FEDERAL COURT OF AUSTRALIA
Toms v Harbour City Ferries Pty Limited [2015] FCAFC 35
Citation:
Toms v Harbour City Ferries Pty Limited [2015] FCAFC
35
Parties:
CHRISTOPHER TOMS v HARBOUR CITY FERRIES
PTY LIMITED and FAIR WORK COMMISSION
File number:
NSD 1003 of2014
Judges:
ALLSOP CJ, SIOPIS J AND BUCHANAN J
Date of judgment:
16 March 2015
Catchwords:
INDUSTRIAL LAW - application under s 39B of
Judiciary Act 1903 (Cth) - where applicant was dismissed
from his employment by the first respondent as a ferry
master - where applicant breached first respondent's drug
policy - unfair dismissal proceedings brought before the
Fair Work Commission ("FWC") - where question for the
FWC was whether dismissal was "harsh, unjust or
unreasonable" - where Full Bench of the FWC reversed an
order of a Deputy President ordering reinstatement of the
applicant - whether Full Bench decision affected by
jurisdictional error - consideration of the history of the
term "harsh, unjust or unreasonable" - consideration of
"fair go all around" - consideration of the nature of
jurisdictional error by the FWC and a Full Bench of the
FWC
Legislation:
Constitution, ss 51(xx), 51(xxxv)
Conciliation and Arbitration Act 1904 (Cth)
Fair WorkAct 2009 (Cth), ss 341, 381(1)(c), 381(2), 382,
385(b), 387, 387(h), 390, 400(1), 539, 545, 577, 578, 591,
604(1), 607(3)
Industrial Relations Act 1988 (Cth)
WorkplaceRelations Act 1996 (Cth), s 170CA(2)
Marine Safety Act 1998 (NSW), s 28
Passenger Transport (Drug and Alcohol Testing)
Regulation 2010 (NSW), reg 17
Cases cited:
Harbour City Ferries Pty Ltd v Toms [2014] FWCFB 6249
Toms v Harbour City Ferries Pty Ltd [2014] FWC 2327
Toms v Harbour City Ferries Pty Ltd PR549780 Order (16
April 2014)
"
-2Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36
FCR20
Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36
FCR439
Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Byrne v Australian Airlines Ltd (1994) 47 FCR 300
Byrne v Australian Airlines Ltd (1992) 45 IR 178
Coal and Allied Operations Pty Ltd v Australian Industrial
Relations Commission (2000) 203 CLR 194
Construction, Forestry, Mining and Energy Union v
Australian Industrial Relations Commission (1998) 89 FCR
200
Craig v South Australia (1995) 184 CLR 163
Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947)
47 SR (NSW) 416
Gorgevski v Bostik (Australia) Pty Ltd (1991) 39 IR 229
Gregory v Philip Morris Ltd (1988) 80 ALR 455
Gregory v Philip Morris Ltd (1987) 77 ALR 79
House v The King (1936) 55 CLR 499
In re Loty and Holloway v Australian Workers' Union
[1971] AR (NSW) 95
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986)
162 CLR 24
Minister for Immigration and Border Protection v Singh
[2014] FCAFC 1
Minister for Immigration and Citizenship v Li (2013) 249
CLR332
Monsanto Chemicals (Australia) Ltd v Amalgamated
Engineering Union (1958) 90 CAR 27
Norbis v Norbis (1986) 161 CLR 513
Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB
1166
Public Service Association of South Australia v Federated
Clerks' Union of Australia, South Australian Branch
(1991) 173 CLR 132
R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944)
69 CLR407
R v Toohey; Ex parte Northern Land Council (1981) 151
CLR 170
R v War Pensions Entitlement Appeal Tribunal; Ex parte
Bott (1933) 50 CLR 228
Re Ranger Uranium Mines Pty Ltd; Ex parte Federated
Miscellaneous Workers' Union of Australia (1987) 163
CLR656
Short v FW Hercus Pty Ltd (1993) 40 FCR 511
Singer v Berghouse (1994) 181 CLR 201
Termination, Change & Redundancy Case (1984) 8 IR 34
Wade v Burns (1966) 115 CLR 537
Western Suburbs District Ambulance Committee v Tipping
[1957] AR (NSW) 273
-3Wong v R (2001) 207 CLR 584
Date of hearing:
26 February 2015
Place:
Sydney
Division:
FAIR WORK DIVISION
Category:
Catchwords
Number of paragraphs:
115
Counsel for the Applicant:
Mr M Gibian
Solicitor for the Applicant:
Australian Maritime Officers Union
Counsel for the First
Respondent:
Mr S Wood QC with Mr Y Shariff
Solicitor for the First
Respondent:
Corrs Chambers Westgarth
Counsel for the Second
Respondent:
The second respondent submitted save as to costs
IN THE FEDERAL
COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT
REGISTRY
NSD 1003 of 2014
FAIR WORK DIVISION
BETWEEN:
CHRISTOPHER
Applicant
TOMS
AND:
HARBOUR CITY FERRIES
First Respondent
PTY LIMITED
FAIR WORK COMMISSION
Second Respondent
JUDGES:
ALLSOP CJ, SIOPIS J AND BUCHANAN J
DATE OF ORDER:
16 MARCH 2015
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.
The application be dismissed.
Note:
Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT
REGISTRY
NSD 1003 0(2014
FAIR WORK DIVISION
BETWEEN:
CHRISTOPHER
Applicant
TOMS
AND:
HARBOUR CITY FERRIES PTY LIMITED
First Respondent
FAIR WORK COMMISSION
Second Respondent
JUDGES:
ALLSOP CJ, SIOPIS J AND BUCHANAN J
DATE:
16 MARCH 2015
PLACE:
SYDNEY
REASONS FOR JUDGMENT
ALLSOPCJ:
I have read the reasons of Buchanan J. I agree with them and with the orders proposed
therein.
I certify that the preceding one (1)
numbered paragraph is a true copy
of the Reasons for Judgment herein
of the Honourable Chief Justice
Allsop.
I
~f/
I
~~
Associate:
Dated:
16 March 2015
- 11 -
from the judgment of Sheldon J in In re Loty and Holloway v Australian Workers' Union
[1971] AR (NSW) 95 ("Loty's Case"). In terms of industrial jurisprudence in New South
Wales, Loty's Case represented an intended departure from the approach synthesised and
restated by McKeon J in Tipping's Case although, as I have attempted to show, that earlier
approach (at least in terms of its formulation) was nevertheless enshrined as a federal award
standard in 1984.
32
The real principle for which Loty's Case stands is to be found stated in the headnote of the
report of the judgment as follows:
(3)
As an industrial tribunal's objective in reinstatement cases is always
industrial justice, it must also in each such case give weight to (a) the
importance, but not the inviolability, of the employer's right to manage his
business, (b) the nature and quality of the employee's work, (c) the
circumstances concerning the employee's dismissal, and (d) the likely
practical outcome if an order of reinstatement be made.
but the case is generally better known for the colloquial declaration enshrined m the
following passage (at 99):
Mr Commissioner Manuel in a recent case put it in a nutshell and in language readily
understood in the industrial world when he conceived his duty to be to ensure "a fair
go all round".
(Italics in original.)
J
33
The discussion of the relevant principles by Sheldon J which followed shortly after this
observation was intended to indicate that the exercise of a discretion to reinstate turned
ultimately on notions of "fairness" (having regard to circumstances at the workplace) rather
than on the identification of "legal" rights or their infringement. [Sheldon J's judgment (and
his approach to "industrial justice") is, however, notable for the absence of any particular
consideration of the consequences of termination for particular employees. Adversity seems
to have been assumed].
In Re Ranger Uranium Mines Pty Ltd; Ex parte Federated
Miscellaneous Workers' Union of Australia (1987) 163 CLR 656 ("Ranger Uranium") the
High Court mentioned the development in approach represented by Loty's Case in the
following way (at 665):
Ordinarily, in industrial tribunals empowered to order reinstatement, the criterion for
the making of an order for reinstatement is that the dismissal was harsh, unjust or
unreasonable, although more recently the tendency has been to express the test in
terms of unfairness: see In re Loty and Holloway and Australian Workers' Union.
