C2005/5158, Transcript of Proceedings [2005] AIRCTrans 2582 (30 December 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13710-1

SENIOR DEPUTY PRESIDENT ACTON
SENIOR DEPUTY PRESIDENT HAMBERGER
COMMISSIONER GRAINGER

C2005/5158

APPEAL BY GUARDIAN HALL PTY LTD
s.45 - Appeal to Full Bench
(C2005/5158)

MELBOURNE

9.56AM, MONDAY, 12 DECEMBER 2005

PN1

MS S McKINNON: I appear on behalf of the appellant.

PN2

MR J D’ABACO: I seek leave to appear on behalf of the respondent.

PN3

SENIOR DEPUTY PRESIDENT ACTON: Leave to appear is granted in both instances. We’ve received written submissions from both sides.

EXHIBIT #A1 SUBMISSIONS OF THE APPELLANT
EXHIBIT #R1 SUBMISSIONS OF THE RESPONDENT
EXHIBIT #A2 APPELLANT SUBMISSIONS IN REPLY

PN4

SENIOR DEPUTY PRESIDENT ACTON: I can indicate to the parties that the bench has had the opportunity to read those submissions, so the purpose of today is for brief oral submissions. Ms McKinnon?

PN5

MS McKINNON: Thank you, your Honour. The submissions filed on behalf of the appellant go through the grounds of the appeal and the basis for the application to the Commission. This is an appeal under section 45(1)(b). In summary, the issues from the appellant’s point of view are firstly, whether the respondent was constructively dismissed, secondly whether the Commission was guided or affected by the respondent’s hours of work in level or remuneration in making the finding of unfair dismissal, thirdly whether there was a failure to properly have regard to the elements in section 170CG(3) in finding unfair dismissal, and fourthly whether the Commission erred in omitting to have regard to the elements in section 170CH(7) in assessing compensation and making the order under section 45(1)(b).

PN6

The grounds of appeal are this. Firstly, that the Commissioner erred in finding that the respondent was demoted from his employment. That was a finding of fact, which we submit was in error, and gave rise to a finding that the demotion resulted in the constructive dismissal of the respondent. A mistake of fact is a ground of appeal in accordance with the principles established in House v R and confirmed in Coal v Allied. Before I go much further, I might hand to the bench my authorities. The authorities provided are those referred to in my submissions. Generally, I won’t take you to specific parts of the decisions unless I need to supplement the submissions, but in relation to the principles established in House v R the first submission is that the decision of the Commission was grounded with a mistake of fact, giving rise to an error of law.

PN7

Secondly, the ground of appeal is related to whether the Commission was guided or affected by extraneous or irrelevant matters in the decision making process. In particular, the Commission took much regard to the hours of work, the level of remuneration of the respondent, and the lack of overtime payments. I have provided, as an attachment to my submissions of 16 November, which is A1 in these proceedings, a summary of the comments made by the Commissioner at annexure B, that’s the final page of my submission. It’s evident from that summary that there are no less than seven references to the respondent’s hours of work, level or remuneration, and failure of the appellant to pay over time.

PN8

It’s my submission that those matters were not relevant to the finding that the respondent was constructively dismissed and in paying such regard to them, it is my submission that the Commission was guided or affected in the decision making process and that acted to the prejudice of the appellant. The third ground of appeal is the failure to have regard to the material considerations in section 170CG(3). Firstly, 170CG(3)(a) relates to the operational requirements of the business and whether they impact on whether there’s a valid reason for termination. It’s my submission that that section was only considered by the Commission on the basis of the hours of work and efforts by the respondent to improve the restaurant.

PN9

There was no consideration given, and it’s certainly not evident from the language of the decision, that there was any consideration given to whether there were valid operational requirements for the appellant doing what it did and in my submission section 170CG(3) contains matters which must be had regard to in making findings under the Act. The next element of that section is whether there was an issue of unsatisfactory performance. The Commission relevantly found that there was no issue of unsatisfactory performance in the proceedings and that no evidence was brought in that regard. That is inconsistent with the evidence. There was evidence of a warning being issued to the respondent.

PN10

There was evidence that that affected the processes that were put into place following 20 October 2005. It’s my submission that in finding that there was no matter of unsatisfactory performance the Commission failed to have regard to the fact that there were matters of unsatisfactory performance relevant to the termination of employment. That is, again, a matter that must be had regard to under section 170CG(3).

PN11

SENIOR DEPUTY PRESIDENT HAMBERGER: Can I just ask you what hangs on that particular point? Clearly, your case was that your client didn’t want to terminate the employment.

PN12

MS McKINNON: Yes.

PN13

SENIOR DEPUTY PRESIDENT HAMBERGER: So, the unsatisfactory performance, the issues of misconduct, and so on, do they matter?

