Fair Work Act 2009

s.604 - Appeal of decisions

Appeal from decision of Commissioner Riordan on 13 April 2017 in matter number U2016/13792 - dismissal of employee - review of dismissal pursuant to company policy - date of dismissal - policy did not suspend dismissal - significant error of fact - appeal upheld

[1] Qantas Airways Limited has lodged an appeal, for which permission is required, against a decision issued by Commissioner Riordan on 13 April 2017 (Decision). The Decision concerned an application by Mr McRae to extend the 21 day period within which to file his unfair dismissal application.

[2] At issue in this matter was a Qantas policy that allows employees to challenge dismissal and other disciplinary action. The Commissioner found that Mr McRae's employment did not terminate until Qantas notified him that his internal appeal had been unsuccessful. Based on this later date, the Commissioner found that Mr McRae's unfair dismissal application was filed within 21 days of dismissal, and that no extension of time was necessary.

[3] The application for permission to appeal was listed for hearing before us on 11 July 2017. On 10 July 2017, Mr McRae's representative advised the Commission that Mr McRae did not oppose Qantas' application for permission to appeal, and that he would not be attended the hearing.

[4] Later that day, Deputy President Colman conducted a telephone mention. The parties advised that there had been settlement discussions concerning Mr McRae's unfair dismissal application, and an agreement had been reached, subject to certain matters. The unfair dismissal application had not been discontinued. Qantas wished to press its appeal because of the broader implications of the Decision for it and for other employers. The parties advised that, in the event that the Full Bench granted permission to appeal, they would be content to have the substantive appeal dealt with on the papers.

[5] The Full Bench proceeded to hear Qantas' application for permission to appeal on 11 July 2017. Having considered the oral argument, the Notice of Appeal and the written submissions filed by Qantas, as well as the position of the respondent, permission to appeal was granted.

[6] The Full Bench issued directions later on 11 July 2017, confirming that the appeal would be dealt with on the papers, and directing the parties to file written submissions in respect of the appeal. Qantas filed written submissions but Mr McRae did not.

[7] This decision deals with our reasons for granting permission to appeal on 11 July 2017 and our analysis and disposition of the substantive appeal.

[8] An appeal under s604 of the Fair Work Act 2009 (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.[1] There is no right to appeal and an appeal may only be made with the permission of the Commission.

[9] The appeal in this matter is one to which s400 of the Act applies. The provision states:

(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.

[10] In Coal & Allied Mining Services Pty Ltd v Lawler and others, the Full Federal Court characterised the requirements of s.400 as "stringent".[2]

[11] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[3] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may eliven 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."[4]

[12] 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.[5]

[13] In support of its application for permission to appeal, Qantas submitted several contentions as to why it was in the public interest that permission be granted. It contended that the Decision disclosed significant errors of law and fact that warranted the granting of appeal, and that the Decision has broader implications, as to the effective date of termination, for employers whose policies may permit an internal appeal. It also contended that the Decision manifests an injustice. Finally, it was submitted that the public interest is served in ensuring that the jurisdiction vested in the Commission is properly exercised and in accordance with established principle.

[14] It was our opinion on 11 July 2017 that the application for permission to appeal had raised a seriously arguable case that the Commissioner had made a significant error of fact in relation to the dismissal date of Mr McRae. We return to this question in considering the substantial appeal further below. Further, we agreed with Qantas that the Decision raised a question of broader significance for other employers with internal review policies. It appeared also that the Decision below was not concordant with the Full Bench authority in Ayub.

[15] For these reasons we decided to grant permission to appeal.

[16] In its Notice of Appeal Qantas advances four grounds.

[17] Ground 1 contends that the Commission erred as a matter of fact and law in finding that the termination date of Mr McRae was 7 November 2016. It submits that there was no evidentiary or legal basis on which it could be inferred that the termination date was 7 November 2016 rather than 19 October 2016. It also says that the Commissioner's conclusions on this question are inconsistent with other findings made in the Decision. [6]

[18] Grounds 2 and 3 concern the consequential error that flows from what is put in Ground 1: that the Commissioner wrongly concluded that Mr McRae had submitted his unfair dismissal application within the 21 day period required by the Act, and that the Commissioner failed to consider whether there were exceptional circumstances for the purposes of s.394.

