Piotto v Secretary, Department of Education, Employment and Workplace Relations

Federal Court of Australia (Full Court)|2010-05-26|Before: McKerracher JJ

INTRODUCTION 1 The appellant is a long term recipient of a newstart allowance under the Social Security Act 1991 (Cth) (the Act). 2 Section 605 of the Act enables the respondent (the Secretary) to require a person in receipt of a newstart allowance to enter into a Newstart Activity Agreement, or to enter into such an agreement instead of an existing one. Section 606 deals with the terms of Newstart Activity Agreements. Section 624 deals with what are called "newstart participation failures", which include failing to comply with a requirement to enter into a Newstart Activity Agreement: s 624(1)(c). The consequences of newstart participation failures are spelled out in ss 626 ff. In certain circumstances, they may lead to a person not being entitled to receive a newstart allowance for a period of time. 3 It is convenient at this point to set out the relevant terms of ss 605 and 624. 4 Section 605 relevantly provides: (1) Subject to this section, the Secretary may require a person who is not a party to a Newstart Activity Agreement to enter into such an agreement if:

(a) the person is receiving, or has made a claim for, a newstart allowance; or

(2) Subject to this section, the Secretary may require a person who has entered into a Newstart Activity Agreement to enter into another such agreement instead of the existing one.

(3) The Secretary is to give a person who is required to enter into a Newstart Activity Agreement notice of:

(b) the places and times at which the agreement is to be negotiated.

(4) A Newstart Activity Agreement is a written agreement in a form approved by the Secretary. The agreement is between the person and the Secretary.

5 The relevant provisions of s 624 are as follows: (1) A person commits a newstart participation failure if the person:

(d) fails to comply with a term of a Newstart Activity Agreement between the Secretary and the person; or

[…] (j) fails to comply with a requirement included in a Newstart Activity Agreement between the Secretary and the person to:

(i) undertake a certain number of job searches per fortnight; and

(ii) keep a record of the person's job searches in a document referred to in the agreement as a job seeker diary; and

(iii) return the job seeker diary to the Department at the end of the period specified in the agreement; or

(2) Despite subsection (1), a failure of a kind referred to in that subsection is not a newstart participation failure if the person satisfies the Secretary that the person had a reasonable excuse for the failure.

(2A) The Secretary must, by legislative instrument, determine matters that the Secretary must take into account in deciding whether, for the purposes of subsection (2), a person had a reasonable excuse for committing a newstart participation failure.

(2B) To avoid doubt, a determination under subsection (2A) does not limit the matters that the Secretary may take into account in deciding whether, for the purposes of subsection (2), a person had a reasonable excuse for committing the newstart participation failure referred to in subsection (1).

6 In 2007, the Secretary by a delegate, and then the Social Security Appeals Tribunal (the SSAT) upon review on 19 December 2007, decided that the appellant had committed three newstart participation failures, namely failures to enter into Newstart Activity Agreements on 14 August 2007, 6 September 2007 and 5 October 2007. On 1 May 2008, the Administrative Appeals Tribunal (the Tribunal) on review affirmed the decision of the SSAT.

