Fair Work Act 2009

s 604 - Appeal of decisions

Appeal against decision [2017] FWC 5789] of Deputy President Masson at Melbourne on 19 December 2017 in matter number U2017/657 - dismissal 'harsh and unjust' - compensation ordered - permission to appeal and appeal - no public interest in granting permission to appeal - permission refused.

[1] On 5 January 2018, Federation Training (the 'appellant') lodged an appeal, for which permission to appeal is required from the Full Bench of the Fair Work Commission (the 'Commission') under ss 400 and 604 of the Fair Work Act 2009 (the 'Act'). The appeal is against a decision and order of Deputy President Masson of 9 December 2017 in Sheehan v Federation Training [2017] FWC 5789 (the 'Decision'). The Deputy President ordered that the appellant pay compensation to Mr Peter Sheehan ('Mr Sheehan' or the 'respondent') of $15,792.52 plus superannuation, following his findings that his dismissal by the appellant on 30 May 2017 was 'harsh and unjust', within the meaning of section 387 of the Act.

[2] The appeal was listed for hearing as to permission to appeal and the merits of the appeal before the Full Bench in Melbourne on 6 February 2018. We note that a stay of the Deputy President's Decision was earlier sought by the appellant and consent orders were made by His Honour the President, Ross J on 15 January 2018 [PR599412].

[3] At the appeal, Ms K Jones of Counsel represented the appellant and Ms F Knowles of Counsel, instructed by the Australian Education Union, appeared for the respondent, Mr Sheehan. We decided, taking into account the submissions of both parties, and in the absence of any objections from either party opposing legal representation of the other, leave to be legally represented be granted to both parties, pursuant to section 596(2)(a) and (c) of the Act.

[4] The Deputy President set out the background to the matter in detail at [13]-[38] of the Decision. This background can be summarised as follows:

1. Until his dismissal, Mr Sheehan had been employed by Federation Training, or its predecessors, since 25 July 1982 as a teacher engaged in apprentice and trade training.

2. On 15 July 2016, Mr Sheehan was issued with a final warning in relation to an incident in which he was found to have punched a cupboard in circumstances which intimidated another employee.

3. On 6 March 2017, Mr Sheehan received a letter advising him that a complaint had been made about his conduct on 21 February 2017 (the 'Allegation Letter'). The complaint alleged Mr Sheehan had gathered two classes together, without consulting with the teacher in charge of the other class, and confronted the students using derogatory language in relation to his concerns about a door, which he believed had been unsafely propped open.

4. Federation Training engaged an independent consultant to undertake an investigation into the complaint.

5. On 28 March 2017, the Investigator, Ms Wendy Cox interviewed Mr Sheehan in the presence of his support person. A statement of interview was prepared which was reviewed and later certified as accurate by Mr Sheehan.

6. The Investigator interviewed a number of witnesses and prepared an investigation report which recommended that Mr Sheehan not be returned to a teaching role.

7. On 24 May 2017, Federation Training requested that Mr Sheehan, who was at that time absent from the workplace on personal leave, attend a meeting to discuss the outcome of the investigation and to provide him with an opportunity to respond to the findings of the investigation.

8. On 26 May 2017, Mr Sheehan advised Federation Training that he would not attend the meeting due to his medical condition, but that the findings should be sent to him by post.

9. On 30 May 2017, Federation Training sent Mr Sheehan a letter of termination setting out the findings of the investigation and advising him that his employment was terminated effective that day (the 'Termination Letter').

[5] Having considered the submissions of the parties, the Deputy President turned to determine whether Mr Sheehan's dismissal was 'harsh, unjust or unreasonable'. In order to do so, the Deputy President, as he was required to do, considered each of the matters set out at section 387(a)-(h) of the Act and found as follows:

1. Mr Sheehan's conduct on 20 February 2017, when he gathered and addressed a group of students using derogatory language, amounted to misconduct. In the context that this conduct occurred whilst Mr Sheehan was on final warning it constituted a valid reason for his dismissal for the purposes of section 387(a) of the Act.

2. Contrary to section 387(b) of the Act, Mr Sheehan was not notified of the reasons for his dismissal prior to his dismissal because the reasons for his dismissal were provided to him in the same correspondence that he was advised of his dismissal.

3. Contrary to section 387(c) of the Act, Mr Sheehan was not provided with an opportunity to respond to the reasons for his dismissal related to his capacity and conduct. The Deputy President noted that Mr Sheehan was informed that:

"In the event that any of the allegations are substantiated you will be given an opportunity to respond to the outcome and any proposed disciplinary action prior to any final decision being made."

However, when Mr Sheehan declined on medical grounds to attend the meeting at which the outcome of the investigation was to be reported to him, Federation Training proceeded to issue him with the Termination Letter.

As required by section 387(d) of the Act, Federation Training did not unreasonably refuse Mr Sheehan the opportunity to be accompanied by a support person.

To the extent that the dismissal related to unsatisfactory performance, Mr Sheehan had been warned about his performance before his dismissal in accordance with section 387(e) of the Act.

The size of Federation Training's enterprise did not impact on the procedures followed in effecting the dismissal. This was a neutral factor for the purposes of section 387(f) of the Act.

Federation Training had access to, and utilised, the services of a dedicated human resource specialist. This was a neutral factor for the purposes of section 387(g) of the Act.

Federation Training did not have sufficient regard to the evidence that Mr Sheehan was 60 years of age and prior to the incident on 2 March 2016 had an unblemished employment record of over 30 years.

[6] The Deputy President concluded that Mr Sheehan's dismissal was 'harsh and unjust', and therefore unfair, for the following reasons:

'...while the Respondent has established a valid reason it failed to notify the Applicant of the reason for his dismissal in plain and clear terms prior to the decision having been made; it had failed to provide the Applicant with an opportunity to respond to the reasons for the dismissal and it had accorded insufficient weight to the Applicant's age and length of service with the Respondent. On balance I am satisfied that these failures rendered the dismissal harsh and unjust.'

[7] The Deputy President next dealt with the question of remedy and concluded that an order for reinstatement was inappropriate. The Deputy President reached this conclusion because:

'[182] I have previously found that there was a valid reason for the Applicant's termination but that procedural deficiencies and a failure to appropriately consider and weigh the Applicant's length of service rendered the termination unfair. In the circumstances of this case, the findings of inappropriate behaviour I have made and the priority that the Respondent is entitled to place on the conduct and behaviour of its teachers weigh against an order of reinstatement.

[183] In carefully weighing the competing factors I have concluded that greater weight in this matter should be accorded to the conduct of the Applicant and the standards of behaviour the Respondent is entitled to expect from its teachers. In the circumstances I am satisfied that reinstatement is inappropriate.'