-3IN THE FEDERAL
COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT
REGISTRY
FAIR WORK DIVISION
NSD 1003 of2014
BETWEEN:
CHRISTOPHER
Applicant
TOMS
AND:
HARBOUR CITY FERRIES PTY LIMITED
First Respondent
FAIR WORK COMMISSION
Second Respondent
JUDGES:
ALLSOP CJ, SIOPIS J AND BUCHANAN J
DATE:
16 MARCH 2015
PLACE:
SYDNEY
REASONS FOR JUDGMENT
BUCHANAN J:
The application
3
This application asserts jurisdictional error by a Full Bench of the Fair Work Commission
("FWC"), established under the Fair Work Act 2009 (Cth) ("the FW Act"). The Full Bench
upheld an appeal from a Deputy President of the FWC who reinstated the applicant in his
employment as a ferry master after his dismissal for testing positive to a drug test for
cannabis.
The Full Bench concluded that the dismissal was not "harsh, unjust or
unreasonable" and, after granting permission to appeal, upholding the appeal and quashing
the reinstatement order it dealt with the application for reinstatement itself by dismissing it.
4
Did the Full Bench commit jurisdictional error?
5
Before I examine that question directly, I propose to consider the historical significance and
antecedents of the test which the FWC was required to apply. There are two reasons for
doing so.
6
The first is to emphasise the evaluative nature of the conclusion required, and the range of
matters which might contribute to it. The exercise of a discretion to order reinstatement is a
consequence, but not a necessary one, of a finding that a dismissal was harsh, unjust or
-4-
unreasonable. The development of that concept is instructive and an appreciation of its
content (both historical and contemporaneous) is necessary.
7
The second reason is to emphasise that, in combination with correction of error, an important
function of an appeal process which reviews or reconsiders the merits of a case, and its
outcome (i.e. an appeal "on the merits"), is to pursue the legitimate aim of developing and
maintaining a consistent and coherent body of principle. It is not foreign to the appellate
process, in the case especially of an industrial tribunal, to supervise the development,
coherence and understanding of "industrial standards".
In that connection, an important
matter in the present case was the significance to be attached to the drugs and alcohol policy
of the respondent. As I shall attempt to show, the development of principles of unfair
dismissal has traditionally recognised the importance of an employer's right to manage its
business. One issue in the present case concerns whether recognition of that right can be
fairly described as simply substituting a different view of the merits of the case, or whether it
involved the correction of an error made at first instance.
8
It will also be necessary to say a little about the nature and quality of error which may be
appropriately described as jurisdictional error in the context of the work of the FWC and the
particular role on appeal of the Full Bench.
The historical significance of "harsh, unjust or unreasonable"
9
A person is "protected from unfair dismissal" if covered by an award or enterprise agreement
(FW Act, s 382). The applicant was such a person. A person has been "unfairly dismissed"
if the FWC is satisfied (relevantly here) that the dismissal was "harsh, unjust or
unreasonable" (FW Act, s 385(b)).
10
The FWC is the most recent of a series of industrial tribunals established under federal
legislation. Its predecessors (in title) were the Commonwealth Court of Conciliation and
Arbitration and the Australian Conciliation and Arbitration Commission (Conciliation and
Arbitration Act 1904 (Cth)), the Australian Industrial Relations Commission ("AIRC")
(Industrial Relations Act 1988 (Cth) and the Workplace Relations Act 1996 (Cth)), and Fair
Work Australia (the FW Act). A traditional aspect of the role of both federal and State
industrial tribunals during most of the twentieth century, and the current one, has been to
consider the circumstances under which award or industrial agreement regulated employees
are dismissed and the circumstances in which they may be, or should be, reinstated to their
employment. The tests to be applied when considering those matters were, initially, within
-5 the discretion of the tribunal in question. Then they were stated, in general terms, in awards
made by the tribunal. More recently, legislatures have prescribed what tests should be
employed, but there is inevitably always a considerable element of judgment involved and the
remedy of reinstatement is never free from the exercise of some discretion, even where a
breach of some legal standard is proved in relation to a termination of employment.
11
Before it was used as a statutory test about unfair dismissal, the term "harsh, unjust or
unreasonable" was already established as an award provision prohibiting termination of
employment of that character. Before that, expressions very similar to it were frequently
used by industrial tribunals in Australia as a test to examine claims for reinstatement after
dismissal.
12
It will be sufficient, to illustrate the points I wish to make, to mention developments in New
South Wales and at the federal level. However, Queensland, South Australia and Western
Australia (in particular) also had well established industrial tribunals (or courts) which
developed a broadly similar body of principles or jurisprudence about unfair dismissal and
reinstatement.
13
Examination of grounds for reinstatement, and the principles which should be applied,
became routine in New South Wales as a consequence of a specific grant of jurisdiction to
deal with a "right ... to refuse to reinstate" as part of a catalogue or list of
"industrial matters".
Early approaches to the issue from cases as early as 1921 were
considered and summarised by McKeon J (as a member of a Full Bench of the Industrial
Commission of New South Wales in Court Session) in a seminal case, Western Suburbs
District Ambulance Committee v Tipping [1957] AR (NSW) 273 ("Tipping's Case"). [The
case was evidently seen as important - Sir Garfield Barwick QC appeared for the
Committee]. Part of McKeon J's distillation was as follows (at 280):
(7)
... it is the Commission's function to inquire whether the employer's action
is harsh or unjust towards the employee-in other words, whether the
employer has abused his rights to dismiss the employee (Greer's Case;
Doberer's Case) ; the proper test to be applied is : Has there been or has
there not been oppression, injustice or unfair dealing on the part of the
employer towards the employee? (Caldwell's Case); in exercising the right
to dismiss, has the employer acted unfairly, harshly, unjustly or
oppressively? (Doberer's Case).
-6 [Some of those expressions were later described, by Sheldon J, who also sat on the Industrial
Commission
of New South Wales, in an important
case to which I shall refer, as
"adjectival tyranny" but they remain in place nevertheless].
14
In 1947, power to address a "duty to reinstate"
was given by an amendment
to the
Conciliation and Arbitration Act 1904 (Cth) and, thereafter, attention began to be given to the
test to be applied to justify an order for reinstatement.
Such an order became available even
when an employee was dismissed on notice, as well as when dismissed summarily for
misconduct.
A test was adopted by the Australian Conciliation and Arbitration Commission
which required consideration
of whether a termination
of employment was "harsh and
unreasonable" (see Monsanto Chemicals (Australia) Ltd v Amalgamated Engineering Union
(1958) 90 CAR 27).
15
The various principles and expressions were well established when the matter became the
subject of specific federal award prescription.
16
The term "harsh, unjust or unreasonable" had its general federal award origins in the decision
by the Australian Conciliation and Arbitration Commission in the Termination, Change &
Redundancy Case (1984) 8 IR 34 ("TCR Case") which approved a standard clause to be
inserted in federal awards. The standard provision was in the following terms:
Termination of employment by an employer shall not be harsh, unjust or
unreasonable. For the purposes of this clause, termination of employment shall
include terminations with or without notice.
17
Although, as I have discussed, language of a similar type had been used by industrial
tribunals for many years when considering unfair dismissal cases on their merits, this was the
first generalised imposition of a positive obligation prohibiting dismissal of that character and
making it unlawful.
Cases in this Court to enforce the obligation followed (e.g. Gregory v
Philip Morris Ltd (1987) 77 ALR 79 - on appeal (1988) 80 ALR 455; Gorgevski v Bostik
(Australia) Pty Ltd (1991) 39 IR 229 - on appeal Bostik (Australia) Pty Ltd v Gorgevski
(No 1) (1992) 36 FCR 20, Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439;
Byrne v Australian Airlines Ltd (1992) 45 IR 178 - on appeal (1994) 47 FCR 300).
18
Then, in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 ("Byrne"), on appeal from the
Full Court of this Court, the High Court also gave some attention to the content of the
expression where it appeared in its award context.
-719
The central issues in the case were whether that award obligation also supported a claim for
damages (if breached) and whether a termination of employment in breach of such a clause
was illegal and void. Each question was answered in the negative by the High Court.
20
However, there was also an issue about whether breach of the award obligation had been
established. A judge of this Court found it had not been, but the Full Court found breaches of
procedural
fairness had occurred which rendered dismissal of the appellants (baggage
handlers employed at Sydney Airport) harsh, unjust or unreasonable.
In the High Court there
were cross-appeals against that finding.