PN14

MS McKINNON: It’s relevant, your Honour, because the warnings issued on
20 October and all the evidence and all the facts in issue occur between 20 and
30 October. The warning on 20 October is the first thing that happens and
30 October is the last. So it is in my submission very relevant that in starting to evidence a breakdown in the relationship there is at first instance a warning issued and there is no regard had in the respondent’s evidence to the fact that that played a part in the termination of the employment. The warning is in evidence, it was before the Commissioner, and it’s my submission that the Commissioner was entitled to have regard to that warning in relation to its part in the events that led to the termination of the employment.

PN15

Now, if we take my submission, that unsatisfactory performance was relevant, then it also fell to the Commission to consider the matters in 170CG(3)(d)(ab) and 170CG(3)(d)(ab). In my submission, again, there’s no evidence that these were considered at all, in the language of the decision. I expect that that is because the Commission found that section 170CG(3)(d) was not relevant; nevertheless, it’s my submission that it should have been considered.

PN16

In relation to section 170CG(3), these matters are matters which must be had regard to. They are mandatory elements of consideration and they must be considered in a real sense and in that respect I have referred your Honours to the decision in Sprigg v Paul’s Licensed Festival Supermarket. There’s no evidence that they were taken into account in a real sense or in some parts at all. That is sufficient, in my submission, to justify a finding that the Commissioner erred and that the decision should be reviewed.

PN17

Finally, on the point of section 170CG(3), the Commission did discuss the question of a fair go being provided to the respondent. There are three problems with the way the Commission discussed the fair go principle. Firstly, and most importantly, the language of the decision evidences a displacement of the statutory provision in favour of the general principle of a fair go. The statutory provision provides mandatory elements which must be had regard to. It’s not sufficient to refer to the section and simply say yes, that section must be considered, but the applicant wasn’t provided a fair go. The fair go principle applies as a supplement rather than a replacement of the statutory provision.

PN18

Secondly, the problem with using the fair go principle in this instance was that it was only implied in favour of the employee. Quite clearly, under section 170CA(2) of the Act, the fair go principle applies to both parties. I did say there were three issues on the fair go principle, I withdraw that, there were two. Finally, section 170CH(7). It is also submitted that elements of that section were not referred to in any proper way. Section 170CH(7)(a) requires that regard be had to the effect of the order the Commission may make on the business. In the decision, the Commissioner refers only to the section in a general sense. The words of the decision are:

PN19

I have had regard to section 170CH(7).

PN20

In my submission, that is not sufficient. Again, in relying on Sprigg v Paul’s Licensed Festival Supermarket, the consideration of the elements must be consideration in a real sense. It is not sufficient to refer generally to the section. That applies equally to 170CH(7)(b), which requires length of service of the employee to be taken into account. This is an important omission, in my submission, because the length of the service of the employee at the time was six months. Six months is a short period of time when you contrast it with the estimated remuneration that would have been likely to be received, estimated by the Commission as five years.

PN21

In my submission, the two are inconsistent and because the language of the decision does not suggest that the elements were considered in any real way it is difficult to ascertain the process through which the Commission went in making the decision; nevertheless, that absence of evidence in the decision itself in my view gives rise to an inference that there was no proper consideration of the elements in section 170CH(7). Therefore, the requirement of the Act that those elements be had regard to was not met. The excessive award of six months pay to the respondent was unreasonable or plainly unjust when regard was had to the effect of the award on the appellant.

PN22

In making the application for appeal, we do need to satisfy your Honours’ discretion to grant leave to appeal. Under section 45(2) of the Act, leave should be granted if in the opinion of the bench the matter is of such importance that in the public interest leave should be granted. It’s my submission that the decision evidences a mistake of fact. It evidences a decision making process guided or affected by extraneous or irrelevant matters and it evidences a failure to give any real consideration - or consideration at all - to material elements of statutory provisions.

PN23

These are matters that, in the principles established by House v R, give rise to an error sufficient to cause the matter to be of such importance that in the public interest leave to appeal should be granted. On that basis, the appellant seeks leave to appeal and seeks that the appeal be upheld.

PN24

SENIOR DEPUTY PRESIDENT ACTON: Thank you, Ms McKinnon.
Mr D’Abaco?

PN25

MR D’ABACO: Thank you, your Honour. Your Honour, what I propose to do, given the fact that fulsome written submissions have been filed on behalf of the parties and, in particular, bearing in mind your prefacing comments, is that I will not take the bench in detail to the written submissions filed on behalf of the respondent. Instead, all I will do is rectify one or two small errors there and also bring to the bench’s attention another relevant authority. I then propose to deal with the reply, exhibit A2, which has been filed on behalf of the appellant, and make some brief comments in relation to that, and then obviously to deal with any questions which the bench may have of me in relation to the respondent’s case. I would not envisage my submissions to take any longer than 20 or 25 minutes this morning.

