Toms v Harbour City Ferries Pty Limited

Federal Court of Australia (Full Court)|2015-03-16|Before: Allsop CJ, Siopis J, Buchanan J

The application be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 1003 of 2014

JUDGES: ALLSOP CJ, SIOPIS J AND BUCHANAN J DATE: 16 March 2015 PLACE: SYDNEY

Associate: Dated: 16 March 2015 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 1003 of 2014

JUDGES: ALLSOP CJ, SIOPIS J AND buchanan J DATE: 16 MARCH 2015 PLACE: SYDNEY

siopis J: 2 I agree with the reasons for judgment of Buchanan J and the orders proposed therein. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

Associate: Dated: 16 March 2015 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 1003 of 2014

JUDGES: ALLSOP CJ, SIOPIS J AND BUCHANAN J DATE: 16 March 2015 PLACE: SYDNEY

The application 3 This application asserts jurisdictional error by a Full Bench of the Fair Work Commission ("FWC"), established under the Fair Work Act 2009 (Cth) ("the FW Act"). The Full Bench upheld an appeal from a Deputy President of the FWC who reinstated the applicant in his employment as a ferry master after his dismissal for testing positive to a drug test for cannabis. The Full Bench concluded that the dismissal was not "harsh, unjust or unreasonable" and, after granting permission to appeal, upholding the appeal and quashing the reinstatement order it dealt with the application for reinstatement itself by dismissing it. 4 Did the Full Bench commit jurisdictional error? 5 Before I examine that question directly, I propose to consider the historical significance and antecedents of the test which the FWC was required to apply. There are two reasons for doing so. 6 The first is to emphasise the evaluative nature of the conclusion required, and the range of matters which might contribute to it. The exercise of a discretion to order reinstatement is a consequence, but not a necessary one, of a finding that a dismissal was harsh, unjust or unreasonable. The development of that concept is instructive and an appreciation of its content (both historical and contemporaneous) is necessary. 7 The second reason is to emphasise that, in combination with correction of error, an important function of an appeal process which reviews or reconsiders the merits of a case, and its outcome (i.e. an appeal "on the merits"), is to pursue the legitimate aim of developing and maintaining a consistent and coherent body of principle. It is not foreign to the appellate process, in the case especially of an industrial tribunal, to supervise the development, coherence and understanding of "industrial standards". In that connection, an important matter in the present case was the significance to be attached to the drugs and alcohol policy of the respondent. As I shall attempt to show, the development of principles of unfair dismissal has traditionally recognised the importance of an employer's right to manage its business. One issue in the present case concerns whether recognition of that right can be fairly described as simply substituting a different view of the merits of the case, or whether it involved the correction of an error made at first instance. 8 It will also be necessary to say a little about the nature and quality of error which may be appropriately described as jurisdictional error in the context of the work of the FWC and the particular role on appeal of the Full Bench.