21
The majority judgment in Byrne (Brennan CJ, Dawson and Toohey JJ) said (at 430):
Save for the prescription of periods of notice, cl 11 does not require the
adoption of any particular procedure for the dismissal of an employee. However, it is
clear that the use of an unfair procedure may result in a dismissal being harsh, unjust
or unreasonable. For example, the failure to afford an employee the opportunity to
explain apparent misconduct where there is an innocent explanation available would
result in the dismissal of the employee being in breach of clll(a). On the other hand,
if an employer were to observe the actual misconduct of an employee in
circumstances which allowed no innocent explanation, a summary dismissal might
not be in breach of clll(a). And facts which existed at the time of a dismissal, but
which come to light only subsequently, might justify the dismissal when otherwise it
would be harsh, unjust or unreasonable.
It was not, therefore, a permissible approach for the Full Court to reach a
conclusion adverse to the respondent based upon the procedure employed in
dismissing the appellants without considering whether the trial judge was correct in
reaching the conclusion that there was sufficient evidence to establish that the
appellants were involved in the misconduct alleged against them....
(Footnotes omitted.)
22
The minority judgment (McHugh and Gummow JJ) considered the possible content of the
obligation at a more general level, saying (at 465):
It may be that the termination is harsh but not unjust or unreasonable, unjust but not
harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the
concepts will overlap. Thus, the one termination of employment may be unjust
because the employee was not guilty of the misconduct on which the employer acted,
may be unreasonable because it was decided upon inferences which could not
reasonably have been drawn from the material before the employer, and 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.
and (at 468):
-8 Procedures adopted in carrying out the termination might properly be taken
into account in determining whether the termination thus produced was harsh, unjust
or unreasonable. The submissions for the respondent in the present appeals appeared
to concede this. But the burden of the respondent's submissions is that there was
error in determining the issue without regard to the very material circumstance of the
finding of the primary judge as to the complicity of the appellants in pilfering.
Those submissions should be accepted....
23
The observations of both the majority and the minority were made for the purpose of
determining that, while procedural failings might infringe the award obligation, it was
relevant also to examine the nature and seriousness of the conduct itself. Obviously, one
might see in the various passages a need to take into account all relevant factors and weigh
them in the balance, depending on the circumstances of the particular case. Then and now, a
final judgment is required, based on all the relevant circumstances, about whether a particular
. dismissal is harsh, unjust or unreasonable. A separate judgment, taking additional matters
into account if necessary, has always been required about whether an employee who was
"unfairly" dismissed should be reinstated.
That separate requirement remains, and is
important.
24
To that point in time, the content of the test to be applied, whether as a matter of discretion or
to give effect to an award obligation, was supplied by decisions of industrial tribunals or of
the courts. The obligation which required consideration in the present case, however, was not
an award obligation to be assessed only against the general formulation approved in the
TCR Case.
25
The protection in the FW Act, to which I have already referred, is accompanied by specific
statutory directions about the matters which must be taken into account when deciding
whether a dismissal was harsh, unjust or unreasonable. Although it may be readily inferred
that the legislature had some regard for the history of the provision in federal awards, and to
the observations of members of the High Court in Byrne, what required particular attention
by the FWC in the present case is the context set by the FW Act itself and the specific
directives which appear within it.
The present statutory scheme for unfair dismissal
26
Section 385(a) and (b) and s 387 of the FW Act provides:
385
What is an unfair dismissal
-9A person has been unfairly dismissed if the FWC is satisfied that:
(a)
the person has been dismissed; and
(b)
the dismissal was harsh, unjust or unreasonable; ...
(Emphasis in original.)
387
Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or
unreasonable, the FWC must take into account:
27
(a)
whether there was a valid reason for the dismissal related to the
person's capacity or conduct (including its effect on the safety and
welfare of other employees); and
(b)
whether the person was notified of that reason; and
(c)
whether the person was given an opportunity to respond to any
reason related to the capacity or conduct of the person; and
(d)
any unreasonable refusal by the employer to allow the person to have
a support person present to assist at any discussions relating to
dismissal; and
(e)
if the dismissal related to unsatisfactory performance by the personwhether the person had been warned about that unsatisfactory
performance before the dismissal; and
(f)
the degree to which the size of the employer's enterprise would be
likely to impact on the procedures followed in effecting the
dismissal; and
(g)
the degree to which the absence of dedicated human resource
management specialists or expertise in the enterprise would be likely
to impact on the procedures followed in effecting the dismissal; and
(h)
any other matters that the FWC considers relevant.
If a person has been unfairly dismissed, the FWC may order reinstatement or, if reinstatement
is inappropriate, may order compensation if an order for payment of compensation is
appropriate (FW Act, s 390).
28
In the performance of its functions the FWC must take into account the objects of the FW Act
and the objects in any part of the FW Act under which it is performing its functions
(FW Act, s 578). One object of Part 3-2 (which provides for the remedies of reinstatement or
compensation for unfair dismissal mentioned above) is s 381(1)(c):
..
- 10 381
Object of this Part
(1)
The object of this Part is:
(c)
29
Section 381(2) provides:
381
Object of this Part
(2)
The procedures and remedies referred to in paragraphs (1)(b) and (c),
and the manner of deciding on and working out such remedies, are
intended to ensure that a "fair go all round" is accorded to both the
employer and employee concerned.
Note:
30
to provide remedies if a dismissal is found to be unfair, with
an emphasis on reinstatement.
The expression "fair go all round" was used by Sheldon J in in re
Loty and Holloway v Australian Workers' Union [1971] AR
(NSW) 95.
The statutory scheme to which I have referred, its provision for the exercise of non-judicial
power and the antecedents of the basic test (a fair go all round) which is suggested in that
scheme (which I will discuss shortly) make it apparent, in my view, that the questions of
whether a dismissal is unfair and what (if any) remedy should be granted as a result are
matters consigned to the particular assessment and discretionary judgment of the FWC.
Although the legislature has given some direction to the FWC about matters to be taken into
account in its assessment, judgment of such matters and the selection of appropriate remedies
is left to a broad evaluation by the FWC, subject to the appeal mechanisms which the FW Act
provides. In particular, the matters offered as examples in the judgments in Byrne must be
considered against the specific directives which now appear in the FW Act and with adequate
regard to the fact that any matters to be taken into account additional to those in s 387(a) to
(g) are those which the FWC considers relevant under s 387(h).
A "fair go all round"
31
In the latter part of the twentieth century, in the period when such matters were generally left
to the judgment of industrial tribunals with known expertise, one iconic test which was
employed in unfair dismissal cases (which was later enshrined in the Workplace Relations
Act 1996 (Cth) - s 170CA(2), and is now to be found in the FW Act - s 381(2)) was distilled
- 11 -
from the judgment of Sheldon J in In re Loty and Holloway v Australian Workers' Union
[1971] AR (NSW) 95 ("Loty's Case"). In terms of industrial jurisprudence in New South
Wales, Loty's Case represented an intended departure from the approach synthesised and
restated by McKeon J in Tipping's Case although, as I have attempted to show, that earlier
approach (at least in terms of its formulation) was nevertheless enshrined as a federal award
standard in 1984.
32
The real principle for which Loty's Case stands is to be found stated in the headnote of the
report of the judgment as follows:
(3)
As an industrial tribunal's objective in reinstatement cases is always
industrial justice, it must also in each such case give weight to (a) the
importance, but not the inviolability, of the employer's right to manage his
business, (b) the nature and quality of the employee's work, (c) the
circumstances concerning the employee's dismissal, and (d) the likely
practical outcome if an order of reinstatement be made.
but the case is generally better known for the colloquial declaration enshrined m the
following passage (at 99):
Mr Commissioner Manuel in a recent case put it in a nutshell and in language readily
understood in the industrial world when he conceived his duty to be to ensure "a fair
go all round".
(Italics in original.)
J
33
The discussion of the relevant principles by Sheldon J which followed shortly after this
observation was intended to indicate that the exercise of a discretion to reinstate turned
ultimately on notions of "fairness" (having regard to circumstances at the workplace) rather
than on the identification of "legal" rights or their infringement. [Sheldon J's judgment (and
his approach to "industrial justice") is, however, notable for the absence of any particular
consideration of the consequences of termination for particular employees. Adversity seems
to have been assumed].
In Re Ranger Uranium Mines Pty Ltd; Ex parte Federated
Miscellaneous Workers' Union of Australia (1987) 163 CLR 656 ("Ranger Uranium") the
High Court mentioned the development in approach represented by Loty's Case in the
following way (at 665):
Ordinarily, in industrial tribunals empowered to order reinstatement, the criterion for
the making of an order for reinstatement is that the dismissal was harsh, unjust or
unreasonable, although more recently the tendency has been to express the test in
terms of unfairness: see In re Loty and Holloway and Australian Workers' Union.
