C2015/6098, Transcript of Proceedings [2016] FWCTrans 97 (30 March 2016)

TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1053178

---

VICE PRESIDENT WATSON
DEPUTY PRESIDENT HAMILTON
COMMISSIONER JOHNS

C2015/6098

s.604 - Appeal of decisions

Parmalat Food Products Pty Ltd

and

Tran

(C2015/6098)

Sydney

9.33 AM, TUESDAY, 23 FEBRUARY 2016

PN1

VICE PRESIDENT WATSON: Change of appearance, Mr Gibian?

PN2

MR M GIBIAN: Yes. Thank you. To the extent necessary, I seek permission to appear for Mr Tran.

PN3

MR LATHAM: It's not opposed.

PN4

VICE PRESIDENT WATSON: Permission is granted, Mr Gibian.

PN5

MR GIBIAN: Thank you, your Honour.

PN6

VICE PRESIDENT WATSON: Yes, Mr Latham.

PN7

MR LATHAM: Yes, your Honour.

PN8

VICE PRESIDENT WATSON: We have had a chance to read your outline of submissions. We'll mark that outline exhibit L1.

EXHIBIT #L1 APPELLANT'S OUTLINE OF SUBMISSIONS

PN9

MR LATHAM: Your Honour, the major point in this appeal is quite a short one. The appeal is essentially about the test for determining whether a dismissal is harsh, unjust or unreasonable. In determining that, of course the Commission is drawn to section 387 and, as the Commission knows, there are a number of different groups of criteria that must be taken into account. Firstly, valid reason, then there are a number of procedural protections - what we might call natural justice or procedural fairness issues - and then at subparagraph (h), any other matters that the Commission considers relevant.

PN10

While valid reason is only one of the matters that needs to be taken into account in that exercise, it does have some significant importance because it is very difficult to imagine a dismissal being found to be fair - if I can use that shorthand version - if there is no valid reason. In fact the Deputy President in this case made that same conclusion at appeal book 9, paragraph 47, a reference to Parmalat v Wililo that many of us remember. In that case, a full bench stated:

PN11

The existence of a valid reason is a very important consideration in any unfair dismissal case. The absence of a valid reason will almost invariably render the termination unfair.

PN12

Then the Commission went on to hold:

PN13

Having found a valid reason ... amounting to serious misconduct and compliance with the statutory requirements for procedural fairness, it would only be if significant mitigating factors are present that a conclusion of harshness is open.

PN14

In short, the finding of valid reason is, in our submission, of great importance. It's of great importance that the finding is made properly. In this case - and it's just necessary to go to this briefly - the Deputy President made a finding that there was no valid reason and the bench will find that at paragraph 54 of the decision, as well as 55, 56 and 47.

PN15

DEPUTY PRESIDENT HAMILTON: The rest of the findings on factors are accepted by you, are they?

PN16

MR LATHAM: There are some small findings that we - - -

PN17

DEPUTY PRESIDENT HAMILTON: They're all in your favour, just about, aren't they?

PN18

MR LATHAM: Sorry, in these findings?

PN19

DEPUTY PRESIDENT HAMILTON: Yes, in section 387(b) through to (h).

PN20

MR LATHAM: Yes. I don't think any of those matters are in contest.

PN21

DEPUTY PRESIDENT HAMILTON: They're not in contest by you or by the other side. That's right, isn't it?

PN22

MR LATHAM: As I understand it.

PN23

DEPUTY PRESIDENT HAMILTON: We're just valid reason we're arguing about and proportionality.

PN24

MR LATHAM: Valid reason is in issue, yes.

PN25

DEPUTY PRESIDENT HAMILTON: Okay.

PN26

MR LATHAM: The Deputy President did so by referring to a number of different matters. You'll find at the beginning of 54, he makes a finding that the applicant breached its safety policy and practices and that's quite an important finding, we say. He doesn't say to what extent the breach occurred; whether it was a serious breach or a trivial breach. We do make that separate complaint later, but there is certainly a finding of a breach of a safety policy.

PN27

The Deputy President then goes on to refer to uncertainty about a response to an earlier incident, that - in the second dot point - there were rational explanations for his actions. That again we make complaint later, that there's no basis for that conclusion. Thirdly, that he was honest and contrite. Then at 55, he goes to particular subjective matters involving the respondent; his casual employment over 10 years, his good work and performance record. Particularly, that the dismissal was not a proportionate response to the breach and I'll have something to say about that in a moment.

PN28

At 56, he goes on to differential approach to employees and says that in this case the applicant and his supervisor, Mr Tiqui, had long and good service, and made this specific finding:

PN29

It is hard to see that the applicant should receive a harsher punishment.

PN30

Those words should be remembered. He then goes on again to conclude at 57 that:

PN31

Although there was a breach of the ... policies and practices, it did not represent a valid reason for dismissal ... there were lesser punishments open to the respondent which would have been appropriate.

PN32

We say in those four paragraphs is found the error. The reference to the breach of safety policy is important because the decision goes to what was called a lock‑up process for trailers of trucks. If the trailer was not locked up, it meant that the truck could move even though it may have had people inside the truck. That is obviously a very serious safety issue.

PN33

Now, if I can get to the crux of the appeal, it is this: the search for valid reason is a search for the reasoning in the mind of the employer. It is not a search for the effects upon the employee. The error that his Honour fell into in this case was that he looked both at the reasons for the decision of the employer and also the issue of the effect upon the employee. In doing so, he imported the notion of harshness into the determination of valid reason and, in so doing, he fell into error.

PN34

Now, I didn't realise when this matter was first before the bench that this issue has been discussed in some detail in an earlier case. I only found it last night. Your Honours should have a folder of authorities there. If the bench go to the decision in Container Terminals, you'll see that at paragraphs 14 and 15 this issue is dealt with. That is a decision of the full bench of the AIRC of 24 July 2000. At paragraph 9, there is a summary of the Deputy President's findings. You'll see:

PN35

It was submitted by the company that the Deputy President erred in concluding that there was no valid reason for the termination ... although it was found that the respondent disobeyed lawful and reasonable directions ... and that the behaviour complained of did occur, the Deputy President concluded that the penalty of termination was inappropriate and therefore that there was no valid reason for termination.

PN36

That's very similar to this case. If I could take the bench then to paragraph 14, that again is repeated:

PN37

His Honour concluded that the behaviour ... did occur but that the penalty of termination was inappropriate.

PN38

You'll see at paragraph 15:

PN39

In our view, the consideration of whether there was a valid reason for termination is a separate issue from the determination of whether a termination was harsh, unjust or unreasonable.

PN40

There is a reference then to the case of Cornwall, which is also in the authorities, but I don't need to go to.

PN41

What has to be examined is the validity of the reason and its connection with the employee's capacity or conduct or its basis in operational requirements of the employer.

PN42

Now, what the bench in that case said and what the appellant in this case complains of is that there was an importation of notions of harshness into the finding as to valid reason. That's impermissible. My friend will say that it doesn't make any difference because however one looks at the steps and the order that the steps are taken in, one is still looking at the same material.

PN43

VICE PRESIDENT WATSON: Before you come to that - and I understand that is the argument against you - I want to understand really the full extent of the vice you allege in relation to the Deputy President's decision.

PN44

MR LATHAM: Yes.

PN45

VICE PRESIDENT WATSON: The Deputy President says and quotes Selvachandran, a valid reason would be one that is "sound, defensible or well‑founded".

PN46

MR LATHAM: Yes.

PN47

VICE PRESIDENT WATSON: As I understand the point you're making, that really must be the focus of the analysis that commences at page 54 - paragraph 54.

PN48

MR LATHAM: Paragraph 54. Yes, your Honour.

PN49

VICE PRESIDENT WATSON: Having quoted the authority, there does not then appear to be the application of that approach in what follows.

PN50

MR LATHAM: Yes.

PN51

VICE PRESIDENT WATSON: That's one matter.

PN52

MR LATHAM: Yes, your Honour. Could I just say on that - sorry to interrupt - the analysis at paragraph 26 and onwards in relation to the authorities at 46 and onwards, is quite an orthodox approach to the authorities. The problem is that the Deputy President then goes further and uses a test that is inconsistent with those authorities.

PN53

VICE PRESIDENT WATSON: One would expect, when one gets to the application of the tests, one would see a reference to those concepts and an evaluation.

PN54

MR LATHAM: Yes.

PN55

VICE PRESIDENT WATSON: But you say it's not present in paragraphs 54 and following.

PN56

MR LATHAM: That's correct.

PN57

VICE PRESIDENT WATSON: The issue of a warning, the Deputy President says that this is a misconduct case so previous warnings are not present. Then it appears that some dispute as to whether there was a verbal warning is a factor taken into account as to whether the single incident on 5 March constituted a valid reason.

PN58

MR LATHAM: Yes, the reasoning there becomes a bit difficult to follow because his Honour seems to find that there was in fact a previous safety incident and the focus then seems to become, well, was there a formal written warning applied in relation to that serious safety incident.

PN59

VICE PRESIDENT WATSON: It might be relevant in terms of understanding of the importance of safety or those sorts of things.

PN60

MR LATHAM: Yes.

PN61

VICE PRESIDENT WATSON: Rather than a termination based on a further breach after various warnings of less significant misconduct.

PN62

MR LATHAM: Yes.

PN63

VICE PRESIDENT WATSON: That might be relevant in that context, but it appears that the failure to prove that the oral warning occurred seemed to affect a finding of the absence of valid reason. That, in a discretionary sense, might be an irrelevant factor.

PN64

MR LATHAM: It could be, your Honour. I think the important thing is whether or not there was a formal written warning is not really the biggest issue in the scheme of things. What the Deputy President should have focused on was how important was this particular breach and the finding in relation to that is somewhat unsatisfactory.

PN65

VICE PRESIDENT WATSON: How could it be that even if there was an absence of a warning or a counselling, that that affected the validity of the reason relating to a single incident?