THE DECISION AT FIRST INSTANCE 7 The appellant appealed to this Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) to set aside the decision of the Tribunal. That appeal was successful: Piotto v Secretary, Department of Education, Employment and Workplace Relations [2009] FCA 1115. The primary judge ordered that the decision of the Tribunal of 1 May 2008 be set aside, and remitted the matter to the Tribunal for reconsideration. 8 Those orders are apparently unrestricted. The Secretary, through counsel on the hearing of this appeal, accepted that the Tribunal, upon hearing the remitter to it of the review, would be unconstrained as to how it proceeded to review the decision of the SSAT. 9 The reasons of the primary judge indicate that his Honour found error only on the first matter of law argued by the appellant. That error concerned the delegation by the Secretary to the relevant Employment Services Provider, described as MatchWorks, to require the appellant to enter into a Newstart Activity Agreement. The issue of the adequacy of the delegation had briefly been addressed by the Tribunal in its reasons, but barely so. It simply noted the claim that there was no authority for MatchWorks to act for Centrelink, but said it was not persuaded of that because there was no material before it to satisfy it that "MatchWorks was doing anything else than performing the task that it had been required to do by Centrelink". 10 His Honour was satisfied that the Tribunal could not have found that there had been a valid delegation to MatchWorks at the time of the alleged newstart participation failures. Consequently, the matter was remitted to the Tribunal for reconsideration. 11 During the course of the hearing of the appeal, the primary judge had been given a copy of a delegation instrument of 26 June 2007, apparently commencing on 1 July 2007, covering the period of the alleged newstart participation failures during 2007. That document was not before the Tribunal. It is not necessary presently to refer to it, in the light of his Honour's order. There was no notice of contention on behalf of the Secretary that his Honour had erred in reaching his conclusion or in making his orders. 12 His Honour then said that, although it was unnecessary to do so, he would also deal with the other two matters raised in argument. They were: (1) the unreasonableness of certain terms of the proposed agreements, and (2) the requirement to sign a Newstart Activity Agreement, as distinct from merely entering into it. The primary judge did not consider that the Tribunal had fallen into error on a question of law on either of those two topics.