[8] The Deputy President then turned his attention to remedy and considered each of the matters he was required to take into account under section 392(2) of the Act. The amount ordered ($15,792.52 plus superannuation less taxation) was calculated as follows:

'Projected remuneration lost (21.6 weeks) $35,672.00

Deductions for income earned or likely to be earned $3,703.26

Deductions for misconduct (30% of the sub-total) $9,590.62

[9] Relevantly, the Deputy President determined the remuneration that Mr Sheehan would have received, but for his dismissal (s 392(2)(b)) on the following basis:

'[194] But for the dismissal of the Applicant it is likely that he would have remained on a final warning up to at least 15 July 2017. Given the nature of the Applicant's behaviour during the incidents of 2 March 2016 and 21 February 2017 I consider that further incidents of similar behaviour were likely and that it was unlikely that the Applicant would have remained employed by the Respondent beyond the period of the final warning (i.e. five months).'

[10] Federation Training's grounds of appeal fall into two broad categories. First, it is contended by Federation Training that the Deputy President made 'significant errors of fact' and secondly, the Deputy President made multiple errors of law. We set out the full grounds of appeal below:

1. The Deputy President made a significant error of fact, in finding that the reasons for the dismissal were not put to Mr Sheehan prior to a decision to dismiss being made, because:

1. the reasons for dismissal were contained in the allegation letter of 6 March 2017, nearly three months before the dismissal;

2. the reasons for the dismissal were further discussed by the investigator and Mr Sheehan when he was interviewed on 28 March 2017; and

1. the discussion of these reasons for the dismissal were contained in the record of interview provided to the Mr Sheehan on 29 March 2017.

1. In the alternative to Ground 1 above, the Deputy President erred in his interpretation of section 387(b) of the Fair Work Act 2009 (Cth) (the Act), in finding that Mr Sheehan was not provided with the reasons for dismissal prior to the decision to dismiss being made, because he applied a requirement of formality that is not supported by caselaw, and is contrary to the intention of the Act.

2. The Deputy President erred in his interpretation of section 387(c) of the Act, in finding that Mr Sheehan was not given an opportunity to respond to the reasons for dismissal, because:

1. Mr Sheehan was invited in the allegation letter to respond in writing at any time after 6 March 2017;

2. Mr Sheehan was given further opportunities to respond verbally when interviewed by the investigator on 29 March 2017;

1. Mr Sheehan was given, and took, an opportunity to annotate the record of interview, which he provided back to the investigator on 4 April 2017;

1. the Deputy President relied upon representations made by Federation Training in the 6 March 2017 letter that an opportunity would be given for Mr Sheehan to respond before a final decision was made (Decision at [147]), and reliance on this representation is an error of law, because this representation is not relevant to, or capable of effecting the operation of, the Act;

2. the Deputy President made a finding that Mr Sheehan was not provided with the investigator's report, nor afforded an opportunity to comment on the proposed disciplinary action prior to the decision being made (Decision at [150]), which are not requirements or factors present in section 387 of the Act.

3. The Deputy President's finding that the dismissal was harsh was irrational, because it is inconsistent with other findings, specifically:

1. the Deputy President was not satisfied that Federation Training gave appropriate weight to Mr Sheehan's length of service (Decision at [167]); but

2. that the Applicant had engaged in an act of misconduct while on a final warning, which was a valid reason for dismissal (Decision at [141]); and

1. that even though the Respondent had failed to satisfy the Commission of a fundamental loss of trust and confidence between the parties (Decision at [180]), the Deputy President held that reinstatement was inappropriate merely because of the gravity of the misconduct, and the standard of behavior that Federation Training that was entitled to expect from its teachers (Decision at [180]); and had Mr Sheehan remained in employment, further similar incidents would have been likely to occur in the short term (Decision at [194]).

1. The implication within the findings described in sub-paragraph [2b], [2c] and [2d] above, is that Federation Training not only had a valid reason to dismiss Mr Sheehan, but it was inappropriate to retain him in the workplace. However, the express finding described in sub-paragraph [2a] is that Federation Training still had an obligation to 'consider' the length of employment service and compensate the employee in some way for that length of service. The effect of this inconsistency, is that Federation Training are to be punished for not giving 'appropriate weight' to a factor, even though effectively there was no other course of action open to it, so positive consideration of this factor would not have been capable of altering the outcome. Alternatively, if consideration did alter the outcome, this would mean that it would have been impossible for an employee with Mr Sheehan's length of service to be dismissed by Federation Training in accordance with the Act, irrespective of his conduct.

4. Further to ground 4 above, the finding that the dismissal was harsh was infected by error, because the Deputy President failed to consider the fact that at all material times, up to and including the time of the hearing in September 2017, Mr Sheehan refused to acknowledge any wrongdoing, and maintained his denials of any misconduct. This is a relevant consideration to harshness, because in the absence of any admissions of wrongdoing, Federation Training could have no faith that the offending conduct would not immediately reoccur. In this context, it had no choice but to dismiss the Applicant, and any further consideration of his length of service could not have had any impact on the employer's decision to do so.

5. In the alternative to grounds 1 to 5 above, in calculating compensation, the Deputy President erred in finding that the 'anticipated employment period' was 21.6 weeks, because:

1. this employment period is expressed in the Deputy President's reasoning as the maximum possible time he could have been employed, not the 'anticipated period' that he would have been employed, which is contrary to established legal principle (Decision at [194]);

2. the Deputy President's reliance on ongoing currency of the warning is not relevant to a hypothetical assessment of the length of time it would have taken Mr Sheehan to engage in a further act of misconduct.

6. Further to grounds 4 and 5 above, and in the alternative to grounds 1 to 3, in the event that it was recognized by the Full Bench that the dismissal was not harsh, yet the finding was upheld that there were procedural defects in the dismissal in accordance with subsections 387(b) and 387 (c) of the Act, then the 'anticipated period' that Mr Sheehan would have been employed should be limited to the period that would have been required to provide Mr Sheehan with the reasons for dismissal and for him to be given an opportunity to respond. This would have been no more than two weeks. At hearing, Mr Sheehan offered no evidence as to what his response would have been had he been given further opportunity to respond, or how this would have been capable of affecting Federation Training's decision. In fact, at hearing in September 2017, five months after the dismissal, Mr Sheehan maintained his denial relating to the misconduct, consistent with the responses he had previously provided to the investigator on 28 March 2017.

7. Further, and in the alternative to ground 6 and 7 above, the Deputy President erred in setting the discount for misconduct at only 30%, because this was inconsistent with his finding in relation to the gravity of the conduct, the fact that the dismissal was solely for reasons relating to Mr Sheehan's conduct, and established legal principles.'

[11] As to permission to appeal, Federation Training submitted that it is in the public interest that permission to appeal be granted because:

1. The appeal raised issues of importance and general application regarding the proper principles to be applied in unfair dismissal cases.

2. The Deputy President's findings in respect of section 387(b) and (c) of the Act are attended with sufficient doubt as to warrant reconsideration.

3. The Decision manifests an injustice in that it inappropriately heightened the importance of the length of service of a dismissed employee.