- 12 (Footnote omitted.)
34
For many years after Loty's Case, in New South Wales in particular, the notion of "a fair go
all round" was used as the touchstone of "industrial justice" or "fairness".
Questions of the
practicability of reinstatement were often decisive in assessing whether reinstatement should
be granted, particularly in cases where any "unfairness" was not egregious.
35
It might be pertinent to observe, in that regard, that the application of the principle adopted by
Sheldon J led to different outcomes in Loty's Case for Mr Loty and Miss Holloway.
had each lost their employment
They
with the New South Wales Branch of the Australian
Workers' Union because their loyalty and faithful application to their duties was in question.
They were associated with the "Oliver group" which was ousted from influence (in the New
South
Wales
union)
by
the
"Barnes-McKay
group".
"clerical assistant"; Mr Loty was "Chief Industrial Clerk".
Miss Holloway
was
a
Miss Holloway was reinstated;
Mr Loty was not. The differing outcomes did not result from any different finding about the
merits of their respective dismissals, or from any consideration of personal hardship, but from
an assessment of the likely practical consequence of their reinstatement
in the workplace
itself.
36
The general principle to be applied was stated by Sheldon J in these terms (at 99):
The objective in these cases is always industrial justice and to this end weight must
be given in varying degrees according to the requirements of each case to the
importance but not the inviolability of the right of the employer to manage his
business, the nature and quality of the work in question, the circumstances
surrounding the dismissal and the likely practical outcome if an order of
reinstatement is made. There certainly may be cases where the dismissal had many
elements of unfairness but an industrial authority if it was convinced of the practical
uselessness of trying to re-establish the employer-employee relationship, would not
intervene at all. There may be other cases where there are reasonable prospects for
the future of the relationship if clarifying conditions are imposed.
37
This was the explanation which was given of the practical content of the idea of a fair go all
round. I take it, therefore, that this is the principle which is now enshrined in s 381(2) of the
FW Act which was to be borne in mind and applied in the present case.
Questions of
practicability of reinstatement do not arise, it might be noted, unless first there is "unfairness"
or lack of justification
for dismissal.
As assessed by Sheldon J, the practicability
reinstatement was a further threshold to cross after a dismissal was first shown to be unfair.
of
- 13 38
Miss Holloway was reinstated because the principal accusation against her was lack of
co-operation, which Sheldon J decided could be overcome on her part. Co-operation became
a condition of reinstatement.
Sheldon J said (at 106):
An award of reinstatement is not a guarantee of permanent employment. It is
a restoration of the status quo where a dismissal is regarded by an arbitrator as
having been unfair. This point needs special emphasis in this case. If I make an
award of reinstatement in this case, it would be in order to put the parties in the
position where they would have been as from 8th February if the dismissal had not
taken place. The future would depend upon events but if co-operation proved
impossible either through Miss Holloway's fault or, after a fair trial, because of
invincible incompatibilities in temperament and outlook, the Commission would not
intervene again. It has no right to try and run the branch office by remote control. Its
sole right is to require the parties to start again from the point where an injustice
occurred.
39
Mr Loty's work involved the implementation of policy for which the executive of the branch
was responsible.
inappropriate.
Without any finding of fault on his part, reinstatement
was deemed
Sheldon J said (at 110):
This is a different case from that of Miss Holloway both because of the nature of the
work involved and the reasons advanced for the dismissal. As I have already
indicated, most of Miss Holloway's work has to be done basically on the same lines
whichever group is in power and no question has been raised as to her general
efficiency. The case against her is solely based on unwillingness to co-operate and,
for the reasons already given, my view is that this question was not fairly tested. In
Mr Loty's case, the decision has been made in an area which is peculiarly the
province of the executive and the grounds on which the decision is justified extend
beyond merely considerations of personal relations although these have played a part.
The application on his behalf must be refused and therefore is dismissed.
40
It is trite to say that this case, which is the foundation for the objective of a fair go all round
now enshrined in the FW Act in s 381(2), involved the working out of that general principle
or objective in practice according to the individual circumstances of the case. But, at each
point in the analysis, other questions of principle required consideration
judgment, as is very obvious from any patient reading of the judgment.
and evaluative
It should not be
assumed that, in s 381(2) of the FW Act, Parliament has simply adopted an empty phrase,
stripped of its content and with no regard for its origin.
As Burchett J said in Short v FW
Hercus Pty Ltd (1993) 40 FCR 511 (at 518):
The context of an expression may thus be much more than the words that are its
immediate neighbours. Context may extend to the entire document of which it is a
part, or to other documents with which there is an association. Context may also
include, in some cases, ideas that gave rise to an expression in a document from
which it has been taken. When the expression was transplanted, it may have brought
- 14 with it some of the soil in which it once grew, retaining a special strength and colour
in its new environment. There is no inherent necessity to read it as uprooted and
stripped of every trace of its former significance, standing bare in alien ground. True,
sometimes it does stand as if alone. But that should not be just assumed, in the case
of an expression with a known source, without looking at its creation, understanding
its original meaning, and then seeing how it is now used.
41
Burchett J was referring to expressions
in industrial instruments, but in the case of the
meaning and intent of s 381 (2) of the FW Act it is apparent that Parliament has attempted to
bring with the transplanted expression "some of the soil in which it once grew".
42
Those matters are important for an assessment of the errors which the Full Bench of the FWC
is said to have made in the present case, and the argument that it lacked power or authority to
review or reverse the findings made at first instance which were relevant to the required,
overall, evaluation to be made about whether the applicant's
whether he should be reinstated.
dismissal was unfair, and
It should be accepted that Parliament
intends that
examination of the merits of unfair dismissal cases should be the particular province of the
FWC, and proceed upon a practical and pragmatic foundation.
That examination necessarily
extends to the possibility of review of reasons and outcomes on appeal.
Those are matters
not readily susceptible to narrow challenges on the grounds of "jurisdictional error".
Non-judicial power
43
In the case of federal industrial
tribunals established pursuant to the conciliation
and
arbitration power in s 51(xxxv) of the Constitution (rather than, as now, primarily under the
corporations power in s 51(xx)), in the period after 1956 keen attention was also needed to
the non-judicial character of the exercise of any power or discretion leading to an order for
reinstatement in employment.
Such a non-judicial body could not grant remedies based only
on its evaluation of existing rights and obligations.
(necessarily forward-looking)
Its power derived from the "arbitral"
character of the exercise it undertook - i.e. to establish new
rights; not to declare or enforce pre-existing
ones.
As the High Court pointed out in
Ranger Uranium (at 666):
The purpose of the Commission's mqUlry
obligations should be created.
44
Although the constitutional underpinnings
body.
The power it exercises
protection
IS
to determine whether rights and
have changed, the FWC remains a non-judicial
to order reinstatement
from "unfair" dismissal,
still represents vindication
of a
even though the legislature has hedged the concept
- 15 around with the various old-fashioned terms which Sheldon J disparaged in favour of a more
simple and recognisable approach.
45
Some remedies for breach of legal rights or standards (including reinstatement
In
employment) are available under the FW Act in this Court, or the Federal Circuit Court of
Australia, rather than in the FWC (e.g. for "adverse action" constituted by dismissal from
employment - ss 341, 539, 545).
Such proceedings fall within the description in
Ranger Uranium which was provided as a contrast to the exercise of arbitral power
(quoted above) (at 666):
The purpose of a court's inquiry and determination is to decide whether a
pre-existing legal obligation has been breached, and if so, what penalty should attach
to the breach.
The grant of remedies in such proceedings involves the use of judicial power, but the exercise
of power by the FWC does not.
46
Moreover, the FWC (including the Full Bench) is directed by the FW Act to perform its
functions and exercise its powers in a manner that "is quick, informal and avoids unnecessary
technicalities" (s 577). It is not bound by rules of evidence or procedure (s 591).
Jurisdictional error and the FWC
47
Although administrative tribunals must act within any jurisdictional limits which apply to
them, that requirement generally requires a correct appreciation of the task at hand and
diligent application to it rather than purity of result, or one where the merits of the result are
free from contention or legitimate dispute.
48
The basic test is stated by Craig v South Australia (1995) 184 CLR 163 where the High Court
said, when contrasting the work of administrative tribunals with that of inferior courts
(at 179):
If ... an administrative tribunal falls into an error of law which causes it to identify a
wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on
irrelevant material or, at least in some circumstances, to make an erroneous finding
or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of
power is thereby affected, it exceeds its authority or powers. Such an error of law is
jurisdictional error which will invalidate any order or decision of the tribunal which
reflects it.
