FEDERAL COURT OF AUSTRALIA Warrell v Walton [2013] FCA 291 Citation: Warrell v Walton [2013] FCA 291 Parties: EDWARD GEORGE WARRELL v VICE PRESIDENT WALTON, SENIOR DEPUTY PRESIDENT HAMBERGER, COMMISSIONER SIMPSON (A FULL BENCH OF FAIR WORK AUSTRALIA) and BACTO LABORATORIES PTY LTD File number: NSD 1820 of 2012 Judge: FLICK J Date of judgment: 4 April 2013 Catchwords: INDUSTRIAL LAW – dismissal of employee – remedy sought in respect to unfair dismissal - permission to be represented by a lawyer – no consideration as to whether permission should be granted – absence of a fair and just hearing Legislation: Fair Work Act 2009 (Cth) ss 385, 387, 394, 400, 577, 596, 604 Fair Work Amendment Act 2012 (Cth) Explanatory Memorandum to the Fair Work Bill 2008 Cases cited: Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Griffin v London Bank of Australia Limited (1919) 19 SR (NSW) 154 Warrell v Bacto Laboratories Pty Ltd [2011] FWAFB 7548 Warrell v Bacto Laboratories Pty Ltd [2012] FWAFB 4700 Warrell v Fair Work Australia, [2012] FCA 267 Date of hearing: 5 March 2013 Date of last submissions: 8 March 2013 Place: Sydney Division: FAIR WORK DIVISION Category: Catchwords Number of paragraphs: 36 Counsel for the Applicant: Mr I Neil SC with Mr C Bolger Solicitor for the Applicant: Clayton Utz Counsel for the First Respondents: The First Respondent submitted save as to costs Counsel for the Second Respondents: The Second Respondent submitted to any order of the Court IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 1820 of 2012 BETWEEN: EDWARD GEORGE WARRELL Applicant AND: VICE PRESIDENT WALTON, SENIOR DEPUTY PRESIDENT HAMBERGER, COMMISSIONER SIMPSON (A FULL BENCH OF FAIR WORK AUSTRALIA) First Respondent BACTO LABORATORIES PTY LTD Second Respondent JUDGE: FLICK J DATE OF ORDER: 4 APRIL 2013 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The Applicant is to bring in Short Minutes of Orders to give effect to these reasons within 14 days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY FAIR WORK DIVISION NSD 1820 of 2012 BETWEEN: EDWARD GEORGE WARRELL Applicant AND: VICE PRESIDENT WALTON, SENIOR DEPUTY PRESIDENT HAMBERGER, COMMISSIONER SIMPSON (A FULL BENCH OF FAIR WORK AUSTRALIA) First Respondent BACTO LABORATORIES PTY LTD Second Respondent JUDGE: FLICK J DATE: 4 APRIL 2013 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The Applicant in the present proceeding, Mr Edward George Warrell, was employed as a gardener by the Second Respondent, Bacto Laboratories Pty Ltd ("Bacto Laboratories"). 2 Mr Warrell's services were terminated by a letter dated 16 March 2011. 3 Mr Warrell sought to challenge his dismissal. Regrettably, however, he mistakenly lodged an unfair dismissal application with the Fair Work Ombudsman rather than with Fair Work Australia. Mr Warrell has difficulties with reading and writing and is brain damaged. The application was not lodged with Fair Work Australia until after the time prescribed by s 394(2) of the Fair Work Act 2009 (Cth) ("Fair Work Act") had expired. 4 A Senior Deputy President on 12 September 2011 refused an extension of time within which an application seeking a remedy for unfair dismissal could be brought. An application seeking permission to appeal from that decision was heard and rejected by a Full Bench of Fair Work Australia on 27 October 2011: Warrell v Bacto Laboratories Pty Ltd [2011] FWAFB 7548. An application made by Mr Warrell to have that hearing adjourned was refused by the Full Bench. A Judge of this Court, Perram J, set aside that decision of the Full Bench on the basis that it had denied Mr Warrell procedural fairness in refusing an application for an adjournment: Warrell v Fair Work Australia [2012] FCA 267. 5 An application seeking permission to appeal was thereafter heard and resolved by a differently constituted Full Bench. On 5 June 2012 that Full Bench also refused permission to appeal: Warrell v Bacto Laboratories Pty Ltd [2012] FWAFB 4700. 6 Now before the Court is an Originating Application seeking (inter alia) an order setting aside the June 2012 decision of the Full Bench. The Respondents to that Originating Application are the members constituting the Full Bench and Bacto Laboratories. All Respondents have filed submitting appearances. THE DECISION-MAKING PROCESS TO-DATE 7 Part 3-2 of the Fair Work Act provides for the making of an application and the grant of a remedy in respect to the "unfair dismissal" of an employee. In December 2012, after the date when the events giving rise to the cause of action occurred, amendments were made to Part 3-2 of the Fair Work Act by the Fair Work Amendment Act 2012 (Cth). 