PN26

Can I first hand up, your Honour, copies of the authorities which are relied upon by the respondent? As my learned friend before me has indicated, I too will not take the bench to those authorities at any particular point unless questions do arise. Before I deal with the respondent’s submissions, can I just make the following opening comments, your Honour?

PN27

This appeal has all the hallmarks of one where a case was run, in this case by the respondent at first instance, in what I would characterise as a very, very brief and somewhat perfunctory way. The bench will be cognizant of the fact that the written submissions, which were filed by the respondent, were relatively brief. They did not deal with many of the substantive aspects of the legislation which need to be applied in terms of issues of liability and also issues of remedy and also the evidence which was educed on behalf of, at that point time in time, the respondent - the appellant in this proceeding - was relatively brief.

PN28

What we have now here on appeal is an attempt as it were by the appellant to pull its case up by the bootstraps to ask the bench to draw inferences on the evidence in circumstances where either no evidence was educed by the appellant or alternatively matters were not put as they ought properly have been put to my client during the course of cross-examination. This is important, because as this bench very well knows, the purposes of the bench is to consider whether any errors of law were committed by Commissioner Tolley at first instance.

PN29

Even though the bench may not agree with the decision he ultimately made, either in respect of liability or in respect of remedy, if the bench is satisfied that on the material before him the decision and the conclusions which were reached by Commissioner Tolley were reasonably open to him then in my submission that ought to be the end of the appeal. Subject to those opening comments, and we detail some greater depth in the written material those aspects of the appellant’s case which fall into those particular problems, in particular the issue of remedy where there were no submissions put at all.

PN30

In respect of the legal position on behalf of the appellant, very little evidence if any was put to the Commissioner at first instance, in relation to evidentiary issues going to those factors. Given that is the case, we say the appeal must either fall or be upheld on the material as educed before Commissioner Tolley. If I can ask the bench, please, to turn to exhibit R1, which are the written submissions filed on behalf of the respondent, and if I could ask you please to turn to page 6 of those submissions, where I dealt with the relevant principles in respect of considerations on appeal. There’s no disagreement, as I apprehend it, between the parties. I wish to bring to the bench’s attention - I wish to cite another authority. I’ve provided a copy of this authority to my friend.

PN31

It’s the decision of Potter v WorkCover Corporation. The bench, no doubt, is aware of this decision. It’s often cited in appeal proceedings. It’s the decision of a Full Bench, comprising Vice President Ross, Senior Deputy President Williams, and Commissioner Foggo, PR948009 at 15 June 2004. I ask the Commission, in particular, to have regard to paragraphs 91 and 92 of that decision, which appear on page 21. There, the Full Bench quotes the oft-cited passage of Kirby J in The Minister for Immigration and Ethnic Affairs v Wu Shan Liang, to the effect that when an appellant tribunal - or in this case this bench of course - are considering reasons at first instance, those reasons under challenge must be read as a whole.

PN32

They must be considered fairly. It is erroneous to adopt a narrow approach, combing through the words of the decision-maker with a fine appellate tooth comb against the prospect that a verbal slip will be found warranting the inference of an error of law. Now, to be fair to the appellant, the case which is put on behalf of the appellant does not fall into some of the cases which I’ve often seen put at Full Benches, where there is an overly technical or overly zealous examination of the words.

PN33

The appellant hasn’t fallen into error of that extent, but it is important in my submission, that these words be borne in mind, because in my submission if one takes one step back and considers the evidence educed, submissions put, and in particular the decision of Commissioner Tolley, which in my respectful submission is a well-reasoned decision, considers the relevant legislative requirements and considers the relevant authorities and then makes finding in respect of what we say are each of the relevant matters which must be the subject of a finding. The decision, in my submission, does not fall into the error which is suggested by the appellant.

PN34

At paragraph 18 of the respondent’s submissions I refer to a crucial finding of fact as contained in paragraph 16 of Commissioner Tolley’s decision and it’s extracted at paragraph 18 of the respondent’s submissions. I wish also to add, your Honour, that paragraph 15 is also obviously a crucial aspect of his Honour’s decision - of the Commissioner’s decision. At paragraph 15 of the decision, Commissioner Tolley also found and stated that with the appointment of Mr Sammut, he was now going to be responsible for the operations of the restaurant, previously the applicant’s principle duty and responsibility, and also that there was going to be a change in reporting relationships. Those were also crucial findings of fact, in my submission.

PN35

At page 13 of the decision, at paragraph 30, we refer to the argument which was put on behalf of the appellant that a decision as it were had been made by the respondent on or about 20 October, when he received the first written warning, that he was not going to return to his employment and, as it were, events flowed on from that. If I can deal with the questions which you put to my learned friend, your Honour, in relation to the relevance of these written warnings. We say that they are completely irrelevant. We submit that because the respondent’s case at first instance was that the reason for the termination of his employment was his constructive dismissal by virtue of the appointment of Mr Sammut as the general manager.

