Fair Work Act 2009

s.604 - Appeal of decisions

Appeal against decision [2024] FWC 1978 and order PR777804 of Deputy President Slevin at Sydney on 26 July 2024 in matter number U2024/5274 - stay application - arguable case on appeal - balance of convenience - appeal only in relation to compensation order - ability of respondent to repay if appeal successful - no basis for doubting that the respondent will repay - stay refused.

• [1] Polymaster Pty Ltd (Polymaster or the appellant) has filed a notice of appeal in relation to a decision of Deputy President Slevin of the Fair Work Commission (the Commission) handed down on 26 July 2024. In the notice of appeal, Polymaster seeks a stay of the decision and the order for compensation made by the Deputy President. This decision concerns the stay application. A hearing was conducted in relation to the stay application on 21 August 2024.

• [2] The decision concerned an application under s 394 of the Fair Work Act 2009 (Cth) (the Act) by Mr Martin Gunn (Mr Gunn or the respondent) seeking an unfair dismissal remedy. The Deputy President found that that Mr Gunn had been unfairly dismissed.[1] The Deputy President noted that Mr Gunn did not seek reinstatement and indicated he was satisfied that the relationship had broken down and that reinstatement was inappropriate.[2]

• [3] The Deputy President indicated he was satisfied that it was appropriate to make an order for payment of compensation in lieu of reinstatement.[3] The Deputy President then referred to the factors set out in s 392(2) of the Act, noting that there is a dispute, on appeal, as to whether the Deputy President properly took those matters into account.[4] Ultimately, the Deputy President concluded that Mr Gunn should receive compensation of 12 weeks' pay in lieu of reinstatement.[5] The Deputy President made an order that Polymaster pay compensation in the amount of $27,600 less applicable taxation.

• [4] By notice of appeal filed on 14 August 2024, Polymaster seeks permission to appeal and to appeal from the decision of the Deputy President. The grounds of appeal relate solely to the order for the payment of compensation. Polymaster does not seek permission to appeal with respect to the Deputy President's finding that Mr Gunn was unfairly dismissed. As has been noted, Polymaster seeks a stay of the order of the Deputy President pending hearing and determination of the appeal.

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

(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.

• [6] A commonly cited formulation of the principles applicable to the grant of a stay is found in the decision of the Australian Industrial Relations Commission in Kellow-Falkiner Motors Pty Ltd v Edghill [2000] AIRC 758 in which Ross VP (as his Honour then was) said:[6]

In determining whether to grant a stay application the Commission must be satisfied that there is an arguable case, with some reasonable prospects 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.

• [7] Assistance may also be derived from the approach adopted by the courts in relation to an application to a stay pending appeal.[7] The principles applied in those cases were summarised in Re Transport Industry - Waste Collection and Recycling (State) Award [2000] NSWIRComm 236; (2000) 102 IR 192 at [19] as follows:

(1) The mere filing of an appeal will not of itself provide a reason or demonstrate an appropriate case nor will it discharge the onus which the applicant bears.

(2) A court has an appropriate discretion whether or not to grant the stay and as to the terms that would be fair if a stay be granted.

(3) The onus is upon the applicant for a stay to demonstrate a proper basis for a stay that will be fair to all the parties.

(4) In the exercise of its discretion all considerations including the balance of convenience and the competing rights of the parties need to be considered and weighed.

(5) Where there is a risk that the appeal will prove abortive or nugatory if the stay is not granted then the normal exercise of discretion will result in the grant of a stay.

(6) Although, generally speaking, it is inappropriate in relation to an application for a stay to speculate as to the appellant's prospects of success, this does not prevent a court, in the context of considering the specific terms of the stay that will appropriately and fairly adjust the interests of the parties, from making a preliminary assessment as to whether the appellant has an arguable case.

• [8] The authorities also suggest that an applicant for a stay must positively demonstrate that the balance of convenience weighs in favour of a stay being granted. There is no prima facie position in favour of the granting of a stay and the grant of a stay is not to be regarded as the usual course.[8]

• [9] The grounds in the notice of appeal allege that the Deputy President committed legal error, or used the law incorrectly, by failing to evaluate and give proper weight to the matters referred to in s 392(2) of the Act and failed to consider those matters separately and as a fundamental element in assessing the amount of compensation. The grounds also alleged that the Deputy President erred in failing to follow the formula set out in Sprigg v Paul's Licenced Festival Supermarket [1998] AIRC 989; (1998) 88 IR 21, particularly in relation to the impact of contingencies.

