s.604 - Appeal of decision

Appeal against decision of Commissioner Connolly in C2024/1086 - error in equating bullying with serious misconduct - appeal upheld

[1] Mark Frost has lodged an appeal under s 604 of the Fair Work Act 2009 (FW Act) against a decision of Commissioner Connolly ( [2024] FWC 2237) which determined a dispute that was referred to the Commission for arbitration under s 739 of the FW Act and clause 11 of the Ambulance Victoria Enterprise Agreement 2020 (Agreement). The dispute concerned the decision of Ambulance Victoria (AV) to impose a disciplinary sanction on Mr Frost in the form of a transfer from Bright in northern Victoria to Dandenong in southeast Melbourne. AV made this decision after an independent report concluded that Mr Frost had engaged in bullying conduct towards coworkers. Mr Frost did not challenge the findings of the report but considered that the decision to transfer him to Dandenong was unreasonable, and that AV had failed to comply with clause 75 of the Agreement, which requires it to deal with alleged misconduct consistent with the principles of procedural fairness. He also considered that his conduct did not amount to serious misconduct, and that the sanction of transfer was therefore not available to AV under clause 74.6(f)(iv) of the Agreement.

[2] It was common ground that the Commission had power to arbitrate the dispute. Clause 11.5(c)(i) of the Agreement allows the Commission to review AV's compliance with clause 75, and to determine whether it has acted 'unreasonably or unjustly in the circumstances' in imposing a disciplinary outcome of the kinds referred to in clause 11.5(b). These include 'restorative practices', one of which is 'transfer in the case of serious misconduct related to conduct that meets the definition of workplace bullying or harassment pursuant to the [FW] Act and the Equal Opportunity Act 2010 (Vic)' (clause 74.6(f)(iv)).

[3] The parties submitted questions for the Commissioner's determination. The first was whether Mr Frost's conduct amounted to 'serious misconduct related to conduct that meets the definition of workplace bullying or harassment'. The second was whether AV had acted 'unreasonably or unjustly' in imposing the sanction of transfer to Dandenong. The Commissioner concluded that Mr Frost's behaviour did amount to serious misconduct, and that AV had not acted unreasonably or unjustly in deciding to transfer him. Mr Frost's appeal contends that these conclusions were affected by error.

[4] In his decision, the Commissioner set out the provisions of the Agreement that established the source of his authority to arbitrate the dispute and addressed the factual background to the dispute. Briefly stated, in August 2021, AV told Mr Frost that allegations of bullying had been made against him. He was suspended pending an investigation. The Hon. Brian Lacy was appointed as the investigator. From October to December 2021, Mr Frost provided written responses to the allegations and participated in an interview with Mr Lacy. On 22 July 2022, AV informed Mr Frost that the investigation had concluded that three allegations had been substantiated, two had been substantiated in part, and one was found to be unsubstantiated. AV asked Mr Frost to show cause why it should not take disciplinary action against him, including by transferring him to Dandenong. AV did not accept Mr Frost's responses and determined to proceed with the transfer. Mr Frost then lodged his application under s 739 in the Commission.

[5] At [25] of his decision, the Commissioner summarised Mr Lacy's report, which ran to twenty pages, and noted certain key findings. These included that Mr Frost was generally rude; that he did not respect women; that he ignored greetings of one of the complainants and would not engage in conversation with her; that he had belittled this person's contributions and failed to create a respectful working environment; that this behaviour was unreasonable and created a risk to safety; and that his conduct had amounted to bullying. The Commissioner noted that Mr Frost did not challenge Mr Lacy's conclusions or findings (at [26]), but that he disputed that his conduct had amounted to serious misconduct, and contended that AV's right to transfer him had therefore not been enlivened (at [27]).

[6] The Commissioner then examined the various steps in AV's investigation of the allegations that had been raised against Mr Frost and addressed the parties' submissions about whether AV had complied with clause 75 of the Agreement. At [54], the Commissioner stated:

[54] I have considered all of Mr Frost's submissions regarding the employer's commitments to procedural fairness and its obligations under clause 75 of the Agreement. What is critical in the present circumstances is the investigation and report of Mr Lacy. The findings of this report are that the conduct of Mr Frost was misconduct within the meaning of serious misconduct as defined.

