Dickson v Industrial Relations Secretary in respect of Department of Communities and Justice

Industrial Relations Commission (NSW)|2023-04-14

decision

On 1 March 2023 the Commission determined that the applicant had been dismissed unfairly and ordered his reinstatement. The reasons for decision (Reasons for Decision) were formally published with minor revision on 8 March 2023; Dickson v Industrial Relations Secretary in respect of Department of Communities and Justice (Corrective Services NSW) [2023] NSWIRComm 1018.
In the Reasons for Decision, the Commission set out that: "74. I have considered the submissions of the applicant and the respondent and I do not find the respondent's submissions persuade me as to reinstatement. Indeed, I agree with the submissions of the applicant. The primary remedy of reinstatement is, therefore, to be applied. 75. I can see no reason why the applicant should not benefit from an order for payment of lost wages since his dismissal, and for continuity of service. I do, however, note that the applicant has given evidence of some employment in the meantime, and I do not believe that the applicant should get a windfall from that. 76. I propose that the parties confer on short minutes of order that would reflect this outcome for two reasons: That will give them an opportunity to consider a date on which it will be possible for the applicant to recommence his employment, and it will give the parties a chance to discuss what the applicant has earned in the meantime and how that should be deducted from a restitution of the wages lost by the applicant since 4 September 2022. Those orders should contain that the period between 5 September 2022 and the date on which the employment practically recommences should count as service by Mr Dickson for all purposes."
By 15 March 2023 the parties had not advised the Registry that they had agreed the form of orders which should be made, and the matter was listed for Mention on 21 March 2023. At that time, it became apparent that the Commission would need to determine certain matters, and perhaps the terms of the final orders to be made.
A timetable was agreed for filing of submissions by the parties as to the orders to be made, and the parties filed: 1. Applicant's Submissions on Final Orders, dated 21 March 2023; 2. Respondent's Submissions as to Final Orders, dated 23 March 2023; and 3. Applicant's Reply Submissions on Final Orders, dated 24 March 2023.

Continuity of Service

The applicant proposed that the order in respect of continuity of service be: "Pursuant to s.89(4) of the Act, the period of the applicant's dismissal (5 September 2022 to 19 March 2023) is taken to be a period of employment for all purposes."
This follows the wording of the Reasons for Decision.
The respondent proposed that the order for continuity of service be: "Pursuant to s.89(4) of the Act, the applicant's service is taken not to have been broken by the dismissal."
This follows the terms of s 89(4) of the Industrial Relations Act 1996 (the Act).
The respondent submitted that to implement the Reasons for Decision, the wording he proposed should be used, as that is "the effect of" the Reasons for Decision. He says this is because the use of the phrase "for all purposes" is unclear in the context of the Reason for Decision and some meanings which might be ascribed to the phrase are beyond the powers set out in s 89(4) of the Act.
The respondent submitted that any reading of the phrase "for all purposes" which extended to recognising the period between dismissal and reinstatement for the accrual of annual leave, or for wage progression and promotion based on length of service, would be beyond the power set out in s 89(4) of the Act.
He submitted this, as set out in his Submission of 23 March 2023, because: "4.2 … (d)… (iii) requiring an employer to recognise a period during which an employee did not work for such purposes would be inconsistent with the self-evident purposes of those entitlements, being: (A) in the case of annual holidays with pay, providing an employee with a period of rest from work; and (B) in the case of progression and promotion based on length of service, recognising the additional skills and experience that an employee gains from performing their duties over time."
The applicant submitted that the respondent had cited no authority in support of his position. The applicant cited prior decisions of the Commission in which orders made excluded a comparable period from counting as service, notwithstanding an order that the dismissal would not be taken to break the service of the employee. It submitted that here the opposite had occurred.
The applicant also submitted that the respondent had provided no statutory analysis in support of his position, adding in his Reply Submissions: "10. … b. … An order for continuity is an order that the employment is taken not to have been broken by the employer's unfair conduct. It is a legal fiction that transfers a period of dismissal to a period of employment, with the underlying intention of restoring an employee to the position they would be in, but for the dismissal. Service counting towards leave entitlements and salary progression is entirely consistent with that intended purpose. c. Moreover, the consequential effect on leave entitlements and salary progression is a result of the terms of the applicable contract, statute, award or other source of legal entitlement, not the order. …"
The applicant also submitted that the wording pressed for by the respondent could not achieve its apparent purpose, for the same reasons set out in paragraph 10. c. of his submissions, extracted above in [15].

