Secretary, Department of Social Security v Spencer, Mark

[1997] FCA 646

FEDERAL COURT OF AUSTRALIA

SOCIAL SECURITY - appeal from decision of the Administrative Appeals Tribunal (“the AAT”) - whether respondent entitled to job search allowance - whether respondent satisfied activity test - respondent seeking employment as the Member of Parliament for Coffs Harbour - where not even slight chance of success - whether respondent was “actively seeking work” - whether reasonable steps to seek work must be taken

ADMINISTRATIVE LAW - appeal from decision of the Administrative Appeals Tribunal (“the AAT”) - whether failure by AAT to consider relevant considerations - whether decision unreasonable - whether AAT failed to give reasons

Social Security Act 1991, (Cth) ss 513, 522

In Re Martens and Director-General of Social Security (1984) 6 ALN 339, cited
Green v Daniels (1977) 13 ALR 1, cited
Director-General of Social Services v Thomson (1981) 38 ALR 624, cited
Re VXL and Secretary, Department of Social Security (1990) 21 ALD 426, cited
Re Tempest and Secretary, Department of Social Security (1996) 41 ALD 797, cited

ON APPEAL FROM THE GENERAL DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL

SECRETARY, DEPARTMENT OF SOCIAL SECURITY - v-
MARK SPENCER

NO NG 483 of 1996

TAMBERLIN J
SYDNEY
21 JULY 1997

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	)  NG 483 of 1996
)
GENERAL DIVISION	)

BETWEEN:	SECRETARY, DEPARTMENT OF SOCIAL SECURITY Applicant
AND:	MARK SPENCER Respondent

ON APPEAL FROM THE GENERAL DIVISION OF THE
ADMINISTRATIVE APPEALS TRIBUNAL
CONSTITUTED BY SENIOR MEMBER LEWIS

JUDGE:	TAMBERLIN J
PLACE:	SYDNEY
DATED:	21 JULY 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The decision of the Administrative Appeals Tribunal be set aside.

1. The matter be remitted to the Administrative Appeals Tribunal for determination in accordance with law.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	)   NG 483 of 1996
)
GENERAL DIVISION	)

ON APPEAL FROM THE GENERAL DIVISION OF THE
ADMINISTRATIVE APPEALS TRIBUNAL
CONSTITUTED BY SENIOR MEMBER LEWIS

BETWEEN:	SECRETARY, DEPARTMENT OF SOCIAL SECURITY Applicant
AND:	MARK SPENCER Respondent

JUDGE:	TAMBERLIN J
PLACE:	SYDNEY
DATED:	21 JULY 1997

REASONS FOR JUDGMENT

The question on this appeal is whether the respondent, Mr Spencer, qualified for a job search allowance in respect of the period 20 February 1995 to 27 March 1995, during which time he was engaged in campaigning for election to the New South Wales State Parliament as the Member for Coffs Harbour.

Of central importance to this question are findings by the Administrative Appeals Tribunal (“the AAT”) that:

“·       During the period under review, being 20 February 1995 to 27 March 1995, Mr Spencer was very substantially and actively involved in an election campaign when he was seeking election as a Member of the New South Wales Parliament as a member of the Greens party. His involvement in electioneering caused him to be stressed and exhausted. Notwithstanding his evidence that he was actively seeking work other than as a Member of Parliament during that period and that in the event of a job offer which could not be delayed until after the election had taken place he would have accepted the job, Mr Spencer would not have been able to sustain full-time or paid employment during the period under review while he was running his campaign. On the balance of probabilities, the Tribunal finds that he would not have been prepared to accept paid employment offered to him if it required him to forego or significantly down-grade his election campaign.

·Even though Mr Spencer put a large amount of time and energy into running his campaign the Tribunal finds that at no time was there even a slight chance that he would be successful in the election, and whilst he was hopeful that he would win he realised that it was not a realistic goal.

·The evidence of Mr Spencer that he was looking for work as outlined in exhibit A was not consistent with contemporaneous evidence in his income statements T.5 and T.8, and in his Work Intentions form T.6, nor was it consistent with the evidence which he gave to the Social Security Appeals Tribunal. The Tribunal finds that during the period under review Mr Spencer was not seeking paid employment other than as a Member of Parliament, notwithstanding his evidence to the contrary to which the Tribunal gives little weight.”

