[2017] FWCFB 6604
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
Section 604 - Appeal of decisions

Needlework Tours Pty Ltd
v
Amanda Olesen
(C2017/6100)

DEPUTY PRESIDENT GOOLEY
DEPUTY PRESIDENT ANDERSON
COMMISSIONER BOOTH

MELBOURNE, 20 DECEMBER 2017

Appeal against decision [2017] FWC 4862 of Commissioner Ryan at Melbourne on 17 October 2017 in matter number U2017/3524.

[1] This decision concerns an appeal by an employer Needlework Tours Pty Ltd (Needlework) against an Order made by Commissioner Ryan of the Fair Work Commission 1 (the Commission) on 17 October 2017. The Commissioner ordered pursuant to section 392(1) of the Fair Work Act 2009 (the FW Act) that Needlework pay Amanda Olesen (the Respondent) “the amount of $12,550 gross, to be taxed at the appropriate rate, as compensation in lieu of reinstatement”.2 The amount was to be paid within 21 days. The Order was effective on and from 17 October 2017.

[2] Needlework’s appeal was made under section 604 of the FW Act. It was lodged on 7 November 2017, the last day allowed under the FW Act and the day by which it was required to pay the compensation amount to the Respondent. On 16 November 2017 the Commission stayed the operation of the Order pending determination of the appeal. 3

[3] An appeal can only be considered if the Commission is minded to grant permission to appeal. A hearing of the request for permission and of the merits of the appeal was jointly conducted on 1 December 2017. Both Needlework and the Respondent were self-represented at the appeal hearing. A decision was reserved.

The Commissioner’s Decision

[4] The primary application before the Commissioner was an application by Ms Olesen under section 394 of the FW Act in which she claimed that her dismissal on 10 March 2017 was harsh, unjust or unreasonable.

[5] In his decision of 17 October 2017 the Commissioner found the dismissal was unfair. This finding has not been challenged on appeal.

[6] In relation to remedy, the Commissioner concluded that:

•  reinstatement was inappropriate but a compensation order would be made;

•  Ms Olesen had been regularly employed as a casual employee and could have reasonably been expected to have been employed for a further nine months at 15 hours per week at $30 per hour had she not been dismissed ($17,550);

•  the amount of compensation would be reduced by $5,000 being the amount the Commissioner estimated Ms Olesen had earned between the date of dismissal and the date compensation would be payable;

•  no evidence of the effect of a compensation order on the viability of the employer’s enterprise was put to the Commission;

•  no other deduction would be made; and

•  the compensation order would be that $12,550 be payable within 21 days.

The Appeal

[7] Needlework’s appeal only concerns the compensation order.

[8] The grounds of appeal advanced by Needlework are summarised by the Appellant as follows:

“This appeal has been caused by what we believe to be and that is all the evidence and material presented at the hearing has not been considered resulting in a substantial injustice in relation to the financial remedy imposed on Needlework Tours Pty Ltd. There has (sic) been significant errors made by the Commission…” 4

[9] For the sake of convenience, we categorise the errors advanced in the Notice of Appeal as falling into two categories: alleged errors of fact (including the application of facts to the law); and errors in making a compensation order on a small business (absence of findings concerning adverse impacts).

[10] In support of its contention that it is in the public interest to grant permission to appeal, Needlework advance two propositions: firstly, that the alleged errors significantly and directly impacted the method by which the Commissioner calculated the compensation order and should not be left uncorrected; and secondly, that Needlework is a very small business and that the quantum of the compensation order is unaffordable and an excessive burden on the business.

[11] The Respondent opposed the request for permission to appeal and also the appeal. She submitted:

•  the evidence Needlework claims the Commissioner failed to take into account about her earnings was not evidence of earnings but merely a projection to an insurance company of turnover. As such, the decision was not in error;

•  she did not mislead the Commissioner in her evidence or lead him into error with misleading evidence;

•  Needlework had the opportunity to present evidence to the Commissioner about the impact of a compensation order and failed to do so;

•  she is earning only a small and variable amount of income from her business as well as receiving a government payment for her small business;

•  she is facing severe financial difficulties of her own; and

•  there is no public interest in disturbing the Commissioner’s decision and Order.

Permission to appeal and appeal principles

[12] An appeal under section 604 of the Act is an appeal by way of rehearing. The Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.5 There is no right to appeal and an appeal may only be made with the permission of the Commission.

[13] Section 400 of the Act applies to this appeal. 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.”