4. The result of the Decision is counter-intuitive for reasons that include, that the Deputy President did not take into account material considerations - including the finding that there was a valid reason for dismissal and that reinstatement was not appropriate due to, inter alia, Mr Sheehan not complying with the standards of behaviour the appellant expected of its teachers, and gave inappropriate weight to the length of service of Mr Sheehan and the offer of Federation Training to provide Mr Sheehan with an opportunity to respond to the outcome of the investigation findings.

5. The decision is disharmonious with established case law which confirm that section 387(b) and (c) does not require formality and is to be applied in a common sense way and that where a decision if found to be for a valid reason, the 'other circumstances' - including length of service or procedural unfairness must be of some substantive significance to outweigh proven misconduct of a serious nature.

6. The level of discount given for Mr Sheehan's contribution to the dismissal is well below other cases and the anticipated period of employment has not been calculated in accordance with established principle.

[12] Counsel for the respondent denied that the Deputy President's Decision is counter-intuitive or that a substantial injustice will result if permission to appeal is refused. He submitted that the Deputy President's Decision is not attended with sufficient doubt, such as to warrant reconsideration and, in any event, the appeal did not raise issues of general importance, which would engage the public interest. The Deputy President's Decision disclosed no significant errors of fact, law or principle. The exercise of the Deputy President's discretion in respect to his findings of unfairness and compensation, did not miscarry and his findings were plainly open on the evidence before him.

[13] In oral submissions, Ms Jones highlighted five issues raised in this appeal:

1. Whether section 387(b)-(c) of the Act had been satisfied and whether there was an error of fact or law in the approach taken by the Deputy President. This question dealt with the appellant's grounds one to three.

2. Whether the Deputy President's Decision, in weighing up the various criteria in section 387 of the Act, was approached in the correct way. This question dealt with the appellant's grounds four and five.

3. Whether the Deputy President's approach to awarding compensation was correct. This question dealt with the appellant's grounds six to eight.

4. Whether the appeal attracted the public interest.

5. Whether the remedy ordered by the Deputy President was appropriate.

[14] In developing each of these matters, Ms Jones agreed that in meeting the statutory requirements, the employer must establish a valid reason for dismissal and that the employer had provided an opportunity for the employee to respond to that reason. The opportunity to respond must be offered before a decision is made. Ms Jones rejected the respondent's view that the factual determinations, not just the allegations, must be put to the employee for a response before a final decision is made; see: Wadey v YMCA Canberra [1996] IRCA 568 ('Wadey v YMCA Canberra'); Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137 ('Crozier') and Gibson v Bosmac Pty Ltd (1995) 60 IR 1 ('Gibson').

[15] Ms Jones relied on these authorities to demonstrate that the requirement for an opportunity to respond to allegations, is not satisfied by adopting a pedantic or semantic approach. In this case, the respondent was on notice of the matters of concern to the appellant in the Allegation Letter of 6 March 2017, before the disciplinary investigation. There had been a formal written complaint and the content of that complaint was set out in the Allegation Letter. The letter advised the respondent he had opportunities to respond, in writing by 9 March 2017, and during the independent investigation. The respondent's cross examination of Mr Sheehan demonstrated that he was aware at the time of the concerns of the employer in respect to the events of 21 February 2017. Attached to the Allegation Letter were the appellant's Disciplinary Procedure and Code of Conduct. Moreover, the respondent was already on a 12 month 'good behaviour' plan and he understood the consequences, if he was involved in another incident.

[16] Counsel put that the respondent had a real opportunity to provide a defence of his conduct. There was nothing new in the Termination Letter which the respondent was unaware of. The Deputy President found that the respondent had misconducted himself and had breached the appellant's policies, consistent with the original allegations and the independent investigator's findings. In these circumstances, it was unnecessary to put the investigator's report or her findings to the respondent. Ms Jones distinguished Francis v Kalgoorlie Consolidated Gold Mines Pty Ltd [2010] FWA 5472; 205 IR 238 ('Francis v Kalgoorlie') in which the employee did not know the reason why he was being investigated. She submitted that there is no requirement, contemplated by section 387(c) of the Act, that the respondent must be given an opportunity to respond to the final decision as to what disciplinary action had been decided.

[17] As to the approach adopted by the Deputy President in weighing up the various indicia in section 387 of the Act, Counsel dealt firstly, with the procedural deficiencies identified by the Deputy President. Procedural deficiencies must be approached with the valid reason in mind. In other words, the question is always to consider procedural unfairness issues in the context of all the relevant circumstances and ask the question 'if the procedural deficiencies did not exist, would that have resulted in a different outcome?'; or 'was the employee denied natural justice as a result of a faulty procedure?'. On both counts, the answer must be 'no', given that the procedural defects (which are denied) could not possibly have had an impact on the valid reason for dismissal. This was an error of law recognised by Byrne and Frew v Australian Airlines Limited [1995] HCA 24; 185 CLR 410 ('Byrne v Australian Airlines').

[18] Ms Jones contended similar errors in the Deputy President's weighing of the factors in section 387, concerning 'harshness'. The Deputy President had elevated the factors of the respondent's length of service above that of valid reason. This was incorrect and inconsistent with case law. Moreover, the Deputy President did not consider how the respondent's age was considered in the balancing exercise. Ms Jones submitted that in considering 'harshness' the Commission must take into account all the circumstances. This involves an assessment of the validity of the employer's reasons in an objective assessment of whether the dismissal was 'harsh, unjust or unreasonable'; see: Bostik Australia Pty Ltd v Gorgevski [1992] FCA 271; 36 FCR 20 ('Bostik v Gorgevski').

[19] Counsel further submitted that the Deputy President was in error by incorrectly weighing up all the circumstances when he accepted the respondent had misconducted himself and was on a final warning. It was relevant to note that at no time, including at the point of dismissal and during the hearing at first instance, had the respondent acknowledged he had done anything wrong, or that his conduct was inappropriate. In fact, the Deputy President contemplated it was likely he would behave the same way again, if reinstated. The Deputy President was in error by basing his findings 'purely on Mr Sheehan's circumstances'. She submitted that the 'harshness' factors had become conclusive and outweighed the valid reason for dismissal. This was an error in the balancing exercise undertaken by the Deputy President.

[20] Further, Ms Jones rejected the approach adopted by the Deputy President to the calculation of compensation, particularly section 392(2)(c) of the Act. In circumstances where the respondent was on a final warning and the Deputy President had, in fact, found it was likely he would act in a similar way, his finding that he would remain in employment for a further five months, was incorrect. The correct approach to determining the anticipated period the respondent would have remained employed, but for his dismissal, was to consider whether the procedural deficiencies (although denied) were applied and corrected by the appellant, and how long he would have remained in employment, until he was dismissed. This would have been no more than two weeks. Ms Jones further submitted that the 30 percent discount for misconduct (section 392(3)) was too low, given the gravity of Mr Sheehan's misconduct.

[21] Counsel acknowledged that once the calculation under section 392 of the Act had been undertaken, the result could still be adjusted up or down, if the outcome was manifestly too low or excessive. In this case, the result was manifestly excessive.