PN36

The respondent, as I’ve indicated in submissions, gave evidence that had it not been for Mr Sammut’s appointment he would not have regarded that written warning as in any way amounting to his constructive dismissal. That evidence is not the subject of cross-examination and it wasn’t shaken. In those circumstances, it was more than amply open to the Commissioner at first instance to find that the truth cause for the termination of the respondent’s employment, an act which took place by virtue of the employer’s act, was the employment of Mr Sammut and the events which flowed from that. It’s for that reason, your Honour, that that written warning is irrelevant and it is also why it is completely irrelevant in terms of considering whether these matters were put to the respondent prior to his dismissal, because that wasn’t the actual cause of the termination of employment.

PN37

The termination of employment was the employment of Mr Sammut. Had, as was advanced on first instance before Commissioner Tolley, the appellant indicated to the respondent that Mr Sammut was to be appointed, had the appellant indicated the reasons for his appointment, the succession planning argument, and had the appellant given Mr Stevenson, the respondent, and opportunity to respond, then yes the appellant may very well have an argument, but those matters did not take place. For that reason, we say, that accordingly when Commissioner Tolley found in effect that procedural fairness was not accorded to the respondent, that was the correct finding.

PN38

SENIOR DEPUTY PRESIDENT HAMBERGER: What do you say to the point made that the Commission didn’t have any particular regard to the issue of whether there was a valid justification for appointing Mr Sammut?

PN39

MR D’ABACO: A couple of matters, sir. The first is that in my submission a reading of the written submissions filed on behalf of the appellant in this regard and also the oral submissions put by Mr Houlihan at first instance were that the argument was never fully developed as an argument. There was certainly some reference made to that, in the evidence, by Mr Marazita and I think to a greater extent by Mr McArthur, but as a fully developed argument it was never fully outlined to Commissioner Tolley. That’s the first point.

PN40

The second point is this, sir. This is a matter which I do deal with in my written submissions at, if your Honour will bear with me, paragraph 39. The argument is this. If one even looks at the argument on its merits and the intention had been that Mr Sammut was being appointed as it were to succeed to Mr McArthur’s position, one would have expected that he would be as it were shadowing
Mr McArthur and learning the various aspects of the business from him, before moving on to his role, but instead what happened was that Mr Sammut was appointed to only one aspect of the operations, the restaurant. He was appointed, as the documentary evidence indicated, and as was also indicated by Mr Marazita, he was appointed to manage the restaurant.

PN41

Although there was a suggestion put that this was only to be a temporary arrangement, your Honour will recall that the evidence that was before the bench was that the McArthurs were not due to actually leave the complex until
June 2005. Mr Sammut is appointed at the end of October 2005, to be fair,
1 November 2005. That’s a period of some seven months. That’s not a temporary variation to your employment contract, to say that for the next seven months you will be relieved of your principle obligation to manage the restaurant. It’s much more than that. So, we say, sir, that, in terms of the argument, it was never fully developed or advanced before Commissioner Tolley at first instance. In the alternative, if the argument is properly considered and examined it is a weak argument and should not be accepted.

PN42

SENIOR DEPUTY PRESIDENT HAMBERGER: Thank you.

PN43

MR D’ABACO: Can I also indicate, your Honour, that at footnote 32 we have referred to the decision of King v Freshmore which deals with, in part, the suggestion that appellate decisions, or appeals, are not opportunities for parties to try to address the deficiencies in the manner in which their case was run at first instance. I refer, at footnote 32, to paragraph 39. That ought be paragraph 59 of the decision. Finally, in relation to the submissions on behalf of the respondent, at page 20, subparagraph C, this is in response to the appellant’s argument that Commissioner Tolley did not have regard to the remuneration which would - or did not properly have regard to - the remuneration which would have been received by the respondent had he continued in his employment. This is the issue of five years.

PN44

The respondent says that, in his decision, Commissioner Tolley did explicitly have regard to this factor by considering five years to be reasonable. We also say that that finding was more than amply open to the Commissioner. Mr Stevenson gave the evidence. He was looking forward to a long career where he could establish himself. He saw the prospects for advancement and he has a very, very young family which would see him looking for a long term career. Had the appellant wished to challenge that, either by cross-examining Mr Stevenson upon it or alternatively by educing any other form of evidence to indicate that there was some suggestion that that expectation was unrealistic or improbable then the evidence could have been educed, but it wasn’t.

