The Castaway Paper Products Co Pty Ltd v Saso Miloskovski
[2024] FWCFB 195
•28 MARCH 2024
| [2024] FWCFB 195 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
The Castaway Paper Products Co Pty Ltd
v
Saso Miloskovski
(C2024/35)
| VICE PRESIDENT ASBURY | BRISBANE, 28 MARCH 2024 |
Appeal against decision [[2023] FWC 3462] of Commissioner Crawford at Sydney on 22 December 2023 in matter number U2023/6231.
Background and outcome
The Castaway Paper Products Co Pty Ltd (the Appellant/Castaway Paper) has lodged an appeal under s. 604 of the Fair Work Act 2009 (the Act), for which permission is required, against a decision of Commissioner Crawford issued on 22 December 2023[1] (Decision).
Mr Miloskovski (the Respondent/Mr Miloskovski) commenced employment with Castaway Paper on 16 August 2010 as a machine operator working in the industry of manufacturing paper products and packaging. On 28 June 2023, he was dismissed for serious misconduct and whilst the Commissioner considered there had been a valid reason for Mr Miloskovski’s dismissal, he decided that Mr Miloskovski’s conduct did not warrant summary dismissal. The Commissioner considered reinstatement inappropriate and ordered an award of compensation.
The appeal was lodged on 4 January 2024. In the Notice of Appeal (Notice), Castaway Paper sought a stay of the order made by the Commissioner, which was granted by consent of the parties on 12 January 2024, pending the determination of the appeal.[2]
The appeal was listed for hearing on 13 March 2024 in relation to both permission to appeal and the merits. The parties were self-represented.
For the reasons that follow, we have decided it is not in the public interest to grant Castaway Paper’s application for permission to appeal. Permission to appeal is therefore refused and the stay order[3] issued on 12 January 2024 is set aside.
Permission to appeal
The Decision subject to appeal was made under Part 3-2 – Unfair Dismissal of the Act. Section 400(1) of the Act provides that permission to appeal must not be granted from a decision made under Part 3-2 unless the Commission considers that it is in the public interest to do so. Therefore, the fact that the Member at first instance made an error is not necessarily a sufficient basis to grant permission to appeal.[4]
In unfair dismissal matters, appeals on a question of fact can only be made on the ground that the decision involved a ‘significant error of fact’ (s. 400(2)). Section 400 of the Act manifests an intention that the threshold for a grant of permission to appeal is higher in respect of unfair dismissal appeals than the threshold pertaining to appeals generally. It follows that the test set out in s. 400 has been described as ‘a stringent one’.[5] To be characterised as significant, a factual error must vitiate the ultimate exercise of discretion.[6] In a misconduct case, a significant fact is foundational to a conclusion in relation to whether misconduct took place.[7]
The decision under appeal is of a discretionary nature. Usually, such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. It is not open to an appeal bench to substitute its view on the matters that fell for determination before the Commissioner, in the absence of error of an appealable nature in the decision at first instance.
The task of assessing whether the public interest test is met is discretionary and involves a broad value judgment. The public interest might be attracted where:
a) a matter raises issues of importance and general application;
b) there is a diversity of decisions at first instance so that guidance from an appellate court is required;
c) the decision at first instance manifests an injustice;
d) the result is counter intuitive; or
e) the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.[8]
Decision under appeal
Turning to the Decision, having determined that Mr Miloskovski was protected from unfair dismissal at paragraph [29] of the Decision, the Commissioner summarised his findings as follows:
(i)Mr Miloskovski was issued with a written warning on 21 February 2023 for breaching Castaway Paper’s policy regarding the use of mobile phones in the workplace.
(ii)Mr Miloskovski was late to return from his lunch break on 23 June 2023 and did not have a reasonable excuse for being late.
(iii)Mr Miloskovski was initially holding his phone when he returned to the factory floor, but he had put it away by the time he commenced working on the machinery.
(iv)A discussion occurred between Mr Miloskovski, Mr Scaccabarrozzi and Mr Erler after Mr Miloskovski returned from his lunch break. Mr Miloskovski was reprimanded for being late and told he needed to attend a meeting with Mr Camp and his supervisors later that afternoon. The discussion upset Mr Miloskovski and an argument of some degree occurred between Mr Miloskovski and Mr Scaccabarrozzi. Having viewed the video footage, I do not consider either party deliberately attempted to threaten the other party physically.
(v)Mr Miloskovski did not comply with several directions from Mr Scaccabarrozzi to return to his work-station and instead spoke to other co- workers about the conflict and also about whether he could bring a support person to the meeting with Mr Camp and his supervisors. This conduct meant less productive work was performed by Mr Miloskovski and the other employees he spoke with, albeit for a reasonably brief period.
(vi)Mr Miloskovski had no documented performance or conduct issues prior to 2023 and he was recognized as an experienced and competent employee.
(vii)A meeting was held on 23 June 2023 between Mr Miloskovski, Mr Camp, Mr Scaccabarrozzi and Mr Erler to discuss Mr Miloskovski returning late from his lunch break. During this meeting, Mr Miloskovski raised concerns about Mr Scaccabarrozzi’s behaviour towards him earlier that day and alleged he felt threatened by Mr Scaccabarrozzi. Mr Miloskovski requested access to the video footage so he could review what had occurred. Mr Miloskovski was permitted to have a support person present at this meeting.