Remuneration

The parties were able to agree the roster pattern the applicant would, theoretically, have worked in the period between dismissal and reinstatement. This has generated an amount which takes into account allowances and penalty rates applicable to that presumed roster.
The parties are in dispute as to whether a further amount should be added for overtime.
The applicant submitted that "remuneration" as used in s89(3) is clearly capable of capturing overtime, as much as it is capable of capturing penalties rates and allowances. He further submitted that the Reasons for Decision contemplate the applicant gaining the maximum order for remuneration lost between dismissal and reinstatement, subject only to deduction of amounts earned by the applicant elsewhere during that period.
The applicant says that a fair means to calculate the overtime would be the average amount of overtime worked across the Wellington Correctional Centre for the period between dismissal and reinstatement. He contends that any issue arising that would require evidence should be the subject of more detailed discussion between the parties, and further evidence before the Commission if then required.
The respondent submitted a number of reasons why overtime should not be a component of the remuneration order. These have been summarised fairly by the applicant in his Reply Submissions as being: "18. … a. Firstly, the Commission should not include overtime into the order for lost wages as there was no evidence during the proceedings that the applicant worked overtime. To include overtime would therefore be an unsound exercise of discretion. b. Secondly, if the lost wages are calculated by reference to an average of overtime worked at WCC, the applicant might receive a windfall because there is no guarantee that he would work the average. This may result in the order being beyond power as the applicant may receive a windfall. c. Thirdly, there is no presumption in the legislation that overtime is included in an order under s. 89(3) of the Act. d. Fourthly, there is no reference in the Decision to overtime, so we should not assume that it falls within the expression lost wages. e. Fifthly, the applicant should be 'censured' for his conduct and therefore not receive backpay for lost overtime."
In reply, the applicant's submissions largely pointed to the Reasons for Decision directing the parties to confer over such matters and referenced his earlier submissions on the issues. As to the fifth point raised by the respondent, the applicant submitted that this was an attempt to relitigate issues already determined.

Consideration

Pursuant to s 87(2) of the Act, in arbitrating a claim that a dismissal was unfair, the Commission is empowered to make orders: 1. Pursuant to s 89 of the Act 2. Dismissing the claim; or 3. Otherwise authorised by the Act.
In this case only orders pursuant to s 89 of the Act are proposed.
The Reasons for Decision set out that an order for reinstatement should benefit the applicant pursuant to s 89(1). Those Reasons also proposed orders pursuant to ss 89(3) and 89(4), because in this case reinstatement was ordered. Both of those sub-sections empower, but do not require, the Commission to make further orders.