8 "Unfair dismissal" was defined as at March 2011 by s 385 within Part 3-2 of the Fair Work Act as follows: What is an unfair dismissal A person has been unfairly dismissed if FWA is satisfied that: (a) the person has been dismissed; and (b) the dismissal was harsh, unjust or unreasonable; and (c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and (d) the dismissal was not a case of genuine redundancy. Section 387, again as at March 2011, further addresses that which constitutes "harshness" as follows: Criteria for considering harshness etc. In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account: (a) whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and (b) whether the person was notified of that reason; and (c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and (d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and (e) if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and (f) the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (h) any other matters that FWA considers relevant. 9 A person who has been dismissed may apply to Fair Work Australia for an order "granting a remedy": s 394(1). Before the December 2012 amendments, any such application was to be made "within 14 days after the dismissal took effect" or within such further time as may be allowed: s 394(2). Section 394(3) provided as follows: FWA may allow a further period for the application to be made by a person under subsection (1) if FWA is satisfied that there are exceptional circumstances, taking into account: (a) the reason for the delay; and (b) whether the person first became aware of the dismissal after it had taken effect; and (c) any action taken by the person to dispute the dismissal; and (d) prejudice to the employer (including prejudice caused by the delay); and (e) the merits of the application; and (f) fairness as between the person and other persons in a similar position. 10 The Senior Deputy President, in the present proceeding, heard both Mr Warrell's application for an extension of time and his application for the grant of a remedy in respect to his claimed "unfair dismissal" together. 11 That hearing was conducted on 7 September 2011. Mr Warrell appeared on his own behalf. At the outset of the hearing, the following exchange occurred in respect to the appearance on behalf of Bacto Laboratories: The Senior Deputy President: Mr Butterfield, it's necessary for you to have permission to appear. Do you seek permission? Mr Butterfield: I do seek leave to appear on behalf of the respondent. Mr Butterfield is a solicitor. That was the entirety of the exchange. No permission was expressly granted. But thereafter Mr Butterfield conducted the hearing on behalf of Bacto Laboratories. Presumably permission was impliedly granted. 12 The "permission" to which the Senior Deputy President referred was that addressed in s 596 of the Fair Work Act. Section 596(1) and (2) provided as follows: Representation by lawyers and paid agents (1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before FWA (including by making an application or submission to FWA on behalf of the person) by a lawyer or paid agent only with the permission of FWA. (2) FWA may grant permission for a person to be represented by a lawyer or paid agent in a matter before FWA only if: (a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or (b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or (c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter. 13 Mr Warrell gave evidence and was cross-examined by Mr Butterfield. Mr Carter gave evidence on behalf of Bacto Laboratories and there was questioning of Mr Carter by Mr Warrell. 14 After having reserved her decision, the Senior Deputy President was not satisfied that an extension of time should be granted. The Senior Deputy President, moreover, was also satisfied that there was a valid reason for the termination of Mr Warrell's employment. She expressed her reasons (in part) as follows: [12] The most significant matter for me, in my consideration of Mr Warrell's application for an extension of time was the merit of his application. I heard Mr Warrell's substantive application at the same time as I heard his application for an extension of time. [13] The absence of merit in Mr Warrell's application was particularly significant. I have concluded that Mr Warrell's application is without merit. I accept Mr Carter's evidence regarding Mr Warrell's conduct. I do not consider that Mr Warrell was a witness of truth in relation to the matters about which Mr Carter gave evidence. I am satisfied that Mr Warrell engaged in gross misconduct in his interaction with Mr Carter and that there was a valid reason for the summary termination of his employment. Mr Warrell's application would fail on the evidence before me were I to extend the time. [14] Should there an error in my conclusion that there is no exceptional circumstance warranting an extension of time, I am also satisfied that there was a valid reason for the termination of Mr Warrell's employment. The termination of Mr Warrell's employment was not harsh unjust or unreasonable. Mr Warrell was thus unsuccessful before the Senior Deputy President in seeking a remedy in respect to his claim for alleged "unfair dismissal". 