[7] The Commissioner then stated that AV should have provided Mr Lacy's report to Mr Frost (at [56]), that it had not done everything within its power to ensure that Mr Frost was provided with procedural fairness (at [57]), but that this did not necessarily mean that AV had not complied with clause 75 (at [58]). The Commissioner reasoned that Mr Lacy had conducted his investigation in accordance with the provisions of clause 75 and afforded Mr Frost every opportunity to respond to the allegations (at [61]), that there was no explicit obligation on AV to provide him with the report (at [62]), nor was there any procedural deficiency or unfairness in the report or the findings of Mr Lacy (at [65]). The Commissioner concluded that AV had fulfilled its obligation to observe clause 75 (at [66]).

[8] From [68] to [92], the Commissioner considered whether AV had acted unreasonably or unjustly in its disciplinary response to the report, and in particular in deciding to transfer Mr Frost to Dandenong. The Commissioner noted Mr Frost's submissions about the consequences of the transfer, including that he would no longer be able to live in Bright. He concluded:

[91] AV's position is that its considerations in determining a transfer were the removal of Mr Frost from the complainants against him, in particular Ms Gibson, minimising the risk of Mr Frost engaging in the same or similar conduct again and imposing an appropriate disciplinary sanction to allow Mr Frost to return to his substantive duties. At the time, the only available location that met this criteria outside of the Hume Region was Dandenong.

[92] Mr Doyle's evidence is that in determining Dandenong as the transfer location he has considered all relevant factors including the circumstances and responses of Mr Frost. Dandenong was proposed because it was the only available option at the time. I accept this evidence and I am not satisfied that in making this determination AV has acted unreasonably or unjustly.

[9] The Commissioner then stated that, because AV had complied with clause 75 and not acted unreasonably or unjustly, he should not exercise his discretion to impose his own view of the matter in substitution for the sanction imposed by AV (at [93] and [94]). He noted that at the time of the decision, Dandenong had been the only available transfer option ([95]), but that it would be appropriate for the parties to consider working together to identify other alternative locations for Mr Frost to work (at [96]).

[10] The Commissioner proceeded to address the questions for determination. As to whether Mr Frost's conduct was serious misconduct related to bullying or harassment, the Commissioner said the following:

[116] On this basis, the Respondent submits any suggestion by the Applicant that Mr Frost's behaviour of bullying towards Ms Gibson did not also constitute serious misconduct must be rejected.

[117] I have considered these submissions, and the contemporaneous evidence of Ms Gibson in proceedings.

[118] For the Applicant's argument to prevail, my finding must be that Mr Frost's behaviour independently found by Mr Lacy and accepted by Mr Frost to be bullying does not constitute serious misconduct.

[119] I do not make this finding. In reaching this conclusion, I accept the Respondent's position that 'serious misconduct' is judged on an objective basis and concur with the findings of the Vice President identified above that it need not be wilful.

[120] Further, I do not accept the distinctions Mr Frost's representatives seek to draw that Mr Lacy did not find Mr Frost's behaviour presented serious imminent risks or was inconsistent to the continuation of the employment relationship.

[121] I do not consider it necessary for AV to make these distinctions. What is relevant in this matter is that AV had received an independently prepared report that included a substantiated finding Mr Frost had engaged in conduct that amounted to bullying, amongst other things.

[122] On this basis alone, I am satisfied the Respondent was entitled to considered Mr Frost had engaged in serious misconduct and move to consider the appropriate disciplinary sanction for this conduct, including transfer.

[123] To suggest that bullying, objectively viewed, does not amount to serious misconduct is implausible in my view.

[124] Moreover, it is inconsistent with the contemporary provisions of the Act and explicit provisions therein that distinguish bullying from other forms of workplace conduct the Parliament has identified in line with contemporary community standards.

[11] As to the question of whether AV had acted unreasonably or unjustly in transferring Mr Frost, the Commissioner concluded:

[125] I have considered the question of whether Mr Frost's conduct was bullying or harassment above. As I am satisfied the conduct amounts to bullying as defined in the present circumstances, consideration of whether the transfer was unreasonable or unjust is not a consideration required by this question. In my review of the employer's observance of its obligations under clause 75 of the Agreement beginning at paragraph [69] above, however, I have considered whether the transfer is unreasonable or unjust. I have not been satisfied this is the case.

[12] Mr Frost advanced nine grounds of appeal by which he contended that the Commissioner's decision was affected by error. Ground 1 submitted that the Commissioner had made an error of law at [123]-[124] by finding that bullying conduct is necessarily serious misconduct. Ground 2 contended that the Commissioner erred by finding that Mr Lacy's report had concluded that Mr Frost had committed serious misconduct. Ground 3 alleged error in the Commissioner's application of the definition of serious misconduct to Mr Frost's conduct. Ground 4 submitted that the Commissioner erred at [125] by finding that because the conduct amounted to bullying, it was not necessary to consider whether AV acted unreasonably.

