Re Secretary, Department of Employment and Workplace Relations and Payne
[2007] AATA 1745
•10 September 2007
CATCHWORDS – SOCIAL SECURITY – newstart allowance – preclusion period – meaning of ‘misconduct’ in the context of ‘misconduct as a worker’ – whether applicant was unemployed due to any such misconduct – interpretation of s 629(1)(c) – relevance of the Social Security Guide – decision set aside.
Acts Interpretation Act 1901 ss 15AA(1), 15AB(1), 15AB(1)(b)(ii) and 15AB(2)
Administrative Appeals Tribunal Act 1975 s 37
Employment and Workplace Relations Amendment (Welfare to Work and Other Measures) Bill 2005
Employment and Workplace Relations Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Act 2006
Income Tax Assessment Act 1922
Income Tax Assessment Act 1936 s 82(2)
Interpretation of Legislation Act 1984 (Vic) s 35(a)
Legal Profession Act 1987 (NSW)
Social Security (Administration) Act 1999 ss 3(3), 7(1), 8, 9(1), 9(3) and 9(4)
Social Security Act 1991 ss 593, 593(1)(i), 595, 595(1), (1A)-(1B), 596(1), 608(1), 611, 615, 626, 629(1)(c) 629(1), 629(1A) to (5), 630, 630(2) and 630(3)
Trade Practices Act 1974
Australia & New Zealand Banking Group Ltd v Federal Commissioner of Taxation (1994) 48 FCR 268; 119 ALR 727
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; 141 ALR 618
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission and Others (2000) 203 CLR 194; 174 ALR 585
Council of the Law Society of New South Wales v A Solicitor [2002] NSWCA 62
Crosland v John Fairfax & Sons Pty Ltd unreported, B No 45 of 1959
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60
Gilmore v Poole-Blunden [1999] SASC 186
In re a Practitioner (1984) 36 SASR 590
Marshall v Watson (1972) 124 CLR 640
Mills v Meeking (1990) 169 CLR 214; 91 ALR 16
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; 66 ALR 299
North v Television Corporation Ltd (1976) 11 ALR 599
R v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45; 27 ALR 321
Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634
Re O’Keeffe and Secretary, Department of Social Security (1998) 27 AAR 533
Thompson v Goold & Co [1910] AC 409
Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492
DECISION AND REASONS FOR DECISION [2007] AATA 1745
ADMINISTRATIVE APPEALS TRIBUNAL )
) 2007/0322
GENERAL ADMINISTRATIVE DIVISION )Re:SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS
Applicant
And:CASEY PAYNE
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 10 September 2007
Place: Melbourne
Decision:The Tribunal:
1.sets aside the decision of the Social Security Appeals Tribunal dated 11 January 2007;
2.substitutes a decision that a newstart allowance was not payable to the respondent for a period of eight weeks starting on 19 August 2006 on the basis that he was unemployed due to his misconduct as a worker; and
3.remits the matter to calculate the amount, if any, of newstart allowance overpaid to the respondent.
S A FORGIE
Deputy President
REASONS FOR DECISION
A delegate of the Secretary of the Department of Workplace Relations (Secretary) decided that newstart allowance was not payable to Mr Casey Payne for an eight week period commencing from the day after his employment was terminated. The decision was made under s 629(1)(c) of the Social Security Act 1991 (SS Act) on the basis that Mr Payne was unemployed due to his misconduct as a worker. The Social Security Appeals Tribunal (SSAT) set the decision aside on the basis that Mr Payne was not unemployed for that reason. Mr Payne did not attend the hearing at the Tribunal but he and I have both been given significantly more material about his employment and its termination than was available to the SSAT. I have considered the meaning of “misconduct” in the context of “misconduct as a worker” and whether Mr Payne was “unemployed due to” any such misconduct. I have decided that he was and have set aside the SSAT’s decision. As he was paid newstart allowance during at least some of the eight week period, Mr Payne will owe a debt but that will need to be calculated by officers of Centrelink acting on behalf of the Secretary.
BACKGROUND
Mr Payne did not attend the hearing at the Tribunal and did not provide any written material. I am, therefore, left with the written material found in the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents) and a volume of supplementary documents lodge on 31 May 2007 on the Secretary’s behalf. On the basis of that material, I have made the findings of fact set out in this section of my reasons.
Mr Payne was employed by Medibank Private Limited (MPL) in April 2006[1] and signed a statement accepting the terms and conditions of his employment as set out in a letter addressed to him and dated 20 April 2006.[2] That letter advised him that the terms and conditions of his employment were described in company policies and industrial agreements as applying from time to time to employees of MPL. The Certified Agreement and Human Resources Policies were located on MPL’s intranet or through Human Resources and were accessible to all staff. MPL asked him to familiarise himself with both the Certified Agreement and the Human Resources Policies and to contact his manager if he required further information. The letter also advised Mr Payne that the normal hours of work amounted to 150 hours over a four week period. Those hours could be worked on any day from Monday to Saturday between 7.00am and 8.00pm. His manager would discuss his start and finish times when he commenced duties.
[1] T documents, 85-86
[2] T documents, 86-88
Clause 2.1 of the Certified Agreement set out an employee’s responsibilities to MPL. They included:
“2.1.1 Doing all work to the best of your ability, skill and competence in accordance with your job description as varied from time to time.
…
2.1.3Complying with Company policy, practices or procedures as varied from time to time.
2.1.4Complying with our email and internet use policy of which a copy has been given to you.
…
2.1.9Complying with all reasonable management instructions.
…
2.1.11Respecting diversity and individual differences to ensure that your dealings with other employees and any other person having dealings with you at the workplace are free from discrimination, harassment, bullying and violence.
2.1.12Being punctual and reliable in your attendance for work and advising us early as possible of your inability to attend work due to illness or injury. You may be required to produce satisfactory proof for any absence.”[3]
[3] T documents, 143
MPL’s letter of 26 April 2006 asked Mr Payne to sign and return a document described as a “Code of Conduct - Undertaking and Acknowledgment”.[4] The HR Administration – Recruitment Checklist shows that Mr Payne returned the document on 1 May 2006.[5] The document set out his obligations with respect to accessing and using information in the course of his work. Those obligations were, in part:
“1. I will at all times faithfully perform my duties to the best of my ability and in accordance with any directions and instructions given to me from time to time.
2.…
3.I will follow reasonable standards of conduct in relation to my work and my relations with other employees and the public.