PN45

We say that on that basis, given the uncontroverted evidence of Mr Stevenson, which was before the Commissioner, he was entitled to have regard to that evidence and find that five years was not an unreasonable period of time. Those are the submissions which are advanced by the respondent in relation to the appeal. I now turn to briefly comment upon the written submissions in reply, exhibit A2, filed on behalf of the appellant.

PN46

If I can ask the bench, please, to turn to paragraph 3 of the reply at paragraph 7[sic]. It’s submitted on behalf of the appellant that the evidence does not support the finding that Mr Sammut’s employment was for the purposes of autonomously managing the restaurant. We say it does and I ask the bench to have regard to paragraph 21 of the respondent’s submissions and in particular the footnotes there, where we have quite carefully asked the bench to have regard to transcript evidence. Similarly, the assertion is made that Mr Sammut’s employment would not remove any of the respondent’s fundamental duties and responsibilities. We disagree with that proposition. We again ask the bench to have regard to paragraphs 24 and 25 of the written submissions of the respondent and in particular the footnotes referred to therein.

PN47

At paragraph 9 of the reply, the appellant submits that it had, through director
Mr Marazita, insisted on numerous occasions in correspondence with the respondent that the situation would continue to remain status quo, ie., no changes. This was the subject of some cross-examination of Mr Marazita. Can I ask the bench in due course to have regard to paragraphs 820 to 830 of transcript, where whilst the term status quo, ie., no change, was used in correspondence by the appellant, the director of the appellant, at those paragraphs, concedes that in fact there were changes as a consequence of the appointment of Mr Sammut. Changes which, as was submitted on behalf of the respondent at first instance, amounted to fundamental changes to terms and conditions of employments, entitling him to regard his employment as having been constructively terminated.

PN48

At paragraph 13, it is submitted on behalf of the appellant that that evidence which was led in relation to the responsibilities of Mr Sammut after the termination of the respondent’s employment is not determinative. We agree, it’s not determinative, but it’s clearly relevant. It is submitted on behalf of the respondent that that evidence that Mr Sammut as it were assumed all of
Mr Stevenson’s responsibilities and continued to manage the restaurant is highly relevant and it goes to the point which I was discussing with you a few moments ago, your Honour.

PN49

Had the succession plan argument in fact had any real merits, and unfortunately this is really an academic exercise, it’s a matter which should have been tested before Commissioner Tolley, but if we just deal with it for a moment, had the succession planning argument had any credence one would have expected that efforts would have been made to appoint another restaurant manager and as it were for Mr Sammut to continue his role, whatever it was, and then move on to the succession plan, but there was no such evidence of that, nor was any evidence advanced by the appellant as to why it did not do that. We say, sir, that those are matters which the bench may have regard to in considering the strength or otherwise of the succession planning argument.

PN50

At paragraph 20 it is put on behalf of the appellant that the evidence didn’t support the proposition that Mr Sammut was appointed only as the general manager of the strata restaurant and there’s reference then to exhibit A2 which outlines his duties as responsibility for conference functions, operations, and facilities. The appellant has omitted to include the words which actually appear in the letter before the word conference and that was:

PN51

Overseeing the strata restaurant.

PN52

That is the responsibility of the respondent and, with the appointment of
Mr Sammut, it was removed from him. The bench will also be aware of the deed of release entered into between the appellant and Mr Sammut some four and a half months after his employment where he was referred to as:

PN53

The restaurant manager.

PN54

The concession by Mr McArthur was that it wasn’t a typographical error. Pretty damning stuff. We say that the correspondence, the appellant’s own correspondence, in fact reflected the factual situation present at the time.

PN55

At paragraph 32, the reply was with the suggestion that the respondent as it were left his employment due to harassment and intimidation. It says that the respondent now seeks to recoil, and I think we could put that as resign, from his position. The respondent’s position, throughout this proceeding, at first instance and now, has always been that the reason for the constructive termination of his employment was the employment of Mr Sammut, not the written warning which he received on 20 October.

PN56

In my respectful submission, consideration is had to the attachments, the material that was submitted in relation to that warning, by the respondent, was simply as a matter of fairness to the Commissioner at first instance to as it were indicate background, but it certainly wasn’t relied upon by the respondent at the time of the hearing as in any way justifying a finding that the termination was harsh, unjust, or unreasonable.

PN57

In terms of the issue of extraneous or irrelevant matters and references to the respondent’s hours of works, overtime, and so forth, it was put by my friend this morning that those matters have nothing, as it were, to do with whether or not there was a valid reason. It was put that it was not relevant to the question of whether the respondent’s employment was constructively terminated. That’s true, it’s not relevant to that, but it is relevant in my respectful submission to the overall fairness or otherwise of the respondent’s termination, because what you had here was an employee who within a period of about six months was working many, many hours – and as he conceded, without complaint, he understood it is what the job entailed – but someone who had worked for a period of six to seven months, extraordinarily long hours, had got this restaurant to the point of profitability, was being praised for his work, and then is suddenly told, well, we don’t need you to manage it any more, there’s now going to be another manager. And when he sought confirmation that his principle duties and responsibilities were to remain unchanged, that’s dealt with in the annexures[sic] to his witness statement, no such written confirmation was ever forthcoming.

