Supreme Caravans Pty Ltd v Pham

[2013] FWC 4766

[2013] FWC 4766

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Supreme Caravans Pty Ltd
v
Mr Hung Pham
(C2013/5106)

VICE PRESIDENT HATCHER SYDNEY, 17 JULY 2013

Application for a stay of order PR538813 of Commissioner Ryan at Melbourne on 10 July 2013 in matter number U2012/9893.

[1] Supreme Caravans Pty Ltd (the appellant) has filed an appeal, for which permission is required, under s.604 of the Fair Work Act 2009,against a decision 1 and orders2 of Commissioner Ryan issued on 10 July 2013. The orders were in the following terms:

“1. Pursuant to s.391(1) of the Fair Work Act 2009 (the Act) the Respondent, Supreme Caravans, shall reinstate the Applicant, Mr Hung Pham, to the position he was employed in immediately before his dismissal.

2. Pursuant to s.391(2) of the Act, Mr Pham’s employment with Supreme Caravans shall be taken as continuous from the date of dismissal to his reinstatement.

3. Pursuant to s.391 (3) and (4) of the Act, Supreme Caravans shall pay to Mr Pham, all remuneration, including superannuation, he would have earned from the date of dismissal to his reinstatement less an amount of $1,700.00, the amount calculated pursuant to s.391(4)(a) and (b).”

[2] It can be seen that the orders have, essentially two elements: a reinstatement order, with an associated order for continuity of employment, and a back-pay order. The appellant seeks a stay of all those orders pending the hearing and determination of its appeal.

[3] The history of this matter requires a short recitation. Mr Hung Pham was dismissed from his employment by the appellant on 3 October 2012, for the reason that he had allegedly during working time taken a piece of checker plate, used company machinery upon it for a personal project, and then removed it from the company’s premises. Mr Pham filed an unfair dismissal application, which was the subject of a hearing before Commissioner Ryan on 7 March 2013. At the end of that hearing, the Commissioner issued on transcript an ex tempore decision in which he found that there was no valid reason for the dismissal of Mr Pham and that the dismissal was “harsh, unjust or unreasonable”. In his reasons, the Commissioner made a finding that Mr Pham had not intended to steal the piece of checker plate, but had only intended to take it once he had obtained permission to do so. He also found, in accordance with Mr Pham’s own admissions, that Mr Pham had used company equipment to work on the checker plate in company time for a short period, but that this misconduct did not justify dismissal. The Commissioner indicated that he would list the matter for a separate hearing on remedy. He issued a formal decision on 12 March 2013 incorporating his earlier reasons given in transcript. 3

[4] The appellant then filed an appeal against the Commissioner’s decision. In a decision issued on 22 May 2013 4, a Full Bench refused permission to appeal. The file was then returned to Commissioner Ryan to determine the outstanding question of remedy.

[5] The Commissioner conducted the hearing on remedy on 14 June 2013. At that hearing, the appellant attempted to adduce an extensive amount of evidence going to alleged misconduct on the part of Mr Pham. The Commissioner determined that most of that evidence would not be admitted. As earlier indicated, the Commissioner’s decision and orders as to remedy were issued on 10 July 2013.

[6] In the decision under appeal, the Commissioner dealt with contested evidence about whether a complaint lodged with the Police by the appellant concerning alleged theft by Mr Pham was going to lead to any action being taken by the Police which would render the restoration of the employment relationship impracticable. The Commissioner stated the following conclusions with respect to this matter:

“[29] The unsworn evidence of Mr Markovic is that he has made a complaint to the police and that he was advised by the police that they will be proceeding and will lodge formal charges against the Applicant. Against this is the sworn oral evidence of the Applicant where he identified that the police had contacted him and asked the Applicant to come and see them. The Applicant didn’t visit the police and they contacted a second time and “they said it’s not really important, but if we do want to speak with you, we will contact you again”. The Respondent didn’t challenge the truthfulness of this evidence from the Applicant.

[30] The submission made by Mr Addison for the Respondent that “should the police not charge, the company will pursue civil charges against Mr Pham” was a matter that was not contained in the filed written submissions of the Respondent nor was it contained in the witness statement of Mr Markovic. The submission on potential civil action has all the appearances of the Respondent trying, on the run, to bolster its case as to loss of trust and confidence.

[31] I have no doubt that Mr Markovic is maintaining his rage against the Applicant whilst these proceedings are underway even to the extent of introducing a threat to take civil action against the Applicant.

[32] Mr Markovic’s complaints of theft made to the police and his threat of civil action against the Applicant relate to items which only came to the attention of Mr Markovic through the open and honest evidence of the Applicant and in circumstances where the Applicant has given sworn evidence as to how those items came into his possession.