PN66

MR LATHAM: Well, it couldn't. I accept that, your Honour. It couldn't.

PN67

VICE PRESIDENT WATSON: Was going to raise one other thing which seemed to be a further parallel with the Containers Ltd decision you referred to. In paragraph 57, the Deputy President says that lesser punishments would have been appropriate. It's well established that the tribunal doesn't put itself in the shoes of the employer in determining what is appropriate.

PN68

MR LATHAM: Yes.

PN69

VICE PRESIDENT WATSON: That's not the question. The question at the end of the day, having regard to all the factors, is whether the particular disciplinary sanction was harsh, unjust or unreasonable.

PN70

MR LATHAM: That's correct.

PN71

VICE PRESIDENT WATSON: Other sanctions may well have been appropriate and they may well have been reasonable, but the finding must be based at the end of the day on whether the actual action was unreasonable or harsh - - -

PN72

MR LATHAM: Yes.

PN73

VICE PRESIDENT WATSON: - - - or unjust. It's what the English cases call substitution error, where the tribunal substitutes itself with the employer. That's the point made in Containers, the second part of paragraph 15, but putting aside the issue of whether all the analyses is in the right place and there is proper weight given to findings in relation to each step of the process, I'm not sure that the way that has been expressed is consistent with the authorities, including Containers.

PN74

MR LATHAM: No, I accept that, your Honour. Could I just go on to deal with that particular point. One of the things put by my friend is that the Commission needs to look at all the factual circumstances to determine whether valid reason exists or not. We don't disagree with that providing it's properly construed. What the Commission is not entitle to do though is to look at matters outside the valid reason issue to determine whether or not there is a valid reason.

PN75

In particular, if the Commission goes to Byrne v Australian Airlines which is in the list of authorities, particularly at page 465, there is a discussion there by McHugh and Gummow JJ which I think is now seen as an orthodox description of the terms. In the second last full paragraph in the third last line, you'll see that their Honours state:

PN76

A termination of employment may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

PN77

There is no doubt - to return to your Honour's point - the question of disproportion is clearly referred to in the Deputy President's judgment. That, we say, leaving aside the issues about the subjective attributes of the respondent - that in itself is a clear reference to harshness. Now, the reason why it becomes important, your Honour, is this: it probably matters little whether these steps in 387 are dealt with in a particular order or not, but what is important is to make sure that the valid reason test in 387 is not conflated with the harsh, unjust or unreasonable test earlier, because allegations of harshness could then almost always be used to deny that there was a valid reason.

PN78

That's essentially the conclusion that the Deputy President reached here. That in itself would then almost inevitably lead to a finding that the dismissal was unfair. Almost every dismissal is to some extent harsh, because the fact of dismissal means that a person loses their employment and if one takes - - -

PN79

VICE PRESIDENT WATSON: It has harsh effects.

PN80

MR LATHAM: That's right. If one takes those effects into account in determining valid reason and then says there is no valid reason, a dismissal ultimately would never be found to be harsh - or, sorry - - -

PN81

DEPUTY PRESIDENT HAMILTON: Is another way to put it that section 387(a), as interpreted by Edwards v Giudice and a number of other authorities - - -

PN82

MR LATHAM: Yes.

PN83

DEPUTY PRESIDENT HAMILTON: - - - requires an assessment on the evidence to be made of that particular fact, the capacity of conduct.

PN84

MR LATHAM: Yes.

PN85

DEPUTY PRESIDENT HAMILTON: It's a statutory function and you have to do that.

PN86

MR LATHAM: Yes.

PN87

DEPUTY PRESIDENT HAMILTON: Then later you have some sort of discretion relating to proportionality. It's quite a simple thing, isn't it? There is a statutory direction for each of the factors and you have to find on the evidence whether those factors - which way they go, in a sense.

PN88

MR LATHAM: That's correct.

PN89

DEPUTY PRESIDENT HAMILTON: That's a simple mechanical function.

PN90

MR LATHAM: Yes.

PN91

DEPUTY PRESIDENT HAMILTON: Then you look at other factors or whatever and weigh it all up.

PN92

MR LATHAM: Weigh them in the balance at the end under the general test - - -

PN93

DEPUTY PRESIDENT HAMILTON: Yes. So it's quite a simple point you're making, isn't it?

PN94

MR LATHAM: Yes.

PN95

DEPUTY PRESIDENT HAMILTON: It's not a complicated point.

PN96

MR LATHAM: No.

PN97

VICE PRESIDENT WATSON: The weighing exercise is in the context of a fair go all round.

PN98

MR LATHAM: Yes.

PN99

VICE PRESIDENT WATSON: So there might be harsh effects - - -

PN100

MR LATHAM: Correct.

PN101

VICE PRESIDENT WATSON: - - - but there are issues such as the importance of safety obligations and enforcement of standards.

PN102

MR LATHAM: Yes.

PN103

VICE PRESIDENT WATSON: Those sort of considerations come in at that stage.

PN104

MR LATHAM: Yes. Just to finish this point - which is really the major point of the appeal - what the Deputy President should have done should have been to determine whether there was a safety breach. He did so, although it's not quite clear how serious that was. We would submit that it's a very serious safety breach. Secondly, he should have determined whether that constituted a valid reason and then he should have gone to the other steps to determine whether it was harsh, unreasonable or unjust. His Honour did not do so.

PN105

The other points, I'm not saying they're minor, but they are of less significance. There is the failure to provide adequate reasoning in relation to the seriousness of the breach of the policy and that is at paragraph 57, and I've hopefully dealt with that. The second is the reference to there were rational reasons for his actions, which is the second dot point at paragraph 54. Can I just say my friend says that that's a reference to an earlier part of the Deputy President's conclusion, but if one actually goes to that evidence - sorry, I'll just come back to that, but that is actually a reference to the submissions of the respondent, not to the evidence itself.

PN106

We say just simply that Pettitt v Dunkley, which is set out in the authorities, makes it clear that decision‑makers are required to set out reasons at least on fundamental matters to allow the proper understanding of their reasoning. In this case a question of the breach and its seriousness was a fundamental issue. In fact, probably the fundamental issue, and we say that's insufficient reasoning.

PN107

In relation to the factual errors, which are short, there is a factual error at paragraph 56 in relation to both the applicant and Mr Tiqui having long and good service. That seems to be a misstatement, but the reasons are set out in the submissions. There is a conclusion that the respondent's work and attendance record have been blameless. That is utterly inconsistent with the reference to the earlier safety breach. In relation to the finding that he was unable to find employment, while strictly not in error, that is misleading in that the respondent simply refused to find employment.

PN108

Your Honour, there are set out in the submissions a number of different alternatives as to what the full bench might do were they to find error. On reflection, I think it would be very difficult for this bench to ultimately make conclusions in relation to it given that there were some credit findings made by the Deputy President; but one option may be to have the matter remitted. If the full bench was sufficiently confident they could make findings in relation to these matters, we would be happy for the full bench to determine it. Unless there is anything further, your Honours, they are the points.

PN109

VICE PRESIDENT WATSON: Do you see a difficulty remitting the matter to the Deputy President?

PN110

MR LATHAM: We do. It's not a reflection upon the Deputy President, but where there have been credit findings made, there are inevitably bias applications and allegations that may be made. It's not a desirable approach. If there is some necessity to do so, of course the Commission would have the power to do so.

PN111

VICE PRESIDENT WATSON: Thank you, Mr Latham. Mr Gibian?

PN112

MR GIBIAN: Thank you, your Honour.

PN113

VICE PRESIDENT WATSON: We'll mark your outline, exhibit G1.

EXHIBIT #G1 RESPONDENT'S OUTLINE OF SUBMISSIONS

PN114

MR GIBIAN: We also have a folder, which perhaps if we could hand up now if that's the convenient course.

PN115

VICE PRESIDENT WATSON: Thank you.

PN116

MR GIBIAN: I will come quickly to what has been described as the principal ground, but can I just make an observation about the allegations that were relied upon in the decision to dismiss. There was an alleged breach of safety policy on 5 March. Two elements of conduct were relied upon. They were alleged failure to secure a pallet in a trailer and a failure to lock down a trailer before entering it to clean up a spill that had eventuated.

PN117

Now, Mr Tran accepted that he didn't secure the pallet and didn't check that the trailer was locked down before he entered it with Mr Tiqui to clean, but he provided what the Deputy President accurately described as explanations for what had occurred. Not justifications, but explanations for what had occurred and it's important that they be borne in mind. In relation to the first, the securing of the pallet, he was in the process of loading on the trailer when he noticed that the battery in the forklift was very low. He exited the trailer and his forklift, as he said in his evidence, to avoid the forklift becoming stuck in the trailer, which would be a great inconvenience and a disruption to operations and attended to what was described as the battery bay to have the battery replaced.

PN118

In the meantime the trailer moved away, apparently Mr Tiqui not realising that the loading had not finished. That resulted in a spill. The trailer then returned to the bay, Mr Tiqui came back - sorry, Mr Tran came back from the battery bay, and observed that Mr Tiqui was already in the process, in the trailer, of cleaning up. He didn't check that the trailer was secured before he entered to assist Mr Tiqui, but as he said he assumed it was, firstly because he didn't know it had moved at all, he assumed that it just stayed in the same place as it was previously, and in any event, Mr Tiqui, who was the leading hand, was already cleaning in the trailer.

PN119

So that does provide some kind of context as to what occurred, and the Deputy President accepted Mr Tran's evidence, and that generally speaking he was a truthful witness.

PN120

In those circumstances, the questions that the Deputy President was called upon to decide was whether dismissal was an appropriate penalty, having regard to that conduct. An issue was raised as to the comparative treatment of Mr Tiqui, who, although he was a leading hand, only received a warning, and whether the dismissal was otherwise harsh having regard to the personal circumstances of Mr Tran.

PN121

Now the principle of a ground of appeal contends that the Deputy President erred in making a finding that there was no valid reason because, in making that finding it is said he considered harshness in the sense of the impact of the decision to dismiss on Mr Tran, having regard to his personal circumstances.