15 Section 604 of the Fair Work Act confers a right of appeal to a Full Bench where "permission" has been granted for the purposes of that section. The criteria for granting "permission" are those set forth in s 400. That section, in its entirety, provided as follows: Appeal rights (1) Despite subsection 604(2), FWA must not grant permission to appeal from a decision made by FWA under this Part unless FWA considers that it is in the public interest to do so. (2) Despite subsection 604(1), an appeal from a decision made by FWA 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. 16 The decision of the Full Bench of Fair Work Australia of 27 October 2011 is not now before this Court. That decision was set aside by Perram J. Now under consideration is the second decision made by a differently constituted Full Bench in June 2012: Warrell v Bacto Laboratories Pty Ltd [2012] FWAFB 4700. A number of grounds were then relied upon, including submissions that the Senior Deputy President: had not proceeded in a manner which was "fair and just"; and had not provided reasons for concluding that the termination of Mr Warrell's services was not "harsh, unjust or unreasonable". A written Outline of Appellant's Submission relied upon when seeking to appeal in this court were separately tendered during the course of the current proceeding. 17 The reference to a "fair and just" hearing is a reference to s 577 of the Fair Work Act which provided as follows: Performance of functions etc. by FWA FWA must perform its functions and exercise its powers in a manner that: (a) is fair and just; and (b) is quick, informal and avoids unnecessary technicalities; and (c) is open and transparent; and (d) promotes harmonious and cooperative workplace relations. 18 In concluding that permission to appeal should not be granted, the Full Bench on the second occasion concluded in part as follows: The Correct Legal Test [21] Counsel for Mr Warrell further contend that there are grounds to suspect that the finding of gross misconduct was made without applying the correct legal test for summary dismissal. This ground also relates to the conclusions expressed by her Honour in paragraph [13] of her decision regarding the merits of the matter. [22] One relevant criterion in an application for an unfair dismissal remedy is whether there was a valid reason for the dismissal, in the sense that the reason was sound, defensible and well-founded. That has been held to be a different question to whether the conduct amounts to grounds for summary dismissal at common law. In accepting the evidence of Mr Carter concerning abusive conduct towards him, we consider that it was sufficiently clear that Senior Deputy President Drake applied the correct test for the existence of a valid reason. Her Honour had the advantage of considering the totality of the evidence including the demeanour of Mr Carter and Mr Warrell. The existence of a valid reason was obviously a significant consideration to the overall conclusion in the matter. We are not persuaded that the decision is in error on the basis alleged and we dismiss this ground of appeal. Fair and Just Hearing [23] The final ground of appeal relates to the hearing of the matter. Counsel for Mr Warrell contend that as Mr Warrell was clearly unable to conduct his case, Senior Deputy President Drake should have adjourned the matter, contacted a relevant legal body and requested that the legal body provide some assistance to Mr Warrell. Counsel submits that in failing to do so her Honour failed to conduct the matter in a fair and just manner. [24] We accept that there may be circumstances where a party is unable to present a case adequately, especially if self-represented. However, we note that an unfair dismissal application is different to a trial for a criminal offence in a court. The application is of a civil nature, applications are commenced voluntarily, assistance is available to prepare a case and representation is available at the hearing of the matter. In this case Mr Warrell obtained the assistance of a solicitor to prepare material for his case and relied on that material at the hearing. He made no attempt to have a support person present to assist him and made no application for an adjournment to obtain representation. He was assisted in the conduct of his case by her Honour in what appears, with respect, to be an appropriate manner. In all the circumstances we are not satisfied that her Honour failed to conduct the hearing in a fair and just manner. We dismiss this ground of appeal. A FAIR AND JUST HEARING? 19 Before the Full Bench of Fair Work Australia in the June 2012 hearing, the submission was advanced that the Senior Deputy President had conducted the hearing in a manner that was not fair and just by allowing Mr Warrell to proceed to conduct his case unrepresented. This submission was rejected: [2012] FWAFB 4700 at [24]. 20 No submission was expressly advanced that the Senior Deputy President had erred by failing to provide reasons for granting "permission" for Bacto Laboratories to be represented by a solicitor; nor was any submission advanced that the granting of "permission" was contrary to s 596(2) and that the Senior Deputy President had thereby denied to Mr Warrell a "fair and just" hearing for the purposes of s 577(a). 