Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [2016] FWC 7982 of Commissioner Cambridge at Sydney on 10 November 2016 in matter number U2016/7347.

Introduction

[1] This decision concerns an application for permission to appeal and an appeal against a decision 1 of Commissioner Cambridge in which he determined that Mr Nash Wong’s (“the Appellant”) dismissal was unjust, but determined to order no compensation.

The Matter at First Instance

[2] The Appellant was summarily dismissed by Taitung Australia Pty Ltd (“the Respondent”) on 17 May 2016 2 on the basis of alleged serious misconduct due to involvement in stealing and selling stock, along with other employees (“the joint criminal enterprise”).3

[3] Evidence was called from the Appellant who denied the allegation.

[4] The Respondent called three witnesses, Mr Yuehai Jiang, Mr Seng Le and Mr Bevan Wong. Only Mr Jiang had direct knowledge of the alleged theft.

[5] Mr Jiang gave evidence that the Appellant paid him to load additional stock onto trucks. Attached to Mr Jiang’s witness statement was a WhatsApp transcript. 4 WhatsApp is a messaging service which enables text communication from one device to another. The transcript was of his WhatsApp communications with Mr Chang (Peter), another employee of the Respondent. That conversation commenced on 19 February 2016 with the majority of the exchange occurring after 10.41pm on 21 February 2016 and ending at 11.10pm. Mr Jiang explained that the transcript was drawn from the history and it was not typed up by him.5 That transcript recorded Mr Jiang referring to the Appellant being involved in the “joint criminal enterprise”.

[6] When Mr Jiang’s statement 6 was tendered, Mr Serge Gorval, who appeared for the Appellant, objected. After an exchange with Commissioner Cambridge, Mr Gorval advised that he would make submissions as to the weight that should be afforded to the evidence and the transcript was admitted.7

[7] Mr Gorval made no reference to the WhatsApp transcript in his final submissions. 8

The Decision

[8] Commissioner Cambridge found that there was a valid reason for the dismissal. 9

[9] Commissioner Cambridge held that if he verified the employer’s belief that the Appellant was a participant in the “joint criminal enterprise”, this would provide a “proper, sound, defensible, valid reason for dismissal.” 10

[10] Commissioner Cambridge identified that he was required to carefully examine and evaluate the directly contested evidence provided by the Appellant and Mr Jiang. Commissioner Cambridge found that “a most significant piece of corroborative evidence of the directly contested evidence, in this instance was provided in the form of the WhatsApp transcript of the exchanges between Mr Jiang (Andy) and Mr Chang (Peter).” 11

[11] He found that the contents of the WhatsApp transcript provided “a compelling basis upon which to conclude that on the balance of probabilities, and to the requisite, elevated Briginshaw standard, the applicant was one of a number of employees who participated in the joint criminal enterprise.” 12

[12] He concluded that, while the evidence may not support a criminal conviction, there was “sufficient evidentiary materials which, upon careful examination and evaluation, has represented a sound basis for the Commission to confirm the employer’s belief that the applicant was a participant in the joint criminal enterprise.” 13

[13] In addition to his consideration of the WhatsApp transcript, Commissioner Cambridge considered the witness evidence of the Appellant and Mr Jiang. He acknowledged that the evidence of both witnesses contained inconsistencies, but preferred the evidence of Mr Jiang to that of the Appellant. The Commissioner had regard to the fact that Mr Jiang, in giving evidence, was making open admissions “without seeking any immunity and in the full knowledge of their self-incrimination.” 14

[14] He then considered ss.387(b)-(g) and his findings in relation to these matters are not the subject of the appeal.

[15] In considering s.387(h), Commissioner Cambridge had regard to the length of time between the discovery of the “joint criminal enterprise” and the dismissal. He found that delay, albeit one that occurred at the suggestion of the police, meant that the Respondent lost the right to summarily dismiss the Appellant. 15

[16] He found, therefore, that the summary dismissal was unjust. 16

[17] In determining remedy, he noted that the Appellant was not seeking reinstatement. In considering the amount of compensation, Commissioner Cambridge noted that he needed to have regard to the Sprigg test, as well as the matters set out in s.392(2).