Mr Spencer was successful before the AAT which held that he satisfied the “activity test” set out in s 522 of the Social Security Act 1991 (Cth) (“the Act”). In so finding the AAT set aside a contrary decision by the Social Security Appeals Tribunal of 11 April 1995 which in turn upheld a decision of the applicant of 3 March 1995 to cancel payment of a job search allowance because the applicant considered Mr Spencer was not “unemployed” and was not “actively seeking” or “willing” to “undertake suitable paid work”.

The Legislation

The following provisions of the Act are relevant to this appeal.

513(1)  Subject to subsection (2A) and sections 514, 515 and 519, a person is qualified for a job search allowance in respect of a period if:

(a)that person satisfies the Secretary that throughout the period the person is unemployed; and

(b)throughout the period, or for each period within the period, the person either:

(i)        satisfies the activity test; or

(ii)       is not required to satisfy the activity test, and

.....

522(1) Subject to subsections (1A) and (3), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that throughout the period, the person is:

(a)      actively seeking work; and

(b)willing to undertake;

paid work, other than paid work that is unsuitable to be undertaken by the person.

......

522(2A) For the purposes of subsection (1) and subparagraph (2)(a)(i), particular paid work is unsuitable for a person if and only if, in the Secretary’s opinion:

(a)the person lacks the particular skills, experience or qualifications that are needed to perform the work; or

(b)the person has an illness, disability or injury that would be aggravated by the conditions in which the work would be performed; or

(c)performing the work in the conditions in which the work would be performed would constitute a risk to health or safety and would contravene a law of the Commonwealth, a State or a Territory relating to occupational health and safety; or

(d)the work would involve the person being self-employed; or

(e)the work would be covered by an industrial award but the employer would only employ the person if the person agreed to become a party to an agreement reducing or abolishing rights that the award confers on employees; or

(f)the work would not be covered by an industrial award and the remuneration for the work would be lower than the minimum applicable rate of remuneration for comparable work that is covered by an industrial award; or

(g)commuting between the person’s home and the place of work would be unreasonably difficult; or

(h)for any other reason, the work is unsuitable for the person.

Grounds of Appeal

The applicant asserts that the AAT reasons disclose four errors of law. These are said to be:

(1)The AAT did not correctly apply the activity test in s 522.

(2)The AAT did not have regard to relevant considerations in that it failed to have regard to its finding of fact that there was not even a slight chance that at any material time that Mr Spencer would be successful in the election and that the AAT failed to have regard to the likelihood of him obtaining paid work as a Member of Parliament.

(3)Wednesbury unreasonableness, in concluding that Mr Spencer was actively seeking work as a Member of Parliament notwithstanding the finding referred to in (2).

(4)Failing to give reasons.

Ground 1 - Activity Test

At the forefront of its submission the applicant refers to the findings of the AAT set out above. The substance of its submission on this aspect is encapsulated in the following two paragraphs based on the applicant’s written submissions.

·   Despite the findings quoted above the AAT concluded that the Mr Spencer was “actively seeking work” because he was “engaged for long periods each week in his campaign to be elected as a member of Parliament”. The applicant submits that the phrase “actively seeking” work requires an assessment of the relevant surrounding circumstances to determine whether Mr Spencer took reasonable steps to obtain employment. The requirement is not satisfied by a claimant simply proving he or she spent a lot of time on a single activity when there was not even a slight chance of obtaining paid employment.

· The interpretation of s 522 contended for by the applicant, accords with the intention of the Act that claimants must make a genuine and realistic effort to obtain employment. If this were not so, and the AAT’s approach is correct, claimants could satisfy the activity test by a charade, by spending all their time pursuing a single position which they had no hope of obtaining.

The applicant says that this interpretation of s 522 accords with the Explanatory Memorandum to cl 522 of the 1991 Bill. The Memorandum relevantly reads:

“Subdivision B - Activity test
New Section 522: Activity test

Section 522 would outline the elements of the activity test.

Subsection 522(1) would require a person to satisfy the Secretary that the person is actively seeking and willing to undertake paid work that, in the opinion of the Secretary, is suitable to be undertaken by the person.

This provision would reflect the current work test provision in the Principal Act.” (Emphasis added)

The reference in the above quotation to the “current work test” provision in the Principal Act is to s 116 of the Social Security Act 1947 (Cth), as at 1991, which reads:

Division 2 - Qualifications for Benefit

Unemployment benefits
116.(1) Subject to this Part, a person (not being a person in receipt of a pension under Part IV or V or a benefit under Part VI) is qualified to receive an unemployment benefit in respect of a period (in this section referred to as the “relevant period”) if, and only if -

(a)      ...

(b)      ....