• [10] The submissions of Mr Cleary, who appeared for Polymaster with permission of the Commission, focused on the adequacy of the Deputy President's consideration of the factors set out in s 392(2) of the Act. Reliance was placed on the approach of the Full Bench in Bowden v Ottrey Homes Cobram and District Retirement Villages Inc [2013] FWCFB 431; (2013) 229 IR 6.The Full Bench found that a Commissioner had committed legal error in the determination of compensation in an unfair dismissal case as follows:

[33] However, the Commissioner makes only some findings on the matters in ss.392(2)(a) to (g) of the FW Act. For example, she finds that Ms Bowden's length of service with Ottrey was four years and three months but does not make any finding about the impact that should have on her determination of an amount for the purposes of an order for the payment of compensation. Further, in determining an amount for the purposes of an order for the amount of compensation, it is apparent the Commissioner only takes into account her findings in regard to ss.392(c), (e) and (f) of the FW Act. She gives no reasons as to why she does not take into account the other matters. The Commissioner says in her second decision:

"[7] The amount earned by Ms Bowden whilst mitigating her loss is greater than the remuneration she would have been likely to receive if she had continued in employment for six months. Therefore, on this basis, there is no need to continue the calculations nor is there a necessity to make an order for the payment of compensation by the respondent to Ms Bowden.

[8] Accordingly, no order for payment of compensation is made."

[34] In determining an amount for the purposes of an order for the payment of compensation to Ms Bowden by Ottrey, therefore, the Commissioner did not take into account all the circumstances of the case as required by s.392(2).

• [11] Polymaster submitted that the Deputy President has committed the same legal error as that identified in Bowden.[9]

• [12] Many provisions of the Act require the Commission to take into account a particular matter in making a decision. The obligation to take a matter into account means that each of the matters must be treated as a matter of significance in the decision-making process[10] and must be evaluated and accorded appropriate weight.[11] As Mr Cleary accepted, whether the Deputy President did so with respect to the factors in s 392(2) turns upon the proper reading of the reasons for decision. Emphasis was placed, in that respect, on whether the Deputy President had evaluated and accorded weight to the length of Mr Gunn's employment at paragraph [30] of the decision.

• [13] It may be arguable that, whilst Mr Gunn's period of service is simply stated at paragraph [30], its relevant in the assessment of compensation is further considered at paragraph [33]. However, that is not a matter that needs to be considered further for the purposes of the stay application. It is sufficient to indicate that I accept, on the basis of the material before me, that Polymaster has arguable grounds of appeal. Whether those grounds are ultimately successful will depend on the full submissions advanced on the hearing of the appeal.

• [14] The Full Bench will also need to consider the question of permission to appeal. The fact that the appeal only seeks to challenge the assessment of compensation following a finding of unfair dismissal may be relevant to that question. However, for present purposes, I accept that Polymaster has an arguable case in relation to permission to appeal having regard to the errors it alleges in the notice of appeal.

• [15] It is necessary to then consider the balance of convenience. Polymaster submitted that the balance of convenience weighs in favour of the decision and order of the Deputy President being stayed. In short, it submitted that, if error is found in the decision, the Full Bench will set aside the decision and redetermine the question of compensation. Polymaster submitted that the Full Bench may determine a lesser amount of compensation is appropriate and "if the appellant has paid Mr Gunn before the appeal hearing, the appellant would need to recover any difference from Mr Gunn".

• [16] When considering the balance of convenience in relation to a stay application, it is significant that the appeal solely seeks to challenge an order for the payment of an amount of compensation. There are a range of circumstances that may be relevant to the balance of convenience in such a case. At least two come to mind. The first is that there may be evidence that the immediate payment of the amount of compensation would cause financial difficulty or hardship to the appellant. That circumstance would favour granting a stay. In this matter, Mr Cleary conceded that there was no evidence before the Commission that compliance with the compensation order would cause any particular financial difficulty to Polymaster.