[18] The Commissioner then noted there was no evidence of any impact that an order of compensation would have on the viability of the employer’s business; 17 that the Appellant had been employed for nine years,18 however, given the employer’s knowledge of the Appellant’s misconduct, this meant that he was likely to have been terminated within a very short period.19 He noted the attempts the Appellant made to mitigate his loss.20 He noted that he had found the dismissal to be unfair as it was a summary dismissal and he held that, had this been a dismissal with notice, he would not have found the dismissal to be harsh, unjust or unreasonable.21

[19] Commissioner Cambridge then reduced this amount to zero having regard to the misconduct engaged in by the Appellant.

Grounds of Appeal

[20] We summarise the grounds of the appeal of the Appellant as follows:

1. Commissioner Cambridge misapplied the principles in Briginshaw in concluding that the WhatsApp transcript had provided compelling evidence and the requisite standard that, on the balance of probabilities, supported the finding that the Appellant had engaged in misconduct, especially serious misconduct at paragraphs [47]-[50] of the decision and, consequently, erred in making the order to reduce compensation to zero in circumstances where:

(a) The WhatsApp transcript was hearsay evidence and highly prejudicial to the Appellant;

(b) The WhatsApp transcript was an excerpt of a conversation between Mr Jiang (Andy) and Mr Chang (Peter) concerning the Appellant and did not include the Appellant as party to the conversation;

(c) Mr Jiang was not a reliable witness in circumstances where he, himself, had admitted to having engaged in the criminal enterprise against the employer at (sic) implicated the Appellant in the criminal conduct to avoid termination of his own employment; and

(d) The WhatsApp transcript was not corroborated by any other reliable evidence or source that could substantiate a reasonable finding to the Briginshaw standard.

2. Further and/or in the alternative, Commissioner Cambridge denied the Appellant procedural fairness and natural justice by relying on and admitting unsafe and objectionable hearsay evidence, namely, the Whatsapp transcript, being the material consideration for the finding of misconduct and satisfaction of the Briginshaw standard at paragraph [46].

3. Further and/or in the alternative, Commissioner Cambridge misapplied the principles of Sprigg at paragraphs [67]-[69] and, consequently, erred in reducing the compensation payable to zero by:

(a) Relying on an erroneous finding of misconduct;

(b) Failing to set out how long the Appellant would have remained in employment;

(c) Taking into account the Appellant’s extended period of service and faultless employment record;

(d) Failing to provide adequate reasons for reduction of quantum of compensation to be payable to that of notice period; and

(e) Failing to provide adequate reasons to reduce the compensation to zero.

Public Interest

[21] The Appellant submitted that the matter is in the public interest because:

1. The grounds of appeal concern the correctness of the Commissioner’s conclusions and findings with respect to the application of established principles in employment law, particularly in relation to findings of serious misconduct. It is readily accepted that an employer who seeks to prove misconduct must meet the high standard which carries a heavy burden as stated in Briginshaw;

2. The conclusion to admit unsafe and hearsay evidence is, in substance, a denial of natural justice and in contravention of recognised and accepted principles of evidence law, especially where the prejudicial evidence is relied upon to prove a material fact in issue;

3. The Commissioner made a finding of serious misconduct on inherently unreliable and hearsay evidence; and

4. It is submitted that this decision diverts from the course of accepted principles regarding the principles of establishing serious misconduct and assessment, as well as reduction of compensation. 22

Principles on Appeal

[22] The decision subject to appeal was made under Part 3-2 - Unfair Dismissal - of the Act. Section 400(1) which provides that permission to appeal must not be granted from such a decision unless the Commission considers that it is in the public interest to do so. Further, in such matters appeals on a question of fact may only be made on the grounds that the decision involved a “significant error of fact” (s.400(2)). In Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as ‘a stringent one’. 23

[23] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 24 In GlaxoSmithKline Australia Pty Ltd v Makin, a Full Bench of the Commission identified some of the considerations that may attract the public interest:

“… 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.” 25

[24] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of an appealable error. 26 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis to grant of permission to appeal.27 As we have mentioned, s.400(1) provides that permission to appeal must not be granted unless the Commission considers that it is in the public interest to do so.