[33] It would appear from the Applicant’s evidence that the police are not pursuing the complaint made by Mr Markovic with the earnestness with which Mr Markovic attributes to the police.”

[7] Having considered the evidence of three of the appellant’s managers and supervisors that they no longer had trust and confidence in Mr Pham, the Commissioner came to the following ultimate conclusions concerning remedy:

“[37] In the circumstances where Mr Markovic is not directly supervising the Applicant but has two layers of supervision between the Applicant and himself I am of the very strong view that the expressed attitudes of Mr Karadulev and Mr Jacobs are no real impediment to the reestablishment of a productive and viable employment relationship between the Applicant and the Respondent. Mr Markovic’s complaint that “I would be forced to make sure that the supervisors spent considerable time monitoring him to ensure compliance with company rules” could, in all of the circumstances of this matter, be an initial positive move to overcome the degree of irrationality in Mr Markovic’s assessment of the level of trust and confidence between himself and the Applicant.

[38] The proven misconduct of the Applicant relates to using a company machine during work hours for personal benefit. This is not sufficient to prevent reinstatement being an appropriate remedy.

[39] Having considered all of the circumstances of this matter I am satisfied that reinstatement is appropriate.”

[8] The principles concerning the determination of stay applications in appeals are well-established. They are as stated in Edghill v Kellow-Faulkner Motors Pty Ltd 5:

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

[9] In respect of the first criterion, the Commission in determining a stay application must assess the strength of the appellant’s case without the benefit of hearing the appellant’s full argument and usually without the opportunity to undertake a full analysis of the case materials. For that reason it is necessarily a preliminary assessment only. The appellant’s notice of appeal contains six substantive grounds, and identifies five reasons why permission to appeal should be granted. At the hearing of its stay application, the appellant’s solicitor quite properly focused on two grounds. Firstly, the appellant submitted, the Commissioner’s decision not to admit most of the evidence which it wished to adduce at the hearing on remedy amounted to a denial of procedural fairness to the appellant and a constructive failure to exercise jurisdiction. I am not persuaded that this ground is sufficiently arguable that it has reasonable prospects of success.

[10] Secondly, the appellant submitted that the Commissioner erred in finding, in circumstances where “a police investigation is underway” and where the appellant had substantial grounds to challenge Mr Pham’s honesty, that a productive and viable relationship could be re-established such as to make reinstatement a practicable remedy. I do not assess this as being a strong argument at this point, but I think it is arguable and has reasonable prospects of success (including on the question of the grant of permission to appeal).

[11] As to the balance of convenience, the appellant submitted that the grant of a stay in an appeal against a reinstatement order was the “normal” or “usual” course. I reject this submission. It is always the case that an applicant for a stay, even of a reinstatement order, must positively satisfy the Commission that the balance of convenience favours the grant of a stay. That there is no prima facie position in favour of the stay of a reinstatement order was made clear by the Full Bench in Edwards v Telstra Corporation Limited 6:

“We only wish to note that previous Commission decisions have suggested that where the intervention of the Commission has imposed an obligation or duty on a party then prima facie the balance of convenience would favour a stay being granted. One reason why such an approach has been adopted is that the creation of a requirement to pay monies under an award which is subsequently quashed gives rise to the practical difficulty of recovering monies paid to what may be a large number of employees covered by the relevant award. It seems to us that the difference in approach to the granting of stay orders between that taken by the Commission and the general Courts arises from the fact that the Commission is generally making or varying awards which apply to a large number of employers and employees. The same problem does not arise in respect of an order under s.170CH which is directed at an individual applicant...

In our view previous statements about the prima facie position favouring the granting of a stay require reconsideration in the context of s.170CH orders providing for a remedy following a decision that a termination was harsh, unjust or unreasonable. In this regard we note that in Re Thiess Watkan's White Group and others [Print J0194, 14 November 1989 per Maddern P, Moore DP and Smith C] the Commission said:

.... These appeals are made on the basis that the result obtained by the FEDFA was obtained unfairly. Without canvassing the merits of the appellants' cases it appears there are issues that warrant fuller consideration by a Full Bench and that should occur, in our view, on the basis that the various orders and awards are stayed pending the hearing of these appeals. We reach this conclusion with the knowledge that the appeals will shortly be listed for hearing next month and are likely to be dealt with expeditiously. This factor is especially important in considering whether to stay the reinstatement order made by the Commissioner where employees' incomes are affected by the granting of such a stay. It may be that in a case where there is no apparently substantial challenge to the jurisdiction of the Commission to make an order for reinstatement, the Commission should be cautious about staying the operation of a reinstatement order even if an undertaking was given of the type given by the employer in these proceedings.”