PN122

VICE PRESIDENT WATSON: And proportionality.

PN123

MR GIBIAN: Yes. But - well it's addressed in ground of appeal and in the submissions as a harsh - taking into account harshness. Can I distinguish between proportionality and harshness? The ground of appeal and the submission of the appellant, so far as they say that the Deputy President considered harshness in the sense of the impact of the decision to dismiss upon Mr Tran, having regard to his age, personal circumstances and the like - - -

PN124

DEPUTY PRESIDENT HAMILTON: Paragraph 56 says, "I accept the comparison with differential approaches", that's a differential, and the Darvell case is a differential case. And at the end it says, "It's hard to see the applicant should receive a harsher punishment."

PN125

MR GIBIAN: Yes.

PN126

DEPUTY PRESIDENT HAMILTON: So the word "harsh" is used in the sense of proportionality. So the two are linked, aren't they? Or is that wrong?

PN127

MR GIBIAN: Can I come back to that? But in that sentence "harshness" is used in the sense of considering the comparative treatment of Mr Tiqui and Mr Tran having regard to their conduct. That is, the conduct that was relied upon by the employer to justify the dismissal. Not having regard to Mr Tran; the fact that he's 63 and has limited English and might have difficulty obtaining alternative employment. Those matters are considered separately.

PN128

The Deputy President did not consider harshness in the sense of the effects on Mr Tran of dismissal in light of his personal circumstances as part of the valid reason. What he considered, and there was no error in him so doing, was whether or not dismissal, having regard to the conduct found to have occurred, and indeed, largely undisputed, was an appropriate response by the employer, was a proportionate response by the employer. There is no error in that approach, and Full Benches have repeatedly, of this Commission and predecessors, adopted such approaches, and I'll take the Full Bench to decisions in a moment.

PN129

Can I just start with the decision of the Deputy President though, which is under Tab 2 in the appeal book. In that respect - - -

PN130

DEPUTY PRESIDENT HAMILTON: And you also are concentrating only on section 387(a), aren't you? The rest of it is - - -

PN131

MR GIBIAN: Well, (a) and (h), I suppose, to the extent of the harshness.

PN132

DEPUTY PRESIDENT HAMILTON: (a) and (h). So that's the case, between (a) and (h)?

PN133

MR GIBIAN: Yes, the procedural issues are not at issue on appeal.

PN134

DEPUTY PRESIDENT HAMILTON: Sorry to interrupt.

PN135

MR GIBIAN: Of course. Now, can I go to the decision then. Can I firstly just note at paragraph 28, which is on - sorry, there's two pages numbers used in there, but the stamped page - - -

PN136

DEPUTY PRESIDENT HAMILTON: We have read the decision, there's no need to read it out to us.

PN137

MR GIBIAN: Of course. But can I just note at paragraph 28, at the bottom of page 7, there's just a brief summary of the applicant's case that the Deputy President provides which notes that it contains three elements; that is, that "The termination was excessive given the nature of the offence", and over the page, secondly, "That there was inconsistent treatment of employees having regard to the treatment of Mr Tiqui", and thirdly, "That it was harsh given the applicant's personal circumstances."

PN138

Now, the Deputy President then has been observed, from paragraph 45, notes a number of authorities in respect of the valid reason consideration, none of which are in issue. Rather, the Full Bench is asked to accept that the Deputy President simply didn't follow those.

PN139

At paragraph 54 the Deputy President notes that respondent had established that the applicant breached its safety policy and practices on 5 March, but finds, and it was open to him to do so, that he was not satisfied that it constitutes a valid reason for dismissal. He notes a number of matters in that respect, as the Full Bench has already been taken to. The first is the status of the earlier incident. Now that was relevant because it was a matter that was relied upon by the employer. And if one goes to the letter of termination, which I think appears in a couple of places, but including at page 154 and 155 under Tab 6.

PN140

At 154 there's a reference in the middle of that page, there's an incorrect date given I think, to an earlier safety incident on 16 February, I think it's actually the 19th. Which was relied upon. It was also referred to in the show cause letter. That is, the employer relied upon the assertion that Mr Tran had been warned in relation to an earlier incident, as justifying the decision to dismiss arising out of the incident on 5 March. In that context there was no error, nor is there any contended for by the appellant in taking that matter account, and nor is there any challenge to the factual finding that, at most, the applicant received verbal counselling in relation to that incident.

PN141

Secondly, the Deputy President refers to the explanations provided for his actions, and I'll come back to that. That's obviously a reference to that the applicant was honest and contrite and cooperating in the investigation. At paragraph 55, that - and this is not a reference to the impact of the dismissal upon Mr Tran, the present respondent, but a reference to the fact that he was an employee of 10 years' service with otherwise good record. There is no error in a member of the Commission, in deciding whether there's a valid reason, taking into account all of the circumstances, including the fact that the employer decided to dismiss an employee for a policy breach in circumstances where that employee was an employee of 10 years' standing with an otherwise good record.

PN142

DEPUTY PRESIDENT HAMILTON: How does that fit with a finding under section 387 if you look at the actual words, "Whether there was a valid reason for dismissal relating to the person's capacity or conduct, including its effect on safety and welfare"? So how those factors relate. That's the statutory function. The statutory function is not to look at warnings and so on.

PN143

MR GIBIAN: No. And - - -

PN144

DEPUTY PRESIDENT HAMILTON: That comes later in relation to another matter. One of the other factors. (e). Factor (e).

PN145

MR GIBIAN: What section 387(a) says is that the Commission is required to take into account whether there was a valid reason for dismissal related to conduct, et cetera.

PN146

DEPUTY PRESIDENT HAMILTON: No, no, valid reason "related to capacity or conduct, including its effects on safety and welfare." It's a full -

PN147

MR GIBIAN: Indeed, yes.

PN148

DEPUTY PRESIDENT HAMILTON: Now what relevance is a warning to a valid reason related to capacity or conduct?

PN149

MR GIBIAN: The authorities have said, from Edwards v Giudice onwards, that the consideration of whether there's a valid reason involves a consideration of whether the conduct relied upon occurred, first of all, and whether the conduct relied upon justified termination of employment.

PN150

Now, part of what was said here by the employer was that, "Termination was justified because we'd given Mr Tran a warning previously." And the status of that was relevant in assessing the seriousness of the conduct on 5 March and whether or not that conduct justified termination of employment, as the words in Edwards v Giudice - - -

PN151

DEPUTY PRESIDENT HAMILTON: I see the point you're making.

PN152

MR GIBIAN: Yes.

PN153

DEPUTY PRESIDENT HAMILTON: I think the point made by the other side is that's a factor you look at in weighing it all up. Weighing up all the factors including valid reason.

PN154

MR GIBIAN: Well - - -

PN155

DEPUTY PRESIDENT HAMILTON: I do see the point you're making.

PN156

MR GIBIAN: Yes.

PN157

DEPUTY PRESIDENT HAMILTON: But the point against you is - - -

PN158

MR GIBIAN: I understand.

PN159

DEPUTY PRESIDENT HAMILTON: - - - those factors, including proportionality, are relevant once you've made the required statutory findings about (a) to (h), then it's a simple function and it's set out in the Act. It's not very hard.

PN160

VICE PRESIDENT WATSON: Mr Gibian, the employer might have been determining whether there as a valid reason, have decided there was a valid reason because there'd been this previous warning. But isn't the task for the Commission member a different one? To consider whether there's a valid reason associated with conduct, capacity, and to the extent that there has been another warning, to consider that, as the Deputy President has pointed out, in a different part of the decision?

PN161

MR GIBIAN: Can I say two things? Firstly, the Commission or a member of the Commission hearing this type of application, is making a very broad discretionary judgment, as is plain from the fact that the overall assessment to be made, as the members of the Full Bench know, is whether or not the dismissal is harsh, unjust or unreasonable and that there is a fair go all round.

PN162

The Act does not dictate, in some technical or literalistic way, where particular considerations necessarily fit. There can be some overlap between where a particular matter might properly fall in the consideration the Commission is called upon to assess in any particular case.

PN163

Secondly, the Commission is required to take into account where there is a valid reason and have - I'm just saying that by way of summary, I don't mean to leave out the other words, a valid reason in the sense that there is a reason which justified termination in a particular case, and this was one, given the approach the employer adopted. It might be said that, and I'm always reluctant to consider hypotheticals, but if there was a lateness for work case, for example, in assessing whether a particular instance of lateness for work justified termination of employment, the words were used in Edwards v Giudice, it is not irrelevant to take into account whether or not the employee had been warned previously that disciplinary consequences might flow from tardiness because of previous incidents. One can't just say that "The worker was late for work by 15 minutes on one day, did that justify termination?" If one looked at it in that way it would never justify termination. It would seem to be a response which would not justify termination.

PN164

DEPUTY PRESIDENT HAMILTON: The appropriate approach - - -

PN165

MR GIBIAN: But if there'd been previous warnings and previous incidents, then that would be relevant in assessing that conduct.

PN166

DEPUTY PRESIDENT HAMILTON: The appropriate approach would be, would it not, to say, "The employee was late for work, that is a valid reason, however it's an isolated case" et cetera, et cetera. Or, alternatively, "He's been warned six times and it's not an isolated case and it's proportionality"? Isn't that the way the Act requires us to proceed?

PN167

MR GIBIAN: With respect, no. It's open to the Commission to take that matter into consideration either in A or in H.

PN168

DEPUTY PRESIDENT HAMILTON: All right.

PN169

MR GIBIAN: The Act does not dictate either. And the approach of only taking into account as part of some overall assessment reduces the valid reason consideration to no more than assessing whether or not the allegations or the conduct relied upon by the employer in fact occurred. That's not sufficient. And the authorities make that clear. The valid reason consideration is broader than that. It involves assessing - and I'm sorry, I'm repeating myself - whether or not there was conduct that justified termination of employment. Not by reference to the individual effect in light of the financial or personal circumstances of the employee, but whether or not there was conduct that justified it.

