[2016] FWCFB 4185

The attached document replaces the document previously issued with the above code on 19 July 2016.

The Appearances have been updated to include J Bourke of Queen’s Counsel and M Follett of Counsel who appeared for the Appellant. Paragraph [3] has been updated with this information.

A typographical error in paragraph [38] has been amended.

Timothy Grellman

Associate to Vice President Catanzariti

Dated 21 July 2016

[2016] FWCFB 4185

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604—Appeal of decision

Commonwealth of Australia (Australian Taxation Office) T/A Australian Taxation Office
v
Ron Shamir
(C2016/3149)

VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT DEAN
COMMISSIONER RIORDAN

MELBOURNE, 19 JULY 2016

Appeal against decision [2016] FWC 1844 of Commissioner Ryan at Melbourne on 23 March 2016 in matter number U2015/11065.

[1] On 23 March 2016 Commissioner Ryan issued a decision 1 (Decision) which found that Mr Ron Shamir (Respondent) was unfairly dismissed by the Australian Taxation Office (Appellant). The Commissioner subsequently ordered2 (Order) the reinstatement of the Respondent pursuant to s.391(1)(b) of the Fair Work Act 2009 (FW Act). On 29 March 2016 the Appellant lodged a Notice of Appeal and sought a stay of the Commissioner’s decision. On 30 March 2016 Senior Deputy President Hamberger ordered a stay of the Commissioner’s decision pending the hearing and determination of the Appellant’s appeal by a Full Bench of the Commission.3 On 6 May 2016 permission to appeal was granted and the matter was set down for appeal.4

[2] We heard the appeal on 24 June 2016 and decided to uphold the appeal and quash the original Decision and rehear the matter. The first part of this decision provides our reasons for upholding the appeal. The second part of this decision provides our findings with regards to the rehearing of the matter.

[3] At the hearing on 24 June 2016, Mr Bourke of Queen’s Counsel and Mr Follett of Counsel sought permission to appear for the Appellant and Mr Slevin of Counsel sought permission to appear for the Respondent. Given the complexity of the matter, and having regard to s.596 of the FW Act, permission was granted to both parties to be represented.

The Appeal

[4] The Appellant submitted seventeen grounds of appeal which the Respondent disputed.

[5] At the heart of the dispute was whether there were errors in accordance with House v The King. 5

Appellant’s Submissions

[6] Ground one of the appeal contended that, on the basis that there was a valid reason for the Respondent’s dismissal, the Decision and Order should be quashed pursuant to s.607(3)(a) of the FW Act. Ground two of the appeal relied on the Full Bench authority in Parmalat Food Products Pty Ltd v Tran 6 (Parmalat) and concerned s.387(h) of the FW Act which provides that the Commission may consider “any other matters” it considers relevant when deciding whether a dismissal was harsh, unjust or unreasonable. The Appellant submitted that the existence of an unresolved dispute under the Australian Taxation Office Enterprise Agreement 2011 (ATO EA) may be a relevant consideration under s.387(h) of the FW Act. The Appellant contended that the existence of an unresolved dispute under the ATO EA was irrelevant, however, to the assessment of whether there was a valid reason for the dismissal of the Respondent, pursuant to s.387(a) of the FW Act.

[7] Ground three of the appeal concerned the Commissioner’s consideration of the ATO EA. Firstly, the Appellant contended that whether the Appellant had followed the processes in section F of the ATO EA was not an issue in the case, making it a factor that was inappropriate for the Commissioner to consider. Secondly, the Appellant submitted that what the Appellant was supposed to do (or not do) under section F of the ATO EA when faced with an employee’s deliberate non-performance of duties was not explored by the Commissioner. Thirdly, the Appellant contended that section F of the ATO EA does not deal at all with the circumstances before the Commissioner, where an employee refuses to perform the duties required of them, and that therefore, this was not an issue to be dealt with under the ATO EA, but rather, it was a matter appropriate to be dealt with under s.29(3)(c) of the Public Service Act 1999 (PS Act).

[8] Grounds five, nine and ten of the appeal concerned what the Commissioner said were relevant factors pursuant to s.387(h) of the FW Act. The Appellant submitted that these included the extent to which the Respondent failed to perform his duties, the Respondent’s level of training in his altered role and the Respondent’s level of competency to perform the duties assigned to him. The Appellant contended that the Commissioner failed to make adequate or appropriate findings as to these matters and that this constituted an error of principle and a failure to provide adequate reasons. The Appellant questions, for example, how it was possible for the Commissioner to consider and determine whether the degree of non-performance of duties favoured the Appellant or the Respondent on overall harshness. The Appellant submits that the Commissioner made no finding as to whether the Respondent’s training was adequate or appropriate, making it inappropriate for the Commissioner to decide this issue favourably for the Respondent, which the Appellant submits occurred. Furthermore, the Appellant posits that likewise, the Commissioner made no findings as to whether the Respondent was competent in the altered role, making it inappropriate for the Commissioner to decide this issue favourably for the Respondent.