The historical significance of "harsh, unjust or unreasonable" 9 A person is "protected from unfair dismissal" if covered by an award or enterprise agreement (FW Act, s 382). The applicant was such a person. A person has been "unfairly dismissed" if the FWC is satisfied (relevantly here) that the dismissal was "harsh, unjust or unreasonable" (FW Act, s 385(b)). 10 The FWC is the most recent of a series of industrial tribunals established under federal legislation. Its predecessors (in title) were the Commonwealth Court of Conciliation and Arbitration and the Australian Conciliation and Arbitration Commission (Conciliation and Arbitration Act 1904 (Cth)), the Australian Industrial Relations Commission ("AIRC") (Industrial Relations Act 1988 (Cth) and the Workplace Relations Act 1996 (Cth)), and Fair Work Australia (the FW Act). A traditional aspect of the role of both federal and State industrial tribunals during most of the twentieth century, and the current one, has been to consider the circumstances under which award or industrial agreement regulated employees are dismissed and the circumstances in which they may be, or should be, reinstated to their employment. The tests to be applied when considering those matters were, initially, within the discretion of the tribunal in question. Then they were stated, in general terms, in awards made by the tribunal. More recently, legislatures have prescribed what tests should be employed, but there is inevitably always a considerable element of judgment involved and the remedy of reinstatement is never free from the exercise of some discretion, even where a breach of some legal standard is proved in relation to a termination of employment. 11 Before it was used as a statutory test about unfair dismissal, the term "harsh, unjust or unreasonable" was already established as an award provision prohibiting termination of employment of that character. Before that, expressions very similar to it were frequently used by industrial tribunals in Australia as a test to examine claims for reinstatement after dismissal. 12 It will be sufficient, to illustrate the points I wish to make, to mention developments in New South Wales and at the federal level. However, Queensland, South Australia and Western Australia (in particular) also had well established industrial tribunals (or courts) which developed a broadly similar body of principles or jurisprudence about unfair dismissal and reinstatement. 13 Examination of grounds for reinstatement, and the principles which should be applied, became routine in New South Wales as a consequence of a specific grant of jurisdiction to deal with a "right … to refuse to reinstate" as part of a catalogue or list of "industrial matters". Early approaches to the issue from cases as early as 1921 were considered and summarised by McKeon J (as a member of a Full Bench of the Industrial Commission of New South Wales in Court Session) in a seminal case, Western Suburbs District Ambulance Committee v Tipping [1957] AR (NSW) 273 ("Tipping's Case"). [The case was evidently seen as important - Sir Garfield Barwick QC appeared for the Committee]. Part of McKeon J's distillation was as follows (at 280): (7) … it is the Commission's function to inquire whether the employer's action is harsh or unjust towards the employee - in other words, whether the employer has abused his rights to dismiss the employee (Greer's Case ; Doberer's Case) ; the proper test to be applied is : Has there been or has there not been oppression, injustice or unfair dealing on the part of the employer towards the employee ? (Caldwell's Case) ; in exercising the right to dismiss, has the employer acted unfairly, harshly, unjustly or oppressively ? (Doberer's Case). [Some of those expressions were later described, by Sheldon J, who also sat on the Industrial Commission of New South Wales, in an important case to which I shall refer, as "adjectival tyranny" but they remain in place nevertheless]. 14 In 1947, power to address a "duty to reinstate" was given by an amendment to the Conciliation and Arbitration Act 1904 (Cth) and, thereafter, attention began to be given to the test to be applied to justify an order for reinstatement. Such an order became available even when an employee was dismissed on notice, as well as when dismissed summarily for misconduct. A test was adopted by the Australian Conciliation and Arbitration Commission which required consideration of whether a termination of employment was "harsh and unreasonable" (see Monsanto Chemicals (Australia) Ltd v Amalgamated Engineering Union (1958) 90 CAR 27). 15 The various principles and expressions were well established when the matter became the subject of specific federal award prescription. 16 The term "harsh, unjust or unreasonable" had its general federal award origins in the decision by the Australian Conciliation and Arbitration Commission in the Termination, Change & Redundancy Case (1984) 8 IR 34 ("TCR Case") which approved a standard clause to be inserted in federal awards. The standard provision was in the following terms: Termination of employment by an employer shall not be harsh, unjust or unreasonable. For the purposes of this clause, termination of employment shall include terminations with or without notice. 17 Although, as I have discussed, language of a similar type had been used by industrial tribunals for many years when considering unfair dismissal cases on their merits, this was the first generalised imposition of a positive obligation prohibiting dismissal of that character and making it unlawful. Cases in this Court to enforce the obligation followed (e.g. Gregory v Philip Morris Ltd (1987) 77 ALR 79 - on appeal (1988) 80 ALR 455; Gorgevski v Bostik (Australia) Pty Ltd (1991) 39 IR 229 - on appeal Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20, Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439; Byrne v Australian Airlines Ltd (1992) 45 IR 178 - on appeal (1994) 47 FCR 300). 18 Then, in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 ("Byrne"), on appeal from the Full Court of this Court, the High Court also gave some attention to the content of the expression where it appeared in its award context. 19 The central issues in the case were whether that award obligation also supported a claim for damages (if breached) and whether a termination of employment in breach of such a clause was illegal and void. Each question was answered in the negative by the High Court. 20 However, there was also an issue about whether breach of the award obligation had been established. A judge of this Court found it had not been, but the Full Court found breaches of procedural fairness had occurred which rendered dismissal of the appellants (baggage handlers employed at Sydney Airport) harsh, unjust or unreasonable. In the High Court there were cross-appeals against that finding. 21 The majority judgment in Byrne (Brennan CJ, Dawson and Toohey JJ) said (at 430): Save for the prescription of periods of notice, cl 11 does not require the adoption of any particular procedure for the dismissal of an employee. However, it is clear that the use of an unfair procedure may result in a dismissal being harsh, unjust or unreasonable. For example, the failure to afford an employee the opportunity to explain apparent misconduct where there is an innocent explanation available would result in the dismissal of the employee being in breach of cl 11(a). On the other hand, if an employer were to observe the actual misconduct of an employee in circumstances which allowed no innocent explanation, a summary dismissal might not be in breach of cl 11(a). And facts which existed at the time of a dismissal, but which come to light only subsequently, might justify the dismissal when otherwise it would be harsh, unjust or unreasonable. It was not, therefore, a permissible approach for the Full Court to reach a conclusion adverse to the respondent based upon the procedure employed in dismissing the appellants without considering whether the trial judge was correct in reaching the conclusion that there was sufficient evidence to establish that the appellants were involved in the misconduct alleged against them. … (Footnotes omitted.) 22 The minority judgment (McHugh and Gummow JJ) considered the possible content of the obligation at a more general level, saying (at 465): It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. and (at 468): Procedures adopted in carrying out the termination might properly be taken into account in determining whether the termination thus produced was harsh, unjust or unreasonable. The submissions for the respondent in the present appeals appeared to concede this. But the burden of the respondent's submissions is that there was error in determining the issue without regard to the very material circumstance of the finding of the primary judge as to the complicity of the appellants in pilfering. Those submissions should be accepted. … 23 The observations of both the majority and the minority were made for the purpose of determining that, while procedural failings might infringe the award obligation, it was relevant also to examine the nature and seriousness of the conduct itself. Obviously, one might see in the various passages a need to take into account all relevant factors and weigh them in the balance, depending on the circumstances of the particular case. Then and now, a final judgment is required, based on all the relevant circumstances, about whether a particular dismissal is harsh, unjust or unreasonable. A separate judgment, taking additional matters into account if necessary, has always been required about whether an employee who was "unfairly" dismissed should be reinstated. That separate requirement remains, and is important. 24 To that point in time, the content of the test to be applied, whether as a matter of discretion or to give effect to an award obligation, was supplied by decisions of industrial tribunals or of the courts. The obligation which required consideration in the present case, however, was not an award obligation to be assessed only against the general formulation approved in the TCR Case. 25 The protection in the FW Act, to which I have already referred, is accompanied by specific statutory directions about the matters which must be taken into account when deciding whether a dismissal was harsh, unjust or unreasonable. Although it may be readily inferred that the legislature had some regard for the history of the provision in federal awards, and to the observations of members of the High Court in Byrne, what required particular attention by the FWC in the present case is the context set by the FW Act itself and the specific directives which appear within it.

The present statutory scheme for unfair dismissal 26 Section 385(a) and (b) and s 387 of the FW Act provides: 385 What is an unfair dismissal A person has been unfairly dismissed if the FWC is satisfied that: (a) the person has been dismissed; and (b) the dismissal was harsh, unjust or unreasonable; … (Emphasis in original.) 387 Criteria for considering harshness etc. In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account: (a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and (b) whether the person was notified of that reason; and (c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and (d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and (e) if the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal; and (f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (h) any other matters that the FWC considers relevant. 27 If a person has been unfairly dismissed, the FWC may order reinstatement or, if reinstatement is inappropriate, may order compensation if an order for payment of compensation is appropriate (FW Act, s 390). 28 In the performance of its functions the FWC must take into account the objects of the FW Act and the objects in any part of the FW Act under which it is performing its functions (FW Act, s 578). One object of Part 3-2 (which provides for the remedies of reinstatement or compensation for unfair dismissal mentioned above) is s 381(1)(c): 381 Object of this Part (1) The object of this Part is: … (c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement. 29 Section 381(2) provides: 381 Object of this Part … (2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a "fair go all round" is accorded to both the employer and employee concerned. Note: The expression "fair go all round" was used by Sheldon J in in re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95. 30 The statutory scheme to which I have referred, its provision for the exercise of non-judicial power and the antecedents of the basic test (a fair go all round) which is suggested in that scheme (which I will discuss shortly) make it apparent, in my view, that the questions of whether a dismissal is unfair and what (if any) remedy should be granted as a result are matters consigned to the particular assessment and discretionary judgment of the FWC. Although the legislature has given some direction to the FWC about matters to be taken into account in its assessment, judgment of such matters and the selection of appropriate remedies is left to a broad evaluation by the FWC, subject to the appeal mechanisms which the FW Act provides. In particular, the matters offered as examples in the judgments in Byrne must be considered against the specific directives which now appear in the FW Act and with adequate regard to the fact that any matters to be taken into account additional to those in s 387(a) to (g) are those which the FWC considers relevant under s 387(h).

