DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Kirsten Karbowiak
v
1000 Mile Travel Group Pty Ltd
(C2019/6395)

Appeal against decision [2019] FWC 6112 of Commissioner McKenna at Sydney on 27 September 2019 of matter number U2019/5895.

Introduction and background

[1] Kirsten Karbowiak has pursuant to s 604 of the Fair Work Act 2009 (FW Act) applied for permission to appeal against a decision issued by Commissioner McKenna on 27 September 2019 1 (decision) in which she dismissed an application made by Ms Karbowiak for an unfair dismissal remedy against her former employer, 1000 Mile Travel Group Pty Ltd (employer). The dismissal occurred not because of any misconduct or deficiency in performance on the part of Ms Karbowiak, but rather because she relocated her residence from Riverstone in Western Sydney to Orange. Having first determined that the employer had not complied with the Small Business Fair Dismissal Code (Code), the Commissioner went on to determine that there was a valid reason for the dismissal based on a lack of capacity for Ms Karbowiak to perform her job from her new residential location and that there was nothing else which rendered the dismissal harsh, unjust or unreasonable. Mr Karbowiak contends in her appeal that the Commissioner erred in concluding that there was a valid reason for her dismissal.

[2] The background facts of the matter are as follows. The employer is a Melbourne-based travel management and booking business, with its customer base being travel professionals and corporate clients. The employer engaged Ms Karbowiak in the role of NSW Sales and Partnerships Manager commencing on 8 May 2017. She was the employer’s only New South Wales-based employee, and she was specifically recruited to target the market in that State (specifically in Sydney). Because the employer was operating on a “start-up” basis in Sydney, Ms Karbowiak was required to operate from her home residence. Her contract of employment designated her residential address in Riverstone as the “Location” for the purpose of the contract, and clause 3.1(c) of the contract required Mr Karbowiak to perform her required duties from this location. Clause 4.1 of the contract provided that “The employment of the Employee by the Company will continue to be subject to the terms of this agreement, unless varied or replaced by an agreement in writing, despite any change to the Position, Duties or Location within the scope of this agreement”. Ms Karbowiak’s duties required working from home, face-to-face liaison with clients, suppliers and travel agents in the Sydney CBD and elsewhere in Sydney, and occasional travel to Melbourne.

[3] After taking annual leave and parental leave, Ms Karbowiak returned to work on a part-time basis on 6 March 2019. Shortly afterwards, her husband obtained a new job in Bathurst and, on 4 April 2019, Ms Karbowiak informed the employer of her intention to move to Bathurst with her husband, which is about 200 kms by road from the Sydney CBD (although as it turned out they ultimately moved to Orange, about 250 kms away). Her plan, which she communicated to the employer, was to use trains to travel to Sydney when necessary to meet personally with clients (who were primarily located in or near the Sydney CBD) or to make accommodation arrangements with family members in Sydney, and otherwise she would work from her new home. There was an exchange of communications between Ms Karbowiak and representatives of the employer about this, and the employer rejected a proposal advanced by Ms Karbowiak to conduct virtual rather than in-person meetings with clients because its business model was to build rapport and relationships on a face-to-face basis. The relevant managers of the employer ultimately concluded that it was not practicable for Ms Karbowiak to discharge the duties of her role from regional New South Wales, particularly as she was required to attend a minimum of two meetings a week in Sydney (often arranged at short notice) and two networking events a month. On 7 May 2019 the employer informed Ms Karbowiak that they were unable to come to an agreement with her, and therefore her employment was terminated effective immediately, with four weeks’ pay in lieu of notice.

The decision

[4] Having regard to Ms Karbowiak’s grounds of appeal, it is only necessary to refer to that part of the decision concerning the Commissioner’s consideration under s 387(a) as to whether there was a valid reason for Ms Karbowiak’s dismissal. In this respect the Commissioner said:

“[20] I am satisfied there was a valid reason for the dismissal related to the applicant’s capacity to undertake her role within the scope of reasonable expectations of the respondent. Included among those expectations were that the applicant should have ready availability to attend in person to the expected incidents of her employment, being those which were anchored in Sydney’s CBD or its environs, albeit the applicant had work-related dealings with persons located outside that district, and as far afield as, for example, Newcastle, Ulladulla and interstate. The applicant’s explanations and proposals as to how the geographical issues presented by her residing in regional New South Wales were not such as to persuade or satisfy the respondent that its business needs properly could be discharged by the applicant, with the respondent’s focus on generating work with clients predominantly proximate to Sydney’s CBD and also its focus on face-to-face interactions. The evidence leads me to the view that the respondent’s conclusions in such respects were not unreasonably-based. To put matters in a different context, travelling on a non-stop flight from Sydney to Perth would take approximately the same travelling time that would be involved in travelling from Sydney to Orange by train; and an employer might reasonably be concerned about an employee’s ability to responsively be available to discharge the duties of a role if residing in a location that entails such significant amounts of travel time in connection with part-time employment.

