[2018] FWCFB 7394
This document has been amended to correct a typographical error in the identifying code.
Associate to Vice President Hatcher
Dated 3 January 2019
| [2018] FWCFB 7394 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Andrew Roos; Loretta Roos
v
Winnaa Pty Ltd
(C2018/5529; C2018/5531)
VICE PRESIDENT HATCHER |
SYDNEY, 21 DECEMBER 2018 |
Appeal against decision [2018] FWC 5692 of Commissioner Simpson at Brisbane on 12 September 2018 in matter number C2017/300.
Introduction and background
[1] Andrew Roos and Loretta Roos have each lodged a notice of appeal, for which permission to appeal is required, against a decision of Commissioner Simpson issued on 12 September 2018 (compensation decision). 1 The circumstances which led to the making of the compensation decision require description at the outset. Mr Roos and Ms Roos, together with Ms Bree Dargan, were formerly employed by the respondent to the appeal, Winnaa Pty Ltd (Winnaa), as casual cultural heritage field officers. They commenced their employment with a different but related corporate entity in November 2015, and Winnaa became their employer on 22 February 2016. Winnaa is one of a number of corporate vehicles used by Barada Barna Aboriginal Corporation RNTBC (BBAC) in the conduct of its affairs. BBAC is a registered indigenous corporation which holds native title on trust for the Barada Barna people in respect of lands located in central Queensland. These lands were the subject of a determination of native title in favour of the Barada Barna people made by the Federal Court on 29 June 2016.2
[2] A dispute arose as to whether Mr Roos and Ms Roos (who is Mr Roos’ mother) and Ms Dargan were blood descendants of an apical ancestor of the Barada Barna People such as to entitle them to be members of BBAC and to be employed as cultural heritage field officers. The heart of the controversy was whether Kitchener Brown, from whom Mr Roos, Ms Roos, Ms Dargan and a number of other members of BBAC were descended, had been a Barada Barna aboriginal. On 11 August 2016 the board of BBAC determined to suspend from membership all those who claimed descent from Kitchener Brown, and to dismiss from their employment with Winnaa Mr and Ms Roos and Ms Dargan. The dismissals appear to have taken effect the following day. The reason given for the dismissals, when communicated by BBAC to Mr Roos, Ms Roos and Ms Dargan was “shortage of work”. Subsequently, on 29 April 2017 a general meeting of BBAC determined that all members of the Kitchener Brown family group were to be removed from membership.
[3] On 30 August 2016 Ms Roos filed an application pursuant to s 365 of the Fair Work Act 2009 (FW Act) for the Commission to deal with a dismissal dispute involving an allegation of contravention of Pt 3-1 of the FW Act. Mr Roos and Ms Dargan did likewise on the following day. In each application, the dismissal was alleged to have been in breach of ss 344 and 351 of the FW Act, with the s 351 contravention allegation being founded on the contention that they had been dismissed on the grounds of social origin and national extraction. The applications were the subject of joint conciliation on 7 October 2016, but they were not settled. On 9 January 2017 the Commission issued certificates in each matter pursuant to s 368(3)(a) to the effect that it was satisfied that all reasonable attempts to resolve the dispute, other than by arbitration, had been or were likely to be unsuccessful. On 18 January 2017 notices were lodged with the Commission in relation to each matter indicating that the parties had agreed to the Commission dealing with the dispute by arbitration pursuant to s 369 of the FW Act. The matters were then heard together by the Commissioner.
[4] On 19 June 2018 the Commissioner issued a decision concerning whether, in respect of each matter, there had been a dismissal in contravention of Pt 3-1 of the FW Act (liability decision). 3 The liability decision recorded that BBAC conceded that the dismissals occurred for reasons which included that it had “formed a view” that Mr Roos, Ms Roos and Ms Dargan were not Barada Barna, and that this constituted the taking of adverse action against them because of their national extraction for the purpose of s 351(1).4 Section 351(1) provides:
(1) An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person's race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
[5] That left the question to be determined as being whether BBAC was entitled to rely on s 351(2)(a) or (b) such as to avoid a finding that it had contravened s 351(1). Those provisions are as follows:
(2) However, subsection (1) does not apply to action that is:
(a) not unlawful under any anti-discrimination law in force in the place where the action is taken; or
(b) taken because of the inherent requirements of the particular position concerned; or
. . .