[9] Grounds five(a)-(c) and twelve of the appeal concerned alleged errors regarding the Respondent’s non-performance of duties. The Appellant submitted that the Commissioner’s use of a duty statement for the Respondent’s former role as a Senior Case Profiling Officer in considering the question of whether the Respondent performed any of his duties in the relevant period was a significant mistake on the basis that this was a position from which the Respondent was originally in, but had since moved on from. The Appellant contended that relatedly, the finding that the Respondent, in agitating and working on a dispute brought by his union against the Appellant, was performing some of the duties of his employment was misconceived and wrong.

[10] Grounds four, six, seven and eight of the appeal concerned the construction of the ATO EA. The Appellant contended that the Commissioner never turned his attention to clause 145 of the ATO EA, never considered what it obliged the parties to do during the pendency of a dispute and never asked, let alone answered, the question of whether the Respondent had failed to comply with the process by not working in accordance with his contract of employment or whether a status quo provision meant that the Respondent could not be required to perform the disputed duties. The Appellant contended that the Commissioner either erred in failing to make appropriate findings as to these matters or erred in reaching what the Appellant submitted were the wrong conclusions.

[11] In ground eleven of the appeal the Appellant submitted that the conclusion that the dismissal was harsh was a conclusion that was not open to the Commissioner based on the evidence or the findings made. In support of this ground of appeal, the Appellant posited that; there was a valid reason for the dismissal, the Respondent was fully notified, there was no finding as to the extent to which the Respondent did not perform his duties, there was no finding as to whether the dispute resolution procedure provided for the status quo pending resolution of the dispute and there was no finding that the Respondent lacked the adequate skills or training.

[12] Ground thirteen of the appeal concerned the validity of a reinstatement order of the type made by the Commissioner. The Appellant submitted that there are several reasons why an order of the type made is invalid, or alternatively, at least fundamentally inappropriate. The Appellant contended that the Commissioner’s order was either invalid or the discretionary exercise of power fundamentally miscarried.

[13] In ground fourteen of the appeal the Appellant submitted that the Commissioner relied on purported rights or entitlements forgone, including rights or entitlements under the PS Act, that were not even identified. The Appellant contended that no such rights or entitlements were forgone and that accordingly, the discretion miscarried.

[14] Ground fifteen of the appeal concerned what the Appellant submitted was the Commissioner’s finding that although it was likely that a reinstatement order would result in the Respondent being excess to requirements, this was itself a reason why he should be reinstated, such that a redundancy payment would be forthcoming. The Appellant contended that it is evident that the Commissioner was attempting to recreate history from 2013, consistent with a view that the Respondent was redundant at that point in time. The Appellant posited that this was an irrelevant matter and that the discretion thus miscarried.

[15] Ground sixteen of the appeal concerned the Commissioner’s findings that the Appellant appeared to be characterising the Respondent as an employee who is not receptive to change or who is not prepared to let go of the old ways of doing things. 7 The Appellant contended that the Commissioner only considered the Respondent’s evidence and contentions and completely ignored the Appellant’s submissions. In ground seventeen of the appeal the Appellant submitted that the Commissioner made a conclusive assertion with regards to s.391 of the Act without any consideration of relevant considerations or the provision of any adequate reasons.

[16] Relying on these grounds of appeal, the Appellant submitted that the appeal should be upheld and that the Respondent’s application for a remedy for an unfair dismissal should be reheard and dismissed on appeal.

Respondent’s Submissions

[17] The Respondent submitted that the Commissioner’s Decision and Order constituted an unremarkable exercise of the Commission’s powers under Part 3-2 of the FW Act. In relation to ground one of the appeal, the Respondent contended that the Commissioner’s finding that non-performance of duties within s.29(3)(c) of the PS Act did not necessarily mean that that reason was, in the circumstances of the case, a valid reason. The Respondent contended that s.8(1) of the PS Act provides that the PS Act has effect subject to the FW Act and that s.387(a) of the FW Act requires the Commission to consider whether the reason for termination was valid. The Respondent further submitted that the Full Bench authority of Dunkerly v Commonwealth of Australia 8 does not support the proposition that a finding that a dismissal was for a reason listed in 29(3) of the PS Act necessarily means that the dismissal is for a valid reason. As such, the Respondent contended that there is no error in the Commissioner’s approach identified in ground one of the appeal.