(viii)Castaway Paper did not intend to dismiss Mr Miloskovski for returning late from his lunch break but may have imposed some other punishment.
(ix)Mr Camp and others reviewed the footage of the events on the factory floor later that day. They did not identify any threatening conduct from Mr Scaccabarrozzi, but did observe:
·Mr Miloskovski holding his phone on the factory floor in breach of
company policy;
·Mr Miloskovski was later than he had initially claimed; and
·Mr Miloskovski was away from his machine for a total of around 75 minutes comprising his break and the time he was talking to Mr Scaccabarrozzi and other employees.
(x)After becoming aware of the further issues, Mr Camp arranged a further meeting with Mr Miloskovski on 26 June 2023. Mr Miloskovski attended with a support person. During this meeting, Mr Camp and others outlined the further issues they had identified with Mr Miloskovski’s behaviour on 23 June 2023 after reviewing the video footage. Mr Camp and others also explained that the footage did not indicate Mr Scaccabarrozzi had physically threatened Mr Miloskovski.
(xi)Mr Miloskovski was not shown the video footage, despite his earlier request, and did not see the footage until it was filed by Castaway Paper as part of this case.
(xii)On 28 June 2023, Mr Miloskovski attended a further meeting with Mr Camp and others where he was summarily dismissed and provided with a termination letter. Mr Miloskovski did not bring a support person, but this was offered to him.
At paragraphs [30]–[32] of the Decision, the Commissioner addressed the weight to be accorded to a prior warning, whether there was sufficient evidence that Castaway Paper was looking for reasons to dismiss Mr Miloskovski, and whether Mr Scaccabarrozzi had engaged in physically intimidating conduct toward Mr Miloskovski.
The Commissioner found no weight could be attributed to the warning of 17 January 2023, that there was insufficient evidence to support the proposition that Castaway Paper was looking for reasons to dismiss Mr Miloskovski and that whilst Mr Miloskovski had accused Mr Scaccabarrozzi of threatening behaviour, the evidence did not support such a finding.
At paragraphs [33]–[36] of the Decision, in relation to whether there was a valid reason for dismissal, the Commissioner found there was a valid reason for Mr Miloskovski’s dismissal, stating that it was the combined conduct that Mr Miloskovski had engaged in on 23 June 2023 that provided the valid reason. That combined conduct included Mr Miloskovski having carried his mobile phone on the factory floor, being late in returning from his lunch break and non-compliance with directions from his supervisor.
At paragraphs [38] and [41] respectively, the Commissioner concluded that prior to any decision to terminate his employment, Mr Miloskovski was notified of the reasons for his dismissal and was provided with an opportunity to respond to such reasons. The Commissioner concluded at paragraph [43] that Mr Miloskovski was offered an opportunity to bring a support person to the disciplinary meeting and as Mr Miloskovski’s performance was not in issue, whether he was warned about unsatisfactory performance was not a relevant consideration.
At paragraphs [45] and [46], the Commissioner noted that whilst Castaway Paper was a reasonably small business and there was an absence of a dedicated human resources management manager, he considered the procedures followed in effecting the dismissal were generally appropriate and therefore concluded that the factors in ss. 387(f) and (g) of the Act, were neutral.
As was appropriate, the Commissioner identified at paragraphs [35] and [49] that the summary dismissal of Mr Miloskovski was a matter to be considered under s. 387(h) of the Act[9] and that a conclusion that a summary dismissal was disproportionate to the gravity of the misconduct may support that the dismissal was harsh.[10]
In relation to any other relevant matters in determining whether the dismissal was harsh, unjust, or unreasonable, at paragraphs [48]–[51] the Commissioner considered: (a) Mr Miloskovski’s length of service (13 years); (b) his unblemished service record (with the exception of the last six months of his employment), (c) Mr Miloskovski spoke English as a second language; (d) the failure to provide Mr Miloskovski with an opportunity to view the video footage; and (e) Mr Miloskovski had been summarily dismissed.
Regarding the summary dismissal of Mr Miloskovski, at paragraph [49], the Commissioner found that Mr Miloskovski’s conduct on 23 June 2023 did not justify his summary dismissal, noting at paragraph [54] that whilst he had found a valid reason for dismissal and that procedural fairness had generally been provided to Mr Miloskovski, the other factors identified by the Commissioner rendered the dismissal harsh in all the circumstances.
Turning to remedy, at paragraph [58], the Commissioner concluded that reinstatement was inappropriate given Mr Miloskovski did not seek that remedy, but considered, at paragraph [61], that an order for payment of compensation was warranted.
At paragraph [62], the Commissioner identified the circumstances to be taken into account when determining an amount of compensation, and at paragraphs [64]–[83] he considered those circumstances. Regarding the Commissioner’s consideration of ss. 392(2)(a), (b), and (d), we consider he adopted an orthodox approach.
At paragraph [64]–[65], the Commissioner reasoned that an order for compensation would not have any significant effect on the Castaway Paper’s viability, and at paragraph [67] the Commissioner expressed a view that Mr Miloskovski’s length of service may support increasing the amount of compensation ordered. With respect to mitigating loss, the Commissioner found at paragraph [73] that whilst Mr Miloskovski had failed to mitigate his loss, a deduction was unwarranted given that Mr Miloskovski had not fully recovered from his injuries for which he was in receipt of motor vehicle insurance payments.