(c)       the person satisfies the Secretary that -

(i)throughout the relevant period he was unemployed and was capable of undertaking, and was willing to undertake, paid work that, in the opinion of the Secretary, was suitable to be undertaken by the person; and

(ii)he had taken, during the relevant period, reasonable steps to obtain such work; and

....” (Emphasis added)

The applicant relies on the expression “reasonable steps” in the previous provision and on the statement in the Explanatory Memorandum that the provision would reflect the current work test provision in the Principal Act. The requirement to take reasonable steps, it is submitted, could not be satisfied on the findings made by the AAT in the present case. The expression requires that the efforts should be reasonably directed to obtain suitable paid work.

The applicant contends that seeking election in circumstances where the candidate did not have “even a slight chance” of success and where he realised election was not a realistic goal, cannot be considered as actively seeking paid work.

The research of Counsel did not disclose any direct authority on the meaning of the expression “actively seeking work”. However, I was referred to several AAT decisions  which considered the expression “reasonable steps”.

In Re Martens and Director-General of Social Security (1984) 6 ALN 339, the AAT held that an applicant for unemployment benefits, who had enrolled in and attended a six month computer training course, had taken reasonable steps to obtain work, notwithstanding that his efforts were confined to the “computer industry”. The AAT considered that this field of endeavour was sufficiently wide to satisfy the requirement that he was taking reasonable steps to obtain paid work.

The AAT contrasted the facts in that case with a case in Queensland where the applicant had confined his efforts to seeking employment as “a radio announcer in provincial towns in Queensland”. See Whyte’s case (unreported, 4 August 1981, Q81/21). The AAT there found that the field of prospective employment was too narrow to satisfy the criterion of taking reasonable steps.

The AAT in reaching its decision in Martens had regard to the size of the computer industry; the work experience and training of Mr Martens; and the extent of job availability.

The genuineness of the conduct of a claimant was considered significant in relation to unemployment benefits in Green v Daniels (1977) 13 ALR 1 at 12, where Stephen J, sitting as a single judge of the High Court, said in relation to the expressions “unemployed” and “taking reasonable steps to obtain work”:

“What the delegate of the Director-General ought to have done,. ..., was to have applied his mind to the plaintiff’s eligibility for unemployment benefit, testing it by reference to the criteria in s 107(c). Sub-paragrapgh (ii) would have occasioned him no difficulty; it would be upon the matters referred to in sub-pars (i) and (iii) that attention would have had to be concentrated: whether the plaintiff was unemployed, involving the question of whether she had genuinely ended her school career and was seeking a place in the work force, and whether she had taken reasonable steps to obtain suitable work.” (Emphasis added)

Section 107(1)(c) was a predecessor of s 522 in the Social Services Act 1947 (Cth).

These observations indicate that Stephen J considered that the genuineness of the  claimant’s conduct was significant in making a determination as to the payment of unemployment benefits.

The Full Federal Court in the later case of Director-General of Social Services vThomson (1981) 38 ALR 624 again considered the application of s 107(1)(c) of the Social Services Act. The Full Court here considered that the several requirements of s 107(1)(c) should not be divorced from each other when interpreting the provision. The Court emphasised the importance of the claimant’s intention to seek work when deciding whether the requirements of the section were satisfied.

In a later decision Re VXL and Secretary, Department of Social Security (1990) 21 ALD 426 the AAT found the claimant had not taken “reasonable steps” to obtain work where he took no active steps during the relevant period to obtain work but simply received and read letters notifying him of his lack of success in previous employment applications made before the period in respect of which benefits were sought.

In a subsequent matter Re Tempest and Secretary, Department of Social Security (1996) 41 ALD 797, the AAT had to consider whether the applicant was qualified to receive a “Newstart” allowance under s 601 of the Act which embodies the same criteria as those set out in s 522. The applicant, in that case, was referred by the Commonwealth Employment Service to a job interview with a potential employer. He attended the interview and accepted an offer of employment for six weeks. However, it was a condition of the employment that he purchase a pair of special safety work boots. He could not afford, nor could he secure assistance to purchase, such boots. He therefore advised the potential employer that he could not take up the offer of employment. The delegate of the Secretary contended that the claimant had not complied with the activity test because he demonstrated an unwillingness to undertake suitable employment. The AAT reversed this decision and held that the applicant was willing to undertake suitable paid work.

To a large extent the above cases represent a “wilderness of single instances” and it is difficult to derive any coherent principles.

