DECISION

Fair Work Act 2009
s.604—Appeal of decision

CUB Pty Ltd T/A Carlton & United Breweries
v
Chaya Johnson; Chelgrave Contracting Australia Pty Ltd
(C2020/8357)

Appeal against decision [2020] FWC 5784 of Commissioner Wilson at Melbourne on 4 November 2020 in matter number U2020/8446 - permission to appeal granted - appeal upheld

[1] CUB Pty Ltd T/A Carlton & United Breweries (the Appellant) has lodged an appeal under s 604 of the Fair Work Act 2009 (Cth) (the Act), for which permission to appeal is required, against a Decision 1 and Order2 of Commissioner Wilson (Commissioner) issued on 4 November 2020. The Decision dealt with an application made by Mr Chaya Johnson (the Respondent) under s 394 of the Act for an unfair dismissal remedy. The Commissioner found that the Respondent’s dismissal was harsh, unjust and unreasonable3 and ordered, inter alia, for Chelgrave Contracting Australia Pty Ltd (Chelgrave) to reinstate the Respondent at the Appellant’s site at Abbotsford, Victoria (the Appellant’s site) and maintain his continuity of employment, his period of service and restore all lost remuneration.4

[2] As the Commissioner ordered that the Respondent be reinstated on the Appellant’s site, although the Appellant was not a party to the proceeding below, the Appellant is plainly a person aggrieved by the Decision within the meaning of s 604(1) of the Act.

[3] On 18 November 2020, the Commission made an interim order to stay the underlined part of paragraph [1](a) of the Order until 6.00pm on 24 November 2020. 5 Thereafter, on 24 November 2020, the Commission made an order to stay the Order pending the hearing and determination of this appeal or until further order of the Commission.6

[4] The matter on appeal was subject to a telephone hearing on 14 January 2021. The Appellant sought permission to be legally represented. The Full Bench granted the Appellant’s application for permission to be represented pursuant to s 596(2)(a) of the Act in the hearing, following there being no objection from the Respondent.

[5] The Appellant filed an amended F7 – Notice of Appeal (Notice of Appeal) as well as an affidavit of Zack Mackey on 17 December 2020. The Respondent did not object to the filing of the amended F7 and maintained that they would not object to the admission of new evidence exhibited within the affidavit, should the Full Bench grant permission to appeal in the matter. The new evidence exhibited within the affidavit included the Labour Services Agreement – Abbotsford Brewery, dated 11 November 2019, between the Appellant and Chelgrave (the Contract), and an email from Mr David Baxter of the Appellant to Mr Robert McGrillen of Chelgrave dated 28 May 2020, whereby the Appellant exercised its right under the Contract to require Chelgrave to remove the Respondent from its site.

[6] For reasons which will be stated, permission to appeal is granted.

[7] The Full Bench has heard the parties on permission to appeal and the substantive appeal.

[8] After the hearing had been concluded the Full Bench formed the view that it was appropriate to allow Chelgrave to put on any submissions if it wished to do so. Chelgrave took up the opportunity to make a submission. The parties were then given the opportunity to make additional submissions if they wanted to do so but chose not to do so.

Decision under appeal

[9] The factual matrix of the Decision under appeal, in broad summary, is as follows:

•  The Respondent was employed by Chelgrave as a maintenance fitter. Chelgrave is a labour hire company providing the services of its employees to a number of businesses. The Respondent’s employment with Chelgrave centred entirely around his work at the Appellant’s site.

•  The Respondent commenced his employment with Chelgrave in May 2017 and he was dismissed on 28 May 2020.

•  In his time at the Appellant’s site, the Respondent was obliged to follow and conform to the Appellant’s health and safety expectations and his performance, conduct and attendance were subject to oversight by the Appellant’s managers and supervisors.

•  On 21 April 2020, it was found that the Respondent had not done everything reasonably practicable in order to test that the palletiser was fully isolated and that he had not established that the safest access and egress to the palletiser area was through the hinged access panel. His conduct on this day, in addition to his previous conduct, led the Appellant to instruct Chelgrave to permanently remove the Respondent from their worksite. Following this, the Respondent’s employment with Chelgrave was terminated, effective 7 May 2020.