[18] In relation to ground two of the appeal and specifically, the Appellant’s reliance on Parmalat, the Respondent contended that in Parmalat, the Full Bench found that in the first instance decision of that case, an error was made by conflating the requirement to make a finding under s.387(a) of the FW Act with the requirement to make a finding under s.387(h). The Respondent posited that the Commissioner did not make the same error in his Decision and submitted that it is clear on the face of the Decision that the Commissioner had not committed the error identified in Parmalat. That the Commissioner was aware of the distinction between s.387(a) and s.387(h) of the FW Act is clear, the Respondent contended, at paragraph 29 of the Decision. The Respondent further contended that the Appellant ignored the Commissioner’s alternative approach later in the Decision where the Commissioner made it clear that if he was wrong in his approach to considering whether there was a valid reason for the dismissal, he would still have found the dismissal to be extremely harsh in all of the circumstances under s.387(h) of the FW Act. For this reason, the Respondent submitted that the Appellant’s complaints with regards to whether there was a valid reason are somewhat academic and identify no error of law.

[19] In relation to ground three of the appeal the Respondent submitted that s.387(h) directs the Commission to take into account any other matters it considers relevant, and that the Commissioner set out the relevant background of the events in 2013 including the Respondent’s position being redundant and the transfer that resulted. The Respondent further contended that the Commissioner made no finding that the Appellant had not followed the processes in section F of the ATO EA in 2013 and observed that the Appellant had the option to follow those processes, and if it had, that may have led to the termination of the Respondent’s employment in accordance with section F of the ATO EA. The Respondent contended that this was a relevant factor to take into account under s.387(h) of the FW Act and, that as a result, the Appellant identified no error of law in ground three of the appeal.

[20] With regards to grounds five, nine and ten of the appeal, the Respondent submitted that the Appellant asserts, but does not identify, an error of principle. The Respondent contended that the principle as to adequate reasons was set out by a Full Bench of the Commission in Barach v University of New South Wales 9 (Barach) and that the decision of the Commissioner must be read as a whole and considered fairly. The Respondent posited that the Commissioner made findings on each of the matters that the Appellant complained about and the Decision articulates the essential grounds for reaching those findings. The Respondent contended that the Decision addressed the material questions of fact and law in a manner which disclosed the steps which led to the findings of the Comissioner. The Respondent submitted that the Commissioner addressed each of the three matters that the Appellant submitted had lacked adequate reasons, specifically:

With regards to the Appellant’s contention that there are inadequate findings/reasons as to the extent to which the Respondent failed to perform his duties, the Respondent posited that the Commissioner recorded that there was no dispute that there had been non-performance of duties and addressed the issue of whether the work which the Respondent performed from 10 April 2015 to 5 June 2015 involved the performance of some duties. The Respondent contended that in those paragraphs the Commissioner dealt with that question in a manner which articulated the essential grounds for reaching the finding that the Respondent had performed some duties during that period and had thereby not refused to perform all of the duties assigned to him. The Respondent posited that taken as a whole, and read fairly, the Commissioner’s reasoning addressed the material questions of fact and law in a manner which disclosed the steps which led to his conclusion and that as a result, the reasons were adequate and there is no appellable error;

In relation to the Appellant’s contention that there are inadequate findings/reasons as to the Respondent’s level of training for his altered role, the Respondent posited that the Commissioner concluded that the Respondent’s capacity to carry out the duties that he was dismissed for not performing was an unresolved issue and that it was unreasonable for the Appellant to dismiss the Respondent without resolving that issue first. The Respondent contended that the Commissioner provided a detailed summary of the evidence as to the competing views about the capacity of the Respondent and that as a result, the reasons were adequate and there is no appellable error; and

With regards to the Appellant’s contention that there are inadequate findings/reasons as to the Respondent’s level of competency to perform his altered role, the Respondent submitted that the Commissioner considered the competing evidence and preferred the evidence of the witness who attested that the Respondent was not capable of performing the duties of an Audit Leader. The Respondent contended that as a result, the reasons are adequate in accordance with Barach and there is no appellable error.

[21] In relation to grounds five (a) – (c) and twelve of the appeal the Respondent submitted that even if the duty statement referred to at paragraph [46] of the Decision was a mistake, the reference to the admission by the Appellant at paragraph [47] makes the reliance upon it of little or no significance. The Respondent further submitted that the Commissioner did not transform the requirement on employees to apply employment policies into a requirement to see to it that the employer complies with the ATO EA. The Respondent contended that the Decision concludes that workplace relations practice includes the utilisation of the dispute procedures of the ATO EA, and is uncontroversial.

[22] With regards to grounds four, six, seven and eight of the appeal the Respondent contended that it is not clear what error these grounds seek to identify. The Respondent posited that the complaint in these grounds of appeal is simply that inappropriate findings or wrong conclusions were reached and that this is not an appellable error, rather it is a complaint that the Appellant disagrees with the Commissioner’s conclusion.

