C2003/375, Transcript of Proceedings [2003] AIRCTrans 279 (31 January 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

VICE PRESIDENT LAWLER

C2003/375

APPEAL UNDER SECTION 45 OF THE ACT
BY TENIX DEFENCE PTY LIMITED
AGAINST THE DECISION AND ORDER OF
SENIOR DEPUTY PRESIDENT ACTON AT MELBOURNE
ON 23 DECEMBER 2002 IN U2001/7605 RE TERMINATION
OF EMPLOYMENT STAY APPLICATION

SYDNEY

10.54 AM, THURSDAY, 16 JANUARY 2003

THIS MATTER WAS CONDUCTED BY VIDEOCONFERENCE IN SYDNEY

PN1

THE VICE PRESIDENT: Thank you. Appearances please?

PN2

MR SKENE: If the Commission pleases, my name is H Skene. I seek leave to appear on behalf of Tenix Defence Proprietary Limited.

PN3

MR ADDISON: If the Commission pleases, I appear on behalf of the Australian Manufacture Workers Union on behalf of Mr Galea, and with me is Mr Galea.

PN4

THE VICE PRESIDENT: Thank you. Yes, Mr Skene?

PN5

MR SKENE: Thank you, your Honour. Initially I would thank you for your patience this morning allowing the parties to have some discussions, and I can report that those discussions have been fruitful. As a result I perhaps won't launch into my submissions, but simply say at this stage, your Honour, that this concerns an application for a stay of an order made by Senior Deputy President Acton on 23 December. That order took effect on Monday, 13 January 2002. Subject to the existing stay application, some arrangements were entered into between the appellant and the respondent that essentially the appellant would pay wages to the respondent subject to the outcome of the stay and that we would propose following the stay application to seek orders in terms which I understand have been provided to your Chambers this morning.

PN6

THE VICE PRESIDENT: Yes. Do I understand it correctly that the stay is to be by consent and that the conditions attaching to the stay are agreed between the parties?

PN7

MR SKENE: Subject to you being satisfied that the order is appropriate to issue, your Honour, that is the case. What I was proposing to do is to briefly outline the amendments to the draft form of order that was proposed and provided to your Chambers this morning, that have arisen through discussions this morning. Following that - - -

PN8

THE VICE PRESIDENT: Would you just take me through then please, Mr Skene?

PN9

MR SKENE: Certainly, your Honour. Paragraph 1 is agreed. In paragraph 2 in the second line, there is a typographical error, where the words read:

PN10

Remuneration loss for each respondent.

PN11

It should be - "the respondent". And "since the date of termination until 23 January 2003" - it should read - "until 13 January 2003" which is the effective date of the order.

PN12

Further to that, your Honour, at the end of paragraph 2, we propose to add a sentence that reads:

PN13

Further, the parties will finalise quantifications of an amount in respect of annual leave, long service leave - - -

PN14

THE VICE PRESIDENT: Just bear with me one moment - of an amount?

PN15

MR SKENE: Yes:

PN16

In respect of annual leave, long service leave and sick leave accrued for this period.

PN17

Paragraph 3, your Honour, the second word in that paragraph "the quantum" should read "quantums", as a result of that petition in paragraph 2. Paragraph 4 as it reads. There is one change in paragraph 5.1, in a sentence - - -

PN18

THE VICE PRESIDENT: So the first alternative - - -

PN19

MR SKENE: The first version of clause 5 has been deleted.

PN20

THE VICE PRESIDENT: Yes.

PN21

MR SKENE: Clause 5.1 in the second line which read "net fortnightly remuneration" is to be changed to "net monthly remuneration", and that is a change throughout the remainder of that clause, your Honour. There are a number of references in clause 5.2 to fortnightly, and they should each read monthly. In the first line of clause 5.2 which reads "from 16 January", that should read "from 13 January".

PN22

THE VICE PRESIDENT: Yes.

PN23

MR SKENE: We have inserted a new paragraph 5.2(c) as follows:

PN24

The appellant shall pay into a separate interest bearing account 9 per cent of the total amount paid to the respondent under paragraphs 5.2(a) and 5.2(b) which would be credited to the respondent's superannuation account should the appeal be successful or will be credited should the appeal be unsuccessful.

PN25

THE VICE PRESIDENT: Yes.

PN26

MR SKENE: At the bottom of paragraph 5.2, there is a sentence - "It is provided that" - the respondent also undertakes - if we could delete the words "in writing" after the words "undertakes" as that undertaking is in the transcripts this morning should the order be successful.

PN27

At the end of 5.2(b), and we are getting very close, your Honour - I don't know if your Honour's looks like mine, but - - -

PN28

THE VICE PRESIDENT: That's fine, Mr Skene.

PN29

MR SKENE: In 5.2(b), if you added a new sentence at the end of that paragraph that:

PN30

The respondent will specify his derived income including any GST expenses and taxation deductions required by law.

PN31

There is one final amendment to paragraph - - -

PN32

THE VICE PRESIDENT: Do I infer from that that the respondent is presently working in some fashion for himself.

PN33

MR SKENE: Indeed, your Honour, he is currently engaged as a sub-contractor.

PN34

THE VICE PRESIDENT: Good.

PN35

MR SKENE: And that causes a further amendment to paragraph 5.3(b). Following the words "voluntarily leave other employment" insert the words "or refuse any contract, in order to obtain benefits under this order", and then there is a bracket at the end of that before the full stop:

PN36

(except with the prior consent of the appellant or for other reasonable cause).

PN37

They are the amendments that we focused on earlier, your Honour.

PN38

THE VICE PRESIDENT: Apart from wanting to interfere with the agreement that the parties have reached in relation to these terms, what is the interaction going to be between paragraphs (a) and (b) at 5.3. Could the situation arise whereby the respondent is engaged on contractual work and obliged by contract to complete it and then the appellant could offer him work and he be faced with the choice of either rejecting the work and therefore causing paragraph (a) to come into operation or repudiating his contract work, which would expose him to difficulties.

PN39

I am just wondering whether or not having regard that the probability that this appeal will be heard before too long, there is any particular need to retain paragraph (a). Does your client, Mr Skene, have any intention of offering him work between now and the resolution of the appeal?

PN40

MR SKENE: The answer to that is no, your Honour. In those circumstances we can consent to the deletion of paragraph 5.3(a). THE VICE PRESIDENT: Do you have any difficulties with that Mr Addison?