[10] After considering the legislative provisions relevant to determining whether the dismissal was unfair, the Commissioner found that the Respondent’s dismissal was harsh, unjust and unreasonable. 7 In determining the appropriate remedy, the Commissioner considered Chelgrave’s submission that reinstatement to the Appellant’s site was not possible due to a lack of contractual power to compel the Appellant to re-engage the Respondent. The Commissioner thereafter ordered, inter alia, that the Respondent be reinstated to the Appellant’s site.8 For completeness, we have extracted the relevant item of the Order under appeal below:

“[1] Pursuant to the decision issued on 4 November 2020 ([2020] FWC 5784), the Fair Work Commission Orders:

a) Pursuant to s.391(1) of the Fair Work Act 2009 (the Act) the Respondent, Chelgrave Contracting Australia Pty Ltd, shall reinstate the Applicant, Mr Chaya Johnson, to his former position as C7 Maintenance Fitter at the Carlton United Breweries Abbotsford site;

…”

Permission to appeal

[11] An appeal under s 604 of the 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. 9  There is no right to appeal and an appeal may only be made with the permission of the Commission.

[12] Section 400 of the Act applies to this appeal. It 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.”

[13] 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 of the Act as “a stringent one”. 10 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.11 The public interest is not satisfied simply by the identification of error, or a preference for a different result.12 In GlaxoSmithKline, 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.” 13

[14] 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. 14 However, that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.

Consideration

Appeal Ground 2A

[15] In ground 2A of the appeal, the Appellant contends that by not considering the Respondent’s incapacity to work at the Appellant’s site, the Commissioner has failed to take into account a material consideration and made an error of principle in ordering reinstatement of the Respondent directly to the Appellant’s work site.

[16] The Commission’s powers to order reinstatement are dealt with in s 390 of the Act. Relevantly, s 390(3) states that an order for compensation to a person must not be made unless the Commission is “satisfied that reinstatement of a person is inappropriate”. It is clear from s 390(3) that reinstatement is the primary remedy to unfair dismissal unless and until it is found to be inappropriate. 15

[17] In Nguyen v Vietnamese Community in Australia [2014] FWCFB 7198 a Full Bench affirmed the position that in addition to practicability, the appropriateness of reinstatement involves an assessment of a broad range of factors. 16 Circumstances in which reinstatement might be inappropriate include circumstances where the employer no longer conducts a business into which the employee may be reappointed,17 and if the employee is incapacitated because of illness or injury.18 In Conlon v Sandlewood Aboriginal Projects Limited [2017] FWC 3186 it was found that incapacity of an employee can also arise in cases where they have been prohibited from entering their work site by a third party.19 Such incapacity was found to render reinstatement inappropriate.20

[18] The Appellant contends that the proper conclusion that the Commissioner should have reached was that an order for reinstatement would be impractical and inappropriate because the Respondent was incapacitated from fulfilling his duties. 21 This lack of capacity to work at the Appellant’s site arose from the Appellant’s contractual right to have the Respondent excluded from its work site.22

[19] The Commissioner knew of the existence of the Contract and knew that its content was critical to an assessment of whether reinstatement of the Respondent to the Appellant’s site was an appropriate remedy. 23 That Chelgrave did not place the Contract in evidence before the Commission24 is cause for criticism. However, we note that the Commission is empowered to conduct inquiries25 and compel production of documents.26 At [104] of the Decision, the Commissioner observes that had Chelgrave placed the Contract before the Commission, appropriate findings as to its contractual obligations could have been made.27 Rather than merely make that observation, especially in circumstances where the Commissioner was alive to the critical importance of the Contract to the question of remedy, the Commissioner ought to have availed himself of the Commission’s powers to be more fully appraised of the Contract or have it produced before him to inform his decision-making. Clearly, the Contract would have heavily informed his assessment as to the appropriateness of reinstatement in the circumstances.

[20] Having had the benefit of seeing the Contract, it is clear to us that the Respondent was incapacitated from working at the Appellant’s site because Chelgrave has no contractual power to force the Appellant to allow the Respondent access to their site after his removal. The order to reinstate the Respondent to the Abbotsford site was inappropriate in all the circumstances.

[21] An error of principle has occurred in that the Commissioner has made an order with which Chelgrave is unable to comply.

