Four Sons Pty Limited v Sakchai Limsiripothong

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: WRIGHT J, President HUNGERFORD J CAMBRIDGE C Monday, 20 March 2000

FOUR SONS PTY LIMITED v SAKCHAI LIMSIRIPOTHONG. Application for leave to appeal and appeal against a decision of Commissioner McKenna given on 11 November 1999 in Matter No. IRC 2806 of 1999.

DECISION OF THE COMMISSION (extempore) [2000] NSWIRComm 38

1 This is an application for leave to appeal and, if leave be granted, an appeal against the decision of McKenna C of 11 October 1999 in which the commissioner ordered that the appellant pay the respondent the sum of $6,000 within seven days, having earlier made a finding that the dismissal of the respondent by the appellant "was, in significant measures, harsh, unreasonable, and unjust". See s 84(1) of the Industrial Relations Act 1996 (the Act).

2 The background to the proceedings at first instance and the issues raised are shortly set out in the second to fifth paragraphs of McKenna C's decision as follows: The applicant was formerly employed by the respondent as an award-covered casual runner at a restaurant named "Doyles". The applicant commenced employment with the respondent in August 1998 and his employment was terminated on 15 May 1999.

The reason for the applicant's termination of employment was said by the respondent to be due to a seasonal downturn in business. The applicant's case contended it was reasonable to infer there was a different reason for the termination of employment, that is some form of victimisation. Shortly before the termination of employment, the applicant had been involved in raising complaints with the respondent's management about the alleged sexual harassment of a female runner by a male chef.

Mr D Lawman , solicitor for the respondent, presented a case in opposing the application for relief which went forward on two principal bases. The first basis was the effect of cl.5B of the Industrial Relations (General) Amendment (Unfair Dismissal) Regulation ("the Regulation"), which relevantly reads: 5B Other exemptions from unfair dismissal provisions (1) For the purposes of section 83(2) of the Act, the following classes of employees are exempted from Part 6 of Chapter 2 of the Act:

... d) employees engaged on a casual basis for a short period except employees who: (i) are engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 6 months, and (ii) would, but for the dismissal, have had a reasonable expectation of continuing employment with the employer.

The respondent's principal submission proceeded on the basis that the applicant was precluded by the Regulation from seeking relief under the unfair dismissal provisions. In this regard, the respondent's case contended that the applicant was not employed on a "regular and systematic basis" (given his casual pattern of employment) and nor could the applicant be said to have had "a reasonable expectation of continuing employment" (given the comments allegedly made to him on recruitment). As an alternative or substantive supplementary submission, the respondent contended that the reason for the termination of employment was not related to the applicant's involvement in complaints to management about the alleged sexual harassment of another employee; Mr Lawman submitted "there was only one reason for the termination of employment and that was a downturn in business".

3 The appellant advances its case on appeal and for leave to appeal, having been permitted by the Full Bench to put its submission in both areas, on these three bases (as set out in its written submissions):

2. The first error concerns the Commissioner's approach to cl.5B(1)(d)(ii) of the Industrial Relations (General) Amendment (Unfair Dismissal) Regulation. (a) It is clear from the Commissioner's decision at pages 128 and 129 of the Appeal Book that she regarded the test imposed by this provision as being entirely subjective. (b) But the language of this provision requires a test that is either entirely or partly objective. (c) In other words, the test is arguably not whether the respondent actually had a reasonable expectation of continuing employment with the appellant, as the Commissioner seems to have thought, but rather whether such an expectation, if in fact held, would have been objectively reasonable. (d) The Commissioner has thereby acted upon a wrong principle, and made an appellable error, of the kind discussed in House v The King (1936) 55 CLR 499, at 504, and Big W Discount Stores v Donato (1995) 58 IR 239, which materially influenced her decision. (e) The evidence demonstrated that an expectation of continuing employment on the part of the applicant would not have been objectively reasonable: see, for example, the evidence of Mr Dyer at pages 32 to 36 of the Appeal Book, and that of Mr Doyle at page 51 of the Appeal Book, all of which seems to have been accepted by the Commissioner in the observation at the foot of page 128 of the Appeal Book: "… I think I can take notice of the fact that a waterfront restaurant with outdoor seating may be expected to have at least some level of seasonal fluctuation …" (f) The question of whether the test imposed by cl.5B(1)(d)(ii) is subjective or objective, which has never been settled by a decision of the Commission so far as I can discover, means that this appeal has the elements of importance and public interest that justify a grant of leave.
3. The second error in the Commissioner's decision is the way in which she came to draw the inference, at page 133 of the Appeal Book, "that the termination of the applicant's employment was not unconnected with the raising of complaints by him about the alleged work-related harassment." It is clear, when one considers the whole of the evidence, that the Commissioner applied a less rigorous standard of proof in drawing this inference that the seriousness of the finding required: see Briginshaw v Briginshaw (1938) 60 CLR 336, at 361 - 362. Again, there is no decision of the Commission in which this question is relevantly considered.
4. The third error in the Commissioner's decision is constituted by her order at page 135 of the Appeal Book that compensation be paid within seven days of the date of her decision. There is no source of power for such an order.

