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[2018] FWCFB 5960
Fair Work Commission (Full Bench)
2018-11-13
Original judgment source is linked above.
s.604 - Appeal of decision
Appeal against decision [2018] FWC 4369 of Commissioner Spencer at Brisbane on 9 August 2018 in matter number U2017/12758 - finding in respect of s.392(2)(c) involved an error of principle and a significant error of fact - public interest enlivened - permission to appeal granted - appeal upheld - compensation decision and order quashed - rehearing - compensation order made.
[1] Hanson Construction Materials Pty Ltd T/A Hanson Construction (Hanson Construction; the Appellant) has applied for permission to appeal and has appealed against a decision[1] made by Commissioner Spencer on 9 August 2018 (the Compensation Decision) in which the Commissioner awarded compensation to the Respondent in the amount of $10,951.87, having previously found, in a decision issued on 25 May 2018[2] (the Substantive Decision), that Mr Pericich had been unfairly dismissed.
[2] An appeal under s.604 of the Fair Work Act 2009 (Cth) (the Act) is an appeal 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.[3] There is no right to appeal and an appeal may only be made with the permission of the Commission. The matter was listed for hearing in respect of both permission to appeal and the merits of the appeal.
[3] At the heart of the appeal is the amount of compensation awarded to Mr Pericich. The relevant background may be shortly stated.
[4] Mr Pericich was employed by the Appellant as a 'professional tipper driver' from about 10 April 2013 until he was dismissed on 13 November 2017. The reasons for his dismissal are set out in the letter of termination provided to him by the Appellant, as follows:
I refer to the incident at around 9:10 AM on 9 November 2017 when your truck and trailer that you were driving had a serious near miss when you failed to stop on the red lights on the railway crossing on Cape Cleveland Road with the bullet passenger train approaching.
Hanson's motor vehicle policy requires that company vehicles must always be driven in a safe manner and all traffic laws must be complied with in full, at all times. It is part of our overall risk management strategy to eliminate "risky" or unsafe behaviour. This letter serves as a Termination Letter to you for unsafe driving, effective immediately. You will be paid one week's pay in lieu of notice.
[5] In short, Mr Pericich was dismissed for "unsafe driving" as a result of an incident on 9 November 2017 in which, while driving a truck with an attached trailer, he had failed to stop at red flashing lights on a railway crossing on Cape Cleveland Road near Townsville, with a passenger train approaching.
[6] The Substantive Decision sets out the background to the proceeding (at [1] to [4]), summarises the Applicant's submissions and evidence (at [5] to [49]); and then summarises the Respondent's submissions and evidence (at [50] to [51]). The Commissioner's consideration begins at [52] and deals with the matters set out at s.387(a) to (h), as follows:
A valid reason existed for the termination (s.387(a)):
'[71] On balance, in considering all of the factors in this matter, a valid reason existed for the dismissal. The conduct of the Applicant involved taking an unnecessary risk that could have resulted in a serious accident. This conduct was fundamental to his duties as a truck driver. There was no reason for the Applicant not to stop at the lights. He was not carrying a load, nor was he on a time constraint. Regardless of whether a complaint was received, there were good reasons for the Applicant to ready his vehicle to stop at this well-known crossing, particularly given the approaching train and the associated risks.'
'[73] The Applicant was not appropriately notified of the reason under consideration prior to the dismissal. The Applicant was solely notified of his failure to stop at the railway crossing when the lights triggered and the Respondent's assessment that this caused a potentially dangerous near miss incident. The Applicant was also not given a prior opportunity to view the available footage of the incident.'
'[79] ...The non-provision of the footage to the Applicant and not providing him an opportunity to respond after viewing the footage, meant that the allegations were not clearly identified to the Applicant and as such, detrimentally impacted the ability of the Applicant to respond to the allegations.
[80] A clear opportunity was not provided to the Applicant, and certainly not a clear opportunity after considering the allegations and having viewed the related video footage.'
'[81] It was agreed that the Respondent allowed a person to be present in the role of witness or support person. However, given that the meeting did not occur in a procedurally fair manner, the addition of a support person did not overcome this.'
'[83] The Applicant had not been warned about the particular conduct previously. The dismissal related to a single, discrete incident and the existence of previous warnings was not relied upon by the Respondent in relation to the dismissal. The Respondent relied on the constant caution given to drivers to operate carefully and the need to adhere to their policies.'
'[86] Given the size of the Respondent and its workforce, the flawed procedures followed in effecting the dismissal impacts on the fairness of the termination. This contributes to a finding that the dismissal was unfair.'