PN41

MR ADDISON: I don't your Honour. I have actually written something else given my client there, I just simply put it back out there which are subject to the requirements of paragraph B. However, I am happy with the issue.

PN42

THE VICE PRESIDENT: Mr Skene you may prefer the change that Mr Addison suggested just in case there is some change of circumstances at Tenix and they desperately need to have someone with Mr Galea's skills back there. I appreciate that's unlikely.

PN43

MR SKENE: I think in the time that is likely to elapse between now and the determination is very unlikely.

PN44

THE VICE PRESIDENT: Okay, so delete A?

PN45

MR SKENE: Indeed.

PN46

THE VICE PRESIDENT: Mr Addison, are you prepared to concede that there is at least an arguable prospect in relation to the appeal or do you wish to argue that there is no arguable prospect and therefore there should be no stay?

PN47

MR ADDISON: Your Honour we do not concede that the appellant has an arguable case, however, we are mindful of the authority's regard to these matters as they come before the commission. We accept that the normal course of events is that a stay would be granted in terms of the reinstatement issue to allow the appellant to put his condition at best. There is no concession on the part of the respondent in these proceedings, however, as a matter of practical convenience for all the parties consent to the form of order to be issued.

PN48

THE VICE PRESIDENT: Mr Addison I just think you have condemned yourself to sitting here for some considerable further time. For this reason: that the authorities as I read them indicate that, if I could summarise it in this fashion that there is a presumption that the judgment below is correct, the decision below is correct and that a stay is not to be granted unless the appellant first demonstrates that there is an arguable prospect that the appeal will succeed and that leave will be given.

PN49

I don't think there is a difficulty with leave in a case of this class but I think I am obliged to require Mr Skene to persuade me that the appeal is arguable before I am permitted on the authorities to grant a stay even though the terms of the stay which are no doubt are directed towards balance of what the parties correctly perceive to be the balance of convenience, considerations of this matter can be - should I say arise for consideration. So I think the ball is in your court Mr Skene.

PN50

MR SKENE: I accept that assessment of the authorities your Honour essentially as you've just outlined - - -

PN51

THE VICE PRESIDENT: Why don't you take me to your best point.

PN52

MR SKENE: Initially your Honour can I just confirm that you have the appeal books and the order and the decision that deal with whether the subject of the appeal are at tab 2 of volume 1 of the appeal book.

PN53

THE VICE PRESIDENT: I have those appeal books and I have the decision and order.

PN54

MR SKENE: I wish to point out just from the outset that there is an omission from the appeal book and that is that the union put some submissions in reply to the respondent in the first proceedings.

PN55

THE VICE PRESIDENT: Thank Mr Skene don't trouble yourself with those at the moment, I wouldn't be treating the submissions as evidence in any event. Fire away.

PN56

MR SKENE: Indeed. Your Honour there are several aspects of Senior Deputy President Acton's decision which we say is likely to be reversed on appeal and certainly are arguable. The first concerns valid reason and that seems essentially on her Honour's finding that there was not a valid reason for the termination. We say that it was not open to the commission to bind it, there was not a valid reason for determination taking into account the whole of the evidence.

PN57

The second point is that her Honour failed to properly balance the interests of the applicant and the respondent provided by interest of the Act under section 170CA. The point, however, that I would like to focus on for the purposes of a stay application concerns your Honour's findings in relation to reinstatement. Her Honour commences dealing with the appropriate remedies to deal with at paragraph 51 of her decision. She sets out, you will note, the relevant provision of the Act, section 170CH.

PN58

At paragraph 59 she correctly identifies that the commission must first consider reinstatement and cites the Full Bench decision of Henderson v Department of Defence in that respect. In paragraph 61 she considers the order that are open to her under section 170CH(3) and finds that if Mr Galea is to be reinstated it would have to be to another position on terms and conditions no less favourable than those on which he was employed before.

PN59

In paragraph 62 provides that there is no evidence concerned of the liability of the undertaking. She then determines that the length of service is a factor in favour of making such a orders that is not subject to appeal. In paragraph 64, however, your Honour, she commences to consider the matter of the loss of remuneration as ..... and she determines in paragraph 74 that that amount favours reinstatement and she determines that his efforts concerning mitigation favour reinstatement at paragraph 75.

PN60

Then she considers your Honour the matter of the relationship between Tenix and Mr Galea. We say that that relationship goes to the heart of whether or not her Honour was able to make a finding that reinstatement was appropriate in the circumstances. Now essentially we say that her Honour is finding that reinstatement is appropriate, was not open to her in respect of three issues essentially. The first issue concerns her factor of findings about the conduct of the applicant. We say that once her Honour had found that the applicant behaved in a way that he did and that conduct relates to threats that were made to Tenix managers.

PN61

THE VICE PRESIDENT: That finding is where?

PN62

MR SKENE: Her finds at paragraph 79 that there were two post termination incidents. Now she first deals with those your Honour at paragraph 50 of her decision where she says that:

PN63

The fact that there were only two well separated instances against ...(reads)... his threats were idle.

PN64

Now we have a number of problems with that finding your Honour. Essentially the characterisation of that behaviour and a failure to deal with the conflicting evidence in relation to what occurred amounts to an error in her finding that reinstatement is appropriate in the circumstances. Essentially we say that once she had determined that those incidents took place it was not open to her to characterise them in the way that she did, that is borne from frustration and going nowhere and being idle. In those circumstances - - -

PN65

THE VICE PRESIDENT: Why isn't it open to her? Why is it not open to the Senior Deputy President to characterise in that fashion?

PN66

MR SKENE: The first reason your Honour is that there was no evidence that supported those findings. The executive evidence, the weight of the evidence is completely contrary to those findings.

PN67

THE VICE PRESIDENT: So you would say would you that this is a case that comes within the - at a loss to these devised principles - de Vries principles I should say where the advantage that the member hearing the matter at first instance had in seeing the witnesses give their evidence was misused or alternatively that her finding was glaringly improbable.

PN68

MR SKENE: Very improbable, your Honour. We say simply that had she properly taken into account the relevant evidence no reasonably person could have arrived at this decision. I would like perhaps just initially to take you through the incidences themselves. Her Honour determined essentially that this conduct was not to be taken seriously. She considers that it was more from frustration and that nothing was to follow from it. The first incident that we wish to deal with, your Honour, was an incident that involved Mr Rootsey on 7 December 2001.