[21] Conduct-related issues did not arise around the time of the dismissal and are unnecessary to consider further, albeit the respondent’s evidence indicates there was deep concern, or deep concern has now belatedly now come into sharper focus in defending the application, about the applicant’s failure to disclose that she was relocating or contemplating relocating. The matter of relocation to Bathurst was presented as a fait accompli, and the applicant had not engaged in any consultation about matters to the time she conveyed her advice about that relocation. The applicant developed her own proposals about how work commitments would be met during her two days (or as had been proposed, but the details were not ironed-out before the dismissal, three days) of work each week where the respondent expected a solid, Sydney-based presence involving at least a couple of face-to-face meetings weekly as well as attendance at work-related networking functions. The applicant subsequently determined to relocate from Sydney to an even more distant location than Bathurst, namely Orange; she did not provide any information to the respondent about the relocation to Orange at any point in time before that matter indirectly came to the attention of the respondent (after information about a Facebook post concerning the Orange relocation was conveyed to Mr Ross by another employee).”

Appeal grounds and submissions

[5] Ms Karbowiak’s appeal grounds and submissions contend that the Commissioner erred in finding that there was a valid reason for her dismissal related to her capacity on the following bases:

(1) Anticipatory concerns about capacity or conduct are not capable of constituting a valid reason under s 387(a).

(2) Ms Karbowiak’s relocation was not capable of constituting a valid reason in circumstances where she was employed substantially from home.

(3) The Commissioner erred in finding that the size of the employer’s business justified its failure to provide Ms Karbowiak with a monitored trial of her proposal to work from home, in circumstances where no relevant distinction in the operation of the FW Act is apparent from its text or purpose.

(4) The Commissioner failed to give proper weight to the fact that Ms Karbowiak’s remuneration was wholly commission-based, with the consequence that she had every motivation to successfully perform her employment from Orange, and that the vast majority of her work when at Riverstone did not require face-to-face meetings or travel to the Sydney CBD.

(5) The Commissioner erred in finding that telephone or video-conferenced meetings were advanced by Ms Karbowiak as being an appropriate alternative to in-person meetings in circumstances where the evidence was that the vast majority of her work was performed at home in Riverstone and did not require face-to-face meetings or travel to the Sydney CBD.

(6) The Commissioner erred in finding that the employer’s conclusion concerning Ms Karbowiak’s ability to perform her role from Orange was not unreasonably based or, alternatively, erred in finding that the employer’s subjective concerns gave rise to a valid reason for dismissal notwithstanding the employer’s failure to provide Ms Karbowiak with an objective opportunity to demonstrate that the concerns could be overcome.

(7) The Commissioner erred in finding that Ms Karbowiak’s decision to move to Orange involved concealment or a lack of disclosure, in circumstances where the evidence demonstrated that the reason for her decision to move to Orange rather than Bathurst was solely to enable her to obtain childcare so she could continue her employment with the employer.

[6] Ms Karbowiak submitted that the grant of permission to appeal would be in the public interest because it raised issues of general application, namely:

•  the practical effect of the decision was that an employee who works predominantly from home will give their employer a valid reason for dismissal if that employee changes residence without the employer’s consent; and

•  whether anticipatory, speculative or imputed performance concerns of a subjective nature can constitute a valid reason, when s 387(a) refers to existing reasons.

[7] It was also submitted that the grant of permission to appeal would be in the public interest because the decision manifested an injustice, in circumstances where Ms Karbowiak only decided to move as a result of her husband’s new employment, her employment was substantially commission-based, and the vast majority of her work could be performed at home.

Consideration

[8] An appeal under s 604 of the FW Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.² There is no right to appeal and an appeal may only be made with the permission of the Commission.

[9] This appeal is one to which s 400 of the FW Act applies. Section 400 provides:

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

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

[10] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [43], Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s 400 as “a stringent one”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.³ A Full Bench of the Commission, in GlaxoSmithKline Australia Pty Ltd v Makin, identified some of the considerations that may attract the public interest:

“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 4

[11] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.⁵ However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.⁶

[12] An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal. 7 However it is necessary to engage with those grounds to consider whether they raise an arguable case of appealable error.

