DECISION

Fair Work Act 2009
s.604—Appeal of decision

Hanson Construction Materials Pty Ltd
v
Darren Pericich
(C2018/4449)

Appeal against decision [2018] FWC 4369 of Commissioner Spencer at Brisbane on 9 August 2018 in matter number U2017/12758.

[1] This decision concerns an application for a stay order by Hanson Construction Materials Pty Ltd (the Appellant). The stay order is sought pursuant to s 606 of the Fair Work Act 2009 (the Act) in relation to an appeal lodged against a decision issued by Commissioner Spencer on 9 August 2018 (the Decision). 1 In the Decision, the Commissioner determined, having previously found and determined in a decision issued on 25 May 20182 that Mr Darren Pericich (Mr Pericich; the Respondent) had been unfairly dismissed, to award compensation in the amount of $10,951.87, less applicable taxation, to be paid within 14 days.

[2] Section 606(1) of the Act provides as follows:

Staying decisions that are appealed or reviewed

(1) If, under section 604 or 605, the FWC hears an appeal from, or conducts a review of, a decision, the FWC may (except as provided by subsection (3)) order that the operation of the whole or part of the decision be stayed, on any terms and conditions that the FWC considers appropriate, until a decision in relation to the appeal or review is made or the FWC makes a further order.

[3] The Appellant seeks a stay of the whole of the order of Commissioner Spencer. The practical effect of a stay would be to suspend the obligation to pay the compensation until the appeal in this matter is determined.

Principles for staying the operation of a decision or order

[4] It is well established that, in deciding whether to exercise its discretion to grant a stay order, the Commission must first be satisfied that the appellant has an arguable case with some reasonable prospects of success, both in respect of permission to appeal and the substantive merits of the appeal.³ In addition, the balance of convenience must weigh in favour of the order subject to appeal being stayed.⁴

[5] These principles should be applied against the statutory framework that applies to appeals against decisions relating to unfair dismissal. Unlike appeals against decisions made under other provisions of the Act, permission to appeal a decision under Part 3-2 will only be granted if the Commission considers it to be in the public interest to do so.⁵ There is accordingly a higher threshold for permission to appeal.⁶

[6] Further, to the extent that the appeal is on a question of fact, the appeal can only be made on the ground that the decision involved a significant error of fact.⁷

[7] More generally, other errors said to have been made by the first instance decision-maker must be of a kind identified by the High Court in House v King.⁸

Background

[8] Mr Pericich was employed by the Appellant as a professional tipper driver. He commenced his employment on or about 10 April 2013 and was dismissed on 13 November 2017.

[9] Mr Pericich was dismissed by the Appellant for “unsafe driving” as a result of an incident on 9 November 2017 in which, while driving a truck with an attached trailer, he had a serious near miss when he failed to stop at red lights on a railway crossing on Cape Cleveland Road with a passenger train approaching.

[10] The unfair dismissal proceedings before the Commission were conducted at a hearing on 7 March 2018. Permission to appear was granted by the Commissioner pursuant to s 596 of the Act for legal representatives to appear for both the Appellant and Mr Pericich.

[11] The Commissioner heard sworn evidence from several witnesses including Mr Pericich and the Appellant’s Logistics Manager, Mr Shane Blank. The Commissioner also had access to dash cam footage of the incident as part of the evidentiary material before her. In her initial decision of 25 May 2018, 9 the Commissioner concluded that a valid reason for Mr Pericich’s dismissal had been established and that “the conduct of the Applicant involved taking an unnecessary risk that could have resulted in a serious accident”.10 The Commissioner further found that while a valid reason existed, Mr Pericich had not been accorded procedural fairness in the process of dismissal.

[12] The Commissioner concluded that Mr Pericich was not afforded procedural fairness; the allegations were not clearly put to him; and he was not given an opportunity to respond with a witness present prior to being stood down and then prior to termination. The Commissioner determined that reinstatement was not appropriate and then proceeded to address the question of compensation. In her decision of 25 May 2018, she directed the parties to make further submissions in relation to the issue of compensation, specifically in relation to the estimation of how much longer Mr Pericich would have remained in the Appellant’s employment but for the termination.

