SOCIAL SECURITY - pensions, benefits and allowances - Newstart Allowance - breach of activity test - offer of suitable employment - only available to work on a part-time basis -relevance of Naval Reserve commitments and other part-time employment - decision affirmed

Social Security Act 1991 ss 593(1), 601(1), 601(2A), 630(1), 630(2), 644AA(1), 644AE(2)

Defence Reserve Service (Protection) Act 2001 s 15, Division 3

Administrative Appeals Tribunal Act 1975 s 43

Mr James Atkinson (the applicant) is a member of the Navy Reserve (the Reserve). He is a leading seaman. His particular role in the Reserve is as a musician.

He has been a recipient of Newstart Allowance for some years, having last had full-time employment in 1987/1988. Departmental records indicate he has been a recipient of Newstart Allowance since 1999.

The applicant's job network provider arranged for the applicant to have an interview with a prospective employer with a view to possible employment as a console operator. That employer reported to the job network provider that the applicant had indicated that he was unavailable for full-time work because of other commitments.

The respondent (the Department) determined that the applicant had breached the activity test in June 2005 in that he had refused or failed to take up an offer of suitable employment. This was a first breach and a penalty of an 18 percent rate reduction was applied to his Newstart Allowance from 1 July 2005 until 29 December 2005.

The applicant sought review of that decision by the Social Security Appeals Tribunal (the SSAT). On 18 April 2006 the SSAT affirmed the decision under review. The applicant seeks a review of the SSAT decision by this Tribunal.

The applicable legislation is found in the Social Security Act 1991 (the Act), and the Defence Reserve Service (Protection) Act 2001 (the DRSP Act).

Section 593(1) of the Act at the relevant time provided:

"593(1)Subject to sections 596, 596A, 597 and 598, 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; or

(b) in the case of a person to whom subparagraph (a)(i) applies--throughout the period, or for each period within the period, the person:

(i) satisfies the activity test; or

(ii) ..."

Section 601 of the Act at the relevant time provided:

"601(1) Subject to subsections (1A) and (5), 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; and

(b) willing to undertake;

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

...

601(2A)Subject to subsections (2AA) and (2AB), 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 and no training will be provided by the employer; or

(b) it has been established that there is medical evidence that 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) the work would require enlistment in the Defence Force or the Reserves; or

(i) the work requires the person to move from a home in a place to a home in another place; or

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

Sections 630(1) and (2) of the Act at the relevant time provided:

"630(1) If a person has refused or failed, without reasonable excuse, to accept a suitable offer of employment (the failure), a newstart allowance is not payable to the person.

630(2) If a newstart allowance becomes payable to the person after the time it ceases to be payable under subsection (1), then:

(a) if the failure is the person's first or second activity test breach in the 2 years immediately before the day after the failure--an activity test breach rate reduction period applies to the person; or

(b) if the failure is the person's third or subsequent activity test breach in the 2 years immediately before the day after the failure--an activity test non-payment period applies to the person."

Section 644AA(1) of the Act at the relevant time provided:

"644AA(1) If an activity test breach rate reduction period applies to a person under this Part, the period applicable to the person is 26 weeks."

Section 644AE(2) of the Act at the relevant time provided:

"644AE(2) A person's rate reduction amount is worked out as follows:

(a) if the activity test breach is the person's first breach in the 2 year period:

(b) if the activity test breach is the person's second breach in the 2 year period:

The DRSP Act makes it unlawful to refuse to give work to a person on the ground that they are rendering or might in the future render defence service. The relevant provisions are found in s 15 and Division 3 of the DRSP Act.

The applicant does not raise any issue with the suitability of the particular paid work for which he was being interviewed namely the position of a console operator.

The issues to be determined in this case are:

•

was the applicant in breach of s 601(1) of the Act in that he was not actively seeking and willing to undertake paid work during June 2005; and

•

did the applicant breach the activity test in that he refused or failed to accept, without reasonable excuse, an offer of suitable employment?

It is common ground that if there has been a breach of the activity test, it is a first breach and the appropriate penalty has been applied.

The applicant represented himself at the hearing. He provided the Tribunal with a letter (Exhibit A1) from the Chief Petty Officer, Navy Headquarters, Keswick Barracks, confirming that the applicant was required to assist in Reserve activities in May 2005 for 6 days and in June 2005 for 8.5 days.

The applicant explained to the Tribunal that he works part-time in a newsagency, usually on a Saturday and sometimes on a weekday. He has been a member of the Reserve for many years. His Reserve training occurs generally on a Tuesday night between 7:30 and 10:30pm. Because of his particular role as a musician with the Reserve, he sometimes has additional weekend engagements and he is sometimes required to travel outside Adelaide. Reserve commitments can sometimes take as much as 10 to 12 days per month.

He acknowledged that his job network provider arranged for him to be interviewed in late May 2005 for a position as a console operator with Peregrine Corporation. He has done this sort of work before and it was suitable work for him He recalls receiving a call from a person by the name of "Denis". He thinks it likely that he told Denis that he could only work on a part-time basis because of other commitments. He did not specifically outline those commitments to that person. These commitments were in fact his impending Reserve commitments, including a commitment to travel interstate for a number of days in June of 2005.

The applicant did not dispute the contents of the witness statements of Mr Simon Griffin (Exhibit R2) or Mr Denis Atkinson (Exhibit R3) that were relied on by the Department. He thought that it was probably correct that he told Mr Atkinson that he could only work 10 to 12 hours per week.

He confirmed the accuracy of the report of the breach interview that he had with the Department which is contained at T12/45.

The applicant explained to the Tribunal that his Reserve work was very important to him and he hoped that one day it could possibly lead to full-time employment. He was aware that an employer is required to give an employee time off for any Reserve work. However, he told the Tribunal that as he had Reserve commitments at the end of June 2005, he considered it would inconvenience the employer if he took employment at that point in time.