[6] In the liability decision, the Commissioner dealt with s 351(2)(b) first. He determined that, while it was an inherent requirement of their positions that Mr Roos, Ms Roos and Ms Dargan be Barada Barna, 5 he was not satisfied that a majority of the board of BBAC held, at the time the decision was made to dismiss them, a genuine belief that they were not Barada Barna.6 Rather, he determined that:
“… I have concluded the collective mind of the decision maker concerning the substantial and operative reason for the decision was that the Applicants had not yet proved that they were Barada Barna, and that is different to concluding they were not Barada Barna.” 7
[7] It must immediately be observed that there is tension between this conclusion and Winnaa’s concession that it had dismissed Mr Roos, Ms Roos and Ms Dargan because it had “formed a view” that they were not Barada Barna. However that is not an issue which arises for consideration in this appeal. In respect of s 351(2)(a), the Commissioner rejected BBAC’s submission that ss 104 and 105 of the Anti-Discrimination Act 1991 (Qld) rendered their conduct as lawful such as to make s 351(1) inapplicable. 8 Thus the effect of the liability decision was that BBAC had dismissed Mr Roos, Ms Roos and Ms Dargan in contravention of s 351(1).
[8] The next step in the arbitral proceedings before the Commissioner was to determine the remedies to be awarded for these contraventions. The power to award compensation is found in s 369(2), which relevantly provides:
(2) The FWC may deal with the dispute by arbitration, including by making one or more of the following orders:
. . .
(b) an order for the payment of compensation to the person;
. . .
[9] After receiving further submissions concerning remedy, the Commissioner issued the compensation decision, in which he awarded the following amounts of monetary compensation:
Mr Roos: Economic loss: $18,608.10 plus 9.5% superannuation, less deduction of any tax as required by law.
Non-economic loss: $5,000.
Ms Roos: Economic loss: $18,675.15 plus 9.5% superannuation, less deduction of any tax as required by law.
Non-economic loss: $5,000.
Ms Dargan: Economic loss: $15,219.75 plus 9.5% superannuation, less deduction of any tax as required by law.
Non-economic loss: $5,000.
[10] Orders were issued in conjunction with the compensation decision to give effect to that decision. 9
[11] In their notices of appeal, Mr Roos and Ms Roos both contend that the compensation decision was attended by appealable error in four identified respects. We will set out those contentions of error later in this decision. Ms Dargan did not file a notice of appeal and accordingly the assessment of compensation for her does not arise for consideration.
The compensation decision
[12] In his consideration of compensation for economic loss in the compensation decision, the Commissioner followed the approach taken in Heraud v Roy Morgan Research Ltd (No 2), 10 namely that the principles identified in Haines v Bendall11 regarding damages in actions in tort and contract should be applied to the assessment of compensation under the FW Act.12 The Commissioner summarised that approach as follows (footnotes omitted):
“[47] The process of calculation involves having regard to the totality of the evidence, an assessment of how long the employee would have remained in that employment and the determination of the value of the likely income stream, followed by the application of the discount for contingencies and vicissitudes. The discounted income stream is then reduced by the employee’s mitigated loss (his or her actual earnings since the dismissal). It is for the employer to establish the facts going to the employee’s alleged failure to mitigate his or her loss.
[48] An order for compensation for economic loss must also be predicated on an appropriate causal connection between the contravention of the Act and the loss claimed.”