[19] Ground 4 contends that the Commissioner erred in misapplying the decision of Ayub v NSW Trains[7].

[20] By ground 5, Qantas says that it was denied procedural fairness, as the parties had approached the hearing before the Commissioner on the basis that it would address whether exceptional circumstances existed, such as to support an extension of the 21 day period. It contends that it was not provided any notice or opportunity to address the Commissioner's view that the 21 day period had actually been complied with.

[21] We have concluded that ground 1 of the appeal should be upheld. In our view, Mr McRae's employment was terminated on 19 October 2016, not on 7 November 2016. The relevant facts can be briefly stated. They bear out our conclusion.

[22] On 19 October 2016, Mr McRae was handed a letter from Mr Paul Crawford.[8] It stated: 'Qantas have decided to terminate your employment effective immediately' (emphasis in the original text). The letter advised Mr McRae that before his 'departure today', he was required to return Qantas property. It advised that Mr McRae would be paid 4 weeks' wages instead of notice, and that his 'final termination payment' would be processed and paid once clearance procedures had been completed. Those procedures were finalised and the termination payment was made to Mr McRae in the next pay period.[9]

[23] The letter of 19 October 2017 also stated that if Mr McRae did not agree with this 'outcome,' he could 'seek to appeal the decision in accordance with the Appeals section of the Qantas Group Standards of Conduct Policy.'

[24] The Policy is in clear terms. Section 17.7 is entitled 'Appeals against decision to terminate employment'. It states:

Where an Employee's employment is terminated and the Employee is aggrieved by the decision, the Employee may appeal against the decision on any of the grounds set out at 17.4. (emphasis added)

[25] Section 17.9 of the Policy is entitled 'Outcome of Appeals'. It states:

• (a) Appeals may be upheld or dismissed;
• (b) Where an appeal is dismissed, there will be no change to the process or decision which was the subject of the appeal.
• (c) Where an appeal is upheld, the Company will, at its discretion, determine what action will be taken. Such action may include, but will not be limited to:

(iv) reinstatement. (emphasis added)[10]

(d) An upheld appeal will not necessarily result in the appealed decision being changed.

[26] Clause 21 of the Policy defines 'dismissal' as 'when the Company terminates an Employee's employment by giving them notice, or payment in lieu of notice.'

[27] Mr McRae sought an internal appeal of the decision to dismiss him. On 7 November 2016, Mr John Walker wrote to Mr McRae, noting that Mr McRae had 'appealed the decision to terminate (his) employment'[11]. Mr Walker stated that he had carefully considered the information provided Mr McRae and had determined that it 'did not warrant a review of the decision to terminate.'

[28] In the Decision, the Commissioner states:

[13] Obviously the Applicant was aware he had been dismissed on 19 October 2016. However, the Applicant exercised his right as an employee of Qantas and sought an internal review of the decision to terminate his employment. Until the review was finalised, the Applicant was hopeful that the decision to terminate him would be overturned. Every employee who seeks an internal review would hope that their termination would be rescinded. Such a desire would be normal behaviour.'

[14] The Applicant only became aware of the Respondent's reliance on the 19 October 2016 date on 8 November - one day before the expiration of the statutory time. In effect, this meant that the Applicant only become aware of his actual date of termination on the 20th day after his dismissal.

[29] 'I note that Mr Walker advised Mr McRae that his decision was final. Such a phrase would infer that 7 November is the accurate date of terminate.'

[31] The decision of the Full Bench in Ayub is on point. I adopt the obiter and reasoning of the Full Bench and find that the termination date of the Applicant was when he was notified of the outcome of his appeal, i.e. 7 November 2016.'

[30] In our opinion, the Commissioner's conclusions are inconsistent with the facts. The letter of 19 October 2016 was very clear. Qantas had decided to terminate Mr McRae's employment immediately. Mr McCrae was to depart that day. The letter said he could seek to appeal under the policy. But there was no suggestion that any such appeal would suspend or affect the decision to dismiss Mr McRae.

[31] Similarly, nowhere does the Policy state or imply that a decision to dismiss an employee is suspended, or otherwise ceases to have effect, if an internal appeal is made. To the contrary, the above provisions of the Policy proceed on the basis that the decision to dismiss stands.