[13] We are not satisfied that the grant of permission to appeal would be in the public interest. We do not consider that the appeal gives rise to any reasonably arguable proposition of law or principle of general application, as Ms Karbowiak contends. The employer’s reason for Ms Karbowiak’s dismissal was that she would not have the capacity to perform her role in the way it expected it to be performed once she moved her residence in the manner she foreshadowed. That was a reason which plainly “related” to her capacity within the meaning of s 387(a) - that is, it was associated or had a connection with her ability to do her job. 8 The task of the Commissioner was to decide whether the reason given was a valid one. That required the Commissioner to consider, on the evidence before her, whether the incapacity relied upon by the employer existed or would exist in an objective sense.9

[14] The fact that, in this case, the capacity issue would not actually arise until Ms Karbowiak effected her change of residence could not alter the fact that the reason for the dismissal “related” to that issue, thus requiring consideration of its validity under s 387(a). In cases where the employment consequences of the capacity issue in question might not be readily foreseeable, or where there was less than certainty as to whether the capacity issue would in fact arise, the Commission may well not be satisfied that it constitutes a valid reason for dismissal. However in this case the capacity issue was certain to arise, its nature was clear, and its effect on the employee’s ability to discharge her duties to the required standard was reasonably predictable. In that circumstance it was open for the Commissioner to find under s 387(a) that there was a valid reason for dismissal.

[15] Insofar as Ms Karbowiak’s appeal grounds and submissions refer to the reason for her dismissal being “speculative”, that amounts to no more than the expression of a view that it was not valid. Insofar as it is described as “subjective”, that says no more than that it was the employer’s reason for dismissal which required consideration under s 387(a). It was the nonetheless necessary for the Commission to consider whether the reason was objectively valid, as earlier stated. We note in that connection that the Commissioner said in paragraph [20] of the decision, earlier quoted, that “The evidence leads me to the view that the respondent’s conclusions in such respects were not unreasonably-based.” In isolation, that might be read as approaching the s 387(a) task on the basis of assessing whether there were reasonable grounds for the employer’s incapacity-based reason for dismissal. If so, that would an error. 10 However, read in the context of the paragraph as a whole, we consider it is clear that in fact the Commissioner formed her own, independent view that the relevant incapacity would exist upon the change of residence based on the evidence before her.

[16] We are not otherwise satisfied that the grounds of appeal are reasonably arguable. The Commissioner’s evaluation of the importance of Ms Karbowiak’s responsibility to conduct face-to-face meetings in Sydney was a matter of fact and degree. Error is not demonstrable merely by reference to a time-based quantitative assessment of this aspect of Ms Karbowiak’s role, since this ignores the qualitative significance of such meetings in the context of the employer’s business model. Nor is error demonstrable merely by the proposition that more weight should have been given to certain considerations than was given by the Commissioner. In relation to the challenge to what was said by the Commissioner in paragraph [21] of the decision concerning a lack of disclosure about the move to Orange, it is clear that the Commissioner declined to find that this formed a valid reason for the dismissal based on conduct, and that she had already found that there was a valid reason based on capacity. Accordingly this was not material to the outcome determined in the decision.

[17] We do not consider that there is any arguable basis for the proposition that the decision manifested an injustice. A conclusion that a dismissal of an employee holding a job requiring the performance of duties in Sydney who chooses to move to Orange, some 250 kms away from where those duties are required to be performed, was not unfair does not appear to us to be surprising or outlandish. The matter was decided on its particular facts, and those facts we consider pointed firmly in the direction of the conclusion reached by the Commissioner.

[18] Because we are not satisfied, for the above reasons, that the grant of permission to appeal would be in the public interest, permission to appeal must be refused in accordance with s 400(1).

VICE PRESIDENT

Appearances:

A Macinnis, solicitor, on behalf of Kirsten Karbowiak

C Gianatti, solicitor, on behalf of 1000 Mile Travel Group Pty Ltd

Hearing details:

2019.

Sydney:

12 November.

Printed by authority of the Commonwealth Government Printer

<PR714642>

 1   [2019] FWC 6112

2 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194, 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ

3 O’Sullivan v Farrer [1989] HCA 61, 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506, 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78, 207 IR 177 at [44]-[46]

 4   [2010] FWAFB 5343, 197 IR 266 at [24]-[27]

5 Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [30]

6 Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089, 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78, 207 IR 177; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663, 241 IR 177 at [28]

 7   Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]

 8   Crozier v Australian Industrial Relations Commission 2001 FCA 1031 at [14]

 9   CSL Limited T/A CSL Behring v Chris Papaioannou [2018] FWCFB 1005

 10   Ibid