[13] The Commissioner commenced his process of analysis by estimating how long Mr Roos and Ms Roos (and Ms Dargan) would have remained employed had they not been unlawfully dismissed on 12 August 2016. In this respect the Commissioner determined that their employment would almost certainly have been brought to an end after the meeting of 29 April 2017 at which they were removed from membership of BBAC, even though this was not technically an inherent requirement of their positions. On that basis he found that compensation for economic loss was necessarily limited to the 21.5 weeks period from the date of their actual dismissal to 29 April 2017. 13 In respect of weekly earnings over the period of their employment, the Commissioner determined that Mr Roos had earned an average of $1,240.54 gross per week, and Ms Roos an average of $1,245.01 gross per week, and were additionally entitled to 9.5% superannuation.14
[14] The Commissioner then considered how long Mr Roos and Ms Roos (and Ms Dargan) would have remained in employment within the maximum 21.5 weeks period. He found that Ms Roos had been employed on a casual basis with no guarantee of ongoing or regular work, that her contract of employment provided that a 10-hour day would generally be worked on an as-needed basis, and that under the contract her employment could be terminated at any time without notice but that one week’s notice or payment in lieu thereof might be provided at the employer’s discretion. 15 In relation to Mr Roos and Ms Roos (and Ms Dargan) generally, the Commissioner found that there was no relevant dissatisfaction with their performance, that Winnaa’s demand for cultural heritage work fluctuated dependent upon the requirements of resource companies and the weather, and that their period of employment had been relatively brief.16 The Commissioner then said:
“[71] Having regard to the totality of the evidence, including length of service, and the casual/non-ongoing nature of the employment I am of the view that the employment may well have not had a duration any longer than the 21.5 weeks, regardless of events at the general meeting in April 2017. I will adopt 20 weeks as the assessment of how long the Applicants would have remained employed if Winnaa had not contravened the Act.
[72] The value of the likely income stream of the Applicants’ excluding superannuation would therefore be as follows:
• Ms Roos – $24,900.20 ($1,245.01 x 20 weeks)
• Mr Roos – $24,810.80 ($1,240.54 x 20 weeks)
• Ms Dargan – $20,293.00 ($1,014.65 x 20 weeks)”
[15] The Commissioner then considered whether there should be any further deduction for contingencies, and in that connection referred to 15% as being the “usual figure” on the basis of the decision in Sagona v R & C Piccoli Investments Pty Ltd & Ors, 17 and also referred to 15% being applied in Masson-Forbes v Gaetjens Real Estate Pty Ltd.18 The Commissioner determined that he should make a deduction for contingencies of 25% based on the following reasoning:
“[74] In reaching my conclusions in the substantive matter I also determined that the mind of the decision maker did not reach a subjective view that the Applicants were not Barada Barna because only three of the seven members of the Board who voted at the meeting in August 2016 had arrived at the requisite view at that time. Had I been satisfied that one more member of the Board had reached the requisite subjective view at that time the result would have been different.
[75] The evidence indicated that the Board did not have the power to suspend the Kitchener line and subsequent events led to the general meeting of members of the BBAC in April 2017 voting to remove the Kitchener line. However I am inclined to the view on the evidence that had the Board not moved to terminate the employment of the Applicants at the August 2016 meeting, they may well have done so before the general meeting. The result of the vote at the general meeting in April 2017 indicates the tide was turning against acceptance of the Kitchener line amongst the majority of the membership of the BBAC and, whilst uncertain, it is quite possible a majority of the Board may have arrived at that requisite view and decided to act on it before the April 2017 meeting, and such a decision would have fallen within the exception in s.351(2)(b).”
[16] The Commissioner made no further deduction for any failure to mitigate loss, 19 and accordingly he determined the compensation to be awarded for economic loss to be the amounts identified in paragraph [72] of his decision (earlier set out) less 25%, plus 9.5% superannuation and less deduction of any tax as required by law.20
[17] In relation to compensation for non-economic loss, the Commission proceeded upon the basis that it was necessary for an applicant to have in fact suffered distress, hurt and humiliation as a result of the contravention of the FW Act in order to be compensated, and that something more than the usual element of distress accompanying most terminations must be demonstrated. 21 The Commissioner referred to decisions concerning compensation for non-economic loss in which courts had taken into account what an applicant had deposed to and what a reasonable person might feel on the basis of certain conduct directed at them; the lack of probative evidence other than the applicant’s “display of despondency, disappointment and anger” and the circumstances of their summary dismissal; and the conduct of the respondent in their treatment of the party to be compensated including whether there had been an apology, an undertaking about future conduct or a recognition of the need for treatment.22
[18] The factual findings upon which the Commissioner proceeded were as follows:
“[97] I am empathetic to the Applicants’ situations and recognise the stress, anxiety and emotional upset that would accompany being removed from a community that they had closely associated with for the majority of their lives. However, as was submitted by Ms Roos and Mr Roos, at least from their perspective their status as Barada Barna people remains intact despite the discontinuing of their memberships to BBAC.