49
Earlier, in Public Service Association of South Australia v Federated Clerks' Union of
Australia, South Australian Branch (1991) 173 CLR 132 ("PSA") a majority of the
- 16 High Court (Brennan, Dawson and Gaudron JJ, Deane and McHugh JJ dissenting) held that
the Industrial Commission of South Australia acted in excess of its jurisdiction.
Brennan J
distilled the test for relief as follows (at 142):
Judicial review on the ground of excess or want of jurisdiction is available when a
body purportedly acting in exercise of jurisdiction has no jurisdiction to act in the
particular way. Judicial review on that ground stands in contrast with judicial review
on the ground of a wrongful failure or refusal to exercise jurisdiction. In the former
case, there is no jurisdiction to exercise; in the latter, there is jurisdiction but no
exercise of it.
and (at 144):
The Full Commission misconceived its jurisdiction and failed to consider the true
question which they had todecide, ... This was ajurisdictional error.
(Footnote omitted.)
50
Dawson and Gaudron JJ said (at 160):
The issues raised when it is complained that necessary issues have not been decided,
and when it is asserted that, had they been decided, the result might have been
different, are different from the issue that arises when it is contended that a
discretionary decision is wrong... ,
A failure to exercise jurisdiction is a jurisdictional error, although, prima facie, it is
not an error involving an excess of or want of jurisdiction ...
and (at 161):
Thus, where a court or tribunal determines some matter or issue which it was not
called upon to determine, the determination is one which is beyond its jurisdiction.
51
The jurisdictional limits for an administrative tribunal also depend importantly upon the
specific nature of the task set for it. Thus, the particular role of the FWC on appeal must also
be borne in mind when assessing whether there was jurisdictional error by the Full Bench of
the FWC when it performed its own role on the appeal, bearing in mind that it is that decision
which is the subject of the present application.
52
In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000)
203 CLR 194 ("Coal and Allied'), the majority (Gleeson CJ, Gaudron and Hayne JJ) said of
the role of a Full Bench of the Australian Industrial Relations Commission on appeal
(at [31]):
- 17 31
There would only have been jurisdictional error on the part of the Full Bench
if it had misconceived its role or if, in terms used by Jordan CJ in Ex parte
Hebburn Ltd; Re Kearsley Shire Council, it ' 'misunder[stood] the nature of
[its] jurisdiction ... or 'misconceive[d] its duty' or '[failed] to apply itself to
the question which [s 45 of the Act] {s 45 was the appeal provision}
prescribes', or '[misunderstood] the nature of the opinion which it [was] to
form' '. The Full Bench did none of those things.
(Footnotes omitted.) {My note.}
53
That passage approved observations by Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley
Shire Council (1947) 47 SR (NSW) 416 ("Hebburn") at 420, which applied dicta from the
High Court in R v .WarPensions Entitlement Appeal Tribunal; Ex parte Batt (1933) 50 CLR
228 at 242-243 and R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407
at 432. The full statement of principle by Jordan CJ, in which those latter references appear,
is as follows:
I quite agree that the mere fact that a tribunal has made a mistake of law, even as to
the proper construction of a statute, does not necessarily constitute a constructive
failure to exercise jurisdiction: R. v. Minister of Health. But there are mistakes and
mistakes; and if a mistake of law as to the proper construction of a statute investing a
tribunal with jurisdiction leads it to misunderstand the nature of the jurisdiction
which it is to exercise, and to apply " a wrong and inadmissible test ": Estate and
Trust Agencies (1927) Ltd. v. Singapore Improvement Trust; or to" misconceive its
duty," or" not to apply itself to the question which the law prescribes "; The King v.
War Pensions Entitlement Appeal Tribunal; or " to misunderstand the nature of the
opinion which it is to form ": The King v. Connell, in giving a decision in exercise of
its jurisdiction or authority, a decision so given will be regarded as given in a
purported and not a real exercise of jurisdiction, leaving the jurisdiction in law
constructively unexercised, and the tribunal liable to the issue of a prerogative writ of
mandamus to hear and determine the matter according to law: R. v. Board of
Education.
(Footnotes omitted.)
54
That essential foundation was also the reason for the relief granted by the Supreme Court of
South Australia, which was approved by the High Court in PSA. Brennan J said (at 143-144),
with a reference to the passage from Hebburn set out above:
The essential relief which the F.C.U. and the A.S.W.U. sought and obtained by way
of judicial review was an order requiring the Full Commission to hear and determine
according to law the application for leave to appeal which, it was submitted, the Full
Commission had constructively failed to determine. The foundation for relief of this
kind is stated by Jordan CJ. in Ex parte Hebburn Ltd.; Re Kearsley Shire Council ...
(Footnotes omitted.)
- 18 55
It must therefore be understood that no attack, in proceedings of the present kind, is available
against the Full Bench merely upon the ground of a dispute or quibble with the quality of the
Full Bench reasons or the weight which it gave to particular aspects of the matter before it
unless some error is demonstrated which may be said to have the result that the Full Bench
has not really exercised the jurisdiction
given to it, leaving the jurisdiction
"in law
constructively unexercised" and thereby exposing the Full Bench to an order that it perform
the task it had failed to carry out (Hebburn; Coal and Allied) or, alternatively, that the
Full Bench has purported to determine some matter outside its jurisdiction altogether (PSA).
56
Finally, it might be worth bearing in mind the nature of the reasoning by a Full Court of this
Court which was overturned by the High Court in Coal and Allied. The Full Court accepted
that the appropriate test was the one enunciated by Jordan CJ in Hebburn (see Construction,
Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89
FCR 200 at 245). The Full Court concluded that a Full Bench of the AIRC had intervened in
the absence of any finding of error, in order to give effect to a desire to exercise a supervisory
role saying, for example, (at 233):
The appellate jurisdiction arising under s 45 is not, in relation to the exercise of a
discretionary power, a means of facilitating the exercise of the discretion in the way a
Full Bench believes is appropriate, in the absence of error, under the guise of
exercising a supervisory function.
57
The analysis and discussion in which the passage appears was criticised by the High Court in
various ways in Coal and Allied (see [25] to [30]).
In my respectful view, it should be
approached with caution, although it is not incorrect to observe (as the Full Court may have
intended to emphasise) that it was the identification of error which constituted the relevant
criterion for appellate intervention (Coal and Allied at [14]), and not merely the exercise of a
supervisory function in the absence of identified error:
58
The High Court observed in Coal and Allied (at [32]):
32
In his reasons for decision, Giudice J proceeded on the basis that the
Full Bench could intervene only if there was error on the part of Boulton 1. In
this his Honour was correct. Giudice J held that there was error on the part of
Boulton J. If he was wrong in that view (a matter upon which it is
unnecessary to express an opinion), that was an error within jurisdiction not
an error as to the nature of the jurisdiction which the Full Bench was required
to exercise under s 45 of the Act. Accordingly, it was not an error in respect
of which relief could be granted by way of prohibition or mandamus under
s 75(v) of the Constitution.
- 19 59
With respect, that is an important statement and it brings together a number of matters where
the High Court was critical of the analysis of the Full Court. The task on judicial review is
not simply to assess whether an administrative tribunal was right or wrong in its conclusions,
or whether it made errors in its analysis. The task is not to correct perceived errors made
within jurisdiction. The task is to examine whether the tribunal misconceived its role or
otherwise failed to exercise its jurisdiction so that its decision should not be seen as a true
exercise of the power committed to it at all.
The background facts
60
The applicant was employed by the respondent as a ferry master. He had been employed
since 1996, initially as a general hand, later as an engineer and in 2010 he obtained a
Master IV Certificate of Competency. He became a permanent ferry master in March 2011.
61
On 25 July 2013, a day on which he was rostered off duty, the applicant agreed to come in to
work to replace another employee on afternoon shift. The evening before he had, he later
admitted, smoked marijuana. He said he did so because of shoulder pain.
62
While on duty, the applicant misjudged an approach to a wharf and the ferry struck a pylon.
Although no one appeared then to be injured, the incident was a reportable one. The
applicant reported the incident about 30 minutes later, although he should have done so at
once. He was required, as a matter of routine, to cease his duties and attend the office of the
respondent where he was required to take a drug test at about 6 pm. The applicant did not
disclose that he had smoked marijuana the previous evening until the drug test returned a
positive reading that evening. When the drug test returned a positive reading for cannabis the
applicant was immediately suspended.