[23] With regards to ground eleven of the appeal the Respondent submitted that this appeal ground is merely a statement that the Commission has come to the wrong conclusion on the ultimate question of unfairness. The Respondent contended that there is no basis for the assertion that the conclusion was not open to the Commissioner on the evidence or findings made. The Respondent further contended that the Appellant fails to read the decision as a whole and consider it fairly, and instead proffers its own version of how the question of unfairness should have been determined. The Respondent submitted that as a result of this, there is no appellable error identified in this ground of appeal.

[24] With regards to ground thirteen of the appeal, the Respondent submitted that this appeal ground is an invitation to reconsider a recent Full Bench authority in Technical and Further Education Commission v Pykett 10 (Pykett). The Respondent contended that in Pykett a Full Bench considered the argument that a reinstatement order pursuant to s.391(1)(b) of the FW Act must specify the position to which the person is to be appointed and rejected it. The Respondent posited that the only reason offered by the Appellant to revisit the authority in Pykett is the suggestion that Cartisano v Sportsmed SA Hospitals Pty Ltd11 inferentially cast doubt on the proposition. The Respondent submitted that as the Appellant concedes the specific issue was not argued or decided in that case, there is no cogent reason to reconsider Pykett and that as a result, there is no appellable error identified in this ground of appeal.

[25] In relation to appeal ground fourteen, the Respondent submitted that the Commissioner dealt with reinstatement and whether if reinstated the Respondent would be receptive of change. The Respondent contended that the Commissioner found that the evidence did not demonstrate that the Respondent was resistant to change and dismissed any suggestion that challenging the decision to allocate duties or the decision to dismiss under the PS Act supported a conclusion that the Respondent could not be reinstated. The Respondent contended that this ground of appeal is an example of the Appellant adopting a narrow approach to the Commissioner’s Decision, and that there is no appellable error identified in this ground of appeal.

[26] With regards to ground fifteen of the appeal, the Respondent submitted that the Commissioner dealt with the evidence and submissions of the Appellant and that as a result, the Appellant cannot claim on appeal that the matters it raised at first instance and asked the Commissioner to determine are irrelevant. In relation to ground sixteen of the appeal, the Respondent contended that this ground is an invitation to reconsider evidence on appeal. The Respondent further submitted that this ground of appeal appears to complain of a mistake on the facts which attracts the prescription in s.400(1) of the FW Act. The Respondent contended that the Appellant does not otherwise identify appellable error and makes no attempt to satisfy the requirements in s.400(1) of the FW Act. The Respondent further contended that the Appellant merely asks that the evidence be reconsidered and the Full Bench find otherwise, and that as a result, there is no appellable error identified in this ground of appeal.

[27] The Respondent submitted that the Decision, read fairly and as a whole, deals with both issues raised in ground seventeen of the appeal. The Respondent contended that the failure to perform duties is dealt with throughout the Decision and that the adherence or otherwise to the disputes procedure is also dealt with in the Decision. The Respondent further submitted that there was no failure to have regard to these matters and that as a result, there is no appellable error identified in this ground of appeal.

[28] In light of these submissions, the Respondent submitted that we should find that the Decision is not affected by appellable error and that the appeal should be dismissed. The Respondent further submitted that if, in the alternative, error is found and the Full Bench determines that a rehearing is necessary, the Respondent relies upon the evidence and submissions at first instance.

Consideration

[29] We note that a decision under appeal is of a discretionary nature and such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. We note that it is not open for us to substitute our view on the matters that fell for determination before the Commissioner in the absence of error of an appellable nature in the Commissioner’s original Decision. As the High Court said in House v The King 12:

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

[30] The Respondent submitted that the Commissioner appropriately referred to ‘valid reason’ in accordance with Selvachandran v Peteron Plastics 13 (Selvachandran), by requiring that the reason be being well founded, sound and defensible or just.14 In the Decision, the Commissioner, relying on Selvachandran, said:

“the reason for dismissal needs to be well founded, sound, defensible or just.” 15

[31] Resultantly, the Commissioner proceeded to consider the justness of the reason for the dismissal of the Respondent, as revealed in paragraph 29 of the Decision:

“[29] … I note at this point that in this paragraph I am considering the justness of the reason for dismissal and not the justness of the dismissal which is a much broader consideration of all the relevant criteria in s.387.” 16

[32] In Selvachandran however, Justice Northrop said:

“In the Macquarie Dictionary the relevant meaning [of “valid”] is “sound, just or well founded.” In its context in subsection 170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded.”