A "fair go all round" 31 In the latter part of the twentieth century, in the period when such matters were generally left to the judgment of industrial tribunals with known expertise, one iconic test which was employed in unfair dismissal cases (which was later enshrined in the Workplace Relations Act 1996 (Cth) - s 170CA(2), and is now to be found in the FW Act - s 381(2)) was distilled from the judgment of Sheldon J in In re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95 ("Loty's Case"). In terms of industrial jurisprudence in New South Wales, Loty's Case represented an intended departure from the approach synthesised and restated by McKeon J in Tipping's Case although, as I have attempted to show, that earlier approach (at least in terms of its formulation) was nevertheless enshrined as a federal award standard in 1984. 32 The real principle for which Loty's Case stands is to be found stated in the headnote of the report of the judgment as follows: (3) As an industrial tribunal's objective in reinstatement cases is always industrial justice, it must also in each such case give weight to (a) the importance, but not the inviolability, of the employer's right to manage his business, (b) the nature and quality of the employee's work, (c) the circumstances concerning the employee's dismissal, and (d) the likely practical outcome if an order of reinstatement be made. but the case is generally better known for the colloquial declaration enshrined in the following passage (at 99): Mr Commissioner Manuel in a recent case put it in a nutshell and in language readily understood in the industrial world when he conceived his duty to be to ensure "a fair go all round". (Italics in original.) 33 The discussion of the relevant principles by Sheldon J which followed shortly after this observation was intended to indicate that the exercise of a discretion to reinstate turned ultimately on notions of "fairness" (having regard to circumstances at the workplace) rather than on the identification of "legal" rights or their infringement. [Sheldon J's judgment (and his approach to "industrial justice") is, however, notable for the absence of any particular consideration of the consequences of termination for particular employees. Adversity seems to have been assumed]. In Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1987) 163 CLR 656 ("Ranger Uranium") the High Court mentioned the development in approach represented by Loty's Case in the following way (at 665): Ordinarily, in industrial tribunals empowered to order reinstatement, the criterion for the making of an order for reinstatement is that the dismissal was harsh, unjust or unreasonable, although more recently the tendency has been to express the test in terms of unfairness: see In re Loty and Holloway and Australian Workers' Union. (Footnote omitted.) 34 For many years after Loty's Case, in New South Wales in particular, the notion of "a fair go all round" was used as the touchstone of "industrial justice" or "fairness". Questions of the practicability of reinstatement were often decisive in assessing whether reinstatement should be granted, particularly in cases where any "unfairness" was not egregious. 35 It might be pertinent to observe, in that regard, that the application of the principle adopted by Sheldon J led to different outcomes in Loty's Case for Mr Loty and Miss Holloway. They had each lost their employment with the New South Wales Branch of the Australian Workers' Union because their loyalty and faithful application to their duties was in question. They were associated with the "Oliver group" which was ousted from influence (in the New South Wales union) by the "Barnes-McKay group". Miss Holloway was a "clerical assistant"; Mr Loty was "Chief Industrial Clerk". Miss Holloway was reinstated; Mr Loty was not. The differing outcomes did not result from any different finding about the merits of their respective dismissals, or from any consideration of personal hardship, but from an assessment of the likely practical consequence of their reinstatement in the workplace itself. 36 The general principle to be applied was stated by Sheldon J in these terms (at 99): The objective in these cases is always industrial justice and to this end weight must be given in varying degrees according to the requirements of each case to the importance but not the inviolability of the right of the employer to manage his business, the nature and quality of the work in question, the circumstances surrounding the dismissal and the likely practical outcome if an order of reinstatement is made. There certainly may be cases where the dismissal had many elements of unfairness but an industrial authority if it was convinced of the practical uselessness of trying to re-establish the employer-employee relationship, would not intervene at all. There may be other cases where there are reasonable prospects for the future of the relationship if clarifying conditions are imposed. 37 This was the explanation which was given of the practical content of the idea of a fair go all round. I take it, therefore, that this is the principle which is now enshrined in s 381(2) of the FW Act which was to be borne in mind and applied in the present case. Questions of practicability of reinstatement do not arise, it might be noted, unless first there is "unfairness" or lack of justification for dismissal. As assessed by Sheldon J, the practicability of reinstatement was a further threshold to cross after a dismissal was first shown to be unfair. 38 Miss Holloway was reinstated because the principal accusation against her was lack of co-operation, which Sheldon J decided could be overcome on her part. Co-operation became a condition of reinstatement. Sheldon J said (at 106): An award of reinstatement is not a guarantee of permanent employment. It is a restoration of the status quo where a dismissal is regarded by an arbitrator as having been unfair. This point needs special emphasis in this case. If I make an award of reinstatement in this case, it would be in order to put the parties in the position where they would have been as from 8th February if the dismissal had not taken place. The future would depend upon events but if co-operation proved impossible either through Miss Holloway's fault or, after a fair trial, because of invincible incompatibilities in temperament and outlook, the Commission would not intervene again. It has no right to try and run the branch office by remote control. Its sole right is to require the parties to start again from the point where an injustice occurred. 39 Mr Loty's work involved the implementation of policy for which the executive of the branch was responsible. Without any finding of fault on his part, reinstatement was deemed inappropriate. Sheldon J said (at 110): This is a different case from that of Miss Holloway both because of the nature of the work involved and the reasons advanced for the dismissal. As I have already indicated, most of Miss Holloway's work has to be done basically on the same lines whichever group is in power and no question has been raised as to her general efficiency. The case against her is solely based on unwillingness to co-operate and, for the reasons already given, my view is that this question was not fairly tested. In Mr Loty's case, the decision has been made in an area which is peculiarly the province of the executive and the grounds on which the decision is justified extend beyond merely considerations of personal relations although these have played a part. The application on his behalf must be refused and therefore is dismissed. 40 It is trite to say that this case, which is the foundation for the objective of a fair go all round now enshrined in the FW Act in s 381(2), involved the working out of that general principle or objective in practice according to the individual circumstances of the case. But, at each point in the analysis, other questions of principle required consideration and evaluative judgment, as is very obvious from any patient reading of the judgment. It should not be assumed that, in s 381(2) of the FW Act, Parliament has simply adopted an empty phrase, stripped of its content and with no regard for its origin. As Burchett J said in Short v FW Hercus Pty Ltd (1993) 40 FCR 511 (at 518): The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. 41 Burchett J was referring to expressions in industrial instruments, but in the case of the meaning and intent of s 381(2) of the FW Act it is apparent that Parliament has attempted to bring with the transplanted expression "some of the soil in which it once grew". 42 Those matters are important for an assessment of the errors which the Full Bench of the FWC is said to have made in the present case, and the argument that it lacked power or authority to review or reverse the findings made at first instance which were relevant to the required, overall, evaluation to be made about whether the applicant's dismissal was unfair, and whether he should be reinstated. It should be accepted that Parliament intends that examination of the merits of unfair dismissal cases should be the particular province of the FWC, and proceed upon a practical and pragmatic foundation. That examination necessarily extends to the possibility of review of reasons and outcomes on appeal. Those are matters not readily susceptible to narrow challenges on the grounds of "jurisdictional error".

