Australian Coal & Shale Employees' Federation v Commonwealth

The decision, the subject of this appeal 6Tabbaa C commenced, what was described as, a "Decision on Mitigation" by setting out the orders made in her decision of 13 July 2012, which we have summarised above. 7Tabbaa C noted that the parties had provided written submissions on the question of mitigation and consented to the matter being determined on the papers. 8It was agreed by the parties that any award for back pay should have deducted from it an amount of $14,817.00, which Ms Ganino had earned in alternate employment. 9It was also agreed between the parties that a further amount of $41,662.27 should be deducted from any award for back pay. This amount represented monies paid by the respondent to Ms Ganino between November 2011 and March 2012, pending an appeal from Tabbaa C's decision. 10Tabbaa C proceeded to summarise the submissions of the parties (at [5] - [25]), and at [36] set out under the heading "Legislative Framework" cl 89(3) and cl 89(6) of the IR Act. 11Under the heading "Consideration" Tabbaa C stated: [27] An order for back pay is a matter of discretion for the Commission. [28] In its decision of 13 July 2012, the Commission found that Ms Ganino's conduct in not participating in the fact-finding/disciplinary meetings was not what one would expect from someone in her position. Many of the allegations made against the Applicant were withdrawn after hearing all of the evidence following 14 days of hearing. In relation to the balance of the misconduct allegations against Ms Ganino, the Commission stated: Having considered all of the above, I find that the nature of the misconduct contained in the remaining allegations relied on by the Respondent is not sufficient to warrant the termination of Ms Ganino. I accept the Applicant's submission that the penalty of dismissal is disproportionate given the circumstances described above and consider the termination to be harsh. [29] The Commission therefore had noted that Ms Ganino's behaviour was not what one would expect from someone in the position she held within the Respondent's legal section. I do not propose to discount the back pay to be awarded in that regard. [30] The Commission also noted that while some misconduct issues remained, they were not sufficient to warrant termination, albeit they did warrant some form of alternative disciplinary measure. I do not propose to discount the back pay to be awarded in that regard. [31] I accept the submission on behalf of the Applicant that the quantum of the back pay should not deter the Commission from making the orders sought as neither the dismissal nor the elapse of time was caused by Ms Ganino. [32] While I accept that the dismissal acted as a serious barrier to Ms Ganino obtaining alternative employment as a legal practitioner, I agree with the Respondent's submission that the evidence of the Applicant demonstrated that she had applied for positions that were not appropriate having regard to her qualifications and/or commensurate with the level of responsibility and salary of the position she previously held with the Respondent. I also agree that there were significant periods of inaction by the Applicant as described above. Her termination does not bar her from persisting with applications for alternative employment. [33] I propose to exercise my discretion to discount the back pay to be awarded. In exercising that discretion, I have taken into account the period of inaction described above. I have also taken into account the difficulties the Applicant would have experienced in obtaining alternative employment given her termination and the previous level of authority she exercised. 12Tabbaa C's orders were: [34] The Respondent shall pay to the Applicant her salary from 23 July 2009 to the date of her reinstatement as if she had been employed during that period less: (1) the amounts earned by her during that period in alternative employment; and (2) the amounts paid to her by the Respondent in the period November 2011 to March 2012; and (3) an amount equivalent to the amount she would have earned during nine (9) calendar months of employment with the Respondent. [35] The Respondent shall pay to the Applicant interest on the back pay calculated in paragraph 34 above pursuant to s 100 of the Civil Procedure Act 2005, to be paid at the Reserve Bank of Australia's cash rate plus 4%. [36] The payments are to be made within 28 days of the date of this decision. [37] Matter IRC 1141 of 2009 is hereby concluded.