21 Before this Court is both the broad submission that: any hearing which was conducted where the discretion to grant "permission" to appear by a lawyer had miscarried was necessarily a hearing which was not "fair and just"; and the alternate, more confined submission that: the hearing in the present proceeding was not "fair and just" by reason of Bacto Laboratories having been impliedly granted "permission" to appear by a lawyer. The broader submission need not be resolved. 22 The alternative and more confined submission, however, should prevail. In reaching the conclusion that the Full Bench erred in concluding that the hearing before the Senior Deputy President was "fair and just", it is respectfully considered that the Full Bench failed to take into account: the fact that Mr Warrell was functionally illiterate and brain damaged; the failure on the part of the Senior Deputy President to make findings of fact relevant to her apparent conclusion that the requirements imposed by s 596(2) had been satisfied; and the manifest advantages that Bacto Laboratories would have in cross-examining Mr Warrell and the manifest difficulties confronting Mr Warrell in his questioning of Mr Carter. In support of its contention that the hearing was not "fair and just", reliance was also placed upon the failure of the Senior Deputy President to: provide reasons for apparently granting permission to Mr Butterfield. The absence of any reasons for granting permission is only reinforced by the comparatively simple and confined factual dispute that arose for resolution. Mr Warrell gave one account of a conversation with Mr Carter; Mr Carter gave a different account. There was an absence of any "complexity" for the purposes of s 596(2)(a). Nor was there any self-evident reason why Bacto Laboratories could not fairly represent itself for the purposes of s 596(2)(b). Nor was any apparent consideration given to "fairness between the parties" for the purposes of s 596(2)(c). Why one or other of the constraints imposed by s 596(2) was satisfied is far from apparent. 23 Even if the constraints imposed by s 596(2) can be left to one side, the potential for unfairness readily emerged during the hearing. This potential for unfairness to Mr Warrell was compounded when, having apparently granted permission to Bacto Laboratories to appear by way of Mr Butterfield, the Senior Deputy President proceeded to make findings adverse to the credit of Mr Warrell based upon his cross-examination and proceeded to accept Mr Carter as "a witness of truth" when he was not exposed to any effective cross-examination. Whether or not the same conclusions may have been reached by the Senior Deputy President had Mr Butterfield not been granted permission to appear for Bacto Laboratories or had Mr Warrell himself sought and obtained permission to appear during the hearing by way of a lawyer may also be left to one side. The unfairness to Mr Warrell had its roots in the failure at the outset on the part of the Senior Deputy President to apparently consider the terms of s 596(2) and the potential prejudice thereafter experienced by Mr Warrell in being effectively cross-examined by a lawyer. Having granted permission for Mr Butterfield to appear, the "damage was done". 24 A decision to grant or refuse "permission" for a party to be represented by "a lawyer" pursuant to s 596 cannot be properly characterised as a mere procedural decision. It is a decision which may fundamentally change the dynamics and manner in which a hearing is conducted. It is apparent from the very terms of s 596 that a party "in a matter before FWA" must normally appear on his own behalf. That normal position may only be departed from where an application for permission has been made and resolved in accordance with law, namely where only one or other of the requirements imposed by s 596(2) have been taken into account and considered. The constraints imposed by s 596(2) upon the discretionary power to grant permission reinforce the legislative intent that the granting of permission is far from a mere "formal" act to be acceded to upon the mere making of a request. Even if a request for representation is made, permission may be granted "only if" one or other of the requirements in s 596(2) is satisfied. Even if one or other of those requirements is satisfied, the satisfaction of any requirement is but the condition precedent to the subsequence exercise of the discretion conferred by s 596(2): i.e., "FWA may grant permission…". The satisfaction of any of the requirements set forth in s 596(2)(a) to (c) thus need not of itself dictate that the discretion is automatically to be exercised in favour of granting "permission". 