63
The respondent has a "zero tolerance" policy for drugs and alcohol.
It has statutory
obligations towards the public and it is an offence for some employees (including ferry
masters) to operate ferries whilst under the influence of alcohol or some drugs (Marine Safety
Act 1998 (NSW), s 28; Passenger Transport (Drug and Alcohol Testing) Regulation 2010
(NSW), reg 17).
64
After further investigation, the applicant was dismissed with five weeks pay in lieu of notice,
on 28 August 2013.
65
The applicant, with the assistance of the Australian Maritime Officers' Union, applied to the
Fair Work Commission for a remedy for unfair dismissal on 16 September 2013.
- 20-
The reinstatement decision
66
The application was decided in favour of the applicant by Deputy President Lawrence on
16 April 2014 ([2014] FWC 2327). The Deputy President was satisfied that there was a valid
reason for the dismissal of the applicant and that the other specifically mentioned factors in
s 387 of the FW Act were either neutral or did not suggest unfairness. Nevertheless, under
the general rubric of "any other matters that the FWC considers relevant" (s 387(h)) and
having regard to the object in s 381(2) to ensure "a fair go all round", Deputy President
Lawrence found that the dismissal was harsh, unjust or unreasonable.
67
The applicant was reinstated to his employment.
68
One factor that appeared influential in this outcome was a finding that there was no evidence
that a positive drug test was proof of impairment and there was no evidence of a link between
the drug use and the accident.
69
The respondent appealed.
The appeal decision
70
The appeal lay to a Full Bench with the permission of the FWC (s 604(1)). However,
s 400(1) provides that in an unfair dismissal case the FWC must not grant permission to
appeal unless satisfied that it is in the public interest to do so.
71
The Full Bench was so satisfied.
72
In my view, a conclusion that it was in the public interest to grant permission to appeal was
not a neutral circumstance. Although it did not serve to indicate that the appeal must
succeed, it certainly demonstrates that a particular threshold of importance and general
significance had been crossed. Although, at one level, the exercise of appellate power is
directed to the correction of error, that is only true in a particular sense. The exercise of a
power to hear and determine an appeal is more correctly described as one to consider
arguments about error. In some cases it may be thought important to confirm a particular
outcome, or the reasons for it. In others, it may be necessary or desirable to consider or
resolve the emergence of differing approaches to a particular question, whether at first
instance or at appellate level. In yet other cases, a need to correct error might satisfy the test.
73
Whatever the particular justification in a particular case for a conclusion that it is in the
public interest to grant permission to appeal, it may be only a short further step to the
..
"
- 21 identification of a particular error of approach or outcome, and the substitution of a different
result.
74
Section 607(3) states the powers of the FWC on appeal as follows:
607
Process for appealing or reviewingdecisions
(3)
75
The FWC
review:
may do any of the followingin relation to the appeal or
(a)
confirm,quashor varythe decision;
(b)
make a further decisionin relation to the matterthat is the
subjectof the appealor review;
(c)
refer the matterthat is the subject of the appealor reviewto
an FWC Member(otherthanan ExpertPanelMember)and:
(i)
require the FWC Member to deal with the subject
matterof the decision;or
(ii)
requirethe FWC Memberto act in accordancewith
the directionsof the FWC.
On the appeal the Full Bench quashed the decision of Deputy President Lawrence and
substituted its own decision that the application to the FWC for relief should be dismissed.
76
The Full Bench, in its short decision, turned very quickly to matters at the heart of Deputy
President Lawrence's reasoning, accepting the Deputy President's finding that there was a
valid reason for dismissal and that the specific matters stated in s 387 (except s 387(h)) did
not assist the applicant. That left for consideration by the Full Bench (as it had by Deputy
President Lawrence) only whether there were "any other matters" (s 387(h)) which the
Full Bench considered were relevant and whether they had been taken into account or,
conversely, whether the matters considered relevant by Deputy President Lawrence were
correctly taken into account.
77
The Full Bench thought the policy about drug and alcohol use was highly relevant. It thought
that the absence of proven impairment of the applicant was not relevant. Those conclusions
identified error in the approach taken by the Deputy President and in the decision-making
process. It is plain that the Full Bench was not speaking of relevance in a strict legal sense
(c.f. Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24). Rather, the
..
"
- 22Full Bench was indicating what matters were important enough to be potentially
determinative in the overall evaluation to be made.
78
After a short discussion of some matters of general principle stated by an earlier Full Bench,
the Full Bench said (at [17]):
[17] We have had regard to the facts of this application. The application is
concerned with serious misconduct which was a valid reason for the termination of
Mr Toms' employment. The serious misconduct was the breach of an important
policy by an employee at the most senior level of employment at Harbour City in a
situation where there was compliance with procedural fairness.
79
As is apparent from this passage, the Full Bench decided that the applicant's conduct
involved serious misconduct, even though the Full Bench appeared to accept that the utility
of urine testing for the use of drugs was contestable. The Full Bench had earlier said:
[8]
This Full Bench has some experience of applications involving the
application and efficacy of such workplace policies. We are not persuaded that urine
testing, the agreed method of drug testing at Harbour City, is a guide as to the actual
presence of marijuana in an employee's system or any impairment arising as a
consequence. It is a testing system which in this case indicated past use and no
present impairment.
[9]
Despite our reservations concerning the usefulness of Harbour City's policy
as an effective method of drug detection, when considering leave to appeal and the
merits of the appeal, we have identified and considered the misconduct of Mr Toms
as his attending work in breach of the policy.
80
The conclusions reached by the Full Bench about the relative importance and relevance of the
questions of impairment and breach of the policy may be seen in the following two
paragraphs which immediately precede the outcome of the appeal:
[27] The lack of any impairment arising from drug use, the absence of a link
between drug use and the accident and the absence of substantial damage to the
Marjorie Jackson are not factors relevant to the ground of misconduct identified as
non-compliance with the Policy. The fact is that Harbour City required its policy
complied with without discussion or variation. As an employer charged with public
safety it does not want to have a discussion following an accident as to whether or
not the level of drug use of one of its captains was a factor. It does not want to listen
to the uninformed in the broadcasting or other communications industry talk about
drug tests establishing impairment. It does not need to have a discussion with any
relevant insurer, litigant or passenger's legal representative about those issues. What
it wants is obedience to the policy. Harbour City never wants to have to have the
discussion.
[28]
The mitigating factors referred to and relied on by Deputy President
Lawrence are not mitigating factors that address the core issue, which was the serious
misconduct which led to the dismissal of Mr Toms. The core issue, the valid reason
..
,1
- 23 for termination of Mr Tom's employment was his deliberate disobedience, as a senior
employee, of a significant policy. The Deputy President does not address Mr Tom's
failure to comply with the Policy. The only mitigating factor relevant to this issue
was the use of marijuana as pain relief. Consequent upon that explanation is the
decision to accept a shift while aware of the likelihood of being in breach of the
Policy.
(Emphasis in original.)
81
It is clear that "deliberate disobedience" of the respondent's policy by a senior employee was
viewed by the Full Bench as the central factor to be assessed and not, as Deputy President
Lawrence had found, whether the drug use had a demonstrated or likely bearing on the
incident. At [24] the Full Bench also listed each of the other matters referred to as taken into
account by Deputy President Lawrence.
It is apparent from [28] that the Full Bench
determined that they did not provide a reason to intervene against the application and
enforcement of the respondent's policy.
82
Those conclusions, and the manner of their expression, are consistent only with a finding by
the Full Bench that Deputy President Lawrence had made errors in the decision-making
process, errors in his findings and conclusions and an error in the exercise of his discretion to
reinstate the applicant.
Was there jurisdictional error?
83
The asserted jurisdictional errors are identified
In
the following way
In
the written
submissions for the applicant:
4.
Mr Toms submits that the Full Bench fell into jurisdictional error in that it:
(a)
The Full Bench failed to properly undertake its appellate function by
failing to identify error in the decision-making process of the Deputy
President and instead substituting its own view of the merits of the
application.
(b)
The Full Bench imposed erroneous limitations on the unfair
dismissal jurisdiction of the Commission not found in the Act by
requiring that, if a valid reason is found, there must be "significant
mitigating factors".
(c)
The Full Bench failed to have regard to and considered irrelevant
mitigating factors put forward by Mr Toms in assessing whether the
dismissal was harsh, unreasonable or unjust.
(d)
Critical aspects of the Full Bench's reasoning were based on findings
that were supported by no evidence or which were irrational, illogical
or lacking in any probative foundation.