4.…
5.I will comply with the MPL Code of Conduct as varied from time to time,
….”[6]
[4] T documents, 88 and 91-92
[5] T documents, 90
[6] T documents, 92
The MPL Code of Conduct begins with a statement that:
“MPL is committed to conducting its business, and to achieving its strategic objectives, in a manner consistent with the company’s values of Integrity, Care, Respect and Innovation. In line with these values, the Code of Conduct for Employees outlines the standards expected of MPL employees in relation to their work, their relationships with other employees, their relationships with external parties and in relation to all company and public property.”[7]
[7] T documents, 91
There then followed nineteen dot points identifying particular behaviour that MPL regarded as a “minimum standard of conduct”.[8] Among them are the following:
[8] T documents, 91
“∙ display skill, professionalism, care and diligence in the performance of the duties for which they are employed;
∙treat other employees, Medibank Private members, providers and other members of the public with courtesy and respect at all times;
∙respect diversity and individual differences at MPL and ensure that all dealings with their colleagues, with Medibank Private members and providers, and with members of the public, are free from discrimination, harassment, bullying and violence;
∙…
∙…
∙be punctual and reliable in their attendance at work;
∙notify MPL where practicable at, or no longer than hour after, the scheduled time of commencement of any inability to attend work;
∙gain specific approval for any absence from duty during their normal hours of work;
∙comply with reasonable oral or written instructions given by a manager or an authorised person;
…”[9]
[9] T documents, 91
The letter of 26 April 2006 also asked Mr Payne to sign and return a document described as an “IT Communications, Facilities, E-mail and Internet Policy Acknowledgment”.[10] That was also returned to MPL on 1 May 2006. The document described as the “IT Communications, Facilities, Email and Internet Policy” set out seven broad principles underpinning the policy. It said:
“… Users of Medibank Private IT communications, including email and internet facilities should not do anything which may:
4.1interfere with the operation of IT and communications facilities;
4.2unnecessarily waste Medibank Private IT resources;
4.3interferes with the work performance of other people;
4.4be offensive or is likely to offend;
4.5cause distress or discomfort to people;
4.6expose Medibank Private to legal action or public criticism;
4.7expose Medibank Private to commercial and/or financial loss.”[11]
[10] T documents, 88
[11] T documents, 134
Those who breached the policy were warned that they might face a range of repercussions including a written warning, counselling, a notation on the person’s Human Resources’ file or the suspension or withdrawal of facilities or resources. Serious breach might attract sanctions including termination of employment and or criminal or civil action. Acceptable use was described in clause 9 of the policy as performing authorised business activities for MPL, bona fide work related self-improvement and professional development and limited reasonable personal use that does not otherwise breach the policy or adversely impact on MPL’s operation. Unacceptable use was described at some length. The first was any use that breached the broad principles. Others included:
“10.2 Accessing, transmitting, storing, keeping or being in possession of pornography or any material which may be regarded as objectionable.
…
10.7Accessing, transmitting, storing, keeping or being in possession of chain, hoax or junk email or content that is of a frivolous or annoying nature.
10.10Accessing, transmitting, storing, keeping or being in possession of computer games that have not been authorised by the CIO [Chief Information Officer] or the DSO [Designated Security Officer].
10.11Doing anything that could be regarded as harassment, offensive or discriminatory.
…
10.13Except as provide [sic] for in clause 9, accessing, transmitting, storing, keeping or being in possession of information that does not directly relate to your job function or work requirements.
…”
Between 17 May 2006 and 29 June 2006, Mr Payne’s supervisor made six notes regarding various aspects of his behaviour on six different days during that period. In summary, they were:
17 May 2006: “adherence and getting into work late.”[12] Told to catch earlier train and to call when he is sick or running late.
23 May 2006 “sitting incorrectly”.[13] Told he could not put his feet up on the cabinet with his keyboard on his lap as ergonomically incorrect.
24 May 2006 Told he could not use his mobile phone at his desk when he should be working.
5 June 2006Supervisor told all staff, including Mr Payne, to delete all games from their computers. Mr Payne playing games on his computer after the meeting.
9 June 2006Mr Payne making personal telephone calls when he was not on a break. He was told to ask for approval if he needed to make a personal call.
29 June 2006 Mr Payne attended a training course regarding the use of aspects of the computer. Staff were required to look at a large communal screen showing various details including an address of a fictitious member of MPL. Mr Payne changed the address to read “Casey is a sexy beast”. The group started laughing and the Recruitment Coordination Manager told Mr Payne that it was imperative that the training be used as a learning environment and that the trainers be respected. Mr Payne felt that the environment was boring and that a laugh here and there would break it up a little. He later advised that he would apologise and change his behaviour.
[12] T documents, 107
[13] T documents, 107
On 20 June 2006 after he had been at MPL for eight weeks, Mr Payne’s Manager conducted a probationary review of his work. She recommended a continuation of his employment.[14] It contained both positive comments about his work and constructive comments directed to improving his performance.[15]
[14] T documents, 96
[15] T documents, 97
A second probationary review was conducted on 14 July 2006 and both Mr Payne and his manager signed it on that day.[16] Mr Payne’s efficiency, diligence and conduct were rated as 2 which signified that, sometimes, he did not meet standards and requirements. Mr Payne’s manager said that he had:
“… a sound knowledge of our company policies and adheres to these on a regular basis. He has had a satisfactory work attendance however he needs to focus on getting to work on time every day.”[17]
In summary, the manager commented:
“I am comfortable with the way Casey is tracking and have faith that he will achieve his results in a short time. Over the last few weeks he has been a positive contributor in the team and I would like him to continue focusing on interacting with the team on a daily basis to build some strong respectful relationships with people from all levels of the business.”[18]
[16] T documents, 101-102
[17] T documents, 101
[18] T documents, 102
On 11 August 2006, the Human Resources Division of MPL advised Mr Payne that there had been no adjustment to his base salary. The reasons for that, he was told, could be discussed with his manager.[19] On the same day, he was counselled regarding his reliability and ability to attend work. He and his manager signed a document described as “Performance Counselling … Form (Verbal Warning)”. The document began with a statement that Mr Payne’s overall reliability and ability to attend work on time was a major concern and that, since May 2006, he had been late on 13 occasions. The expected standard required of all MPL employees was said to be that they would:
“be punctual and reliable in their attendance for work
gain specific approval for any absence from duty during normal hours or work”.[20]
[19] T documents, 103
[20] T documents, 105
Mr Payne’s lateness was itemised:
“05/05/06 - 12 minutes
11/05/06- 1 hr 14 minutes
12/05/06- 10 minutes
15/05/06- 4 minutes
17/05/06- 45 minutes
26/05/06- 10 minutes
29/05/06- 42 minutes
13/07/06- 11 minutes
20/07/06- 6 minutes
21/07/06- 3 minutes
22/07/06- 8 minutes
04/08/06- 30 minutes”[21]
Mr Payne’s explanation was included in the document. That was that he had been late due to public transport issues and personal medical issues. He had attempted to go to the doctor outside work hours to ensure that he was at work for the full day. Mr Payne also explained that he had trouble getting up in the morning and slept through his alarm.
[21] T documents, 105
Mr Payne’s Manager said that he would monitor his performance monthly over the next three months. If his punctuality did not improve dramatically, there might be further disciplinary action.[22]
[22] T documents, 106
At 2.55pm on 16 August 2006, Mr Payne sent an email to a team colleague and copied it to the team. His email was the last of three emails. The first had been sent with the subject matter of “International food day” and had attached another document. It had been sent by Mr Payne’s Team Leader to a number of people, one of whom was Mr Payne. One of the recipients replied to the Team Leader’s email and copied it to the others with the message that he would not be there as he was leaving for Thailand on that day. Mr Payne sent a reply to that recipient and copied it to the others to whom it had been copied as well. There is no record on the copy of the print out that I have that Mr Payne’s email was sent to the Team Leader. I will not set it out but his reply but it appeared to describe two members of the team in terms that encompassed the sexuality of one and the denigrated the other.[23]
[23] T documents, 104
At 3.45pm on the same day, Mr Payne sent an email to the recipient who had advised he was going to Thailand. He wrote:
“My apologies comrades I’m glad you all gave me the consideration and chose to delete the clear mistake. --- I assure you it was not directed to anyone in the team or as a fact no one in this country --- apparently Poland ???
Well it’s a clear problem I have caused and if I have made everyone feel nervous or unsure as to what the content was, I will take it on the chin if you choose to direct your discomfort to our TL.