Regarding the Commissioner’s consideration of s. 392(2)(c) of the Act, at paragraph [69] of the Decision, the Commissioner outlined his finding that Mr Miloskovski, but for his dismissal, would have remained in the employment of Castaway Paper for the period of 28 June 2023 until 28 December 2023, as follows:
“[69] Mr Miloskovski worked at Castaway Paper for over 13 years and indicated he planned to work there until retirement. However, there is evidence of him having increasing issues with superiors during 2023. If Mr Miloskovski was not dismissed on 28 June 2023, a lesser punishment would likely have been imposed. Given Mr Miloskovski was already on a written warning, I suspect a final written warning would have been issued. I consider it reasonably likely Mr Miloskovski would have continued clashing with superiors after 28 June 2023 and that his employment was likely to end within approximately the next six months. I find Mr Miloskovski’s employment was likely to continue until 28 December 2023.”
At paragraph [86], the Commissioner considered the first step in the ‘Sprigg formula’ as articulated in the decision of Sprigg v Paul’s Licenced Festival Supermarkets (Sprigg)[11] and later in the Bowden v Ottrey Homes Cobram and District Retirement Villages,[12] and reiterated that Mr Miloskovski would have remained in employment until 28 December 2023 (for six months).
At paragraph [94] of the Decision, the Commissioner acknowledged he had found there was a valid reason for Mr Miloskovski’s dismissal and reduced the compensatory amount by 5%, and at paragraph [100] the Commissioner observed that given he had found Mr Miloskovski should not have been summarily dismissed, the effect of the order he was proposing was such that Mr Miloskovski would not receive an amount of compensation equivalent to payment in lieu of notice which, in the Commissioner’s view, Mr Miloskovski should have received.
In respect of the remuneration earned by Mr Miloskovski from employment or other work during the period between his dismissal and the making of the order for compensation, the Commissioner grappled with the somewhat unusual circumstances where 80% of Mr Miloskovski’s regular wage with Castaway Paper had been paid since his dismissal. At paragraph [79], the Commissioner found, on balance, that the third party insurance payments made to Mr Miloskovski constituted ‘remuneration’ from ‘employment or other work’ for the purposes of s. 392 of the Act. The Commissioner considered the compulsory third party insurance payments closer to workers’ compensation payment than social security payments. The Commissioner therefore deducted from the compensation, the amount of $24,788.93 paid to Mr Miloskovski by way of compulsory third party insurance. Having observed that amount fell shy of what Mr Miloskovski would have received had he been dismissed with notice, the Commissioner increased the compensatory amount to $10,000.00 gross plus $1,100.00 in superannuation.
Appeal grounds
In short, Castaway Paper advances several grounds in the Notice most of which appear to be premised on the contention that the Commissioner failed to consider and make findings about, or otherwise consider, significant aspects of the evidence upon which Castaway Paper relied in its case. The grounds can be distilled in the following terms:
1. the Commissioner did not consider Mr Miloskovski’s previous insubordination and refusal to work which had formed part of Mr Miloskovski’s attitudinal problems and were relied upon by Castaway Paper as reasons for Mr Miloskovski’s dismissal. Instead, the Commissioner’s Decision was mainly based on video recordings;
2. the Commissioner did not accord due weight to Mr Miloskovski’s false statements that he was about to suffer physical abuse and harassment from his supervisor, and the Commissioner failed to consider that Mr Miloskovski produced fraudulent documents;
3. the Commissioner considered the periods in which Mr Miloskovski distracted colleagues and took them out of the production line to be a reasonably brief period when the evidence presented suggested otherwise;
4. at paragraph [29] of the Decision, the Commissioner stated that Mr Miloskovski had no performance issues prior to 2023 and in doing so failed to evaluate the evidence in light of the period before and after the ‘accident’;
5. the Commissioner made an erroneous finding when accepting that the procedure adopted in respect of the dismissal was correct but that Mr Miloskovski’s conduct did not justify summary dismissal, when Mr Miloskovski had refused to carry out lawful and reasonable instructions consistent with the employment contract and had made false allegations;
6. the Commissioner gave undue weight to Mr Miloskovski’s 13 years of service when determining the dismissal was unfair, particularly given Mr Miloskovski’s misconduct, including returning late to work after lunch, using a mobile phone on premises (notwithstanding a prior warning for the same infringement), and distracting other employees; and
7. the Commissioner failed to consider in his assessment of whether Mr Miloskovski’s conduct constituted serious misconduct that Mr Miloskovski’s failure to follow lawful and reasonable instructions generated a risk of producing defective products, which required the closure of the afternoon shift due to quality issues.
Consideration
Before turning to a detailed examination of the grounds of appeal, we make the following observation. Notwithstanding the Commissioner’s Directions to the parties to file witness statements on 3 October 2023 and by the amended Directions issued on 23 November 2023, Castaway Paper did not do so. That Castaway Paper did not file witness statements appears to have provided sound basis for the Commissioner to identify Castaway’s Paper’s reasons for Mr Miloskovski’s summary dismissal by reference to the Form F3 in addition to the letter of termination. It was at all times open to the Commissioner to have adopted this approach in circumstances where evidence was not provided in the form of witness statements, in accordance with Directions.