[13] In the subsequent Decision issued on 9 August 2018, the Commissioner determined to award compensation of $10,951.87, less applicable taxation, to be paid to Mr Pericich within 14 days.

The grounds of appeal

[14] The Appellant raises two grounds of appeal, contending that the Commissioner’s decision was affected by an error of law and a significant error of fact.

[15] By its first ground of appeal, the Appellant contends that the Commissioner erred in her application of s 392(2)(c) of the Act, contrary to prior authority, by not determining the period of time Mr Pericich would have remained employed by the Appellant had the Appellant afforded him procedural fairness.

[16] By its second ground of appeal, the Appellant contends that the Commissioner made a significant error of fact in her assessment under s 392(2)(c) of the Act, in finding that Mr Pericich’s employment would have continued for six months.

[17] The grounds of appeal are not matters that are to be determined in this stay application. Rather, the question to be determined is whether the order made by Commissioner Spencer on 9 August 2018 should be stayed. The purpose of examining the grounds of appeal is to consider whether they disclose an arguable case of error, with some reasonable prospect of success on appeal.

Arguable case with some reasonable prospect of success

[18] The Appellant contends that in considering s 392(2)(c) of the Act, the Commissioner failed to follow relevant legal authority in reaching her conclusion that Mr Pericich would have continued his employment for six months in circumstances where she had found a valid reason existed for his dismissal.

[19] The Appellant contends that in the circumstances of the present matter, the proper approach that ought to have been followed by the Commissioner was that of considering how much longer Mr Pericich would have remained employed had the Appellant afforded him procedural fairness. The conclusion of six months that was reached by the Commissioner in answering s 392(2)(c) of the Act and the ultimate compensation amount determined was based in part on an erroneous application of the law in the Appellant’s submission.

[20] The Commissioner described the competing submissions of the Appellant and Mr Pericich regarding the estimated length of employment at paragraphs [25] and [26] in the Decision where she states as follows:

“[25] In accordance with the decision in The Pet Cemetery, the parties were directed to address the estimated length of the continuation of the employment contract, but for the dismissal. For the purposes of s.392(2)(c), the submission of the Applicant was that he intended to remain employed for some time. There was no evidence that he had any intention of leaving the Respondent’s business, prior to his dismissal. The Respondent only relied on the incident in contention for the dismissal.

[26] The Respondent considered the Applicant’s employment would only have continued for a further week, to allow for a procedurally fair process to occur. The Respondent noted the risk taken by the Applicant as a driver, and considered the employment relationship would not continue for long.

[21] The Commissioner went on to conclude at paragraph [33] as follows:

“[33] The reasons in relation to the dismissal, based on the evidence, have been set out in the substantive decision. In the assessment of the continuation of the employment contract (as required in the consideration of compensation), it is considered that based on the Applicant’s prior employment and the procedural fairness issues, the particular circumstances of the Applicant’s driving as set out in relation to the incident, that the Applicant’s employment would have continued for six months.”

[22] It is relevant to observe that determination of the remuneration that a dismissed employee would have earned pursuant to s 392(2)(c) of the Act but for their dismissal is an inherently imprecise process. It requires a degree of speculation and consideration of a range of factors. In circumstances where the Commission has found that a valid reason for the dismissal was established but procedural flaws rendered the dismissal unfair, it is not the case that the only consideration in respect of s 392(2)(c) of the Act is how much longer would a procedurally fair process have taken. Were that the case, there would be little utility to requiring procedural fairness, as the assumption would be that no difference in outcome would have arisen had procedural fairness been accorded.