PN170

DEPUTY PRESIDENT HAMILTON: You can't be capricious, for example.

PN171

MR GIBIAN: But - - -

PN172

DEPUTY PRESIDENT HAMILTON: So it's a pretty limited test.

PN173

MR GIBIAN: No.

PN174

DEPUTY PRESIDENT HAMILTON: You see there is a limit. For example, stealing a paperclip could be seen as a valid reason but it would be kind of capricious to terminate someone for that reason.

PN175

MR GIBIAN: Yes.

PN176

DEPUTY PRESIDENT HAMILTON: So it's a very limited restriction on valid reason, isn't it?

PN177

MR GIBIAN: I think I have to go to some cases then.

PN178

DEPUTY PRESIDENT HAMILTON: All right.

PN179

MR GIBIAN: To explain why that's not right, with respect.

PN180

DEPUTY PRESIDENT HAMILTON: Fair enough.

PN181

MR GIBIAN: Can I just, with respect to the decision, note that - and members of the Full Bench have read it, but the four paragraphs relied upon by the appellant involve consideration of whether or not dismissal was an appropriate response to the conduct, not a consideration of harshness in the sense of the personal effect upon Mr Tran.

PN182

And if you go over to paragraphs 69, 70 and 71, under (h), 387(h), that's where the Deputy President considered Mr Tran's personal circumstances and the effect of the dismissal upon him, and at paragraph 70 notes the personal circumstances, his age, the fact that English is not his first language, his wife being ill, the difficulties likely to otherwise encounter in obtaining suitable alternative employment. There's no error in taking - and indeed I think the appellant thinks it appropriate, those matter be taken into account under (h), there's other matters that the Commission considers relevant.

PN183

There is no error in the (a) considerations, the valid reasons considerations, encompassing consideration of whether or not, looking at the conduct, dismissal was an appropriate response or indeed a proportionate response. There's no error in adopting that approach.

PN184

Can I just go to a couple of authorities in relation to that.

PN185

VICE PRESIDENT WATSON: So just in relation to that. Maybe the authorities go to it. Isn't it appropriate to adopt Selvachandran, no more, no less?

PN186

MR GIBIAN: I'm sorry, I just missed that.

PN187

VICE PRESIDENT WATSON: Is it not appropriate in relation to valid reason to adopt the concepts in Selvachandran? No more than that and no less than that? You haven't mentioned it, and the wording used is different, but why isn't that the touchstone?

PN188

MR GIBIAN: I obviously don't disagree with the formulation in that decision, but it's sound defensible and - sorry, well-founded are three words, aren't they.

PN189

MR LATHAM: It's four.

PN190

MR GIBIAN: Sound-defensible and well-founded, I suppose it's four words.

PN191

DEPUTY PRESIDENT HAMILTON: As opposed to capricious.

PN192

MR GIBIAN: Sorry. Three phrases, perhaps. Three terms.

PN193

DEPUTY PRESIDENT HAMILTON: As opposed to capricious or fanciful or - - -

PN194

MR GIBIAN: What the authorities have said is at least in relation to defensible, a dismissal is not defensible if it was an inappropriate response to the conduct that was relied upon. And the formulation that's adopted there is, and indeed, is required to be, a required consideration of not just some mechanical, "Did it happen?" That's not the extent of the consideration that the Commission's required to - and one doesn't have to go quite to the level of the paperclip, but if that's all that's done, then - if that's all that's done of that criteria, then it is really deprived of any availability function. Did the employee drop the paperclip or not? And that's not what the authorities suggest is an appropriate approach.

PN195

Can I just go, and I don't want to go to all of them.

PN196

DEPUTY PRESIDENT HAMILTON: I mean a breach of safety policy is prima facie defensible, isn't it?

PN197

MR GIBIAN: It would again depend upon what the breach - there's two things about that.

PN198

DEPUTY PRESIDENT HAMILTON: We're not talking about paperclips here, we're talking about matters that concern the life and limb of employees, which is a very serious matter almost by definition.

PN199

MR GIBIAN: I accept we're not considering - - -

PN200

DEPUTY PRESIDENT HAMILTON: Let's deal in the realm of what we're dealing with.

PN201

MR GIBIAN: Obviously - I'm sorry.

PN202

DEPUTY PRESIDENT HAMILTON: It's a serious matter for the health of employees. No joke. So, prima facie such a breach would be defensible within Selvachandran.

PN203

MR GIBIAN: Obviously I accept we're not dealing with paperclips. There's two things about that. Firstly, it will still depend upon - I mean, if one's dealing with some safety policy it will depend upon the nature of the breach of the policy and the circumstances in which it occurred. That's the first point.

PN204

The second point is that the Act allows for different ways of making decisions so long as all the factors are taken into account. So it may be possible - the Deputy President might have decided this matter by saying, "There was a valid reason but, look in these circumstances I think dismissal was too great a penalty", but there was no error in the approach that he did adopt, and indeed Full Benches have adopted the very same approach on numerous occasions.

PN205

Can I just start with Edwards v Giudice, and I'm in the passage that no doubt the Full Bench is familiar with. It's under Tab 5, I think, in the bundle.

PN206

The passage that appears on page - the report is [1999] FCA 1836; 94 FCR 561. Just the passage that appears at 565 in paragraph 7 of the judgment of Justice Moore, where it's noted that the reason would be valid - and this is under the equivalent provisions existing after 1996.

PN207

The reason will be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur or did occur but did not justify termination. An employee may concede in an arbitration that the conduct took place because, for example, it involved a trivial misdemeanour. In those circumstances the employee might elect to contest the termination on the basis that the conduct took place but the conduct did not provide a valid reason, and also perhaps relying upon other grounds.

PN208

And it goes on. So it's not simply an assessment of whether or not the conduct occurred, it involves separate - - -

PN209

COMMISSIONER JOHNS: So in the present matter then before the Deputy President, as I understand it, Mr Tran conceded that the conduct occurred. That's right, isn't it?

PN210

MR GIBIAN: Yes. Yes.

PN211

COMMISSIONER JOHNS: On what basis do you say it didn't justify termination? It wasn't a trivial misdemeanour, was it?

PN212

MR GIBIAN: On the basis of the explanations that were provided by Mr Tran as to what occurred, on the basis that one was dealing here with - - -

PN213

COMMISSIONER JOHNS: But the Deputy President didn't then make a finding that Mr Tran was unaware that the vehicle had moved.

PN214

MR GIBIAN: He accepted the explanations which were provided, which was that Mr Tran had assumed that Mr Tiqui, how was a leading hand and was in the truck, would have secured the truck. Now, the reasons the Deputy President gave went to whether or not the decision to dismiss was justified or the conduct relied upon justified termination. And it was open to him to approach that matter on that basis. Not by reference to some individual circumstance of a personal nature in relation to Mr Tran, but in looking at the conduct in its entire context.

PN215

Can I go, then, to Tab 11 in the bundle, Full Bench decision in the matter of Ricegrowers Co-operative v Schliebs, a decision of the Full Bench. There can I just note, if one goes to page 2 of the print and over onto page 3, there's an extended extract from the decision at first instance in that matter. At the bottom of page 2, in the decision of first instance, it's said that "Having done so I find the termination of the applicant's employment was for a reason that was not a valid reason", and the Commissioner at first instance said, "I found so because" and then there's a list of matters that appear on the top half of page 3. They include, in the third dot point, they include a consideration of the effect of the breach of policy that was in that case and the significance of it, and the third point, that "The penalty of termination is disproportionate to the degree to which the policy was breached, taking into account the circumstances at the time." And the fourth dot point, the treatment of other employees who have breached the policy, but they were only warned, and the final dot point, the knowledge of the employee of that policy.

PN216

Going to page 7 of the print, within paragraph 9 there is there set out the grounds of appeal. They included, in the third ground, that:

PN217

The Commissioner erred in determining whether the appellant had a valid reason for the respondent's termination by considering, among other things (a) whether the penalty of termination was disproportionate to the degree to which the applicant breached the policy, the circumstances surrounding the case at Echuca,

PN218

Which was the comparative treatment issue. At paragraph 11 the Full Bench refers to Selvachandran, which has been referred to, and says:

PN219

In this case the Commissioner's approach to whether the reason for termination was sound, defensible or well-founded would appear unexceptional. It is hardly a defensible reason for punishment if that punishment is inappropriate to the circumstances. Another reason, not well-founded, would be if it were inconsistent with what had occurred elsewhere in similar circumstances.

PN220

At the top of page 8, paragraph 12, it's said that:

PN221

The basis for the first ground of attack is that the facts were clear, the finding that there was no valid reason could not be sustained.

PN222

The Full Bench disagreed.

PN223

The circumstances in which those facts occurred is relevant to the issue whether or not there was a valid reason for termination. In this regard the reason for termination must be considered in the context of the penalty of termination and such a policy must, among other things, be proportionate to the reason relied upon.

PN224

COMMISSIONER JOHNS: This is a very old authority and there are many who have said something slightly different. Do you have anything more recent which canvasses recent authorities which says the same thing?

PN225

MR GIBIAN: We're really dealing with - - -

PN226

COMMISSIONER JOHNS: This does support what you're saying, no doubt about it, but it seems inconsistent with recent authority.

PN227

MR GIBIAN: The case that was referred to in the leave or permission decision was Potter v WorkCover, which was a couple of years after this, so it's the same period. So I don't know - the respondents refer to no other decision in that respect and refer to Container Terminals, which I think is actually earlier than this decision.

PN228

COMMISSIONER JOHNS: So you don't have anything more recent?

