1
Fair Work Act 2009
s.604 - Appeal of decisions
Guillermo (William) Diaz
v
Anzpac Services (Australia) Pty Limited
(C2016/5140)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT CLANCY
COMMISSIONER CIRKOVIC SYDNEY, 21 OCTOBER 2016
Permission to appeal against decision [2016] FWC 5305 of Senior Deputy President
Hamberger at Sydney on 10 August 2016 in U2016/2078.
Introduction and background
[1] Mr Guillermo Diaz has applied for permission to appeal and appealed a decision of
Senior Deputy President Hamberger issued on 10 August 20161 (Decision). In the Decision,
the Senior Deputy President found that Mr Diaz’s dismissal by Anzpac Services (Australia)
Pty Limited (Anzpac) was not unfair, and dismissed his application for an unfair dismissal
remedy. The crux of the Decision was that the Senior Deputy President found, for the purpose
of s.387(a) of the Fair Work Act 2009 (FW Act), that Mr Diaz’s conduct in yelling and
arguing with a fellow employee constituted a valid reason for dismissal having regard to the
fact that Mr Diaz had been warned about similar behaviour in the workplace on a number of
previous occasions. Mr Diaz, represented by his union, the Australian Manufacturing Workers
Union (AMWU), contends that the Senior Deputy President erred in principle by taking into
account the earlier warnings under s.387(a), and this raised an issue of importance and general
application which justified the grant of permission to appeal in the public interest.
[2] The factual background is uncontroversial. As described in Mr Diaz’s own
submissions in support of his application for permission to appeal, he had before his dismissal
been employed by Anzpac for 24 years and over that period “he had been warned (formally
and informally) on multiple occasions for losing his temper and shouting at colleagues”. The
most recent of these warnings was in 2012. The incidents which caused Mr Diaz’s dismissal
occurred on 30 and 31 March 2016. There was no challenge to the findings of fact made in the
Decision about this incident, which were as follows (footnotes omitted):
“[8] On 30 March, Ms Murphy was operating the Alpina (a gluing machine designed to
glue cartons into folded shapes). Mr Diaz was working as Ms Murphy’s offsider,
feeding the machine. Ms Murphy started the machine at 30,000 units per hour and
1 [2016] FWC 5305
[2016] FWCFB 7204
DECISION
E AUSTRALIA FairWork Commission
[2016] FWCFB 7204
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increased speed gradually to about 62,000 units per hour. Shortly after this, Mr Diaz
started waving his arm and yelling at her. Ms Murphy stopped the machine and went
to talk to Mr Diaz. Because of the noise and the distance involved, Mr Diaz had had to
raise his voice to attract Ms Murphy’s attention. However he did not lower his voice
when she went to talk to him. Instead Mr Diaz continued to yell at her:
‘Turn the machine down! You’re going too fast!’
[9] Mr Diaz was standing around a foot from Ms Murphy while he was saying this. He
also waved his arms in Ms Murphy’s face. They then had an argument about the speed
of the machine.
…
[12] The next day (31 March 2016) Ms Murphy was setting up the machine and went
to the feeder end to talk to Mr Diaz. She asked him how he was and he yelled at her
‘Go away!’ and waved his arms at her.
[13] Later that morning Mr Arduin was having a discussion with John Sfikas
(Production Shift Manager) and Ms Borsey near the Alpina machine. Mr Diaz began
yelling at Mr Arduin and complaining that the machine was running too fast. Mr
Arduin told Ms Murphy to maintain a speed where everyone was comfortable.
[14] Soon after that, Ms Borsey arranged for someone other than Mr Diaz to work as a
feeder with Ms Murphy.”
[3] Mr Diaz was dismissed on 13 April 2016, and he lodged an unfair dismissal remedy
application pursuant to s.394 of the FW Act on 4 May 2016.
[4] In his consideration of Mr Diaz’s application the Senior Deputy President was
required by s.387(a) to take into account whether there was a valid reason for Mr Diaz’s
dismissal based on his capacity or conduct. The Senior Deputy President found:
“[30] I am satisfied that the respondent had a valid reason for the applicant’s dismissal.
There is no doubt that the applicant’s conduct towards Ms Murphy on 30 and 31
March 2016 was inappropriate. By itself it would not have justified the termination of
the applicant’s employment. However this instance of misconduct must be seen in the
context of the applicant’s long record of repeated inappropriate behaviour – most
obviously getting angry and shouting at his colleagues when something did not go his
own way. It is not good enough for the applicant to simply say that this is his nature.
Moreover it is nonsense to suggest that it is just the case of the applicant having a loud
voice. What happened on 30 (and to some extent the 31) March 2016 was just one
occasion too many. The respondent was well within its rights to dismiss Mr Diaz.”