PN69

THE VICE PRESIDENT: Can I just stop you there, Mr Skene. When you said that there was no evidence that enabled the Senior Deputy President to reach the characterisation that she did, that's my summary of what she said. Isn't it the case though that the case being put by the applicant below, the respondent in this appeal, was that springing from his failure to carry out work which was ordinarily undertaken by striking award employees, he found himself moved to the module hall which is the Senior Deputy President found as a matter of fact, is referred to by employees as the departure lounge.

PN70

Thereafter given a task which had no clear duty statement attaching to it, no clear and specific set of duties that he had to perform and then was subjected to a series of counsellings and warning letters which were amorphous. That all of that put together represented from Mr Galea's perspective, if I can summarise it this way. A program on the part of Tenix to get rid of him, springing from his refusal to do the work of striking workers. That as I understand it from reading the judgment is the way in which Mr Galea put his case below.

PN71

MR SKENE: I don't take issue with that, your Honour, other than to say that that is not a matter that should properly be taken into account for the purposes of assessing reinstatement. Those matters - - -

PN72

THE VICE PRESIDENT: Having established that understanding as not being widely of the mark, and it appears I should add from a reading of the judgment or at least a cursory reading of the judgment that the Senior Deputy President appears to have accepted at least the key elements of that case. Why is it not open to her in a way which the Full Commission on appeal can't interfere with, having regard to the application of House v The King principles and the review of discretions. It's not a question of whether or not the Full Commission would have made the same decision. It's whether or not there was some error of principle or approach. Whether or not the exercise of discretion was outside any legitimate ambit.

PN73

Why isn't it open to her to characterise these incidents of abuse and threats as borne of frustration, if she has accepted the underlying thrust of the applicant's case below?

PN74

MR SKENE: I take your Honour's point. Her findings are made in relation to conduct that took place after the termination. In one case six months after the termination and she applies those findings in the context of whether or not there can be an ongoing relationship between the applicant and the respondent. Her Honour, completely failed to deal with the relevant authorities that were raised by the respondent at first instance concerning its concerns about trust and confidence. She doesn't deal at all with the evidence that was before her about the victims of those incidents if I can put it that way.

PN75

Essentially, if the evidence of these incidences is considered as a whole and no irrelevant matters are taken into account, then it is clear that these threats were deliberate and intended and quite capable of being carried out. It would be a ridiculous position, your Honour, that the Commission would only in the context of a reinstatement case take into account threats like that as militating against reinstatement if they were actually carried out.

PN76

THE VICE PRESIDENT: Mr Skene, so take me to the evidence or a sample of the evidence of one of those threats.

PN77

MR SKENE: Indeed, your Honour. There are two. The first deals with Mr Rootsey on 7 December. That is at exhibit T2 which appears in volume 1 of your appeal book at tab 12. Mr Rootsey gave some evidence on that and he attaches a file note which is in fact the last two pages at tab 12. This conversation took place inside the Williamstown RSL completely removed from the work environment which is understandable given Mr Galea being terminated some months before this incident. It was at some drinks in relation to work people and Mr Galea approached Mr Rootsey - - -

PN78

THE VICE PRESIDENT: Yes, just bear with me for one moment, Mr Skene, and I will just read this.

PN79

MR SKENE: Certainly, go ahead, your Honour.

PN80

THE VICE PRESIDENT: Yes.

PN81

MR SKENE: In his witness statement, your Honour, at the beginning of tab 12, Mr Rootsey deals with this incident at paragraphs 71 through to 74. In particular, paragraph 74 he makes clear his response to Mr Galea's threat. To give you the full picture of that incident, your Honour, I should take you to the transcript in volume 2 of the appeal book at paragraph 494. THE VICE PRESIDENT: Yes, but bear with me a moment. Where should I read to, end of 495, end of 496?

PN82

MR SKENE: 496, your Honour. Mr Galea denies that that incident took place and the way that it was supported by Mr Rootsey. There was no assessment by her Honour that that conflicted the evidence. There's no indication at all that her Honour gave any weight at all to the characterisation of those events by the respondent's witnesses or took that into account. This becomes clearer if I could briefly deal with the second incident, your Honour.

PN83

THE VICE PRESIDENT: Mr Skene, can I just stop you there. McHugh J in Abalos v Australian Postal Commission in a passage that I think could properly be described as celebrated said this:

PN84

Where a trial Judge made a finding of fact contrary to the evidence of a witness but has made no reference to that evidence an appellate Court cannot act on that evidence to reverse the finding unless it is satisfied that any advantage enjoyed by the trial Judge by reason of having seen and heard the witness could not be sufficient to explain or justify the trial Judge conclusion.

PN85

MR SKENE: Indeed, your Honour.

PN86

THE VICE PRESIDENT: Do you accept that that's the relevant legal principle that you'll be confronted with on the appeal in relation to this point you're trying to make?

PN87

MR SKENE: Your Honour, I accept that that will be a quite - I think that in conjunction with the relevant principle, House v King concerning discretionary decisions and indeed a finding in relation to reinstatement the party as to whether or not something is appropriate is a discretionary decision. The House v King makes clear the exact rules where error by the decision making process may lead to a reversal at first instance and that includes the circumstances where a reasonable decision maker appraised of all the relevant facts could not have reached the conclusion that was open.

PN88

Now, I would say that both those tests - you mentioned one that I mentioned - are not inconsistent and indeed they are difficult to make out but the test that her Honour - - -

PN89

THE VICE PRESIDENT: The test here is only that your case is arguable.

PN90

MR SKENE: Indeed.

PN91

THE VICE PRESIDENT: Fine.

PN92

MR SKENE: And the vast weight of the evidence in this case, your Honour, is completely against the findings made by her Honour and if I could briefly deal with the incident which we would say is even more egregious. We agreed to that outline why we've had this, amounts to an appealable matter.

PN93

Mr Sullivan provides evidence about the incident involving him which took place on 25 May, 2002 at paragraph 4715 of the transcript. Now that's at volume 3, your Honour. Under tab 29 - - -

PN94

THE VICE PRESIDENT: I'll read from there. There's an interesting question to be permitted in - - -

PN95

MR SKENE: It was objected to, your Honour. It was found to be allowable on the basis that the reinstatement of - - -

PN96

THE VICE PRESIDENT: No, no, sorry, I'd just spread the notations. It looked as though, no that's fine, I withdraw that observation. I thought it was in re-examination in chief. Yes?