'[88] There is no evidence suggesting that the company does not have a human resources department or officer, however no human resources team was involved in the dismissal. However, access to legal advice was available and no significant defence to the lack of procedural fairness was provided.'
'[90] The Applicant submitted that the loss of his employment had caused him significant personal and financial issues. As described above, the Applicant supports two children with special needs, and provided a medical certificate from their General Practitioner attesting to severe autism in his seven year old child, and Klinefelter syndrome, ADHD and Severe Behaviour Disorder in one of the 19-year-old twins.'
[7] The Commissioner found that while there was a valid reason for the dismissal, the allegations were not clearly put to the Respondent and he was not given an opportunity to respond prior to termination. The Commissioner concluded that the Respondent had not been afforded procedural fairness; had consequently been unfairly dismissed;[5] and that an order for remedy should be made.
[8] The Commissioner went on to conclude that reinstatement was inappropriate and, in turning to the question of compensation decided to provide the parties with an opportunity to address 'the estimated period of the continuing employment relationship' for the purpose of assessing an appropriate order for compensation. There is no challenge to the Substantive Decision, in particular there is no challenge to the Commissioner's conclusions that there was a valid reason for Mr Pericich's dismissal; that he had not been afforded procedural fairness; and that reinstatement was not appropriate.
[9] The Compensation Decision sets out the relevant background (at [1] to [4]), the legislative provisions (at [5] to [6]) and then summarises the parties' submissions (at [7] to [18]). The Commissioner's consideration begins at [19] and she deals with the matters set out at s.392(2)(a) to (g), as follows:
There was no evidence that an order for compensation would have any effect on the viability of Hanson Construction (s.392(2)(a)) (at [23]).
Mr Pericich had been employed by Hanson Construction for four years and 7 months (s.392(2)(b)) (at [24]).
As to the remuneration Mr Pericich would have received, or would have been likely to receive, had he not been dismissed (s.392(2)(c)) the Commissioner found (at [33]-[34]):
'[33] ...it is considered that based on the Applicant's prior employment and the procedural fairness issues, the particular circumstances of the Applicant's driving as set out in relation to the incident, that the Applicant's employment would have continued for six months.
[34] If the Applicant had remained working for that period he would have received further remuneration to the amount of $35,000.00 gross, based on his annual salary...'
[10] The Commissioner's compensation assessment is set out at [33] to [38] of the Compensation Decision. In summary the process undertaken was as follows:
(the starting point - the Applicant's employment would have continued for six months)
[11] The Commissioner went on to award compensation of $10,951.87.
[12] The decision subject to appeal was made under Part 3.2 - Unfair Dismissal - of the Act. Section 400(1) of the Act provides that permission to appeal must not be granted from such a decision unless the Commission considers that it is in the public interest to do so. 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' (s.400(2)). In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 of the Act as 'a stringent one'.[6] The Commission must not grant permission to appeal unless it considers that it is 'in the public interest to do so'.
[13] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[7] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
'... 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.'[8]
[14] 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.[9] 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.[10]
[15] The Appellant advances two, related, grounds of appeal in the notice of appeal:
The Commissioner erred in her application of s.392(2)(c) of the Act, contrary to previous authority, by not determining the period of time Respondent would have remained employed by the Appellant had the Appellant afforded him procedural fairness.
The Commissioner made a significant error of fact in her assessment under s.392(2)(c) of the Act, in finding that the Respondent's employment would have continued for six months.
[16] In short, the Appellant contends that the circumstances of the present matter required the Commissioner to consider how much longer Mr Pericich would have remained in employment had he been afforded a procedurally fair process.
[17] The Appellant does not suggest that the assessment of compensation begins and ends with working out how long it would have taken for the allegations to have been put to Mr Pericich and to receive and consider his responses. It is acknowledged that an additional payment may be warranted having regard to Mr Pericich's family circumstances.
[18] In deciding whether the Commissioner erred in the manner contended by the Appellant it is necessary to say something further about the Substantive Decision. It may be observed at the outset that some of the Commissioner's findings and conclusion lack clarity. Under the heading 'Consideration' the Commissioner fails to make any finding as to whether the dismissal was 'unfair' within the meaning of s.385, as it required before considering an order for a remedy. However, such a finding may be inferred at [93] under the heading 'Remedy':
'[93] Having determined that a valid reason existed for the dismissal but that the Applicant was unfairly dismissed, due to the lack of procedural fairness afforded in the process of dismissal, it is necessary to determine whether a remedy for the unfair dismissal should be applied.' (emphasis added)
[19] It follows from [93] that the Commissioner concluded that there was a valid reason for the dismissal but that it was unfair because of the lack of procedural fairness. There is no finding that the dismissal was harsh. The closest the Commissioner approaches that issue is in the following passage:
'[91] The severe impact of the dismissal on the Applicant's family and household income is a factor which goes to harshness.' (emphasis added)
[20] The above observation stops well short of a finding that the dismissal was harsh based on the Applicant's personal circumstances.
