Fair Work Act 2009

s.604 - Appeal of decision

Low Latency Media Pty Ltd T/A Frameplay, Frameplay Holdings Corporation

Appeal against the Decision [ [2022] FWC 2133] of Commissioner Yilmaz at Melbourne on 12 August 2022 in matter U2021/6369 - s. 606 Application for stay of decision - Approach to determining whether to stay a decision - Balance of convenience - Application for a stay granted.

• [1] This Decision concerns an application for a stay order by Low Latency Media Pty Ltd T/A Frameplay (Appellant). The stay order is sought pursuant to s. 606 of the Fair Work Act 2009 (FW Act) in relation to a Decision and Order made by Commissioner Yilmaz on 12 August 2022.[1] In the Decision, the Commissioner determined that Mr Eric Rossi (Respondent) had been unfairly dismissed and ordered that he be reinstated to his former position with the Appellant with continuity of service, an amount of compensation for lost wages and superannuation and an amount for reimbursement for loss found by the Commissioner to have been suffered by the Appellant in the last six months of his employment because of a drop in his salary. The Order was to take effect within seven days - on 19 August 2022.

• [2] The Appellant filed a notice of appeal on 14 August 2022 and sought the stay order on an urgent basis. Directions were issued requiring the parties to file submissions and any material relied on in relation to the stay application and a hearing was conducted on 16 August 2022. At the conclusion of the hearing, I indicated provisional views on a number of matters and informed the parties that I would issue a decision the following day. The stay Order was issued on 17 August 2022 and the parties were informed that I would provide reasons for this decision in due course. These are my reasons for making the stay Order.

• [3] The power to grant a stay pending the hearing and determination of an appeal lodged under s.604 is contained in s.606(1), which provides:

"606 Staying decisions that are appealed or reviewed

(1) If, under section 604 or 605, the FWC hears an appeal from, or conducts a review of, a decision, the FWC may (except as provided by subsection (3)) order that the operation of the whole or part of the decision be stayed, on any terms and conditions that the FWC considers appropriate, until a decision in relation to the appeal or review is made or the FWC makes a further order."

• [4] The principles concerning whether a stay application will be granted are well-established and were stated in Edghill v Kellow-Falkiner Motors Pty Ltd as follows:

"In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospect of success, in respect of both the question of leave to appeal and the substantive merits of the appeal. In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed. Each of the two elements referred to must be established before a stay order will be granted." [2]

• [5] The prima facie position in relation to the balance of convenience is that the status quo should be preserved. Although this may be the status quo pre- or post-decision, in Coal and Allied Operations Pty Ltd v Crawford[3] a Full Bench of the Commission said:

"...[t]he statements to be found in various decisions that the Commission normally grants a stay to restore the status quo pending an appeal, simply recognize that in most cases the balance of convenience favours the grant of a stay. This is because of the difficulty which may be encountered if a stay is not granted, in restoring the parties to their original position, if the appeal is ultimately successful."[4]

• [6] In its notice of appeal, the Appellant advances a number of grounds including errors said to relate to jurisdiction and discretion including that the Commissioner:

• Purported to make both an order for reinstatement under s. 391 of the FW Act and an order for compensation under s. 392;
• Purported to make orders to correct what is said to be an alleged pre-dismissal underpayment of salary; a deferral of pay and a disputed amount of annual leave; and
• Made other significant errors of fact said to include confusing the Respondent's roles as employee, director and ongoing shareholder and failed to have any, or proper regard to evidence about the conduct of the Respondent and the impact of his reinstatement.

• [7] It is sufficient for present purposes to note that the Commissioner ordered an amount of $60,616.39 less taxation in respect of the alleged pre-dismissal underpayment and $26,153.85 less taxation, plus superannuation contributions of 10% in respect of compensation for loss of income.

• [8] In relation to the balance of convenience, the Appellant submits that the Commission should have regard to the following matters:

• The reinstatement order has the potential - on evidence at first instance - to impact the mental health and ongoing employment of a number of employees of the Employer group, its financial viability and ability to attract investment;
• The Respondent - on evidence at first instance - has been earning approximately twice the pay as an IT consultant that he earned as an employee of the Appellant; and
• It is more than 12 months since the dismissal and the evidence at first instance was not only that the Respondent earned more post dismissal, but also that the employer group and its employees flourished in his absence.