THE TRIBUNAL'S REASONS 13 The Tribunal first rejected the contention that MatchWorks was somehow acting vindictively and therefore illegally, simply because there was no evidence of that. It is not necessary to refer further to that issue. It was not pursued on this appeal. 14 It then rejected the contention that the proposed Newstart Activity Agreements contained terms which were unreasonable. It noted the appellant's contention that some of the conditions were "sometimes ambiguous, sometimes unclear, sometimes not appropriate and sometimes, he said, left him in a position where had he complied with the conditions as written, he would have been liable to be breeched [sic] anyway, which, in fact, did happen". That is a very general description of some of the points the appellant apparently sought to make before the Tribunal. It said that there is a limit to what could reasonably be expected to be included in a Newstart Activity Agreement, "such as reporting requirements, those sorts of things". It then noted that the appellant, as he clearly did, at least in respect of the proposed Newstart Activity Agreement of 14 August 2007, inserted in handwriting other proposed conditions which (he then accepted and now accepts) were unreasonable, apparently to stimulate some negotiation. Although it is not directly relevant to the case, the appellant was presenting, the Tribunal then referred to the fact that the Secretary had published the Social Security (Reasonable Excuse) (DEWR) Determination 2006 as required by s 624(2A) to specify matters that must be taken into account to decide if there was a reasonable excuse for a failure to comply with a requirement to enter into a Newstart Activity Agreement. They are not exclusive: s 624(2B). The appellant did not seek to rely on any of them. The Tribunal then further considered whether the appellant's refusal to sign the proposed agreements was reasonable. It addressed each of the three alleged newstart participation failures. 15 Apparently on 14 August 2007, the appellant had said he proposed to record the interview leading to the then anticipated Newstart Activity Agreement, and was told that he could not. The Tribunal said that: … [the appellant] was really holding them to ransom, saying "Look, if you do not let me do it, I am not going to sign", rather than saying to them, "Ok, you do not me [sic] to put the tape recorder on. How can we deal with this? Can I take written notes of our conversation?" Something like that. But just to say, "Well, if you are not going to let me use the tape recorder, I am not going to sign", to me I do not think that shows good faith on the part of [the appellant] or that MatchWorks acted unreasonably in that case. In addition, it found that the conditions that the appellant proposed in that Newstart Activity Agreement on 14 August 2007 were unreasonable, so a refusal to enter into the proposed agreement without them was not a reasonable excuse for not doing so. 16 As to the second alleged participation failure, it said: … he was required to attend an appointment. He failed to comply with the requirement to enter a new agreement for much the same reasons as the first one. He chose to put conditions which were not included there which he - once again, some of them I accept he genuinely believed were unreasonable, but I do not think that - I do not agree that there was any basis for him forming those views. In my view, they were not unreasonable, therefore, his failure to sign constituted a second participation failure. 17 The third participation failure alleged on 5 October 2007 was also briefly dealt with in the following terms: … as a result of a letter from the Australian Education Industry Centre writing to him to attend an appointment on 5 October requiring him to enter into an agreement on that date. In my view, he has, once again, failed to comply with the conditions and I do not believe that his amendments were reasonable and, therefore, his failure to sign the activity agreement on that date constituted a third breech (sic). The Tribunal does not appear to have recognised that the Australian Education Industry Centre (AEIC) is different from MatchWorks. Nor does it appear to have adverted to the fact (which is apparent from the limited material before the Court on this appeal) that on 3 October 2007 the appellant had signed a Newstart Activity Agreement with an officer of MatchWorks. It was that agreement which required him to attend a "Full Time Work for the Dole Interview" with AEIC on 5 October 2007. A Newstart Activity Agreement of 3 October 2007 which imposed obligations extending over a period extending at least to the end of February 2008 does not sit comfortably with a requirement on 5 October 2007 that the appellant negotiate another one with a different delegate only two days later. 18 The Tribunal's approach did not, in the view of the primary judge, demonstrate legal error. His Honour said at [33]: The language of s 605 of the Act, in place at the time of the 2007 Participation Failures, did not require the parties to a Newstart Activity Agreement to engage in the same process of negotiation that may be expected of parties to other types of contracts. The respondent is placed in the stronger negotiation position by the Act and is able, to a very real extent to dictate the terms of a Newstart Activity Agreement. Accordingly, the Newstart Activity Agreements proposed at the time of the 2007 Participation Failures were not unconscionable or unreasonable as a result of the failure of [the appellant] and MatchWorks to engage in a negotiation process. The Tribunal's findings in this respect were correct. In addition, whether or not [the appellant] was permitted to engage in negotiation of the agreements is not a matter for this Court to review. His Honour concluded that the appellant's complaints in relation to the alleged "unconscionability" of the proposed Newstart Activity Agreements were not capable of constituting a reasonable excuse for the purposes of the Act. Hence, he held that the finding which the Tribunal made was open to it. 19 Whilst we agree with his Honour's observations about the comparative negotiating positions of the Secretary or the delegate of the Secretary and the recipient of a newstart allowance, there are matters which the SSAT and on review the Tribunal may not have apprehended or addressed in the appellant's contentions. It is of course an error of law to fail to consider the case put by an applicant. As the matter is to be reconsidered by the Tribunal, it is appropriate to record our understanding of what may have been overlooked perhaps because those considerations had not been put explicitly before the Tribunal. Whether or not that was so is immaterial for present purposes. 20 Separately, the primary judge addressed whether the requirement of the respondent for the appellant to sign, as distinct apparently from simply agreeing to, a Newstart Activity Agreement involved an error of law. As his Honour correctly said, the question is whether the appellant was prepared to enter into a Newstart Activity Agreement, as required by s 624(1)(c) of the Act. Section 605(4) requires such an agreement to be in writing. The acceptance of the agreement through a signature is an entirely appropriate step. 21 That matter was not ventilated again on this appeal. 22 As we understood the appellant, he argued that the Tribunal had erred on a matter of law because: (1) it was reasonable for him to have taken steps to secure a reliable record of what was said at an interview to negotiate a Newstart Activity Agreement, so that if he was not permitted to do so there was no lawful requirement that he enter into such an agreement or alternatively that he had a reasonable excuse for failing to comply with the requirement to do so; (2) he had a reasonable excuse for failing to enter into each of the three Newstart Activity Agreements the subject of the alleged network participation failures because he was, in each instance, required to agree to terms which he was told would not be adhered to by the delegate of the Secretary, in particular terms about dates he was required to attend interviews with an Employment Service Provider or to take other steps to comply with each agreement. 23 We make some comments about those matters below. 24 The primary judge noted in passing, under the heading "Background", that the respondent on the appeal had conceded that, in respect of the Newstart Activity Agreement proposed on 5 October 2007 (as was not raised before the Tribunal), the Tribunal's decision was "arguably affected by an error of law". That concession was made because that agreement contained a term requiring the appellant to participate in a work program in excess of 30 hours per fortnight, in contravention of s 28(2)(d) of the Act. That was not taken further in his Honour's reasons.

