[2008] AIRCFB 81

PR980513
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AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996
s.120 - Appeal to Full Bench

Selak

and

Woolworths Limited
(C2007/3757)

Industries not otherwise assigned

   

VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT CARTWRIGHT
COMMISSIONER FOGGO

MELBOURNE, 8 FEBRUARY 2008

Appeal against decision [PR979405] of Commissioner Grainger at Melbourne on 26 October 2007 in U2007/4198 – whether error involved in the exercise of a discretion – leave to appeal – Workplace Relations Act ss 120, 643 and s652(3).

DECISION

Introduction

[1] This is an appeal, for which leave is required, by Mr T Selak against the order of Commissioner Grainger dated 26 October 2007 ([2007] AIRC 786) dismissing his application for relief in respect of the termination of his employment by Woolworths Limited. The original application was made pursuant to s 643(1)(a) of the Workplace Relations Act 1996 (“the Act”). Commissioner Grainger found that the appellant was terminated for serious misconduct and that this termination was not harsh, unjust or unreasonable.

[2] Mr Selak lodged a notice of appeal under s 120 of the Act. The appeal was heard on 12 December 2007. Mr R Millar, of counsel, represented Mr Selak. Mr J Bourke and Mr J Snaden, both of counsel, appeared for Woolworths.

Background

[3] Prior to his dismissal, Mr Selak had over 20 years experience with Woolworths in various roles. At the time of termination, Mr Selak was employed as a Store Manager at the Southland Safeway store, a position he had held since June 2005. His responsibilities included the requirement to be familiar with, to act consistently with and to ensure that his subordinates complied with Woolworth’s various policies.

[4] On 2 May 2007, Mr Selak took a subordinate manager to lunch at the Sandbelt Club Hotel in Moorrabbin allegedly for the purposes of mentoring. At lunch, both managers consumed alcohol. The consumption of alcohol during working hours was prohibited by Woolworths and expressed in several policies including its ‘Code of Conduct’, ‘Staff Handbook’ and ‘Drugs and Alcohol Policy’, all of which applied to Mr Selak and, as alleged by Woolworths, were known and understood by him.

[5] In particular, the Respondent relied upon the prohibition expressed in Mr Selak’s written contract of employment which had been signed by him and governed his employment as Store Manager. The contract provided that ‘[no] alcohol is to be consumed by employees during their working hours, including meal breaks’. The contract further provided that:

[6] This alleged breach of the prohibition was communicated to Mr Selak by both his immediate supervisor and Human Resources Manager for the purposes of giving him an opportunity to respond to the allegation. When confronted with the allegation, the appellant, at first denied the allegation. He subsequently admitted to the consumption of two pots of full-strength beer when the investigations of his supervisor and Human Resources Manager continued. The employment of the appellant was at first suspended and he was then summarily dismissed on 3 May 2007 on the basis of serious misconduct. The employment of the subordinate employee was also terminated.

[7] The Commissioner issued a lengthy decision recounting the evidence, the arguments of the parties and each of the considerations relevant to determining whether the termination was harsh, unjust or unreasonable. He expressed his conclusions on the existence of a valid reason for termination at [26] of his decision in the following terms:

[8] His overall conclusions were expressed at [34] as follows:

Grounds of Appeal

[9] The decision of the Commissioner was a discretionary decision involving a consideration of a range of relevant circumstances against the statutory criteria for relief in order to form an overall view as to whether the termination was harsh, unjust or unreasonable.

[10] The appellant submits that the decision was affected by error on three grounds, namely that the Commissioner:

Nature of the Appeal

[11] Section 120 of the Act provides that an appeal lies against a decision of the Commission with leave of the Full Bench where either it is in the public interest for leave to be granted or where the decision is affected by error. An appeal against a decision on an application for relief under s 643(1)(a) is properly characterised as a discretionary one and the existence of appealable error must therefore be determined according to the principles articulated in House v The King1

[12] It is not enough for the Bench to be of the view that it would have preferred a different outcome 2 or would have decided the matter differently. The appellant must establish that the decision is affected by appealable error such as acting on a wrong principle, mistaking a finding of fact, not taking into account a material consideration or that the decision was unreasonable or plainly unjust.3 In matters involving the exercise of discretion, an appeal only lies to the extent that the decision of the Commissioner was in error.4

[13] We will now consider whether the three grounds of appeal advanced by Mr Selak establish the existence of appealable error.