Non-judicial power 43 In the case of federal industrial tribunals established pursuant to the conciliation and arbitration power in s 51(xxxv) of the Constitution (rather than, as now, primarily under the corporations power in s 51(xx)), in the period after 1956 keen attention was also needed to the non-judicial character of the exercise of any power or discretion leading to an order for reinstatement in employment. Such a non-judicial body could not grant remedies based only on its evaluation of existing rights and obligations. Its power derived from the "arbitral" (necessarily forward-looking) character of the exercise it undertook - i.e. to establish new rights; not to declare or enforce pre-existing ones. As the High Court pointed out in Ranger Uranium (at 666): The purpose of the Commission's inquiry is to determine whether rights and obligations should be created. 44 Although the constitutional underpinnings have changed, the FWC remains a non-judicial body. The power it exercises to order reinstatement still represents vindication of a protection from "unfair" dismissal, even though the legislature has hedged the concept around with the various old-fashioned terms which Sheldon J disparaged in favour of a more simple and recognisable approach. 45 Some remedies for breach of legal rights or standards (including reinstatement in employment) are available under the FW Act in this Court, or the Federal Circuit Court of Australia, rather than in the FWC (e.g. for "adverse action" constituted by dismissal from employment - ss 341, 539, 545). Such proceedings fall within the description in Ranger Uranium which was provided as a contrast to the exercise of arbitral power (quoted above) (at 666): The purpose of a court's inquiry and determination is to decide whether a pre-existing legal obligation has been breached, and if so, what penalty should attach to the breach. The grant of remedies in such proceedings involves the use of judicial power, but the exercise of power by the FWC does not. 46 Moreover, the FWC (including the Full Bench) is directed by the FW Act to perform its functions and exercise its powers in a manner that "is quick, informal and avoids unnecessary technicalities" (s 577). It is not bound by rules of evidence or procedure (s 591).

Jurisdictional error and the FWC 47 Although administrative tribunals must act within any jurisdictional limits which apply to them, that requirement generally requires a correct appreciation of the task at hand and diligent application to it rather than purity of result, or one where the merits of the result are free from contention or legitimate dispute. 48 The basic test is stated by Craig v South Australia (1995) 184 CLR 163 where the High Court said, when contrasting the work of administrative tribunals with that of inferior courts (at 179): If … an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it. 49 Earlier, in Public Service Association of South Australia v Federated Clerks' Union of Australia, South Australian Branch (1991) 173 CLR 132 ("PSA") a majority of the High Court (Brennan, Dawson and Gaudron JJ, Deane and McHugh JJ dissenting) held that the Industrial Commission of South Australia acted in excess of its jurisdiction. Brennan J distilled the test for relief as follows (at 142): Judicial review on the ground of excess or want of jurisdiction is available when a body purportedly acting in exercise of jurisdiction has no jurisdiction to act in the particular way. Judicial review on that ground stands in contrast with judicial review on the ground of a wrongful failure or refusal to exercise jurisdiction. In the former case, there is no jurisdiction to exercise; in the latter, there is jurisdiction but no exercise of it. and (at 144): The Full Commission misconceived its jurisdiction and failed to consider the true question which they had to·decide, … This was a jurisdictional error. (Footnote omitted.) 50 Dawson and Gaudron JJ said (at 160): The issues raised when it is complained that necessary issues have not been decided, and when it is asserted that, had they been decided, the result might have been different, are different from the issue that arises when it is contended that a discretionary decision is wrong. … A failure to exercise jurisdiction is a jurisdictional error, although, prima facie, it is not an error involving an excess of or want of jurisdiction … and (at 161): Thus, where a court or tribunal determines some matter or issue which it was not called upon to determine, the determination is one which is beyond its jurisdiction. 51 The jurisdictional limits for an administrative tribunal also depend importantly upon the specific nature of the task set for it. Thus, the particular role of the FWC on appeal must also be borne in mind when assessing whether there was jurisdictional error by the Full Bench of the FWC when it performed its own role on the appeal, bearing in mind that it is that decision which is the subject of the present application. 52 In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 ("Coal and Allied"), the majority (Gleeson CJ, Gaudron and Hayne JJ) said of the role of a Full Bench of the Australian Industrial Relations Commission on appeal (at [31]): 31 There would only have been jurisdictional error on the part of the Full Bench if it had misconceived its role or if, in terms used by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council, it ' 'misunder[stood] the nature of [its] jurisdiction ... or 'misconceive[d] its duty' or '[failed] to apply itself to the question which [s 45 of the Act] {s 45 was the appeal provision} prescribes', or '[misunderstood] the nature of the opinion which it [was] to form' '. The Full Bench did none of those things. (Footnotes omitted.) {My note.} 53 That passage approved observations by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 ("Hebburn") at 420, which applied dicta from the High Court in R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 at 242-243 and R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 432. The full statement of principle by Jordan CJ, in which those latter references appear, is as follows: I quite agree that the mere fact that a tribunal has made a mistake of law, even as to the proper construction of a statute, does not necessarily constitute a constructive failure to exercise jurisdiction: R. v. Minister of Health. But there are mistakes and mistakes; and if a mistake of law as to the proper construction of a statute investing a tribunal with jurisdiction leads it to misunderstand the nature of the jurisdiction which it is to exercise, and to apply " a wrong and inadmissible test ": Estate and Trust Agencies (1927) Ltd. v. Singapore Improvement Trust; or to " misconceive its duty," or " not to apply itself to the question which the law prescribes "; The King v. War Pensions Entitlement Appeal Tribunal; or " to misunderstand the nature of the opinion which it is to form ": The King v. Connell, in giving a decision in exercise of its jurisdiction or authority, a decision so given will be regarded as given in a purported and not a real exercise of jurisdiction, leaving the jurisdiction in law constructively unexercised, and the tribunal liable to the issue of a prerogative writ of mandamus to hear and determine the matter according to law: R. v. Board of Education. (Footnotes omitted.) 54 That essential foundation was also the reason for the relief granted by the Supreme Court of South Australia, which was approved by the High Court in PSA. Brennan J said (at 143-144), with a reference to the passage from Hebburn set out above: The essential relief which the F.C.U. and the A.S.W.U. sought and obtained by way of judicial review was an order requiring the Full Commission to hear and determine according to law the application for leave to appeal which, it was submitted, the Full Commission had constructively failed to determine. The foundation for relief of this kind is stated by Jordan CJ. in Ex parte Hebburn Ltd.; Re Kearsley Shire Council … (Footnotes omitted.) 55 It must therefore be understood that no attack, in proceedings of the present kind, is available against the Full Bench merely upon the ground of a dispute or quibble with the quality of the Full Bench reasons or the weight which it gave to particular aspects of the matter before it unless some error is demonstrated which may be said to have the result that the Full Bench has not really exercised the jurisdiction given to it, leaving the jurisdiction "in law constructively unexercised" and thereby exposing the Full Bench to an order that it perform the task it had failed to carry out (Hebburn; Coal and Allied) or, alternatively, that the Full Bench has purported to determine some matter outside its jurisdiction altogether (PSA). 56 Finally, it might be worth bearing in mind the nature of the reasoning by a Full Court of this Court which was overturned by the High Court in Coal and Allied. The Full Court accepted that the appropriate test was the one enunciated by Jordan CJ in Hebburn (see Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89 FCR 200 at 245). The Full Court concluded that a Full Bench of the AIRC had intervened in the absence of any finding of error, in order to give effect to a desire to exercise a supervisory role saying, for example, (at 233): The appellate jurisdiction arising under s 45 is not, in relation to the exercise of a discretionary power, a means of facilitating the exercise of the discretion in the way a Full Bench believes is appropriate, in the absence of error, under the guise of exercising a supervisory function. 57 The analysis and discussion in which the passage appears was criticised by the High Court in various ways in Coal and Allied (see [25] to [30]). In my respectful view, it should be approached with caution, although it is not incorrect to observe (as the Full Court may have intended to emphasise) that it was the identification of error which constituted the relevant criterion for appellate intervention (Coal and Allied at [14]), and not merely the exercise of a supervisory function in the absence of identified error. 58 The High Court observed in Coal and Allied (at [32]): 32 In his reasons for decision, Giudice J proceeded on the basis that the Full Bench could intervene only if there was error on the part of Boulton J. In this his Honour was correct. Giudice J held that there was error on the part of Boulton J. If he was wrong in that view (a matter upon which it is unnecessary to express an opinion), that was an error within jurisdiction not an error as to the nature of the jurisdiction which the Full Bench was required to exercise under s 45 of the Act. Accordingly, it was not an error in respect of which relief could be granted by way of prohibition or mandamus under s 75(v) of the Constitution. 59 With respect, that is an important statement and it brings together a number of matters where the High Court was critical of the analysis of the Full Court. The task on judicial review is not simply to assess whether an administrative tribunal was right or wrong in its conclusions, or whether it made errors in its analysis. The task is not to correct perceived errors made within jurisdiction. The task is to examine whether the tribunal misconceived its role or otherwise failed to exercise its jurisdiction so that its decision should not be seen as a true exercise of the power committed to it at all.