[14] In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under section 400 of the Act as “a stringent one”.6 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.7 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest: 8

“... 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.” 

[15] 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.9 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.10

[16] It is also important to note that the decision under appeal is of a discretionary nature. Usually such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. 11  It is not open to an appeal bench to substitute its view on the matters that fell for determination before the Commissioner in the absence of error of an appealable nature in the decision at first instance. As the High Court said in House v The King:12

“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

Consideration

[17] Section 392 of the FW Act sets out the statutory basis on which the Commissioner made the compensation order. It provides:

[18] The principles governing the application of section 392 (and its predecessors) have been well established. 13 Relevant for current purposes they were summarised by a full bench of the Commission in Balaclava Pastoral Pty Ltd t/a Australian Hotel Cowra v Nurcombe (footnotes omitted):14

“[42] The correct approach to the assessment of compensation was summarised by the Full Bench in the recent decision in Double N Equipment Hire Pty Ltd t/a A1 Distributions v Alan Humphries as follows (footnotes omitted):

“[16] The well-established approach to the assessment of compensation under s.392 of the FW Act, taking into account the matters specified in s.392(2), is to apply the “Sprigg formula” derived from the Australian Industrial Relations Commission Full Bench decision in Sprigg v Paul Licensed Festival Supermarket. This approach was articulated in the context of the FW Act in Bowden v Ottrey Homes Cobram and District Retirement Villages. Under that approach, the first step to be taken in assessing compensation is to consider s.392(2)(c) - that is, to determine what the applicant would have received, or would have been likely to receive, if the person had not been dismissed. In Bowden this was described in the following way:

‘[33] The first step in this process - the assessment of remuneration lost - is a necessary element in determining an amount to be ordered in lieu of reinstatement. Such an assessment is often difficult, but it must be done. As the Full Bench observed in Sprigg:

‘... we acknowledge that there is a speculative element involved in all such assessments. We believe it is a necessary step by virtue of the requirement of s.170CH(7)(c). We accept that assessment of relative likelihoods is integral to most assessments of compensation or damages in courts of law.’

[34] Lost remuneration is usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment. We refer to this period as the ‘anticipated period of employment’...’

[17] The identification of this starting point amount “necessarily involves assessments as to future events that will often be problematic”. Once this first step has been undertaken, various adjustments are made in accordance with s.392 and the formula for matters including monies earned since dismissal, contingencies, any reduction on account of the employee’s misconduct and the application of the cap of six months’ pay. This approach is however subject to the overarching requirement to ensure that the level of compensation is in an amount that is considered appropriate having regard to all the circumstances of the case.”

[19] We also adopt the observations recently made by a full bench in XL Express (Personnel) Pty Ltd v Biffin: 15

“It must be noted that that the power to order compensation is a power to order compensation in lieu of reinstatement. The assessment that is undertaken in determining the amount of compensation is essentially an assessment of income that an unfairly dismissed employee would have earned with the employer had the employment continued for a period determined by the Commission, less income earned from other sources, contingencies and other deductions. The assessment of compensation looks forward into a hypothetical future. Also relevant are non-monetary considerations such as impact on viability of an employer’s enterprise, misconduct contributions and the statutory cap.”

[20] We now turn to deal with the appeal grounds advanced by Needlework as we have categorised them.

Errors of Fact

[21] Needlework submit that the decision manifests an injustice having regard to the evidence that was before the Commissioner. In particular it said that:

•  the Commissioner had no reasonable basis for concluding that Ms Olesen would have been employed for a further nine months by the business. Needlework contends four months is what the Commissioner should have decided. As a result, it is said that he overestimated her loss;

•  the Commissioner failed to take into account relevant evidence about earnings Ms Olesen received or was projected to receive from her own business activities. As a result the Commissioner failed to make a sufficiently large deduction from the amount payable and ordered an excessive amount of compensation; and

•  the amount of compensation that should have been ordered was $6,350 not $12,550.

[22] In considering these submissions, it is noted that an appeal in an unfair dismissal matter which concerns the treatment of evidence must, under the FW Act, identify a “significant error of fact” 16.

[23] At the appeal hearing Needlework contended that the Respondent’s evidence about income received from Centrelink misled the Commissioner and caused him to fall into error. It was said that Ms Olesen had not remained on Centrelink but had moved onto a different government funded benefit, one associated with the establishment of a small business (the New Enterprise Incentive Scheme – NEIS).