[98] I find that the Applicants should be awarded some amount for non-economic loss associated with the dismissal, as the level of distress they have experienced in these unfortunate circumstances would go beyond the level of distress accompanying most terminations.”
[19] The Commissioner referred to a number of decisions in which compensation had been awarded for non-economic loss in the employment context, including the Federal Court Full Court decision in Richardson v Oracle Corporation Australia Pty Ltd 23(Richardson) which he characterised as involving a finding that “an award of $18,000 was adequate in the circumstances”.24 The Commissioner accepted that there was no medical evidence of psychological injury or need for treatment, no aggravating circumstances personal to any of the applicants, and that any “tangible emotional upset” arising from their removal from membership of BBAC was not relevant to any claim for non-economic loss.25 In this connection the Commissioner observed: “…questions of discrimination arising from the Applicants’ status, or otherwise, as Barada Barna People cannot form part of any claim for non-economic loss, as this would necessarily involve determining that the Applicants were or were not Barada Barna People”. It was concluded that the relevant emotional loss was the denial of “rewarding work on Country for an organisation, membership and community whose goals aligned with their own” and that this went beyond the usual level of loss accompanying most terminations. On that basis the Commissioner awarded $5,000 for non-economic loss in each case.26
Appeal grounds and submissions
[20] There are four appeal grounds stated in each of the notices of appeal:
(1) the Commissioner erred in applying a discount of 25% to the amount awarded for compensation for economic loss;
(2) the Commissioner erred in failing to award compensation for economic loss past 29 April 2017;
(3) the Commissioner erred in awarding a sum of $5,000 for non-economic loss as that sum is manifestly inadequate; and
(4) the Commissioner erred in stating that the Full Court of the Federal Court in Richardson awarded $18,000 by way of damages for non-economic loss when in fact it awarded $130,000.
[21] The notices of appeal contended that the grant of permission to appeal would be in the public interest because the public interest required that justice not only be done but seen to be done, there were manifest errors in the compensation decision requiring correction, and compensation for breaches of s 351(1) should be commensurate with the loss occasioned by such a breach and reflect community standards that such breaches are unacceptable.
[22] In relation to their first ground of appeal, Mr and Ms Roos submitted that the Commissioner erred by making a percentage deduction for contingencies when this was based on a view that there would have been a termination prior to April 2017 rather than assessing what the compensation amount would be in that circumstance. Further it was inappropriate to discount for contingencies when assessing past and not future economic loss.
[23] As to the second ground of appeal, the appellants submitted that the Commissioner erred in failing to award compensation past 29 April 2017 because:
● section 369(2)(b) did not require, in respect of awarding compensation, a causal connection between a contravention found to have occurred and economic loss, so that the Commissioner was incorrect in treating 29 April 2017 as the end-point of economic loss because the causal connection at that point terminated; and
● in any event, the Commissioner failed to take into account that if they had remained in employment until the 29 April 2017 meeting, Mr and Ms Roos would have acquired unfair dismissal rights under the Pt 3-2 of the FW Act because they would have been employed for over 12 months.
[24] The appellants submitted in relation to the third and fourth grounds of appeal that:
● the Commissioner proceeded to assess compensation for non-economic loss based upon a plain misreading of the amount of compensation awarded as a result of the Full Court decision in Richardson;
● more fundamentally, Richardson was authority for the proposition that it was necessary to have regard to general standards prevailing in the community when making an award for compensation, and such standards accord a higher value to compensation for pain and suffering than before;
● the spiritual or religious relationship between Australian aboriginals and the land was well-recognised, and Ms Roos explained in her evidence the significance of the loss to her arising from the disconnection to the land caused by the dismissal; and
● the Commissioner failed to consider that the practical effect of the dismissals was to remove the ability of the appellants to exercise that spiritual connection with the land on an almost daily basis, and the amount of $5,000 awarded to each appellant was manifestly inadequate to compensate them for that loss.
