 in matter number U2015/4370 - Permission to appeal – whether grounds of appeal attract the public interest – whether arguable case of appealable error – Fair Work Act 2009, ss.394, 400 and 604.
Introduction
[1] This decision concerns an application for permission to appeal against a decision 1 of Commissioner Riordan handed down on 21 October 2015 (Decision). The Decision concerned an application for an unfair dismissal remedy made by Mr Nigel Smith on 27 March 2015 under s.394 of the Fair Work Act 2009 (Act) in relation to the termination of his employment by Buick Holdings Pty Ltd T/A DVG Automotive Group – Midland City (DVG).
[2] By way of background,
a) Mr Smith was employed by DVG on 5 June 2014. He was employed as a salesman in DVG’s used car division.
b) He earned a minimum weekly wage of $746.20 plus commission. It was also a term of Mr Smith’s employment that he be provided with the use of a motor vehicle from the used cars sales yard to travel to and from work and for his private use on weekends.
c) At some stage during the course of his employment DVG became concerned about the amount of fuel Mr Smith was purchasing on his company fuel card.
d) On 25 March 2015 Mr Smith’s employment was terminated following an investigation into his use of the fuel card. It was alleged that unleaded petrol had been purchased on his card on 2 occasions during the month of February when the company vehicle he had been provided used diesel fuel.
e) No logbook was used in the used-car side of the DVG business and it did not seek to obtain a copy of the relevant CCTV footage for the particular petrol stations where the unleaded petrol had been bought until many weeks after the purchases (by which time the footage had been erased).
f) Although other reasons for termination were cited at the time that Mr Smith’s employment was terminated, in defending the unfair dismissal application, DVG only relied upon the fuel card issue.
g) DVG conceded that it had denied Mr Smith procedural fairness in relation to the termination of his employment.
h) Mr Smith vehemently and consistently denied that he had fraudulently used the fuel card to purchase fuel for his private vehicle. However, in his application for an unfair dismissal remedy Mr Smith wrote:
“They state that I use my fuel card in a personal car, I did not deny this as my manager was aware - but denies now. I made him aware that I use my new A3 convertible on weekends and days off when I need them and was putting fuel in. He was okay with that for months until the DP Ross Bennett resigned and when the new DP came in who doesn’t like me now he denies that too.”
[3] At the hearing before the Commissioner, and at the hearing of the appeal matter on 10 February 2016 Mr Smith appeared for himself and Mr Ron Ballucci from the Motor Trade Association of Western Australia appeared on behalf of DVG.
The Decision under Appeal
[4] In the Decision the Commissioner:
a) accepted that the information provided by Mr Smith in his application for an unfair dismissal remedy was true and accurate. Consequently he found that Mr Smith had misused the fuel card in February 2015 and that this provided a valid reason for the termination of his employment (s.387(a) of the Act);
b) found that Mr Smith was notified of the reason for termination (s.387(b) of the Act);
c) found that Mr Smith had been denied the opportunity to respond (and was denied the requisite procedural fairness) (s.387(c) of the Act);
d) found that s.387(d) of the Act was not relevant because Mr Smith was not provided an opportunity to have a meeting and so therefore was not denied opportunity to have a support person;
e) found performance was not a relevant issue in relation to the dismissal and therefore the issue of warnings in relation to performance did not arise (s.387(e) of the Act);
f) found DVG was a large employer and had its own HR Department (s.387(f) & (g) of the Act); and
g) under s.387(h) of the Act, took into account a number of matters including that,
i. the management practices of DVG were sloppy;
ii. DVG did not attempt to source the CCTV footage;
iii. DVG failed to document the alleged direction given to Mr Smith in February 2015 that he only drive the diesel Nissan Patrol during February 2015;
iv. the evidence led him to believe that Mr Smith may have been “set up”.
[5] Having made the requisite findings under s.387 of the Act the Commissioner determined that, applying a “fair go all round”, “Mr Smith’s dismissal was therefore harsh, unjust or unreasonable.” 2
[6] In relation to the question of remedy the Commissioner determined that by reason of the lack of trust that existed between Mr Smith and DVG reinstatement would be inappropriate in all the circumstances. The Commissioner then made an assessment of the appropriate amount of compensation to be awarded. He decided to award Mr Smith “four weeks’ pay plus superannuation”. 3
Grounds of Appeal
[7] The grounds of appeal advanced by Mr Smith are as follows:
- the Commissioner did not set a “monetary value [for the compensation]… just allowed [the] respondent to pay any monies [it] liked”;
- the amount of compensation was “reduced due to circumstances ‘dropped’ by the respondent”;
- he was “not allowed to give evidence or prove the allegation was unfounded”;
- there was no real compensation awarded for harm caused to the applicant by the respondent;
- “the fact that this was a premeditated act from the director level down…”;
- the fact that he has not been able to obtain employment;
- “the way they dismissed [him] with our cause and without reason and without following any procedures.”