PN58

It was more than open to Commissioner Tolley in those circumstances to have regard to those factors as to whether in the circumstances the termination was harsh, or whether it was unreasonable. Indeed, the legislation at section 170CG(3)(e) specifically says that the Commission is to have regard to matters which are relevant. We submit that they were clearly relevant. Finally, if I can turn to the issue of remedy. In my submission, if there is any possible argument from the appellant which has some merit, we don’t say it is meritorious and we don’t say it should be upheld, is the issue of remedy. Certainly, at first blush, it may appear that a six month award of compensation is high. We say it is not and can I indicate to the bench why.

PN59

The first matter, and this is what I said at the opening of my submissions, is that it must be borne in mind that no evidence whatsoever was led by the appellant at first instance in relation to those factors contained in 170CH(6) and 170CH(7), none whatsoever. The closest we got to any evidence was that at the time of the termination of the respondent’s employment the restaurant was in a break even or about to hit break even position. There was no evidence whatsoever to indicate that the appellant’s overall operations were perilous or financially not viable. This matter was heard in May of this year. Evidence should have been educed, if in fact it was the case, at that point in time, to indicate that the appellant’s business was such that it could not meet an award of compensation of three, or four, or five months. No such evidence was ever educed.

PN60

Indeed, the appellant had the availability or had the option if it wanted to do so, for the purposes of this appeal, to seek leave to educe further evidence to indicate what its current financial position is. It hasn’t done so. So, the Commission and the bench is currently in the position of having before it an appellant who says that this is an enlarged award of compensation, but there’s no evidence before it whatsoever that it is not capable of satisfying that award of compensation or that such an award of compensation would have a deleterious effect upon its operations. There’s no such evidence before the Commission now and there was no such evidence before the Commission at first instance in May of this year.

PN61

In relation to the argument which is advanced on behalf of the appellant regarding those factors contained in section 170CH(7), it is true that Commissioner Tolley acknowledged the provision, but did not go through each of the various elements, but in my submission, adopting the guidelines in Sprigg, he did so implicitly. We submit that in arriving at the award of compensation, which he did, it was a finding open to him on the evidence.

PN62

Much has been made by the appellant of the fact that the respondent had approximately six months’ service and that was a relatively brief period of service. Well, let’s just question that assumption. Why is it that an employee who perhaps has ten or fifteen years of service must necessarily get more than someone who has only been there for six months. The person who has been there for ten or fifteen years may well have the benefit of service leave.

PN63

SENIOR DEPUTY PRESIDENT HAMBERGER: I mean, the Act specifically draws the Commission’s attention to length of service in considering remedy, but why do you think it does that?

PN64

MR D’ABACO: It does, your Honour, in circumstances where there is perhaps the implicit assumption that the longer you are there the more you should get. I think we have always proceeded upon that.

PN65

SENIOR DEPUTY PRESIDENT HAMBERGER: Isn’t that parliament’s intention? Isn’t that obviously parliament’s intention? Isn’t that clearly there in the Act?

PN66

MR D’ABACO: I’m sorry, I don’t have at hand Hansard, which would indicate what parliament’s intention would have been - - -

PN67

SENIOR DEPUTY PRESIDENT HAMBERGER: What else could it have been?

PN68

MR D’ABACO: Well, it may well be, sir, that that is the case, but what we submit is that even if an employee such as the respondent in this case has a relatively brief period of service, that does not necessarily mean that the financial and economic impact of termination is any less than it may be for an employee with a greater period of service and indeed the evidence here was that given the respondent’s personal circumstances of having, at the time of his termination, quadruplets under the age of twelve months, plus another child at the age of four years, and a substantial period of unemployment after that, it’s all part of the mix as it were which should be considered.

PN69

SENIOR DEPUTY PRESIDENT HAMBERGER: In the Act, it’s specified that we have to consider each - and there’s plenty of Full Bench authority if you happen to go through - factor, that’s spelled out in the Act.

PN70

MR D’ABACO: We say, sir, that in substance Commissioner Tolley indeed did that, and that the guidelines in Sprigg - - -

PN71

SENIOR DEPUTY PRESIDENT HAMBERGER: Well, where in Sprigg is the length of service taken into account?

PN72

MR D’ABACO: Well, implicitly it can also be taken into account, sir, in determining how long one would expect the employment to have continued. I accept that in terms of going through each of the particular factors in the manner suggested, that exercise was not undertaken by Commissioner Tolley. But the issue then becomes whether by failing to do so the ultimate finding which he made was so manifestly unjust or so manifestly unreasonable that it can’t be allowed to stand. We say that’s not the case, because otherwise what you have, your Honour, is a situation where an appellate bench as it were, will be combing over the decisions of a member at first instance with a fine tooth comb, as Kirby J referred to in the authority which I cited previously.