[24] This contention does not establish error of fact on the part of the Commissioner, let alone a significant error of fact. Firstly, the evidence shows that Ms Olesen did disclose in cross examination that she had applied for and been accepted into the NEIS. Secondly, the Commissioner disregarded Centrelink income and was not in error in doing so. Thirdly, Needlework accepted on appeal that the income from Centrelink was equivalent to the income received from NEIS.

[25] It was also submitted by Needlework that the Respondent misled the Commissioner because the NEIS requires NEIS business to be the recipient’s primary full time activity. 17 Needlework said that the Commissioner could not have reasonably determined a compensation order based on future earnings of 15 hours per week work with Needlework whilst at the same time the Respondent was committing to the Australian government that she would operate her business as a primary full time activity.

[26] This contention does not establish error of fact on the part of the Commissioner, let alone a significant error of fact. Firstly, Needlework could have, but did not, produce evidence to support this submission at the hearing before Commissioner Ryan. It failed to do so. Secondly, the NEIS does not require the business activity to be the exclusive activity of a recipient, simply the primary activity. It is not incompatible with that proposition for a person to be supplementing a primary business activity with 15 hours per week casual work elsewhere.

[27] The Commissioner’s estimate that Ms Olesen could have reasonably been expected to have been employed for a further nine months at 15 hours per week at $30 per hour had she not been dismissed involved a discretionary judgement. At paragraph 33 of the Commissioner’s decision he describes his calculation of $17,550 as “its best guesstimate” based on the formula of 15 hours x $30 per hour x 39 weeks. The reasonableness of the 39 week figure and the 15 hour figure is brought into question on the appeal by Needlework. This finding was open to the Commissioner. The evidence before him was that the hours worked by Ms Olesen varied according to business conditions. In the months leading up to her dismissal she had worked in excess of an average of 15 hours per week. The evidence was that business conditions were likely to moderate in the months that followed, resulting in the probability her hours of work may be reduced. The estimate of 15 hours per week on which the Commissioner based his compensation order was not unreasonable having regard to this evidence and did not manifest an injustice to Needlework in the calculation made.

[28] In relation to the deduction for earnings by Ms Olesen the Commissioner relied on material supplied to him by Ms Olesen at and following the hearing. The Commissioner also said that “the Commission is also unaware of the amount of income reasonably likely to be earned by Ms Olesen during the period between the making or an order for compensation and the actual compensation” (paragraph 34 of the Commissioner’s decision). The insurance certificate Needlework says was in evidence dated 28 June 2017 refers to “turnover of $50,000”. Given that it appears agreed that Ms Olesen only commenced trading her own business in June 2017, it is reasonable to conclude that, at best, this was evidence of a projection rather than a statement of actual earnings. The Commissioner went on to say that he “must guess a figure”. The Commissioner did not err in not calculating his compensation order based on this figure.

[29] No doubt the Commissioner was in a difficult position given the limited evidence before him. It was not, however, the case that no evidence was relied upon. Further, as the authorities note, aspects of a decision relating to a compensation order do involve the difficult task of the Commission making estimates, particularly those concerning projected length of future employment had dismissal not occurred, and projected future earnings from alternate work. Those estimates must be objectively made and based on best available evidence or set of conclusions drawn from the evidence that can reasonably be relied upon.

[30] We consider that the Commissioner had limited but sufficient evidence before him to make the findings and draw the conclusions he did. We also consider that he provided sufficient detail to make his findings and conclusions readily apparent and explicable.

[31] We also add that having regard to the conduct of the matter and the opportunity given by the Commissioner to submit additional material on the question of remedy there was no error on the part of the Commissioner in not relisting the matter for further evidence and submission on remedy.

[32] There is no arguable case of appealable error on the facts or on the conclusion reached on the facts. Permission to appeal is not granted to Needlework with respect to its contention of alleged errors of fact or the misapplication of facts. Neither the decision nor the method for calculating the compensation order is disharmonious when compared with other decisions dealing with similar matters. Nor does the decision manifest an injustice having regard to the factors considered by the Commissioner, the evidence before him and the discretion he was entitled to exercise.

Small Business Impacts

[33] A ground on which Needlework seeks both permission to appeal and to advance the appeal is the contention that as a very small business the quantum of the compensation order “would place our business under great financial strain with the possibility of the business closing.” 18

[34] We accept that this appeal raises issues relevant to the application of a compensation order on a small business and that the contentions raised by Needlework identify a matter that could be said to be of general importance, being the considerations that should apply when taking into account the needs of small business and in particular the impact of compensation orders on the viability of a small business. The appeal also raises related issues about the obligation on the Commission to assist self-represented parties, including a self-represented small business and a self-represented employee who was, at the time of hearing, also operating a small business.