[33] Justice Northrop differentiated the meaning given to the word “valid” in the Macquarie Dictionary from the meaning given to the word “valid” in the legislation that preceded the FW Act. The word “just” is explicitly excluded from the meaning given to the word “valid” by Justice Northtrop in the industrial relations context. As a result, it cannot be concluded that Selvachandran is authority that establishes that the justness of a reason for dismissal is captured by the scope of whether the reason was valid. On the contrary, Justice Northrop excluded the word “just” from being a consideration when determining whether there was a valid reason for a dismissal. It therefore follows that by considering the justness of the reason for the dismissal of the Respondent, the Commissioner was considering an irrelevant matter to guide him as to whether there was a valid reason for the Appellant to dismiss the Respondent. We are therefore of the view that the Commissioner made an error in accordance with House v The King in exercising his discretion as to whether there was a valid reason for the Respondent’s dismissal.

[34] In grounds four, six, seven and eight of the Appellant’s submissions the Appellant contended that the Commissioner failed to take into account a relevant consideration with regards to the industrial dispute raised by the CPSU about the Respondent being asked to undertake duties for which he did not have the requisite skills or training. In disputing this contention, the Respondent posited that these submissions are complaints that inappropriate findings or wrong conclusions were reached, and are not complaints that expose appellable errors. Relevant to these grounds of appeal, the Commissioner said:

“[29] In the present matter the decision to dismiss Mr Shamir is unjust. I note at this point that in this paragraph I am considering the justness of the reason for dismissal and not the justness of the dismissal which is a much broader consideration of all of the relevant criteria in s.387. The decision to dismiss was made before the dispute resolution process in relation to the dispute about what duties Mr Shamir could be required to perform was resolved. The decision to dismiss denied Mr Shamir the opportunity to have the dispute over performance of duties resolved in accordance with the dispute procedures of the ATO EA. The decision to dismiss Mr Shamir could only have occurred on the basis that the ATO considered at all times that it had a right to terminate Mr Shamir under s.29 of the PS Act and that that right trumped any entitlement Mr Shamir had to raise a dispute under the disputes procedure of the ATO EA and any rights that Mr Shamir had under the ATO EA and or the Fair Work Act.” 17

[35] The Commissioner also considered the dispute to be relevant pursuant to s.387(h) of the FW Act and said:

“[55] The existence of the dispute notified by the CPSU on 7 April 2015 has direct relevance to this matter. The dispute concerned the performance of duties by Mr Shamir. Whilst the non-performance of duties by Mr Shamir could have been dealt with under the dispute handling procedures of the ATO EA, the ATO chose to deal with the non-performance of duties under the PS Act. It is the very fact that the CPSU had notified a dispute under the terms of the ATO EA which is relevant to a consideration of the fairness of the decision of the ATO to dismiss Mr Shamir. Each of Mr Shamir and Mr Wiesse gave evidence of their understanding that an Assistant Commissioner at the ATO gave an undertaking to the profilers when their jobs were made redundant that no profiler would be required to perform audit work until they were ready for it. The recollections of Mr Weisse and Mr Shamir differ as to detail but concur as to outcome. Mr Vydelingum gave evidence to a similar effect but without mentioning any Assistant Commissioner.

[56] Clearly the dispute related to an ongoing issue over the readiness of Mr Shamir to do the audit work he was being required to perform. The mere existence of an industrial dispute as to performance of duties does not prevent the ATO from acting under s.29 of the PS Act but it is relevant in considering whether the dismissal which flowed from the ATO’s reliance on s.29 of the PS Act is fair or unfair.”

[36] As the Commissioner found that the industrial dispute was relevant in considering whether the dismissal was fair, it follows that the obligations imposed by the relevant enterprise agreement during a dispute is a relevant consideration. Clause 145.5 of the ATO EA prescribes as follows:

“Continuation of work – conduct during dispute

145.5 If there is no imminent risk to their health or safety, employees will continue to work in accordance with the provisions of their contract of employment or, where this is not inconsistent, established custom and practice at the workplace while any matter in dispute is resolved.

If there is an imminent risk to their health and safety, employees will be reassigned to alternative available work that is safe and appropriate, either at the same or at another workplace.”

[37] As such, clause 145.5 of the ATO EA prescribed that while the dispute was being resolved, the Respondent was obliged to continue to work in accordance with the provisions of his contract on the condition that there is no imminent risk to his health and safety. On the basis that the Commissioner found that the dispute was a relevant factor pursuant to s.387(a) and s.387(h) of the FW Act, it follows that this obligation as prescribed in clause 145.5 of the ATO EA was a relevant matter. It therefore follows that by not taking clause 145.5 of the ATO EA into account, the Commissioner failed to consider a relevant consideration. As such, we are persuaded that the Commissioner, by failing to consider a relevant consideration, erred in accordance with House v The King.

[38] We are not required to identify an appellable error in every ground of appeal for there to be a rehearing of the matter; a rehearing is warranted upon an appeal bench identifying error in accordance with House v The King. In light of the above consideration of the parties submissions and having considered the relevant principles of law, we are of the view that there are errors in accordance with House v The King in at least five of the grounds of appeal, being grounds two, four, six, seven and eight, as submitted by the Appellant. As such, we are of the view that the Commissioner did not properly exercise the discretion which is vested in the Commission. We are therefore satisfied that the appeal should be upheld and that we should quash the original Decision. As such, the Commissioner’s Decision is quashed.