4 We shall initially deal with the last issue raised. The provision relevant to the exercise of the commissioner's power to make the monetary orders she did were subsections (5), (6) and (8) of s 89 of the Act which provide:

(5) If the Commission considers that it would be impracticable to make an order for reinstatement or re-employment, the Commission may order the employer to pay to the applicant an amount of compensation not exceeding the amount of remuneration of the applicant during the period of 6 months immediately before being dismissed. If the applicant was on leave without full pay during any part of that period, the maximum amount of compensation is to be determined as if the applicant had received full pay while on leave. (6) When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration received in alternative employment, or that would have been payable if the applicant had succeeded in obtaining alternative employment.

… (8) An order under this section may be made on such terms and conditions as the Commission determines.

5 In our view the elaboration of power contained in s 89(8) (which applies to all orders made under s 89 and not only the kind of order made by McKenna C) makes plain that the commissioner's decision as to the time within which the order was to be complied with, was within power. Section 89(8) is a provision enacted to remove doubt, or for more abundant caution. The legislature may have enacted the provision precisely to avoid de minimis arguments such as this. It may not have needed to do so in light of the canon of construction referred to in judgments such as that of the High Court in D'Emden v Pedder (1904) 1 CLR 91 at 109 - 110 where Sir Samuel Griffith CJ said: … where any power or control is expressly granted there is included in that grant, to the full extent of the capacity of the grantor, and without special mention, every power and every control the denial of which would render the grant itself ineffective. This is, in truth, not a doctrine of any special system of law, but a statement of a necessary rule of construction of all grants of power, whether by unwritten constitution, formal written instrument or other delegation of authority …

6 See also the judgment of Samuels JA in Hornsby Shire Council v Porter (1990) 19 NSWLR 716 at 725 where his Honour cited with approval the following passage from Craies on Statute Law, 7th edition, 1971, at 111: If a statute is passed for the purpose of enabling something to be done, but omits to mention in terms some detail which is of great importance (if not actually essential) to the proper and effectual performance of the work which the statute has in contemplation, the courts are at liberty to infer that the statute by implication empowers that detail to be carried out.

7 To similar effect is the judgment of Pearlman CJ in another local government case, Hamman v Lake Macquarie City Council [1998] NSWLEC 98 at pp. 10 - 11, where her Honour in a part of the judgment approved in terms by the Court of Appeal in Hamman v Lake Macquarie City Council [1999] NSWCA 82 at 17, said: An authority granted in general terms carries with it an authority to perform subordinate acts which are necessary or ordinarily incidental to the exercise of express authority ( Small and Ors v Smith and Ors (1884) 10 AC 119 at 129; D'Emden v Pedder (1904) 1 CLR 91 at 109 - 110). In my opinion the express authority in this case to "issue … approvals" under the Local Government Act carries with it the authority to carry out all the functions which are a necessary part of the approvals process under the Local Government Act .