..
;
...
- 24(e)
84
If the Full Bench did validly find appealable error, it erred as a
matter of jurisdiction in dismissing Mr Toms' application for relief
without validly making a finding as to whether his dismissal was
"harsh, unjust or unreasonable".
I cannot accept any of those criticisms as one~ which raise any jurisdictional
error in the
circumstances of the present case, for the following reasons:
(a)
85
No identification of error in the decision-making process?
The contention obviously relies on observations by the High Court in Coal and Allied at [21]
(which must be read with [19] and [20]):
19
"Discretion" is a notion that "signifies a number of different legal concepts".
In general terms, it refers to a decision-making process in which "no one
[consideration] and no combination of [considerations] is necessarily
determinative of the result". Rather, the decision-maker is allowed some
latitude as to the choice of the decision to be made. The latitude may be
considerable as, for example, where the relevant considerations are confined
only by the subject matter and object of the legislation which confers the
discretion. On the other hand, it may be quite narrow where, for example, the
decision-maker is required to make a particular decision if he or she forms a
particular opinion or value judgment.
(Footnotes omitted.)
20
In the present case, the decision by Boulton J to terminate the bargaining
period involved, in effect, two discretionary decisions. The first was as to his
satisfaction or otherwise that the industrial action being pursued posed a
threat for the purposes of s 170MW(3) of the Act. Although that question had
to be determined by reference to the facts and circumstances attending the
industrial action taken in support of claims with respect to a certified
agreement, the threat as to which his Honour had to be satisfied was one that
involved a degree of subjectivity. In a broad sense, therefore, that decision
can be described as a discretionary decision. And if Boulton J was satisfied
that there was a threat for the purposes of s 170MW(3), that necessitated the
making of a further discretionary decision as to whether the bargaining
period should be terminated.
21
Because a decision-maker charged with the making of a discretionary
decision has some latitude as to the decision to be made, the correctness of
the decision can only be challenged by showing error in the decision-making
process (82). And unless the relevant statute directs otherwise, it is only if
there is error in that process that a discretionary decision can be set aside by
an appellate tribunal. The errors that might be made in the decision-making
process were identified, in relation to judicial discretions, ill
House v The King in these terms:
"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
..
"
- 25 exercise its own discretion
materials for doing so."
(82)
ill
substitution
for his if it has the
See Norbis v Norbis (1986) 161 CLR 513 at 518-519, per Mason and
Deane JJ.
(Other Footnote omitted.)
86
The present case first required a broad evaluation about whether the termination of the
applicant's employment was "harsh, unjust or unreasonable".
In Coal and Allied an
evaluation of a similar broad kind was referred to at [20] as a discretionary judgment "in a
broad sense". The decision about a remedy was more classically discretionary, but that point
was only reached after a conclusion of unfair dismissal.
87
The reference to House v The King (1936) 55 CLR 499 at 505 which was given in Coal and
Allied at [21] was related to "judicial discretion" but the principles in House v The King have
come to be applied in a broader context. In appeals in some other fields of judicial enquiry
which involve a two-step examination (satisfaction of conditions for judicial examination,
followed by discretionary relief) appellate review of the first stage (as well as the second)
also depends on House v The King principles even where the first stage may be described as a
question of ultimate fact, or "jurisdictional" (see e.g. Singer v Berghouse (1994) 181 CLR
201 at 212). The underlying rationale concerns appellate restraint.
88
The FWC (and its predecessors) frequently refer to House v The King as a guide to their own
approach on appeals (as did Giudice J in the proceedings in the AIRC which led to Coal and
Allied - see Coal and Allied at [25]).
89
The error of acting on a "wrong principle" referred to in House v The King is a reference to
principles developed often as part of judge-made law, usually by appellate courts at various
levels in the judicial hierarchy. The principles developed and applied by industrial tribunals
are equally dynamic as any emanating from the courts. Particularly is that so in the case of
the leading federal industrial tribunal which (to take only one example) developed and stated
wage fixing principles over many years for the purpose of arbitral jurisdiction which were
then systematically applied and enforced on appeal without any serious suggestion of
jurisdictional error. The power of the concept of "a fair go all round" was first derived from
its adoption as a principled modification of earlier formulations (since, ironically, re-enacted
- 26 by the legislature) which were themselves statements of principle fashioned by industrial
tribunals; not by parliaments.
90
Furthermore, the identification in House v The King of the circumstances which support a
proper finding of error
include
(in a continuation
of the short passage
quoted
in
Coal and Allied):
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.
(Emphasis added.)
91
The concept of acting on a wrong principle must be accommodated to all those matters in the
present case.
92
The specific reference in Coal and Allied at [21] (before the extract from House v The King)
to Norbis v Norbis (1986) 161 CLR 513 at 518-519 should also be noted.
In that passage
Mason and Deane JJ said:
The principles enunciated in House v. The King were fashioned with a close eye on
the characteristics of a discretionary order in the sense which we have outlined. If the
questions involved lend themselves to differences of opinion which, within a given
range, are legitimate and reasonable answers to the questions, it would be wrong to
allow a court of appeal to set aside a judgment at first instance merely because there
exists just such a difference of opinion between the judges on appeal and the judge at
first instance. In conformity with the dictates of principled decision-making, it would
be wrong to determine the parties' rights by reference to a mere preference for
a different result over that favoured by the judge at first instance, in the absence
of error on his part. According to our conception of the appellate process, the
existence of an error, whether of law or fact, on the part of the court at first instance
is an indispensable condition of a successful appeal.
(Emphasis added.) (Footnote omitted.)
93
The important aspect of the references in Coal and Allied at [21] (for the task of appellate
review) is, in my respectful view, that the exercise of a discretion should not (as a matter of
principle at least) be overturned on a mere preference for a different legitimate result and (as
a matter of jurisdiction)
error must be found to exist as part of the appellate process before
intervention is permissible.
94
The basic principle was stated in Coal and Allied at [14]:
- 27 14
Ordinarily, if there has been no further evidence admitted and if there has
been no relevant change in the law, a court or tribunal entertaining an
appeal by way of rehearing can exercise its appellate powers only if
satisfied that there was error on the part of the primary decision-maker.
That is because statutory provisions conferring appellate powers, even in the
case of an appeal by way of rehearing, are construed on the basis that, unless
there is something to indicate otherwise, the power is to be exercised for
the correction of error. However, the conferral of a right of appeal by way
of a hearing de novo is construed as a proceeding in which the appellate body
is required to exercise its powers whether or not there was error at first
instance.
(Emphasis added.) (Footnotes omitted.)
95
The Full Bench was therefore obliged to only intervene if satisfied there was error. It seems
to me to be clear beyond reasonable argument that the Full Bench held the view that Deputy
President Lawrence had fallen into error. As I said earlier, the effect of the Full Bench's
reasoning is that it clearly decided that Deputy President Lawrence made errors in the
decision-making process and an error in his finding that the dismissal was harsh, unjust or
unreasonable. It followed, inevitably, that Deputy President Lawrence made an error in
ordering reinstatement. The pre-condition for such an order was not established. On the
contrary, the termination of employment was found by the Full Bench not to be harsh, unjust
or unreasonable.
96
Apart from a proper understanding of the principles which apply to appellate review, the fact
that evaluative judgments are required (both at first instance and on appeal) at each of the
different stages in the hearing and determination of an unfair dismissal case has an important
significance for any attempt at judicial review of the final outcome. Unless the Full Bench
misunderstood its own role, including the way to approach its task of appellate review, the
broad evaluative judgment required also from it is not readily amenable to the prerogative
writs.
97
This is because if the Full Bench had made an error in its assessment, or errors in reaching its
conclusion, they would normally be errors within jurisdiction and not an error or errors as to
the nature of the jurisdiction which the Full Bench was required to exercise (Coal and Allied
at [32]).
(b)
98
Erroneous limitations?
This criticism relates to the adoption by the Full Bench of statements by an earlier Full Bench
in Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 ("Parmalat") (at [24]):
- 28 [24] ... Having found a valid reason for termination 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....