[25] It is also important to note that the decision under appeal is of a discretionary nature. Usually, such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. It is not open to an appeal bench to substitute its view on the matters that fell for determination before the Commissioner in the absence of error of an appealable nature in the decision at first instance. As the High Court said in House v The King: 28

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

Consideration

[26] We now turn to consider each of the grounds of appeal in making our decision.

[27] Ground 1 of the appeal asserted that Commissioner Cambridge misapplied the test in Briginshaw.

[28] In the Appellant’s submissions at first instance, it was put that if the standards of Briginshaw were applied on the facts available and on the material before the Commission, there would be no basis to find that the Appellant engaged in serious and wilful misconduct that warranted the termination of his employment. 29 In the closing submissions, apart from quoting from Briginshaw,30 no submissions were made by Mr Gorval about how its application should cause Commissioner Cambridge to find that the Appellant did not engage in the conduct.

[29] At the Appeal, the Appellant submitted that the WhatsApp transcript was hearsay and highly prejudicial to the Appellant. It was submitted that Mr Jiang was not a reliable witness and the transcript was not corroborated by any other reliable evidence.

[30] The WhatsApp transcript recorded a conversation between Mr Jiang and another employee. The other employee had been caught stealing goods and had been suspended on pay.

[31] Although the rules of evidence do not apply in the strictest sense, as a Full Bench noted in the decision in Hail Creek Coal Pty Ltd v Construction, Forestry, Mining and Energy Union: 31

“While the Commission is not bound by the rules of evidence that does not mean that those rules are irrelevant. As the then President of the Industrial Relations Commission of Western Australia said in respect of a similar provisions in the then Industrial Relations Act 1979 (WA):

‘However, this is not a licence to ignore the rules. The rules of evidence provide a method of enquiry formulated to elicit truth and to prevent error. They cannot be set aside in favour of a course of inquiry which necessarily advantages one party and necessarily disadvantages the opposing party (R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott (1933) 50 CLR 228 Evatt J. at 256 (dissenting)). The common law requirement that the Commission must not in its reception of evidence deny natural justice to any of the parties acts as a powerful control over a tribunal which is not bound by the rules of evidence.’

A similar observation was made by the Industrial Commission of New South Wales in PDS Rural Products Ltd v Corthorn:

‘First, it is correct to say, as the commissioner did, that he was not bound to observe the rules of law governing the admissibility of evidence (s 83). It should be borne in mind that those rules are founded in experience, logic, and above all, common sense. Not to be bound by the rules of evidence does not mean that the acceptance of evidence is thereby unrestrained. What s 83 does do in appropriate cases is to relieve the Commission of the need to observe the technicalities of the law of evidence. Common sense, as well as the rules of evidence, dictates that only evidence relevant to an issue which requires determination in order to decide the case should be received. This means that issues must be correctly identified and defined. This did not happen in this case.’

We agree with the above observations. In our view the rules of evidence provide general guidance as to the manner in which the Commission chooses to inform itself [emphasis added].”

[32] We do not accept that the WhatsApp transcript is hearsay evidence.

[33] Section 64(3) of the Evidence Act 1995 (Cth) provides as follows:

“If the person who made the representation has been or is to be called to give evidence, the hearsay rule does not apply to evidence of the representation that is given by;

(a) that person; or

(b) a person who saw, heard or otherwise perceived the representation being made.”

[34] Therefore, whilst the WhatsApp transcript recorded Mr Jiang’s representation, Mr Jiang was called to give evidence regarding this representation. As such, his representation is not hearsay.

[35] We are satisfied that the WhatsApp transcript was relevant to the issue before the Commission, namely, whether the Appellant was engaged in the conduct as alleged.

[36] We are not satisfied that Commissioner Cambridge erred when he had regard to the WhatsApp transcript in deciding whether to prefer Mr Jiang’s evidence to that of the Appellant’s evidence.