Regards, a clearly crazy Casey.”[24]
[24] T documents, 113
On 18 August 2006 at 10.18am, Mr Payne sent an email to three other members of his team at MPL. The subject line described it as “Realy [sic] interesting facts about 9/11”. In essence, the email gave examples of the names of people and events associated with the events relating to the Twin Towers on 9 September 2001. It explained how each had an association with the number 11.[25]
[25] T documents, 110-111
At 10.22am, a colleague advised Mr Payne’s Team Leader that another had noted that Mr Payne had not been working on a case file for eight minutes. He had been replying to emails that could have been team emails.[26] At 2.33pm on 18 August 2006, Mr Payne sent to the Team Leader a copy of his email of 16 August 2007 apologising to his colleagues.
[26] T documents, 112
On 18 August 2006, Mr Payne had met with MPL’s Human Resources Consultant and his Team Leader. Notes were kept of the meeting[27] and their flavour is reproduced in the Human Resources Consultant’s letter to Mr Payne dated 20 September 2006. The letter read in part:
[27] T documents, 114-116
“A meeting was held … to discuss your alleged breach of code of conduct, specifically, not treating other employees, with courtesy & respect at all times in addition to allegedly breaching EEO & IT policies.
The purpose of this meeting was to provide you with an opportunity to explain and respond to allegations that you had circulated an abusive email to your team, vilifying one team member and using offensive language. In addition, whilst the investigation was underway you continued to breach IT policy and circulate personal emails to the team of an offensive nature ie: breach of EEO policy.
In response to the above, you confirmed the above allegation of circulating the email and you were aware that your conduct was inappropriate and a serious breach of Medibank’s Code of Conduct. Furthermore, you stated that you should have been more professional and it was the wrong thing to do. You also apologised for your conduct and agreed that your behaviour was unacceptable and a breach of code of conduct.
In accordance with clause 8.1 in the Certified Agreement, we may terminate your employment in a number of circumstances. They include:
(a)Serious misconduct by you; or
(b)A fundamental or serious breach by you of our policies and practices as issued by Medibank (or on our behalf) from time to time; or
(c)A fundamental or serious breach by you of this Agreement; or
(d)A failure by you to perform to a satisfactory standard on a consistent basis (so long as you have been told the problems with your performance and been given an opportunity to improve the required standard)
Medibank concludes that you have demonstrated serious misconduct by breaching the EEO & IT policy and practice at Medibank.
Therefore in accordance with Clause 8.1 of the Certified Agreement, you are advised that as of 18th August 2006 your employment is terminated effective immediately.
…”[28]
[28] T documents, 132-133
The Payroll Officer in MPL completed an Employment Separation Certificate for Centrelink on 23 August 2006.[29] She marked the box indicating that Mr Payne’s employment had been terminated due to “Other” reasons. She did not tick the box that it had been due to his “Misconduct”. The reason she gave for the termination of the employment was “summary dismissal”.
[29] T documents, 129
LEGISLATIVE BACKGROUND
Part 2.12 of the SS Act is concerned with newstart allowance. In order to qualify for a newstart allowance, a person must meet the criteria specified in s 593. The criterion relevant in this case is that which provides that:
“… a person is qualified for a newstart allowance in respect of a period if:
(a)the person satisfies the Secretary that:
(i)throughout the period the person is unemployed …”.[30]
[30] s 593(1)(i)
The word “unemployed” must be read in light of other sections. Section 595, for example, provides that persons may be treated as unemployed in certain circumstances even though they would otherwise not be regarded as unemployed.[31] Other sections prevent a person from being qualified for a newstart allowance when that person’s unemployment came about in certain ways. Section 596(1), for example, provides that a person is not qualified for a newstart allowance in respect of a period unless the person satisfies the Secretary that the person’s unemployment is not due to that person’s being, or having been, engaged in industrial action or a series of industrial actions.
[31] ss 595(1), (1A) and (1B)
Although a person may be qualified for a newstart allowance, that allowance may not be payable to that person. It is not payable, for example, if the person’s rate of newstart allowance would be nil[32] or if the person’s assets exceed a certain limit.[33] Other sections of the SS Act provide that a newstart allowance is not payable if a person fails to do something such as attend an interview or to enter a Newstart Activity Agreement when required to do so.[34] Central to this case is s 629(1)(c) but I will reproduce the whole of s 629(1) in order to put it in context. It provides:
[32] s 608(1)
[33] s 611
[34] s 615
“A newstart allowance is not payable to a person, for the period of 8 weeks starting in accordance with section 630, if the person:
(a)commits a newstart participation failure (the repeated failure), having committed newstart participation failures (the earlier failures) on 2 or more other occasions during the period of 12 months preceding that failure; or
(b)is unemployed due, either directly or indirectly, to a voluntary act of the person; or
(c)is unemployed due to the person’s misconduct as a worker;
(d)has refused or failed, without reasonable excuse, to accept a suitable offer of employment; or
(e)fails, [without reasonable excuse][35]:
(i)to commence, complete or participate in an approved program of work for income support payment that the person is required to undertake; or
(ii)to comply with the conditions of such a program.”
[35] Inserted by Employment and Workplace Relations Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Act 2006, s 3, Schedule 5, item 3
Section 630 fixes the commencement of the eight week period. Generally, in a case involving the application of s 629(1)(c), the period commences at the time that the Secretary determines that a newstart allowance is not payable to a person because of that provision.[36] If, however, the person was not receiving a newstart allowance at the time the person became unemployed as a result of misconduct, the period starts at the time the person became unemployed for that reason.[37]
[36] s 630(2)
[37] s 630(3)
Sections 629(1A) to (5) qualify aspects of s 629(1) to a certain extent but not in so far as s 629(1)(c) is concerned. In relation to whether a person had a reasonable excuse for refusing or failing to accept a suitable offer of employment, for example, the Secretary must determine by legislative instrument the matters to be taken into account in making that decision[38] but the determination will not limit the matters to which regard may be had.[39] If a person is unemployed due to that person’s voluntary act within the meaning of s 629(1)(b), that provision will not apply if the Secretary is satisfied that the voluntary act was reasonable.[40] Similarly, the Secretary may disregard a participation failure under s 626 if the person had a reasonable excuse for the failure[41] and may disregard a repeated failure if satisfied that s 629(1) should not apply to it for any other reason.[42]
[38] s 629(1A)
[39] s 629(1B)
[40] s 629(4)
[41] s 629(2)
[42] s 629(3)
THE SUBMISSIONS
Mr de Uray, who represented the Secretary at the hearing, submitted that I should have regard to the ordinary meaning of the word “misconduct” and should not attempt to qualify its meaning by reading it as “serious misconduct” or “misconduct of a serious nature”. To do so would be to merge my function with Parliament’s function and that would be the wrong thing to do. Mr de Uray referred to the judgment of Lord Mersey in Thompson v Goold & Co[43] and of Stephen J in Marshall v Watson[44] Mr de Uray also submitted that:
“4.4 In seeking guidance on the application and object of s 629 of the Act, … in appropriate cases such as this, the Tribunal should take into account relevant Government policy, which is not inconsistent with the provisions or objects of the Act:
Drake and Minister for Immigration and Ethnic Affairs 1979 2 ALD 60
4.5 It is submitted that, by taking in to account relevant Government policy, the Tribunal is better placed to construe the expression misconduct or, in other words, the context in which that expression is used in the Act. In this instance, the relevant policy is contained in ‘The Guide to Social Security Law’ (‘the Guide’).”[45]
[43] [1910] AC 409 at 420
[44] (1972) 124 CLR 640 at 649
[45] Secretary’s Statement of Facts and Contentions, [4.5]
Mr de Uray referred to the following passage from The Guide to Social Security Law (Guide):
“3.213.10 A person can only become unemployed due to misconduct if their misconduct occurred in the workplace. A person who was dismissed for lack of ability to do the job or even for incompetence cannot be considered to be unemployed due to misconduct unless their behaviour was clearly deliberate and within their control (this is particularly important when considering the behaviour of people with mental illnesses). The intention of this policy is not to penalise people for something over which they clearly had no control. The intention is primarily to provide a deterrent to those who might behave inappropriately at work in order to be dismissed and avoid a penalty for leaving employment voluntarily. However, even if it is not certain that a jobseeker wanted to be dismissed, a penalty should be applied if they could reasonably have been expected to understand that their action would result in dismissal.