[5] The Senior Deputy President’s conclusions as to the unfairness of the dismissal were
as follows:
“[36] I have had regard to the impact of the dismissal on the applicant’s personal
circumstances. However this must be weighed against the applicant’s failure to remedy
his own poor behaviour in the workplace - despite being given repeated opportunities
to do so over a long period of time. I am sure that the consequences of his dismissal
[2016] FWCFB 7204
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weigh heavily on the applicant. However they are the consequences of his own
conduct, and he must take responsibility for them.
[37] The applicant’s representative pointed to a number of weaknesses in the
respondent’s investigation. Some of these criticisms have merit. However they are
largely irrelevant to the issue before me. I am satisfied, based on the evidence
presented in the proceedings before the Commission, that the applicant engaged in the
misconduct for which he was dismissed. I am also satisfied that the applicant was
afforded procedural fairness, in that he was notified of the reason for his dismissal and
was given an opportunity to respond.
[38] In conclusion, I find that Mr Diaz’s dismissal was not unfair and his application is
dismissed.”
[6] The AMWU submitted, on Mr Diaz’s behalf, that the Senior Deputy President erred in
his consideration under s.387(a) because:
the correct approach to s.387(a) required the identification of the conduct said to
constitute the valid reason for dismissal, a determination as to whether the
conduct occurred, and consideration of whether the conduct viewed from the
perspective of the employer but considered in isolation from the broader context
in which it occurred was of sufficient gravity to justify dismissal;
it was erroneous to conclude that a valid reason existed on the basis of factors
specific to the individual employee that were independent of the relevant conduct;
it was necessary to determine whether the actual conduct was serious enough to
justify dismissal, regardless of who engaged in it;
to approach s.387(a) otherwise conflated the requirement to make a finding as to
whether there was a valid reason under that provision with the requirement to
determine whether the dismissal was harsh, unjust or unreasonable under s.385(b);
by taking into account Mr Diaz’s disciplinary record under s.387(a), the Senior
Deputy President moved beyond a consideration of valid reason and into a
broader consideration of whether the dismissal was harsh, unjust and
unreasonable, and also “double-counted” Mr Diaz’s disciplinary record under
s.387(a) and (h); and
had the correct approach been taken, the conclusion would have been that there
was no valid reason for the dismissal, and this would almost certainly have led to
the conclusion that the dismissal was unfair.
[7] It was also submitted that there was discordance in the authorities on the question of
what matters properly arose for consideration under s.387(a), and Mr Diaz should be granted
permission to appeal in the public interest to allow this issue to be settled. In this connection
the AMWU contrasted the Full Bench decisions in Parmalat v Tran2 and B, C and D v
2 [2016] FWCFB 1199 at [8]-[9]; (2016) 257 IR 21
[2016] FWCFB 7204
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Australia Post3 with those in Ricegrowers Co-operative Limited4, Walsh v Australian Tax
Office5 and Caspanello v Telstra Corporation Ltd.6
Consideration
[8] An appeal under s.604 of the FW Act is an appeal by way of rehearing and the
Commission’s powers on appeal are only exercisable if there is error on the part of the
primary decision maker.7 There is no right to appeal and an appeal may only be made with the
permission of the Commission.
[9] This appeal is one to which s.400 of the FW Act applies. Section 400 provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a
decision made by the FWC under this Part unless the FWC considers that it is in the
public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation
to a matter arising under this Part can only, to the extent that it is an appeal on a
question of fact, be made on the ground that the decision involved a significant error
of fact.
[10] In the Federal Court Full Court decision 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”.8 The task of assessing whether the public interest test
is met is a discretionary one involving a broad value judgment9. 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.”10
[11] 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
3 [2013] FWCFB 6191 at [42]; (2013) 238 IR 1
4 [2001] AIRC 887 at [14]-[17]; PR908351
5 [2015] AIRC 185 at [17]; PR956205
6 [2002] AIRC 1171 at [18]; PR922915
7 This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and
Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ
8 (2011) 192 FCR 78 at [43]
9 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) 192 FCR 78 at [44] -[46]
10 [2010] FWAFB 5343, 197 IR 266 at [27]
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of appealable error.11 However, the fact that the Member at first instance made an error is not
necessarily a sufficient basis for the grant of permission to appeal.12
[12] It is correct, as submitted on behalf of Mr Diaz, that there is some division in the
authorities concerning whether mitigating factors relevant to whether dismissal was a
proportionate sanction for any misconduct on the part of the relevant employee should be
considered under s.387(a) or under s.387(h), although we note that in the recent decision of
Sayers v CUB Pty Ltd13, the Full Bench said that the “balance of authority under the FW Act”
was in favour of such mitigating factors being considered under s.387(h). However, we
consider that the authorities are clear that s.387(a) requires consideration, in a case where
misconduct is the reason for dismissal, first as to whether the relevant conduct occurred, and
second, if the conduct did occur, whether it was of sufficient seriousness or gravity to
constitute a valid reason for dismissal. In this respect we endorse the analysis in Bista v Glad
Commercial Cleaning14 at paragraphs [34]-[42] in relation to the consideration required by
s.387(a).