PN229

MR GIBIAN: I do. I do. I'm coming to it. There's a couple more. Can I just finish with this decision briefly. At paragraph 14 there's a reference to Edwards v Giudice, and at paragraph 15 at the top of page 9 the Full Bench said:

PN230

We take from this, Edwards v Giudice, to be a firm statement of the proportion of the penalty to the offence is relevant to validity for the termination,

PN231

and then refers to the comparative treatment point as well. There is a reference to Container Terminals at paragraph 17, that is an earlier decision, relied upon by my friend. At the commencement of that paragraph, an acceptance by the submission that the delay consideration focused on the reason for termination:

PN232

However we do not think there is any limit other than relevance on what they considered and reached a conclusion that there is or is not a valid reason for termination."

PN233

At paragraph 18 on page 10 there is a reference to an earlier Full Bench decision which adopted the same approach, a decision of GrainCorp Operations v Vallette, V-a-l-e-t-t-e. Finally, at paragraph 19, by way of conclusion, the Full Bench notes that:

PN234

The findings which led the Commissioner to his conclusion on the section 170CG(3)(a) were related to the conduct of the employee, he observed the employee (indistinct) et cetera. The explanations are provided, and said that "All of these are relevant to the conduct of the applicant and go to whether or not the reason for termination was valid in the sense it could be described as sound, defensible or well-founded."

PN235

COMMISSIONER JOHNS: Was CGA(3)(a) in the same form as the current - - -

PN236

MR GIBIAN: Yes.

PN237

COMMISSIONER JOHNS: Exactly the same words.

PN238

MR GIBIAN: I'll just see if it's set out in - - -

PN239

COMMISSIONER JOHNS: Including the reference - - -

PN240

VICE PRESIDENT WATSON: Apart from operation of reasons, I think you might find.

PN241

MR GIBIAN: Yes, I think there might be one word difference, but it's - I don't think anyone's said that there's - indeed the Full Bench - - -

PN242

COMMISSIONER JOHNS: No, no, I just don't recall.

PN243

MR GIBIAN: I think Annetta and the like said that the same approach is intended.

PN244

COMMISSIONER JOHNS: Selvachandran's been followed and that's a very old decision.

PN245

MR GIBIAN: Yes. Indeed.

PN246

VICE PRESIDENT WATSON: Annetta is quoted in this decision as saying, "The test is not whether the conduct was justified summary dismissal at common law."

PN247

MR GIBIAN: Yes.

PN248

VICE PRESIDENT WATSON: It actually goes further than that and says that whether the conduct justified summary dismissal is not a factor to be taken into account in paragraph (a). It is a factor to be taken into account later.

PN249

MR GIBIAN: Yes.

PN250

VICE PRESIDENT WATSON: If you refer to that case and various other cases that are followed and apply that, including recent Full Benches.

PN251

MR GIBIAN: Yes. Well, as the members of the Full Bench know there are cases in which parties perhaps - and sometimes the members of the Commission have considered questions of whether or not there was serious misconduct of at common law or may be under some instrument of policy as well and sometimes that's been found to involve error, in that it's departed from the statutory words which referred to valid reason. And in other cases it's been accepted that looked as a whole of the reasons encompassed to consideration of whether there was a valid reason for determination consistent with the legislation.

PN252

There was a further decision that - sorry - escaped the folder. So can I just hand a copy to the - - -

PN253

VICE PRESIDENT WATSON: I'm just concerned that - - -

PN254

MR GIBIAN: I'm sorry. I missed that reference, your Honours.

PN255

VICE PRESIDENT WATSON: I'm just concerned there needs to be a full reference to all of the relevant authorities, not a selective quoting.

PN256

MR GIBIAN: Yes.

PN257

VICE PRESIDENT WATSON: And Annetta is perhaps not directly on point but it is relevant in terms of determining issues at particular points along the way. And as I recall the reference in that case which has been applied it said that it's not appropriate to adopt a different approach to the existence of a valid reason if a summary dismissal was involved compared to a dismissal on notice. It must be the same test and that's Selvachandran and if the dismissal was insufficient there are insufficient grounds to warrant summary dismissal then that is a relevant factor but it's a relevant factor later.

PN258

MR GIBIAN: Yes.

PN259

VICE PRESIDENT WATSON: Not at that stage of valid reason. That's what Annetta stands for.

PN260

MR GIBIAN: What the Full Bench has said in the Ricegrowers is that the Commissioner, at first instance didn't have regard to that matter at all and directed his attention, appropriately to the statutory consideration, namely whether there was a valid reason for termination and the attack was whether or not the Commissioner had erred in finding there was no valid reason by considering whether or not the decision to dismiss was proportionate to the conduct that was relied upon. And the Full Bench very clearly says that there was no error in adopting that approach and to do so was open on the authorities.

PN261

So I mean there seemed to be in paragraph 13 if that's the portion your Honour's referring to some issue as to whether or not there was a reference to whether the conduct was serious and wilful misconduct in the Commissioner's decision but at the conclusion of that paragraph the Full Bench says that they don't read it in that way and accept that the Commissioner decided the matter by reference to the statutory consideration of valid reason. So I don't know that that issue arises in that matter and it certainly doesn't arise in this matter that was made - separate consideration of whether or not the conduct was serious misconduct at common law or for any other purpose.

PN262

VICE PRESIDENT WATSON: In other words whether it was disproportionate.

PN263

MR GIBIAN: To the extent that there was consideration of whether it was a proportionate response. As I say that's not - when it's focused upon the conduct the penalty of dismissal and whether or not that is an appropriate response by an employer to the conduct that occurred there's no error in taking that matter into account in considering the valid reason.

PN264

DEPUTY PRESIDENT HAMILTON: I think you've made that point.

PN265

MR GIBIAN: Yes, indeed. I'm sorry, Commissioner.

PN266

DEPUTY PRESIDENT HAMILTON: Some dozens of point times and I heard it the first and the second time.

PN267

MR GIBIAN: Indeed.

PN268

DEPUTY PRESIDENT HAMILTON: You've made your point essentially.

PN269

MR GIBIAN: Yes.

PN270

DEPUTY PRESIDENT HAMILTON: But the question I have do you have any more recent authority and what is it?

PN271

MR GIBIAN: I've just handed up a decision of Caspanello. It is - - -

PN272

DEPUTY PRESIDENT HAMILTON: That's 2002.

PN273

MR GIBIAN: It is.

PN274

DEPUTY PRESIDENT HAMILTON: And it doesn't seem to support you as far as I can see.

PN275

MR GIBIAN: What it says is the matters are - well various matters are capable of being considered under a number of subject headings and then sections 170CG.

PN276

DEPUTY PRESIDENT HAMILTON: Sixteen supports you.

PN277

MR GIBIAN: Yes.

PN278

DEPUTY PRESIDENT HAMILTON: Paragraph 16.

PN279

MR GIBIAN: Yes, so really, paragraph 15, 16, and 17. At 15 - - -

PN280

DEPUTY PRESIDENT HAMILTON: And they're very old authorities, that's the point. So there's no need to read it out because you've made the point but do you have anything recent which is similar?

PN281

MR GIBIAN: Yes, well nothing more recent has been cited against us - on this point - if there's anything then I'm happy to take it on notice but nothing more recent. Indeed, the decision my learned friend relied upon was older than these decisions. So Container Terminals - if it's a question of age - but my researchers have not suggested that any of these decisions have been disapproved of or said they were wrong or they are followed and members of the Commission refer to them from time to time as one would expect. But I don't want to labour it but - - -

PN282

DEPUTY PRESIDENT HAMILTON: There's no need to repeat the point. I think we have absorbed the point.

PN283

MR GIBIAN: Yes. But, importantly what was said in the Caspanello matter at the base of 17 was that - well, in 17 was that if the punishment is inappropriate would not be - can hardly be defensible. And that the reason for termination must be considered in the context of the penalty of termination and amongst other things to be proportionate for the reasons relied upon.

PN284

It's then said that if the reason for the termination of the particular conduct and that conduct in fact does not justify termination then the reason for termination may not be valid but then says that the issue of proportionality may arise under either (a) or (e) at 170CG(3). So there's not sort of only one way to correctly decide matters of this nature. The Commission is conferred with a very broad discretionary power and it does not err in looking at the conduct and deciding in looking at the valid reasons question whether or not that conduct was such as to justify termination.

PN285

VICE PRESIDENT WATSON: So long as Selvachandran is applied.

PN286

MR GIBIAN: Well, yes. So long as the statute is applied.

PN287

VICE PRESIDENT WATSON: Yes.

PN288

MR GIBIAN: And the Federal Court has repeatedly said that there's not - has repeatedly emphasised the degree of the discretion that the Commission has in to the matters it considers relevant in making a decision in cases of this type and the way in which it goes about those decisions and that there are not rules about the weight to be given to particular considerations or any priority to be given to any particular consideration as is listed in section 387.

PN289

VICE PRESIDENT WATSON: But there must be a finding based in relation to each of the relevant factors.

PN290

MR GIBIAN: Yes.

PN291

VICE PRESIDENT WATSON: And the finding must be given weight as fundamental elements in assessing the ultimate question.

PN292

MR GIBIAN: Yes.

PN293

VICE PRESIDENT WATSON: So if there's an absence of a proper analysis in relation to, for example, whether there was an opportunity to respond and a finding is made erroneously then that is then taken into account as a negative when it should be taken into account as a positive then the discretion has miscarried. That's what the cases also stand for. That there must be some rigour in the decision-making process and applying the concepts properly determined and analysed through these authorities.

PN294

MR GIBIAN: There must be a finding as to the matters set out in 387. There's no issue that the Deputy President made a finding about valid reason. There's no suggestion that he didn't find and give weight to the matters - make findings and give weight to all the matters that are set out in section 387. The Deputy Presidents clearly did. The attack is upon is an assertion which is both erroneous on the reasons that the Deputy President gave that he took into account harshness in the sense of the effects of dismissal upon Mr Tran, in deciding valid reason, that's not correct. Those matters were considered under (h).

PN295

To the extent the attack is broadened from the ground of appeal or the submissions to allege error on the basis that there was something inappropriate in the Deputy President assessing whether the conduct he found - that Mr Tran was engaged in - in the circumstances of which it occurred was or was not a proportionate response - well, dismissal was or was not a proportionate response there was no error in the Deputy President adopting that approach.