1.1.U.40 For the purposes of [Newstart Allowance … unemployment due to misconduct refers to a situation in which a person contributes to their own unemployment through their own action or inaction at work. A jobseeker who has been dismissed for misconduct can incur an 8-week non-payment period from the date of unemployment.
A person is regarded as becoming unemployed through misconduct if they have been dismissed or given the option of resigning, as a result of an action such as:
deliberate failure to produce/deliver a reasonable amount of work.
unauthorised absences from duty without good reason,
improper behaviour or practices, such as theft, assault or harassment of other employees or customers,
actions that cause serious risk to the health or safety of other employees or customers, OR
actions that threaten the reputation, viability or profitability of the business.”
Mr de Uray distinguished the judgment of Smithers and Evatt JJ in North v Television Corporation Ltd[46] on the basis that the context in which they were considering the meaning of “misconduct” was very different from that in the SS Act. It was the context of an industrial award. The judgment should be followed, though, in so far as their Honours said:
“ It is of assistance to consider the expression ‘misconduct’ by reference to the subject matter to which it is related and the context in which it appears. …”[47]
[46] (1976) 11 ALR 599
[47] (1976) 11 ALR 599 at 608
Mr de Uray also drew my attention to the decision of Senior Member Handley in Re O’Keeffe and Secretary, Department of Social Security.[48] He rejected a submission that he could be assisted by an understanding of what was meant by the word “misconduct” by having regard to what was meant by “serious misconduct” in the Workplace Regulations. “The concept of ‘serious misconduct’ is different … from the concept of ‘misconduct’ obviously by use of the word ‘serious’.”[49] Senior Member Handley added:
“ Because the Department of Social Security is not a party to the previously existing contract of employment between a beneficiary and a former employer it must necessarily make inquiries of the behaviour existing immediately before the contract of employment was ended upon the alleged basis of misconduct. It must satisfy itself whether an employee’s behaviour permitted a reasonable person to conclude that the misconduct had occurred. In making those inquiries it will consider not only the behaviour of the employee (and perhaps also that of the employer) but will be obliged to look at all circumstances surrounding the employment. In the present case it would be obliged to consider any breach of written terms of conditions of employment and in other cases it might consider any workplace agreements.”[50]
[48] (1998) 27 AAR 533
[49] (1998) 27 AAR 533 at 538
[50] (1998) 27 AAR 533 at 539
CONSIDERATION
The principles underpinning the interpretation of s 629(1)(c) generally and “misconduct” in particular
Beginning with the interpreting the word “misconduct”, I must have regard to s 15AA(1) of the Acts Interpretation Act 1901 (AI Act), which requires that:
“In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”
The interpretation of s 15AA has been the subject of much consideration.[51] It is apparent from the authorities that there is no need to find any ambiguity on the face of the provision before regard can be had to the purpose of the Act. Regard may be had to the purpose in order to determine whether more than one construction is open as well as in situations in which more than one construction is apparent from the face of the provision.[52] That goes beyond the realm of the mischief rule which, Dawson J said in Mills v Meeking,[53] required an ambiguity or inconsistency before regard could be had to purpose.
[51] See, for example, Pearce and Geddes, Statutory Interpretation in Australia, 6th edition, 2006, Butterworths, [2.6]-[2.14]
[52] Mills v Meeking (1990) 169 CLR 214; 91 ALR 16 at 235; 30-31 per Dawson J considering an equivalent to s 15AA(1): s 35(a) of the Interpretation of Legislation Act 1984 (Vic).
[53] (1990) 169 CLR 214; 91 ALR 16 at 235; 30-31
Section 15AA(1) makes no reference to the manner in which the purpose of an Act is to be determined. Is s 15AB(1) of the AI Act of any assistance? It provides that:
“… if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material …”
but only for limited purposes set out in the subsection.
Those purposes are:
(a)to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision when:
(i) the provision is ambiguous or obscure; or
(ii)the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.”
Section 15AB(2) sets out a number of types of material to which regard may be had in the interpretation of a provision in accordance with s 15AB(1) but it does not limit the material to those types.
Given the limited purposes to which s 15AB(1) is addressed, it cannot be read as relevant to identifying the material to which regard may be had in ascertaining the purpose or object underlying an Act for the purposes of s 15AA(1). That this is so is underlined by the reference in s 15AB(1)(b)(ii) to the use of extrinsic material to determine the meaning conveyed by the text of a provision after taking into account the purpose or object underlying the Act i.e. the meaning reached by the process referred to in s 15AA(1).
Despite the enactment of s 15AA(1) and of s 15AB, the common law has continued to develop principles of statutory interpretation. In 1997 in CIC Insurance Ltd v Bankstown Football Club Ltd,[54] Brennan CJ, Dawson, Toohey and Gummow JJ said:
“… the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means …, one may discern the statute was intended to remedy …”[55]
This passage makes it clear that regard may be had to a wide range of extrinsic material in interpreting an Act at common law. There is no suggestion that the provisions of the AI Act have qualified the common law in this regard.
[54] (1997) 187 CLR 384; 141 ALR 618
[55] (1997) 187 CLR 384; 141 ALR 618 at 408; 634-635 per Brennan CJ, Dawson, Toohey and Gummow JJ.
Just how broad is the category of the extrinsic material? Mr de Uray would have me have regard to the Guide. He described the Guide as “government policy” to which I should have regard in interpreting the meaning of the word “misconduct”. An examination of the whole of the Guide does not reveal its origin. It may, for example, be a document of the Secretary for the guidance of those exercising delegated powers. I also note that the Social Security (Administration) Act 1999 (SSA Act) refers on two occasions to directions or statements to be given to the Secretary. One occurs in s 7(1) which provides that the “… Secretary is, subject to any direction of the Minister, to have the general administration of the social security law.” The other occurs in s 9(1) which provides that the “… Minister may prepare a written statement of the policy of the Commonwealth Government in relation to the administration of the social security law …” (policy statement). The Minister may give a copy of the policy statement to the Secretary and the Executive Director of the Social Security Appeals Tribunal. In exercising powers under the social security law, an officer must have regard to the Minister’s policy statement[56] and so too must the Executive Director of the SSAT.[57] The reference to “social security law” in both s 7 and s 9 includes a reference to both the SS Act and the SSA Act.[58]
[56] SSA Act, s 9(3)
[57] SSA Act, s 9(4)
[58] SSA Act, s 3(3)
What is meant by “administration”? Section 8 of the SSA Act sets out the matters to which the Secretary is to have regard in administering the social security law. They are:
“(a) the desirability of achieving the following results:
(i)the ready availability to members of the public of advice and information services relating to income support generally and to the social security payments that are available;:
(ii)the ready availability of publications containing clear statements about income support entitlements and procedural requirements;
(iii)the delivery of services under the law in a fair, courteous, prompt and cost-efficient manner;
(iv)the development of a process of monitoring and evaluating delivery of programs with an emphasis on the impact of programs on social security recipients;
(v)the establishment of procedures to ensure that abuses of the social security system are minimised; and
(b)the special needs of disadvantaged groups in the community; and
(c)the need to be responsive to the interests of the Aboriginal and Torres Strait Islander communities and to cultural and linguistic diversity; and
(d)the importance of the system of review of decisions under the social security law; and
(e)the need to ensure that social security recipients have adequate information regarding the system of review of decisions under the social security law; and
(f)the need to apply government policy in accordance with the law and with due regard to relevant decisions of the Administrative Appeals Tribunal and the Social Security Appeals Tribunal.”