[22] As to public interest considerations, Ms Jones put that permission to appeal should be granted in this case because the Deputy President:

• made incorrect factual findings;

• applied an incorrect approach to balancing section 387 considerations;

• made findings which were disharmonious to other recent decisions of the Commission;

• ordered compensation which resulted in an injustice and was inconsistent with authority; and

• imported a further step in section 387(b) requiring employers to put the findings of the investigation to an employee, in circumstances where the employee is fully aware of the reasons for dismissal.

[23] Counsel submitted that the appeal raises errors, contemplated by the High Court in House v The King [1936] HCA 40; (1936) 55 CLR 499, and raises matters consistent with the conclusions in Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 ('Parmalat'). The Decision raises important questions about the rights and obligations of employees and employers in respect to workplace behaviour and what investigation is necessary to be undertaken. Parmalat also dealt with the balance of mitigating factors with the seriousness of the misconduct.

[24] Finally, Ms Jones submitted that if the Full Bench grants permission to appeal and upholds any, or a combination of the grounds of appeal, the Full Bench should:

1. quash the Deputy President's decision;

2. decide the matter for itself; and

3. dismiss Mr Sheehan's application for an unfair dismissal remedy.

[25] Ms Knowles grouped the appellant's grounds of appeal into two broad categories:

1. Errors of facts; and

2. The Deputy President's discretion was wrongly exercised.

[26] Ms Knowles put that where there were factual findings made against Mr Sheehan, the appellant does not criticise the Decision, but if other facts do not go its way, it is said to be error. She described this as a 'convenience of approach', without identification of error, or even significant error.

[27] Ms Knowles submitted that the Deputy President made two important factual findings. Firstly, that the appellant did not advise Mr Sheehan in clear and explicit terms of the reasons for his dismissal, prior to making the decision to dismiss him. The question is whether that finding was open on the evidence. In Ms Knowles' submission, that finding was actually apparent by the two key documents, being:

1. the 6 March 2017 Allegation Letter; and

2. the 30 May 2017 Termination Letter.

[28] Counsel pointed out that the Allegation Letter contained a series of serious allegations which were not found to be substantiated, by either the Investigator, or the Deputy President. These included that in the 21 February 2017 incident, Mr Sheehan had been 'exceedingly aggressive' and that he had used 'extremely graphic profanity'. Despite neither of these two allegations being substantiated, the Termination Letter claimed that the complaint had been substantiated, without indicating in clear and precise terms what aspects of the complaint had been substantiated. Ms Cox, the Investigator, conceded these were key differences. Her findings were that Mr Sheehan's behaviour and language were inappropriate, but she did not uphold the more serious descriptions of his behaviour and language.

[29] Ms Knowles also relied on the appellant's HR Operations Manager, Ms Sharon Junker's evidence in which she conceded Mr Sheehan was not dismissed for the more serious allegations; the Termination Letter did not accurately convey the reasons for dismissal; and that these less serious allegations were not put to Mr Sheehan. In other words, Ms Knowles submitted Mr Sheehan was not given an opportunity to respond to a less serious case against him. This opportunity was required in terms of an employee being aware of the precise nature of the employer's concerns and given a full opportunity to respond to these concerns; see: Gibson. Mr Sheehan was denied this opportunity, because the actual reasons were never put to him.

[30] Counsel rejected the appellant's claim that Mr Sheehan had breached its Code of Conduct. Mr Sheehan did not have a chance to argue that his behaviour may have been inappropriate, which did not meet the threshold of a breach of the Code; see: Francis v Kalgoorlie. She put that it was significant in this case, Mr Sheehan did not have an opportunity to change the decision maker's mind (Mr Jonathan Davis, Managing Director) who acted solely on Ms Junker's advice. Ms Knowles noted that the decision in Wadey v YMCA Canberra is authority for the proposition that an employee must be afforded an opportunity to respond to allegations. This was what was required under the predecessor provisions of the Workplace Relations Act 1996. The wording of the current Act requires an opportunity to respond to the valid reason, not just the allegations. This is precisely what did not happen here. It is an opportunity to convince the decision maker to change the outcome.

[31] As to the appeal grounds going to errors in the exercise of the Deputy President's discretion, Ms Knowles noted the obvious proposition that a finding as to whether a dismissal is 'harsh, unjust or unreasonable_'_, involves a broad value judgement. It is very clear that the Deputy President addressed each of the criteria in section 387 of the Act and found that:

• there was a valid reason for dismissal, although less serious than first alleged;

• there was no opportunity afforded to Mr Sheehan to respond to the valid reason; and

• the appellant did not accord sufficient weight to Mr Sheehan's age, length of service and his unblemished service for 33 of his 35 years employment.

[32] Counsel put that the Deputy President balanced all the relevant considerations and found the dismissal 'harsh and unjust'. The appellant could not identify any error in this balancing exercise. Rather, its case was because misconduct was found, that essentially was 'the end of the story' and 'trumps the rest of it (section 387)'. Such an approach is contrary to the authorities. There was no higher standard imposed on the employer in this case. In fact, the reverse is the case. The appellant did not do what the authorities require it to have done.

[33] Counsel said that, as the calculation of compensation based on a dismissal being 'harsh and unjust', the assessment in section 392(2)(c) is that but for the dismissal, what is the likelihood of a further period of employment. While the Deputy President opined that it was likely Mr Sheehan would engage in a similar behaviour, he settled on a five month period, being the expiry date of an earlier warning. This finding was open on the evidence and was not manifestly excessive for an employee of 35 years' service; 33 of which were unblemished. It is not a question of the Full Bench simply replacing the Deputy President's conclusion, with its own view. Moreover, Ms Knowles observed that the 30 percent discount for Mr Sheehan's misconduct brought the calculated figure down from around 21.6 weeks to around 14 weeks. In all the circumstances, this result was neither unreasonable, nor excessive.

[34] Ms Knowles rejected the appellant's submission that had Mr Sheehan been given the opportunity to respond, then any procedural deficiency would have been cured, say, in a couple of weeks, and the outcome of dismissal would have been the same. She stressed that the procedural deficiencies were not the only reasons why the Deputy President found Mr Sheehan's dismissal was unfair. It was also because of the inappropriate weight attributed by the appellant to his length of service, 33 years of unblemished service and his age. Moreover, that is the point of being able to give the employee an opportunity to respond to the valid reason and to convince the decision maker to change the proposed outcome. Ms Knowles further noted Mr Sheehan was on sick leave at the time and may have remained on leave for some time beyond two weeks. Accordingly, Counsel submitted there was no miscarriage of the Deputy President's discretion or an error of law in this respect.

[35] Finally, Ms Knowles submitted that this appeal discloses no error of fact, let alone significant error of fact, and no miscarriage of the Deputy President's discretion of the House v King kind. Accordingly, there is no public interest in this appeal.

[36] In addition, Counsel put that the Deputy President's Decision was an orthodox unfair dismissal case. The Deputy President addressed each of the mandatory requirements of the Act in a conventional and reasonable way, consistent with authority. There is no issue of general application and the Decision is not inconsistent with other decisions of the Commission of a similar nature. While the Full Bench may have come to a different view, particularly about the level of compensation and the 30% discount, that is not the test. Permission to appeal should be refused and the appeal dismissed.