[25] Winnaa submitted:
● deductions for contingencies and vicissitudes were commonplace in relation to awards of compensation by the Commission and its predecessors and were not controversial;
● the Commissioner correctly identified what the compensation should be before applying a percentage deduction;
● it was legitimate to take into account past hypotheticalities in making a deduction for contingencies;
● in considering contingencies, the Commissioner legitimately had regard to the facts that the appellants’ employment was casual, there was no guarantee of ongoing work and the work undertaken could be the subject of fluctuation;
● there was no error in the approach whereby the Commissioner determined an earning period post-termination for which there should be compensation, and then applied a deduction for contingencies;
● as to the Commissioner’s determination to cap compensation for economic loss to the period ending on 29 April 2017, this was a conclusion that was entirely reasonable and open to him on the facts, and the Commissioner additionally took into account the casual and fluctuating nature of the appellants’ employment;
● the fact that the appellants might have been able to challenge a termination of employment which occurred on or around 29 April 2017 under Pt 3-2 of the FW Act was another hypothetical and did not make the 29 April 2017 cap on compensation erroneous;
● in relation to non-economic loss, the Full Court decision in Richardson was based on its own facts, which involved eleven separate acts of overt and offensive sexual harassment over a prolonged period of time, evidence of witnesses concerning the effect of the harassment on the complainant, and medical evidence concerning the effect of the harassment;
● in this case, there was no independent or objective evidence of the effect of the termination of employment on the appellants;
● the Commissioner’s decision was correctly directed to the effects of the dismissal, and did not take into account the loss of the right to exercise the spiritual connection to the land which arose from their exclusion from the Barada Barna People;
● the power to award compensation under s 369(2) was a power which arose in resolution of a dismissal dispute, such that a causal link between the dismissal and the loss being compensated was required; and
● the power to assess compensation for non-economic loss was discretionary, and no error had been demonstrated in the exercise of the discretion.
Consideration
Permission to appeal
[26] The appeals before us are brought pursuant to s 604 of the FW Act. An appeal under s 604 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.27 There is no right to appeal and an appeal may only be made with the permission of the Commission. Section 604(2) requires that permission to appeal be granted if the Commission is satisfied that it is in the public interest to do so.
[27] In addition, because the compensation decision was made pursuant to s 369 of the FW Act, s 375A applies to these appeals. Section 375A provides:
(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under subsection 369(2) (which is about arbitration of a dismissal dispute) 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 subsection 369(2) 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.
[28] Section 375A is expressed in terms relevantly identical to s 400, which applies to appeals from decision made pursuant to Pt 3-2 of the FW Act. We consider that decisions made concerning the proper interpretation and application of s 400 are relevant for that reason. In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others 28, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s 400 as “a stringent one”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.29 A Full Bench of the Commission, in GlaxoSmithKline Australia Pty Ltd v Makin, 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…” 30
[29] 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 appealable error.31 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.32
[30] We do not consider that it would be in the public interest to grant permission to appeal in respect of the second, third and fourth grounds of appeal. In relation to the second ground of appeal, we consider that the Commissioner’s decision set an “outer limit” for compensation for economic loss at 29 April 2017, by reason of the exclusion of Mr Roos and Ms Roos from BBAC which occurred on that date and the likely effect this would have had on any continued employment was largely irrelevant to his assessment of monetary compensation. This is because the Commissioner separately concluded that, if they had not been dismissed on 12 August 2016, the employment of Mr Roos and Ms Roos would not have extended for more than 20 weeks having regard to the casual and fluctuating nature of their work. A period of 20 weeks from 12 August 2016 falls well short of 29 April 2017 since it does not go past the end of 2016. Compensation was calculated by multiplying 20 weeks by average weekly earnings, and the 25% contingency deduction (which is dealt with later in this decision) was then applied to this figure. The 29 April 2017 “outer limit” played no role in this methodology. The Commissioner’s assessment of 20 weeks’ further employment was not the subject of any challenge by the appellants in their appeals. Accordingly, the second ground of appeal lacks utility because even if it were to be upheld it would not alter the result determined by the Commissioner in relation to economic loss.