[39] On this basis we have proceeded to rehear the application for a remedy for an unfair dismissal and our findings are provided below.

The unfair dismissal application

[40] The Respondent applied under s.394 of the FW Act for an unfair dismissal remedy and sought reinstatement with continuity of service and back pay on the basis that the dismissal was harsh, unjust and unreasonable. The relevant background to the dismissal is provided in the original Decision:

“[3] Mr Shamir was employed by the ATO as a Senior Case Profiling Officer. That was the position advertised and each of the “Job description”, “Duty statement” and “Selection criteria” for the position were clearly that of a profiling analyst with significant experience. The position of Senior Case Profiling Officer was classified at the EL1 level.

[4] In 2013 the ATO restructured its business and made the positions of Senior Case Profiling Officer redundant. Mr Shamir and other case profiling officers were transferred to other employment within the ATO at the same classification level. In the case of Mr Shamir he was transferred to a position in an audit team performing an audit role. Mr Shamir maintained his classification of EL1 but was reporting to a Team Leader, Indirect Tax, Serious Evasion who was also at the classification level of EL1. Mr Shamir was expected to make the transition from profiling to audit with some training provided.

[5] Mr Shamir did not accept that he could or should be transferred into an audit role and notwithstanding the provision of some training in relation to the audit role Mr Shamir considered himself to lack the skills necessary to enable him to perform the audit role he was expected to undertake.

[6] The audit role specifically required that an auditor talk with the client or the client’s legal representative or accounting advisers. There was no such requirement in the role of the case profiling officer.

[7] Until March 2015 there had been significant disagreement between Mr Shamir’s then Team Leader and more senior management as to the need to require Mr Shamir to undertake client contact duties as part of his audit role. More senior management expected Mr Shamir to have the skills necessary to undertake the client contact duties associated with the audit role. The Team Leader at the time was of the view that Mr Shamir needed much more time before he would be able to perform client contact duties.

[8] Until March 2015 Mr Shamir had not been required to have contact with clients or client representatives as his then Team Leader accepted that Mr Shamir considered himself to lack the skills and ability to properly interact with clients in an audit role.

[9] On 10 March 2015 a new Team Leader was appointed to the audit team comprising Mr Shamir.

[10] On 7 April 2015 the CPSU confirmed with the ATO the existence of a dispute under clause 145 of the ATO EA concerning the ATO requiring Mr Shamir to work in a role outside his skill, competence and training.

[11] The new Team Leader, Mr Konstantinidis, developed a proposed work plan for
Mr Shamir which required him to perform client contact duties. This was communicated by email to Mr Shamir on 13 April 2015 and Mr Shamir responded by email on 15 April 2015 declining to discuss the proposed work plan because the matter was subject to the dispute notification from the CPSU.

[12] Mr Konstantinidis gave directions to Mr Shamir to perform certain specific duties which included client contact. Mr Shamir refused to perform the duties. Mr Shamir relied on the notification of the dispute and the status quo provisions of the ATO EA as providing a basis for his refusal to perform duties which were in dispute.

[13] The decision to dismiss Mr Shamir was made by Mr Miller, Assistant Commissioner, ATO People on 19 June 2015 and the reason for dismissal was the non-performance of duties by Mr Shamir during the period 10 April 2015 and 5 June 2015. During that period
Mr Shamir only attended work on 11 days. The non-performance of duties only related to the non-performance of the specific tasks that Mr Konstantinidis required Mr Shamir to perform when he was attending work. Mr Shamir did perform work when he attended work during the period 10 April 2015 and 5 June 2015 but the work he performed was not the work that Mr Konstantinidis required him to perform.”

[41] Section 385 of the FW Act provides that:

“385 What is an unfair dismissal

A 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; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.”

[42] At the heart of the case were conflicting submissions with regards to s.385(b) of the FW Act, that is, whether the Respondent’s dismissal was harsh, unjust or unreasonable. Section 387 of the FW Act requires the Commission, in considering whether a dismissal was harsh, unjust or unreasonable, to take into account a number of matters specified in paragraphs (a) to (h) of the section:

“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:

(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 person—whether 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.”

[43] The ambit of the conduct that may fall within the phrase ‘harsh, unjust or unreasonable’ was explained in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows:

“.... 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.”

[44] We will deal with each of the paragraphs in s.387 of the FW Act in relation to the dispute in turn below.