PN97

MR SKENE: Your Honour, that is an incident which clearly imports a threat of physical violence against the person who whom Mr Galea would ultimately report should be return to the workplace. It takes place some six months after the termination of his employment. It demonstrates the deeply harboured hostility by Mr Galea. It is not merely something that can be characterised as frustration and something that was either, indeed the person the subject of a threat felt sufficiently intimidated and threatened that he went to the police over the incident.

PN98

Now, none of that evidence is considered by her Honour and I accept the point that your Honour raises against me in relation to that.

PN99

THE VICE PRESIDENT: I think that point is really one that you face more acutely on the appeal rather than for the purpose of today's application.

PN100

MR SKENE: Indeed, I agree with that, your Honour. I think for the purposes of today's application I wish to make one final point on that evidence and that is that the task that your Honour had to undertake was to assess whether or not reinstatement was appropriate. Now accepted authority, Full Bench authority, in relation to this considers whether or not there's been an irrevocable breakdown in the trust and confidence in the relationship.

PN101

Full Bench authority finds that where there's a rational basis for the breakdown of that trust reinstatement is not appropriate. Now those authorities were raised in submissions by the respondent not at all by your Honour so the failure of the parties is twofold. Firstly, she gives characterisation to Mr Galea's conduct which she accepts took place. There's a finding of fact that this conduct took place. She then characterises it in a way that is completely unreasonable in light of the weight of the evidence.

PN102

THE VICE PRESIDENT: Mr Skene, can I just interrupt you there. What was the competing evidence? Did Mr Galea accept - I withdraw that - what was his response to Mr Ogilvy's allegation?

PN103

MR SKENE: No response was made other than by his evidence in chief.

PN104

THE VICE PRESIDENT: Mr Addison, do you know where it is, do you happen to know where it is? It doesn't matter if you can't find it?

PN105

MR ADDISON: Your Honour, there was certainly evidence given by Mr Galea with regards to - it was in respect to denial that the incidents took police into where they were recorded. Certainly there was a conversation between Mr Galea and Mr Rootsey but it was not in terms that are reported in Mr Rootsey's - - -

PN106

THE VICE PRESIDENT: We've dealt with that because Mr Skene took me to the evidence on that in the cross-examination of Mr Galea but Mr Ogilvy - - -

PN107

MR ADDISON: Mr Sullivan also, your Honour, I think this position needs to be clarified. In final written submissions from myself submissions in response I pointed out that Mr Sullivan was in fact leaving, Mr Sullivan has in fact left. Mr Sullivan no longer is employed by Tenix at the shipyard. Mr Skene just said that Mr Sullivan wanted persons ..... that's not true. That's no longer true. Mr Sullivan has gone, has been gone for quite some time as I understand it. Certainly the matter was dealt with in submissions by myself and it would be my submission that the decision that her Honour, Senior Deputy President, acted does reflect that she's taken those matters into account.

PN108

THE VICE PRESIDENT: Mr Addison, let me interrupt you. I'll come back to you. I really interrupted Mr Skene just to ascertain what the status of any contradictory evidence was. You've told me what that is, we should let Mr Skene finish. Yes, Mr Skene?

PN109

MR SKENE: I should say that I'm now instructed that Mr Sullivan has left the site. That is not the case necessarily when the order was made. In any event we would say that - - -

PN110

THE VICE PRESIDENT: That itself raises an interesting issue, buy anyway, yes.

PN111

MR SKENE: Indeed. But the essential basis here of our submission, your Honour, is that her Honour not only failed - characterised the evidence in a way that was not open to her, but she further failed to take into account the appropriate steps. So it is not simply a matter of whether or not there has been, as a matter of fact, any revocable breakdown of trust and confidence, but rather the test is whether there's a rational basis for a party appealing that there is such a breakdown.

PN112

Now, her Honour may well have taken the view that this situation was not irrevocable, but in doing so she failed to take into account the authorities on the point, failed to take into account the submissions concerning that conclusion that were made by the respondents, and relied in any event on conclusions that were not open to her.

PN113

So in those circumstances, your Honour, we say that for those factual reasons her Honour's findings are unsound. Further, I wish to deal very briefly with two findings concerning reinstatement that her Honour makes. The first concerns the operation of section 170CH(2); we provided those - in her decision. Now, her Honour takes into account two matters that are required to be considered under section 170CH(2) for the purposes of assessing whether or not a particular order is appropriate. Those two matters are the remuneration loss by the applicant, that's the first matter; and secondly the steps taken by him to mitigate his loss.

PN114

Now, section 170CH(2) does require her Honour to take into account in deciding whether or not to make an order, whether or not that order is appropriate in light of those factors. But the way her Honour applies, both for remuneration loss and the mitigation issue, is to say that because in respect of mitigation Mr Galea took steps to mitigate his loss, which was not denied, that favoured a reinstatement order, and because Mr Galea had a certain amount of loss remuneration, that favoured a reinstatement order.

PN115

Now, what we would say is that neither of those considerations needs to be taken into account to assess whether as a matter of law it is appropriate for the Commission to make an order concerning reinstatement, particularly with respect to mitigation. It is very hard to see that whether a reinstatement order is appropriate in circumstances - - -

PN116

THE VICE PRESIDENT: Where does she that they favour reinstatement?

PN117

MR SKENE: I will take you to the references in the decision, your Honour.

PN118

THE VICE PRESIDENT: I see, para 75.

PN119

MR SKENE: Yes indeed.

PN120

THE VICE PRESIDENT: And para 76, yes.

PN121

MR SKENE: So it's para 75 and para 76. Now, we would say, your Honour, that while those considerations may be appropriate for some forms of order, and may indeed weigh in favour of some forms of order that her Honour made, they don't at all weigh in favour of a reinstatement order. It may be that the applicant has taken steps to mitigate his losses; it may be that he hasn't. Where that would be appropriate in deciding whether or not it is appropriate in the circumstances of section 170CH(2) to make an order in respect of loss remuneration or continuity of employment, or potentially should reinstatement not be appropriate, an order in respect of compensation essentially.