Serious misconduct and harshness – s. 387(h)
As to the issues that have been raised on appeal, no issue appears to arise regarding the finding there was a valid reason for Mr Miloskovski’s dismissal, as detailed in the reasons at paragraph [36] of the Decision. The Notice appears to focus on a perceived failure by the Commissioner to fulsomely take into account Castaway Paper’s evidentiary case in respect of Mr Miloskovski’s summary dismissal.
The expression ‘summary dismissal’ has a reasonably well understood meaning at law, referring to a dismissal without notice arising from a breach of an essential term of the employment contract, a serious breach of a non-essential term of the contract, or conduct manifesting an intention not to be bound by the contract in the future on the part of the employee.[13] It is accepted that it is not the case that ‘serious misconduct’ operates as a fixed standard for the determination of the type of conduct by the employee which may warrant summary dismissal,[14] and that there is no rule of law that defines the degree of misconduct which would justify dismissal without notice, the touchstone being whether the conduct was of such a grave nature as to be repugnant to the employment relationship.[15]
An assessment of the degree of seriousness of misconduct which is found to constitute a valid reason for dismissal for the purposes of s. 387(a) will be a relevant matter under s. 387(h). A dismissal will be found to be harsh because of ‘its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted’.[16] It is well-established that a dismissal may be found to be harsh by reason of matters taken into account pursuant to s. 387(h), notwithstanding that there is a valid reason for dismissal. Matters include those raised in mitigation of misconduct which has been found to have occurred.[17]
As we have observed, the Commissioner correctly identified that the summary dismissal of Mr Miloskovski was a matter to be considered under s. 387(h) of the Act[18] and that a conclusion that a summary dismissal was disproportionate to the gravity of the misconduct may support that the dismissal was harsh.[19] In general terms, the Commissioner’s reasoning regarding the consideration of factors in ss 387(a) to (h) demonstrates the adoption of an established approach in which no error is to be found.
In relation to appeal ground one, Castaway Paper contends that the Commissioner premised his Decision mainly on video recordings and failed to consider Mr Miloskovski’s previous insubordination and refusal to work which had formed part of his attitudinal problems and were relied upon by Castaway Paper as reasons for Mr Miloskovski’s dismissal. Appeal grounds two, three, four, five and seven, similarly direct criticism at the Commissioner’s consideration of Mr Miloskovski’s misconduct, presumedly under the auspices of s. 387(h) of the Act.
Regarding the first appeal ground, Castaway relied on several incidences of purported insubordination.
The first was Mr Miloskovski’s purported misconduct on 17 January 2023. At paragraph [30] of the Decision, the Commissioner found that in respect of this alleged behaviour, it was not clear whether Mr Miloskovski was verbally warned about his failure to follow the directions provided on 17 January 2023. The Commissioner identified that the record of the verbal warning had not been shown to Mr Miloskovski at the time it was purportedly given, and Mr Miloskovski disputed its contents. That the finding made was that significant weight could not be afforded to the verbal warning, was, in our view, clearly correct. It is evident that the verbal warning was of little probative value given the aforementioned reasons and was, in any event, not relied upon by Castaway Paper at the time to justify Mr Miloskovski’s dismissal for serious misconduct.
The second example of insubordination was said to be detailed in emails dated 9 May 2023 and 11 May 2023 between Mark Senior, Production Supervisor, to James Camp. The Commissioner clearly had regard to such emails, marking them as Exhibit R 2 and referring to the same, at paragraph [13] of the Decision.
Those emails included an email from Mr Senior to James Camp dated 9 May 2023 time stamped 1:53 PM, found at page 185 of the Appeal Book (AB). The email detailed that Mr Senior had asked Mr Miloskovski to run the ‘2A’ for a period and Mr Miloskovski had questioned why, stated it was hard work and that Mr Senior should persist in getting ‘Amar’ to run it. Mr Miloskovski continued that he was always given hard jobs which he should not be doing as he was on light duties, to which Mr Senior is said to have informed Mr Miloskovski that he makes sure that he does not lift anything over his 5kg limit. Mr Senior advised Mr Camp that he informed Mr Miloskovski he was not discussing it further and instructed Mr Miloskovski to run the ‘2A’.
Castaway Paper refers further to an email dated 11 May 2023. The AB includes two such emails. First, an email dated 11 May 2023 time stamped 6:34 AM (AB, page 187), from Mr Senior to Mr Camp in which Mr Senior details that he held a discussion with Mr Miloskovski about going ‘onto the 2A to finish off the changeover and fine tune the 1Ply lunch’. Mr Senior advised Mr Camp that Mr Miloskovski said he was not capable to do the changeover and that Mr Senior would need to find another machine setter to do the job. The email reports that Mr Miloskovski had said to Mr Senior that he only wanted to stay on one machine and had provided details as to work he had done, which, in his view, had resulted in him having to go home and take tablets.
The second email of that date is from Mr Senior to Mr Camp (dated 11 May 2023 time stamped 1:43 PM (AB page 186)), in which Mr Senior sets out that Mr Miloskovski had raised an issue with ‘5A’ regarding the ‘switches mechanism on Line 1 on the 5A’. Mr Senior formed the view that someone of Mr Miloskovski’s skill level should be able to solve the problem and that Mr Miloskovski could have fixed the issue but chose not to.