See also the judgments, respectively, of the Commonwealth Industrial Court and Schmidt J in this Commission in Drinkwater v Amos (1972) 20 FLR 359 at 361 - 362 and Hill v Director-General of the Department of Education and Training (NSW) (1998) 85 IR 201 at 207. 8 Before leaving this argument we should note that it is likely that an order made under s 89(5) may operate upon it being made or pronounced in open court: see Nutshack Franchise Pty Ltd v Smith (1999) 90 IR 355 at 359 - 360. But that issue need not be considered further in the light of the particular argument that was put here.

9 To deal with the first two arguments on appeal, we need to refer to the section of McKenna C's decision entitled "Consideration". It is in these terms: Consideration The respondent's evidence contended that the "main" reason for the termination of employment was due to a seasonal downturn. Somewhat amorphous supplementary reasons were given relating to unspecified performance-related issues, and a proposition (which was not established on the evidence) that the applicant may have had alternative employment at the time his employment was terminated. There was no evidence of threats made to the applicant about his employment for raising the allegations. Mr Inverarity submitted, however, "the disruption that the applicant caused in the respondent's business led the respondent to make a very easy decision to let him go, for reasons, we say, they dressed up as a reduction in business".

While I take notice of the fact that a restaurant with outdoor seating may be expected to have seasonal fluctuations and that the number of employees required may vary accordingly, the evidence in this case leads me, on balance, to draw the inference submitted by Mr Inverarity and conclude that the termination of the applicant's employment was not unconnected with the raising of complaints by him about the alleged work-related harassment .

My consideration of this matter, and of the inference drawn concerning the termination of employment, has been influenced particularly by the timing of events and by the comments and reactions of the respondent's management concerning the issues raised by the applicant. On 9 May 1999, the applicant discussed with the respondent's management, in the presence of the alleged harasser, the allegations of harassment. As noted earlier in this decision, the conduct to which the allegations related included unsolicited and unwanted embracing and kissing at the workplace, and harassing telephone calls at the home of the female employee. The response of the person in charge of the restaurant, Mr Doyle, included: informing the applicant that "if you want someone to be your girlfriend you do this sort of thing... This happens all the time"; laughing at the applicant's protestations about this comment; informing the applicant that nothing could be done so far as the respondent was concerned; and advising the applicant that his options were to contact a solicitor or the police if he wanted to pursue the matter. In turn, the applicant advised that the matter would be pursued. Less than a week later, when the applicant worked his next rostered shift, the applicant's employment was terminated. Accepting, as I have, the applicant's version of what was said to him on the termination of employment, it can be seen that no proper reasons were given to the applicant for the dismissal. Lastly, if there were performance-related issues for the termination of employment, they were not discussed with the applicant at any time prior to the termination of employment; and if the applicant was selected for dismissal because he may have had another part-time or casual job, it is not apparent why this should have been a consideration and, in any event, the existence of such alternative employment at the time of the termination of employment by the respondent was not apparent on the evidence. (The finding complained of by the appellant in the second submission is emphasised in the above quotation.) 10 In Briginshaw v Briginshaw (1938) 60 CLR 336, the High Court affirmed the principle that there is only one standard of proof applicable in civil matters, namely, on the balance of probabilities. However, it was held that the strength of the evidence necessary to establish a matter on the balance of probabilities may vary according to the nature or gravity of the fact to be proved. Dixon J stated (at 362):

The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences. 11 Similarly statements are made in other cases such as M v M (1988) 63 ALJR 108 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449. In the last cited case, Mason CJ, Brennan, Deane and Gaudron JJ stated (at 449 - 450):