[21] The only time the Commissioner states that the Applicant was unfairly dismissed is at [93] and the sole reason identified for that unfairness is the lack of procedural fairness. At [86] the Commissioner notes that the size of the employer's business and the flawed procedure adopted 'contributes to a finding that the dismissal was unfair'; but this falls well short of an actual finding that the dismissal was unfair.
[22] Relevantly, in the Compensation Decision the Commissioner makes express reference to [93] and [106] to [107] of the Substantive Decision.[11] Paragraphs [106] to [107] also refer to the procedural deficiencies in the termination decision:
'[106] The Applicant was not afforded procedural fairness. The allegations were not clearly addressed with him prior to the dismissal. He was also not given a proper opportunity to respond with a witness present, prior to being stood down and then prior to the termination.
[107] He was also not given the opportunity to view the footage of the incident from the dash cam on his truck prior to the dismissal, nor allowed an opportunity to comment on such to the Respondent. The Applicant was denied natural justice. The Respondent is a large employer and had the ability to seek expert advice to avoid dismissal of the Applicant without allowing the required procedurally fair process.'
[23] If the Applicant's dismissal was inevitable then the Appellant is correct in contending that the starting point in assessing compensation is how long a procedurally fair process would have taken. The Respondent contested the inevitability of dismissal submitting, during the course of oral argument:
'... it comes to this question of procedural fairness and whether or not my client's dismissal was inevitable because we say that the words reasons supporting the dismissal by the Commissioner do not equate to dismissal being inevitable ...'[12]
[24] Contrary to the submission put we are satisfied that the Commissioner's reasons amount to a finding that dismissal was inevitable, so much is apparent from [92] of the Substantive Decision:
'[92] The allegations were not clearly put to him for response. He was not afforded the opportunity to view the footage of the incident prior to the dismissal. The addition of his responses after dismissal has not however, undermined the reasons supporting the dismissal.' (emphasis added)
[25] The circumstances of the present matter are that the following findings have either been made directly or may be inferred:
there was a valid reason for the dismissal;
there was an absence of procedural fairness;
the dismissal was unfair solely due to the absence of procedural fairness; and
the Applicant's dismissal was inevitable.
[26] In such circumstances the finding required by s.392(2)(c) involves assessing the duration of a procedurally fair process.[13]
[27] Contrary to the Respondent's submission the Full Bench decision in Federation Training v Mr Peter Sheehan (Federation)[14] is entirely distinguishable from the present matter. In Federation the Member at first instance had 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 Applicant's age and length of service with the Respondent. On balance I am satisfied that these factors rendered the dismissal harsh and unjust.'[15] (emphasis added)
[28] In Federation there is a clear finding that the dismissal was harsh and unjust, based on the procedural deficiencies and the Applicant's age and length of service. The present case is very different. There is no finding of harshness; the sole basis for the finding of unfairness rests on procedural deficiencies and dismissal was inevitable.
[29] The Commissioner's finding in respect of s.392(2)(c) involved both an error of principle and a significant error of fact. On that basis we are satisfied that it is in the public interest to grant permission to appeal and we grant permission. On the basis of the errors identified we uphold the appeal and quash the Commissioner's Compensation Decision and Order.
[30] We now turn to the rehearing of the question of compensation.
[31] The Appellant submits that a compensation payment of 3 weeks' pay would be appropriate - one week to address the procedural deficiencies and a further two weeks to mitigate the harshness of the termination, in view of Mr Pericich's personal circumstances. The Appellant proposes that this amount ($4038.46) should be reduced by 30% on account of Mr Pericich's conduct and on that basis arrives at a compensation order for $2826.92).
[32] The Respondent submits that should we find that the Commissioner erred in her approach to determining the quantum of compensation we should nevertheless conclude that 'the quantum arrived at was fair and just in all the circumstances'. As the Respondent puts it:
'The length of Mr Pericich's employment, employment record, clean traffic history and his relationship with his colleagues favour the award of compensation Commissioner Spencer deemed in her overarching decision to be appropriate.'[16]
[33] We now turn to the factors which s.392(2) directs that we take into account.
[34] We accept the Appellant's submission that a procedurally fair process would have taken 1 week. Given the Commissioner's finding that dismissal was inevitable it follows that the starting amount (s.392(2)(c)) is 1 weeks' pay.