[35] For these reasons we consider that the public interest is enlivened and that permission to appeal should be granted in respect to that ground of appeal.

[36] We now turn to deal with that ground.

[37] Needlework is a very small business. It is comprised of a husband and wife as co-proprietors and one casual employee. It asserts that it is in severe financial constraint and unable to comply with the order without adverse impact on cash flow and going further into debt and overdraft, or possibly closing.

[38] We accept that the circumstances of small and micro businesses, including their vulnerability to compensation orders is a relevant consideration in determining compensation for an unfair dismissal and ensuring that the statutory objective of a “fair go all round” 19 is met. We note that the objects of Part 3-2 ‘Unfair Dismissal’ of the FW Act refer to a statutory scheme that balances both the needs of business and the needs of employees. In referring to the needs of business the legislature specifically says “including small business”. Small business is the only business category so specified. In so doing, specific attention is brought to their circumstances, amongst others.

[39] These considerations are taken into account under section 392(2)(a) of the FW Act which directs the Commission to consider “the effect of the order on the viability of the employer’s enterprise”. Some considerations relevant to the needs of small business may arise but fall short of impacting viability. Such considerations are able to be considered in the catch-all provision of section 392(2)(g) which directs attention to “any other matter that the FWC considers relevant”.

[40] Considerations relevant to the needs of small business, or business more generally, are not however stand-alone items. As a matter of principle, they constitute no lesser nor greater consideration than other factors set out in the statutory objects including the needs of employees. Statutory objects operate to help inform and guide the application of the specific statutory scheme but do not substitute for it. In relation to a compensation order, it is ultimately the provisions of section 392 which need to be applied in accordance with its terms and having regard, as the case may be, to the totality of those statutory objects relevant to the matters in issue.

[41] In any event, considerations relevant to small and micro businesses must be based upon relevant evidence on which findings can be made. It is an equivalent standard that applies to the needs and circumstances of employees. That evidence should be specific to the case at hand, in the same way that other issues requiring consideration under section 392 of the FW Act relevant to the employee and their earnings and earning capacity must be based on evidence specific to that employee’s circumstances.

[42] Whilst a self-represented small or micro business appearing before the Commission may understandably seek a level of guidance from the Commission about the proceedings and the legal framework in which it finds itself, the Commission carries no specific obligation to provide guidance beyond forming a general level of satisfaction that both parties have a basic understanding of the process in order to present their case, to test the case against them and have a reasonable opportunity to do so. 20 Ultimately it is for a party of whatever size or capacity to present its case in pursuit of its application or in defence of its position.21 It is also trite to observe that the Commission must not put itself in a positon where it provides guidance to one or other or both parties that compromises or gives the appearance of compromise to its independent statutory decision-making responsibilities or privileges one party over the other.22

[43] In this matter, both parties were self-represented and, somewhat unusually, at the time of hearing before the Commissioner both were operating a small business. In Needlework’s case, it was an established micro business. In the Respondent’s case, it was a micro business in its infancy. The Commissioner provided an opportunity for Needlework to cross examine the Respondent and bring evidence in its own right on all matters relevant to section 392. Needlework did cross examine Ms Olesen though this cross examination was primarily directed at the merits of the dismissal. However, it was made clear to both parties by the Commissioner that the hearing concerned all matters arising under the application, including the merits of the dismissal as well as the remedy sought.

[44] The Commissioner also provided Needlework (and the Respondent) with the opportunity to put before him whatever evidence they sought on the question of remedy both during proceedings and for a period immediately following the hearing. The Commissioner did not direct or request Needlework to provide evidence of the impact of a compensation order on its viability but did specifically draw attention to each of the matters outlined in section 392. In doing so, we are satisfied that the Commissioner met his obligation to provide procedural fairness to Needlework without privileging one self-represented party over the other.

[45] Needlework presented no evidence to the Commission on the question of the impact of a compensation order on the viability of its business.