[13] Appeal grounds 5 to 8 were said to pertain to error in the Commissioner's consideration of whether AV had complied with clause 75 of the Agreement, specifically: that the Commissioner had wrongly concluded at [60] that the requirement to observe procedural fairness was confined to the investigation process, rather than the whole process from notification to imposition of penalty; that AV had not afforded Mr Frost procedural fairness because it did not provide him with all of the relevant information, including material that was before the decision-maker; that the Commissioner misconstrued the interaction of clauses 74.5 and 75; and that it was not open to the Commissioner to conclude that the decision-maker did not take into account irrelevant considerations. Ground 9 contended that the Commissioner failed to take into account relevant considerations in his assessment of whether AV complied with clause 75, including that AV's decision to transfer Mr Frost to Dandenong was based on matters irrelevant to the misconduct.

[14] Mr Frost contended that the Full Bench should grant permission to appeal in the public interest or otherwise, uphold the appeal, and substitute its own decision in terms that the transfer should not occur. Alternatively, the application should be remitted for rehearing.

[15] AV contended that that none of the appeal grounds had merit and that permission to appeal should be refused. It submitted that appeal ground 1 misstated the findings in the Commissioner's decision, and that the Commissioner had not equated bullying with serious misconduct. Rather, the Commissioner had adopted the report's findings of fact and then concluded that this particular conduct constituted serious misconduct. AV submitted that ground 2 was the product of a selective reading of the decision, and in any event the import of Mr Lacy's report was that Mr Frost had indeed engaged in misconduct.

[16] AV submitted that ground 3 did not bear out any error in the Commissioner's application of the definition of serious misconduct to Mr Frost's conduct, and that the Commissioner had engaged with the concept and its application in an orthodox manner that was consistent with the authorities. AV said that ground 4 misread the decision, as the Commissioner had explicitly accepted the need for him to consider whether AV had acted unreasonably or unjustly by considering the location of the transfer, the impact of the decision on Mr Frost and the reasons for which AV had selected that location (at [89]-[92] and [125])

[17] As to grounds 5 to 8, which concerned alleged non-compliance with clause 75, AV contended that the Commissioner did not make any error of construction that wrongly confined the scope of the obligation on AV to afford procedural fairness, and that the language used by the Commissioner at [60] merely reflected the manner in which the questions had been presented to him. AV said that it was unclear precisely how it was said to have failed to afford Mr Frost procedural fairness, and that there was no contention that Mr Frost was not afforded procedural fairness throughout the investigation conducted by Mr Lacy. Further, the allegations that were found to be substantiated did not involve any significant contest as to what was said or done, and Mr Frost was well aware of the allegations and findings to which he responded. AV said that in coming to a decision about the disciplinary action to be taken, Mr Frost was provided with an opportunity to respond to the proposed disciplinary action and did so.

[18] AV submitted that in any event, all of the material from the investigation and the disciplinary process was available to Mr Frost in the proceedings before the Commissioner, during which he was provided with procedural fairness and was legally represented. Having considered all the material and the responses of Mr Frost, the Commissioner did not regard the transfer as unreasonable or unjust. He considered whether to substitute his view for the outcome imposed by AV and decided not to do so. AV said that if there were any failures of procedural fairness on its part, they were cured by the Commission's consideration of Mr Frost's case, which resulted in the same outcome. Any lack of procedural fairness could have made no difference.

[19] Lastly, AV submitted that ground 9 was not tenable as no relevant issues had been ignored, and no irrelevant ones had been considered. In particular, there was no basis to contend that Mr Frost's offer to step down from his team leader role was a relevant consideration because that would not have fixed the problem that arose from him working in an isolated branch with one of the complainants.

[20] The standard by which an appeal under s 604 must be assessed depends on the nature of the decision that is the subject of the appeal. In this case, the decision of the Commissioner determined a dispute that had been referred to the Commission under s 739 of the Act and the dispute resolution procedure in the Agreement. The first question that the Commissioner was required to determine was whether Mr Frost's behaviour amounted to serious misconduct related to conduct that met the relevant definitions of bullying or harassment. The correctness standard applies here, because the question must have a single answer that is legally correct. The second question, whether AV acted unreasonably or unjustly, is evaluative in nature, however the Agreement authorises the Commission to 'determine whether the Employer has acted unreasonably or unjustly', which in our view contemplates a unique outcome (see Minister for Immigration and Border Protection v SZVFW [2018] HCA 30 at [49]). Mr Frost's appeal proceeded on the basis that the decision was affected by errors of law and discretionary errors of the kind in House v The King (1936) 55 CLR 499, the consequence of which would be that the answers to the questions were wrong.