[37] There is nothing in Commissioner Cambridge’s decision which is inconsistent with the discussion of Briginshaw in Commission decisions, such as Brinks Australia Pty Ltd v TWU, 32 in which a Full Bench said:

“[6] The appellant’s submission is that this passage indicates that the Commissioner fell into error in weighing the evidence because he failed to apply the correct onus of proof - namely, the balance of probabilities. The appellant submitted that the standard in civil proceedings is always proof on the balance of probabilities. Reliance was placed on the following passage from the joint judgment of Mason CJ, Brennan, Deane and Gaudron JJ in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others:

‘2. The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary “where so serious a matter as fraud is to be found”. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. As Dixon J. commented in Briginshaw v. Briginshaw:

“The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved …”

There are, however, circumstances in which generalisations about the need for clear and cogent evidence to prove matters of the gravity of fraud or crime are, even when understood as not directed to the standard of proof, likely to be unhelpful and even misleading.’

[7] It seems to us beyond doubt that the standard of proof to be applied in Commission proceedings is proof on the balance of probabilities. While it is true that the strength of the evidence necessary to establish a fact on the balance of probabilities may vary according to the nature of what it is sought to prove, the standard of proof never changes. The Commissioner indicated that he thought it appropriate to apply a higher level of satisfaction in relation to findings of fact involved than the bare civil onus of the balance of probabilities. That was an error of law.”

[38] Commissioner Cambridge had to assess the evidence before him. It cannot be said that Mr Jiang’s evidence was indirect. He gave evidence that he received monies from the Appellant to load additional items. Commissioner Cambridge had the benefit of hearing Mr Jiang’s evidence, as well as the Appellant’s denial of any involvement in the “joint criminal enterprise”. Commissioner Cambridge did not just have regard to the WhatsApp transcript in making his finding. He also had regard to the fact that Mr Jiang was giving evidence in circumstances where he had admitted his own involvement in the “joint criminal enterprise” and where he was fully aware of the potential consequences for him in doing so.

[39] Commissioner Cambridge was aware that in assessing the evidence he should have regard to the principles in Briginshaw. 33

[40] We are not satisfied that Commissioner Cambridge misapplied the test in Briginshaw.

[41] Ground 2 of the appeal asserted that Commissioner Cambridge denied the Appellant procedural fairness by relying on and admitting the WhatsApp transcript.

[42] We have set out above the circumstances in which the WhatsApp transcript was admitted. We note that Mr Gorval was provided with an opportunity to make submissions as to the weight that should be given to this evidence and he did not make any submissions.

[43] It is unusual for an Appellant to be permitted to rely on an argument put on appeal which was not put at first instance. However, in light of our decision it is not necessary to consider and determine this issue.

[44] We are not satisfied that the Appellant was denied procedural fairness when the decision was taken to admit the evidence. As the Commissioner noted, the evidence of both parties was replete with hearsay evidence. Further, the Appellant was provided with an opportunity to make submissions as to the weight that should be afforded to the evidence and he did not do so. As we are not satisfied that the transcript was hearsay in so far as it recorded Mr Jiang’s texts, we are not satisfied that Commissioner Cambridge denied the Appellant procedural fairness by relying on the WhatsApp transcript.

[45] Ground 3 of the appeal asserted that Commissioner Cambridge misapplied the principles in Sprigg when he reduced the compensation to zero.

[46] It was submitted that Commissioner Cambridge failed to set out how long the Appellant would have remained in employment. Commissioner Cambridge found that the summary termination of the Appellant was unjust. He found that he would have been terminated within a very short period. We are not satisfied that Commissioner Cambridge’s finding was in error, given the finding that the Appellant was engaged in the “joint criminal enterprise.”

[47] In those circumstances, the Commissioner found that termination with notice would not have been unfair. 34 As such, the amount of compensation the Appellant would have been entitled to was four to five weeks depending on his age.

[48] It was submitted that Commissioner Cambridge failed to have regard to the Appellant’s length of service and his faultless employment record.