Consideration of Proportionality

[14] The first ground of appeal concerns whether the Commissioner considered the proportionality between the allegation giving rise to the termination of employment and the termination itself. Counsel for Mr Selak submits that although the Commissioner correctly stated the approach to be applied when considering this issue, he significantly erred in failing to consider, or adequately consider, whether the termination of employment was disproportionate to the seriousness of the alleged misconduct. He alleges that the issue of proportionality was central to its case and the absence of any reasoning in the decision, including a consideration of alternative sanctions such as a reprimand or demotion, indicates that the Commission did not give proper consideration to this issue.

[15] Woolworths contends that this submission is wrong in substance for two reasons. First, it maintains that the misconduct was not only serious given the position of trust he occupied as Manager and an on-site ‘public-face’ of the Company, but also wilful, deliberate and involved dishonesty. Thus, it was submitted, it cannot be said that the Commissioner erred in finding that the sanction was an appropriate response to the misconduct in all of the circumstances. Secondly, Woolworths contests the submission that the issue was not properly considered by the Commission. It relies on the paragraphs preceding the finding at [34] that the termination was ‘not disproportionate to the seriousness of the misconduct’ including the discussion of the factual matrix surrounding the dismissal as well as an analysis of matters that were required to be considered under s 652(3). Woolworths also disputes the assertion that an obligation lies with the Commission to consider the appropriateness of alternative sanctions as being ‘a more proportionate response’.

[16] In determining whether a termination was harsh, unjust or unreasonable for the purposes of s 652, the Commission must have regard to the specific considerations of s 652(3) as follows:

[17] Although proportionality is not expressly identified as a consideration to which the Commission must have regard, the issue will often arise in a consideration of these factors and the overall consideration of whether the termination was ‘harsh’. As stated by McHugh and Gummow JJ of the High Court in Byrne v Australian Airlines Limited (1996) 185 CLR 410, a termination, although founded upon a valid reason, may nevertheless be found to be harsh ‘because it is disproportionate to the gravity of the misconduct in respect of which the employer acted’. 5

[18] It is well established that s 652 directs the manner in which the Commission is to exercise a discretionary power, and it is imperative that the Commission exercise that power in accordance with those provisions. A conclusion must be drawn after analysis of those provisions to which the Commission must have regard and be considered as matters of significance in the decision making process. 6 As the Act does not specify the relative weight to be given to certain provisions, the weight to be given to factors will generally be at the decision-maker’s discretion.7 It is not practical for decisions at first instance to be accompanied by a catalogue of the entire range of matters considered, but the reasoning of discretionary evaluation must nevertheless be adequate.8 A finding that the misconduct occurred is required in cases where it forms a reason for termination.9

[19] In our view the conclusion on this ground of appeal depends on whether the Commissioner considered the question of proportionality in the exercise of his discretion. If he did then the ground of appeal must fail. If he did not, then he failed to consider a relevant consideration and the discretion vested in him miscarried. In a case such as the present, the question whether the sanction of termination was a proportionate response to the conduct of the employee is necessarily involved in the consideration of whether the dismissal was harsh. The attribution of weight to a consideration in the exercise of a broad discretion will only amount to error where it is established that the overall decision was unreasonable or plainly unjust. Such an argument is encompassed within the third ground of appeal. It should be noted that here, neither the existence of the discretion, nor the facts upon which it was exercised, was in dispute between the parties. Where conflicts in evidence existed, cautious findings were made including the appellant’s knowledge of the contractual term and the Company’s zero-tolerance policy.