PN296

DEPUTY PRESIDENT HAMILTON: I think you're going round in circles.

PN297

MR GIBIAN: Indeed.

PN298

DEPUTY PRESIDENT HAMILTON: You're making precisely the same point.

PN299

MR GIBIAN: I am.

PN300

DEPUTY PRESIDENT HAMILTON: And we're making precisely the same point and I think in a somewhat circular process. It's interesting but circular.

PN301

MR GIBIAN: Can I just note two further matters? Just Walsh v Taxation Office and which is tab 13. This is a decision from 2005 which seems a bit closer. At 141, Industrial Courts, 226. In this matter the contrary error was alleged, that is, it was alleged that the error that the Commissioner adopted at first instance was that there was a finding of valid reason in circumstances where the member of the Commission should have found that the penalty was disproportionate. So it's sort of the inverse error was alleged in this case.

PN302

At page 232 of the report at paragraph 15 there's a reference to (b) - sorry the ground raised in 1(b) and it said that we have no difficulty with the Commissioner finding that there was a valid reason for termination based on conduct while he separately found that the termination was harsh by reason to its proportionate nature the two findings may appear contradictory but there are decisions of the Full Benches which accept the co-existence of the two findings.

PN303

There's a reference to the passage in Potter v WorkCover that was referred to in the permission decision in this matter. And then at 17, it said, that we are aware the Full Benches have also held that proportionality may be considered under either section 3(a) or what was then (e) - the other matters provision - referring to Ricegrowers and another Full Bench matter (indistinct) corporation but concluded this does not render invalid the approach adopted by Commissioner Reanes, that is either in a particular case either approach may be appropriate.

PN304

DEPUTY PRESIDENT HAMILTON: I can imagine a case where the Commission says, under (a) I find there is a valid reason but it is not a very serious one under any proper consideration of the evidence and then at the end find that it's an unfair dismissal. But probably that's as far as it goes, doesn't it?

PN305

MR GIBIAN: A member of the Commission may adopt that approach and so long as it considered all the matters.

PN306

DEPUTY PRESIDENT HAMILTON: That's as far as it goes, isn't it? You'd have to make - find there's a valid reason of some kind and you're at liberty to observe whether it's a very serious matter, such as threatening life and limb of employees or trivial and one-off's such as five minutes late for work. You're entitled to perhaps to say that but to go further and say being late for work twice in a week is no valid reason. That would not be performing the statutory function would it?

PN307

MR GIBIAN: It would to the extent that it involved - - -

PN308

DEPUTY PRESIDENT HAMILTON: It would be performing the statutory function.

PN309

MR GIBIAN: To the extent that it involved a consideration of whether the conduct in the circumstance that occurred justified termination and that's what Edwards v Guidice says and/or provided a defensible reason in the sense that it was an appropriate response to the conduct that was alleged. I mean that's what these decisions have said.

PN310

I was just going to refer quickly to Potter v WorkCover, which is under tab 8 - because it was referred to in the decision on permission in the current matter. The question of this nature that the type of considerations to be taken into account under the valid reason factor were not, in a strict sense at issue. The issue on the appeal seemed to be primarily directed at whether or not there was serious misconduct which was as the Full Bench observed somewhat - a misdirected way of approaching the case.

PN311

And it was really in that context that at paragraph 55 there was an observation that in circumstances - and this is on page 473 - that in circumstances of summary dismissal the issue of whether the penalty imposed was proportionate to the conduct is a matter that was more appropriately considered under (e) than (a), that's the other matters - rather than (a) - the valid reason - and that if summary dismissals disproportionate to a misconduct that would support a conclusion that determination was harsh despite the existence of a valid reason for termination.

PN312

COMMISSIONER JOHNS: Sorry, Mr Gibian.

PN313

MR GIBIAN: I'm sorry, Commissioner.

PN314

COMMISSIONER JOHNS: Just for my own part - the Deputy President in the present matter didn't he consider the proportionate nature of it on a different basis? Isn't there a difference saying the conduct was engaged in but the conduct was trivial and therefore it's out of proportion to dismiss and it's not a valid reason. On the authority that you've just taken us to that seems like an orthodox approach.

PN315

Didn't what the Deputy President do in this matter say the conduct occurred and it's out of proportion because he'd been there for 10 years, he'd had good work performance and had a good performance record. Sorry the way that the Deputy President seems to me has assessed proportionality is very different to assessing proportionality having regard to whether the conduct engaged in by the employee is trivial or serious or whatever which seems to be the more orthodox approach.

PN316

MR GIBIAN: The decisions that I've referred to - look, Edwards v Guidice says that the assessment must involve a consideration of whether the conduct justified termination of employment.

PN317

COMMISSIONER JOHNS: Yes, but is this - - -

PN318

MR GIBIAN: It gives an example by way of reference to a trivial matter. In my submission one doesn't read it as limited to that and certainly when one looks at Ricegrowers for example or Caspanello what the Full Benches there were saying - were looking at the context to be considered was not the personal effects on the personal circumstances but it included the full context of the person's employment and the conduct that occurred, including treatment of others, length of service - all of those matters were considered in determining whether or not the decision to dismiss was defensible in the sense that it was an appropriate response to the conduct that occurred.

PN319

And that's apparent from just on page three in Ricegrowers, there's a list of the matters that were taken into account by the Commissioner at first instance - appropriately so - the Full Bench found. And one doesn't read "valid" as simply meaning "not trivial".

PN320

COMMISSIONER JOHNS: But the circumstances taken into account in Ricegrowers seem to be the fact that he attempted to use a toilet. The fact that there was no impact on the hygiene. It's not a consideration of he's been a loyal employee for many, many years. It's a focus on the conduct - the actual activity engaged in by the person - and a consideration of the proportionality of that is it a large breach of the policy? Or a minor breach of the policy having regard to the conduct the person engaged in. That seems to be the more orthodox approach doesn't it?

PN321

MR GIBIAN: Firstly yes - it focuses upon the conduct and whether or not the decision to dismiss was a proportionate response to the conduct. It doesn't adopt a narrow approach as to what the circumstances that are considered in describing the nature of the conduct itself.

PN322

COMMISSIONER JOHNS: I understand what you're saying.

PN323

MR GIBIAN: And they included the treatment of others under the policy, the nature of the conduct such as it occurred, whether that was a proportional response. Now that's what the Deputy President has done here. He looked at the conduct. The only additional consideration you mentioned, Commissioner, is the length of service issue. That was also considered in Ricegrowers, although I'm just struggling to find the particular passage so maybe I'll find that rather than holding anyone up now in a moment if that's a convenient course.

PN324

But there are certainly cases that have taken that matter into account, not as a matter going to the effect upon the employee but as part of the circumstances in which the employer took the decision to dismiss - part of the characterisation of the conduct - that it is quite a different thing when one looks at one instance to say, "That was a one-off." That's relevant to an assessment of whether the one-off incident justified termination or over occurrence of earlier incidents.

PN325

DEPUTY PRESIDENT HAMILTON: It could be trivial in the words of Selvachandran.

PN326

MR GIBIAN: Yes, but valid is not - - -

PN327

DEPUTY PRESIDENT HAMILTON: Such as being five minutes late for work - or, I don't know all sorts of things.

PN328

MR GIBIAN: A case could be trivial but the considerations in the matters that I have referred to are not limited to was it trivial or not trivial.

PN329

DEPUTY PRESIDENT HAMILTON: All right.

PN330

MR GIBIAN: It involves an assessment of whether or not the dismissal was an appropriate response to the conduct.

PN331

DEPUTY PRESIDENT HAMILTON: I think once again - - -

PN332

MR GIBIAN: Indeed.

PN333

DEPUTY PRESIDENT HAMILTON: - - - we're going around in circles. You've made your point and I certainly understand what you're trying to say, thank you.

PN334

MR GIBIAN: And in Potter, I just wanted to make clear that the issue doesn't really arise. We don't read Potter as erecting some rule - and it was only phrased as "appropriate" - and I just note that if one looks at the decision. And I'm sorry I didn't arrange for copies of the first instance decision but it was clear in that case that the work history of Mr Potter was considered as part of the valid reason consideration, at first instance, in that case and the Full Bench detected no error in that approach and that appears - if one looks at page 476 at paragraph 71 there's an extract from the decision at first instance in which account is taken in Mr Potter's work history as part of the consideration of whether there was a valid reason for determination in Mr Potter's employment. And in that context nowhere I found in adopting that approach.

PN335

My learned friend referred to Cornwall as well which is under tab 9 and stands - and includes - I'm sorry I've missed the reference. And at 48 the Full Court there said that the assessment of valid reason is admittedly focused upon the conduct of the employer but - I'm sorry if you just give me a moment - it involves in the middle of that page it said that -

PN336

"The section requires employee's reasons to be valid and thereby focused upon the employer on the basis of the decision rather than upon its consequences for the employee. What has to be examined is a validity of the decision and its connection to the employer's capacity or conduct and its basis in operational requirements. In such a case, such as the present, where conduct is relied on and will entail consideration of the nature that will entail a consideration of the nature of the conduct in the full context in which it was heard."

PN337

So, it's not a narrow consideration. It doesn't involve the particular effects on the personal circumstances but that's not what the Deputy President did here otherwise it involves a broad consideration of the conduct in all the circumstances in which it occurred.

PN338

VICE PRESIDENT WATSON: For completeness and I don't want to send us round and round in circles again and receive a rebuke on my right but I think the concept I was referring to emanating from Annetta is discussed in Potter at page 472 and following and paragraph 55 is the adoption and application of that principle that I referred to. And that's been applied by quite a number of recent Full Benches.

PN339

MR GIBIAN: Yes. Involving that case - well that was a case in which it appears led by the submissions of the parties there was an attention focused upon the question of serious misconduct at common law, rather than that perhaps would have been more appropriate directly upon the valid reason consideration.