The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud (See, eg, Hocking v Bell (1945) 71 CLR 430, at 500; Rejfek v McElroy (1965) 112 CLR 517, at 519 - 521). On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear ( Briginshaw v Briginshaw (1938) 60 CLR 336, at 362; Helton v Allen (1940) 63 CLR 691, at 701; Hocking v Bell (1944) 44 SR (NSW) 468, at 477 (affirmed in Hocking v Bell (1945) 71 CLR, at 464, 500); Rejfek v McElroy (1965) 112 CLR, at 521; Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, at 539 or cogent ( Rejfek v McElroy (1965) 112 CLR, at 521) or strict ( Jonesco v Beard [1930] AC 298, at 300; Briginshaw v Briginshaw (1938) 60 CLR, at 362; Helton v Allen (1940) 63 CLR, at 711; Hocking v Bell (1944) 44 SR (NSW), at 478 (affirmed in Hocking v Bell (1945) 71 CLR, at 464, 500); Wentworth v Rogers (No 5) (1986) 6 NSWLR, at 538) proof is necessary "where so serious a matter as fraud is to be found" ( Rejfek v McElroy (1965) 112 CLR, at 521). Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct (See, eg, Motchall v Massoud [1926] VLR 273, at 276) and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. (footnotes incorporated) 12 The Briginshaw v Briginshaw principle is now embodied in s 140 of the Evidence Act 1995. That section provides:

140. Civil proceedings: standard of proof (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence, and (b) the nature of the subject-matter of the proceeding, and (c) the gravity of the matters alleged. 13 The principle in Briginshaw v Briginshaw has been applied by the Commission in unfair dismissal cases when considering allegations against an employee of serious misconduct involving allegations of criminal activity. For example, in Wang v Crestell Industries Pty Ltd (1997) 73 IR 454 at 463 - 464, the Full Bench said:

The principle applicable in relation to the onus and standard of proof in a reinstatement case concerning summary dismissal for serious misconduct involving criminal activity by the employee is that the employer must establish to the reasonable satisfaction of the Commission, that the employee was guilty of the misconduct alleged. The onus of proof in such a case is on the employer and the standard of proof must be such as to enable a positive finding that the misconduct occurred. The standard is, of course, the civil and not the criminal one, but the requisite degree of satisfaction must have regard to the seriousness of the alleged conduct and the gravity of the consequences of the finding. 14 Nevertheless, the Full Bench made it clear that: … the evidence in a reinstatement case involving criminal activity may well establish that the employee was guilty of conduct which, whilst falling short of criminal conduct, nevertheless constitutes serious and wilful misconduct justifying dismissal and refusal of reinstatement.

See also Coles Myer Ltd v Shop, Distributive and Allied Employees Association (1989) 27 IR 299 at 304 and Bigg v NSW Police Service (1998) 80 IR 434 at 456. 15 Ordinarily, the principle in Briginshaw v Briginshaw is applicable to findings of criminal conduct or fraud (see, for example, Neat Holdings), however, the statements of principle may be applied to allegations of a broader nature. In all matters, it is necessary for a tribunal to consider the nature and seriousness of the allegation made before finding it proved at the requisite level. In this case, the finding made by the Commissioner was that "the termination of the [respondent's] employment was not unconnected with the raising of complaints by him about the alleged work-related harassment".

16 What has to be considered is the nature of the finding made by the commissioner, the evidentiary approach appropriate to that finding, and whether, by reference to the approach appropriate to the relevant finding, the approach taken by the commissioner was erroneous.

17 Considered in the context of the whole of the commissioner's consideration set out earlier, and her findings some of which we have not set out, having regard particularly to the fact that Mr Doyle did not give evidence, the finding that no proper reasons were given for the dismissal, and the findings as to failure of the employer to raise adequately the alleged performance issues, the particular finding was well open to the commissioner. It did not require a Briginshaw v Briginshaw approach. The finding was a very narrow and carefully framed one. When the terms of the finding are carefully considered, it did not involve a finding of guilt of fraud or criminal conduct or the like. It was styled in suitably temperate and confined language.

18 In its written submissions in reply, the appellant submitted that a finding that a dismissal infringed the statutory tests in s 84(1) had to be proved on the basis of the approach in Briginshaw v Briginshaw. We reject this contention as involving a fundamental misconception of the test and scheme of the Act relating to unfair dismissals. For example, a conclusion that a dismissal was harsh, unreasonable, or unjust does not necessarily involve any finding of legally or morally reprehensible conduct on the part of the employer. It may be sufficient, for example, to find the test met where the conduct of the employer, or the circumstances of the dismissal, result in a situation where the dismissal viewed objectively can be said to be harsh, unreasonable, or unjust. That does not involve necessarily a finding as to the employer's intent, or that the employer has acted reprehensibly, illegally, or fraudulently. Indeed, such a finding could arise from mere inadvertence on the employer's part.