It is evident from the materials before the Commissioner, that Mr Miloskovski had not been afforded a contemporaneous opportunity to respond to such purported insubordination, as detailed in those emails. Furthermore, Castaway Paper did not rely upon the emails as forming part of the reason for Mr Miloskovski’s dismissal at the time of terminating his employment. Whilst the letter of termination states that Mr Miloskovski ‘[c]omitted insubordination’, the insubordination referred to did not extend to the conduct purported in the emails sent between Mr Camp and Mr Senior. In our view, it was appropriate for the Commissioner to attribute no weight to the emails given their limited probative value.
The third example of insubordination was with respect to Mr Miloskovski’s repeated refusal to go to his workstation on 23 June 2023. At paragraph [29(v)] of the Decision, the Commissioner found that Mr Miloskovski ‘did not comply with several directions from Mr Scaccabarrozzi to return to his work-station and instead spoke to other co-workers about the conflict…’. That such conduct was considered by the Commissioner as significant is clear, when, at paragraph [36], the Commissioner finds a valid reason for Mr Miloskovski’s dismissal based, in part, on this non-compliance with the directions from a supervisor. However, it was nevertheless open to the Commissioner to find that Mr Miloskovski’s conduct on 23 June 2023, including his non-compliance with a supervisor’s direction, was conduct that was not sufficiently serious to warrant summary dismissal when regard was had to other relevant factors. We will detail why shortly.
Castaway Paper took issue with the Commissioner’s finding at paragraph [29(iii)] in respect of another example of Mr Miloskovski’s insubordination. Namely, the Commissioner’s finding that Mr Miloskovski had put his mobile phone away by the time he commenced working on machinery. According to Castaway Paper, the video footage showed Mr Miloskovski walking with the mobile phone in his right hand and looking at the mobile at 12:44:35 PM and from 12:44:40 PM to 12:44:43 PM. At paragraph [36] of the Decision, the Commissioner found that Mr Miloskovski had been previously warned in writing about using his mobile phone on the factory floor and he should have made sure he was not carrying his phone when he returned to the factory floor on 23 June 2023. Mr Miloskovski’s misconduct in this respect was considered by the Commissioner to be sufficiently serious to justify forming part of a valid reason for his dismissal, particularly when considered with Mr Miloskovski’s late return from lunch and other non-compliance with directions.
We observe, in the circumstances of the matter before him, the Commissioner found that there were mitigating factors which made the manner of the termination of employment without notice, as occurred, harsh. These factors included that Mr Miloskovski was summarily dismissed after 13 years of service in the same business, that Mr Miloskovski spoke English as a second language, his age, and his unblemished record for approximately the first 12 and a half years with Castaway Paper. The Commissioner also had regard to a shortcoming of the investigation (paragraph [51]), which we consider was open for him to do.
Turning to the factor that Mr Miloskovski spoke English as a second language,[20] Castaway Paper contended that the Commissioner’s assessment of Ms Miloskovski’s English skills was essentially misplaced and that Mr Miloskovski never had a problem speaking ‘fluid English’.[21] Castaway Paper’s submission was made in the context of contending that the Commissioner had minimised Mr Miloskovski’s misconduct when it came to evaluating whether a percentage reduction in compensation was warranted, not in respect of those factors considered under s. 387(h). However, insofar as the Commissioner considered that Mr Miloskovski spoke English as a second language and considered this relevant alongside Mr Miloskovski’s age, as a mitigating factor, we consider there was no error in the Commissioner’s approach.
Essentially, the Commissioner’s finding in relation to the mitigating circumstances and his conclusion that the termination of employment was harsh, was made after weighing that consideration against findings in relation to other matters arising from s. 387 of the Act, including his findings as to valid reason. We are satisfied that the Commissioner considered the incidences of subordination and made no error of fact. As such, his Decision in this respect, does not reflect a case of error, let alone significant error. Insofar as it is relevant, we also consider that the findings of mitigating circumstances appear to have been properly made based on the evidence before the Commissioner.
Regarding appeal ground two, namely the Commissioner’s purported failure to give due weight to Mr Miloskovski’s false allegation that he was about to suffer physical abuse and harassment by a supervisor, we are unable to conclude that the Commissioner erred in this respect and find the inferences relied upon by the Commissioner at arriving at his finding were reasonable in all circumstances. At paragraph [32] of his Decision, the Commissioner gave the following reason for his finding that the parties held differing perceptions concerning Mr Miloskovski’s assertion that Mr Scaccabarrozzi engaged in threatening behaviour:
“[32] I put the differing perceptions of the interaction down to human nature and the subjectivity that is often associate with interpreting another person’s behaviour.”
Castaway Paper also contended that Mr Miloskovski produced fraudulent documents which were not considered relevant to the determination of whether he engaged in serious misconduct. The contention appears premised on Mr Miloskovski’s certificates of capacity referring to him as a ‘mechanic’ instead of a ‘machine operator’. Castaway Paper asserts that it advised Mr Miloskovski to have his treating physician rectify the mistake, but the certificates of capacity continued to refer to him as a ‘mechanic’. Castaway Paper stated that it considered this a false statement. Whilst Castaway Paper may hold the view that Mr Miloskovski relied upon ‘fraudulent’ documents, such assertion appears to bear little to no relevance to the reasons relied upon by Castaway Paper to justify Mr Miloskovski’s summary dismissal as detailed in the letter of termination and the Form F3. We do not consider that the Commissioner erred by not putting weight on this matter.