[23] The according of procedural fairness ensures an employee has an opportunity to respond and advance reasons why they believe allegations are unfounded and/or to provide matters for their employer to consider by way of mitigation. The provision of that opportunity may result in a different outcome for an employee under threat of dismissal to that which may have occurred but for the opportunity to respond having been provided. That is why the absence of an opportunity to respond in the context of considering s 392(2)(c) of the Act requires such a degree of speculation. It must be said, however, that consideration of what impact the procedural fairness steps would have yielded if provided, is likely to be more straightforward in circumstances such as where clear breaches of critical safety requirements have been established.

[24] In the present matter, the Commissioner was satisfied that Mr Pericich had engaged in conduct that posed a risk to the safety of himself and others by driving through a rail crossing at which the red lights were flashing and a passenger train was approaching. It is hard to envisage a more serious breach of safety rules by a heavy vehicle driver. The Commissioner in the circumstances also concluded that reinstatement was not appropriate. There is a significant tension between those findings and the Commissioner’s conclusion that Mr Pericich would have remained employed for a further six months.

[25] While the Commissioner’s decision makes reference to her consideration of a number of factors in arriving at the six month estimate for Mr Pericich’s continued employment, it does not adequately disclose her reasoning. Further, the Commissioner’s approach to considering s 392(2)(c) of the Act and her conclusion appears dissonant with recent authority. 11

[26] In my view there is an arguable case, with some prospects of success that the Commissioner has fallen into error and that the facts and reasoning upon which the Commissioner relied was an insufficient base on which to conclude that Mr Pericich would have remained employed for a period of six months.

Balance of convenience

[27] As to the balance of convenience, the Appellant confirmed that, if a stay were granted, it would be prepared to deposit the amount due to the Respondent into a trust account of the amount that would have been payable to Mr Pericich, pursuant to the Commissioner’s order, pending determination of the appeal. This weighs in favour of the Appellant in consideration of the balance of convenience.

[28] I also note that the preservation of the status quo and the prejudice the Appellant may suffer if required to pay the compensation in advance of the appeal hearing also favoured the Appellant in consideration of the balance of convenience.

Conclusion

[29] Taking all of these matters into account, I am satisfied that I should make an order staying the operation of the order of Commissioner Spencer in PR609283, pending the determination of the appeal.

[30] I will also order that the Appellant pays into the trust account of the Appellant’s legal representative amounts that would otherwise have been payable to Mr Pericich as contemplated by the Commissioner’s order. These sums shall be paid to Mr Pericich in the event that the appeal is unsuccessful.

[31] The application for a stay is granted. An order giving effect to my decision is issued separately in PR610009.

DEPUTY PRESIDENT

Appearances:

P Copeland for the Appellant.

K Fredericks for the Respondent.

Hearing details:

2018.

Melbourne

August 16

Printed by authority of the Commonwealth Government Printer

<PR610010>

 1   Mr Darren Pericich v Hanson Construction Materials Pty Ltd T/A Hanson Construction Materials Pty Ltd [2018] FWC 4369.

 2   Mr Darren Pericich v Hanson Construction Materials Pty Ltd T/A Hanson Construction Materials Pty Ltd [2018] FWC 1336.

3 Kellow-Falkiner Motors Pty Ltd v Edghill Print S2639, 24 January 2000 at [5]; applied in Bank of Sydney Ltd v Repici [2015] FWC 5511 et al.

4 Ibid. See also Coal and Allied Operations Pty Limited v Crawford and Others (2001) 109 IR 409 at [13].

5 Section 400(1) of the Act.

6 WorkPac Pty Ltd v Bambach (2012) 220 IR 313; FWAFB 3206 at 14.

7 Section 400(2) of the Act.

8 House v R (1936) 55 CLR 499.

 9   [2018] FWC 1336.

 10   Ibid, Paragraph [71].

 11   See Mr. Nigel Smith V Buick Holding Pty Ltd T/A DVG Automotive Group – Midland City [2016] FWCFB 3683 at [6]; Phillip Parker v Garry Crick’s (Nambour) Pty Ltd as The Trustee for Crick Unit Trust T/A Crick’s Volkswagen [2018] FWCFB 279 at [20].