Continuity of Service

In a very real sense, the wording of the order to be made pursuant to s 89(4) has been determined in the Reasons for Decision. The Commission would therefore need to be positively persuaded that a different form of wording should instead be used.
In terms, s 89(4) of the Act is confined to the Commission ordering that a reinstated employee's period of employment is not broken by the overturned dismissal. As the applicant submitted, such an order, without explicitly setting it out, may cause consequences to flow because of the terms of other instruments such as awards, because continuity is restored.
Section 89(8) of the Act provides that "[a]n order under this section may be made on such terms and conditions as the Commission determines."
It is presumably s 89(8) which has empowered the Commission in other matters to order continuity of service, but without the period between dismissal and reinstatement counting as service. As the applicant has submitted, it is not unusual for the Commission to make such orders when it has reinstated a dismissed employee. The applicant cited three decisions where such an order was made, being Lawrence v Commissioner of Police (No 2) [2010] NSWIRComm 173; New South Wales Local Government, Administrative, Energy, Airlines & Utilities Union (on behalf of Grose) v Griffith City Council [2006] NSWIRComm 1137; New South Wales Local Government, Administrative, Energy, Airlines & Utilities Union (on behalf of O'Hara) v Griffith City Council [2006] NSWIRComm 1102.
Other recent decisions can be found, such as Maxwell v Commissioner of Fire and Rescue NSW [2020] NSWIRComm 1024 and Romeo v Griffith City Council [2023] NSWIRComm 1015.
In Lawrence, Walton J made orders that continuity of employment was not broken by the dismissal, but specifically ordered that the period between dismissal and re-employment would not count for the purpose of accruing leave entitlements. It is apparent that His Honour did so because this was consistent with his decision not to order any back pay for that period.
The submissions of the parties in Lawrence clearly assumed that orders which would require the accrual of leave for the period between dismissal and re-employment were open to the Commission. Accordingly, while His Honour rejected the accrual of leave on a merit basis, he was not asked to determine whether such an order was within jurisdiction.
Given the nature of the re-employment order in Lawrence, the question of the period counting for progression based on length of service did not arise.
In O'Hara, the order of Bishop C also made orders that continuity of employment was not broken by the dismissal, but specifically ordered that the period between dismissal and re-employment would not count for the purpose of accruing leave. Bishop C clearly made this order based on the merits of the matter, and because it was consistent with her decision not to award back pay.
In Grose, a re-employment order was made effectively retrospective, by some 6 months to the order, but not back to the date of dismissal. The period from dismissal to retrospective re-employment would not break the service of the reinstated employee. Bishop C's order specified that the period prior to re-employment would not count for accrual of any leave.
No specific order was made as to lost remuneration in Grose. Nevertheless, presumably the effect in totality of the orders was that no pay or accrual of leave was to be made between dismissal and re-employment, and between re-employment and the date of the orders, the employee should be both back paid and be entitled to accrual of leave. This would flow both from the re-employment as such, and from the specific order relating to the prior period.
It can be readily seen that the effect of the orders in Grose, albeit only for part of the period between the decision of the Commission and dismissal, is the same as the orders proposed by the applicant in the current matter.
In both Maxwell and Romeo, the orders provided for continuity, but also that the intervening period would not count as service for any purpose. This was consistent with the decision in each matter not to award any back pay. As with the decision of Walton J in Lawrence, while Constant CC's and Sloan C's decisions were based on the merits of the case, it does not appear the parties in either Maxwell or Romeo submitted that the alternative course was beyond jurisdiction.
On multiple occasions the Commission has issued orders with the opposite effect of that sought by the respondent in this matter. It is clear those decisions have been determined on a merit basis. In at least one matter, the Commission made orders that, at least in effect, are the same as those sought by the applicant.
I consider these decisions to be strongly supportive of the position put by the applicant. However, none of them directly addressed the question now before the Commission, as in none of those cases was it put to the Commission that an order of the kind now sought by the applicant was beyond jurisdiction. I am therefore required to consider whether s 89 of the Act empowers an order as sought by the applicant.
As set out above at [25], if an order is made for reinstatement, the Commission is empowered, but not required, to make orders concerning remuneration and continuity of employment. The Commission is empowered by s 89(8) of the Act to make orders under s 89 on "such terms and conditions" as it determines.
In their terms, the various sub-sections of s 89 of the Act confer a discretion without any express constraint on the way in which the Commission may exercise that discretion. As set out above at [29] to [38], in respect of s 89(4), that discretion has been exercised in a variety of ways. Of course, even a discretion without an express constraint will be constrained by the purpose for which it exists, and often implicitly by the wider context of the Act.
It is obvious that the purpose of s 89 is to provide the power to remedy the unfairness of dismissal, where a dismissal has been found to be unfair. Given the repeated use of "may" it might seem obvious that it was not intended that the Commission always make the maximum possible remedial order.
Lawrence, O'Hara, Maxwell and Romeo are examples where the Commission decided to award less to the re-employed or reinstated employee than would have been permitted by s 89 of the Act. In each case the Commission set out some conduct of the employee which warranted that lesser remedy.
In each case, the order of the Commission included an order that the dismissal did not break the service of the employee. It did so conditionally, and that condition in each case was that the period nevertheless did not count as service. The employee in each case would not accrue specified entitlements, such as leave in some cases, or at all in others, related to the period.
Given the use of "may" in s 89(4), and in appropriate circumstances, there is the prospect of an order for reinstatement without an accompanying order that the dismissal did not break the service of the employee. That is, an employee may be effectively "reinstated" to a new period of employment.
What of the circumstance, at the other end of the spectrum, where the Commission decided to order the maximum remedy permitted by s 89?
As set out above at [43], it is obvious that the purpose of s 89 of the Act is to provide the power to remedy unfairness. Notwithstanding the six-month cap in s 89(5), it is not obvious that, in the case of a re-employed or reinstated employee, the intent was to constrain the remedy available to anything less than every benefit the employee would have had, but for being dismissed unfairly. Indeed, in appropriate cases, the totality of powers set out in s 89 of the Act strongly suggests an intent to provide for the possibility of every benefit.
More than this, if continuity of employment is ordered without any constraint or condition, the applicant's submission that employment benefits would automatically flow is logically sound. While the prior decisions of the Commission, referenced above, did not directly address the question, it is apparent they proceeded on the basis that an order for continuity without condition at least might have had the effect of leave accruing.
In this case, the applicant received neither remuneration for work, nor paid leave to rest. After being dismissed, the applicant obtained a series of casual jobs, paying less than his old wages, and given its nature, not offering paid leave.
The Reasons for Decision set out, as submitted by the applicant, that the Commission intended that the applicant receive the maximum benefit available under s 89 of the Act. If an unconstrained order for continuity has consequences that leave accrues, and I consider that it does, then that is what is intended.
Accordingly, and for the avoidance of doubt as submitted by the applicant, the applicant should have an order for continuity in the form sought by the applicant.