[46] We are not satisfied that the Commissioner fell into either procedural or substantive error in this regard. In the absence of evidence on which he could make findings or estimate impacts it would have been wrong and improper for the Commissioner to speculate on what those impacts on Needlework’s viability might be. No explanation was given at the appeal hearing by Needlework as to why it did not present evidence to the Commissioner on this issue. In these circumstances the decision reveals no error. We adopt the further observations of the Commission in XL Express (Personnel) Pty Ltd v Biffin: 23

“The Deputy President cannot be fairly criticised for not taking into account a matter which the Appellant did not ask her to take into account. Moreover, on appeal an Appellant would not generally be permitted to raise a matter, which though available, it did not raise or argue at first instance. This is so whether the failure to raise or argue the matter was by omission or by design. The Appellant should be held to the case it ran at first instance. The issue it now raises is not in the nature of a jurisdictional issue going to power. This is a powerful reason alone for not granting permission to appeal. An appeal is not an opportunity to run a better case than that advanced at first instance.”

[47] Having granted permission to appeal on the issue of small business impacts and the management of small business parties, we find no appealable error.

Conclusion

[48] We are not satisfied that the Commissioner made errors of fact let alone serious errors of fact in making the compensation order. The compensation order was made only after the Commissioner found that the dismissal was harsh, unjust and unreasonable. It did not include compensation for shock or distress. It was not reduced on account of misconduct because the Commissioner found no misconduct. We are satisfied that the Commissioner took into account each of the factors in section 392(2) of the FW Act and applied them according to the evidence before him. In doing so he correctly applied the Sprigg approach.

[49] We have granted permission to appeal on the issue of small business impacts but have found no appealable error having regard to the facts or the manner in which proceedings were conducted.

[50] Accordingly the appeal is dismissed.

[51] Having determined the appeal in this manner, the stay order made is set aside. We note that section 393 of the Act permits the Commission to order that a compensation order be paid in instalments. Needlework did not apply for such an order either before the Commissioner or on appeal. Given that no evidence of the impact of the compensation order was called by Needlework it is not possible to draw any conclusion as to whether such an order would have utility or be appropriate having regard to the interests of both parties. We note that in the decision to stay the order the Commission observed that both Needlework and the Respondent claimed financial distress. In these circumstances we decline to make an order under section 393. The compensation order operates in the terms made by Commissioner Ryan.

DEPUTY PRESIDENT

Appearances:

S. Laughlin for the Appellant

A. Olesen on her own behalf

Hearing details:

2017.

Melbourne:

1 December.

 1   [2017] FWC 4862 Commissioner Ryan

 2   Order PR596870

 3   [2017] FWC 6022 (Decision) and PR 597785 (Stay Order) per Deputy President Anderson

 4   Notice of Appeal 7 November 2017 at paragraph 2.2

5 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ

6 (2011) 192 FCR 78; 207 IR 177 at [43]

7 O’Sullivan v Farrer (1989) 168 CLR 210 at 216-217 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78; 207 IR 177 at [44] -[46]

 8   [2010] FWAFB 5343; (2010) 197 IR 266 at [27]

9 Wan v Australian Industrial Relations Commission (2001) 116 FCR 481 at [30]

10 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343; (2001) 197 IR 266 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth [2010] FWAFB 10089; (2010) 202 IR 388 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; 207 IR 177; New South Wales Bar Association v McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663; (2014) 241 IR 177 at [28]

 11   House v The King (1936) 55 CLR 499 at [504]-[505] per Dixon, Evatt and McTiernan JJ.

 12   Ibid

 13   See, for example, Bowden v Ottrey Homes Cobram and District Retirement Village [2013] FWCFB 431; Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21; Ellawala v Australian Postal Corporation 17 April 2000 Print S5109

 14   [2017] FWCFB 429

 15   [2017] FWCFB 5441 at [35]

 16   Section 400(2) FW Act

 17   Exhibit A2 on appeal

 18   Notice of Appeal 3.2(a)

 19   Section 381(2)

 20   Jones T/A The Pet Cemetery & Crematorium v Ciuzelis [2015] FWCFB 84; Sorrell v Hutt Street Centre [2016] FWCFB 5505

 21   Tan v Australian Broadcasting Corporation [2016] FWCFB 2814: “It is the obligation of a member to ensure a fair hearing and to have regard to difficulties a party may have in representing themselves, however the role of the member is not the self-represented party’s advocate.”

 22   John Holland Pty Ltd T/A John Holland Aviation Services Pty Ltd v Salazar [2014] FWCFB 7813 at [24] citing Rajski v Scitec Corporation Pty Ltd [1986] NSWCA 1 at [28]

 23   [2017] FWCFB 5441 at [34]

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