[31] In relation to the third ground of appeal, we do not consider that it is reasonably arguable that the Commissioner’s assessment of compensation for non-economic loss was manifestly inadequate. The evidence concerning any distress, hurt and humiliation suffered by Mr Roos and Ms Roos as a consequence of the dismissal beyond that which would normally be occasioned by dismissal was limited. Mr Roos’ witness statement described mental unwellness and a loss of confidence since his dismissal; he said that it was hurtful to “have my cultural identity undermined in this way” that it was “devastating” to have “ripped away” the sense of belonging and self-worth from working on Country, connecting with his ancestry, learning about Barada Barna lore and customs and working with other Barada Barna People and making a connection. 33 Ms Roos described in her reply witness statement34 in some greater detail the comfort and satisfaction she obtained from working on and reconnecting with Country, retrieving artefacts, attending sacred places and seeing ancient paintings. She also regarded it as special that she was working with her son and that knowledge was being passed on to him. She said that she was sad after her dismissal that she and her son could no longer do cultural heritage work, hurt by the reasons for the dismissals, and that she had lost confidence and self-belief as a result. She also observed a “decline” in Mr Roos due to his loss of the means to support his children and assist his family. She characterised the dismissals as being “inextricably linked” to the cancellation of BBAC membership, which she described as humiliating, and said her concerns for Mr Roos were such that she convinced him to go to the mental health team and the Aboriginal health service in town.
[32] There are at least four major difficulties in terms of this evidence supporting any award of compensation for non-economic loss significantly greater than the amounts awarded by the Commissioner:
(1) The non-economic benefits of working on Country which had accrued to Mr Roos and Ms Roos from their employment with Winnaa had only actually lasted for six months (with another three months’ prior employment with a different but related entity). As earlier stated, the appellants did not challenge the Commissioner’s finding that the employment would only have continued for another 20 weeks, to the end of 2016, if the dismissals had not occurred. Thus the enjoyment of working on Country would only have continued for a relatively short period and would then have been lost anyway. This necessarily placed a significant restriction on any award of compensation for non-economic loss, as the Commissioner recognised.
(2) The non-economic damage described in the evidence clearly encompassed the emotional consequences of the removal of appellants and the rest of the Kitchener Brown family group from BBAC at the 29 April 2017 meeting. Although that event arose, like the dismissals, from the dispute concerning whether the Kitchener Brown family group were Barada Barna, the 29 April 2017 meeting outcome was an independent event which likely would have occurred irrespective of the dismissals of the appellants. That means there is a lack of causal connection between the emotional consequences for the appellants of the 29 April 2017 meeting and the dismissals. We reject as not arguable the proposition that compensation may be awarded pursuant to s 369(2)(b) for losses not causally connected to the contravening dismissal.
(3) There was no evidence which demonstrated that the dismissals had the result of depriving Mr Roos and Ms Roos of any capacity to maintain a connection with the Barada Barna lands. We accept as likely however that their subsequent removal from BBAC had that consequence since it presumably removed their capacity to lawfully access those lands.
(4) Further, as the Commissioner recognised, any notion of non-economic loss caused by an alleged deprivation by Winnaa of the appellants’ identity as Barada Barna is necessarily premised on them being, properly speaking, Barada Barna People in the first place who were entitled to be members of BBAC. The Commissioner did not find that they were Barada Barna People, and the appellants do not contend that he erred in this connection.
[33] These matters, we consider, render untenable the proposition that the amount of compensation awarded by the Commissioner was manifestly inadequate.
[34] Finally, insofar as the fourth ground of appeal is concerned, it may be accepted that the Commissioner mischaracterised the outcome of the Federal Court Full Court decision in Richardson. 35 As Winnaa submitted, the Full Court in that matter quashed the first instance award of $18,000 for non-economic loss, and made an award of $130,000 in substitution. However, in accordance with the principles earlier stated, not every error will justify the grant of permission to appeal in the public interest. The amount of compensation in Richardson was determined by reference to the particular facts pertaining to the contraventions which were found to have occurred in that case. The factors which the Commissioner regarded as operating to confine any award of compensation for non-economic loss in the matters before him were applicable independent of anything stated in Richardson, so that we do not consider that the error identified by the appellants had any effect on the outcome. For that reason, it would not be in the public interest to grant permission to appeal in respect of the fourth ground of appeal.
[35] We consider however that the grant of permission to appeal in relation to the first ground of appeal would be in the public interest. For the reasons which follow, we consider that the Commissioner’s approach in deducting 25% for contingencies was attended by appealable error, that this error caused an injustice to the appellants and raises questions of broader principle.