The principles of “administration” set out in the first five paragraphs clearly accord with the ordinary meaning of “administration” as “… the directing, managing or governing of … [one’s] affairs”[59] or “… the management or direction of any office …”.[60] They relate to the manner in which the Secretary carries out his responsibilities under the social security law but do not impinge on the individual decisions that he or his delegates must make regarding individual’s entitlements and liabilities under the social security law. The principle set out in s 8(f) could impinge on individual decisions but the degree to which it may do so is carefully limited by the way in which the principle is expressed. The principle requires the Secretary to have regard to “the need to apply government policy in accordance with the law” and with due regard to decisions of the AAT and of the SSAT.
[59] Chambers 21st Century Dictionary, revised edition 1996, Chambers
[60] Macquarie Dictionary, revised 3rd edition, 2001, Macquarie
The reference to being “in accordance with the law” takes me to the law relating to the application of government policy in decision-making under the social security law. The general principle is that the power to give directions and make guidelines is determined by reference to “… the subject matter, scope and purpose of the statute …”.[61] Equally, the scope of any discretion given to a decision-maker under the social security law depends on the latitude of the subject matter, scope and purpose of the Act.[62] A decision-maker is free to adopt a policy to guide it in the exercise of its discretion provided its policy is consistent with the Act[63] and does not require it to take irrelevant circumstances into account.[64] A policy “… must leave … [the decision-maker] free to consider the unique circumstances of each case … [It] does not control the making of decisions … [but] is informative of the standards and values which a … [decision-maker] usually applies. …”.[65] That this is so is illustrated by the way in which the Tribunal must carry out its duties:
“… the Tribunal is not, in the absence of specific statutory provision, entitled to abdicate its function of determining whether the decision made was, on the material before the Tribunal, the correct or preferable one in favour of a function of merely determining whether the decision made conformed with whatever the relevant general government policy might be.”.[66]
[61] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; 66 ALR 299 at 40; 309 per Mason J. See also R v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd (1979) 144 CLR 45; 27 ALR 321 at 49; 325 per Stephen, Mason, Murphy, Aickin and Wilson JJ citing with approval Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492 at 505.
[62][63] Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) (1979) 2 ALD 634 at 640 per Brennan J
[64] Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) at (1979) 2 ALD 634 at 641
[65] Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) at 641 and see also the general discussion of the principles by Mr SC Fisher, Member, in Re Gray and Australian Securities and Investments Commission [2004] AATA 1235
[66] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J
It follows that policy and guidelines can guide decision-making but only if that policy and those guidelines are consistent with the legislation itself. The legislation, therefore, must provide the firm framework on which the policy and guidelines are built by defining their boundaries and limiting their content. As a general principle, the policy and guidelines do not shape the legislation. Therefore, policy and guidelines cannot be used to identify the boundaries and content of the legislation. That is to say, they cannot be used to interpret a particular provision of the legislation.
That is not to say that they cannot be used to identify the mischief to which a legislative provision or an enactment is directed. In Australia & New Zealand Banking Group Ltd v Federal Commissioner of Taxation,[67] for example, Hill J, with whom Northrop and Lockhart JJ agreed, had regard to an explanatory handbook that had been issued by authority of the Commonwealth Treasurer on 31 August 1936. In a note relating to s 82(2) of the Income Tax Assessment Act 1936 (ITA Act), that handbook showed the differences between that Act and the Income Tax Assessment Act 1922. Hill J said:
“… That handbook does not stand in the same position as Explanatory Memoranda to legislation to which regard may be had in interpreting that legislation, at least in the case of ambiguity under s 15AB(2)(e) of the Acts Interpretation Act (1901) (Cth). Publication of the handbook post dated the assent to the Income Tax Assessment Act 1936 on 2 June 1936. Nevertheless, regard might be had to that publication as indicating the mischief to which s 82(2) was directed, that the subsection had no counterpart in the prior legislation. …”[68]
[67] (1994) 48 FCR 268; 119 ALR 727
[68] (1994) 48 FCR 268; 119 ALR 727 at 291; 752
I have set out the relevant extract from the Guide above but have also looked to the Second Reading Speech and the Explanatory Memorandum and Supplementary Explanatory Memorandum accompanying the Bill substituting Subdivision FA of Division 1 of Part 2.12 of the SS Act. That was the Employment and Workplace Relations Amendment (Welfare to Work and Other Measures) Bill 2005. That Subdivision was amended the next year by the Employment and Workplace Relations Amendment (Welfare to Work and Other Measures) (Consequential Amendments) Act 2006 but not in ways relevant to this case.[69]
[69] See [24] above
In his Second Reading Speech, the Minister for Employment and Workplace Relations spoke of the government’s Welfare to Work package’s recognising:
“… that every Australian of working age has the right, and deserves the opportunity, to participate in the nation’s prosperity. The best way for people to do this is by having a job and engaging in the economic and social life of our nation.”[70]
[70] Hansard, House of Representatives, 9 November 2005 at 2
“No-one denies the fact that a government must preserve a well-targeted social safety net while at the same time encouraging working age people to find jobs and remain employed. These welfare reforms demonstrate the government’s strong commitment to this principle.
…
The bill meets with community standards about the need for a balance of assistance, incentives and obligations to increase participation and reduce welfare dependence amongst working age Australians.”[71]
“This bill abolishes the current breaching regime, under which job seekers can incur long-lasting financial penalties regardless of any subsequent efforts to meet their requirements.
The new compliance framework included in this bill will more clearly link participation to payment and will reward those who are willing to re-engage quickly. A job seeker without a record of repeated non-compliance who commits a participation failure, such as missing an interview with an employment service provider, will be given the opportunity to avoid any financial penalty by quickly re-engaging with that provider.
Job seekers who persist with their non-compliance, despite being repeatedly warned, will lose their payments. As a deterrent to repeated participation failures or more serious failures, such as refusing a job offer, an eight-week non-payment period will apply. …”[72]
Apart from stating the effect of s 629(1)(c), the Explanatory Memorandum does not address it or its operation.
[71] Hansard, House of Representatives, 9 November 2005 at 3
[72] Hansard, House of Representatives, 9 November 2005 at 7
It is apparent from the Second Reading Speech and the Explanatory Memorandum that Parliament intended that newstart allowance be paid to those who need support in finding employment but not be paid to those who repeatedly do not participate in the process of finding employment and then participate in employment. That is the purpose or object of the provisions.
The Guide presents a much more detailed view of the provisions but I do not consider that I can have regard to it in discovering the object or purpose of the provisions. In the first place, there is no evidence that it pre-dated the enactment of the provisions. In the second, unlike the Second Reading Speech and the Explanatory Memorandum, there is no suggestion that the Guide was available to Parliament before the enactment of the new provisions. In the third, the very fact that the Guide is so detailed regarding the circumstances in which the powers in s 629 are intended to operate takes it beyond being a document of the type to which Hill J referred in Australia & New Zealand Banking Group Ltd v Federal Commissioner of Taxation[73]. The document referred to by Hill J showed the differences between two pieces of legislation and, in particular, showed that the provision under consideration had no counterpart in the earlier legislation. The passages from the Guide go well beyond that.