• [17] The second circumstance is that there may be cases in which the Commission has reason to doubt the ability or willingness of a respondent to repay monies paid pursuant to an order subject of the appeal if the appeal is successful. In Coal & Allied Operations Pty Ltd v Crawford (2001) 109 IR 409, the Full Bench suggested that, in such circumstances, the appropriate course is to adopt an appropriate procedure to protect the appellant in the event that the appeal is successful, such as requiring an undertaking to repay or that the money be preserved in an interest-bearing account pending the appeal.[12] The existence of doubt as to the ability or willingness of a respondent to repay monies received in the event of a successful appeal may also justify a stay being granted.

• [18] The threshold suggested in Coal & Allied for implementing an arrangement to protect the position of an appellant is that there is reason to doubt the ability of the respondent to repay money paid pursuant to the order under appeal. In another context, French J (as his Honour then was) said in Australian Telecommunications Corporation v Moffat [1992] FCA 30 (at p 16):[13]

In the present case, the Court is empowered to make such order as to a stay for the purpose of securing the effectiveness of the hearing and determination of the appeal. In my opinion, if there is evidence supporting the view that if the appeal is successful, the successful applicant would not be in a position to recover the money paid to the respondent, the Court should, in the exercise of its discretion, grant an order staying the operation of the decision under appeal or part of that decision. This depends also on the question of whether the Court is satisfied that the appeal is not merely a sham.

• [19] The approach of French J suggests there should be some evidentiary foundation for a conclusion that, if the appeal is successful, the appellant would not be able to recover the money paid to the respondent. Similarly, Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880 dealt with an application for a stay pending an appeal from a decision of the Administrative Appeals Tribunal that the respondent was entitled to disability support payments. Dodds-Streeton J concluded as follows (at [45]):

Further, the respondent's material makes clear, to a sufficient degree, that he is not affluent and requires extra money to satisfy the current needs of himself and his seriously ill mother. While the respondent's statement that the payment would "greatly assist" tended to minimise his need for it, the matters to which he deposed, including the inability to provide personal items necessary for the care of his mother, in my view demonstrated hardship in the relevant sense. It was unnecessary that the respondent make a formal demand for the amount in order to demonstrate hardship. There was no evidence of the respondent's total assets, potential resources, financial position or prospects. It was not clear whether such information was available to the Secretary, who bears the onus in the stay application. Nevertheless, although the respondent is in receipt of a disability pension, it cannot be inferred from that circumstance that he would not, in the future, command the wherewithal to repay the sum of $11,500. The respondent has asserted that he would repay the relevant amount should the Secretary's appeal succeed. There is no evidence to suggest that the respondent would not comply with orders of the court or fail to fulfil any lawful obligation to repay the money. There is no evidence that he intends permanently to absent himself from Australia or to sever his ties with the jurisdiction.

• [20] The same approach was adopted by Marshall J in Saltmarsh v Nicols t/as Tasmanian Carpet Cleaning (1997) 72 IR 61 in dealing with an application for a stay pending review of a decision of a judicial registrar to order the payment of compensation as a result of a termination of employment. Marshall J concluded (at 61):[14]

A mere assertion of an inability of a successful applicant to repay moneys ordered to be paid by a judicial registrar in the event that a respondent succeeds on a review will rarely found an appropriate case for a stay of the payment of the compensation ordered. There is no evidence before the Court of the financial circumstances of Ms Saltmarsh. To assert that Ms Saltmarsh would not repay any sum which the Court may ultimately order her to pay is to assume that she would act disreputably. I have no reason to assume that she would act disreputably. See Public Transport Corporation v Boulton (unreported, IRCA, Full Court, 22 December 1995).

• [21] There are also various decisions of the Commission in which a stay of a compensation or other monetary order has been refused where there was no evidence that the amount would not be repaid if the appeal was successful.[15]

• [22] I consider I should apply the same approach to the present application. There is no material before the Commission to suggest that Mr Gunn would be unable or unwilling to repay any part of the compensation the Deputy President ordered to be paid if Polymaster's appeal is successful. Mr Cleary did not suggest there was any such evidence and referred to no more than a possibility that recovery action may be necessary if the appeal succeeds. That possibility would only arise if Mr Gunn refused to repay any part of the compensation payment which exceeds the amount determined by the Full Bench on redetermination.