CONSIDERATION 25 The Secretary filed a notice of objection to competency of the appeal on the grounds that the notice of appeal did not expose the existence of an error of law. 26 The point was not taken, and appropriately not taken, that because the appellant was not appealing from the order made by the primary judge (remitting the matter to the Tribunal for rehearing and setting aside the Tribunal's decision), the appeal was incompetent. The appellant was entitled to appeal from the essential part of the reasoning which was embedded in the formal judgment of the Court, as well as the Court's reasons or, put another way, was implicit in the judgment and otherwise provided a basis on which his Honour could have declined to remit the matter: see the discussion of the Full Court (Ryan, Jacobson and Foster JJ in Australian Competition and Consumer Commission v Telstra Corporation Ltd (2009) 176 FCR 203 at [23]-[24] and [64]-[66]; Australian Telecommunications Commission v Colpitts (1986) 12 FCR 395 per Toohey J at 402; Sellick v Australian Postal Corporation [2009] 113 ALD 58. 27 The objection to the competency of this appeal, putting aside the issue just referred to, is hard to understand. There was apparently no objection to the competency of the appeal at first instance from the decision of the Tribunal. The appeal to a Full Court is an appeal as of right: s 24(1)(a), Federal Court of Australia Act 1976 (Cth), but in a matter such as the present, the Full Court may be restricted to deciding whether the primary judge has erred in deciding that the Tribunal did or did not err on a question of law, and so itself be confined in effect to deciding if the Tribunal erred on a question of law. 28 In this matter, the Tribunal was found to have erred on a question of law. As noted, there was no contention that the primary judge had erred in setting aside the decision of the Tribunal and remitting the matter to the Tribunal for reconsideration on the issue of delegation. We note that the delegation by the Secretary (set out in [23] of the reasons for decision of the primary judge), and the definition of "Employment Services Provider" points to the delegation being to an individual, rather than to an institution. It is "to each person engaged by an Employment Services Provider". It may be necessary to look at the particular arrangement between the Commonwealth and each of the appellant's relevant Job Network Member (MatchWorks) and Community Work Coordinator (AEIC) to see whether each has an arrangement with the Commonwealth which enables that person to perform the function of requiring the appellant to enter into a Newstart Activity Agreement, including the negotiation provided for by s 605(3). One concern of the appellant was that he had been told by one of the persons with whom he was required to negotiate a Newstart Activity Agreement that there was no discretion on the part of the officer concerned to do otherwise than to require the execution of the proposed agreement as presented. That of course may be a misunderstanding on his part. The forms of the Newstart Activity Agreements in the Appeal Book have provision for the insertion of particulars specific to the individual beneficiary of the newstart allowance. 29 In view of the matter referred to in [24] above and, noted by the primary judge, the Tribunal must also be taken to have erred on a question of law. It must be a reasonable excuse to fail to comply with a requirement to enter into a Newstart Activity Agreement that it imposes obligations which are not permitted by the Act. It is not appropriate for a delegate of the Secretary to seek to impose unlawful obligations, leaving it to the recipient of the newstart allowance to negotiate such a term out of the proposed agreement. Indeed, there may well be an issue as to whether a proposed activity agreement which includes an unlawful requirement constitutes a Newstart Activity Agreement for the purposes of the definition of newstart participation failure in s 624; it may be implicit in s 606 that the terms of a Newstart Activity Agreement must be lawful. 30 It is not necessary to determine finally if the Tribunal erred on other questions of law. However, it is appropriate to make certain observations about the other two matters referred to in [22] above. 