[8] Mr Smith submits that it is in the public interest to grant permission to appeal because:
a) he has been suffering “PTSD for some years which [DVG] were aware of and this allegation has caused [him] continual great distress and has resulted in [his] application for disability … [he] cannot gain employment due to malicious claims by [DVG]. These claims were unfounded and unsubstantiated by any evidence even though it was available”;
b) the “limit on [his] damages was imposed due to the 2 other allegations from the employer, which were dropped and subsequently [he] was unable to prove [his] innocence, yet used in the decision”;
c) “The decision was from director level down and [he] was aware of their malicious nature to dismiss [him] 4 months before the event”;
d) the respondent did not comply with orders to produce documents;
e) papers were doctored;
f) there was a conspiracy between DVG and a previous employer;
g) the amount paid by DVG was not the same as that requested by the Commissioner.
[9] At the hearing of the appeal matter it became apparent that, despite the Commissioner finding that the termination of his employment was unfair, Mr Smith was aggrieved that he had been branded a “thief” (although the Commissioner made no such finding). Further, it became apparent that the gravamen of Mr Smith’s complaint was the assessment of compensation made by the Commissioner. 4
Permission to appeal
[10] An appeal in relation to an unfair dismissal matter is governed by the provisions of ss.604 and 400 of the Act. Section 604 of the Act deals with appeals generally. These requirements are modified with respect to unfair dismissal appeals by s.400 of the Act which provides:
“400 Appeal rights
(1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA 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.”
[11] 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’ 5. The Commission must not grant permission to appeal unless it considers that it is ‘in the public interest to do so’
[12] The test for determining the public interest has been described as follows: 6
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although 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, it seems to us that none of those elements is present in this case.”
[13] It is also important to note that the decision under appeal is of a discretionary nature. Usually such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. 7 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:8
“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.”
Consideration
[14] Section 390(3)(b) provides the Commission may only issue an order for compensation to an applicant if it is appropriate in all the circumstances. In his Decision the Commissioner found that it was appropriate to order compensation.
[15] In the Decision the Commissioner addressed the issue of compensation as follows:
“[79] I find that the appropriate remedy is the payment of compensation in accordance with section 390(3)(b) of the Act.
[80] I note that Mr Smith received a week in lieu of notice when he was dismissed on 25 March 2015. I have taken this into account.
[81] I also note that Mr Smith sent an offensive text message to his Manager and ignored a lawful direction from his Manager to remain on site. These incidents would have resulted in significant and appropriate disciplinary action against Mr Smith. As a result, I do not believe that Mr Smith would have remained employed by DVG for a lengthy period. I have taken this into account.
[82] Taking into account the above issues, I have decided to award Mr Smith four weeks’ pay plus superannuation.”
[16] Section 392 of the Act sets out the circumstances that must be taken into consideration when determining an amount of compensation, the effect of any findings of misconduct on that compensation amount and the upper limit of compensation that may be ordered.
[17] The Commissioner properly set out s.392 of the Act at paragraph [75] of the Decision.
“…
392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period—the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
[18] The method for calculating compensation under s.392 of the Act requires an orthodox approach. So much so was addressed by a Full Bench of the Commission in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 9 (Bowden). In that decision the Full Bench set out the order in which the criteria and other factors should be applied, taking into account authority under the Workplace Relations Act 1996 in Sprigg v Paul’s Licensed Festival Supermarket10 and Ellawala v Australian Postal Corporation11.
Remuneration that would have been received: s.392(2)(c)
[19] The starting point for the analysis is for the Tribunal Member to determine the period of time an applicant would have remained employed by the respondent, or would have likely remained employed with the respondent, had they not been dismissed.
[20] In the Decision the Commissioner observed that because of events that happened post termination Mr Smith would not “…have remained employed by DVG for a lengthy period”. However, the Commissioner did not determine the period of time Mr Smith would have remained employed by DVG, or would have likely remained employed with DVG, had Mr Smith not been dismissed on 25 March 2015.
Remuneration earned: s.392(2)(e)
[21] It is next necessary for the Tribunal Member to consider the remuneration earned by an applicant since the dismissal with reference to the evidence.
[22] In the Decision the Commissioner noted that Mr Smith had been paid “…a week in lieu of notice”.
Income likely to be earned: s.392(2)(f)
[23] It is next necessary for the Tribunal Member to consider the income to be reasonably likely earned by an applicant between the time of the making of the order for compensation and the actual compensation with reference to the evidence.