[49] Commissioner Cambridge did have regard to the Appellant’s length of service. 35 It cannot be said he failed to have regard to the Appellant’s faultless employment record as that was in contest at the hearing. Mr Bevan Wong denied that the Appellant’s employment record was faultless and he was not cross examined on his evidence about this.36

[50] It was submitted that Commissioner Cambridge failed to give reasons for limiting compensation to the notice period and the reduction of the compensation to zero.

[51] For the reasons set out above, we are not satisfied that Commissioner Cambridge erred when he found that the dismissal would not have been unjust if the Appellant had been dismissed with notice. It was that finding which explained why the compensation was limited to the notice period.

[52] We are not satisfied that Commissioner Cambridge failed to give adequate reasons for his decision to reduce the compensation payable to zero. Commissioner Cambridge made reference to s.392(4) which required him to reduce the compensation by an appropriate amount if he was satisfied there was misconduct which contributed to the decision to dismiss the Appellant. Commissioner Cambridge reduced the amount to zero because of the “severity and nature of the misconduct” of the Appellant. 37 While his reasons were brief, we are not satisfied that his reasons were inadequate.

[53] In the Appellant’s written submissions, it was put that Commissioner Cambridge wrongly applied a test in making findings under s.387(a) that the Respondent believed on reasonable grounds that the Appellant was guilty of the conduct which resulted in termination. 38

[54] We do not agree with this characterisation of the Commissioner’s findings. Commissioner Cambridge found that the Appellant was involved in the “joint criminal enterprise”. He made this clear in paragraph [44] of the decision where he noted that his task was to verify the Appellant’s involvement to the requisite standard of proof. Again, in paragraph [45], he noted that he needed to determine if the Appellant was guilty of the misconduct as found by the employer. He further noted at paragraph [46] that he needed to give consideration to the evidence before him. He did not make a finding that the employer had a reasonable belief that the Appellant was guilty of the conduct alleged. He found on the evidence before him that there was reasonable basis to conclude that the Appellant had engaged in the alleged conduct and, hence, there was a valid reason. We are not satisfied that Commission Cambridge applied the wrong test.

Conclusion

[55] For the reasons set out above and, in particular, the absence of an appealable error, we are not satisfied that it would be in the public interest to grant permission to appeal. We are further not satisfied that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. Therefore, and in accordance with section 400(1), permission to appeal is refused.

VICE PRESIDENT

Appearances:

S. Gorval for the Appellant.

R. Hassall for the Respondent.

Hearing details:

2017.

Melbourne via video link to Sydney:

January 11.

 1   Nash Wong v Taitung Australia Pty Ltd [2016] FWC 7982.

 2   Ibid at [24].

 3   Ibid [24] and refer to [17] for the definition of the joint criminal enterprise.

 4   Appeal Book between pp197-198.

 5   Ibid pp 68-69 at Transcript PN730-733.

 6   Ibid p 196.

 7   Ibid pp 57-58 at PN569-578.

 8   Ibid pp 153-164.

 9   Ibid p 9 at [52].

 10   Ibid p 8 at [44].

 11   Ibid at [46].

 12   Ibid at [47].

 13   Ibid p 9 at [50].

 14   Ibid at [49].

 15   Ibid p10 at [59]-[60].

 16   Ibid p11 at [65].

 17   S.392(2)(a), Appeal Book at p12 at [70].

 18   S.392(2)(b).

 19   S.392(2)(c).

 20   S.392(2)(d).

 21   Appeal Book p12 at [72].

 22   Notice of Appeal filed by the Appellant.

 23   [2011] FCAFC 54 at [43].

 24   O'Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54 at [44]-[46].

 25   [2010] FWAFB 5343 at [27].

 26   Wan v AIRC [2001] FCA 1803 at [30].

 27   Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].

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

 29   Appeal Book p18.

 30   Ibid p159.

 31   (2004) 143 IR 354 at [48]-[50].

 32   PR922612.

 33   [2016] FWC 7982 at [47] and [50].

 34   Ibid at [70].

 35   Ibid.

 36   Appeal Book p 237 and p115, Transcript PN1525.

 37   Ibid p 12 at [73].

 38   Outline of submissions of the Appellant at 7a.

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