31 The Tribunal's findings about the proposed use of a tape recorder on 14 August 2007 are not totally clear. It does not find expressly what the appellant said to the officer of MatchWorks, or what was said in reply. There is an interpretation of the conversation. Counsel for the Secretary on the appeal said that recording an interview by a newstart allowance recipient was permitted subject to certain protocols. In any event, if that delegate in effect precluded the appellant from recording the interview (so that he had no accurate record of it) as a condition of the interview proceeding, it is difficult to see that it was the appellant who terminated the interview. It may also be an error of law to permit a prohibition on the making of a record of such an interview (provided it did not impede the course of the interview and provided any reasonable protocols were complied with), but to regard the request to make such a record as being incapable of showing the appellant's refusal to enter the proposed agreement was reasonable. It is clear that, on that matter, more specific factual findings would be necessary than those made by the Tribunal. 32 Finally, the Tribunal appears not to have identified and addressed the appellant's particular concerns about the terms of the particular proposed Newstart Activity Agreements. The general description of them referred to in [15]-[17] above does not do so. There are only three Activity Agreements in the Appeal Book, one (executed) of 5 December 2006, the second (unexecuted) of 6 September 2007 and the third (executed) of 3 October 2007. The first appears to cover a period of some six months; the second (as presented to the appellant) appears to cover a period of some 10 months; the third some five months. Obviously, the third was only two days before some other network services provider sought to have the appellant agree to the Newstart Activity Agreement presented on 5 October 2007. 33 To determine whether the appellant had a reasonable excuse for declining to enter into the third one, which gave rise to the third network participation failure, and so had a reasonable excuse for that asserted failure, it was probably necessary for the Tribunal to compare the obligations imposed on him by each of them. Indeed, the frequency of requiring such agreements might itself be a relevant consideration for the Tribunal. It was suggested in the course of submissions that Newstart Activity Agreements generally operate for some months. So, too, it might be a relevant consideration that each - through different newstart service providers - had imposed different and perhaps inconsistent obligations on the appellant. So, too, might the fact - if it be the fact, as the appellant asserted - that although each proposed agreement obliged him to attend meetings or other consultations on specified dates, he was told that the service provider would not adhere to those dates. The appellant said that it was not his concern that dates specified in the agreement might be changed upon notice, or that other additional attendances might be imposed on him pursuant to s 63 of the Act requiring him to attend on other occasions. His concern, he claimed, was that he was told that the dates which he was required to agree to attend for meetings and consultations were not dates that the delegate of the Secretary in fact required him to attend. There was evidence before the Tribunal which suggested that, in respect of the earlier Newstart Activity Agreement of 5 December 2006, he had been required to attend almost twice the number of meetings it specified, none of which occurred on a date it specified. He was concerned, he put bluntly, that he was required to commit to arrangements which he knew, because he had been told, were not correct. 34 The Tribunal does not make detailed factual findings in relation to those matters. The appellant's allegations may or may not be correct. If they are correct, one or more of them may or may not provide him with a reasonable excuse for failing to enter into the Newstart Participation Agreements presented. It is unnecessary to comment upon those matters further. 35 The appellant, as noted, did not seek to maintain that it was reasonable of him to refuse to sign such an agreement if he proposed terms which clearly were not reasonable. 36 The appellant also did not pursue on this appeal the claim that the particular delegates were vindictive towards him and were seeking to impose terms in the Newstart Activity Agreements for purposes other than legitimate purposes. 37 Whilst the Court has endeavoured to enunciate the issues of law raised by the appellant, it has not been necessary to determine all of them. Ultimately, on review, the Tribunal will have to determine the relevant facts and the issue of reasonableness. The Court's observations are not intended to impose any obligation on the Tribunal to make particular factual findings, or any particular assessment on the question of reasonableness of the appellant's excuse or excuses for failing to enter into the three Newstart Activity Agreements the subject of the review. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Ryan, Mansfield and McKerracher.

Social Security Act 1991(Cth)ss 28(2)(d), 63, 605, 606, 624(1)(c), 624(2A), 624(2B), 626

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