Fair Work Act 2009
s.604—Appeal of decision

Appeal against decision [2014] FWC 3040 of Commissioner Cambridge at Sydney on 9 May 2014 in matter number U2013/12907 - permission to appeal - whether Commissioner had erred in law in respect to his findings on repudiation - errors of fact - whether Commissioner’s findings were inconsistent with contemporaneous documents - no appealable error - permission to appeal refused.

[1] This is an application by City Motor Transport Pty Ltd (the Company) for permission to appeal and, if granted, an appeal against a decision 1 and order2 made by Commissioner Cambridge on 9 May 2014. The Commissioner determined that Mr Zlatko Devcic (the respondent) had been unfairly dismissed by the Company and that an amount approximating 26 weeks’ remuneration be ordered to be paid as compensation.

[2] The factual background to the matter may be set out in brief terms as follows:

- the Company operates a motor vehicle rental business and employs about twelve persons in an office-based environment;

- the respondent commenced employment with the Company in August 2006 and was employed in the full-time position of a rental manager;

- on 20 June 2013 the respondent sent an email to the Company requesting annual leave of 4 weeks and 4 days (from 1 July to 1 August 2013) to facilitate his travel to Croatia to attend to his father’s burial;

- the respondent had only 2 weeks accrued annual leave available and expected to take the additional amount of time off as unpaid leave;

- on 28 June 2013 the respondent was paid his weekly wages and given a cheque for payment of two weeks annual leave, together with a note which was headed “Termination Pay - Employer [sic] Resigned (Notice by Employee)”;

- on 1 July 2013, the day the respondent departed for Croatia, he sent an email to the Company refuting that he had resigned and requesting confirmation that he was on 2 weeks annual leave and the remainder as leave without pay;

- the respondent returned to Australia on 1 August and, after a brief telephone call to the Company, he received an SMS message which invited him to “apply for a position”;

- later that day the respondent sent an email refuting that he had resigned;

- on 5-9 August 2013, the respondent attended the workplace and undertook limited duties;

- during that week, the Company’s managing director was absent due to a serious medical condition; and

- on 9 August 2013, the respondent was advised by the Company’s operations manager that she considered he had resigned and that he should leave the premises.

[3] The respondent claimed that he was unfairly dismissed when he was directed to leave the workplace on 9 August 2013. The Company contended that the respondent had resigned his employment in a conversation with Ms Angela Shaw, Operations Manager, on 24 June 2013 and that this had been confirmed with the note on 28 June which accompanied the payment for his annual leave. The Company also contended that the respondent had been inadvertently allowed to resume work for the period 5 to 9 August 2013.

[4] There was strongly contested evidence in the case as to the communications between the respondent and the Company about his leave. The respondent gave evidence that he was granted verbal approval on 17 June 2013 by Mr Anatoly Kushnir, the Managing Director of the Company, to be absent for at least four weeks to attend the burial of his father. The evidence of the Company was that Ms Shaw advised the respondent on 24 June 2013 that, due to operational requirements, he was only permitted to take two weeks absence and that if he absented himself for any longer period then the Company would treat such action as a resignation. The respondent’s evidence was that this conversation never occurred.

[5] The evidence before the Commissioner included written statements from the respondent, and from Mr Kushnir and Ms Shaw. Both the respondent and Ms Shaw gave oral testimony in the proceedings before the Commissioner. Mr Kushnir was unable to attend the proceedings due to his serious medical condition.

[6] In his decision, the Commissioner firstly considered whether the respondent had been “dismissed” from his employment. 3 It was noted that there was no written or verbal resignation by the respondent but that the Company had treated his actions as a resignation or as a repudiation or abandonment of employment.4

[7] The Commissioner referred to the direct factual conflict about the circumstances of the termination and, in particular, as to whether the respondent had been clearly informed that the employer did not approve any absence beyond the two week annual leave entitlement. In this regard, the Commissioner indicated that he preferred the evidence provided by the respondent over that provided for the Company by Ms Shaw. The Commissioner said:

“[44] ... The overall assessment of the evidence provided by Ms Shaw has led to adverse conclusions as to her credit. At times during cross-examination, Ms Shaw provided evasive and non-responsive answers to simple propositions.” 5

[8] The Commissioner referred to the absence of any clear written direction by the employer regarding the four week absence, apart from the heading of the termination pay letter of 28 June 2013. 6 The Commissioner also referred to the respondent recommencing work on 5 August 2013 and to the exchanges which took place during that week between the respondent and Ms Shaw which culminated when the respondent was told to leave the workplace premises on 9 August.7

[9] The Commissioner concluded:

“[68] In this instance, the jurisdictional objections raised by the employer cannot be sustained in circumstances where the employment continued beyond the date that the employer asserted to be the time at which the applicant had resigned. At no time did the applicant resign either in writing or verbally. Further, there was no basis upon which the employer could properly consider that the actions of the applicant represented a repudiation of the employment.