[37] In reply, Ms Jones submitted it was not the case that the appellant only challenged factual findings, which did not suit its case. There was no challenge to the Deputy President's consideration of the respondent's length of service. What was challenged were two glaring and critical errors in the approach adopted by the Deputy President to sections 387(b) and (c) of the Act. This was enough to enliven the public interest.

[38] Ms Jones further put that in some ways, the Termination Letter is irrelevant, because the dismissal decision had already been made. The appellant contended that section 387(b) of the Act was met well prior to that. Section 387(c) is an opportunity to respond to capacity and conduct. It is not an opportunity to 'make a plea for mercy'.

[39] Lastly, Counsel Ms Jones rejected Ms Knowles' characterisation of the appellant's case that the valid reason 'trumps' everything. Other factors had to be considered in light of the valid reason finding and what impact do the mitigating factors have on the employer and the employee. Those factors cannot be elevated above valid reason, which is what happened in this case.

[40] Section 604 of the Act reads:

(a) made by the FWC (other than a decision of a Full Bench or the Minimum Wage Panel); or

(b) made by the General Manager (including a delegate of the General Manager) under the Registered Organisations Act;

may appeal the decision, with the permission of the FWC.

(2) Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.

Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).

(3) A person may appeal the decision by applying to the FWC.'

[41] An appeal under section 604 of the Act is by way of rehearing and the Commission's powers on appeal are only exercisable if there is error on the part of the primary decision maker. An appeal is not as of right and permission to appeal must first be obtained (s 604(2)). It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error; see: Wan v AIRC [2001] FCA 1803; (2001) 116 FCR 481 at [30]. However, the fact that the member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal; see: GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 ('GlaxoSmithKline') at [26]-[27].

[42] Subsection 604(2) of the Act requires the Commission to grant permission to appeal if satisfied that it is 'in the public interest to do so'. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment; see: GlaxoSmithKline at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], affirmed on judicial review; Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; Ferrymen Pty Ltd v Maritime Union of Australia [2013] FWCFB 8025; and NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663. In GlaxoSmithKline a Full Bench of the Commission identified some of the considerations that may attract the public interest at [27]:

'... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.'

[43] Other than a special case in section 604(2) of the Act, the grounds for granting permission to appeal are not specified. Considerations which would usually justify the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused; see: CFMEU v AIRC [1998] FCA 1404; (1998) 89 FCR 200 and Wan v AIRC [2001] FCA 1803; (2001) 116 FCR 481; see also: the Explanatory Memorandum to what is now s 604, at paragraph 2328.

[44] The decision subject to appeal is a discretionary decision. In Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47; (2000) 174 ALR 585 ('Coal & Allied') the High Court addressed the concept of error in the context of an appeal from a discretionary decision, in these terms:

'Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process. And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms:

"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".' [Citations omitted]

[45] We would also observe that House v The King articulates a further basis upon which error may be established in the exercise of a discretion:

'It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law responses in the court at first instance. In such a case, although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred.'

[46] Section 400 modifies section 604(2) of the Act in relation to a certain category of decisions. It provides:

(1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA considers that it is in the public interest to do so.

(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.'

[47] The reference in section 400(1) to 'this Part' is a reference to Part 3-2 of the FW Act, which is concerned with unfair dismissal. If section 400(1) applies, the public interest is the sole criterion for the grant or refusal of permission to appeal. If the appeal bench does not consider that it is in the public interest to grant permission to appeal, it must refuse such permission. It is not open for an Appeal Bench to grant permission to appeal on discretionary grounds. Further, in such matters appeals on a question of fact may only be made on the ground that the decision involved a 'significant error of fact' (section 400(2)). In Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; 192 FCR 78; 207 IR 177, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under section 400 as 'a stringent one.'

[48] It is convenient to group the appellant's grounds of appeal under two broad headings. Grounds 1 to 5 relate to the appellant's contention that the Deputy President made significant errors of fact and/or law and that his discretion miscarried when he found that:

• subsections 387(b) and (c) of the Act had not been complied with by the appellant;
• Mr Sheehan had not been aware of the valid reason for his dismissal;
• Mr Sheehan had not been given an opportunity to respond to these reasons before a decision was made to dismiss him; and
• on balance, these failures rendered the dismissal 'harsh and unjust' and therefore 'unfair'.

We group these grounds under the heading of 'Procedural Unfairness/Harshness Grounds'.

[49] Grounds 6-8 relate to the appellant's contentions that the Deputy President's findings as to the quantum of compensation was in error and/or his discretion miscarried when he ordered $15,792.52 be paid to Mr Sheehan. We group these grounds under the heading 'Compensation Grounds'.

[50] Section 387 of the Act provides as follows:

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.'

[51] In Bostik v Gorgevski the Federal Court of Australia (Shepperd and Heerey JJ) under the heading of 'harsh, unjust or unreasonable', said at [37]:

'These are ordinary non-technical words which are intended to apply to an infinite variety of situations where employment is terminated. We do not think any redefinition or paraphrase of the expression is desirable. We agree with the learned trial judge's view that a court must decide whether the decision of the employer to dismiss was, viewed objectively, harsh, unjust or unreasonable to this are the circumstances which led to the decision to dismiss and also the effect of that decision on the employer. Any harsh effect on the individual employee is clearly relevant but of course not conclusive. Other matters have to be considered such as the gravity of the employee's misconduct.'

[52] The Full Commission of the Australian Industrial Relations Commission (the 'AIRC') in Crozier did not expressly deal with what constituted the content of the notification of the reason for an employee's dismissal. There the Full Commission was dealing with the timing of the notification of the reason in the context of giving the dismissed employee, an opportunity to respond to the reason. It was found that the employee was not notified of the reasons for termination, before a decision was taken to terminate his employment.

[53] In Wadey v YMCA Canberra, Moore J made clear that an employer cannot merely pay 'lip service' to giving an employee an opportunity to respond to allegations concerning an employee's conduct. His Honour said:

'In my opinion the obligation imposed on an employer by that section has, for present purposes, two relevant aspects. The first is that the employee must be made aware of allegations concerning the employee's conduct so as to be able to respond to them. The second is that the employee must be given an opportunity to defend himself or herself. The second aspect, the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.' (Our emphasis).

[54] Nevertheless, procedural fairness steps should be applied in a common sense and practical way. In Gibson, Wilcox CJ said at [7]:

'Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, commonsense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employer's concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section.' (Our emphasis).

[55] It is trite to observe that any issue/s of procedural unfairness may not be of such significance as to outweigh the substantive reason/s for an employee's dismissal, particularly in cases of misconduct where the proven misconduct is of such gravity as to outweigh any other considerations in respect to 'harshness', such as age, length of service, employment record, contrition or personal and family circumstances.