[20] A finding that misconduct occurred was made by the Commissioner on the evidence before him in concluding that a valid reason for the termination exists. The significance of this breach was then examined in all the circumstances to determine whether the sanction was ‘harsh’. Regard was had to factors such as the appellant’s seniority, the public position at the Company and the involvement of a subordinate in the breach. These findings preceded his conclusion at [34] that the misconduct was ‘serious’ as it constituted a breach of an express term and lawful direction in the appellant’s written contract. It was this characterisation that the Commissioner essentially relied upon in determining that the sanction was not harsh because it was not disproportionate to the misconduct.

[21] For these reasons it cannot be said that the Commissioner failed to consider whether termination was disproportionate to the seriousness of the misconduct. The first ground of appeal must fail.

The weight attributed to the alleged breach of contract

[22] The second ground of appeal is that the Commissioner erred in applying excessive weight to the alleged breach of contract in concluding that the termination was not harsh, unjust or unreasonable. In doing so, it is alleged that the Commissioner erred in applying the law of summary dismissal to this case. Although Mr Selak admitted to the breach, the characterisation of the breach as being at the very ‘heart of the contract’ was disputed. The breach was said to be ‘at the fringes of the contract’, ‘relatively trivial’ and should be seen as but one factor to consider rather than the determinative factor. Further, it was submitted that this case is not of the kind in which summary termination may be justified, such as cases of dishonesty or breach of trust.

[23] Woolworths disputes this characterisation and submits that the Commissioner was correct in the way in which he both applied the relevant law and determined the matter. It was submitted that at the very least, the conclusion that the misconduct justified summary dismissal was open on the evidence because a breach had been found to be serious, wilful and deliberate as well as involving an element of dishonesty.

[24] As noted above, section 652(3) directs the Commission’s attention to certain matters to which it ‘must have regard’. It does not direct the Commission regarding the particular weight to be attributed to each matter. Providing all relevant factors are considered, any disagreement over the weight to be given to a particular ingredient is not one which can give rise to appealable error – unless the overall conclusion is unreasonable or plainly unjust. The significance of any particular factor is a matter which the Commissioner at first instance must consider as part of the discretion required to be exercised. The emphasis placed on a relevant consideration cannot give rise to appealable error in the House v The King 10 sense. In our view this ground of appeal seeking to challenge the weight given to a factor can only succeed if it is demonstrated that the giving of weight to this factor meant that other relevant factors were given no weight or that the alleged disproportionate weight led to an unreasonable or plainly unjust outcome – the third ground of appeal.

[25] The significance of the breach was examined by the Commissioner. As the basis for the summary dismissal, he was entitled to do so. It was clearly a relevant consideration and one that was required to be addressed as a matter arising from the appellant’s submissions regarding lack of adequate notice and mitigating circumstances including the amount of alcohol involved. It was a consideration based upon undisputed findings of fact, including the involvement of a subordinate manager.

[26] It has not been established that either he should not have relied on this factor or that his reliance led to the failure to have regard to some other relevant consideration. This ground of appeal must fail.

The reasonableness of the ultimate conclusion

[27] The final ground of appeal is that the Commissioner erred in finding that the termination was not harsh, unjust or unreasonable. The appellant submits that such a finding was not reasonably open to the Commissioner and was against the weight of the evidence. The appellant lists the following as support of this proposition:

[28] Mr Selak submits that having regard to all of the circumstances, the termination was manifestly unfair and a finding to the contrary discloses a miscarriage of the discretion vested in the Commission.

[29] Woolworths submits that a consideration of all of the mandatory statutory considerations in s 652(3) supports the conclusion drawn by the Commissioner. Alternatively the conclusion was, at the very least, one that was reasonably open to the Commissioner. It submits that such a conclusion is further supported by the fact that the Commissioner’s conclusion is drawn from several findings which were largely unchallenged. These included the existence of a valid reason (s 652(3)(a)), the notification of the reason (s 652(3)(b)) and matters going to procedural fairness (s 652(3)(c)).

[30] This ground of appeal requires the appellant to advance a very strong case. It is not simply a matter of convincing the appeal bench that if it was exercising the discretion it would have reached a different conclusion to that in the decision under appeal. The appellant must demonstrate that the discretion could not reasonably lead to the conclusion reached at first instance.