[69] The applicant was summarily dismissed on 9 August 2013. The basis for this dismissal involved the erroneous assumption that the applicant had earlier acted in a manner which was construed to represent his resignation. Consequently, the reason for the applicant’s dismissal cannot be held to be valid.” 8

[10] The Commissioner also found that the dismissal was not consistent with the Small Business Fair Dismissal Code 9 and that it was harsh, unjust and unreasonable. The Commissioner decided that compensation would be an appropriate remedy and ordered that an amount approximating 26 weeks’ remuneration be paid as compensation to the respondent.

[11] In the appeal, the Company submitted that there were several errors in the reasoning of the Commissioner in finding that the respondent’s actions did not amount to a repudiation of his employment. It was also submitted that there were significant errors of fact and other errors in the Commissioner’s decision.

Appeal Principles

[12] An appeal under s.604 of the Act involves an appeal by way of rehearing, with the powers of the Full Bench being exercisable only if there is error on the part of the primary decision-maker. 10

[13] The majority of the High Court explained in the following passage how error may be identified where a discretionary decision is involved:

“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 (See Norbis v Norbis (1986) 161 CLR 513 at 518-519). 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.” 11

[14] The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King 12 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 exercise its own discretion in substitution for his if it has the materials for doing so”; 13 and

“It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion...” 14

[15] An appeal under s.604 of the Act may only be pursued with the permission of the Commission. Section 604(2) requires the Commission to grant permission to appeal if it is satisfied that it is in the public interest to do so. However, there is a note following the subsection to the effect that this does not apply in relation to an application to appeal from an unfair dismissal decision. 15

[16] The effect of s.400 is twofold. Firstly, the Commission may only grant permission to appeal from an unfair dismissal decision where it considers it is in the public interest to do so (s.400(1)). 16 Secondly, an appeal of an unfair dismissal decision, to the extent that it is an appeal on a question of fact, may only be made on the ground that the decision involved a significant error of fact (s.400(2)).

Consideration

[17] The main issues raised in the appeal by the Company relate to the principles concerning repudiation of employment and to alleged factual errors in the findings made by the Commissioner.

[18] We have considered the evidence and submissions before the Commissioner and the submissions in the appeal and have decided that this is not a matter in which permission to appeal should be granted. We have reached this conclusion for the following reasons.

[19] Firstly, it has been stated in many decisions of the Commission that permission to appeal is not a mere formality and that it is not the function of the appeal process to provide an avenue for unsuccessful parties to seek to redress deficiencies in the matter in which their case was run at first instance. 17

[20] The Company’s case at first instance was run on the basis that there was a resignation by the respondent. In the appeal, however, the issues raised by the Company were mainly to the effect that the Commissioner erred in failing to find that there had been a repudiation of the employment by the respondent.

[21] It is accepted that the Commissioner considered issues relating to the possible repudiation of the employment in his decision and that there might have been some confusion in the evidence given in the proceedings as to what might constitute a resignation or repudiation. However, to the extent to which there was an endeavour to advance a different case on appeal to that which was put to the Commissioner, it supports the conclusion that it is not in the public interest to grant permission to appeal in this matter.

[22] Secondly, the submissions of the Company in the appeal in relation to repudiation would seem to be based upon a misreading of the Commissioner’s decision. It was contended that the Commissioner determined that the Company’s failure to provide a clear written instruction to the respondent meant that it was not entitled to treat the respondent’s actions as a repudiation of his employment. 18 However we do not read the relevant passages in the Commissioner’s decision19 as going beyond saying that the Company would have been prudent to put its position in writing and to have given a clear written direction for the respondent to return to work after two weeks of paid annual leave. The evidentiary position of the Company would have been stronger if this had been done.

[23] The Commissioner indicated his preference for the evidence of the respondent over that of Ms Shaw on the crucial question about whether the respondent had resigned. The Commissioner then went on to consider the other circumstances surrounding the termination of the respondent’s employment. These included the termination pay letter given to the respondent on 28 June 2013 and the respondent’s work for the Company in the week of 5-9 August 2013.