Appeal proceedings 13At the commencement of the hearing of the appeal on 14 August 2013, Ms P F Lowson of counsel, who appeared for the appellant, sought to file an amended notice of appeal. This was opposed by Ms K L Eastman SC, who appeared for the respondent. 14During argument in respect of the amendment and prior to the Full Bench making any ruling, Ms Eastman submitted that the respondent had taken an unusual approach by attaching to its written submissions, an open offer, which the respondent contended satisfied the subject matter of the appeal. 15Senior counsel submitted that the offer had been rejected, but a further offer had been made prior to the commencement of the proceedings that morning, to which a response had not been forthcoming. In short, the parties agreed that the proceedings be adjourned into conciliation, which was chaired by Walton VP. The proceedings were ultimately adjourned to enable the parties to undertake some further steps, which included, in summary, the checking of figures, obtaining further instructions, and advice regarding without prejudice terms of settlement. 16The proceedings were adjourned for report on 25 September 2013, at which time, the parties sought the further assistance of the Commission in conciliation. 17On 3 October 2013, Staff J chaired a further conciliation of the parties, which failed to resolve the matter. 18At the resumed hearing of the appeal, leave was granted to Ms Lowson to tender an email dated 21 June 2013 from her instructing solicitors, forwarded to the solicitors for the respondent, which annexed a spread sheet setting out monies owing to the appellant. 19The notice of appeal and the grounds of appeal were expressed to be from a decision of Tabbaa C, given on 24 May 2013. As we have already explained, the subject matter of Tabbaa C's decision, dealt with a discrete issue, that being, the quantum of lost remuneration that should be awarded to Ms Ganino. Nevertheless, in summary, the notice of appeal challenged the following findings and matters: (1)The findings that the appellant had applied for positions that were not appropriate having regard to her qualifications; (2)Applied for jobs that were not commensurate with the level of responsibility and salary of the position she held with the respondent, and there were significant periods of inaction by the appellant in seeking alternate employment; (3)The inclusion in the catchwords to the decision that the salary to be awarded to the appellant was to be decreased "in recognition of finding of misconduct"; (4)Tabbaa C's order at paragraph 34 of her decision that the respondent deduct an amount equivalent to what the appellant would have earned during nine calendar months of employment with the respondent; (5)A failure to make an order with respect to continuity of service. 20The grounds of appeal contended that Tabbaa C had erred in respect of these findings and the inclusion in the catchwords of a reference to "misconduct". In addition, the grounds contended that there had been a failure to accord procedural fairness to the appellant. 21In addition, Ms Lowson sought leave to amend the notice of appeal to seek an order pursuant to s 89(8) of the IR Act that the respondent credit to Ms Ganino, entitlements in respect of annual leave, leave loading, and long service leave, consequent upon her reinstatement. This was reflected in an amended notice of appeal. 22At the commencement of the hearing of the appeal on 21 November 2013, Ms Lowson made an application for leave to extend the time to appeal from Tabbaa C's decision of 13 July 2012. The basis was the failure of Tabbaa C to make an order for continuity of service in her decision. 23These applications were opposed by the respondent on the basis that the powers of the Full Bench, pursuant to s 192(1)(a) are to confirm, quash or vary the decision of the Commission. 24Ms Eastman submitted that the actual decision the subject of the appeal, did not deal with the matters identified in the amended notice of appeal. In addition, the respondent submitted that it would be prejudiced by what was described as the instanter application to extend time to appeal. 25The Full Bench refused leave in respect of each of the applications. In short, the reason for refusing leave to amend the notice of appeal to include a prayer seeking orders for additional payments in respect of annual leave, leave loading and long service leave, is that the proposed amendments invite the Full Bench to make orders pursuant to s 89(8) of the IR Act, in circumstances where the powers of the Full Bench on appeal are limited by s 192 of the IR Act. Section 89(8) enables an order to be made under s 89, which deals with orders for reinstatement, re-employment, remuneration and compensation, on such terms and conditions as the Commission determines. 26Tabbaa C's decision of 24 May 2013, as we have already observed, was dealing with the question of, what we have described as, lost remuneration or back pay. The question of continuity of service did not arise for consideration in that decision. It may well have arisen in Tabbaa C's decision of July 2012. However, the Full Bench is not dealing with an appeal from that decision. 27Turning to the second application, it was not entirely clear to the Full Bench whether it was, in substance, an application to amend the notice of appeal filed on 14 June 2013, or to bring an entirely new appeal. The appellant pointed to their outline of submissions in reply dated 2 August 2013, in which they foreshadowed an application "instanter" would be made on 14 August for leave to extend time to appeal in respect of the failure of Tabbaa C to make an order for continuity of service in the 13 July 2012 decision. 28The submissions in reply then set out reasons why time should be extended. The appellant did not seek to file any amended notice of appeal in respect of this issue, or any other formal process that described what it was seeking. Although the Full Bench was mindful that it is always available to a party to seek the Commission's leave to amend a process, instanter during proceedings before it, the approach adopted by the appellant if leave was granted, would have, in our view, deprived the respondent of fairly presenting its case on appeal. The respondent would not have been in a position to know what was the exact form of the appeal that it was required to meet. Usually a party is required to provide a proper and adequate description of any amendment that was being sought, which would be sufficient to do justice between the parties and enable the respondent to be in a position to deal with any additional matter, or matters raised against it. This was not done and, as a consequence, leave was refused.