Castaway Paper took issue with the Commissioner finding that Mr Miloskovski distracted his colleagues for a ‘reasonably brief period’. At paragraph [29(v)] of the Decision, the Commissioner refers to Mr Miloskovski, in addition to the other employees he spoke to, performing less productive work ‘albeit for a reasonably brief period’. The period in question appears to amount to 45 minutes as detailed in Castaway Paper’s submissions at first instance. At paragraph [45] of the Decision, the Commissioner addresses the loss of production issues arising from Mr Miloskovski’s ‘distraction’ by reference to the temporal relativity of the period of distraction as compared to Mr Miloskovski’s work history. In such circumstances, we are of the view it was open on the evidence for the Commissioner to consider the period was ‘reasonably brief’.
Appeal ground five effectively replicates the assertions relied upon at grounds one, two, and three, all of which have been considered and addressed in the aforementioned paragraphs. Appeal ground six essentially expresses Castaway Paper’s erroneous opinion regarding length of service and how it is to be considered under ‘other matters’ the Commission considers relevant under s. 387(h) of the Act. It is unnecessary to further address such ground, as it discloses no error and the ground is misconceived.
Appeal ground four of the Decision sets out to the effect that the Commissioner incorrectly found that Mr Miloskovski had no performance issues prior to 2023 and in doing so failed to evaluate the evidence in light of the period before and after the ‘accident’. However, Castaway Paper’s own evidence in respect of Mr Miloskovski’s performance predominately focused on the six months prior to his dismissal. Furthermore, the performance issues referred to by Castaway Paper, appeared to have had little bearing on the reasons Castaway Paper advanced to justify summarily dismissing Mr Miloskovski.
Briefly stated, we simply do not accept Castaway Paper’s submissions that the Decision under appeal contains a number of errors of fact. Furthermore, an error made concerning findings of fact, is required to be a significant error of fact. To be characterised as significant, a factual error must vitiate the ultimate exercise of discretion.[22] In a misconduct case, a significant fact is foundational to a conclusion in relation to whether misconduct took place.[23]
No such factual errors have been made. Regarding the failure to take into account a relevant consideration, this ground can only be made out if the decision maker fails to take into account a consideration which he or she was bound to take into account[24] and as such this caused the exercise of discretion to miscarry. That has not occurred.
Although the Commissioner found in favour of Mr Miloskovski and this is an understandably unpalatable outcome for Castaway Paper, Castaway Paper’s dissatisfaction with the factual findings and outcome is not of itself a proper basis of appeal where those findings of fact are supported by the evidence.
The Commissioner took an entirely orthodox approach to Mr Miloskovski’s application, analysed the evidence in detail, made carefully considered findings of fact, and took into account and considered the case advanced by Castaway Paper and Mr Miloskovski. The result in this respect does not manifest an injustice, nor is it counter-intuitive.
Remedy – compensation
The submissions filed in support of the Notice included additional grounds of appeal or discontent. It is well established that when determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal.[25]
While it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal, we have considered the grounds of appeal as set out in the Notice of appeal lodged by Castaway Paper, and as elaborated upon or supplemented by written submissions in support.
Despite the Notice appearing to be silent on the Commissioner’s consideration of remedy, Castaway Paper’s appeal submissions raised issues regarding the following matters pertaining to the award of compensation:
a) an error in the finding regarding of the anticipated period of employment;
b) an error in the amount deducted from the compensatory amount due to Mr Miloskovski’s misconduct; and
c) a failure to provide Castaway Paper with an opportunity to bring written evidence supporting Mr Miloskovski’s financial position.
In the Decision and with respect to remedy, the Commissioner set out the legislative provisions relevant to an award of compensation in addition to the relevant authorities. Having determined that reinstatement was not appropriate, the Commissioner determined that had Mr Miloskovski not been dismissed, it was reasonably likely his employment would have ended within the next six months. The compensatory amount was calculated on the basis of six months, and amounts were deducted in respect of payments Mr Miloskovski received pursuant to motor vehicle accident insurance and an amount on the account of Mr Miloskovski’s misconduct. Having observed that amount fell shy of what Mr Miloskovski would have received had he been dismissed with notice, the Commissioner increased the compensatory amount to $10,000.00 gross plus $1100.00 in superannuation.
In respect of the contentions set out above, we do not consider, should it have been suggested, that the Notice should be amended to include such contentions. We note that the Directions issued by the Commissioner required that parties make submissions in relation to remedy and that the Respondent had the opportunity to bring evidence about Mr Miloskovski’s financial position or any other matter relevant to compensation in the hearing at first instance, and did not do so. We are of the view, the contentions lack sufficient merit and raise no question of law, principle or general application, for the following reasons.
Anticipated period of employment
Turning first to the issue of compensation and the Commissioner’s finding in respect of the anticipated employment period.