19 We conclude that this argument also fails, and turn to the submissions based on clause 5B(1)(d)(ii) of the Industrial Relations (General) Regulation 1996 which was inserted in 1997 by the Industrial Relations (General) Amendment (Unfair Dismissal) Regulation. The issue here is whether the test provided by that provision is wholly subjective, it being submitted that was the view of the commissioner, or wholly or partly objective.

20 We are prepared to consider, for the purposes of dealing with this appeal only, that the test is objective, but in deciding whether it has been satisfied objectively it is appropriate to have regard to the expectations that an employee may reasonably have gathered from what may have been said to the employee at relevant times, or from what the employee may have inferred, or had an expectation about, from the employer's conduct, acts, or omissions. We consider that the words, "[an employee] who ... would, but for the dismissal, have had a reasonable expectation ..." as appear in the Regulation may well lead to that conclusion.

21 The part of the decision relevant to this issue is as follows: The Regulation The evidence of the applicant (as confirmed in the employment records presented in the respondent's evidence), discloses that the applicant ordinarily was rostered to work three days a week during the period of his employment. While there were fluctuations, the applicant generally worked shifts on Tuesday, Saturday and Sunday. The evidence shows, therefore, that the applicant was, within the meaning of cl.5B(1)(d)(i) of the Regulation, employed on a regular and systematic basis for at least six months. During that time he earned about $350 a week.

Patrick Dyer is employed by the respondent as a Host Manager. Mr Dyer employed the applicant. Mr Dyer explained in evidence he informs all new employees that the work is seasonal when giving inductions about terms and conditions of employment, and said he also recollected giving this information to the applicant. The applicant deposed that he was not told his employment was only temporary or that he would not receive regular shifts. To the extent that Mr Dyer could not provide any particular words relevantly involved in the conversation about seasonal work (and seemed often to base his evidence on the proposition that the information is given routinely to all employees), I preferred the evidence of the applicant for this reason: I preferred the specific over the general. That being said, I think I can take notice of the fact that a waterfront restaurant with outdoor seating might be expected to have at least some level of seasonal fluctuation (albeit that the restaurant also has functions). Nonetheless, the applicant was recruited during winter and was regularly rostered thereafter throughout the period of employment. As submitted by counsel for the applicant, Mr D Inverarity , on the basis of the employment arrangements that the applicant enjoyed with the respondent, "there can be no doubt that he had a real expectation of further work". I am satisfied there was, within the meaning of cl.5B(1)(d)(ii) of the Regulation, a reasonable expectation of continuing employment.

Having regard to the foregoing matters, I am satisfied the applicant is not an exempted casual employee within the meaning of the Regulation. The applicant may make an application under Part 6 of Chapter 2 of the Act.

22 We do not consider that the commissioner's approach on this matter involves either error or a failure to apply the criteria in the Regulation in a manner inconsistent with the construction which we have accepted for the purposes of this particular appeal. Accordingly, this ground of appeal also fails. 23 We have therefore concluded that the appeal should be dismissed prior to dealing with the question of leave to appeal. We have also provided reasons for our conclusions, which is not a usual course in relation to matters where leave is being considered and refused. We have taken this course, a course unlikely to be repeated, because of the ingenuity of the appellant's submissions, and the fact that they raise a number of matters which have not arisen before, or have not arisen in the same form. For that reason we consider that we should grant leave since it is appropriate that these matters be the subject of consideration and decision at Full Bench level.

24 It should be clearly stated, however, that novelty or ingenious arguments do not of themselves demonstrate either significant error or a basis for the grant of leave. Although we grant leave it is not on a basis which involves any finding that there was any arguable error in the decision of McKenna C.

1. Leave to appeal granted.
2. Appeal dismissed.
3. Stay order granted on 23 November 1999 dissolved. (and, after hearing submissions from the parties)
4. Costs reserved.

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.