[73] (1994) 48 FCR 268; 119 ALR 727
The principles in Drake v Minister for Immigration and Ethnic Affairs
I have already referred to the case of Drake v Minister for Immigration and Ethnic Affairs to which Mr de Uray referred. I should explain further why I do not consider that its principles support his submission that I can have regard to the Guide in interpreting the meaning of a provision in the Act. In Re Drake and Minister for Immigration and Ethnic Affairs (No. 2),[74] Brennan J, President, said that the decision-maker:
“… is equally free, in point of law, to adopt such a policy in order to guide him in the exercise of the statutory discretion, provided the policy is consistent with the statute.”
This is consistent with the earlier judgments of the Full Court of the Federal Court in Drake v Minister for Immigration and Ethnic Affairs[75] and Smithers J.[76] Brennan J explained the reason for adopting a policy in relation to decision-making:
“… It can serve to focus attention on the purpose which the exercise of the discretion is calculated to achieve, and thereby to assist the Minister and others to see more clearly, in each case, the desirability of exercising the power in one way or another. Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process.”[77]
[74] (1979) 2 ALD 634 at 640
[75] (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J
[76] (1979) 24 ALR 577; 2 ALD 60 at 602; 80
[77] (1979) 2 ALD 634 at 640
While acknowledging the importance of policy, Smithers J had said in Drake v Minister for Immigration and Ethnic Affairs:
“ In the performance of the Tribunal’s function it is essential that a policy adopted by an administrator should be under review to the same extent as his evaluation of relevant matters and his general process of reasoning, not for the purpose of deciding whether it was reasonable for the administrator to make the decision he did, but for the purpose of deciding whether, by the objective standard of good government it was the right decision to make.”[78]
The views of Smithers J were consistent with those of Bowen CJ and Deane J (at page 70) and developed by Brennan J in Re Drake (No. 2):
“ Of course, a policy must be consistent with the statute. It must allow the Minister to take into account the relevant circumstances, it must not require him to take into account irrelevant circumstances, and it must not serve a purpose foreign to the purpose for which the discretionary power was created. A policy which contravenes these criteria would be inconsistent with the statute (see Murphyores Incorporated Ltd v The Commonwealth (1976) 136 CLR 1; Drake’s case, supra, at 589, and the cases there cited). …
That is not to deny the lawfulness of adopting an appropriate policy which guides but does not control the making of decisions, a policy which is informative of the standards and values which the Minister usually applies. There is a distinction between an unlawful policy which creates a fetter purporting to limit the range of discretion conferred by a statute, and a lawful policy which leaves the range of discretion intact while guiding the exercise of the power. (see British Oxygen Co v Board of Trade [1971] AC 610 at 625 and 631). Lord Denning referred to the distinction in Sagnata Investments Ltd v Norwich Corporation [1971] 2 QB 614 at 626, where he said:
‘I take it to be perfectly clear now that an administrative body, including a licensing body, which may have to consider numerous applications of a similar kind, is entitled to lay down a general policy which it proposes to follow in coming to its individual decisions, provided always that it is a reasonable policy which it is fair and just to apply. Once laid down, the administrative body is entitled to apply the policy in the individual cases which come before it. The only qualification is that the administrative body must not apply the policy so rigidly as to reject an applicant without hearing what he has to say. It must not “shut its ears to an application”: see [1971] AC 610, 625 per Lord Reid. The applicant is entitled to put forward reasons urging that the policy should be changed, or saying that in any case it should not be applied to him. But, so long as the administrative body is ready to hear him and consider what he has to say, it is entitled to apply its general policy to him as to others.’”[79]
[78] (1979) 2 ALD 60; 24 ALR 577 at 80; 602
[79] (1979) 2 ALD 634 at 640 at 640-641
The principles in these passages are reflected in s 8(f) of the SSA Act i.e. that government policy must accord with the law. Therefore, the Tribunal cannot simply apply the policy but must consider whether it does accord with the law. If it does accord with the law, the policy should inform the Tribunal of the standards and values that the Minister considers important in making a decision and that should be applied unless there is a very good reason to depart from it. This encourages consistency of the decisions made under a particular power and promotes a sense that decision-making will be fair.
Interpretation of s 629(1)(c)
On its face, s 629(1)(c) means that a person will not be paid a newstart allowance for a period of eight weeks “if that person is unemployed due to the person’s misconduct as a worker”. The section does not give the decision-maker a discretion as to whether the consequences of a person’s loss of employment for misconduct should be applied. Unlike s 629(1)(b), for example, the SS Act does not permit the Secretary or the Tribunal to decide if the misconduct was reasonable. Unlike s 629(2), it does not permit the Secretary to disregard a participation failure under s 626 if the person had a reasonable excuse for the failure[80] or to disregard a repeated failure if satisfied that s 629(1) should not apply to it for any other reason.[81] Instead, the effect of s 629(1)(c) is that, once the decision-maker decides that the person is unemployed due to the misconduct as a worker, that is an end of the matter. There is no discretion to disregard the misconduct or the fact of the person’s being unemployed due to that misconduct.
[80] s 629(2)
[81] s 629(3)
That takes me back to the ordinary meaning of the word “misconduct” when used, as it is in s 629(1)(c), a noun:
“… 1 improper or unethical behaviour professional misconduct …”.[82]
“… 1. improper conduct; wrong behaviour. ...”[83]“… 1 Bad management, mismanagement; esp culpable neglect of duties. …
2 Improper or wrong behaviour. …”[84][82] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[83] Macquarie Dictionary, revised 3rd edition, 2003, Macquarie
[84] Shorter Oxford English Dictionary, 5th edition, 2002, Oxford University Press
The judgment of Smithers and Evatt JJ in North v Television Corporation Ltd[85] has been referred to as relevant in the interpretation of “misconduct” in s 629(1)(c). That was a case focused on whether an employer’s summary termination of a journalist’s employment on the ground of misconduct had been in breach of the Journalists’ (Television) Award 1971 (Award). The written agreement between the journalist and Television Corporation Ltd had provided for summary termination on the grounds of misconduct without any notice or any payment in lieu of notice. Clause 10 of the Award provided for summary termination as well when certain specified circumstances, including misconduct, existed. It expressed it in this way: “the employer shall have the right to dismiss a member without notice for refusal of duty, wilful and serious neglect of duty, disobedience of instructions or orders or misconduct …”. Clause 10 was interpreted as not only giving the employer the right to dismiss for these circumstances but as imposing a duty upon that employer not to terminate an employee’s employment except when those instances existed.[86] The employer carried the burden of proving the existence of one of those instances justifying termination. As to the degree of proof required, Smithers and Evatt JJ adopted a passage from the judgment of Morgan J in Crosland v John Fairfax & Sons Pty Ltd[87] when he said “The burden is discharged if the misconduct is proved on the whole of the evidence to the Court’s reasonable satisfaction having regard to the gravity of the issues involve.”[88]
[85] (1976) 11 ALR 599
[86] (1976) 11 ALR 599 at 602-603
[87] unreported, B No 45 of 1959
[88] (1976) 11 ALR 599 at 603
Smithers and Evatt JJ rejected any tendency to treat the terms of the written agreement as if they were irrelevant to the inquiry but continued:
“… But although a definition of misconduct contained in that contract could not control the meaning of the expression ‘misconduct’ in cl 10(e) of the award, the question as to whether any particular conduct constitutes misconduct within the meaning of cl 10(e) does depend upon the terms of the contract of employment.
Until the terms of the contract are known and identified it is impossible to say whether or not any particular conduct is in breach thereof or is a breach of such gravity or importance as to indicate a rejection or repudiation of the contract.