PN122

Now it would be our submission, your Honour, that by taking those matters into account in favour of reinstatement, what her Honour has in fact done has said, "Well, because those matters - the applicant hasn't done anything wrong in respect of those matters, they favour a reinstatement order." Now, in our submission that's taking into account an irrelevant matter. It's jumping the gun. The correct conclusion would be to say that if he hadn't mitigated his loss perhaps a particular order might not be appropriate. If he had mitigated his loss perhaps another form of order would be appropriate, but it doesn't weigh either for or against, as a matter of relevance and law, whether or not reinstatement is appropriate.

PN123

Now, we would say that is the same - make essentially the same submission in relation to the question of lost remuneration. He may well have lost $10 and got another job the next day. It's - - -

PN124

THE VICE PRESIDENT: Is this a matter that to your knowledge has been considered by the Full Commission in the past?

PN125

MR SKENE: Your Honour, I have done - you will appreciate that this matter was listed somewhat urgently. I do not have authorities to take the Commission to in respect of that point.

PN126

THE VICE PRESIDENT: That's fine, Mr Skene.

PN127

MR SKENE: I have conducted some preliminary research but that hasn't been fruitful as yet.

PN128

THE VICE PRESIDENT: If I can say to you, the urgency of listing was a product of the expiry of the period for compliance with the orders.

PN129

MR SKENE: I appreciate that, your Honour, entirely, and at our request incidentally. I think that however there is no doubt on the relevant Full Bench authorities that the Commission must consider the circumstances in section 170CH, each of them, and give each of them serious consideration in their own right in deciding whether or not a particular order is appropriate. But what her Honour has done here is proceed on the basis that in doing so any of those considerations which can't be countered against the applicant weighs in favour of the order she's considering, without really considering whether or not that factor is at all relevant to whether a particular order, in this case a reinstatement order, is appropriate.

PN130

Now, we would say they are a significant jurisdictional clause in this decision. The Commission only has jurisdiction to make an order if it is satisfied, having regard to those factors in section 170CH, that an order particularly is appropriate. Those requirements are mandatory, and they have been the subject of Full Bench considerations. And there is no doubt - Edwards in judicature is a relevant authority in that respect, your Honour, but there can be no doubt that the Commission is obliged to give serious consideration to each of those factors. But that doesn't necessarily mean that they weigh in favour of or against a reinstatement order, a compensation order. Different favours will take - it should be into account, given different weight, in light of the type of order that has been - - -

PN131

THE VICE PRESIDENT: Which factors did she disregard, do you say?

PN132

MR SKENE: She commences dealing with the factors at paragraph 62, where she deals with the question of the viability of reinstatement orders in light of - on the undertaking, and we don't quibble with that finding, your Honour. She finds that that weighs neither for nor against the making of the order. Now, we would say that that is the appropriate finding to make in respect of mitigation and in respect of the lost wages points, the points that she makes later in the decision.

PN133

Now, we have a range of other grounds of appeal. There are a number of problems with these findings but I don't want to, because of the problems that your Honour has raised I don't want to deal exhaustively with the findings that we say were not open to her, but we do not quibble with her finding in respect to the validity of, or the effect of the order on our undertaking. We do take issue with a number of other things dealt with between paragraph 62 and 75.

PN134

THE VICE PRESIDENT: You would say as a matter of principle that whether or not an employee has sought to mitigate his or her loss in a period between termination and an order for reinstatement following a hearing before the Commission would be something that is relevant only to whether or not an order is made under 170CH(4)?

PN135

MR SKENE: Yes, your Honour, or it may be relevant to an order in deciding how to allocate the amount of money that has potentially accrued in lost wages. It may be relevant to say, "Well, because this applicant has done nothing to seek employment between termination and reinstatement, I'm not going to order that payment of wages", if I can use that expression in the circumstances. It could be relevant to that, but what it can't be relevant to is whether or not reinstatement is appropriate. And it would definitely arise in the circumstances that your Honour has mentioned, and that's determined again by a Full Bench authority in a case called Sprig, which is referred to in the respondent's submissions as the appropriate way to calculate compensation.

PN136

Now, they are what I would say are our strongest points on arguable case, your Honour. I can deal more exhaustively with the valid reason issues. We do say that there are some flaws in her Honour's reasoning there that give rise to appealable error. I suspect that the only way for your Honour to come to a firm view in relation to those would be to exhaustively go through the evidence and it may be that's not appropriate in this application in any case.

PN137

THE VICE PRESIDENT: I don't think it is appropriate, Mr Skene, that's fine. I think the specific problem that arises, if that were the only ground we can probably side step here. Mr Addison, what submission do you wish to make?

PN138

MR ADDISON: Your Honour, I am in a similar position as Mr Skene with regard to a lack of authority. I wasn't aware of these proceedings until about 3 o'clock yesterday afternoon and I have had even less time to do any research. But, your Honour, with regard to the points that Mr Skene raises, the effect of it as I understand his submissions is two points. The first is the question of whether the findings of fact were in fact all the terms of the Senior Deputy President or not on the read of the evidence. I think that Mr Skene has an incredibly difficult job in that regard.

PN139

THE VICE PRESIDENT: It is not whether the finding is right but rather he is a little bit more focused than that. It's whether or not the characterisation of the conduct was open.

PN140

MR ADDISON: Yes, I accept that, your Honour. Your Honour has already referred to one High Court authority. There is another which is De Vries v Australian National Railways Commission. That's a report - - -

PN141

THE VICE PRESIDENT: You can take it I am familiar with Dr Vries.

PN142

MR ADDISON: Yes, where Brennan, Gaudron and Heerey JJs basically said more than once recently the court findings of fact by the trial judge based on the credibility of a witness is not to be set aside because the High Court thinks the probabilities of a case are against. Even strongly against that finding of fact. If the trial judges findings depend to any substantial degree on the credibility of the witnesses the finding must stand unless it can be shown that the trial judge has failed to use or has probably misused his advantage.

PN143

Your Honour, yes there was evidence with regard to the incidence that Mr Skene refers to. There was evidence from Mr Rootsey, Mr Sullivan and also Mr Galea. In that evidence my submission is that the Senior Deputy President has the advantage of being able to absorb the demeanour of all the three witnesses and can come to a conclusion. In fact my submission is that paragraph 40 which Mr Skene has just pointed out is in fact inconclusive and it's a finding of fact by her Honour. That is the fact that the two well separated incidents are actively involved in this notation ..... abuse and made in a threat suggest that this abuse was a product of frustration ..... They are findings of fact, your Honour, in my submission.