The deduction for contingencies
[36] The principles applicable to the application of a percentage deduction for contingencies and the vicissitudes of life were summarised in the High Court in Wynn v NSW Insurance Ministerial Corporation 36 (Wynn) as follows:
“It is necessary to say something as to contingencies or `vicissitudes'. Calculation of future economic loss must take account of the various possibilities which might otherwise have affected earning capacity. The principle and the relevant considerations were identified by Barwick CJ in Arthur Robinson (Grafton) Pty Ltd v Carter as follows:
‘Ill health, unemployment, road or rail accidents, wars, changes in industrial emphasis, so that industries move their location, or are superseded by new and different techniques, the onset and effect of automation and the mere daily vicissitudes of life are not adequately reflected by merely - and blindly - taking some percentage reduction of a sum which ignores them.’ [(1968) 122 CLR 649 at 659]
It is to be remembered that a discount for contingencies or `vicissitudes' is to take account of matters which might otherwise adversely affect earning capacity and as Professor Luntz notes, death apart, `sickness, accident, unemployment and industrial disputes are the four major contingencies which expose employees to the risk of loss of income'. Positive considerations which might have resulted in advancement and increased earnings are also to be taken into account for, as Windeyer J pointed out in Bresatz v Przibilla, [(1962) 108 CLR 541 at 544] ‘(a)ll "contingencies" are not adverse: all "vicissitudes" are not harmful’. Finally, contingencies are to be considered in terms of their likely impact on the earning capacity of the person who has been injured, not by reference to the workforce generally. Even so, the practice in New South Wales is to proceed on the basis that a 15 per cent discount is generally appropriate, subject to adjustment up or down to take account of the plaintiff's particular circumstances.” 37
[37] In short, the purpose of a deduction for contingencies is to apply a discount to an assessment of future economic loss in order to account for future unknown matters which might detrimentally affect that earning capacity. In the employment context, where it is necessary to compensate an employee for the wrongful or unfair deprivation of employment, a deduction for contingencies is usually applied after an assessment has been made of the period the employee would have remained employed but for the termination of employment and that has been applied to an estimate of future earnings over that period. Importantly, the deduction for contingencies is applied to any future estimate of loss of employment earnings – that is, earnings that would be lost after the date of hearing – consistent with the principles stated in Wynn. If the assessment is that the employment, but for the termination, would only have endured for a short period ending before the date of the hearing, then a deduction for contingencies becomes irrelevant because the earning capacity of the employee over that part period is a known fact, not a hypothetical. 38
[38] Having regard to these principles, it is necessary to analyse the process by which the Commissioner assessed compensation for the economic loss suffered by Mr Roos and Ms Roos as a result of their dismissals. The first step which the Commissioner undertook was to assess the period they would have remained employed. As earlier explained, the Commissioner initially determined that the appellants would not have been employed past the 29 April 2017 meeting 39 but this was overtaken by his finding that they would have been employed for 20 weeks if Winnaa had not contravened the FW Act. In making that assessment, the Commissioner took into account the casual and fluctuating nature of the employment, its relatively short duration, and Winnaa’s demand for cultural heritage work. The Commissioner then applied the 20 week period to the past average weekly earnings for Mr Roos and Ms Roos to reach compensation figures of $24,810.80 and $24,900.20 respectively. The deduction of 25% then applied by the Commissioner appears to have taken into account two factors: a “standard” deduction for contingencies of 15% and a further 10% based on an assessment that, if the dismissal had not occurred on 12 August 2016, the board of BBAC may have formed the “requisite view” that they were not Barada Barna at some later stage prior to the 29 April 2017 general meeting and dismissed them.
[39] There are two significant errors of principle in this process of analysis. The first is that the so-called “standard” deduction of 15% for contingencies was applied to past rather than future economic loss. There was no proper basis to make this deduction at all, since any matters detrimentally affecting the appellants’ earning capacity over the relevant 20 week period of putative further employment could have been, but were not, the subject of evidence. In short, there was no basis to conclude that there was anything which had affected the appellants’ earning capacity over that part period.