[56] Although these less recent cases were decided under a different statutory scheme, the corresponding provisions between the Workplace Relations Act 1996 and the Fair Work Act 2009 are not materially different for relevant purposes. It does not detract from the observation that these cases still remain good law. These authorities plainly demonstrate that the weighing up of all the matters in section 387 by the Commission, remains quintessentially, an exercise of discretion. Accordingly, the correctness of a discretionary decision of this nature, under section 387 of the Act can only succeed if there is a demonstrated error in the decision making process by the member at first instance, of a kind discussed in House v King in that the decision maker:

• acted on a wrong principle;

• mistook the facts;

• took into account extraneous or irrelevant matters which affected the outcome; or

• did not take into account a material consideration/s.

[57] For the reasons we will shortly explain, we do not consider that the Deputy President made any significant error of fact, nor did his discretion miscarry when he firstly found that Mr Sheehan had been denied procedural fairness and secondly, when he balanced all of the matters he was required to take into account under section 387 of the Act and determined that Mr Sheehan's dismissal was 'harsh and unjust'.

[58] We agree with Ms Knowles' submission that one needs to go no further than the documents themselves, being the Allegation Letter of 6 March 2017 and the 30 May 2017 Termination Letter.

[59] Five specific allegations were put to Mr Sheehan in the Allegation Letter. These were:

• You allegedly found a door propped open with a piece of steel, which you considered a tripping hazard.

• You allegedly called both groups of students into the workshop to address the matter.

• You allegedly confronted the students, accusing them of propping the door open.

• You were allegedly exceedingly aggressive towards the group, including the use of an extremely graphic profanity.

• You were not the scheduled teacher of the first year apprentice students, and did not communicate with their teacher about the situation.

[60] The relevant passages in the Termination Letter which are said to correspond to the totality of the allegations in the Allegation Letter were:

'This investigation was undertaken as a result of a formal complaint from your previous manger, Michael Hamilton, in relation to events that were alleged to have occurred on 21 February 2017 in the Mechanical Engineering Workshop at Yallourn. This incident involved Federation Training Students and was deemed unacceptable behaviour, if proven, by yourself in the workplace. We deemed this matter serious enough that you were subsequently placed on suspension with full pay whilst we called in the independent workplace investigator to examine the situation and you subsequently went on sick leave. The investigation involved interviews with yourself, the relevant students, their employer, and other Federation Training staff as appropriate.

The Institute has now received a final report from the investigator, which has been considered by myself and the Human Resources Operations Manager. It is clear that this report demonstrates consistency in statements from witnesses to substantiate the complaint. This behaviour is unacceptable in any workplace but creates even greater risk when dealing with young students. It is Federation Training's determination that an unsafe and unhealthy work environment exists as a result of your inappropriate and unprofessional behaviour, to the extent that we believe it is an untenable situation. Federation Training cannot, consistent with its work health and safety obligations to students and out staff, allow you to return in the workplace.'

[61] The Deputy President concluded that Mr Sheehan had not been notified of the valid reason for his dismissal because:

• (a) The reasons for Mr Sheehan's dismissal were expressed in general and not the same terms in the Termination Letter than in the Allegation Letter.

• (b) Aspects of his conduct were found by the Investigator to be less serious than originally alleged; namely the investigator found Mr Sheehan's conduct was inappropriate and his language was inappropriate, rather than the original allegations that he had acted 'exceedingly aggressive' and used 'extremely graphic profanity'.

• (c) The allegations in the Allegation Letter could not be assumed by Mr Sheehan to be the reasons for his dismissal because the investigator had not been conducted, let alone concluded.

• (d) Mr Sheehan's response for the decision maker and opportunity to convince Mr Davis to change the outcome may well have been led to a different outcome, given the downgrading of the more serious allegations.

[62] It is apparent that the Deputy President relied on the evidence of one of the principal witnesses in Federation Training's case, Ms Junker. The Deputy President described her evidence at para [91] as follows:

'[91] During cross-examination Ms Junker gave evidence in relation to the initiation of the investigation, conduct of the investigation and its outcome and the reasons for termination of the Applicant's employment. The relevant evidence Ms Junker gave on these issues was:

• Mr Hamilton initiated the complaint regarding the Applicant's conduct prior to Australian Paper then lodging a complaint;

• She chose to brief Ms Cox regarding the previous incident of 2 March 2016 involving the Applicant and conceded that in doing so may have created a bad impression of the Applicant in Ms Cox's mind;

• She conceded that the Applicant was not dismissed for use of exceedingly aggressive behaviour or extremely graphic profanity and that the letter of termination dated 30 May 2017 did not accurately convey the reasons for termination of the Applicant;

• She accepted that the reasons for termination expressed in the letter dated 30 May 2017 were not put to the Applicant in the original letter dated 6 March 2017 that had outlined the initial allegations;

• Accepted that the summary of the investigation was not provided to the Applicant until after the termination of his employment was communicated to him.'

[63] The Deputy President also referred to the Investigator's cross examination at para [96], where he said in respect to Ms Cox's evidence:

'[96] Under cross-examination Ms Cox was questioned in relation to her investigation conclusion that the allegations against the Applicant had been substantiated. Specifically, Ms Cox was pressed regarding the particular allegation contained in the 6 March 2017 letter from the Respondent to the Applicant that he had been "...exceedingly aggressive towards the group, including the use of extremely graphic profanity". Ms Cox conceded that the evidence provided by witnesses in the matter did not support a conclusion that the Applicant had used "extremely graphic profanity" or acted in an "exceedingly aggressive manner".'

[64] Ms Knowles submitted that a principal factor going to whether a dismissed employee has been afforded procedural fairness, is that the employee must be made aware of the precise nature of the allegations said to have been found substantiated, in order for the employee to be able to persuade the decision maker to change the proposed outcome of dismissal. We agree. In this case, there was an obvious disjunct between the reasons for the employer's concerns in the Allegation Letter to the final reasons for dismissal in the Termination Letter. In our view, as a matter of procedural fairness, a dismissed employee is entitled to know, in clear and unequivocal terms, the precise details of the allegations found to have been established by the decision maker, and be provided with an opportunity to respond to those reasons in order to persuade the dismissal maker to an alternative outcome to dismissal.

[65] This is so because an employee's opportunity to respond to the decision maker and provide the employee with an opportunity to convince the decision maker to change the disciplinary outcome, will obviously be conditioned by what the employer's precise concerns are, in light of the findings of an investigation or other inquiries of the employer. This conclusion is consistent with Gibson where it was said '[w]here the employee is aware of the precise nature of the employer's concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section'. We note Ms Junker conceded as much when she said the Allegation Letter did not accurately reflect the reasons for the applicant's dismissal.

[66] In our opinion, the fact an employee might have been told some time earlier (three months in this case) what the allegations were, may not, and sometimes do not correspond to the reasons ultimately determined by the decision maker. This is precisely what happened in this case. The Deputy President found that, in these circumstances, there was a denial of procedural fairness. We concur with that finding.