The background facts 60 The applicant was employed by the respondent as a ferry master. He had been employed since 1996, initially as a general hand, later as an engineer and in 2010 he obtained a Master IV Certificate of Competency. He became a permanent ferry master in March 2011. 61 On 25 July 2013, a day on which he was rostered off duty, the applicant agreed to come in to work to replace another employee on afternoon shift. The evening before he had, he later admitted, smoked marijuana. He said he did so because of shoulder pain. 62 While on duty, the applicant misjudged an approach to a wharf and the ferry struck a pylon. Although no one appeared then to be injured, the incident was a reportable one. The applicant reported the incident about 30 minutes later, although he should have done so at once. He was required, as a matter of routine, to cease his duties and attend the office of the respondent where he was required to take a drug test at about 6 pm. The applicant did not disclose that he had smoked marijuana the previous evening until the drug test returned a positive reading that evening. When the drug test returned a positive reading for cannabis the applicant was immediately suspended. 63 The respondent has a "zero tolerance" policy for drugs and alcohol. It has statutory obligations towards the public and it is an offence for some employees (including ferry masters) to operate ferries whilst under the influence of alcohol or some drugs (Marine Safety Act 1998 (NSW), s 28; Passenger Transport (Drug and Alcohol Testing) Regulation 2010 (NSW), reg 17). 64 After further investigation, the applicant was dismissed with five weeks pay in lieu of notice, on 28 August 2013. 65 The applicant, with the assistance of the Australian Maritime Officers' Union, applied to the Fair Work Commission for a remedy for unfair dismissal on 16 September 2013.

The reinstatement decision 66 The application was decided in favour of the applicant by Deputy President Lawrence on 16 April 2014 ([2014] FWC 2327). The Deputy President was satisfied that there was a valid reason for the dismissal of the applicant and that the other specifically mentioned factors in s 387 of the FW Act were either neutral or did not suggest unfairness. Nevertheless, under the general rubric of "any other matters that the FWC considers relevant" (s 387(h)) and having regard to the object in s 381(2) to ensure "a fair go all round", Deputy President Lawrence found that the dismissal was harsh, unjust or unreasonable. 67 The applicant was reinstated to his employment. 68 One factor that appeared influential in this outcome was a finding that there was no evidence that a positive drug test was proof of impairment and there was no evidence of a link between the drug use and the accident. 69 The respondent appealed.