99
It is convenient to refer again to Norbis v Norbis to make a point which applies to the
Full Bench equally with appeal courts - it is not an error to adopt guidelines on matters of
principle to foster consistent decision-making. That does not represent an impermissible
fetter on the exercise of a discretion. The following passage in Norbis v Norbis follows
immediately after the passage set out earlier:
It has sometimes been said by judges of high authority that a broad discretion left
largely unfettered by Parliament cannot be fettered by the judicial enunciation of
guidance in the form of binding rules governing the manner in which the discretion is
to be exercised: see, e.g. Mallet; Evans v. Bartlam; and Gardner v. Jay. However, it
does not follow that, because a discretion is expressed in general terms, Parliament
intended that the courts should refrain from developing rules or guidelines affecting
its exercise. One very significant strand in the development of the law has been the
judicial transformation of discretionary remedies into remedies which are granted or
refused according to well-settled principles: United Engineering Workers' Union v.
Devanayagam. It has been a development which has promoted consistency in
decision-making and diminished the risks of arbitrary and capricious adjudication.
The proposition referred to at the beginning of this paragraph should not be
seen as inhibiting an appellate court from giving guidance, which falls short of
constituting a binding rule, as to the manner in which the discretion should be
exercised: ...
(Emphasis added.) (Footnotes omitted.)
[The implicit criticism in Wong v R (2001) 207 CLR 584 at [79]-[80] of a passage
which then follows does not affect the authority of the statement I have emphasised.]
100
Statements of principle often serve a useful and legitimate function. They provide a body of
appellate guidance against which to test suggestions of error in future cases. They cannot
substitute for, or alter, a statutory prescription but they are not jurisdictionally flawed unless
they are given (or assume) the status of a "rule" or are general pronouncements not related
sufficiently to the facts of the particular case (see, by way of example of the principle in the
exercise of federal appellate judicial discretion, Wong v R (2001) 207 CLR 584 per Gaudron,
Gummow and Hayne JJ at [83]). It is arguable that the statement in Parmalat which I set out
earlier, infringed this restriction.
It appears to be a dogmatic pronouncement if it was
intended as a general rule. It could not fetter the broad evaluative task assigned by the
FW Act using the principles I have discussed of "a fair go all round". But, in a case such as
"'-
l)
- 29the present, attention must remam focussed on the significance of the statement for the
outcome of the present case, not some other case.
101
In my view, no jurisdictional error by the Full Bench has been demonstrated in this respect.
In the present case the Full Bench did not ultimately resort to generalities drawn from an
earlier case. It put aside the "other" factors which Deputy President Lawrence had regarded
I
as relevant (and ultimately decisive) under s 387(h) and brought to account further matters to
which it felt Deputy President Lawrence had given insufficient attention.
That did not
involve the imposition of "erroneous limitations on the unfair dismissal jurisdiction".
(c)
102
Failure to considermitigating/actors?
The written argument on this issue commences as follows:
29.
In addition, the Full Bench regarded mitigating factors referred to by the
Deputy President as irrelevant to the determination of whether Mr Toms'
dismissal was harsh, unjust or unreasonable.
and continues:
34.
36.
103
Further, the Full Bench disregarded mitigating factors favouring Mr Toms
because they were said to not address the "core issue" of valid reason.
Mitigating factors such as Mr Toms' length of service, absence of past
disciplinary history, assistance provided in the investigation, inability to find
alternative employment and limited employment options were, on any view,
relevant considerations in assessing the consequences of dismissal for
MrToms.
I
By finding error on the part of the Deputy President by disregarding
considerations necessary to assess the consequences of dismissal for the
employee or whether the penalty of dismissal was disproportionate to the
misconduct found, the Full Bench misunderstood the Commission's
jurisdiction, asked itself the wrong question and failed to have regard to
essential and relevant considerations.
In my view, those submissions misstate the terms and effect of the Full Bench decision and
identify no jurisdictional error (although the reference to "finding error" in [36] should be
noted for its contrast to Ground (a) - that the Full Bench failed to identify error).
104
The Full Bench listed (at [24]) the factors which Deputy President Lawrence took into
account. It commented on some:
[25]
We consider that Mr Toms' seniority and his very high level of responsibility
are factors which attract sympathy when considering outcome, but equally those
- 30 factors demand a high level of compliance with policy.
referred to additional matters:
[26]
In addition, Mr Toms failed to immediately inform Harbour City of the
potential for a positive finding. He put off the moment of confession as long as he
could. This was not taken into account by the Deputy President.
and then moved to the matters I set out earlier in [27] and [28]. In particular, the Full Bench
said (at [28]):
[28]
The mitigating factors referred to and relied on by Deputy President
Lawrence are not mitigating factors that address the core issue, which was the serious
misconduct which led to the dismissal of Mr Toms. The core issue, the valid reason
for termination of Mr Tom's employment was his deliberate disobedience, as a senior
employee, of a significant policy....
105
In the written argument about this suggested error, the applicant also contended that the
Full Bench failed to address the gravity of the applicant's conduct by disregarding "the lack
of any impairment" and "the absence of any link with the accident". At [27] the Full Bench
said:
[27]
The lack of any impairment arising from drug use, the absence of a link
between drug use and the accident and the absence of substantial damage to the
Marjorie Jackson are not factors relevant to the ground of misconduct identified as
non-compliance with the Policy....
106
In my view, each of these complaints is a complaint about the weight or significance which
the Full Bench gave (or did not give) to particular matters. In my view, that illustrates that in
this, and other, respects the argument advanced slipped from a contention of jurisdictional
error to argumentative debate canvassing the merit of the Full Bench's approach. As a result,
it fails to point to any jurisdictional error.
107
The argument of the applicant sought to elevate from the broad evaluative sweep of the
judgment of what is harsh, unjust and unreasonable in s 385(b), a statutory requirement to
give weight to each and every factor that could be said to weigh in the balance in favour of an
applicant as a consequence of termination.
108
Section 385(b) fulfils no such function. The FWC is entitled to approach its task by focusing
on considerations it considers to be relevant (while also complying with s 387). Here, its
view (after identifying what it perceived to be the error in the Deputy President's approach)
was that the core question - the deliberate disobedience of a significant policy (one central to
- 31 the safety of the public and the public's confidence in the safety of ferry travel) was not
touched by a lack of evidence of impairment, or by a lack of evidence of causal relationship
between the event and the cannabis, or by the other considerations that were said to weigh in
the balance in favour of the applicant.
(d)
109
No evidence or irrational?
Each of those is a serious charge. They amount to an accusation of a failure to carry out the
assigned task, or attempting to do so in a way which is manifestly inadequate or capricious.
As the respondent's submissions pointed out, the statements about which specific complaint
was made (at [27]) reflected matters debated in the proceedings and reflected in the policies
and evidence in contest in the proceedings.
110
The tests which must be applied in considering whether a decision is legally unreasonable are
those stated by the High Court in Minister for Immigration and Citizenship v Li (2013) 249
CLR 332, as further discussed in Minister for Immigration and Border Protection v Singh
[2014] FCAFC 1 especially at [44].
111
Applying those tests, this argument must be rejected.
(e)
112
No Full Bench finding supporting its order?
The way in which the first argument of jurisdictional error discussed earlier was formulated
makes it apparent at the outset that this criticism has no substance. There, the criticism was
that the reasoning of the Full Bench was directed to the substitution of its own view of the
merits, rather than an examination of specific error. That assertion is destructive of any
proposition that the Full Bench failed to address the question of whether the dismissal of the
applicant was harsh, unjust or unreasonable.
113
In any event, there is no substance in the contention that the reasons of the Full Bench were
not satisfactorily addressed to the question of whether the termination of the applicant's
employment was harsh, unjust or unreasonable. A finding to that effect by the Deputy
President was a fundamental pre-condition to any order for reinstatement. Whether that
finding was correct was the very subject of the appeal, and the arguments of both parties.
114
Once the Full Bench found error in the finding that the termination was harsh, unjust or
unreasonable (as it undoubtedly did) it was open to it to quash the order for reinstatement.
Once that was done, it was necessary for the Full Bench to take some further step. Unless the
",_"1
J.
- 32 application
for reinstatement
was remitted
for further
hearing,
after the order
for
reinstatement was quashed it was inevitable that the Full Bench would deal with the question
itself. It was open to the Full Bench to decide the original application itself, which is what it
did. It is in no way surprising that it did so as an extension of its reasons for quashing the
order for reinstatement and by applying the findings it had already made.
Its decision to
dismiss the application must be taken to have reflected the matters discussed by it in
concluding that Deputy President Lawrence had erred in his own decision.
Conclusion
115
I would dismiss the application.
Costs were not sought.
I certify that the preceding one
hundred
and
thirteen
(113)
numbered paragraphs are a true copy
of the Reasons for Judgment herein
of the Honourable Justice Buchanan.
Associate:
Dated:
16 March 2015