PN73

And it should only be in circumstances where the ultimate conclusion was manifestly unreasonable or manifestly unjust that this bench should have regard to the fact that as it were strict compliance or strict observation of each of the factors in the written decision were not observed. Another factor should also be borne in mind. The Commission, whilst it is a quasi-judicial authority, is also composed of a large number of lay members, ie., people who are not qualified in the law and it is unreasonable in my respectful submission to request of those members such as the Commissioner here at first instance to adopt as it were a legalistic, formulaic approach which may not necessarily be one which they are naturally comfortable with.

PN74

Obviously, they have to follow the requirements of the Act, we don’t dispute that, but what I’m putting to your Honour, is that had it been that all the material which was before Commissioner Tolley did not justify the conclusion of six months then - I can’t say I’d be agreeing with your point, given where I’m standing, but I think - your point would have some merit. But in the circumstance of all the other issues which were addressed to Commissioner Tolley, particularly the evidence put before him, which wasn’t the subject of cross-examination by the appellant, we say the conclusion of an award of compensation of six months was reasonably open to him.

PN75

SENIOR DEPUTY PRESIDENT ACTON: Mr D’Abaco, I understand part of your submissions are that the appellant made no submissions in regard to remedy. Therefore, presumably, you’re saying the appellant made no submissions that the issue of length of service was to the effect so small or so little that it should diminish the compensation?

PN76

MR D’ABACO: I believe that is the case, your Honour. Certainly that is my recollection. It is clearly my recollection that no such submissions were advanced on behalf of the appellant to that effect.

PN77

SENIOR DEPUTY PRESIDENT ACTON: I’ll take you to page 43 of your submissions to the bench.

PN78

MR D’ABACO: Yes.

PN79

SENIOR DEPUTY PRESIDENT ACTON: Which say no submission on remedy.

PN80

MR D’ABACO: No, there weren’t and we say that in those circumstances not that the Commissioner at first instance could not have regard to the factor, but he is entitled in those circumstances as it were to deal with it in perhaps a slightly more oblique manner than would otherwise be the case had it been raised before him fairly and squarely.

PN81

SENIOR DEPUTY PRESIDENT ACTON: Well, there is of course Federal Court authority to the effect that the matters in section 170CG(3) and CH only have to be considered to the extent that they are relevant.

PN82

MR D’ABACO: Yes. I think in a somewhat elliptical manner that is what I am endeavouring to submit to you, your Honour. Unless the bench has any further questions of me those are the submissions on behalf of the respondent.

PN83

SENIOR DEPUTY PRESIDENT ACTON: Ms McKinnon?

PN84

MS McKINNON: Thank you, your Honours. I would like to start responding to my friend by saying that this is not a case where we are seeking to pull our case up by the bootstraps. There is sufficient evidence, there was sufficient evidence before the Commission at first instance and there remains that evidence before the Commission on this occasion on which the bench can find that firstly the decision was made in error and secondly that those errors are sufficient to warrant reconsideration. Whilst some of the material put at first instance may not have been argued at length, nevertheless the evidence was put. It was before the Commissioner and it is before the bench today.

PN85

The appellant agrees with the submission of the respondent that the matters are to be determined on the evidence and material before the Commission. That is what we ask you to do. In that respect, the written warning, which has come up today, I do refer to my submission and take your Honours particularly to tab 3 of the appeal book, which is the transcript, at paragraph 235, where it refers to a comment when the respondent was the issue that you considered a constructive dismissal because of the demotion and his answer was:

PN86

No, not in isolation.

PN87

So, it can’t be said that the respondent’s argument at first instance was solely aimed at whether or not the demotion resulted in the constructive dismissal. Quite clearly, the issue of whether he was being harassed or intimidated by
Mr McArthur was relevant. It was referred to in the respondent advising his view that he had been constructively dismissed on 30 October and it was confirmed in the evidence on transcript.

PN88

My friend has submitted that Mr Stevenson, the respondent, was given no opportunity to respond to various things that occurred. Well, I simply say to that that the respondent wasn’t at work sufficiently over a period of time when the relationship broke down to be afforded that opportunity. There is evidence before the Commission in that regard.

PN89

Regarding the issue in relation to Mr Sammut’s appointment. He wasn’t appointed only to the restaurant and to say so is to misconstrue the evidence.
Mr Sammut was appointed primarily to the restaurant, but he was also appointed to manage conferences and other facilities. I have referred, in our submissions in A2, at paragraph 20, to the evidence in that regard. Quite clearly, the inference can be drawn, from the fact that Mr Sammut only lasted in the role four and a half months, that after the respondent ceased employment Mr Sammut had then taken on too much of a load.