[31] In determining whether a finding of a tribunal at first instance involves the miscarriage of a discretion, it is necessary to consider all the factors to which the tribunal had regard, rather than merely those that were in dispute. This is because the obligation upon the Commission is to consider all of the matters listed in s 652(3) and any other relevant consideration. An appeal bench must do the same when determining the existence of error. The discretion was exercised in light of the totality of all these considerations, not merely those which were in dispute.

[32] The assessment must be based on the evidence presented to the tribunal at the time of hearing. New evidence may only be considered where leave to admit such evidence has been granted. This will often be granted in circumstances where the evidence could not be called at first instance 11 or where it would be likely to produce a different outcome.12 The admission of further evidence was not sought by the appellant. Therefore, matters before the Commissioner cannot be re-argued and re-formulated in the absence of appealable error. We have found in dismissing the first two grounds of appeal that no appealable error has been demonstrated in relation to the matters properly taken into account.

[33] We are of the view that all the relevant matters were before the Commissioner, addressed in his decision and were supported by sound and adequate reasoning. The various considerations were competing, in the sense that they pointed to one conclusion or the other. For example, the breach of contract appears to be an isolated incident by an employee who had long service with the Company. Against this, the breach was clear, and made by a senior managerial employee who had the responsibility of upholding policies which the company had every right to implement and enforce. Such a breach will be sufficient to justify a termination and amount to a valid reason unless the policy in question was illegal, does not relate to matters subject to the employment relationship or is unreasonable. 13 For reasons outlined above, including the nature of the employee’s responsibilities as a manager, this is not the case here.

[34] While the ultimate decision required to be made is whether the termination was harsh, unjust or unreasonable, the manner of deciding matters of this kind is required to be with the intention of ensuring a “fair go all round.” This, in turn, requires a consideration of the circumstances from the perspective of the employer and the employee.

[35] Different employers may have taken different courses of action in these circumstances and reasonable minds might differ on the question of whether termination of employment was a fair and just sanction. However in our view, the finding that the termination was not harsh, unjust or unreasonable cannot be described as unreasonable or plainly unjust. The conclusions drawn were reasonably open to the Commissioner. Hence this ground of appeal must fail.

Conclusions

[36] In our view, the decision of the Commissioner was within his discretion and one that was reasonably open to him. As such, no appealable error has been demonstrated. Further, the matter is not of such importance that leave to appeal should be granted.

[37] For the reasons above, we decline to grant leave to appeal. The application for leave to appeal is dismissed.

BY THE COMMISSION:

VICE PRESIDENT

Appearances:

Mr R Millar, of counsel, for T Selak.
Mr J Bourke and Mr J Snaden, of counsel, for Woolworths Limited.

Hearing details:
2007.
Melbourne:
12 December.

 1   (1936) 55 CLR 499.

 2   Ibid 504-5 (per Dixon, Evatt and Mc Tiernan JJ).

 3   Ibid.

 4   Woodman v Hoyts Corporation (2001) 107 IR 172.

 5   Byrne v Australian Airlines Limited (1996) 185 CLR 410, 465.

 6   See, eg, Edwards v Giudice (1999) 169 ALR 89, Henderson v Department of Defence [Print S8591] (28 July 2000), Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport (2000) 98 IR 137.

 7   Mallet v Mallet [1984] 156 CLR 605.

 8   CDJ v VAJ(No 1) (1998) 197 CLR 172, 236 (per Kirby J).

 9   See, eg, King v Freshmore (Vic) Pty Ltd [Print S4213] (Unreported, Australian Industrial Relations Commission, Ross VP, Williams SDP, Hingley C, 17 March 2000); Edwards v Giudice, 94 FCR 561.

 10   (1936) 55 CLR 499

 11   See, eg, Harvey v Australian Injecting & Illicit Drug Users’ League [2007] AIRCFB 230.

 12   See, eg, Guss v Johnstone [2000] FCA 1455 [30] (per Sackville J).

 13   Woolworths v Brown [PR963023] (Unreported, Australian Industrial Relations Commission, Lawler VP, Lloyd SDP and Bacon C, 25 September 2005).

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