One cannot begin the inquiry without ascertaining what work as a journalist the employee was employed and had undertaken to perform. It is also necessary to ascertain what particular obligations the parties had agreed upon as important or even vital.”[89]
[89] (1976) 11 ALR 599 at 609
If the contract did not control the meaning of “misconduct”, what did? As is apparent from the judgment of Smithers and Evatt JJ, it was the context in which it appeared in the award:
“ It was pointed out by Mr Hughes that whereas the award gave the right to an employer to dismiss an employee for serious and wilful neglect of duty, his right to dismiss an employee without notice was for misconduct simpliciter. It was accordingly argued that under cl 10(e) the employer is entitled to dismiss an employee without notice for any positive act of misconduct although not wilful or serious or even of such gravity as would, at common law, justify an employer dismissing an employee.
This is a possible construction, but it is difficult to believe that it really represents the intention of the provisions of the award. There is in it a certain incongruity with sub-cl (e) considered as a whole. There was a suggestion that the expression ‘serious and wilful’ should, as a matter of construction, be attached to the expression ‘misconduct’. But the arrangement of the clause is against this.
It is of assistance to consider the expression ‘misconduct’ by reference to the subject matter to which it is related and the context in which it appears. The subject matter is the termination by one party against the will of another of a continuing contract of employment on the ground of breach of one of the terms of the contract. And the context is such as to indicate that certain breaches of a non-serious nature, some of which would be within the connotation of misconduct, are not regarded as grounds for termination. In such a situation it is reasonable to interpret the expression ‘misconduct’ as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment.
This situation would arise if there were conduct inconsistent with the fulfilment of the express or implied conditions of service. It is conduct of that kind which will justify dismissal at common law. …
For the purposes of the application of the common law principles to the facts of this case, the remarks of the Master of the Rolls in Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287 and 289, are in point. He said:
‘To my mind the proper conclusion to be drawn from the passages which I have cited and the cases to which we were referred is that, since a contract of service is but an example of contracts in general, so that the general law of contract will be applicable, it follows that, if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service
..
I do, however, think (following the passages which I have already cited) that one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is ‘wilful’; it does (in other words) connote a deliberate flouting of the essential contractual conditions.’
Mr Hughes expressed the relevant question at common law as being whether the acts complained of as misconduct are of such gravity or importance as to indicate a rejection or repudiation of the contract by the employee.”[90]
[90] (1976) 11 ALR 599 at 608-609
The context in which the word “misconduct” was used in cl 10(e) of the Award is very different from the context in which it is used in s 629(1)(c). The context of the Award was one of regulation of the relations between employers and employees coming within a particular class. The context was that in which certain behaviour, being refusal of duty, wilful and serious neglect of duty and disobedience of instructions or orders were stated as grounds for summary dismissal as well as that of misconduct. If the ordinary meanings were to be attributed to the word “misconduct”, it might well be thought that the specific behaviour referred to in cl 10(e) would come within them. The fact that they were specifically referred to led Smithers and Evatt JJ to conclude that “misconduct” could not be qualified by words such as “serious and wilful”. They looked instead to a broader categorisation of the type of conduct that could be regarded as “misconduct”. They described it as “conduct so seriously in breach of contract that by standards of fairness and justice the employer should not be bound to continue the employment.”[91] In doing so, they did not conclude that the word “misconduct” should be read as “serious misconduct”. It is clear from what I have said that they expressly rejected the introduction of any such qualification.
[91] (1976) 11 ALR 599 at 609
Adopting the approach taken by Smithers and Evatt JJ in analysing cl 10(e) of the Award, I begin with the context in which the word is used in s 629(1)(c). That context is one of Parliament’s specifying five particular circumstances in which newstart will not be paid to a person for an eight week period. Unlike cl 10(e), it cannot be said that those specified in the provisions other than s 629(1)(b) and (c) are instances of what would be described as misconduct at common law. If it were not for s 629(1)(c), it might be thought that s 629(1)(b) might include unemployment due to a voluntary act that incorporated misconduct as well as those that did not. As it is, it seems to me that Parliament has intended to deal separately with misconduct. It did not intend to qualify the reference to misconduct by the addition of words such as “serious”, “wilful” or “voluntary”. It may be, though, that under the terms of employment of a particular employee, that employee’s employment may only be terminated for misconduct that is described as, for example, serious misconduct. It may also be that a consideration of whether there has been serious misconduct, as opposed to misconduct (if there has been misconduct at all) would be relevant in determining whether the employment was in fact terminated due to misconduct or whether it has been terminated for some other reason.
Section 629(1)(c) will not come into play unless the person’s misconduct was “misconduct as a worker” and unless the person is unemployed “due to” that misconduct as a worker. This is an important qualification in view of the breadth of matters that can be relevant in some contexts in considering misconduct. Those matters can include conduct that occurs outside the workplace and unconnected with persons in the workplace. I refer, for example, to the regulatory context in which those with particular expertise or engaged in a particular occupation, are regulated in order to ensure that only those with “the qualities of character and trustworthiness which are necessary attributes of a person entrusted with the responsibilities of …”[92] the particular occupation. “Professional misconduct” in the context of the Legal Profession Act 1987 (NSW) is considered against such a regulatory context. The New South Wales Court of Appeal said in Council of the Law Society of New South Wales v A Solicitor.[93]Sheller JA, with whom Mason P and Giles JA agreed, said:
“… The phrase ‘professional misconduct’ may extend beyond acts closely connected with actual practice, even though not occurring in the course of such practice, to conduct the outside course of practice which manifests the presence of absence of qualities which are incompatible with, or essential for, the conduct of practice; see New South Wales Bar Association v Cummins [[2001] NSWCA 284] at par 56. …”[94]
[92] In re a Practitioner (1984) 36 SASR 590 at 591
[93] [2002] NSWCA 62
[94] [2002] NSWCA 62 at [80]
This, however, is not a regulatory context. The SS Act in general and s 629(1)(c) in particular are not concerned with ensuring that an employee has certain qualities or is a fit and proper person or the like and so a person suitable to carry out the duties of certain employment. It has an entirely different focus and limits consideration to unemployment due to misconduct as a worker.
The precise boundaries of words “misconduct as a worker” remain for consideration. Can they extend to a pieceworker working from home? A question such as that must remain for consideration on another occasion when it is relevant to explore the boundaries.
The words “due to” are usually used to indicate that something was “caused by it or them … [or] because of it or them”.[95] This was the view adopted in Gilmore v Poole-Blunden[96] when considering whether a contravention of the Trade Practices Act 1974 was due to reasonable reliance on the information supplied. Bleby J said:
“… Whether a contravention is ‘due to’ reliance on particular information will be essentially a question of fact to be determined by reference to commonsense and experience, and one into which policy considerations and value judgments will necessarily enter.”[97]
Martin J, with whom Olsson J agreed, said:
“ In my opinion, it is inappropriate to adopt a technical or narrow approach to causation in the circumstances of this particular defence. The words ‘due to’ should be given their ordinary and natural meaning and should not be unduly restricted by legal technicalities such as issues of proximity that might arise in a civil context (cf R v Reilly [1982] 3 All ER 27 at 34-35; Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 at 461-464).”[98]
[95] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[96] [1999] SASC 186
[97] [1999] SASC 186 at [37]
[98] [1999] SASC 186 at [118]
This approach is equally applicable in this case. Whether a person is unemployed due to the person’s misconduct as a worker will be a question whether that person is unemployed because of that misconduct. The answer to the question will depend upon the particular facts of the case and it is in this context that the approach adopted by Smithers and Evatt JJ in North v Television Corporation Ltd will be apposite. They directed their attention to the contract of employment and the behaviour in forming a view as to whether the journalist’s conduct had been misconduct. I have already referred to this passage in their judgement.[99]
[99] See [52] above
I must also direct my attention to the terms of the contract of employment between the employee and the employer in the context of his duties as well as to any reasons given by the employer for the termination of the employment. His conduct must then be considered against a background of the terms of that contract in order to ascertain whether it is improper conduct or wrong behaviour in the context of his employment under that contract. That is not to say that every minor transgression of the contract will necessarily amount to misconduct as a worker. The transgression must be such that, in light of the contract, the nature of the work and any other relevant fact, the conduct is improper conduct. If the contract of employment or relationship between employer and employee leads to the conclusion that it is very important, or perhaps vital, that the employee meet certain standards of behaviour or exhibit certain qualities, those standards and qualities will be relevant in deciding whether a failure to show them amounts to misconduct. It is difficult to see that a mere failure to meet a production quota would come within the description of that sort of conduct. Deliberately taking some sort of action or engaging in some sort of inaction to delay production might conceivably do so. Arriving late for work on one occasion might not but, depending on the context, regular tardiness might amount to misconduct. It may be that a single action or inaction does not amount to misconduct but a combination of actions or inactions does.