• [23] In the circumstances, I can see no basis upon which I should infer that there is a substantial risk that Mr Gunn will refuse to repay any amount if the appeal succeeds. In that respect, it is relevant that Polymaster's appeal at most hopes to reduce the amount of compensation it is ordered to pay. As it does not challenge the Deputy President's finding that Mr Gunn was unfairly dismissed, it is not suggested that the amount of compensation is likely to be reduced to zero even if it succeeds in its appeal.

• [24] Mr Cleary further submitted that there was no evidence that Mr Gunn would experience hardship if a stay were granted. That submission tends to invert the assessment to be conducted. It is for the party seeking a stay to establish an appropriate case for the orders under appeal to be stayed. In any event, at the time of the hearing at first instance, Mr Gunn had not obtained other employment. Mr Gunn informed me, and I have no reason to doubt, that he is still not working. In those circumstances, the balance of hardships does not favour granting a stay.

• [25] Finally, Mr Cleary noted that the appeal was likely to be listed in the week commencing 14 October 2024 and that the period of the stay is relatively short. The period of time a stay is likely to operate is likely to be relevant in assessing the balance of convenience and I have taken it into account. However, even if the appeal is heard in the middle of October, there is no guarantee that the Full Bench will be able to hand down a decision immediately. The consequence of a stay being granted is that Mr Gunn is likely to be denied access to the compensation he is entitled under the order made by the Deputy President for some months. That would cause material prejudice to Mr Gunn.

• [26] Polymaster has not demonstrated that the balance of convenience weighs in favour of a stay being granted.

• [27] For the above reasons, the application for a stay is refused.

M Cleary, counsel, instructed by A Berry, solicitor, for the appellant.

[1] Gunn v Polymaster Pty Ltd [2024] FWC 1978 at [28].

[2] [2024] FWC 1978 at [29].

[3] [2024] FWC 1978 at [29].

[4] [2024] FWC 1978 at [30]- [33].

[5] [2024] FWC 1978 at [33].

[6] Kellow-Falkiner Motors Pty Ltd v Edghill [2000] AIRC 758 at [5].

[7] See, for example, Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 694; Powerflex Services Pty Ltd v Data Access Corporation [1996] FCA 460; (1996) 67 FCR 65 at 66.

[8] Supreme Caravans Pty Ltd v Pham [2013] FWC 4766 at [11] citing Edwards v Telstra Corporation Limited [1998] AIRC 679, Print Q2467.

[9] See also Enhance Systems Pty Ltd v Cox (AIRCFB, Williams SDP, Acton SDP, Gay C, PR910779, 31 October 2001) at [32].

[10] National Retail Association v Fair Work Commission [2014] FCAFC 118; (2014) 225 FCR 154 at [56]; 4 yearly review of modern award - Award stage - General Retail Award [2020] FWCFB 6301; (2020) 301 IR 296 at [16].

[11] Nestle Australia Ltd v Federal Commissioner of Taxation (1987) 16 FCR 167 at 184 (cited with approval by Hely J in Elias v Federal Commissioner of Taxation [2002] FCA 845, (2002) 123 FCR 499 at [62] and by Katzmann J in Construction, Forestry, Mining and Energy Union v Hamberger and Another [2011] FCA 719, (2011) 195 FCR 74 at [103]).

[12] Coal & Allied Operations Pty Ltd v Crawford (2001) 109 IR 409 at [31].

[13] Referred to in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880 at [25] (Dodds-Streeton J).

[14] See also Gadecki v International Health and Beauty Aids Pty Ltd (1997) 76 IR 224 at 225.

[15] Just Relations - Consultants v Ecolab Pty Ltd [2017] FWC 1126 at [13]; Wynbob Pty Ltd (t/as Andersens Tweed Heads) v Bond [2018] FWC 2212 at [16]; Smerff Electrical v Lamacq [2019] FWC 796 at [15].

Printed by authority of the Commonwealth Government Printer