• [9] The Appellant also provided an undertaking to the Commission in the following terms, in relation to preserving the Respondent's position if the appeal is not successful:

"1. The Appellants will not take any steps to fill the Respondent's vacant CTO role during the intervening period; and

1. The Appellants will pay interest in relation to any of the sums ordered to the Respondent pursuant to the prescribed rate of post-judgment interest fixed by rule 39.06 of the Federal Court Rules 2011."[5]

• [10] The Respondent objected to the stay being granted on several grounds including that the application for an unfair dismissal remedy was made on 20 July 2021 and a further delay in obtaining the remedy ordered by the Commissioner would be prejudicial to the Appellant. The Respondent submitted that the Appellant had advanced unsuccessful jurisdictional objections to his application, which were also the subject of a hearing, and this had further occasioned delay in the finalisation of his application.

• [11] The Respondent also submitted that he is a shareholder and co-founder of the Appellant. According to the Appellant, since his dismissal, the Appellant's Board has granted bonus shares to senior staff resulting in a dilution of the Appellant's shareholding and there is a risk that this will continue. The Appellant maintains that he will be in a better position to protect his shareholding if he is reinstated. The Appellant also maintains that reinstatement will provide him with access to members of the Appellant's Board so that he can advocate his position in relation to his role with the Appellant and allocation of shares as a senior staff member.

• [12] Ultimately the Appellant accepted that the question of whether he would be granted further shares if he was reinstated, is hypothetical. The Appellant also confirmed that he is earning more in his current role than he previously earned working for the Appellant.

• [13] After considering the appeal grounds advanced by the Appellant, I am satisfied that there is an arguable case for permission to appeal, and that the Appellant has some reasonable prospects of success in relation to the merits of the appeal. In particular, the Appellant has identified an arguable case of appealable error in relation to the Commissioner's orders with respect to the financial compensation. These matters go to jurisdiction and as the Commissioner also ordered that the Respondent be reinstated, it is arguable that an error also infected that aspect of the decision.

• [14] With respect to the balance of convenience, I am satisfied that it weighs in favour of the grant of a stay on the basis that on the Respondent's own submissions he is conducting his own business and his current earnings exceed his previous earnings while employed by the Appellant and will continue to do so up to the hearing and determination of the appeal. The Respondent's position is protected if the appeal is unsuccessful, based on the undertakings given by the Appellant. The effect of the undertakings is that if the appeal is unsuccessful, the Respondent will be reinstated with continuity of service, to a position that the Appellant has undertaken not to fill until the appeal is determined and will be paid the financial amounts ordered by the Commissioner, with interest. Accordingly, there will be no prejudice to the Respondent and the pre-decision status quo is maintained.

• [15] It is also the case that if the Respondent's reinstatement took effect immediately, his ability to benefit from any allocation of shares in his capacity as a senior staff member, would be entirely hypothetical. It is also unlikely board members would grant the Respondent a bonus share allocation if he were reinstated immediately, given the reasons asserted by the Appellant for dismissing the Respondent, and the grounds of appeal. Finally, any rights the Respondent has in his capacity as a shareholder can be pursued independently of his rights as an employee.

• [16] On the other side of the ledger, if the stay is not granted and the reinstatement order takes effect immediately, the Appellant will suffer actual prejudice for which it cannot receive redress if the appeal is successful. In this regard, the Respondent's operations will be disrupted by the reinstatement of the Respondent to a senior position, and the disruption will continue until the appeal is heard and determined. It would also undoubtedly be disruptive for the Respondent if the appeal were successful and the Commissioner's orders were quashed, thereby ending his employment for a second time.

• [17] For this reason, I did not accept the Respondent's proposal to stay only the terms of the order dealing with compensation. Plainly this proposal would not achieve the status quo and the disruption for the Respondent associated with reinstatement, even were that situation to pertain only to the period up to the hearing and determination of the appeal, could not be redressed if the appeal succeeds.

• [18] For these reasons, I determined to grant the stay order sought by the Appellant, on the basis of the undertakings provided by its legal representative, and issued an Order to that effect.[6]

[1] Eric Rossi v Low Latency Media Pty Ltd T/A Frameplay [2022] FWC 2133; PR744901

[2] [2000] AIRC 785, Print S2639 at [5]

[3] (2001) 109 IR 409.

[5] Email from Appellant dated 15 August 2022.

[6] PR744901.

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