The power to order compensation is a power to order compensation in lieu of reinstatement. The assessment that is undertaken in determining the amount of compensation is essentially an assessment of income that an unfairly dismissed employee would have earned with the employer had the employment continued for a period determined by the Commission, less income earned from other sources, contingencies, and other deductions.[26] The assessment of compensation looks forwards into a hypothetical future.[27] Also relevant are non-monetary considerations such as impact on viability of an employer’s enterprise, misconduct contributions and the statutory cap. In arriving at a final amount of compensation to be awarded, it is open to the Commission to consider any other matter that the Commission considers relevant. Above all, it is accepted that the overarching requirement is to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.[28]
At paragraph [36] of the Decision, the Commissioner found that there was a valid reason for Mr Miloskovski’s dismissal. At paragraph [49] of the Decision, the Commissioner identified factors which weighed toward the summary dismissal being harsh and concluded that Mr Miloskovski’s dismissal was unfair.
One potential outcome of a summary termination being disproportionate to the conduct in a case, is that the applicant may obtain an order for compensation reflecting the notice period she or he would have received, had they not had their employment terminated without notice.[29] The anticipated period of employment in such circumstances may be considered to be zero weeks and the period of notice not served or paid, being a matter connected with the length of service, will warrant consideration under either s. 392(2)(b) or s. 392(2)(g) of the Act.[30]
However, an assessment of the anticipated period under s. 392(2)(c) ultimately involves elements of speculation and conjecture since it is necessarily based on a counter-factual scenario and requires the exercise of an evaluative objective judgment. This is a matter of discretion and we see no error in the Commissioner’s approach. We are, therefore, unpersuaded that Castaway Paper has demonstrated any reasonably arguable case of appealable error in the Commissioner’s assessment in this respect, and are of the view that if Castaway Paper did so demonstrate, such error would not impact the compensatory amount that the Commissioner otherwise ordered.
To explain further, at paragraph [99] of the Decision, the Commissioner concluded that the application of the ‘Sprigg’ formula had resulted in an outcome where Mr Miloskovski would be awarded compensation of $6,122.86 plus superannuation, which was $673.51 at the current rate of 11%. The Commissioner concluded that this amount equated to less than five weeks of wages for Mr Miloskovski plus superannuation. At paragraph [100], the Commissioner stated that given Mr Miloskovski should not have been summarily dismissed the effect of the proposed order would be that Mr Miloskovski would not receive that payment in lieu of notice that the Commissioner considered he should have been paid.
Essentially, the Commissioner had identified that the strict application of the approach set out in Sprigg[31] and endorsed in subsequent decisions, had yielded an order that Mr Miloskovski be paid compensation of an amount that was less than he would otherwise have received, if paid for his notice period. As has been said before, ‘Sprigg is a useful servant, but is not to be applied in a rigid determinative manner’.[32] In deciding the amount of a compensation order, the Act directs that the Commission ‘must take into account all of the circumstances of the case’ including the particular matters set out at ss. 392(2)(a) to (g).
That the Commissioner considered the compensatory amount too low in all the circumstances was grounded upon well-founded reasons as expressed at paragraphs [99]–[101]. We see no error in the amount arrived at.
While Castaway Paper pressed that it disagreed with how the Commissioner considered payments or premiums from compulsory third party insurance payments, mere disagreement is not the articulation of a ground of appealable error. In any event, the Commissioner’s characterisation of such payments ultimately favoured Castaway Paper.
Deduction for misconduct
The totality of the Commissioner’s assessment of the appropriate reduction for misconduct was as follows:
“[93] If I am satisfied that misconduct of Mr Miloskovski contributed to the employer’s decision to dismiss, I am obliged by s.392(3) of the FW Act to reduce the amount I would otherwise order by an appropriate amount on account of the misconduct.
[94] Given I have found there was a valid reason for dismissal based on Mr Miloskovski’s misconduct, I will reduce the compensation amount by 5%. That leaves a figure of $6,122.86 plus superannuation.”
Section 392(3) of the Act provides:
“If the FWC is satisfied that misconduct of a person contributed to the employer's decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct (emphasis added).”
Two relevant considerations arise from the terms of the provision. Firstly, the specific use of the term ‘misconduct’, encompasses misconduct of such a nature as to have justified summary dismissal and conduct which could not be so described. As a Full Bench of the Commission observed in Sharp v BCS Infrastructure Support Pty Limited[33]:
“Section 392(3) requires the Commission, in relation to the award of compensation for an unfair dismissal, to reduce the amount that it would otherwise order by an appropriate amount where it is “satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person”. However, it is clear that conduct may constitute “misconduct” for the purpose of s.392(3) without necessarily being ‘serious misconduct’.”[34]
Secondly, the provision requires the Commission to reduce the amount of compensation it would otherwise order by an appropriate amount, on account of misconduct, if satisfied that the misconduct contributed to the employer’s decision to dismiss.[35]
Having made the finding that the Respondent’s misconduct contributed to the Appellant’s decision to dismiss the Respondent, the decision of the Commissioner as to the reduction of the compensatory amount because of misconduct, was a discretionary decision and a conclusion, on the evidence, he was entitled to draw. We see no error in the percentage reduction arrived at. Whilst Castaway Papers has referred the Full Bench to decisions where greater reductions were made because of misconduct, each case will turn on its own facts and as such does not provide guidance as to the appropriate amount of reduction warranted in a particular case.