[67] In addition, the fact the details of the allegations were discussed during Ms Cox's investigation is not the point. Just as happened here, the Investigator's Report, (which Mr Sheehan did not even receive until after his dismissal, and then only in summary form), did not make findings which corresponded to the allegations made much earlier. Moreover, it is not the Investigator's Report or its findings which are decisive to the decision maker's determination, as to whether the employee's dismissal was consistent with the provisions of section 387(b) and (c) of the Act.

[68] There was no error of law or principle in respect to the procedural fairness issues. We consider the conclusions of the Deputy President were not only reasonably open to him, we would expressly agree with them.

[69] The appellant further submitted that the Deputy President erred in his approach to determining 'harshness' in that he failed to give appropriate weight to the valid reasons by giving greater weight to Mr Sheehan's length of service. We do not accept this characterisation of the Deputy President's finding of 'harshness'. It is plainly evident that the Deputy President carefully and methodically considered each of the matters in section 387 and balanced all of those matters, including the seriousness of Mr Sheehan's conduct, the procedural deficiencies, Mr Sheehan's 35 years service and his 33 years of unblemished service, prior to the warning he received for an incident on 2 March 2016. The Deputy President's decision in this respect, reveals no appealable error, in either fact, or approach or any miscarriage of the Deputy President's broad discretion, under section 387 of the Act. We reject the appellant's submissions, that the Deputy President gave one or more factors greater weight than the valid reason finding.

[70] We refer to the Explanatory Memorandum to the Fair Work Bill 2008 where it is said at para 1541:

'FWA must consider all of the above factors in totality. It is intended that FWA will weigh up all the factors in coming to a decision about whether a dismissal was harsh, unjust or unreasonable and no factor alone will necessarily be determinative.' (Our emphasis).

[71] We also respectfully adopt the reasoning of the majority in B, C, D v Australia Post [2013] FWCFB 6191 where at para [41] Lawler VP and Cribb C said:

'[41] Nevertheless, it remains a bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be "harsh, unjust or unreasonable" notwithstanding the existence of a "valid reason" for the dismissal. That principle reflects the approach of the High Court in Victoria v Commonwealth and is consequence of the reality that in any given case there may be "relevant matters" that do not bear upon whether there was a "valid reason" for the dismissal but do bear upon whether the dismissal was "harsh, unjust or unreasonable".'(Citations removed).

[72] We do not accept that the Deputy President's decision is counter-intuitive or is disharmonious with other similar decisions of the Commission dealing with 'harshness' in the context of an employee's lengthy period of service. We refer to two such decisions.

[73] In BlueScope Steel Limited v Sirijavoski [2014] FWCFB 2593 a Full Bench of the Commission dealt with an appeal by BlueScope Steel of a decision of Riordan C in which the Commissioner found a valid reason for the applicant's dismissal (a safety breach), but the dismissal was nevertheless 'harsh, unjust and unreasonable'. The Commissioner ordered 26 weeks pay compensation (we note the employee cross appealed, seeking reinstatement). The Full Bench observed that the Commissioner took into account several matters under section 387(h) of the Act and found:

● the investigation conducted by the Company was incomplete and disjointed, and did not provide the fundamental elements of procedural fairness to the applicant;

● the applicant had not been disciplined in 35 years of employment for any issue in relation to operational performance and it was unfair for a single incident of operational negligence to now be the cause of his dismissal;

● it was accepted by Mr Otsyula and others involved in the investigation that the actions of the applicant did not warrant dismissal except for the final warning; and

● the effect of the dismissal was to deny the applicant the opportunity to apply for redundancy in the restructuring which was being undertaken by the Company at the Plate Mill.

[74] The Full Bench concluded at para [68] to [70]:

'[68] In all the circumstances, we recognise that the Company had good and adequate reasons to terminate the employment of the applicant. The incident on 21 May 2013 amounted to a serious performance failure on the part of the applicant which resulted in significant loss to the Company. The incident was the subject of a full investigation by the Company and no satisfactory explanation was provided for the applicant's poor performance. The incident occurred within six months of the applicant being given a first and final warning by the Company in relation to a serious safety breach.

[69] However we also recognise that, having regard in particular to the applicant's long and satisfactory period of service and the impact of the dismissal upon him, the dismissal might be considered to be harsh. The applicant had been employed by the Company or its predecessors for 35 years with no prior warnings in relation to his operational competency. He was 53 years old and had spent his entire working life at the Steelworks. The impact of the termination on the applicant and his family has been severe and there may be few prospects for him to find alternative employment in the Wollongong area. It is also relevant that as a result of the dismissal the applicant missed the opportunity to be selected for retrenchment and receive a redundancy package from the Company. In this regard we note and adopt the Commissioner's finding that the dismissal was not motivated by any purpose on the part of the Company to avoid redundancy obligations or payments. We also note that there is no certainty that the applicant would have been retrenched and provided with a redundancy package by the Company.

[70] On balance, and having regard to all the relevant factors referred to in s.387, we have come to the conclusion that the termination of the applicant's employment was harsh, unjust or unreasonable.' (Our emphasis).

[75] In a recent decision, Barclay DP in Brain v Nyrstar Hobart Pty Ltd [2018] FWC 846 said at para [7]:

'[7] For the reasons which follow I have found that there was a valid reason for termination. The Applicant was guilty of a serious safety breach. He proceeded to energise equipment which was still being worked on by maintenance. He removed tags from the equipment when he should not have done so, and knew he should not have done so. He potentially exposed a maintenance worker to the risk of injury. However, I have also found that the termination was harsh. The Respondent failed to seek submissions from the Applicant in respect to sanction. Accordingly, he was denied procedural fairness in this regard. The Applicant had been employed by the Respondent and its predecessors for 37 years. He had no relevant previous warnings and only had two counselling matters some 14 years prior to dismissal. He had worked his whole life in employment at the Respondents premises. It is unlikely he will be able to obtain alternative employment due to his age and skills. A single safety breach over a 37 year career of the type the Applicant is guilty of does not justify dismissal.' (Our emphasis).

[76] For the aforementioned reasons, we are not persuaded that the appellant's grounds of appeal, one to five, have been made out.

[77] Section 392 of the Act is as follows:

(1) An order for the payment of compensation to a person must be an order that the person's employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.

(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer's enterprise; and

(b) the length of the person's service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that the FWC considers relevant.

(3) 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.

(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation, or other analogous hurt, caused to the person by the manner of the person's dismissal.

(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:

(a) the amount worked out under subsection (6); and

(b) half the amount of the high income threshold immediately before the dismissal.

(6) The amount is the total of the following amounts:

(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and

(b) if the employee was on leave without pay or without full pay while so employed during any part of that period - the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.'

[78] The appellant submitted that but for the procedural deficiencies identified by the Deputy President (although not conceded by the appellant), Mr Sheehan would have remained in employment for no longer than two weeks, while the appellant provided him with an opportunity to respond to the valid reason/s for his dismissal.