[13] As was made clear in Bista, assessing whether a particular instance of misconduct is of
sufficient gravity to constitute a valid reason for dismissal is not the same thing as considering
whether dismissal was a disproportionate penalty for the misconduct. The former is
“concerned with whether the conduct in question, considered in isolation, was intrinsically
capable of constituting a valid reason for dismissal”.15 The latter involves taking into account
a range of potential mitigating factors, which may include matters such as the employee’s
length of service and disciplinary record, and weighing them against the gravity of the
misconduct in order to determine whether dismissal was too harsh a penalty.
[14] In respect of the former task, it is not correct, as Mr Diaz submits, that the specific acts
or omissions which constitute the relevant misconduct can be divorced from contextual
matters relevant to the seriousness of that conduct. In Sayers v CUB Pty Ltd, the Full Bench
made it clear that the “conventional position” in considering the valid reason issue is to take
into account contextual matters bearing upon the degree of culpability on the part of the
employee.16 The majority judgment in B, C and D v Australia Post17 might be read as
standing for the proposition that contextual matters which operate to diminish the culpability
of the employee should be taken into account under s.387(h) rather than s.387(a). However
that does not assist Mr Diaz, because the majority also made it clear that the following
matters, which concern the employee’s misconduct assessed from the employer’s perspective,
arise for consideration in relation to the valid reason issue under s.387(a) (emphasis added):
“The acts or omissions that constitute the alleged misconduct on which the employer
relied (together with the employee’s disciplinary history and any warnings, if relied
11 Wan v AIRC (2001) 116 FCR 481 at [30]
12 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied
Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 388, affirmed on
judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett
McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]
13 [2016] FWCFB 5499
14 [2016] FWC 3009
15 Ibid at [42]
16 [2016] FWCFB 5499 at [14], [16]
17 [2013] FWCFB 6191, (2013) 238 IR 1
[2016] FWCFB 7204
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upon by the employer at the time of dismissal) but otherwise considered in isolation
from the broader context in which those acts or omissions occurred.” 18
[15] It is clearly the case that the gravity of an employee’s misconduct is increased in
circumstances where the employee has previously engaged in conduct of the same or a similar
conduct and has been warned not to repeat it. To put this another way, the employee’s
defiance of the earlier warning(s) is an intrinsic aspect of his or her misconduct, and
necessarily forms part of the assessment of the gravity of the misconduct. We do not consider
that it is in any way controversial for such circumstances to be taken into account in
determining whether there is a valid reason for dismissal under s.387(a). We therefore do not
consider that Mr Diaz has demonstrated any arguable case of error in respect of the approach
taken by the Senior Deputy President under s.387(a). Nor do we consider that Mr Diaz has
identified any question of general application or any disconformity in the authorities in this
respect.
[16] We would add that Mr Diaz’s submission that the outcome of his case might change
depending upon the paragraph of s.387 under which his prior disciplinary record was
considered is both artificial and counter-intuitive. That prior disciplinary record was, as the
Decision makes clear, the critical factor which caused the Senior Deputy President to
conclude that the dismissal was not unfair. It seems to us to be logically inexplicable that the
dismissal could become unfair merely because that same disciplinary record was considered
under s.387(h) rather than s.387(a), since in either case the degree of relevance of that
disciplinary record and the weight to be assigned to it in assessing the fairness of the dismissal
should be the same. Section 387 does not require any greater or lesser weight to be assigned
to paragraph (a) as compared to paragraph (h); provided each specified matter in s.387 is
properly taken into account, the weight to be assigned to them is a matter for the Commission
member in the exercise of his or her discretion.
[17] For the reasons stated, we do not consider that it would be in the public interest to
grant permission to appeal. Therefore, as required by s.400(1) of the FW Act, permission to
appeal is refused.
VICE PRESIDENT
Appearances:
L. Saunders from the Australian Manufacturing Workers’ Union for G.Diaz.
C. Watson from Printing Industries Association of Australia for Anzpac Services (Australia)
Pty Limited.
Hearing details:
18 Ibid at [42]-[43]
OF THE FAIR WORK MISSION THE
[2016] FWCFB 7204
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2016.
Melbourne:
10 October.
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