Consideration 29This appeal is brought from a decision of Tabbaa C given on 24 May 2013. The decision deals with the discrete issue of mitigation by the appellant, and whether she was entitled to lost remuneration between the period of dismissal and reinstatement. 30Section 89(3) of the IR Act provides as follows: 89 Orders for reinstatement, re-employment, remuneration, compensation ... (3) Remuneration If the Commission orders reinstatement or re-employment, it may order the employer to pay to the applicant an amount stated in the order that does not exceed the remuneration the applicant would, but for being dismissed, have received before being reinstated or re-employed in accordance with the order. 31It was not in dispute that Tabbaa C's decision in relation to the s 89(3) order, involved an exercise of discretion. 32As we have already observed, Tabbaa C, under the heading "Legislative Framework", set out the provisions of s 89(3) and s 89(6) of the IR Act. This latter subsection refers to compensation and follows s 89(5), which gives the Commission power to order compensation in circumstances where it has reached a conclusion that it would be impracticable to order either reinstatement or re-employment. It has no work to do in relation to orders for unpaid remuneration. It is unclear from the decision whether Tabbaa C considered the terms of s 89(6), in reaching her conclusion that an amount of nine months remuneration should be deducted from what the appellant would have earned, but for the dismissal. 33In the case of discretionary decisions, the exercise by a Full Bench of the Commission of its powers under s 192 of the IR Act, depends on the decision, at first instance, being attended by appealable error: House v R [1936] HCA 40; (1936) 55 CLR 499. The errors that might be made in the decision-making process, were identified, in relation to judicial discretions by Dixon, Evatt and McTiernan JJ (at 505): ... If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. ... 34In Coal and Allied v AIRC [2000] HCA 47; 203 CLR 194; 74 ALJR 1348; 99 IR 309; 174 ALR 585, Gleeson CJ, Gaudron and Hayne JJ, stated at [19]: "Discretion" is a notion that "signifies a number of different legal concepts". In general terms, it refers to a decision-making process in which "no one [consideration] and no combination of [considerations] is necessarily determinative of the result." Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject-matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment. 35That being so, it is necessary to consider the manner in which Tabbaa C determined the quantum of lost remuneration. 36In her decision of 24 May 2013, Tabbaa C referred to her decision of 13 July 2012, where she found that the appellant's conduct in not participating in the fact-finding/disciplinary meetings, was not what one would expect from someone in her position. 37Tabbaa C noted that many of the allegations made against the appellant were withdrawn after hearing all of the evidence and following 14 days of hearings. In relation to the balance of the misconduct allegations against the appellant, Tabbaa C found that the nature of the misconduct contained in the remaining allegations, was not sufficient to warrant the termination of the appellant. 38Tabbaa C proceeded to note that "Ms Ganino's behaviour was not what one would expect from someone in the position she held within the Respondent's legal section" and that "while some misconduct issues remained, they were not sufficient to warrant termination, albeit they did warrant some form of alternative disciplinary measure. I do not propose to discount the back pay to be awarded in that regard" (at [29] - [30]). 39In respect of each of these matters, Tabbaa C concluded that she did not propose to discount the back pay to be awarded. Tabbaa C accepted that the appellant's dismissal had acted as a serious barrier to her obtaining alternate employment as a legal practitioner. However, she also accepted the respondent's submission that the evidence of the appellant demonstrated that she had applied for positions that were not appropriate, having regard to her qualifications and/or commensurate with the level of responsibility and salary of the position she previously held with the respondent. She also found that there were significant periods of inaction by the appellant. 40Tabbaa C then turned to the exercise of her discretion. In doing so, Tabbaa C stated at [33]: ... I have taken into account the period of inaction described above. I have also taken into account the difficulties the Applicant would have experienced in obtaining alternative employment given her termination and the previous level of authority she exercised. 