PN144

The findings of fact were that the abuse was the product of frustration, fact 1. Fact 2, the threat was idle and her Honour's come to that conclusion with the advantage of being able to observe the witnesses. She assessed the evidence before she has come to the conclusion. We have said on the authority that Dr Vries in that finding cannot be disturbed by the appellate court.

PN145

THE VICE PRESIDENT: Mr Addison, can I just stop you there and perhaps as much for my own benefit as for yours. Just bring a closer focus to what the issue is here. The sort of argument you've outlined is precisely the sort of argument that I would expect to hear from a most competent counsel or advocate for the respondent on the hearing of the full appeal as to whether or not the appeal ought be allowed. But the issue here is only whether or not it is arguable.

PN146

In other words are you in a position, are you seeking to, by making those submissions, to say not that the Full Commission ought reject the appeal because when it has been properly analysed these findings were open and they were findings that were made and they shouldn't be displaced by reference to the principles in Abalos or de Vries. Rather than saying it is not even arguable that the exceptions in Abalos and de Vries apply. Do you understand the distinction, have I made myself clear?

PN147

MR ADDISON: I do, your Honour. In the context of the facts in this case we see ..... It is unarguable. The findings of fact won't stand. We won't say there's no arguable point with regard to that issue that Mr Skene raises. That's our submissions with regards to that. The second point is as I understand Mr Skene's argument with this in effect which ..... with regard to section 170CH. We say that her Honour - - -

PN148

THE VICE PRESIDENT: Mr Addison, just bear with me one moment. There is just some papers I need to turn up. Yes, continue.

PN149

MR ADDISON: Thanks, your Honour. As I was going to the second point which was in terms of arguable position or an arguable case, that's the jurisdictional point with regards to section 170CH(2). With regard to CH(2) the Commission does not ..... under subsection (4) and under subsection (1) it is open to the Commission to make an order under subsection (3) and (4). Unless the Commission is satisfied having regard to all the circumstances of the case including those circumstances which are listed in subsection A through E. Your Honour, there is now a mandatory form that needs to be complied with under the terms of the Act. So long as the Commission is satisfied of those issues listed through subsection A through E, that it is open, in my submissions, to the Commission to have regard to the circumstances in whatever way is appropriate given the facts of the case.

PN150

Her Honour has dealt with each of the issues in the decision from paragraph I think it was 62, your Honour. Yes, from paragraph 62 through to paragraph 76 her Honour deals with those issues. Her Honour comes to some conclusions which they said the statute doesn't prevent her from coming to those conclusions as she sees fit. So we say her Honour has taken into account those factors, then has made the order pursuant to section 170 ..... She is entitled to do it. Then has made a further order with regards to CH(4)(b) with regard to remuneration lost.

PN151

We say in light of the fact that I am not able to point to any authority with regard to that, your Honour, because I just haven't had time to look at that. We say on the basis of the words and study of the law, it is unarguable that there is a discretion on the part of the Commission to look at the issues in any way the Commission sees fit.

PN152

THE VICE PRESIDENT: Might I just test that proposition with you, Mr Addison. It is unarguable that there's a discretion invested in the Commission but can I put this proposition to you. The discretions are to be exercised judicially. That is in a fair and principled fashion and where the Full Bench of the Commission or some other appropriate appellate court, the Federal Court or the High Court, has laid down some statement of principle as to the way in which a discretion should be exercised, then a failure to adopt that approach can result in an erroneous exercise of discretion.

PN153

MR ADDISON: I accept that as a matter of principle.

PN154

THE VICE PRESIDENT: Mr Skene's argument is that the authorities require a respondent employer on an application only to establish that there is a rational basis for that party perceiving there to have been an irrevocable breakdown in the relationship and that in those circumstances the proper exercise of discretion under section 170CH subsection 3 is to decline to order reinstatement.

PN155

MR ADDISON: No, well, I disagree with that, your Honour, even without applying to the authorities and I have thought this for a long time - - -

PN156

THE VICE PRESIDENT: Mr Addison, that's fine.

PN157

MR ADDISON: Finally, I want to - - -

PN158

THE VICE PRESIDENT: No, that's fine. What I'll do is I'll ask Mr Skene to identify what the authority is and if you wish you can have an opportunity to check whether there are any other authorities that you'd wish to bring an answer to it. This is not a matter that needs to be resolved at this instant.

PN159

MR ADDISON: If your Honour pleases.

PN160

THE VICE PRESIDENT: Sorry, I interrupted you, that was really just because I was seeking to bring a bit of focus onto that submission you were making. What about this - - -

PN161

MR ADDISON: Yes, well, your Honour, as I understand it they are the two points that are raised. They are general submissions.

PN162

THE VICE PRESIDENT: The next point that he raises is that the approach to section 170CH subsection 2(d), paragraph (d), for example, is erroneous because the approach adopted by the learned Senior Deputy President was to say in relation to 170CH(d) that his efforts at mitigation favoured the making of an order when Mr Skene argues as a matter of rationality whether or not an employee has made efforts at mitigation is relevant to whether or not they should be paid the compensation in respect of wages for the period between termination and reinstatement, but cannot logically have any relevance to whether or not a reinstatement order ought be made.

PN163

MR ADDISON: Well, your Honour, I think - - -

PN164

THE VICE PRESIDENT: And that therefore there is an error on the part of the Senior Deputy President in concluding that the fact of mitigation having occurred results in that matter favouring reinstatement.

PN165

MR ADDISON: As a matter of logic that argument can't survive, in my submission. I'm certain that efforts to mitigate must have a bearing with regard to orders for compensation. They must have and there is certainly authority with regard to that, in Springs and some other cases, etcetera, so there's certainly authority with regard to that. But it is a fact that it also needs to be taken into account with regards to CH4(b). On the same rationale and the same basis as compensation 4(b) reads that subject to subsection 5 "any order that the Commission thinks appropriate to cause the employer, pay the employer in a manner in respect with remuneration lost".