[24] In the Decision the Commissioner made no such finding. If he had he would then have been required to deduct this amount from the compensation to be ordered.
Other matters: s.392(2)(g)
[25] It is next necessary for the Tribunal Member to consider whether a contingency applies based on the evidence. If it is found that a contingency is relevant the Tribunal Member must then find whether it is appropriate or not appropriate in the circumstances that a contingency should be applied. If a contingency does apply then the Tribunal Member must decide whether to increase or reduce the amount of compensation to be ordered based on the contingency and apply an appropriate percentage amount.
[26] In the Decision the Commissioner did not give consideration to contingencies.
Viability: s.392(2)(a)
[27] In the Decision the Commissioner did not given consideration to whether an order for compensation in the amount proposed would affect the viability of the DVG’s enterprise.
Length of service: section (s.392(2)(b))
[28] It is next necessary for the Tribunal Member to consider whether the length of an applicant’s service with the respondent should effect the compensation to be ordered.
[29] In the Decision the Commissioner did not give consideration to Mr Smith’s length of service. He was required to do so in order to determine if Mr Smith’s period of service with the DVG, being 9 months, should affect the amount of compensation to be ordered.
Mitigating efforts: s.392(2)(d)
[30] It is next necessary for the Tribunal Member to consider whether an applicant has taken steps to mitigate the loss suffered as a result of the dismissal; this requires an assessment of whether an applicant has acted reasonably in the circumstances. 12
[31] In the Decision the Commissioner made no finding about whether Mr Smith had made efforts to mitigate his loss suffered as a result of the dismissal. Consequently, the Commissioner did not make an assessment about whether he should reduce the amount of compensation to take into account that the Applicant did not did not make all reasonable efforts to mitigate his loss because of the dismissal.
Misconduct: s.392(3)
[32] The Commissioner found that there was a valid reason for termination. However, he did not make a finding that Mr Smith engaged in misconduct. He did not make a finding that any misconduct by Mr Smith contributed to the dismissal.
[33] The Commissioner was required to make such a finding so that he could determine, under s.392(3) of the Act, the amount by which the compensation ordered under s.392(1) was to be reduced on account of the misconduct.
Shock, Distress: s.392(4)
[34] An amount of compensation cannot include a component for shock, humiliation or distress.
Compensation cap: s.392(5)
[35] Finally, the Tribunal Member must reduce the amount of compensation to be ordered if it exceeds the lesser of the total amount of remuneration received by an applicant, or to which the applicant was entitled, for any period of employment with the employer during the 26 weeks immediately before the dismissal, or the high income threshold immediately prior to the dismissal.
[36] The high income threshold immediately prior to the dismissal was $133,000.
[37] In the Decision the Commissioner made no finding about what Mr Smith would have earned, or to which Mr Smith was entitled, for the 26 week period immediately prior to the dismissal.
[38] The Commissioner did not assess whether the amount of compensation he ordered did not exceed the compensation cap (although it likely did not exceed the cap).
Conclusions
[39] As the above authorities make clear, an appeal will not succeed if is simply an attempt to reargue a case and seek a different outcome. Permission to appeal can only be granted if the public interest is attracted. In this case we are satisfied that there is an arguable case of appealable error with respect to the assessment of compensation. In the Decision the Commissioner does not appear to have adopted the methodology utilised in Bowden in determining the amount of a payment of compensation. He did not consider each of the criteria in s.392 of the Act.
[40] In failing to do so it is apparent that the Commissioner applied legal principles in a manner that was disharmonious when compared with other decisions dealing with similar matters. Consequently, we are satisfied that it is in the public interest to grant permission to appeal.
[41] For these reasons we grant permission to appeal on the grounds of appeal regarding the assessment of compensation. In all other respects we decline to grant permission to appeal.
[42] Directions will be issued for the filing of supplementary written submissions regarding the determination of the appeal.
VICE PRESIDENT
Appearances:
Mr Smith for himself.
Mr Ballucci on behalf of DVG.
Hearing details:
2016.
Melbourne—Video link to Perth.
10 February.
1 [2015] FWC 6900.
2 [2015] FWC 6900, [74].
3 [2015] FWC 6900, [82].
4 Transcript at PN56-59 in answer to questions from the Vice President.
5 (2011) 192 FCR 78 at paragraph 43.
6 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343.
7 House v The King (1936) 55 CLR 499 at [504]-[505] per Dixon, Evatt and McTiernan JJ.
8 Ibid.
9 [2013] FWCFB 431.
10 (1998) 88 IR 21.
11 Print S5109.
12 Biviano v Suji Kim Collection PR915963 at [34].
Printed by authority of the Commonwealth Government Printer
<Price code C, PR578235>
2
5
0