41Based on these reasons, Tabbaa C discounted the appellant's lost remuneration by nine months. It follows that the only reason given by Tabbaa C for exercising her discretion, was "the period of inaction" by the appellant in not seeking alternate employment during the period of her dismissal. The acceptance of the respondent's submissions (at [32]) as to the appellant's reason for discounting the inadequate job search does not seem to have featured in her reasons for the back pay order. Attention is fixed upon what was not done rather than what was done. 42In our view, Tabbaa C has failed to provide adequate proper reasons for the exercising of her discretion under s 89(3) of the IR Act. 43As we have said, the sole basis for Tabbaa C's order to reduce the remuneration payable was that there were "significant periods of inaction" by the appellant (in pursuing alternate employment). The only material in the decision upon which the order could have been based consists of a submission to that effect by the respondent which is referred to by Tabbaa C at [18] of the Decision. The Commissioner appeared to accept the submission but there is no discernible basis as to why it was accepted or why that factor should have resulted in a reduction of any order otherwise properly made under s 89(3). Tabbaa C does not explain what constituted the inaction referred to in [33]. Nor does she explain why that should constitute a discount in remuneration. 44We accept that there is no statutory presumption that full "lost remuneration" is an appropriate starting point. However, there needs to be a proper basis identified as to why a particular order as to lost remuneration is made. 45As was stated by the High Court of Australia in Australian Coal & Shale Employees' Federation v Commonwealth [1953] [1953] HCA 25; (1953) 94 CLR 621 at 627: ... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: ... 46See also Mace v Murray [1955] HCA 2; (1955) 92 CLR 370 and Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at 378. 47In our view, there is no demonstrable basis for the conclusion reached by Tabbaa C. For the reasons we have set out, the inference is available that the Commissioner erred in failing properly to exercise her discretion when considering the issue of remuneration under s 89(3): see House v R at 505. By taking into account a factor, namely, the appellant's inaction, without properly connecting the subject matter to the discretion under s 89(3) of the IR Act Tabbaa C has arrived at a result that is so unreasonable, appellate intervention is required. The error is of the kind referred to in Australian Coal & Shale Employees' Federation. 48We turn to consider the remaining grounds of appeal, which may be disposed of shortly.

Catchwords 49The appellant seeks an order to correct the catchwords and/or the decision so as to reflect the findings made by Tabbaa C. In her decision of 24 May 2013, the catchwords included the words: "Exercise of discretion to decrease amount of back pay in recognition of finding of misconduct against the Applicant". 50As we have already determined, no such finding was made by Tabbaa C in her decision of 24 May 2013. 51However, in our view, the function of catchwords are to give a summary of the matters dealt with in a case: see Australian Institute of Judicial Administration; Guide to Uniform Production of Judgments, 2nd ed, 1999. Catchwords do not form part of the decision itself. They are indexing terms which describe the legal and factual subject matter of the case. 52No appeal lies in respect of the formulation of catchwords. There is no foundation for this ground of appeal. It is dismissed.

Order for continuity of service 53The appellant seeks an order for continuity of service. During oral submissions, Ms Lowson conceded that the question of continuity of service arose in relation to Tabbaa C's decision of 13 July 2012 and that it was not a question that arose in relation to Tabbaa C's decision of 24 May 2013. 54It was for this reason that the appellant brought an application for an extension of time to appeal Tabbaa C's decision of 13 July 2012. 55While it is correct that Tabbaa C did not give reasons in her decision of 13 July 2012 for not making an order for continuity of service under s 89(4) of the IR Act, and this may have constituted a basis for appellate intervention, no appeal was brought in respect of that decision. The decision under appeal does not deal with the question of continuity of service. It follows that no error in relation to that decision is therefore identifiable. This ground of appeal is therefore incompetent and is dismissed.