PN166

Well, that would be a loss by the employer because of the termination. That operates in conjunction with CH3 which is for a statement and CH5 which can be damages awarded. We say the same logic applies to reinstatement as applies to compensation. The Commission and the Act envisages that there will be no double dipping, if I can use that phrase. So Mr Galea experienced it through his employment the Commission may award remuneration lost but must take into account the matter of mitigation. If Mr Galea has earned $20,000 over the period between termination and reinstatement, that's got to be factored in to reduce the amount of remuneration lost awarded.

PN167

As a matter of logic, the more the person has successfully mitigated their loss, the easier it is for the respondent employer, the less expensive it is, the less impost of business there is, for the respondent employer to reinstate. So it is a factor that ought be considered, in my submission, and quite rightly the more successful the mitigation of the loss that's been, is a factor which favours the making of an order for reinstatement. If there'd been no mitigation, even though they'd been genuine attempts, it would be more expensive and therefore more of an impost on Tenix's business to reinstate in this case.

PN168

THE VICE PRESIDENT: Fine, yes, okay.

PN169

MR ADDISON: In this case I have been successful with Tenix and therefore in favour of the reinstatement order, it would be my submission.

PN170

THE VICE PRESIDENT: Thank you. Now, Mr Skene, the only thing I seek from you in this, unless there is anything you specifically wish to say, is what is the authority for the proposition that there has to be merely a rational basis for a party to - - -

PN171

MR SKENE: The case is McVinish v Flight West Airlines Print R9672 and Brown - - -

PN172

THE VICE PRESIDENT: Sorry, you said Print R?

PN173

MR SKENE: Sorry, yes, it's print R9672.

PN174

THE VICE PRESIDENT: The decision of who?

PN175

MR SKENE: Your Honour, I apologise, I don't have the full citation in front of me. The second authority we say supports our principle is Brown v SBA Prudence which is Print Q6011. Now, I will just say in relation to that that if there is some things that Mr Addison wishes to raise in relation to that matter I would seek only that I be given a brief opportunity to respond to anything that he says.

PN176

THE VICE PRESIDENT: Well, now, I think I'll just - Mr Addison, do you want an opportunity to go away and check these cases for the purposes of this particular argument a stay but operative in relation to the period between now and the likely hearing of this matter which is - I can't say that the matter has been, I can't guarantee that the matter will be heard on these dates, but there's a Full Bench rostered to sit in Melbourne on 17, 18 and 19 February and at the moment there is a significant prospect that this matter will be listed in that period. Just bearing that in mind, do you want to have the opportunity to go away and see if you want to respond to these authorities that Mr Skene is relying upon.

PN177

MR ADDISON: Your Honour, I think it's incumbent on me to do so.

PN178

THE VICE PRESIDENT: Very good, just bear with me a moment. What about if we resumed sitting today at three o'clock? Would that give you sufficient time, three hours, to do the digging you need to do?

PN179

MR ADDISON: Your Honour, if we could resume in the morning rather than this afternoon, just to give me a bit of extra time.

PN180

THE VICE PRESIDENT: In costs terms, Mr Skene, is it six of one, half a dozen of another to you if we resumed at three or resumed in the morning?

PN181

MR SKENE: Your Honour, I'm unavailable at three o'clock this afternoon in any event. I have another matter that I need to attend to. I'm wondering whether or not it would be possible simply to deal with this in writing and then it seems to a reasonably confined point. We're dealing with the arguable nature of this assertion.

PN182

THE VICE PRESIDENT: You don't know what you ask, Mr Skene. I was hoping to dispose of this by way of an ex tempore decision rather than to write something.

PN183

MR SKENE: Well, I was about to address your Honour to do that, not on the basis that I seek written reasons for the stay, but simply on the basis that arguable grounds have already been established. I mean I won't press that ground if need be if that means we can dispose of the matter now. In terms of what Mr Addison said, I don't have anything really that I wish to respond to in detail beyond saying that his assertion that Mr Galea gave the evidence in relation to Sullivan, I can't categorically say that's right, but it seems unlikely given that Mr Galea gave evidence on 6 May and the incident took place on 24 May.

PN184

Now, while I understand Mr Galea was recalled to give further evidence, he didn't give evidence on that point, so it seems very unlikely that he responded in relation to that evidence. without expressing this very much on a provisional basis, I think, however, that's your best point, isn't it for the purposes of the argument today, and indeed for the purposes of the appeal. I'm just concerned that the requirements of procedural fairness really dictate in the present circumstances, that if Mr Addison wants an opportunity to consider whether or not these cases represent the full story, that he shouldn't be denied that opportunity.

PN185

MR ADDISON: I am sorry for interrupting, your Honour - as I understand it, Mr Skene basically said he would withdraw that ground.

PN186

THE VICE PRESIDENT: No, he wasn't withdrawing the grounds of the appeal, what he was saying was, that for the purposes of this stay application, he would be happy not to press it as an arguable matter and rely upon the other matters.

PN187

MR ADDISON: Yes, that's fine. On that basis then, I don't think there is any need to - - -

PN188

MR SKENE: Given your Honour has just expressed a very peripheral view about the other grounds that appear - we would say that all we need to establish is that it is arguable that the exceptions that apply in depositions, may be open to us. And we say clearly on the evidence that they are, excepting that it will be a much harder case to make at the full hearing of the appeal.

PN189

In terms of what Mr Addison said in relation to the other parts of the appeal about section 170CH (a) to (e). Quite frankly our response would be to say that that is a bit of a nonsense. Clearly what your Honour said is right, that is that the Commission has the discretion. It has to come to applying as to whether or not it has jurisdiction to make particular orders and in doing so, it can only take into account relevant matters.

PN190

If there is a matter that is spelt out as something to take into account in deciding whether or not to make a reinstatement or in the legislation, that doesn't provide the Commission with the opportunity to give weight to an irrelevant consideration in deciding - - -

PN191

THE VICE PRESIDENT: Sorry, what is this in relation to?

PN192

MR SKENE: This is in relation to the points raised by Mr Addison about whether or not the Commission should have found that mitigating his loss - in our submission remuneration loss - by the making of a reinstatement order. Now, if those matters are irrelevant considerations, that would clearly be an error in the decision process for the purposes of house and kin or in the Commission then deciding what the jurisdiction the relevant authority would be fought, and Australian Industrial Relations decision of the Federal Court which deals with how the court should approach discretionary findings as to its jurisdiction, which is the nature of the finding under section 170CH.