If I decide that a person has misconducted him or herself as a worker, I will then need to ask myself whether that person is unemployed by reason of, and so due to, that misconduct as a worker. That is a necessary question because the conclusion that there has been misconduct as a worker does not necessarily mean that the termination of that employment, and so the person’s unemployment, is due to that misconduct. It may be, for example, that the termination is for another reason and the misconduct was an irrelevancy. All will depend on the particular facts of the case.
Is the Guide in accordance with s 629 of the SS Act?
This is not a question that I need address. I will merely observe that, in my view, it attempts to specify what amounts to misconduct in the abstract. What amounts to misconduct and to a person’s being unemployed due to misconduct at work can only be answered against the background of a particular employee’s circumstances in a particular workplace.
Was Mr Payne unemployed due to his misconduct as a worker?
I have set out the terms of Mr Payne’s contract relating to his employment in MPL. MPL is a body clearly concerned with service to the public and a body in which that service is delivered by its employees. The documents he was given and the Code of Conduct - Undertaking and Acknowledgment that he signed all emphasised that he follow reasonable standards of conduct in relation to his work and in his relationships with other employees and with the public. The Certified Agreement, for example, addresses specific behaviour that an employee is to avoid in the workplace i.e. discrimination, harassment, bullying and violence. The Code of Conduct outlines the standards expected of MPL employees in relation to their work and to other people.
The IT Communications, Facilities, E-mail and Internet Policy that Mr Payne acknowledged he had received also directed itself to monitoring the standard of behaviour expected of Mr Payne and other employees. Again, that standard was drafted in terms of the effect of the employee’s behaviour on others be they other employees or members of the public. It regarded as inappropriate behaviour that interfered with the work performance of others or was offensive or likely to offend or cause distress or be likely to offend. The standards set for the use of MPL’s email system were also drafted in part in terms of the effect of the user’s behaviour on others. Among other things, the IT Communications, Facilities, E-mail and Internet Policy prohibited the transmission of material that may be regarded as objectionable, frivolous or annoying and the doing of anything that could be regarded as harassment, offensive or discriminatory.
From these matters, I have concluded that MPL placed a considerable importance on its employees’ maintaining the standard of behaviour it outlined in these documents. I do not have Mr Payne’s view of his behaviour and so am left only with his written word in an email, his actions in forwarding an email relating to September 2001 to others and reports of his supervisors. When I have regard to that evidence, I find that Mr Payne did misconduct himself and did so over a period of time when it came to computer use and his behaviour to others through his use. It began with his changing the address on the communal screen during a training session held on 29 June 2006. The change brought a laugh from his colleagues but was inappropriate in the workplace, and regarded as such by his supervisors. His email to others on 16 August 2006 with the subject heading of International Food Day was in clear breach of the IT Communications, Facilities, E-mail and Internet Policy. On its face, it was objectionable. The only criticism that can be made of the substance Mr Payne’s email on 18 August 2005 regarding the Twin Towers was that it was unrelated to work but it is difficult to see that it was offensive or likely to cause upset. It was of a type commonly circulated and that come unbidden to an employee’s workplace email. Mr Payne told the SSAT that others at MPL circulated non-related emails and that it was “pretty much a wide practice”.[100] What was of concern was that he showed inappropriate behaviour in a workplace was Mr Payne’s using email to transmit a non-work related email of that sort when he knew that he had already transgressed in sending the International Food Day email. In addition, he knew that he had been spoken to regarding his behaviour at the computer training session and told that his behaviour had been unsatisfactory. Although on a different topic, Mr Payne also chose to act as he did knowing that his performance was under review in so far as his tardiness in arriving at work and that, after his performance review on 11 August 2006, he had been given a verbal warning.
[100] T documents, 5 at [8]
Mr Payne’s behaviour in relation to his email communications was consistent with his behaviour at MPL generally. On one view, his tardiness in arriving for work was a small matter because, for the most part, he was only a few minutes late. On another view, his tardiness is a reflection of Mr Payne’s view that he did not need to conform with the behaviour expected of him at MPL. It was also a reflection of his lack of understanding that he was part of a team whose efforts were directed to a common purpose.
Having regard to all of these matters, I have concluded that Mr Payne did misconduct himself at work. The Employment Separation Certificate does not sway my decision. Even though it did not indicate that Mr Payne’s employment had been terminated for misconduct, the fact that it noted summary dismissal as the reason is consistent with the conclusion I have reached. Mr Payne’s conduct was conduct that was regarded by MPL as a serious breach of its standards of what was appropriate conduct in light of the work in which Mr Payne was engaged. That work brought him into contact with other employees and with members of the public. Contact at both levels required a consideration for others detailed in MPL’s Code of Conduct. Mr Payne did not meet the standards and did not meet them on more than one occasion. His conduct amounted to misconduct in the circumstances and occurred in the workplace and as a worker. It was misconduct that, in light of the documents read by Mr Payne and evidencing the terms of his engagement, were a basis on which MPL could, and did, terminate his employment.
Having regard to the course of events culminating in the termination of his employment, I am satisfied that the termination, and so his being unemployed, was due to his misconduct. His failure to comply with the IT Communications, Facilities, E-mail and Internet Policy and the Code of Conduct in the ways I have described.
These findings lead me to conclude that the circumstances specified in s 629(1)(c) have been met. As the SS Act does not give me any discretion to conclude otherwise, the outcome is that newstart allowance was not payable to Mr Payne for a period of eight weeks commencing in accordance with s 630. As Mr Payne was not receiving newstart allowance at the time he became unemployed, the effect of s 630(3)(b) is that the eight week period commences at that time i.e. the day after the termination and so on 19 August 2006.
For the reasons I have given, I:
1.set aside the decision of the Social Security Appeals Tribunal dated 11 January 2007;
2.substitute a decision that a newstart allowance was not payable to the respondent for a period of eight weeks starting on 19 August 2006 on the basis that he was unemployed due to his misconduct as a worker; and
3.remit the matter to calculate the amount, if any, of newstart allowance overpaid to the respondent.
I certify that the seventy one preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ...............................................................
Jayne Rathjen Associate
Date of Hearing 20 July 2007
Date of Decision 10 September 2007
Solicitor for the Applicant Mr T. de Uray
Advocate, Legal Services Branch
Respondent No appearance
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission and Others (2000) 203 CLR 194; 174 ALR 585 at 205; 591 and see also Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J and 602; 80
per Smithers J
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