Procedural fairness 56The appellant contends, in the notice of appeal, that she was denied procedural fairness. During oral submissions, Ms Lowson submitted that the appellant had been denied procedural fairness in circumstances where Tabbaa C formed adverse views about the appellant's evidence, without providing her with an opportunity to address these matters. 57The starting point in respect of this ground is, the order made as follows at [41] of Tabbaa C's decision of 13 July 2012: The parties are required to observe the following filing schedules in relation to the Mitigation and Costs issues. The Applicant is to file and serve submissions and evidence by 20 July 2012; the Respondent is to file and serve its reply submissions and evidence by 3 August 2012 and the Applicant is file its reply to the Respondent's submissions and evidence by 10 August 2012. Unless either party requests within 7 days of the filing schedules being met that the Commission hear them, the issues will be determined on the papers. 58The appellant filed evidence and submissions in respect of the issue of mitigation. The respondent filed submissions in reply to the appellant's evidence and the appellant's reply submissions directly addressed matters raised by the respondent. 59At no stage did the appellant seek that the matter be listed for hearing so that she could address the Commission by way of further oral evidence or submissions. 60In short, the evidence dealt with the appellant's search for work during the period of her dismissal. 61The appellant was represented by experienced counsel and solicitors during the proceeding. 62The complaint that the appellant makes about procedural fairness is entirely of her own making. 63Either party could have sought to have the matter re-listed before the Commissioner. The respondent was not required to cross-examine the appellant and in submissions, invited Tabbaa C to draw inferences in respect of the evidence that had been filed by the appellant. 64The appellant's material highlighted that there were significant gaps in periods of time when the appellant had not sought employment and that the appellant had applied for jobs where she was either overqualified, or, in some cases, underqualified. These are all matters commented upon by the respondent in its submissions, to which the appellant had an opportunity to respond. 65In these circumstances, we find that there has not been a denial of procedural fairness to the appellant. This ground of appeal is not made out. 66We would observe in passing that in oral submissions, Ms Lowson raised an interesting issue in respect of whether the Commission could have regard to the principles of mitigation in exercising its discretion pursuant to s 89(3) of the IR Act, as opposed to s 89(6) of the IR Act. As the issue was never squarely raised in written submissions, and although the Full Bench considered taking up the issue, we have formed the view that it would not be appropriate in the circumstances of this case, where significant delay has already occurred and the matter has not been fully argued. 67In light of the conclusion reached that the discretion exercised by Tabbaa C miscarried, leave to appeal should be granted and the appeal upheld. 68The parties contended, with good reason, that the Full Bench should hear and determine for itself the question of what orders should appropriately be made under s 89(3) of the Act having regard to the application at first instance brought by the appellant and the undisturbed determination by Tabbaa C regarding the reinstatement of the appellant. Unfortunately, this Full Bench will not be able to undertake that task. Nor does it seem appropriate to constitute another Full Bench for that purpose. With those considerations in mind, we have decided to adopt the alternative course of remitting the matter to a Member of the Commission to determine the application with expedition. The matter will be allocated to Boland J for that purpose. 69We wish to make clear that the only issue that arises in respect of the remuneration is the quantum of remuneration to be awarded to Ms Ganino in light of her reinstatement.

Orders 70Pursuant to s 187 and s 192 of the Industrial Relations Act 1996, the Commission orders that: (1)Leave to appeal is granted. (2)To the extent reflected in this decision, the appeal is upheld. (3)The orders of Tabbaa C of 24 May 2013 are quashed. (4)The matter is remitted to Boland J to determine any appropriate orders to be made in the first instance matter under s 89(3) of the Act in accordance with this decision. His Honour should have before him the evidence and submissions relied upon by the parties.

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