Effect of the order on the viability of the employer’s enterprise
As we have observed, on 23 November 2023, the Commissioner issued amended directions that required the parties to file materials in the lead up to the hearing at first instance. Those materials included submissions, witness statements and any documents referred to in the witness statements. Those same directions set out that Castaway Paper’s materials (that is the company’s materials) were to respond to the unfair dismissal application including the remedy sought. Those same directions provided a hyperlink to the ‘Unfair dismissals bench book, which at pages 210 to 211, address s. 392(2)(a) of the Act, stating:
“The employer must ‘present evidence and/or argument as to the financial situation’ of the business and ‘the likely effect that an order for compensation’ will have on the viability of the business.”[36]
At paragraph [64] and [65] of the Decision, the Commissioner effectively states he alerted Castaway Paper to the issue of the effect of the order on the viability of Castaway Paper’s business. Castaway Paper contends that it was not requested to bring written evidence supporting Castaway Paper’s financial position. The statement is incorrect. Castaway Paper had, as early as the first directions issued on 3 October 2023, been placed on notice of the requirement to file submissions, witness statements and documents in response to the remedy sought by Mr Miloskovski. That direction was reiterated in the amended directions issued on 23 November 2023. Insofar as an assertion is levelled that the Commissioner failed to afford procedural fairness with respect to providing Castaway Paper an opportunity to bring on evidence in support of the effect of an order, it cannot be sustained.
Conclusion
We are not persuaded that any of the matters raised by Castaway Paper justify the grant of permission to appeal or enliven the public interest. In this regard, we are not satisfied that the appeal raises any issue of importance or general application, nor does it identify any relevant diversity of decisions at first instance. We do not consider that it is arguable that the decision of the Commissioner manifests an injustice, or that the result is counterintuitive or unjust. The legal principles applied are not disharmonious with other authorities dealing with similar matters.
As we are not satisfied that the grant of permission to appeal would be in the public interest, permission to appeal must therefore be refused in accordance with s. 400(1) of the Act.
VICE PRESIDENT
Appearances:
G Scaccabarrozzi and J Camp for the Appellant.
S Miloskovski, Respondent.
Hearing details:
2024.
Sydney:
March 13.
[1] Miloskovski v The Castaway Paper Products Co Pty Ltd[2023] FWC 3462 (Decision).
[2] The Castaway Paper Products Co Pty Ltd v Miloskovski[2024] FWC 83.
[3] PR770159.
[4] Wan v AIRC [2001] FC 1803, [30].
[5] Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78, [43], Buchanan J (with whom Marshall and Cowdroy JJ agreed).
[6] Gelagotis v Esso Australia Pty Ltd T/A Esso[2018] FWCFB 6092 (Gelagotis).
[7] Ibid [43].
[8] GlaxoSmithKline Australia Pty Ltd v Makin (2010) 197 IR 266, [24]–[27]; Gelagotis at [43].
[9] Grandbridge Ltd v Wiburd [2017] FWCFB 6732, [27] (Grandbridge).
[10] Potter v WorkCover Corporation (2004) 133 IR 458, 473 [55] (Potter).
[11] (1998) 88 IR 21.
[12] (2013) 229 IR 6.
[13] Grandbridge (n 9) [27].
[14] See Rankin v Marine Power International Pty Ltd (2001) 107 IR 117.
[15] Ibid; Grandbridge (n 9) [28]
[16] Byrne v Australian Airlines Ltd [1995] HCA 24, 185 CLR 410, 465 per McHugh and Gummow JJ.
[17] Australian National University v Mr Scott Morrison[2022] FWCFB 83, [48].
[18] Grandbridge (n 9) [27]
[19] Potter (n 10) 4733 [55].
[20] Decision (n 1) [50].
[21] Appellant’s Outline of Submissions, [8].
[22] Gelagotis v Esso Australia Pty Ltd T/A Esso [2018] FWCFB 6092 at [43].
[23] Ibid at [43].
[24] Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 (Peko-Wallsend).
[25] Johnson v Water Corporation, The Trustee for DFP Business Trust T/A DFP Recruitment Services [2024] FWCFB 126. Support for that proposition is also found in a decision of the Full Court of the Federal Court of Australia in Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]. Paragraph [82] of that decision in turn referred, with clear approval, to paragraphs [9]-[10] of an earlier Full Court decision in Waters v Commonwealth (Australian Taxation Office) [2015] FCAFC 46.
[26] XL Express (Personnel) Pty Ltd v Biffen[2017] FWCFB 5441, [35] (Biffen).
[27] Ibid [35].
[28] Smith v Moore Paragon Australia Ltd (2004) 130 IR 446, [32].
[29] Johnson v Northwest Supermarkets Pty Ltd[2017] FWCFB 3897.
[30] Double N Equipment Hire Pty Ltd [2016] FWCFB 7206.
[31] Hanson Construction Materials Pty Ltd v Darren Pericich [2018] FWCFB 5960.
[32] Ibid [39].
[33] [2015] FWCFB 1033.
[34] Ibid at [33].
[35] Butterfly Systems Pty Ltd v Eduard Sergeev[2021] FWCFB 18, [35].
[36] D.A. Moore v Highpace Pty Ltd Print Q0871 (AIRCFB, Boulton J, Watson SDP, Whelan C, 18 May 1998).
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