387(a) – valid reason

[45] The Appellant must have had a valid reason for the dismissal of the Respondent, although it need not be the reason given to the Respondent at the time of the dismissal. 18 The reasons should be “sound, defensible and well founded”19 and should not be “capricious, fanciful, spiteful or prejudiced.”20

[46] It is not the role of the Commission to “stand in the shoes of the employer and determine whether or not the decision made by the employer was a decision that would be made by the court.” 21 However, the Commission must consider the entire factual matrix in determining whether an employee’s termination was for a valid reason.22

[47] The parties were in dispute as to whether there was a valid reason for the Respondent’s dismissal. The Letter of Termination confirms that the Respondent was dismissed for what the Appellant describes as the Respondent’s failure to undertake his assigned duties on the eleven days on which he attended work. 23 The Respondent admitted in his submissions that during these eleven days he did not perform any of the duties assigned to him by the Appellant.24 The Respondent contended that his non-performance was a result of his lack of capacity to undertake the duties assigned to him and his reliance on clause 145.5 of the ATO EA.25

[48] With regards to the Respondent’s contention that he did not have the capacity to undertake the duties assigned to him, the Respondent posited that he did not have the required tax knowledge to engage in client contact. The evidence indicates however that the Respondent had completed 68 training courses that were directly relevant to his role as a Serious Evasion Audit Leader. 26 The evidence also indicates that in relation to the Respondent’s concern that a client may ask questions which were beyond his capacity to answer,27 the Respondent was entitled to take on notice any questions that he was unable to answer.28 Furthermore, the evidence indicates that the Respondent had the capacity to prepare written correspondence to clients who preferred to not communicate by telephone and that if the Respondent had questions about any written correspondence, someone could review the correspondence before it was sent.29

[49] It therefore follows that the weight of evidence does not support a conclusion that the Respondent lacked the capacity to engage in the client contact that would have been required of him in completing the work that was assigned to him by the Appellant. It also follows that that the weight of evidence does not support a conclusion that there were no training or support mechanisms in place to assist the Respondent to perform his assigned duties.

[50] We invited the parties to submit supplementary submissions in relation to clause 145.5 of the ATO EA. The Appellant contended that to rely on clause 145.5 of the ATO EA, the Respondent would need to persuade us that the work assigned to him in the relevant period was not work in accordance with his contract of employment and was not otherwise consistent with established custom and practice. The Appellant posited that in addition to the Respondent being unable to establish these matters, such a claim would be contrary to the findings of the Commissioner. The Respondent submitted that the work assigned to the Respondent in the relevant period required client contact and that ‘no client contact’ was the status quo up to 10 March 2015 pursuant to clause 145.5 of the ATO EA. The Respondent submitted that accordingly, clause 145.5 of the ATO EA required the Appellant to conduct itself on the premise that it ensured that the Respondent was allocated duties other than duties that involved client contact.

[51] We have read and considered all of the material filed by the parties including the supplementary submissions, correspondence and relevant authorities in relation to clause 145.5 of the ATO EA. We are of the view that the clause required the Respondent to continue to work in accordance with his contract of employment while the dispute dated 7 April 2015 proceeded. The Respondent admitted that he did not perform any of the duties assigned to him in the relevant period. 30 The assigned duties that the Respondent admitted he did not perform were part of his role as an Audit Leader to which he was transferred on 1 July 2013. There is no basis to accept the proposition that clause 145.5 of the ATO EA entitled the Respondent to refuse to perform the duties that were part of the role to which he was transferred to on 1 July 2013, well over a year before the 7 April 2015 dispute. There is no basis for accepting the Respondent’s interpretation of clause 145.5 of the ATO EA which in effect meant that he could only be required to work in the then abolished role of Profiler until the resolution of the dispute.31 It therefore follows that the weight of evidence does not support the conclusion that clause 145.5 of the ATO EA entitled the Respondent to refuse to perform the duties assigned to him by the Appellant.

[52] The evidence does not provide a justification for the Respondent’s refusal to perform the duties assigned to him by the Appellant. We are therefore of the view that there was no justification for the non-performance of the Respondent’s duties. As there was no justification for the non-performance of those duties, we are persuaded that it follows that the Respondent’s non-performance of the duties was a sound, defensible and well founded reason for his dismissal. We are persuaded that the dismissal was a result of the Respondent’s unjustified non-performance of duties, and was not a result of “capricious, fanciful, spiteful or prejudiced” reasoning. 32 As such, having considered the submissions of the parties and the relevant authorities, we are of the view that there was a valid reason for the dismissal of the Respondent in accordance with s.387(a) of the FW Act.

387(b) – notification of reason and 387(c) – opportunity to respond

[53] With regards to s.387(b) and (c) of the FW Act, the Respondent submitted that he was removed from the Appellant’s premises and locked out of his work computer and other records during the seven day period that he was required to respond to the Appellant. The Respondent contended that his request for access to his records was ignored and/or refused and that as a result, the process was inherently unfair and was conducted in a manner that was in breach of the ATO EA.