PN340

VICE PRESIDENT WATSON: The Full Bench took it and expressed it in terms of proportionate, whether the penalty was proportionate to the conduct, being more appropriately dealt with in (e), rather than (a).

PN341

MR GIBIAN: Yes. And as I say what one draws from these authorities there is a capacity of a member of the Commission to decide matters in different ways in a manner which nonetheless considers all of those matters. So it may be appropriate in a particular case, but in another case it may be open - it would be open to a member of the Commission to say, "Well, look I'm looking at this conduct in the full context." As the Full Court said in Cornwall - in the full context - in which which it occurred. I don't think dismissal was an appropriate or proportionate response and, therefore, there was no valid reason.

PN342

And there was no error in the Deputy President adopting that approach in the present matter. In any event, and perhaps in the alternative we've also said that there's no - nothing turns upon the particular heading under which a consideration is put in the decision-making process.

PN343

VICE PRESIDENT WATSON: The outcome would be the same.

PN344

MR GIBIAN: I'm sorry?

PN345

VICE PRESIDENT WATSON: You say the outcome would be the same.

PN346

MR GIBIAN: There's no suggestion in this case that the Deputy President in deciding that the dismissal was harsh, unjust or unreasonable took into account anything that was not a relevant consideration. No ground of appeal is suggested upon that. What it suggested is that there was some material difference as to whether or not some consideration of proportion by reference to the conduct that occurred that some different outcome might have arisen that was considered under (h), rather than (e) or perhaps as an overall fair-go all-round consideration.

PN347

We don't see that there is any basis in the decision to suggest that any different outcome would have been arrived at. It's clear that the Deputy President concluded that it was harsh. It was harsh because of the personal circumstances of Mr Tran under (h) for the dismissal to occur and that just having regard to the conduct in the full circumstances of what occurred the dismissal was a disproportionate response and inappropriate in the circumstances.

PN348

And in that context there's no basis for any submission that some significance turned upon the particular subject heading under which the matter fell. And I've set out in the written submission, and perhaps I don't need to read a passage from the Full Bench decision in Railcorp v Rettos 176 IC, 129.

PN349

The issue in that case was that the employer said that or discerned an error in or alleged an error in that there was allegedly a failure to take into account - again, perhaps it's somewhat contrary to the submissions that are put in this case. The employer alleged that there was a failure of the decision maker at first instance to take into account Mr Rettos's disciplinary history in deciding whether there was a valid reason for termination. That is, it was said that at first instance the member of the Commission focused too narrowly on the particular conduct that was relied upon and didn't, in considering whether that conduct provided a valid reason for termination have regard to Mr Rettos's disciplinary history which the employer sought to rely upon to demonstrate that the particular conduct relied upon was such as to justify and provide a valid reason for the termination of employment.

PN350

VICE PRESIDENT WATSON: Does that submission involve some speculation as to whether the outcome would be different? Given the wording of the Deputy President's decision at paragraph 71, he said "Having found that there was no valid reason the other factors support the finding that the dismissal was harsh, unjust or unreasonable." If the matters were considered differently and the paragraph began having found that there was a valid reason I'm nevertheless of the view that the termination was harsh, unjust or unreasonable. A separate issue as to whether that is actually a finding as to either of those alternatives but anyway, because I am not sure whether it is a finding that it is harsh or unjust or unreasonable; t does not say that it is all three and it does not say which one it is, but anyway that is a separate point - are we not in the realms of speculation if the proportionality issues were considered in the overall sense and a valid reason was the starting point of that final conclusion?

PN351

MR GIBIAN: If you go back to that the dismissal in the circumstances was not a proportionate response to the breach, it does not involve much speculation at all to suggest, particularly when combined with the personal factors that the Deputy President also found to be persuasive, that had that matter been considered in (h), it would have led to the same outcome that the decision was harsh, unjust or unreasonable.

PN352

COMMISSIONER JOHNS: It might not have been the case, that if the Deputy President had not done what Mr Latham complains about, he might have found that there was a valid reason but found that the dismissal was harsh and then that would have made reinstatement more difficult if there is a valid reason.

PN353

MR GIBIAN: Only if one gave "valid reason" some separate status to a consideration of the conduct. The Deputy President had decided to reinstate having looked at the conduct, having looked at the history of Mr Tran's employment. Whether the Deputy President looked at the conduct as a valid reason or just in itself, in my submission, one would not see that there would be some different outcome in relation to remedy. There is no doubt that he had regard to the evidence as to what in fact occurred and what Mr Tran did and did not do and determined that there was nothing inappropriate about reinstatement occurring in that case. Whether he gave it the label "valid reason" or not ought not have affected the remedy as to reinstatement, unless one erected some principle that if there is a valid reason, there is some higher barrier to get over to obtain an order for reinstatement and that is not what the Act says.

PN354

As I say, I refer to Rettos in the written submissions and what is said there is - as I say, the complaint was by the employer that matters other than strictly the conduct relied upon were not considered and ought to have been considered in the valid reason consideration, that there should have been a wider consideration of disciplinary history. That complaint was made in circumstances where there had been consideration of disciplinary history in the decision, albeit put in a different category, and in that context, the Full Bench, the majority said, in particular at page 143 of the report, that there are overlaps in the considerations that arise, that the Act does not require a formulaic unduly technical or robotic approach as to what category a discrete consideration ought arise in; it is enough that, along the way, the ultimate decision, the ultimate consideration as to whether the termination is harsh or just or unreasonable, the Commission had proper regard to the full factual matrix and assigned appropriate rates to the facts, et cetera.

PN355

So even if the Full Bench were to conclude that the Deputy President considered matters under (a) that could have been considered under (h), it is not said that any of those matters were irrelevant to an assessment of whether the dismissal was harsh, unjust or unreasonable - sorry, Deputy President?

PN356

DEPUTY PRESIDENT HAMILTON: No, I was going to ask - sorry, finish your sentence. My apologies.

PN357

MR GIBIAN: Only that the proportionality of the response, it is accepted, must be relevant and capable of being taken into account at least under (h) or as part of an overall assessment of whether the employee and employer received a fair go overall. Where that is the case, it is difficult to see what turns upon which category it is put into.

PN358

DEPUTY PRESIDENT HAMILTON: If the appeal is allowed, what should we do? Do we determine it ourselves or remit it? What is your view on that?

PN359

MR GIBIAN: Our submission is it ought be remitted. If the Full Bench is against us on that, we would seek to make some submissions in respect of how it should be decided, but our principal submission is it be remitted. We don't see why it couldn't be remitted to the Deputy President. There was very little factual dispute in the matter. There was some issue, it appears, as to whether or not the forklift had been driven onto the trailer or not driven onto the trailer. That seemed to be about the extent of it. Mr Tran, who was found to be an honest witness, admitted that he should have but didn't lock down the trailer, but explained in a manner that the Deputy President found to be sincere what had occurred and what the explanation was. So we don't see that it is a matter in which there are some sort of factual controversies which would require some sort of reassessment.

PN360

I don't know there is much more I can add in terms of the principal ground, but can I just briefly deal with the alleged factual errors and reasons issues. My learned friend dealt with those very briefly but can I just deal with them quickly, firstly just noting that, obviously, with respect to the alleged factual errors, an appeal in this type of matter must allege a significant error of fact, and it is difficult to see how any of them rise to that level.

PN361

The first matter that is considered, it is alleged there is some misapprehension in relation to Mr Tiqui's and Mr Tran's periods of service. With respect, that does not leave the decision as a whole and I just note that at paragraph 41, for example, it is noted that the employer relied upon the differential treatment because of Mr Tiqui's 31 years of service and he noted Mr Tran's period of service. There is no error in regarding a 10-year or 11-year employee and a 30-year employee as both having long, good periods of service and there was no error of fact or misapprehension at all.

PN362

Can I just note, with respect to Mr Tiqui's conduct, it was open to the Deputy President to think that if there were to be a comparison, his conduct was more serious or had a greater level of responsibility attached to it because he was a leading hand, so he had some supervisory responsibility. He also entered the trailer first and it was only after Mr Tran returned and saw Mr Tiqui cleaning up the spill that he entered the trailer to assist, so it was, initially at least, his responsibility to ensure that the trailer was locked down and, without going to it, particularly at pages 200 and 201 of the report, the evidence of the employer or the manager who attended the location was that Mr Tiqui, although being a leading hand, did not accept the seriousness of the incident or that the incident had any seriousness and was argumentative.

PN363

The second matter that was relied upon was it is alleged there was some error in observing that Mr Tran had an otherwise blameless work record because that ignored reference to the immediately earlier incident of 19 February. With respect, again, that does not leave the decision as a whole, and can I just note the Deputy President noted the incident of 19 February at paragraphs 52, 53, 54 of the decision, and then, at 55, says that he had a good work record, good working performance record. The appellant would ask the Full Bench to conclude that the Deputy President neglected something that he referred to in the immediately preceding paragraph. What's more, when one goes to the reinstatement issue at paragraph 76 on page 16, the Deputy President said:

PN364

There was no issue raised concerning the applicant's work attendance or attitude. Prior to these two incidents, there was no issue with respect to his performance as a forklift driver.

PN365

So it is clear that the good record is other than the incident on 19 February and 5 March and to read the decision as having ignored the other incident is not sustainable.

PN366

The third matter relied upon is there is alleged error about whether Mr Tran sought alternative employment. There is no error because no such finding was made. The reference to an error is alleged to have occurred at paragraph 35, which is, in fact, a summary of the submissions that were advanced by the applicant, not a finding by the Deputy President at all. All the Deputy President found was under (h) that, at paragraph 70, it would be difficult for Mr Tran to find alternative suitable employment given his age, the fact that English is not his first language and the like. That is not a fact which is disputed, a conclusion which is disputed, or would be capable of any sensible dispute.