The appeal decision 70 The appeal lay to a Full Bench with the permission of the FWC (s 604(1)). However, s 400(1) provides that in an unfair dismissal case the FWC must not grant permission to appeal unless satisfied that it is in the public interest to do so. 71 The Full Bench was so satisfied. 72 In my view, a conclusion that it was in the public interest to grant permission to appeal was not a neutral circumstance. Although it did not serve to indicate that the appeal must succeed, it certainly demonstrates that a particular threshold of importance and general significance had been crossed. Although, at one level, the exercise of appellate power is directed to the correction of error, that is only true in a particular sense. The exercise of a power to hear and determine an appeal is more correctly described as one to consider arguments about error. In some cases it may be thought important to confirm a particular outcome, or the reasons for it. In others, it may be necessary or desirable to consider or resolve the emergence of differing approaches to a particular question, whether at first instance or at appellate level. In yet other cases, a need to correct error might satisfy the test. 73 Whatever the particular justification in a particular case for a conclusion that it is in the public interest to grant permission to appeal, it may be only a short further step to the identification of a particular error of approach or outcome, and the substitution of a different result. 74 Section 607(3) states the powers of the FWC on appeal as follows: 607 Process for appealing or reviewing decisions … (3) The FWC may do any of the following in relation to the appeal or review: (a) confirm, quash or vary the decision; (b) make a further decision in relation to the matter that is the subject of the appeal or review; (c) refer the matter that is the subject of the appeal or review to an FWC Member (other than an Expert Panel Member) and: (i) require the FWC Member to deal with the subject matter of the decision; or (ii) require the FWC Member to act in accordance with the directions of the FWC. 75 On the appeal the Full Bench quashed the decision of Deputy President Lawrence and substituted its own decision that the application to the FWC for relief should be dismissed. 76 The Full Bench, in its short decision, turned very quickly to matters at the heart of Deputy President Lawrence's reasoning, accepting the Deputy President's finding that there was a valid reason for dismissal and that the specific matters stated in s 387 (except s 387(h)) did not assist the applicant. That left for consideration by the Full Bench (as it had by Deputy President Lawrence) only whether there were "any other matters" (s 387(h)) which the Full Bench considered were relevant and whether they had been taken into account or, conversely, whether the matters considered relevant by Deputy President Lawrence were correctly taken into account. 77 The Full Bench thought the policy about drug and alcohol use was highly relevant. It thought that the absence of proven impairment of the applicant was not relevant. Those conclusions identified error in the approach taken by the Deputy President and in the decision-making process. It is plain that the Full Bench was not speaking of relevance in a strict legal sense (c.f. Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24). Rather, the Full Bench was indicating what matters were important enough to be potentially determinative in the overall evaluation to be made. 78 After a short discussion of some matters of general principle stated by an earlier Full Bench, the Full Bench said (at [17]): [17] We have had regard to the facts of this application. The application is concerned with serious misconduct which was a valid reason for the termination of Mr Toms' employment. The serious misconduct was the breach of an important policy by an employee at the most senior level of employment at Harbour City in a situation where there was compliance with procedural fairness. 79 As is apparent from this passage, the Full Bench decided that the applicant's conduct involved serious misconduct, even though the Full Bench appeared to accept that the utility of urine testing for the use of drugs was contestable. The Full Bench had earlier said: [8] This Full Bench has some experience of applications involving the application and efficacy of such workplace policies. We are not persuaded that urine testing, the agreed method of drug testing at Harbour City, is a guide as to the actual presence of marijuana in an employee's system or any impairment arising as a consequence. It is a testing system which in this case indicated past use and no present impairment. [9] Despite our reservations concerning the usefulness of Harbour City's policy as an effective method of drug detection, when considering leave to appeal and the merits of the appeal, we have identified and considered the misconduct of Mr Toms as his attending work in breach of the policy. 80 The conclusions reached by the Full Bench about the relative importance and relevance of the questions of impairment and breach of the policy may be seen in the following two paragraphs which immediately precede the outcome of the appeal: [27] The lack of any impairment arising from drug use, the absence of a link between drug use and the accident and the absence of substantial damage to the Marjorie Jackson are not factors relevant to the ground of misconduct identified as non-compliance with the Policy. The fact is that Harbour City required its policy complied with without discussion or variation. As an employer charged with public safety it does not want to have a discussion following an accident as to whether or not the level of drug use of one of its captains was a factor. It does not want to listen to the uninformed in the broadcasting or other communications industry talk about drug tests establishing impairment. It does not need to have a discussion with any relevant insurer, litigant or passenger's legal representative about those issues. What it wants is obedience to the policy. Harbour City never wants to have to have the discussion. [28] The mitigating factors referred to and relied on by Deputy President Lawrence are not mitigating factors that address the core issue, which was the serious misconduct which led to the dismissal of Mr Toms. The core issue, the valid reason for termination of Mr Tom's employment was his deliberate disobedience, as a senior employee, of a significant policy. The Deputy President does not address Mr Tom's failure to comply with the Policy. The only mitigating factor relevant to this issue was the use of marijuana as pain relief. Consequent upon that explanation is the decision to accept a shift while aware of the likelihood of being in breach of the Policy. (Emphasis in original.) 81 It is clear that "deliberate disobedience" of the respondent's policy by a senior employee was viewed by the Full Bench as the central factor to be assessed and not, as Deputy President Lawrence had found, whether the drug use had a demonstrated or likely bearing on the incident. At [24] the Full Bench also listed each of the other matters referred to as taken into account by Deputy President Lawrence. It is apparent from [28] that the Full Bench determined that they did not provide a reason to intervene against the application and enforcement of the respondent's policy. 82 Those conclusions, and the manner of their expression, are consistent only with a finding by the Full Bench that Deputy President Lawrence had made errors in the decision-making process, errors in his findings and conclusions and an error in the exercise of his discretion to reinstate the applicant.

Was there jurisdictional error? 83 The asserted jurisdictional errors are identified in the following way in the written submissions for the applicant: 4. Mr Toms submits that the Full Bench fell into jurisdictional error in that it: (a) The Full Bench failed to properly undertake its appellate function by failing to identify error in the decision-making process of the Deputy President and instead substituting its own view of the merits of the application. (b) The Full Bench imposed erroneous limitations on the unfair dismissal jurisdiction of the Commission not found in the Act by requiring that, if a valid reason is found, there must be "significant mitigating factors". (c) The Full Bench failed to have regard to and considered irrelevant mitigating factors put forward by Mr Toms in assessing whether the dismissal was harsh, unreasonable or unjust. (d) Critical aspects of the Full Bench's reasoning were based on findings that were supported by no evidence or which were irrational, illogical or lacking in any probative foundation. (e) If the Full Bench did validly find appealable error, it erred as a matter of jurisdiction in dismissing Mr Toms' application for relief without validly making a finding as to whether his dismissal was "harsh, unjust or unreasonable". 84 I cannot accept any of those criticisms as ones which raise any jurisdictional error in the circumstances of the present case, for the following reasons:

(a) No identification of error in the decision-making process? 85 The contention obviously relies on observations by the High Court in Coal and Allied at [21] (which must be read with [19] and [20]): 19 "Discretion" is a notion that "signifies a number of different legal concepts". In general terms, it refers to a decision-making process in which "no one [consideration] and no combination of [considerations] is necessarily determinative of the result". Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment. (Footnotes omitted.) 20 In the present case, the decision by Boulton J to terminate the bargaining period involved, in effect, two discretionary decisions. The first was as to his satisfaction or otherwise that the industrial action being pursued posed a threat for the purposes of s 170MW(3) of the Act. Although that question had to be determined by reference to the facts and circumstances attending the industrial action taken in support of claims with respect to a certified agreement, the threat as to which his Honour had to be satisfied was one that involved a degree of subjectivity. In a broad sense, therefore, that decision can be described as a discretionary decision. And if Boulton J was satisfied that there was a threat for the purposes of s 170MW(3), that necessitated the making of a further discretionary decision as to whether the bargaining period should be terminated. 21 Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process (82). And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms: "If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so." (82) See Norbis v Norbis (1986) 161 CLR 513 at 518-519, per Mason and Deane JJ. (Other Footnote omitted.) 86 The present case first required a broad evaluation about whether the termination of the applicant's employment was "harsh, unjust or unreasonable". In Coal and Allied an evaluation of a similar broad kind was referred to at [20] as a discretionary judgment "in a broad sense". The decision about a remedy was more classically discretionary, but that point was only reached after a conclusion of unfair dismissal. 87 The reference to House v The King (1936) 55 CLR 499 at 505 which was given in Coal and Allied at [21] was related to "judicial discretion" but the principles in House v The King have come to be applied in a broader context. In appeals in some other fields of judicial enquiry which involve a two-step examination (satisfaction of conditions for judicial examination, followed by discretionary relief) appellate review of the first stage (as well as the second) also depends on House v The King principles even where the first stage may be described as a question of ultimate fact, or "jurisdictional" (see e.g. Singer v Berghouse (1994) 181 CLR 201 at 212). The underlying rationale concerns appellate restraint. 88 The FWC (and its predecessors) frequently refer to House v The King as a guide to their own approach on appeals (as did Giudice J in the proceedings in the AIRC which led to Coal and Allied - see Coal and Allied at [25]). 89 The error of acting on a "wrong principle" referred to in House v The King is a reference to principles developed often as part of judge-made law, usually by appellate courts at various levels in the judicial hierarchy. The principles developed and applied by industrial tribunals are equally dynamic as any emanating from the courts. Particularly is that so in the case of the leading federal industrial tribunal which (to take only one example) developed and stated wage fixing principles over many years for the purpose of arbitral jurisdiction which were then systematically applied and enforced on appeal without any serious suggestion of jurisdictional error. The power of the concept of "a fair go all round" was first derived from its adoption as a principled modification of earlier formulations (since, ironically, re-enacted by the legislature) which were themselves statements of principle fashioned by industrial tribunals; not by parliaments. 90 Furthermore, the identification in House v The King of the circumstances which support a proper finding of error include (in a continuation of the short passage quoted in Coal and Allied): It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. (Emphasis added.) 91 The concept of acting on a wrong principle must be accommodated to all those matters in the present case. 92 The specific reference in Coal and Allied at [21] (before the extract from House v The King) to Norbis v Norbis (1986) 161 CLR 513 at 518-519 should also be noted. In that passage Mason and Deane JJ said: The principles enunciated in House v. The King were fashioned with a close eye on the characteristics of a discretionary order in the sense which we have outlined. If the questions involved lend themselves to differences of opinion which, within a given range, are legitimate and reasonable answers to the questions, it would be wrong to allow a court of appeal to set aside a judgment at first instance merely because there exists just such a difference of opinion between the judges on appeal and the judge at first instance. In conformity with the dictates of principled decision-making, it would be wrong to determine the parties' rights by reference to a mere preference for a different result over that favoured by the judge at first instance, in the absence of error on his part. According to our conception of the appellate process, the existence of an error, whether of law or fact, on the part of the court at first instance is an indispensable condition of a successful appeal. (Emphasis added.) (Footnote omitted.) 93 The important aspect of the references in Coal and Allied at [21] (for the task of appellate review) is, in my respectful view, that the exercise of a discretion should not (as a matter of principle at least) be overturned on a mere preference for a different legitimate result and (as a matter of jurisdiction) error must be found to exist as part of the appellate process before intervention is permissible. 94 The basic principle was stated in Coal and Allied at [14]: 14 Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. However, the conferral of a right of appeal by way of a hearing de novo is construed as a proceeding in which the appellate body is required to exercise its powers whether or not there was error at first instance. (Emphasis added.) (Footnotes omitted.) 95 The Full Bench was therefore obliged to only intervene if satisfied there was error. It seems to me to be clear beyond reasonable argument that the Full Bench held the view that Deputy President Lawrence had fallen into error. As I said earlier, the effect of the Full Bench's reasoning is that it clearly decided that Deputy President Lawrence made errors in the decision-making process and an error in his finding that the dismissal was harsh, unjust or unreasonable. It followed, inevitably, that Deputy President Lawrence made an error in ordering reinstatement. The pre-condition for such an order was not established. On the contrary, the termination of employment was found by the Full Bench not to be harsh, unjust or unreasonable. 96 Apart from a proper understanding of the principles which apply to appellate review, the fact that evaluative judgments are required (both at first instance and on appeal) at each of the different stages in the hearing and determination of an unfair dismissal case has an important significance for any attempt at judicial review of the final outcome. Unless the Full Bench misunderstood its own role, including the way to approach its task of appellate review, the broad evaluative judgment required also from it is not readily amenable to the prerogative writs. 97 This is because if the Full Bench had made an error in its assessment, or errors in reaching its conclusion, they would normally be errors within jurisdiction and not an error or errors as to the nature of the jurisdiction which the Full Bench was required to exercise (Coal and Allied at [32]).

(b) Erroneous limitations? 98 This criticism relates to the adoption by the Full Bench of statements by an earlier Full Bench in Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 ("Parmalat") (at [24]): [24] … Having found a valid reason for termination amounting to serious misconduct and compliance with the statutory requirements for procedural fairness it would only be if significant mitigating factors are present that a conclusion of harshness is open. … 99 It is convenient to refer again to Norbis v Norbis to make a point which applies to the Full Bench equally with appeal courts - it is not an error to adopt guidelines on matters of principle to foster consistent decision-making. That does not represent an impermissible fetter on the exercise of a discretion. The following passage in Norbis v Norbis follows immediately after the passage set out earlier: It has sometimes been said by judges of high authority that a broad discretion left largely unfettered by Parliament cannot be fettered by the judicial enunciation of guidance in the form of binding rules governing the manner in which the discretion is to be exercised: see, e.g. Mallet; Evans v. Bartlam; and Gardner v. Jay. However, it does not follow that, because a discretion is expressed in general terms, Parliament intended that the courts should refrain from developing rules or guidelines affecting its exercise. One very significant strand in the development of the law has been the judicial transformation of discretionary remedies into remedies which are granted or refused according to well-settled principles: United Engineering Workers' Union v. Devanayagam. It has been a development which has promoted consistency in decision-making and diminished the risks of arbitrary and capricious adjudication. The proposition referred to at the beginning of this paragraph should not be seen as inhibiting an appellate court from giving guidance, which falls short of constituting a binding rule, as to the manner in which the discretion should be exercised: … (Emphasis added.) (Footnotes omitted.) [The implicit criticism in Wong v R (2001) 207 CLR 584 at [79]-[80] of a passage which then follows does not affect the authority of the statement I have emphasised.] 100 Statements of principle often serve a useful and legitimate function. They provide a body of appellate guidance against which to test suggestions of error in future cases. They cannot substitute for, or alter, a statutory prescription but they are not jurisdictionally flawed unless they are given (or assume) the status of a "rule" or are general pronouncements not related sufficiently to the facts of the particular case (see, by way of example of the principle in the exercise of federal appellate judicial discretion, Wong v R (2001) 207 CLR 584 per Gaudron, Gummow and Hayne JJ at [83]). It is arguable that the statement in Parmalat which I set out earlier, infringed this restriction. It appears to be a dogmatic pronouncement if it was intended as a general rule. It could not fetter the broad evaluative task assigned by the FW Act using the principles I have discussed of "a fair go all round". But, in a case such as the present, attention must remain focussed on the significance of the statement for the outcome of the present case, not some other case. 101 In my view, no jurisdictional error by the Full Bench has been demonstrated in this respect. In the present case the Full Bench did not ultimately resort to generalities drawn from an earlier case. It put aside the "other" factors which Deputy President Lawrence had regarded as relevant (and ultimately decisive) under s 387(h) and brought to account further matters to which it felt Deputy President Lawrence had given insufficient attention. That did not involve the imposition of "erroneous limitations on the unfair dismissal jurisdiction".