25 The appearance of lawyers to represent the interests of parties to a hearing runs the very real risk that what was intended by the legislature to be an informal procedure will be burdened by unnecessary formality. The legislative desire for informality and a predisposition to parties not being represented by lawyers emerges, if not from the terms of s 596, from the terms of the Explanatory Memorandum to the Fair Work Bill 2008 which provided in relevant part as follows: 2291. FWA is intended to operate efficiently and informally and, where appropriate, in a non-adversarial manner. Persons dealing with FWA would generally represent themselves. Individuals and companies can be represented by an officer or employee, or a member, officer or employee or an organisation of which they are a member, or a bargaining representative. Similarly, an organisation can be represented by a member, officer or employee of the organisation. In both cases, a person from a relevant peak body can be a representative. 2292. However, in many cases, legal or other professional representation should not be necessary for matters before FWA. Accordingly, cl 596 provides that a person may be represented by a lawyer or paid agent only where FWA grants permission. … 2296. In granting permission, FWA would have regard to considerations of efficiency and fairness rather than merely the convenience and preference of the parties. 26 Neither on a review of the reasons for decision of the Senior Deputy President nor the transcript of the proceedings does it appear that any consideration at all was given to the constraints imposed by s 596(2). Nor was there any apparent consideration given to the manner in which the discretion was to be exercised – even if s 596(2)(a), (b) or (c) was satisfied. These matters cannot be regarded as some mere oversight assuming no real importance or exposing Mr Warrell to no real prejudice. Given the nature of the issues to be resolved by the Senior Deputy President and the difficulties confronting Mr Warrell, it is not self evident that Bacto Laboratories could have readily satisfied one or other of those constraints. 27 It is thus concluded that the Senior Deputy President either erred in granting permission for Mr Butterfield to represent Bacto Laboratories or in failing to consider whether one or other of the constraints imposed by s 596(2) had been satisfied. A decision which fails to properly address whether permission should be granted or refused in the present proceeding had the consequence that the hearing was not "fair and just" as required by s 577(a). The Full Bench, it is respectfully concluded, erred in not so concluding. HARSH AND UNJUST? 28 In the event that Mr Warrell was successful in his primary submission, it was accepted that his alternative submission need not be resolved. 29 The alternative submission was that no reasons or findings had been made in respect to the conclusion that Mr Warrell had engaged in "gross misconduct" or that the termination of his services was not "harsh, unjust or unreasonable". 30 The conclusion of the Senior Deputy President, it was submitted, was no more than a conclusion unsupported by findings of fact or reasons. 31 A conclusion as to whether conduct is "misconduct" is ordinarily a question of fact: Griffin v London Bank of Australia Limited (1919) 19 SR (NSW) 154 at 162 per Cullen CJ (Pring and Sly JJ agreeing). The strength of Mr Warrell's submission is that no findings of fact were made. 32 Had it been necessary to resolve the alternative submission as to the absence of findings of fact in support of a conclusion that Mr Warrell had engaged in "misconduct", that submission may well have been unsuccessful. Findings were made as to Mr Carter being a witness of truth and Mr Warrell not being a "witness of truth". And the "conduct" engaged in by Mr Warrell which was presumably accepted was the conduct described by Mr Carter in his evidence. Mr Warrell should, perhaps, not be left to speculate as to what "conduct" was envisaged by the Senior Deputy President. But not much speculation is called for in that regard. 33 More difficult to determine is why the Senior Deputy President also concluded that termination of Mr Warrell's employment was not "harsh unjust or unreasonable". The ambit of that conduct which may fall within that phrase was explained in Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 465 by McHugh and Gummow JJ as follows: …. It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted. Why the termination of Mr Warrell's employment upon the basis of the presumed conduct was not considered to be "harsh, unjust or unreasonable" is open to greater uncertainty. It is unclear, for example, whether the Senior Deputy President took into account the "personal and economic" circumstances of Mr Warrell's case, including his disabilities, or the circumstances surrounding the conduct in question. 34 But it is unnecessary to resolve the alternative submission. CONCLUSIONS 35 It follows that the orders made by the Full Bench on 5 June 2012 should be quashed and that the matter should be reconsidered. 36 The Applicant is to bring in proposed short minutes of orders within 14 days. THE ORDERS OF THE COURT ARE: 1. The Applicant is to bring in Short Minutes of Orders to give effect to these reasons within 14 days. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 4 April 2013