[21] We will consider the question of whether to grant permission to appeal concurrently with our consideration of the appeal grounds, to which we now turn.

[22] The first ground of appeal must be upheld. In our opinion, the Commissioner made an error of law by equating bullying conduct with serious misconduct. We reject AV's contention that this appeal ground is the product of an unfair or selective reading of the Commissioner's decision. At [123], the Commissioner stated very clearly that 'to suggest that bullying, objectively viewed, does not amount to serious misconduct is implausible in my view'. This was not a mere infelicity of expression, nor does it run counter to the relevant context or to other components of the Commissioner's reasoning. In the preceding paragraphs, the Commissioner stated that, in order for Mr Frost's case to succeed, he would need to make a finding that Mr Frost's behaviour, as found by Mr Lacy, did not constitute serious misconduct (at [118]). The Commissioner then stated that he did not make this finding (at [119]). Although no finding is explicitly stated, it is clear enough from the double negative that the Commissioner considered the bullying conduct to be serious misconduct. This was a finding that the Commissioner was required to make. But the Commissioner's approach to making this finding was in error because he equated bullying with serious misconduct.

[23] At [120], the Commissioner stated that he did not accept the 'distinctions' drawn by Mr Frost to the effect that Mr Lacy did not find the behaviour posed serious imminent risks or was inconsistent with the continuation of the employment relationship. While this might suggest an engagement by the Commissioner with the question of whether the bullying conduct in this case amounted to serious misconduct, rather than an approach of equating any bullying conduct with serious misconduct, the Commissioner went on to state that he did 'not consider it necessary for AV to make these distinctions', because 'what was relevant' in this matter was that AV had received an independent report that included a substantiated finding that Mr Frost had engaged in bullying (at 121]). Evidently for the Commissioner, this was sufficient to conclude that serious misconduct had occurred. At [122], the Commissioner went on to state that 'on this basis alone', he was satisfied that AV was 'entitled to consider Mr Frost had engaged in serious misconduct'. Already at this point, the error is clear. It is then encapsulated at [123] by the Commissioner's rejection of the rhetorical suggestion that bullying might not amount to serious misconduct, and is reinforced at [124] where the Commissioner states that the suggestion that bullying is not serious misconduct would be inconsistent with 'contemporary provisions of the Act and explicit provisions therein that distinguish bullying from other forms of workplace conduct the Parliament has identified in line with contemporary community standards.'

[24] It is clear to us that the Commissioner proceeded on the basis that a finding of bullying must mean that the relevant conduct amounts to serious misconduct. This is an error of law. The meaning of these terms in this case is determined by the Agreement. Clause 74.6(f)(iv) states that transfer is a disciplinary option for AV 'in the case of serious misconduct related to conduct that meets the definition of workplace bullying or harassment pursuant to the Act and Equal Opportunity Act 2010 (Vic)'. The 'Act' means the FW Act, s 789FC of which states that a worker is 'bullied at work' if, while the worker is at work in a constitutionally covered business, an individual or group 'repeatedly behaves unreasonably towards the worker ... and that behaviour creates a risk to health and safety'. 'Serious misconduct' is not directly defined, however clause 74.1 of the Agreement states that 'misconduct includes serious misconduct', and that 'misconduct' has the same meaning as provided for in AV's Misconduct Policy, which in turn defines serious misconduct in terms similar to those in the Fair Work Regulations. In our view, this is the meaning of serious misconduct for the purposes of the Agreement. But even if the meaning of serious misconduct were instead to be the one set out in the Regulations, or the meaning given to serious misconduct at common law, it is clear that bullying and serious misconduct are two entirely distinct concepts for the purposes of the Agreement, as indeed they are generally, even if their application to fact in some cases might overlap.

[25] That Mr Frost had engaged in bullying was not in contest because he did not dispute Mr Lacy's finding that this had occurred. But Mr Frost did dispute that his conduct amounted to serious misconduct. We do not accept the suggestion of AV that the Commissioner concluded at [120] that the conduct posed a serious risk and was inconsistent with the continuation of the employment relationship; as we have said, on our reading, the Commissioner regarded such 'distinctions' as irrelevant. But to the extent that the Commissioner made an assessment of the seriousness of the conduct, his conclusion that the conduct was serious misconduct was infected by his erroneous belief that bullying amounts to serious misconduct.