[79] It is notoriously difficult to speculate, with any certainty, how long a period an unfairly dismissed employee would have continued in employment, but for their dismissal. In McCulloch v Calvary [2015] FWCFB 873, the Full Bench of the Commission put it this way, when it said at para [27]:

'[27] We would also observe that, in our view, the evidence upon which the Commissioner relied was insufficient to sustain the inference that, but for the dismissal, the appellant would only have remained in employment for a further 8 weeks, at which time he would be summarily terminated. Implicit in the Commissioner's finding is that the conduct which led to his dismissal (and which the Commissioner found did not constitute a valid reason for termination) would not only be repeated within a relatively short period of time but would in fact be repeated in a more serious form such as to constitute serious misconduct. While the task of determining an anticipated period of employment can be difficult, it must be done. In the context of this case it seems to us that the Commission would require cogent evidence to conclude that a person such as the appellant, who was dismissed without a valid reason, would only have worked another 8 weeks at which time he would have been summarily dismissed. The Commissioner's s.392(2)(c) finding constitutes a significant error of fact, within the meaning of s400(2) of the Act.'

[80] We are also mindful of what the Full Bench of the AIRC said in Smith v Moore Paragon Australia Ltd [PR942856]130 R 446 ('Paragon') at [32]:

'It seems to us that the amounts arrived at by the application of the guidelines in Sprigg in the present matter are on their face manifestly inadequate for employees with the length of service of the Appellants, the circumstances of their dismissal and their poor prospects for future employment. This causes us to sound a warning in relation to the application of Sprigg. The guidelines laid down in Sprigg and refined in Ellawala v Australian Postal Commission are clearly designed to serve the proper and desirable purpose of fostering uniformity and consistency in decision-making by individual members of the Commission when assessing compensation pursuant to s.170CH(6). However, those guidelines are not a substitute for the words of the Act. By virtue of s.170CH(2), any remedy ordered by the Commission must be a remedy that the Commission considers "appropriate" having regard to all the circumstances of the case including the matters set out in s.170CH(2). Section 170CH(6) confers a general discretion "if the Commission considers it appropriate in all the circumstances of the case" to "make an order requiring the employer to pay the employee an amount ordered by Commission in lieu of reinstatement" subject to the Commission having regard "to all the circumstances of the case including" the matters listed in s.170CH(7) - the same list of matters set out in s.170CH(2) - and subject also to the `cap' provided for in s.170CH(8) and (9). If an application of the guidelines in Sprigg yields an amount which appears either clearly excessive or clearly inadequate, then the member should reassess any assumptions or intermediate conclusions made or reached in applying the guidelines so as to ensure that the level of compensation is in an amount that the member considers appropriate having regard "to all the circumstances of the case" including the matters listed in s.170CH(7) and subject to the `cap' provided for in s.170CH(8) and (9). In this context it should be borne in mind that the result yielded by an application of the Sprigg guidelines may vary greatly depending upon particular findings in relation to the various steps including, in particular, step one, which necessarily involves assessments as to future events that will often be problematic.' (Footnotes omitted).

[81] In our view, the submissions of the appellant as to the Deputy President's approach to section 392(c) of the Act are misconceived. Once a dismissal is found by the Commission to be unfair and a remedy of compensation is considered appropriate, the calculation of the likelihood of a further period of employment, is as if the dismissal had not taken place. That this is so, is obvious from the language used in section 392(2)(c), 'the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed'. In other words, the starting point is what is the period of time Mr Sheehan would have likely continued in employment, had he not been dismissed. As the authorities make plain, the task of determining an anticipated period of employment can be difficult. It involves a broad, and highly speculative discretionary assessment. Nevertheless, in our view, the Deputy President engaged in that assessment in an unremarkable and entirely orthodox way. Reasonable minds might differ as to whether Mr Sheehan would have likely remained in employment, but for his dismissal, for less than five months (or whether the 30 percent discount for misconduct was too high or too low). That is not the test. It is not open to an appeal bench to disturb a discretionary finding of the first instance decision maker, simply because we may have come to a different view. This is particularly so where the discretion, required to be exercised under section 392(2)(c), involves a highly speculative judgement as to how long the employee would have remained in employment, but for dismissal.

[82] We would add that while there may be some superficial attraction to Ms Jones's submission that had the appellant cured the procedural deficiencies found by the Deputy President, Mr Sheehan would not have had a likelihood of future employment beyond one or two weeks, while the appellant gave him an opportunity to respond precisely to the valid reason, that submission ignores the other factors found by the Deputy President as being matters going to unfairness; namely, his length of service, his unblemished 33 years of service and his age (60 years). To isolate one of the factors telling against a finding of unfairness, without taking into account all the other factors which the Deputy President clearly did, is an incorrect and impermissible approach to determining compensation under section 392(2) of the Act.

[83] In our opinion, it is plainly apparent from para [190] to [210] of the Deputy President's Decision that he carefully and systematically addressed each of the factors he was required to take into account under section 392(2) of the Act. Some factors weighed in favour of Mr Sheehan and others did not (the 30% discount for misconduct). The Deputy President arrived at a compensation amount of $15,792.52. We do not consider the Deputy President elevated one factor, above any other. Accordingly, we are satisfied that there was no error of law or principle in the Deputy President's approach to compensation.

[84] Lastly, while it may have been open to the Deputy President to exercise a further discretion, where the application of the Sprigg formula yielded an amount which was either clearly excessive, of clearly inadequate and order a different amount; see: McCulloch v Calvary Health Care at [29] and Paragon, it may be inferred that by not doing so, the Deputy President considered the outcome of the Sprigg methodology in this case, to be 'appropriate in all the circumstances'. We do not cavil with that inference, particularly given the overarching objective of the Commission's unfair dismissal jurisdiction is to ensure a 'fair go all round' (section 381(2) of the Act).

[85] For these reasons, we consider there is no substance to the appellant's grounds six to eight.

[86] In his decision, the Deputy President carefully reviewed and weighed all of the evidence before him and made appropriate findings in relation to that evidence. He clearly set out his reasons for doing so. We are not persuaded that any aspect of the Deputy President's decision manifests a significant error.

[87] We consider His Honour's approach was entirely orthodox and conventional. We can discern no miscarriage in the exercise of the Deputy President's discretion and find no errors of law or principle, in accordance with established authority. The legal principles applied by the Deputy President do not appear to us to be disharmonious when compared with other decisions of the Commission, dealing with similar matters. We do not consider the Decision is counter-intuitive, or otherwise manifests an injustice. Further, we are not persuaded the appeal raises matters of general importance relevant to the Commission's unfair dismissal jurisdiction.

[88] As set out earlier, section 400(1) of the Act provides that permission to appeal must not be granted unless the Commission considers that it is in the public interest to do so. For the reasons given, we are not persuaded that it is in the public interest to grant permission to appeal. Accordingly, permission to appeal is refused and the appeal is dismissed.

[89] Pursuant to the consent orders made by His Honour the President on 15 January 2018, the stay of the Deputy President's decision is dissolved and the consent orders, in the event of the appeal not succeeding in paragraph [3] of the orders, are confirmed.

Ms F Knowles of Counsel for the respondent, Mr Sheehan.

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