Remuneration

Given that the parties have agreed a hypothetical roster the applicant would have worked but for his dismissal, and that the roster has pay outcomes that extend to applicable allowances and shift penalties, there is no dispute between the parties that remuneration extends beyond the basic wage.
What is left in dispute is two questions. The first is whether overtime can be calculated on a basis that is rational and not simply speculative. The second is whether the conduct of the applicant nevertheless warrants a refusal of any overtime that would have been ordered.
The second question can be readily answered in the negative. The issue has been determined, and it is clear that what was contemplated by the Reasons for Decision were the total remuneration the applicant would have received, less only the amount earned by him elsewhere in the meantime.
To the extent that any issue arises from the absence of a specific mention of overtime in the Reasons for Decision, all that needs to be said is that those Reasons also did not specifically set out penalty rates or allowances. That is why the Commission directed the parties to confer on such matters.
The submissions of the parties clearly accept that overtime is regular feature of employment in the applicant's workplace.
The respondent reasonably submitted that overtime is unpredictable as to demand and not guaranteed to any employee. The respondent also submitted that recent recruitment had reduced the need for overtime. Nevertheless, its submissions accepted that a significant quantity of overtime was worked.
The respondent also presented some figures about the difference between mean overtime and median overtime per employee, with the latter being significantly lower. He submitted that there was a general lack of evidence before the Commission on the level, allocation and need for overtime, let alone evidence related to overtime that the applicant had previously worked.
This is all true, but this is almost uniquely within the knowledge of the respondent, and he could have produced such detail, either to the applicant or the Commission.
I find the respondent's submission that median not mean overtime should be the basis, if projected overtime were to be included, is coloured by his submission that overtime not be included because of the conduct of the applicant. The Reasons for Decision set out that the Commission did not intend for a deduction on any such basis.
Both the respondent's submissions on a deduction for the applicant's conduct, and on the use of median overtime appear to the Commission to be an attempt to relitigate the Reasons for Decision. In combination they evidence a reluctance by the respondent to accept the outcome set out in the Reasons for Decision.
In my view the mean hours of overtime worked in the relevant period should be used to calculate the overtime component of remuneration lost by the applicant because of the dismissal. As this amount was not formally included in the submissions of the parties I propose to direct the parties largely as proposed by the applicant.

Orders

The following orders are made: 1. The respondent is directed to prepare by 21 April 2023 a calculation of the applicant's lost remuneration for the period 5 September 2022 to 19 March 2023, which is to include the applicant's ordinary pay, allowances, penalty rates and overtime, consistent with the reasons in this decision; 2. The applicant is directed to provide the respondent by 21 April 2023 a calculation of earnings, and evidence thereof, for the period 5 September 2022 to 19 March 2023; 3. The parties are directed to finalise short minutes of order which accord with the Reasons for Decision and this decision, and which includes orders for: 1. Reinstatement under s 89(1) of the Act; 2. Remuneration under s 89(3) of the Act calculated by deducting the amount in order (2) from order (1); 3. The amount referred to (b) above being paid to the applicant by the later of 5 May 2023, or 14 days from the applicant complying with order (2); and 4. Continuity under s 89(4) of the Act, which is to include that applicant's service is taken not to have been broken by the dismissal, and that the period between the applicant's dismissal and reinstatement is taken to be a period of employment for all purposes. C Muir Commissioner

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 April 2023

At a glance

Court

Decision date

Source

Judgment (8 paragraphs)

Parties

Cases Cited (6)