PN367

Finally, there is alleged to be some deficiency in the reasons given with respect to three matters. Firstly, it is said there was no finding as to the seriousness of the breach of policy. That submission suggests that it is incumbent upon the Deputy President to ascribe some serious rating to the breach of policy alleged against Mr Tran. The Deputy President was not required to express his conclusion in that way, he was required to make findings about the conduct, which he did, and to take into account whether that conduct provided a valid reason for the termination of employment, which he did. He was not required to express that conclusion in any particular way which either said it was a serious or not serious or moderately serious breach of policy.

PN368

VICE PRESIDENT WATSON: At 56 he did make an expression of view:

PN369

It is hard to see the applicant should receive a harsher punishment.

PN370

If you make that sort of statement, surely you should look at countervailing factors such as the seriousness or otherwise of a policy breach. Did it threaten life and limb or was it simply trivial failing to fill out a form our something of that sort?

PN371

MR GIBIAN: Again, that paragraph is dealing with the comparison with Mr Tiqui, the comparative treatment issue, so the statement as to whether or not the applicant should have received a harsher punishment was by reference to the fact that Mr Tiqui was an employee with a higher level of responsibility and notwithstanding his involvement in precisely the same incident had received a warning rather than anything further.

PN372

The second issue that is raised as to the reasons is as to whether there was a finding as to whether the forklift was on the trailer. I have referred in the written submissions to the obligations in relation to the provision of reasons, which make clear that there is no requirement to mention each and every fact or each and every contention that is advanced. There is no reference to that matter at all in the written submissions which were advanced. To the extent, it would seem to have been referred to once in the oral submission that were advanced by the company as referable only to the question of reinstatement as to whether or not Mr Tran had been entirely truthful about the incident and that that, it was said, ought go to the question of whether reinstatement should follow. The Deputy President resolved the issue as to the credit or truthfulness of Mr Tran and expressed his view that Mr Tran was a truthful witness and, in that respect, the Deputy President sufficiently resolved that issue.

PN373

Finally, it is said there was no explanation as to what the Deputy President referred to as the rational explanations given by the applicant for his actions in the second dot point in paragraph 54. There is no difficulty in discerning what those explanations were and the Deputy President is not required to write them out again. They are as was contained in his evidence and as was summarised in the submissions of the applicant at paragraph 30 of the Deputy President's decision. The Deputy President summarised what the explanations were and then in his Conclusions accepted that the applicant had provided rational explanations. He is not required to set them out again in order to give adequate reasons for his decision and the Deputy President, with respect, did so.

PN374

May I just have a moment? I think I have addressed the issue of disposal. We think the matter ought to be remitted. If the Full Bench is doing to determine the matter itself, we could make some brief further submissions in that respect, but I will not do that unless asked.

PN375

VICE PRESIDENT WATSON: Thank you, Mr Gibian. Mr Latham?

PN376

MR LATHAM: Your Honour, I just want to go to the cases that my friend has referred to, just briefly. Using my friend's bundle, if I could first go to tab 5, Edwards v Giudice. I will be brief on this. At page 565, paragraph 7, there is a reference to his Honour Justice Moore's judgment. What His Honour is saying here is it is necessary to determine whether particular conduct occurred or did not occur. It may be that, as he describes it, "trivial misdemeanours" do not add up to a conclusion that a valid reason exists. That is just a standard legal principle that de minimus matters or trivial matters or, as his Honour describes it, "misdemeanours", should not be used in processes like this, in the words before, I think, "in a capricious way". It does not change the statutory test.

PN377

In the decision of Schliebs v Ricegrowers there is a reference, at page 9, paragraph 17, to the then CG3(a) and my friend relies upon this particular statement in the second sentence:

PN378

However, we do not think that there is any limit, other than relevance, on what may be considered in reaching a conclusion that there is or is not a valid reason for termination.

PN379

Could I just say two things about that. There is some circularity about that reasoning because it doesn't actually define what is relevant, so we might be pushed into an inquiry as to the meaning of relevance to valid reason, which does not really answer the question as to what is a valid reason, but if the Full Bench - and I will put this bluntly - if the Full Bench is saying that anything may be looked at in the search for valid reason, that decision is clearly wrong and it should not be followed by this Full Bench.

PN380

COMMISSIONER JOHNS: Mr Latham, what do you say about paragraph 15:

PN381

We take this to be a firm statement that the proportion of the penalty to the offence is relevant to validity for termination.

PN382

MR LATHAM: On that point, I put squarely that that decision is wrong and should not be followed.

PN383

COMMISSIONER JOHNS: Where is there a countervailing authority?

PN384

MR LATHAM: In relation to proportionality?

PN385

COMMISSIONER JOHNS: Yes.

PN386

MR LATHAM: Byrne v Australian Airlines describes proportionality as part of the harshness test, and I just repeat the earlier submissions we made on that.

PN387

If I could then go to the decision of Potter, which is at tab 8. This is moving very slowly towards the current day. I think my friend did concede this in response to some questions. At paragraph 55, we are approaching a more orthodox approach where, in the first sentence, it is said that:

PN388

The issue of whether the penalty imposed was proportionate is a matter more appropriately considered in the context of 3(e) rather than 3(a).

PN389

That is not an absolutely categorical decision, and we are asking for a categorical decision, but that approach is certainly more correct than the earlier approaches put forward.

PN390

Then if one goes to the decision of Caspanello. I have gone slightly back in time but the decision of Caspanello states, at paragraph 17:

PN391

The issue of proportionality may arise under (a) or (e).

PN392

We say that decision is incorrect and it is contrary to the decision I was referring to.

PN393

Broadly, members of the Commission, what we say in relation to these questions is this: it is clear that there is a divergence of views amongst the authorities in relation to this question. One must always ultimately go back to the terms of the Statute, and we say that if the terms of the Statute are had regard to, the conclusion is inescapable that matters such as proportionality and harshness cannot be determined as part of the process of determining valid reason.

PN394

It is appropriate, we submit, that this Full Bench finally resolve these issues. I think the only one I have not dealt with is Walsh. Walsh itself, at paragraph 16, seems to be leaning in the same direction that we urge. You will see there, in the second half, after the reference to Potter, the Full Bench state:

PN395

This means that the Commissioner could find both that there was a valid reason based on conduct and that, separately, the termination was harsh by reason of its disproportionate nature.

PN396

We say that is a correct analysis.

PN397

COMMISSIONER JOHNS: Do you say the first sentence in paragraph 17 is incorrect?

PN398

MR LATHAM: Sorry, Commissioner, the first sentence in?

PN399

COMMISSIONER JOHNS: Paragraph 17.

PN400

MR LATHAM: It is correct to the extent that there are Full Benches that have said it, but I don't think it is endorsing those conditions.

PN401

COMMISSIONER JOHNS: The sentence goes on to say:

PN402

This does not render invalid the approach adopted by Commissioner Eames.

PN403

MR LATHAM: Yes, and Commissioner Eames undertook the process that we are talking about. I think what the Full Bench is saying there is that there are these contrary decisions, and my friend has referred to them today, but they do not render invalid the approach set out above.

PN404

Could I then just go to finally this point. It is put really in conclusion by my friend that there is no suggestion that any different outcome would have been reached if valid reason had been determined in the way proposed by the appellant as opposed to as proposed by the respondent. Just at risk of repetition, I will conclude with this point: if the decision in relation to valid reason had not included harshness, we say it is almost inevitable that the Deputy President would have found that there was a valid reason. If he had found that, he would have then been required to balance, as part of the ultimate exercise, the valid reason with notions, for example, of harshness, and that is a balancing exercise both in relation to whether the dismissal was unfair, if I can describe it in that shorthand way, and also whether the respondent should have been reinstated.

PN405

The task or the exercise that the Deputy President did go through, though, was different. By inserting notions of harshness into the finding as to valid reason, he made the conclusion inevitable that there was no valid reason and once that conclusion was reached, it was almost inevitable that the dismissal be found to be unfair. So there is a very clear and material difference in the approaches that would have been taken and the result would have been very different.

PN406

Unless there is anything further, your Honours, they are the submissions.

PN407

MR GIBIAN: Sorry, can I just - - -

PN408

VICE PRESIDENT WATSON: There is something further?

PN409

MR GIBIAN: Byrne and Frew cannot be an answer to the 3(a). It was obviously an award provision which simply referred to dismissals being harsh, unjust or unreasonable without the statutory criteria that are to be taken into account and obviously did not consider the meaning of "valid reason" and was not called upon to do so given the nature of the provision that was in issue.

PN410

DEPUTY PRESIDENT HAMILTON: The award provision was based on the convention 158 of the ILO from which section 170CG(a) and all the rest of it derives. So there is a commonality and source. I don't know, you may be correct, and obviously we need to check that, but there is a common source, namely convention 158.

PN411

MR GIBIAN: In Byrne, it was an award provision arising from the termination change in redundancy decisions.

PN412

DEPUTY PRESIDENT HAMILTON: Which drew it from convention 158.

PN413

VICE PRESIDENT WATSON: If we go through all of the history and moving from an award provision to two statutory tests, one of which was held to be unconstitutional, then a raft of inconsistent decisions going to the residual statutory requirement of there being a valid reason, culminating in clarification of the confined nature of that test in Selvachandran, because the conflicting decisions were found to actually engage in the vice that is subject to the criticism here, conflating unfairness with the question of valid reason. Selvachandran was the reason - was the outcome of that and the legislation has then followed the notions arising from that case and then applied universally and valid reason is one factor to be taken into account in the current test. All of that history may be relevant to a consideration of the issue that arises in this case.

PN414

MR GIBIAN: As I have said, the Deputy President did not conflate unfairness with valid reason; all he did was consider the conduct in its context and whether it was an appropriate response.

PN415

VICE PRESIDENT WATSON: Yes. Thank you, Mr Gibian. We will reserve our decision in this matter. We will now adjourn.

ADJOURNED INDEFINITELY [11.27 AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #L1 APPELLANT'S OUTLINE OF SUBMISSIONS........................ PN8

EXHIBIT #G1 RESPONDENT'S OUTLINE OF SUBMISSIONS................. PN113