[24] The note which referred to “Termination Pay - Employer [sic] Resigned (Notice by Employee)” was considered by the Commissioner to be “an invalid and premature attempt” by the Company to end the employment. 20 The respondent had replied to the termination pay letter on 1 July 2013 indicating that he had not resigned and requesting confirmation that he would be on annual leave and leave without pay for the period he would be absent overseas attending the burial of his father. There was no written or other response by the Company to the request.

[25] In relation to the respondent’s recommencement of work on 5-9 August 2013, the Commissioner considered that the exchanges which took place during that week reflected the “uncertainty that had been created by the termination pay letter of 28 June, and the subsequent absence of any response to the (respondent’s) request for clarification regarding the period of his absence”. 21

[26] We consider that in the circumstances it was open to the Commissioner to take into account the absence of written directions, instructions or advice by the employer in assessing the evidence before him and determining whether there had been any clear instruction given by the Company and whether the actions of the respondent represented a repudiation of the employment. Even allowing for the informalities which often accompany communications within small business, it is difficult to understand why such important verbal communications affecting the estimated employment of a long serving employee were not confirmed and clarified by the Company by way of some written record.

[27] Having regard to these matters, it has not been shown in the appeal that the Commissioner fell into error in his consideration of whether there was a repudiation of employment by the respondent.

[28] Thirdly, we do not consider that the Company has demonstrated in the appeal that there are any significant errors of fact in the Commissioner’s determination of the matter.

[29] The Company has sought to challenge the credit findings of the Commissioner in relation to Ms Shaw’s evidence and the acceptance of the respondent’s evidence. The limitations on an appellate bench interfering in findings of fact based on an assessment of the credibility of witnesses at first instance have been considered in several High Court decisions. A key statement of principle is provided in Devries v Australia National Railways Commission 22 where Brennan, Gaudron and McHugh JJ said:

“More than once in recent years, this court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against - that finding of fact. If the trial judge’s finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge “has failed to use or has palpably misused his (or her) advantage” or has acted on evidence which was “inconsistent with facts incontrovertibly established by the evidence” or which was “glaringly improbable”.” 23 (references omitted)

[30] The circumstances in which a finding of fact will be overturned on appeal in the Commission are well established and have been summarised as follows:

“If a finding made by a member at first instance depends to any substantial degree on the credibility of a witness, that finding must stand, unless it can be shown that the member at first instance:

- acted on evidence inconsistent with facts incontrovertibly established by the evidence;

- acted on “glaringly improbable” evidence or

- failed to use or palpably misused the advantage the member had at first instance enjoyed in hearing the witness given evidence.” 24

[31] The Company submitted that the Commissioner’s credit findings are inconsistent with reliable contemporaneous records and that the inconsistency was not explained. 25 The inconsistent records were said to be the respondent’s emails of 20 June and 1 July 2013 and the termination pay letter of 28 June 2013.

[32] We do not accept that the emails are necessarily inconsistent with the evidence given by the respondent. To the extent to which there is some inconsistency between the respondent’s testimony and the termination pay letter, we note that the Commissioner referred in his decision to the response by the respondent to the letter. 26 We consider that the weight to be given to the termination pay letter and the response to it were matters for the Commissioner having regard to his assessment of all the evidence presented. We are not persuaded that the findings made by the Commissioner were not reasonably open to him. The termination pay letter did not incontrovertibly establish that the respondent had resigned from his employment.

[33] It was also submitted that there were other aspects of the evidence which raised questions about whether the Commissioner should have rejected the employer’s version of events relating to the respondent’s taking of leave. These matters included the harmonious relationship between the parties over the seven preceding years of employment and the respondent’s response in totally refuting the termination pay letter and his failure to attempt to contact the Company during the period of his absence between 1 July and 1 August 2013 to clarify the position in regard to his employment.

[34] We do not consider that these matters are necessarily inconsistent with the Commissioner’s acceptance of the respondent’s position. As put by counsel for the Company in the appeal proceedings, the previous harmonious employment relationship might suggest that the Company would not surreptitiously change its mind over allowing a period of leave (even though two different managers were involved). However the previous relationship could also be supportive of a conclusion that the employer would not refuse to allow a longstanding employee to take an additional 2-3 weeks unpaid leave in order to attend his father’s burial. It is also possible that the failure of the respondent to contact the Company during his absence overseas could be viewed as indicating a belief that the Company, by not responding to his email of 1 July, had accepted his position. The variety of possible inferences which might be drawn from the evidence and circumstances do not, in our view, necessarily lead to a conclusion different to that reached by the Commissioner.