[40] Second, the Commissioner added another 10% to the deduction because of the possibility of termination prior to 29 April 2017, in circumstances where he had already formed an estimate that the employment would have continued only for another 20 weeks but for the dismissals. In effect, the Commissioner took into account in assessing compensation the hypothetical duration of further employment twice – once through the 20 weeks’ estimate, and the second time through the 10% deduction. This error is compounded by the fact the deduction of 10% was expressed as taking into account termination at any time prior to 29 April 2017, when the Commissioner had already determined that the employment would not have lasted beyond the end of 2016.
[41] This error of principle in the exercise of the discretion concerning the award of compensation decision caused injustice to the appellants by reducing the amount of compensation properly payable to them for what were found to be unlawful dismissals. We consider that the appropriate course is to uphold the appeal with respect to the first ground of appeal, and exercise our power under s 607(3)(a) to vary the compensation decision and the accompanying orders by adding back into the amounts of compensation for economic loss the amounts that were deducted for contingencies.
Orders
[42] We order as follows:
(1) Permission to appeal is granted with respect to the first ground of appeal. Permission to appeal is otherwise refused.
(2) The appeal is upheld with respect to the first ground of appeal.
(3) The compensation decision is varied to:
(a) replace the amount of $18,675.15 in paragraph [84] with the amount of $24,900.20; and
(b) replace the amount of $18,608.10 in paragraph [85] with the amount of $24,810.80.
(4) Order PR700262 is varied to:
(a) replace the amount of $18,608.10 in paragraph B with the amount of $24,810.80; and
(b) replace the date of 24 October 2018 in paragraph C with the date 4 January 2019.
(5) Order PR700265 is varied to:
(a) replace the amount of $18,675.15 in paragraph B with the amount of $24,900.20; and
(b) replace the date of 24 October 2018 in paragraph C with the date 4 January 2019.
Appearances:
K. Watson of Counsel and T. Makamure for Loretta and Andrew Roos.
J. Dwyer of Counsel and D. Pratt for Winnaa Pty Ltd.
Hearing details:
2018.
Sydney/Brisbane:
15 November.
VICE PRESIDENT
2 Budby on behalf of the Barada Barna People v State of Queensland (No 7) [2016] FCA 1271
4 Ibid at [14]-[15]
5 Ibid at [339]
6 Ibid at [359]
7 Ibid at [360]
8 Ibid at [362]- [374]
9 PR700262 and PR700265 for Mr Roos and Ms Roos respectively
10 [2016] FCCA 1797
11 [1991] HCA 15, 172 CLR 60
12 Compensation decision at [46]
13 Compensation decision at [55]-[56]
14 Compensation decision at [64]-[65]
15 Compensation decision at [67]-[68]
16 Compensation decision at [69]-[70]
17 [2014] FCCA 875 at [358]
19 Compensation decision at [77]-[82]
20 Compensation decision at [83]-[86]
21 Compensation decision at [87]-[92]
22 Compensation decision at [93]
23 [2014] FCAFC 82, 223 FCR 334
24 Compensation decision at [99]-[100]
25 Compensation decision at [101]-[103]
26 Compensation decision at [104]
27 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] HCA 47, 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ
28 [2011] FCAFC 54, 192 FCR 78 at [43]
29 O’Sullivan v Farrer [1989] HCA 61, 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch [2011] HCA 4, 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others [2011] FCAFC 54, 192 FCR 78 at [44]-[46]
30 [2010] FWAFB 5343, 197 IR 266 at [24] – [27]
31 Wan v AIRC [2001] FCA 1803, 116 FCR 481 at [30]
32 Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089, 202 IR 288 at [28], affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663, 241 IR 177 at [28]
33 Exhibit 3 para 21
34 Exhibit 2 paras 93-109
35 [2014] FCAFC 82, 223 FCR 334
36 [1995] HCA 53, 184 CLR 485 at [497]
37 Ibid at 497–498 per Dawson, Toohey, Gaudron and Gummow JJ
38 Section 1.01 McCulloch v Calvary Health Care Adelaide [2015] FWCFB 2267 at [20]-[22]
39 At paragraph [66] of the compensation decision, the Commissioner appears to refer to the period from the dismissals to 29 April 2017 as being 21.5 weeks. In fact it is approximately 37 weeks.
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