(c) Failure to consider mitigating factors? 102 The written argument on this issue commences as follows: 29. In addition, the Full Bench regarded mitigating factors referred to by the Deputy President as irrelevant to the determination of whether Mr Toms' dismissal was harsh, unjust or unreasonable. and continues: 34. Further, the Full Bench disregarded mitigating factors favouring Mr Toms because they were said to not address the "core issue" of valid reason. Mitigating factors such as Mr Toms' length of service, absence of past disciplinary history, assistance provided in the investigation, inability to find alternative employment and limited employment options were, on any view, relevant considerations in assessing the consequences of dismissal for Mr Toms. … 36. By finding error on the part of the Deputy President by disregarding considerations necessary to assess the consequences of dismissal for the employee or whether the penalty of dismissal was disproportionate to the misconduct found, the Full Bench misunderstood the Commission's jurisdiction, asked itself the wrong question and failed to have regard to essential and relevant considerations. 103 In my view, those submissions misstate the terms and effect of the Full Bench decision and identify no jurisdictional error (although the reference to "finding error" in [36] should be noted for its contrast to Ground (a) - that the Full Bench failed to identify error). 104 The Full Bench listed (at [24]) the factors which Deputy President Lawrence took into account. It commented on some: [25] We consider that Mr Toms' seniority and his very high level of responsibility are factors which attract sympathy when considering outcome, but equally those factors demand a high level of compliance with policy. referred to additional matters: [26] In addition, Mr Toms failed to immediately inform Harbour City of the potential for a positive finding. He put off the moment of confession as long as he could. This was not taken into account by the Deputy President. and then moved to the matters I set out earlier in [27] and [28]. In particular, the Full Bench said (at [28]): [28] The mitigating factors referred to and relied on by Deputy President Lawrence are not mitigating factors that address the core issue, which was the serious misconduct which led to the dismissal of Mr Toms. The core issue, the valid reason for termination of Mr Tom's employment was his deliberate disobedience, as a senior employee, of a significant policy. … 105 In the written argument about this suggested error, the applicant also contended that the Full Bench failed to address the gravity of the applicant's conduct by disregarding "the lack of any impairment" and "the absence of any link with the accident". At [27] the Full Bench said: [27] The lack of any impairment arising from drug use, the absence of a link between drug use and the accident and the absence of substantial damage to the Marjorie Jackson are not factors relevant to the ground of misconduct identified as non-compliance with the Policy. … 106 In my view, each of these complaints is a complaint about the weight or significance which the Full Bench gave (or did not give) to particular matters. In my view, that illustrates that in this, and other, respects the argument advanced slipped from a contention of jurisdictional error to argumentative debate canvassing the merit of the Full Bench's approach. As a result, it fails to point to any jurisdictional error. 107 The argument of the applicant sought to elevate from the broad evaluative sweep of the judgment of what is harsh, unjust and unreasonable in s 385(b), a statutory requirement to give weight to each and every factor that could be said to weigh in the balance in favour of an applicant as a consequence of termination. 108 Section 385(b) fulfils no such function. The FWC is entitled to approach its task by focusing on considerations it considers to be relevant (while also complying with s 387). Here, its view (after identifying what it perceived to be the error in the Deputy President's approach) was that the core question - the deliberate disobedience of a significant policy (one central to the safety of the public and the public's confidence in the safety of ferry travel) was not touched by a lack of evidence of impairment, or by a lack of evidence of causal relationship between the event and the cannabis, or by the other considerations that were said to weigh in the balance in favour of the applicant.

(d) No evidence or irrational? 109 Each of those is a serious charge. They amount to an accusation of a failure to carry out the assigned task, or attempting to do so in a way which is manifestly inadequate or capricious. As the respondent's submissions pointed out, the statements about which specific complaint was made (at [27]) reflected matters debated in the proceedings and reflected in the policies and evidence in contest in the proceedings. 110 The tests which must be applied in considering whether a decision is legally unreasonable are those stated by the High Court in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332, as further discussed in Minister for Immigration and Border Protection v Singh [2014] FCAFC 1 especially at [44]. 111 Applying those tests, this argument must be rejected.

(e) No Full Bench finding supporting its order? 112 The way in which the first argument of jurisdictional error discussed earlier was formulated makes it apparent at the outset that this criticism has no substance. There, the criticism was that the reasoning of the Full Bench was directed to the substitution of its own view of the merits, rather than an examination of specific error. That assertion is destructive of any proposition that the Full Bench failed to address the question of whether the dismissal of the applicant was harsh, unjust or unreasonable. 113 In any event, there is no substance in the contention that the reasons of the Full Bench were not satisfactorily addressed to the question of whether the termination of the applicant's employment was harsh, unjust or unreasonable. A finding to that effect by the Deputy President was a fundamental pre-condition to any order for reinstatement. Whether that finding was correct was the very subject of the appeal, and the arguments of both parties. 114 Once the Full Bench found error in the finding that the termination was harsh, unjust or unreasonable (as it undoubtedly did) it was open to it to quash the order for reinstatement. Once that was done, it was necessary for the Full Bench to take some further step. Unless the application for reinstatement was remitted for further hearing, after the order for reinstatement was quashed it was inevitable that the Full Bench would deal with the question itself. It was open to the Full Bench to decide the original application itself, which is what it did. It is in no way surprising that it did so as an extension of its reasons for quashing the order for reinstatement and by applying the findings it had already made. Its decision to dismiss the application must be taken to have reflected the matters discussed by it in concluding that Deputy President Lawrence had erred in his own decision.

Conclusion 115 I would dismiss the application. Costs were not sought. I certify that the preceding one hundred and thirteen (113) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan.

Conciliation and Arbitration Act 1904(Cth)

Industrial Relations Act 1988(Cth)

Workplace Relations Act 1996(Cth)

Passenger Transport (Drug and Alcohol Testing) Regulation 2010(NSW)

Australian Conciliation and Arbitration Commission (Conciliation and Arbitration Act 1904(Cth)

Australian Conciliation and Arbitration Commission (Conciliation and Arbitration Act 1904 (Cth)), the Australian Industrial Relations Commission ("AIRC") (Industrial Relations Act 1988(Cth)

(Marine Safety Act 1998(NSW)

Engineering Union (1958) 90 CAR 27 Norbis v Norbis (1986) 161 CLR 513 Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 Public Service Association of South Australia v Federated Clerks' Union of Australia, South Australian Branch (1991) 173 CLR 132 R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 Re Ranger Uranium Mines Pty Ltd; Ex parte Federated Miscellaneous Workers' Union of Australia (1987) 163 CLR 656 Short v FW Hercus Pty Ltd (1993) 40 FCR 511 Singer v Berghouse (1994) 181 CLR 201 Termination, Change & Redundancy Case (1984) 8 IR 34 Wade v Burns (1966) 115 CLR 537 Western Suburbs District Ambulance Committee v Tipping [1957] AR (NSW) 273 Wong v R (2001) 207 CLR 584

At a glance

Court

Decision date

Before

Source

Judgment (25 paragraphs)

Parties

Legislation Cited (10)

Cases Cited (29)