The findings of the AAT in the present case make it somewhat special. The finding that Mr Spencer did not seek, nor would he have taken up any position which would distract him from his political campaign, indicates that he devoted his efforts solely to obtaining a position within an extremely narrow field. There is only one State member for Coffs Harbour. Of itself, I do not think that this is sufficient to disqualify him from being actively engaged in seeking paid work. Nor do I consider that the work he sought could be classified as “not suitable”. There can be no suggestion in the present case that there was any impediment, inability, or obstacle to him performing work as a Member of State Parliament. However, that being said, in addition to the very narrow field of endeavour to which he confined himself, the Tribunal also found that there was not even a slight chance of success. Moreover, although he was “hopeful” of being elected, the AAT found he appreciated that his election was not a realistic goal.

In my view, the requirement in s 522 that a claimant actively seek paid work, calls for a claimant to make a genuine positive effort to secure work in relation to which the claimant has some realistic expectation of success and that there must be some objective prospect of success. The prospect of success need not be such as to support a conclusion that it was likely he would be successful. But it must have some real prospect in the sense that it should be more than fanciful, extremely remote or patently futile. This is especially so where the field of activity is limited to a very narrow field of work.

The obvious purpose of the job search allowance is to alleviate the hardship and distress suffered by unemployed persons who, despite genuine efforts, are realistically seeking but unable to find paid work. It is designed ultimately to provide the means to obtain or to return to employment. The section must, of course, be given a beneficial interpretation in favour of the claimant. However, it is difficult to perceive any reason why Parliament would pay an allowance to a person who, during the relevant period, exclusively confines his efforts to an extremely narrow area of work where there is not even a slight chance of success.

The above remarks must not be taken to suggest that before a claimant can qualify it is necessary to show that there was a likelihood of success in respect of applications made. In times of high unemployment, no doubt there will frequently be a large number of applicants (perhaps hundreds) who seek a few positions or perhaps a single position. In the case of any single claimant it may be difficult, if not impossible, to determine the claimant’s prospects as to success. Indeed, the prospects may even be highly unlikely. Nevertheless, it may well be the case that, looking at the totality of the efforts made, and the circumstances, the claimant should not be disqualified because the objective fact was that he or she was unlikely to secure the position and subjectively the claimant was aware of such unlikelihood.

In the Act the wording of the section was changed from that of corresponding provisions in earlier legislation. Normally, that might indicate a change in the intention of the legislature. However, given the terms of the Explanatory Memorandum and the result which would flow from accepting the submission advanced on behalf of Mr Spencer, I do not consider that s 522 has been satisfied in the present case. In my view, the totality of the facts as found by the AAT in the present case could not support a conclusion that Mr Spencer was actively seeking work. The provision cannot be read so widely. The AAT erred in its interpretation of s 522, in particular in its construction of the expression “actively seeking” work. There was therefore an error of law.

Ground Two - ignoring a  relevant consideration

The applicant submits that the AAT in reaching its decision failed to take its own findings of fact into account as to the likelihood of the applicant being successful. In my view this ground has not been made out. The findings were referred to. On a fair reading of the substance of the decision they were considered by the AAT. However, as indicated in the above consideration of Ground one, the AAT in effect misdirected itself as to the proper question because it misconstrued the statutory provision. It does not follow nor does this mean that the findings or relevant considerations were ignored.

Ground Three - Wednesbury unreasonableness

It follows from my conclusion in relation to Ground one that, given the AAT findings, and the totality of the circumstances, it was not open to the AAT to conclude that s 522 had been satisfied. This ground has been made out.

Ground Four - Failure to give reasons

This ground has not been made out. The AAT has set out its reasoning and its analysis of the evidence in considerable detail. The analysis refers to the relevant language of s 522 and refers to the finding which it made. It reached conclusions in relation to those findings. This is not a case where the parties were unable to perceive the rationale or basis of the decision. The very circumstance that the applicant is able to formulate grounds of appeal based on the reasons given, lends some support to the conclusion that the AAT reasons for decision are adequately set out.

Accordingly, I allow the appeal. I set aside the decision of the AAT. I remit the matter to the AAT for consideration in accordance with law. The applicant, quite properly, in my view, does not seek costs in the present proceedings, and therefore I make no order as to costs.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin

Associate:

Dated:            21 July 1997

Counsel for the Applicant:	Mr G M Elliott
Solicitor for the Applicant:	Australian Government Solicitor
Solicitor for the Respondent:	Legal Aid Commission of New South Wales
Date of Hearing:	30 June 1997
Date of Judgment:	21 July 1997