[22] For the above reasons, Ground 2A of the appeal is upheld.

Grounds 1 and 2

[23] Grounds 1 and 2 of the Appellant’s submissions can broadly be described as procedural fairness grounds. Ground 1 contends that the Commissioner erred in law by denying the Appellant natural justice or procedural fairness in that he did not give it an opportunity to be heard as to the matter of reinstatement of the Respondent to the Appellant’s site. 28 Ground 2 contends that the Commissioner ought to have sought out evidence and submissions from the Appellant where that evidence would have confirmed that Chelgrave was contractually obliged to remove the Respondent from the Appellant’s site.29

[24] Given that the appeal has been upheld on the basis of ground 2A, it is unnecessary to engage with this question of natural justice and how it extends to the Appellant, who was a third party in the proceedings at first instance.

[25] However, we would make the general observation that Members of the Commission who find themselves dealing with circumstances where a third party to proceedings can potentially be directly affected by an order they are minded to make should, as a matter of prudence, take extreme care to ensure the orders they are contemplating are capable of being complied with. This is especially the case given the increased incidence of labour hire contracts and working arrangements. In such circumstances an invitation to the third party to make submissions on the proposed order may resolve issues of procedural fairness.

Grounds 5 and 6

[26] It is unnecessary to deal with these grounds of appeal, given that we have upheld ground 2A above.

Permission to Appeal

[27] Having regard to the above, we are satisfied that the appeal enlivens the public interest. The Appellant has identified, an appellable error of law within the Decision. It is in the public interest to ensure that the requirements of the Act in the context of the appropriateness of reinstatement orders are properly considered in each matter. Appellate intervention is both warranted and necessary to examine the identified error and quash the impugned part of the Order.

Conclusion

[28] For the aforementioned reasons, the Order under appeal should be varied to the extent that it orders reinstatement of the Respondent to the Appellant’s site. We order as follows:

1. Permission to appeal is granted.

2. The appeal is upheld.

3. The order of Commissioner Wilson of 4 November 2020 is quashed insofar as it orders reinstatement of the Respondent to the Appellant’s site.

VICE PRESIDENT

Appearances:

Mr J Tracey of Counsel, on behalf of the Appellant

Mr B Terzic on behalf of the Respondent

Hearing details:

2021.

Telephone hearing:

14 January.

Printed by authority of the Commonwealth Government Printer

<PR726475>

 1   Chaya Johnson v Chelgrave Contracting Australia Pty Ltd [2020] FWC 5784 (the Decision).

 2   PR724193.

 3   Decision [110].

 4   PR724193.

 5   PR724668.

 6   PR724837.

 7   Decision [50]-[110].

 8   Decision [144]; PR724193.

 9   Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 [17] per Gleeson CJ, Gaudron and Hayne JJ (Coal and Allied Operations Pty Ltd)

 10   (2011) 192 FCR 78; (2011) 207 IR 177 [43].

 11   O’Sullivan v Farrer and another (1989) 168 CLR 210 [216] – [217] per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 243 CLR 506 [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78; (2011) 207 IR 177 [44]-[46].

 12   see: GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266 (‘GlaxoSmithKline’); 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   GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 [27]; (2010) 197 IR 266.

 14   Wan v AIRC (2001) 116 FCR 481 at [30].

 15   Cartisano v Sportsmed SA Hospitals Pty Ltd [2015] FWCFB 1523, [33]; Nguyen v Vietnamese Community in Australia [2014] FWCFB 7198 at [10] affirmed in Phillip Seitz v Ironbay Pty Ltd t/a City Beach IGA [2018] FWCFB 1341 at [15].

 16   [2014] FWCFB 7198 [15].

 17   Ibid [17].

 18   Ibid [19].

 19   [2017] FWC 3186 [90] – [91].

 20   Ibid [88].

 21   Appellant’s written submissions dated 17 December 2020 at 17.

 22   Ibid.

 23   Decision [118].

 24   Ibid [119].

 25   Fair Work Act 2009 s 590(f).

 26   Ibid s 590(c).

 27   Decision [89].

 28   F7 – Notice of Appeal.

 29   Appellant’s written submissions dated 17 December 2020 at 16.