[12] The appellant submitted that the reinstatement order should be stayed because, so far as it was concerned, the respondent was a dishonest person who had committed theft in the past and had breached occupational health and safety requirements. The problem with this submission is that the Commissioner made no findings to support those assertions. Nor was I directed to any evidence on the record which would permit me to make my own findings to that effect. The highest it gets in favour of the appellant is that the Commissioner found in his first decision that Mr Pham had undertaken a personal project in company time and using company equipment (for a short period), and that Mr Pham had voluntarily disclosed in his evidence that he had taken home pieces of metal on previous occasions with permission. Neither of these matters prevented the Commissioner from finding that there was no valid reason for Mr Pham’s dismissal and that the dismissal was harsh, unjust or unreasonable - findings which are not open to challenge in this appeal. The matters raised by the appellant amount to no more than the findings which the appellant wished that the Commissioner had made, on the basis of evidence it sought to adduce at the hearing on remedy but which was not admitted and is consequently not properly before me. That is not a proper foundation for the grant of a stay application.

[13] The appellant also relied upon the alleged police investigation into Mr Pham which was discussed in the Commissioner’s decision as earlier set out. Having regard to the Commissioner’s conclusions, and given that I was advised that there have been no further developments in this matter since the hearing on remedy occurred over a month ago, I am not inclined to attach any significant weight to this.

[14] The appellant further relied upon the evidence which was admitted by the Commissioner at the remedy hearing to the effect that three of its managers and supervisors did not have trust or confidence in Mr Pham. Even though that evidence must be characterised as subjective in nature, it must be given some weight in the context of a consideration of whether the employment relationship should be continued. However, there are two unusual features of this case which must also be given weight. The first is that, as earlier stated, this appeal involves a challenge to remedy only, so that it is necessarily a starting premise for my consideration of this stay application that there was no valid reason for Mr Pham’s dismissal and that his dismissal was, to use the general rubric, unfair. The second is that it was a fact agreed between the parties that, in accordance with the Commissioner’s order, Mr Pham actually returned to work on 12 July 2013. The grant of a stay order would therefore change what is now the status quo. There was no evidence of any difficulty associated with Mr Pham’s return to work (beyond a contested assertion from the bar table that Mr Pham was under “close supervision”), although of course only a few days have passed since this occurred.

[15] I initially considered that a stay of the reinstatement order might be granted on the condition that the appellant be required to pay Mr Pham the wages he would otherwise have earned had he stayed in employment, pending the hearing and determination of the appeal. This would give him the benefit of income over the interim period, in circumstances where the evidence before Commissioner Ryan demonstrated that he had suffered financial and personal hardship because of a lack of income resulting from his dismissal. However, as Mr Pham’s representative properly reminded me, such an order would deprive the respondent of the benefit of actual employment - something he has substantially been denied since he was dismissed. I accept that the capacity to work in one’s chosen occupation has an intrinsic value to most individuals which is separate and distinct from the benefit of the remuneration received for the performance of such work. In Blackadder v Ramsey Butchering Services Pty Ltd 7 Kirby J described this as “the satisfaction of employment, the feeling of self-worth that it can generate and the maintenance of ... skills to which their exercise would contribute”. In the context of an application to stay a reinstatement order, this is a matter which must be accounted for at least to some degree in the weighing of the balance of convenience.

[16] Ultimately, I have not positively been satisfied that the balance of convenience favours a stay of the reinstatement order. I will not therefore grant the appellant’s application in this respect at this time. However, I will grant the appellant liberty to apply to renew its application for a stay of the reinstatement order if some tangible difficulty arises with respect to Mr Pham’s continuing employment prior to the hearing and determination of the appeal.

[17] With respect to the order for back-pay, I am persuaded that the balance of convenience favours the grant of a stay. The amount required to be paid, although not yet quantified, is likely to be reasonably substantial. Mr Pham’s financial hardship, to which I have earlier referred, raises a question as to his capacity to repay that amount if a stay is not granted and the appellant’s appeal is ultimately successful. The stay will be subject to the condition that the amount required to be paid is to be quantified and deposited by the appellant into an interest-bearing account pending the hearing and determination of the appeal. I will issue a separate order 8 to this effect.

VICE PRESIDENT

Appearances:

M. Addison, Solicitor, for the Appellant

J. Maloney for the Respondent

Hearing details:

2013.

Sydney:

16, July

 1   [2013] FWC 4561

 2   PR538813

 3   [2013] FWC 1559

 4   [2013] FWCFB 3016

 5 [2000] AIRC 785, Print S2639 at [55]

 6 [1998] AIRC 679, Print Q2467

 7 (2005) 221 CLR 539 at 549 [32]

 8   PR539042

Printed by authority of the Commonwealth Government Printer

<Price code C, PR539019 >