[35] In this matter the Commissioner reached his conclusions having regard to the evidence before him and influenced by his findings as to the credibility of witnesses. It has not been shown in the appeal proceedings that there were such incontrovertible facts or uncontested testimony as to demonstrate that the Commissioner’s conclusions were erroneous or that the conclusions reached by him were “glaringly improbable” or “contrary to compelling inferences” in the case or involved a far-fetched interpretation of the evidence.

[36] It was also submitted by the Company that the Commissioner did not give any weight to the statement of Mr Kushnir which was corroborative of key aspects of Ms Shaw’s evidence. However we note that the Commissioner referred in his decision to Mr Kushnir’s evidence. 27 Given that Mr Kushnir was unable to give evidence in the proceedings, it was for the Commissioner to determine the appropriate weight to be given to the different aspects of the “contested evidence” before him.

[37] It was further submitted by the Company that the Commissioner wrongly characterised the respondent’s resumption of work in the week of 5 August 2013 as a continuation of his previous employment. In so doing, it was said that the Commissioner did not take into consideration the circumstances faced by the Company and Ms Shaw in that week as a result of her father’s serious medical condition and hospitalisation and the respondent’s earlier repudiation of the employment. It was contended that, properly analysed, the limited duties undertaken by the respondent in that week constituted a new contract of employment following the repudiation of his earlier contract.

[38] The resumption of work by the respondent in early August 2013 was only one part of the circumstances to be taken into account in an overall assessment of the evidence. The Commissioner did not accept the alternative view put by the Company that the resumption of work constituted a new employment contract. This was because the Commissioner had determined that the respondent had not resigned or repudiated his employment with the Company. It has not been shown that those findings of the Commissioner were in error.

[39] It was also submitted in the appeal that there were errors made by the Commissioner in relation to the assessment of compensation. However, little was put by the Company in support of this submission. We are not persuaded that any basis has been provided for a reduction in the compensation awarded.

Conclusion

[40] In general, we consider that most of the matters relied upon in support of the appeal amount to little more than an attempt to have the appeal bench reconsider the evidence before the Commissioner and draw different inferences and conclusions from that evidence. This is not the function of an appeal bench unless there is shown to be some demonstrable error in the decision-making process at first instance. We do not consider that this has been shown in the present case.

[41] Having considered the evidence and findings of the Commissioner and the submissions in the appeal, we are not persuaded that it has been shown that there was any error in the decision making process such as would warrant an appeal bench interfering with the decision reached by the Commissioner.

[42] For all the reasons given, we have decided it would not be in the public interest to grant permission to appeal in this matter. Accordingly, permission to appeal is refused.

SENIOR DEPUTY PRESIDENT

Appearances:

M Moir, of counsel, appeared on behalf of the Company.

I Latham, of counsel, appeared on behalf of the respondent.

Hearing details:

2014:

Sydney

August 21.

 1   Devcic v City Motor Transport Pty Ltd [2014] FWC 3040.

 2   PR550399.

 3   See ss.385(a) and 386 of the Act.

 4   [2014] FWC 3040 at [35] - [39].

 5   Ibid at [44].

 6   Ibid at [45] - [47].

 7   Ibid at [47] - [48].

 8   Ibid at [68] - [69].

 9   See s.385(c) of the Act.

 10   See Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 205.

 11   Ibid at [21].

 12   (1936) 55 CLR 499

 13   Ibid at 505.

 14   Ibid at 504-505.

 15   See s.400 of the Act.

 16   The way in which the public interest requirement in s.400(1) may be attracted has been described as follows in GlaxoSmithKline Australia Pty Ltd v Colin Makin [2010] FWAFB 5343 at [27]:

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

 17   See e.g. Curtis v Darwin City Council [2012] FWAFB 8021 at [80].

 18   See Company’s outline of submissions at [12].

 19   See [2014] FWC 3040 at [45] - [46], [68] - [69].

 20   Ibid at [46].

 21   Ibid at [47].

 22   (1993) 177 CLR 472 at 479.

 23   See also Fox v Percy (2003) 214 CLR 118 where Gleeson CJ, Gummow and Kirby JJ summarised the relevant legal principles at [23] - [31].

 24   Rode v Burwood Mitsubishi [Dec 451/99 M Print R4471] at [45]. See also Il Migliore Pty Ltd T/A Il Migliore v Miss Kelly McDonald [2013] FWCFB 5759 at [22] - [25] and Robert Van Den Enden v Bechtel Constructions (Australia) Pty Ltd [2013] FWCFB 8053 at [16].

 25   See Fox v Percy (2003) 214 CLR 118 at [31].

 26   [2014] FWC 3040 at [11] - [12].

 27   See Ibid at [5], [10] - [11].

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