The Department relied on the witness statements referred to and on its statement of facts, issues and contentions. The Department did not call any witnesses.

The applicant contends that he did not breach the activity test and that it was reasonable that he prioritise his Reserve commitments over full-time employment in the month of June 2005. He also contends that he was not offered a position, as he made it clear to Mr Atkinson at the outset that he could only work on a part-time basis. He considers that it was unreasonable and premature for his job network provider to report him to the Department after this one incident.

The Department contends that the applicant has breached the activity test by refusing an offer of employment by Peregrine Corporation. If the Tribunal considers that no formal offer of employment was made to the applicant, then the Department contends that the applicant did not satisfy the activity test in June 2005 in that by his actions he demonstrated that he was not actively seeking work and was not willing to undertake full-time work.

The applicant was a straightforward witness, although he had difficulty recalling some of the specific detail with respect to the interview with Mr Atkinson. It was evident to the Tribunal that he considers that his Reserve work limits his ability to consider offers of full-time employment. He felt he was being fair and reasonable with Mr Atkinson as to his impending commitments. He would have created inconvenience for the employer had he accepted employment and then almost immediately taken time off for Reserve commitments

The Tribunal notes that there is some contradiction between the evidence that the applicant gave to the SSAT as to what transpired during the interview with Mr Atkinson and the evidence that he gave to this Tribunal. The applicant accepted when appearing before this Tribunal that the statement of Mr Atkinson was correct and that the record of the breach interview was correct. He told the Tribunal that it was more likely than not that he made a general statement to Mr Atkinson that he could only work for 10 to 12 hours per week.

The Tribunal made the following findings of fact in addition to the facts set out in paragraphs 1 and 2 of this decision:

•

The applicant is not exempt from the activity test.

•

The applicant's job network provider during the relevant period was ASK Services.

•

The applicant entered into a Preparing for Work Agreement (T6) with Centrelink in May 2004 (the agreement) which set out his commitment to obtaining employment. His commitment was to look for all types of suitable work including part-time, casual and full-time work.

•

An attachment to that agreement (T6/31) set out clearly what comprises an activity test breach and that included not actively looking for suitable work or refusing an offer of suitable work.

•

The job placement co-ordinator with ASK Services arranged for the applicant to have an interview with Peregrine Corporation in late May 2005 with a view to the applicant obtaining full-time employment as a console operator.

•

The applicant has previously worked as a console operator. The employment was suitable employment.

•

The applicant was aware at the time of interview that a financial incentive was being offered to the Peregrine Corporation by the job network provider if he was offered employment.

•

The person conducting the interview was also aware that if employment was offered to the applicant, a financial incentive would be provided as the applicant had not worked in that industry for some time.

•

A telephone interview was conducted with the applicant on 30 May 2005. Mr Atkinson raised the issue of a full-time position with the applicant. The applicant immediately made it clear to Mr Atkinson that he was not interested in full-time work at that time and could only be available for employment with Peregrine Corporation for 10 to 12 hours per week.

The Tribunal is satisfied that s 43 of the Administrative Appeals Tribunal Act 1975 provides that the Tribunal can exercise all the powers and discretions conferred by enactment on the person (in this case the SSAT) who made the decision of which review is being sought. The Tribunal is able to consider whether the applicant has generally failed to satisfy the activity test during a period and is not confined to considering only whether he has failed to accept an offer of employment.

Mr Denis Atkinson in his statement (Exhibit R3) states that he has no independent recollection of speaking with the applicant and has recorded "No - only 10-12 hrs wanted" on his record of contact with the applicant.

Mr Simon Griffin, the employment consultant for the job network provider, states at paragraph 7 of his statement (Exhibit R2):

"... I recall that Mr Dennis Atkinson advised me that he did not wish to take any further steps to recruit Mr James Atkinson because as soon as he had mentioned that full-time work was available, Mr James Atkinson had started making excuses. I recall that Mr Dennis Atkinson advised me that Mr James Atkinson's attitude during the interview had been negative all the way through. Specifically, I recall that Mr Dennis Atkins told me that Mr James Atkinson had said that he wouldn't be prepared to work full-time."

The Tribunal is satisfied that it is more likely than not that the interviewer effectively offered employment to the applicant, but the applicant made it quite clear that he was not interested in full-time work. In the alternative, if no formal offer of employment was made because of the applicant's attitude during the interview, the applicant still committed a breach of the activity test in that he did satisfy s 601 of the Act during the relevant period in that he was not actively seeking and willing to undertake work.

Section 601 of the Act is specific in that a person who is not exempted from the activity test must be willing to undertake employment that is suitable during all periods that they are in receipt of Newstart Allowance.

The applicant was aware at all times that an employer is bound to give him time off for his Reserve commitments and suspend his contract of employment accordingly. Despite this, he took the view that full-time employment would interfere with his plans for the month of June.

The applicant plays a valuable role in the Reserve and is to be commended for his long-term commitment. Nevertheless, there is nothing in the legislation that allows his Reserve commitments to be a reason for declining suitable work or a reason for making himself unavailable for full-time work.

The Tribunal is satisfied that the applicant breached the activity test on 30 May 2005 in that he was not willing to undertake suitable paid employment at the time and he declined an offer of employment. He did not satisfy the provisions of s 601 of the Act in May and June of 2005 as he was also not willing and available to accept an offer of suitable employment during that period.

In the circumstances the Tribunal affirms the decision under review.

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell

Signed: ............J Coulthard............................................

Associate

Date of Hearing 2 November 2006

Date of Decision 3 January 2007

Advocate for the Applicant In person

Counsel for the Respondent Mr M Kennedy

Solicitor for the Respondent AGS