[35] Mr Pericich made efforts to mitigate his loss (s.392(2)(d)). The amount of remuneration Mr Pericich has earned since his dismissal is not relevant for present purposes because it was earned well after the prospective period of employment, a point conceded by the Appellant. Nor is s.392(2)(f) relevant in the present circumstances.
[36] The Respondent's length of service - 4 years and 7 months - favours an award of compensation of in excess of 1 weeks' pay.
[37] As to other relevant matters (s.392(2)(g)) we have had regard to all of the material before the Commissioner and the parties' subsequent written and oral submissions in the appeal. In particular, we note that the Applicant's conduct involved taking an unnecessary risk that could have resulted in a serious accident and that the dismissal has had a significant adverse impact upon the Applicant, given his personal circumstances.
[38] The Respondent and his partner support a 7 year old daughter with autism (who had an NDIS application pending) and an adult son (19 years) with special needs who does not live at home (and had a Centrelink application pending).[17] The Respondent and his partner also have a mortgage on a rental property which is not covered by the rent because of the low value of houses in Townsville.[18] These matters are set out in more detail in the Respondent's supplementary written submissions of 6 September 2018 at [10] to [37].
[39] The strict application of the approach set out in Sprigg v Paul's Licensed Festival Supermarket (Sprigg),[19] and endorsed in subsequent decisions, would yield an order that Mr Pericich be paid compensation of 1 weeks' pay. Sprigg is a useful servant, but is not to be applied in a rigid determinative manner. In deciding the amount of a compensation order the Act directs that the Commission 'must take into account all of the circumstances of the case' including the particular matters set out at s.392(2)(a) to (g).
[40] We have taken all of the circumstances into account including that there was a valid reason for dismissal based on the Applicant's conduct, the Applicant has received a payment in lieu of notice, and the matters at s.392(2)(b) to (g), insofar as they are relevant. We have determined that an order for the payment of 6 weeks' compensation is appropriate, having regard to the matters set out at [36] and [38] above. We are satisfied that Mr Pericich's misconduct contributed to the employer's decision to dismiss him and reduce the amount we would otherwise order by 1 weeks' pay on account of his misconduct (s.392(3)).
[41] We have decided to make an order for 5 weeks' compensation ($6730.88), less applicable tax, with 7 days. The amount we propose to order does not include any component by way of compensation for shock, distress or humiliation or other analogous hurt, caused to Mr Pericich by the manner of his dismissal (see s.392(4)). Such order will have no effect on the viability of the employer's enterprise (s.392(2)(a)).
[42] In conclusion, we grant permission to appeal, uphold the appeal, quash the Commissioner's Compensation Decision and Order, and order that Hanson Construction Materials Pty Ltd pay Mr Pericich $6730.77, within 7 days.
[1] Pericich v Hanson Construction Materials Pty Ltd T/A Hanson Construction Materials Pty Ltd [2018] FWC 4369.
[2] Pericich v Hanson Construction Materials Pty Ltd T/A Hanson Construction Materials Pty Ltd [2018] FWC 1336.
[3] This is so because on appeal FWC has power to receive further evidence, pursuant to s.607(2); see Coal and Allied v AIRC [2000] HCA 47; (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
[4] [2018] FWC 1336 at [2].
[6] Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; (2011) 192 FCR 78 at [43].
[7] O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4; (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54; (2011) 192 FCR 78 at [44] - [46].
[8] GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343, 197 IR 266 at [27].
[9] Wan v AIRC [2001] FCA 1803; (2001) 116 FCR 481 at [30].
[10] GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343, 197 IR 266 at [26]- [27]; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
[11] See [2018] FWC 4369 at [2]; also see the reference to 'a series of procedural deficiencies ... regarding the manner in which the dismissal was implemented' at [30].
[12] Transcript 5 September 2018 at [50].
[13] See generally Parker v Garry Crick's (Nambour) Pty Ltd the Trustee for Crick Unit Trust T/A Crick's Volkswagon [2016] FWCFB 3683.
[15] Quoted in [2018] FWCFB 1679 at [6].
[16] Respondent's supplementary submissions, 6 September 2018 at [8].
[17] [2018] FWC 1336 at [90]; Exhibit 5, witness statement of Ms Margaret Stacy dated 11 February 2018 at paragraphs 116, 122 and 124.
[18] Exhibit 5, witness statement of Ms Margaret Stacey dated 11 February 2018 at paragraph 127.
Printed by authority of the Commonwealth Government Printer
Hanson Construction Materials Pty Ltd
Darren Pericich [2018] FWCFB 5960
(2011) 192 FCR 78
(2001) 116 FCR 481
(2011) 85 ALJR 398
(1989) 168 CLR 210
(2000) 203 CLR 194
(1998) 88 IR 21