[26] For conduct to amount to bullying under the FW Act, it is sufficient that a person has behaved unreasonably at work on two occasions towards another, and that this has caused a risk to health and safety. That such conduct has occurred does not of itself say anything about the seriousness of that conduct. Plainly, the gravity of conduct that can fall within the definition of bullying in the FW Act can be charted on a wide spectrum. Some such conduct is very serious. Some is not. For example, there will be cases where a person has behaved unreasonably, but marginally so, and the risk to safety is one that is peculiar to the personal circumstances of the complainant and could not have been known to the first person. Such a case would come nowhere near amounting to misconduct, let alone serious misconduct, nor would there be any fair basis to condemn the person for marginal unreasonableness, or to label the person a 'bully', with all moral opprobrium that is associated with that word in contemporary society. Simply put, cases of bullying may range across a spectrum of seriousness. The FW Act implicitly recognises this possibility because the Commission retains a discretion as to whether to make any order in respect of bullying that it has found to occur, even if it apprehends a risk of further bullying in the future.

[27] In our opinion, the second ground of appeal must also be upheld. The Commissioner proceeded on the basis that Mr Lacy had concluded that Mr Frost's behaviour amounted to serious misconduct. This is incorrect. AV contended that this appeal ground involved cherry picking or decontextualising certain statements in the decision. We accept that at [2] of the decision, where the Commissioner stated that AV's decision to transfer Mr Frost was based on 'substantiated findings of serious misconduct', one might infer that the Commissioner had in mind AV's own satisfaction that the findings of Mr Lacy amounted to serious misconduct. But at [54], the Commissioner stated that what was critical was Mr Lacy's report, and that the findings of the report were that the conduct was serious misconduct as defined. This was not Mr Lacy's finding. Rather, Mr Lacy found that Mr Frost's behaviour had constituted bullying. AV submitted that the import of Mr Lacy's report was that Mr Frost had engaged in misconduct. But even if this is accepted, it is not a finding of serious misconduct.

[28] Given our view that the correctness standard applies to the questions posed for determination, it is relevant to consider whether despite the errors that we have identified, the Commissioner reached the correct answers. But to determine this question, we would have to decide for ourselves whether the conduct of Mr Frost constituted serious misconduct. We do not propose to do so in circumstances where no proper assessment was made of this question at first instance. Based on our conclusions of error above, the appropriate and efficient course is to grant permission to appeal, quash the decision, and remit the application to the Commissioner for redetermination. The Commissioner will need to determine whether the conduct that Mr Lacy found to have occurred constitutes serious misconduct. We note that the Commissioner will have the benefit of having heard the evidence of the five witnesses who were called in the proceeding at first instance.

[29] To facilitate the Commissioner's redetermination of the application, it is necessary for us to address the remaining appeal grounds. We will do so briefly. We reject them.

[30] We find no substance in appeal ground 3. As to ground 4, we agree with AV that, despite what was said at [125], the Commissioner clearly accepted the need for him to consider whether AV had acted unreasonably or unjustly by considering the location of the transfer, and the impact of the decision on Mr Frost. As to the appeal grounds pertaining to procedural fairness, we find that AV afforded Mr Frost procedural fairness as required by clause 75. The content of procedural fairness will vary from case to case. In our view, AV did enough in this case to meet what was required of it by the Agreement. Mr Frost was not provided with all of the information pertaining to the investigation or its outcome, but that does not alter our conclusion. For one thing, all of the relevant materials were ultimately provided to him for the purposes of the Commission proceedings. We record our view that Mr Frost was afforded procedural fairness in respect of his interactions with Mr Lacy. Further, Mr Frost was provided with an opportunity to show cause as to why the proposed disciplinary outcome should not be implemented. It seems to us that this had the effect of providing Mr Frost with procedural fairness both in respect of the process and the proposed outcome, consistent with the broad interpretation of clause 75 advanced by Mr Frost in the appeal. We agree with AV that to the extent that it might have fallen short of providing adequate procedural fairness, this was cured in the proceeding before the Commissioner, in which Mr Frost had the opportunity to address any matters that might have advanced his case, including by reference to all of the relevant documents. We do not consider that the Commissioner failed to take into account relevant considerations or that he took into account irrelevant considerations.

[31] We order as follows:

1. Permission to appeal is granted.

2. The appeal is allowed.

3. The decision in Frost v Ambulance Victoria [2024] FWC 2237 is quashed.

4. The application is remitted to Commissioner Connolly for redetermination in accordance with our decision.

Printed by authority of the Commonwealth Government Printer