PN90

So, as much as the bench gives weight to the argument of my friend that the inferences can be drawn that Mr Sammut took on the role as restaurant manager, equally the inference can be drawn that he took on the role of restaurant manager and other functions and that following his attempt to do so he struggled, using the word from the evidence, and decided that he couldn’t handle it and left.

PN91

The only evidence in relation to the future length of service of the respondent was the respondent’s evidence that he believed he had the promise of a good and long career. Well, a belief of a promise is insufficient evidence to justify a finding that five years’ would have been likely in the circumstances. It is submitted that that finding was not reasonably open on the evidence.

PN92

Specifically responding to the submissions on A2 in the proceedings today, primarily my point is that I disagree with many of the submissions put and rely on the submissions that we have made. Specifically, in relation to our paragraph 7, it is submitted that the evidence does not support that Mr Stevenson had autonomous management of the restaurant. He at all times reported to
Mr McArthur and it was intended that he would then report to Mr Sammut. That is the only change that was demonstrated on the evidence. A change in the recording. My friend has referred you to paragraphs numbered 820 to 822[sic] of the transcript, those paragraphs referred to the change in reporting. It is not sufficient, in my submission, to find that having there been a change in reporting there has been thereby a demotion. That was not proved on the evidence and that is the submission of the appellant.

PN93

In relation to paragraph 13 of A2, it was submitted that - well, I have just dealt with the issue, in relation to the inferences that can be drawn from Mr Sammut’s role after the cessation of the respondent, and I’ll leave that point.

PN94

At paragraph 32 of our submissions in A2 I refer your Honours, again, to tab 3, paragraph 235:

PN95

Not in isolation.

PN96

Were the words of the respondent. The issue of demotion was not the only issue which gave rise to his view that he had been constructively dismissed and, so, therefore, the issues in relation to the harassment and intimidation must be taken into account.

PN97

At paragraph 34 of our A2, well, the respondent accepts that the hours of work and the remuneration level was not relevant to whether there was a constructive dismissal and in my respectful submission that’s because there is no alternative to accepting that proposition. The acceptance, however, by the respondent of the proposition gives weight to our submission. Hours of work, level of remuneration, failure to pay overtime were not relevant to whether the respondent was constructively dismissed.

PN98

SENIOR DEPUTY PRESIDENT HAMBERGER: Could they be relevant to whether - if you take it that he was constructively dismissed - the dismissal itself was harsh, unjust, or unreasonable?

PN99

MS McKINNON: Yes, they could be relevant to that limited point, but I do make the point on that that it is not the function of an unfair dismissal order to compensate for overtime payments. Now, it’s not an underpayment proceeding and, therefore, to the extent that it’s relevant, it’s relevant only from the point of view of a fair go around.

PN100

Finally, on the issue of remedy, well, there was evidence before the Commission to give real consideration to the elements of section 170CH(7). There was evidence about the size of the business. It was a small business, eight fulltime employees and 30 in total. There was evidence about the turnover, approximately 1.7 million dollars per year. There was evidence about the management structure, board of directors, Mr McArthur intended to then ring Mr Sammut and then
Mr Stevenson. There were no HR procedures or management structures in place that could have improved what occurred. There was sufficient evidence and ample evidence in my submission to demonstrate that all relevant times the restaurant under management was making a loss. It may have been about to break even, it never did. On the evidence before the Commission it was always operating at a loss.

PN101

It is submitted that the appellant hasn’t sought to educe further evidence in that regard. Well, the reason for that is because we say that there is sufficient evidence before the Commission to make a finding that those factors are relevant under section 170CH(7) and should be taken into account. Finally, I submit that you cannot implicitly have regard to the matters in section 170CH(7). Those matters are fundamental elements of consideration, there must be consideration in a real sense, as outlined in Sprigg, and an implicit regard to this section is not sufficient. Your Honour asked a question about the outcome in Sprigg in relation to length of service.

PN102

Well, the outcome in Sprigg was for an employee with ten years’ service an estimated likely further period of employment of one year. That’s telling, because it reflects the importance of the length of service in the consideration of what is an appropriate award. In this particular instance, five years’ in my submission was plainly unreasonable and unjust. Those are the appellant’s submissions.

PN103

SENIOR DEPUTY PRESIDENT ACTON: Thank you, we will reserve our decision and will now adjourn.

<ADJOURNED INDEFINITELY [10.56AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 SUBMISSIONS OF THE APPELLANT PN3
EXHIBIT #R1 SUBMISSIONS OF THE RESPONDENT PN3
EXHIBIT #A2 APPELLANT SUBMISSIONS IN REPLY PN3