PN193

There can be, on my submission, no doubt that it is arguable that whether or not mitigating the loss is relevant to a reinstatement order, is a matter that should be taken into account which is ..... order that is appropriate, is an arguable point on appeal grounds in light of those authorities.

PN194

THE VICE PRESIDENT: I must say that I find force in what you say there on that point. I was thinking that very thing when Mr Addison was making his submission. Mr Addison, can I say this, first of all is there anything else you wish to say on any of these other points, putting aside the point where Mr Skene raised the authorities of McVinish v Brown.

PN195

MR ADDISON: No, I'd have to say I think I've said what I need to at this point in time, your Honour.

PN196

THE VICE PRESIDENT: What I propose to do is to order a stay and I will just deliver some short reasons now.

PN197

By a decision dated 23 December 2002, Senior Deputy President Acton found in favour of Edwin Galea in an application brought against Tenix Defence Proprietary Limited in respect to the termination of his employment. That being an application pursuant to section 170CE of the Workplace Relations Act.

PN198

On 23 December 2002, Senior Deputy President Acton made orders relevantly including an order for the reinstatement of Mr Galea and for the payment of monies pursuant to section 170CH(4). A notice of appeal pursuant to section 45 of the Act was filed by Tenix Proprietary Limited on 9 January 2003 and in that application, consistent with the requirements of the rules, Tenix sought a stay of the operation of the decision in orders of Acton SDP pending the termination of the appeal or until further order of the Commission. That application for a stay has been listed before me and argued today.

PN199

Prior to argument commencing today, the parties undertook some negotiations and reached an agreed position in relation to the terms upon which any stay would be granted. However, Mr Addison, appearing on behalf of Mr Galea, did not formally concede that the appellant had an arguable case and accordingly it was necessary to hear further argument in order to determine whether or not that mandatory prerequisite for the grant of a stay was present. Namely whether there were arguable grounds for the appeal.

PN200

Mr Skene relied upon a number of passages in the evidence as contained in the appeal books and identified several bases upon which he said that the appeal was clearly arguable. Firstly, he points to the characterisation by Acton SDP of incidents where threats and abuse were allegedly made by Mr Galea against officers of Tenix. There were two such occasions. SDP Acton found in relation to those incidents at paragraph 40:

PN201

Further, the fact that there were only two well separated incidents against those actively involved in his termination and he walked away after giving some abuse and making a threat, suggest his abuse was a product of frustration and his threats were idle.

PN202

Mr Skene submits that that characterisation of the conduct was not open on the evidence. I am mindful that at this stage the issue is not whether or not the characterisation was open, but merely whether or not it is arguable that the characterisation was not open. I am also mindful of the significant hurdle that an appellant must pass in challenging findings of fact, being the well known principles laid down by the High Court in Abalos v Australian Postal Commission and de Vries v Australian Railways Commission, as adopted and applied by the Full Commission, in for example, Rode v Burwood Mitsubishi, Print R4471.

PN203

THE VICE PRESIDENT: It is impracticable and arguably inappropriate on an application such as this to engage in a minute analysis of the evidence, however I am satisfied that it is at least faintly arguable that the characterisation of the conduct by Acton SDP and may be made the subject of a successful challenge. In saying that I should not be taken as giving any indication as to the outcome of any appeal on that point.

PN204

The next matter raised by or relied upon by Mr Skene on behalf of Tenix was the alleged failure of Acton SDP to take into account the appropriate test for reinstatement in cases of this class. It was submitted by Mr Skene that the proper test which was determinative of whether or not the Commission should exercise its discretion to order reinstatement pursuant to section 17CH(3) was whether or not there was a rational basis for the employer concluding that there had been an irrevocable breakdown in the relationship between the parties. In this regard he relied upon McVinish v Flight West Airlines, print R9672, and Brown v SUA Foods, print Q6011.

PN205

Mr Addison on behalf of Mr Galea had not had an opportunity to consider these authorities and I propose not to make any finding as to whether or not the appellant's case is arguable on this ground in those circumstances, it being apparent that the test for arguable grounds in the appeal is made out in relation to other matters.

PN206

The next matter relied upon by Mr Skene on behalf of Tenix was the finding by Acton SDP that the mitigation by Mr Galea in the period following termination was a matter favouring reinstatement. The decision appealed states relevantly at paragraph 75:

PN207

With respect to section 170CH(2) paragraph (a), there was no dispute between the parties about Mr Galea's evidence to mitigate the loss he has suffered as a result of the termination. I find his efforts in this regard also favour the making of such orders.

PN208

It is not entirely clear that Acton SDP when she referred to "such orders" was referring specifically to the reinstatement order as distinct from the order she made pursuant to section 170CH(4). However, having regard to the nature of the test at this stage in my opinion the matter is arguable. Mr Addison on behalf of the union contended that the more successful terminated employee's attempts at litigation, the less the impact would be on any employer subject to a reinstatement order. In my opinion that argument suffers from the difficulty that the power to order reinstatement and the power to make orders in relation to continuity of employment and lost remuneration are distinct powers which do not necessarily have to be exercised in tandem and that, on a provisional basis, I see merit in the argument that mitigation cannot have a logical bearing one way or the other on whether or not an order for reinstatement should be made.

PN209

Mr Skene advanced further arguments but it is unnecessary to consider these. I am satisfied that the appellant has established an arguable case for the appeal and in circumstances where the parties have in essence settled the issue of balance of convenience I propose to make orders in accordance with the draft orders agreed with the parties. Mr Skene, can you email to my associate or have your office email to my associate a form of orders as amended in accordance with the agreement of the parties?

PN210

MR SKENE: I'll do so this afternoon.

PN211

THE VICE PRESIDENT: Is there anything else that I need to do now, gentlemen?

PN212

MR SKENE: No.

PN213

THE VICE PRESIDENT: I don't know whether I need to do this but I'll indicate to the parties in any event, I'll reserve the parties' leave to relist the matter at, say, 24 hours notice should there be any need to deal with problems that arise in relation to the regime set up under the orders. I have in mind particularly, Mr Addison, your client's position. If there is some difficulty with payment because of some technical non compliance with the filing of a certificate or something of that nature that's a matter which - - -

PN214

MR ADDISON: I appreciate that, your Honour.

PN215

THE VICE PRESIDENT: - - - you could have dealt with on short notice. If there is nothing further the Commission is adjourned.

ADJOURNED INDEFINITELY [12.25pm]