[54] The Appellant contended that the Respondent was directly notified of the steps that he should take if he required access to the ATO premises and was given a proper opportunity to respond and availed himself of that opportunity before a final decision was made. The Appellant also contended that the Respondent was notified of the reason for the proposed termination pursuant to s.29(3)(c) of the PS Act.

[55] In light of these submissions we are satisfied that the Respondent was given detailed notice of the reasons for his dismissal in a manner which permitted him to respond to those reasons. We are satisfied that the Respondent did not make a proper attempt to access his records and that had he done so, the Appellant was willing to at least consider the Respondent’s requests. This willingness on the part of the Appellant to at least consider the Respondent’s request is revealed in the Formal Direction issued to the Respondent. 33 Accordingly, each of the criteria in s.387(b) and (c) of the FW Act weigh in favour of a conclusion that the dismissal was fair.

387(d) – support person during discussions

[56] The Respondent made no submissions with regards to s.387(d) of the FW Act in his final submissions. In his earlier submissions dated 23 November 2015, the Respondent acknowledged that he was able to seek legal advice from his solicitor. 34 As such, s.387(d) of the FW Act is not relevant in this matter.

387(e) – unsatisfactory performance

[57] The Respondent contended that to the extent that an alleged failure to undertake some duties is an issue of unsatisfactory performance, s.387(e) of the Act is relevant. The Respondent contended that no warnings were received by the Respondent that there would or could be any adverse consequences if he failed to perform his duties.

[58] The weight of the evidence indicates that the Respondent was dismissed for the non-performance – rather than unsatisfactory performance – of his duties. As such, we are of the view that s.387(e) of the FW Act is not relevant in this matter.

387(f) - the size of enterprise and 387(g) –and dedicated human resources management

[59] The Respondent did not make submissions with regards to s.387(f) and (g) of the FW Act. We are satisfied that s.387(f) and (g) of the FW Act are not relevant in this matter.

387(h) – any other relevant matter

[60] The Respondent submitted that his medical condition and potential superannuation benefits were relevant matters pursuant to s.387(h) of the FW Act.

[61] With regards to the Respondent’s medical condition, the Respondent posited that the Appellant failed to take the Respondent’s medical condition into account in determining whether he should be dismissed. 35 In determining whether the Respondent should be dismissed, the Appellant confined its consideration to the eleven days that the Respondent was at work.36 The Respondent acknowledged that during these eleven days he engaged in CPSU-related work, attended to matters that related to his Comcare claim, attended to an application in the Fair Work Commission and complied with a notice from the Inspector-General of Taxation.37 On the basis that the Respondent was able to attend to these matters during the eleven day period, it does not follow that the Respondent’s medical condition precluded him from attending to the duties assigned to him by the Appellant in that period. Furthermore, the Appellant on two occasions offered the Respondent temporary transfers in light of his medical condition, which the Respondent rejected.38 Therefore, the weight of evidence does not lead to the conclusion that the manner in which the Appellant dealt with the Respondent’s medical condition in considering whether the Respondent should be dismissed was harsh, unjust or unreasonable. As such, we are not persuaded that the Respondent’s medical condition is a factor that indicates that the dismissal was harsh, unjust or unreasonable pursuant to s.387(h) of the FW Act.

[62] In relation to the Respondent’s submission that a harsh effect of the dismissal is that the Respondent’s superannuation benefits are significantly disadvantaged by the dismissal, the Respondent said:

“if I’d stayed with the ATO for 20 years, then the benefits would have been significant, whereas after only four years they are almost incidental, not significant.” 39

[63] It does not follow that an employer should be restrained or discouraged from dismissing an employee who refuses to attend to reasonable duties assigned to him or her on the basis that the employee will receive a greater level of benefits if they remain employed. As such, we are not persuaded that this submission exposes a factor that indicates that the dismissal was harsh, unjust or unreasonable pursuant to s.387(h) of the FW Act.

[64] In light of the above, we are of the view that:

There was a valid reason for the dismissal pursuant to s.387(a);

The factors in s.387(b), and (c) weigh in favour of a conclusion that the dismissal was fair;

Section 387(d) is not relevant;

Section 387(e) is not relevant;

The factors in s.387(f) and (g) are not relevant; and

None of the factors pursuant to s.387(h) indicate that the dismissal was harsh, unjust or unreasonable.

[65] In balancing these findings, we are not persuaded that the dismissal was harsh, unjust or unreasonable pursuant to s.387 of the FW Act. As such, we are not persuaded that there was an unfair dismissal in accordance with s.385 of the FW Act. Accordingly, the application for a remedy for an unfair dismissal must be dismissed.

Conclusion

[66] The appeal is upheld.

[67] The application for a remedy for an unfair dismissal is dismissed.