[32] The Commissioner notes at [13] that Mr McRae was aware that he had been dismissed, and that he sought a review of the decision to terminate him. It is no doubt the case, as the Commissioner says, that Mr McRae was hopeful that the decision to terminate him would be overturned. But the decision had been made. Unless overturned, it stood.

[33] It is not the case that Mr McRae became aware of the Respondent's reliance on the 19 October 2016 date only on 8 November 2016. He was clearly told on 19 October that he was dismissed immediately.

[34] In our view, there was nothing to suggest to Mr McRae that his decision to seek an internal appeal would alter, suspend or otherwise affect Qantas' decision to dismiss him. If Mr McRae's internal appeal had been successful, 'reinstatement' was a possible option. The reference to reinstatement underscores the fact that the employee has been dismissed. Further, reinstatement is a possible, but not necessary consequence of an appeal being upheld. As clauses 17(c) and (d) of the Policy make clear, Qantas retains a discretion as to what action is taken, and whether an appealed decision is changed.

[35] The position would be very different if the Policy had said that, when an employee lodges an internal appeal, the relevant decision is suspended, or the status quo ante applies. But the policy in this case relevantly sets up an internal review that occurs after the decision to dismiss has been taken and is in effect.

[36] The reasoning in the Full Bench decision in Ayub is relevant to the present matter, and to the consideration of Ground 1. However, the facts of that case are distinguishable from those of the present case. At [12] of the Decision, in Ayub the Full Bench stated:

'Our conclusion is that, in respect of dismissal without notice, s394(2)(a) is to be interpreted on the basis that the dismissal cannot take effect for the purposes of Pt 3-2 of the FW Act until an employee knows, or at least has a reasonable opportunity to find out, that he or she has been dismissed. It is in that sense the dismissal is regarded as having been communicated to the employee.'

[37] Mr McRae knew that he had been dismissed. Unlike the facts in Ayub, there was no ambiguity about his dismissal. His dismissal was not conditional on other events. It was clearly expressed. The letters of 19 October and 8 November 2016, and the Policy document, all point to this conclusion.

[38] Accordingly, Ground 1 of the appeal must be upheld. It discloses a significant error of fact for the purposes of s.400(2). It is significant because it led to an unsupportable conclusion, namely that Mr McRae's unfair dismissal application was filed within the 21 day period required by s394.

[39] It is not necessary for us to consider the other grounds of appeal.

[40] The consequence of our decision for Mr McRae's unfair dismissal application is that it was filed outside the 21 day period required by s.394(2)(a). If his unfair dismissal application is to proceed, Mr McRae must request a further period in accordance with s 394(3). As noted earlier, there have been discussions between the parties concerning a settlement of Mr McRae's unfair dismissal application. As at the date of this decision, the Commission has not received a notice of discontinuance. Accordingly, it is appropriate that the application for an extension of time be remitted to Commissioner Riordan for determination, subject to any discontinuance that may be filed by Mr McRae before the matter is listed for hearing.

[41] We are satisfied that Qantas has demonstrated appealable error in relation to ground 1 of the appeal. We uphold the appeal and quash the Decision.

[42] We order as follows:

• (1) Permission to appeal is granted.

• (2) The appeal is upheld.

• (3) The Decision ( [2017] FWC 1756) is quashed.

• (4) Mr McRae's application for an extension of the 21 day period to file his unfair dismissal application is remitted to Commissioner Riordan for determination.

Hearing details in relation to permission to appeal:

[1] See Coal and Allied v AIRC [2000] HCA 47; (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ

[2] [2011] FCAFC 54; (2011) 192 FCR 78 at [43], per Buchanan J (with whom Marshall and Cowdroy JJ agreed).

[3] 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] to [46]

[5] Wan v AIRC [2001] FCA 1803; (2001) 116 FCR 481 at [30]

[6] Reference is made to paragraphs [4], [5], [8], [13], [14], [15], [20], [24], [27] and [30], which refer to the dismissal of Mr McRae on 19 October 2016.

[7] [2016] FWCFB 5500

[9] Appellant's outline of submissions at [19(b)], page 81 of the Appeal Book

[10] Sections 17 to 20 of the Policy are contained at pages 40-42 of the Appeal Book. At the telephone mention on 10 July 2017, the Commission requested a complete copy of the Policy. Qantas provided this to the Commission the next date.

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