Dec 1294/00 M Print T2421

AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Workplace Relations Act 1996
s.45 appeal against decision Print S7981
issued by Commissioner Foggo on 10 July 2000

H Kyvelos
(C No. 35596 of 2000)

s.170CE application for relief re termination of employment

H Kyvelos

and

Champion Socks Pty Limited
(U No. 31007 of 2000)

Application for relief in relation to termination of employment- application filed outside the time required by s.170CE(7) - discretion to accept late application pursuant to s.170CE(8) -circumstances in which a Full bench may exercise s.45(7) powers in relation to the exercise of a discretion - whether error in the exercise of the discretion.

DECISION

[1] This is an appeal by Ms H Kyvelos (the appellant) against a decision given by Commissioner Foggo on 10 July 2000. The formal reasons for the Commissioner's decision were published on 26 July 2000 [Print S7981]. The appellant's employment was terminated by Champion Socks Pty Limited (the respondent) on 24 February 2000. An application for a remedy in relation to the termination of her employment was lodged on her behalf on 21 March 2000. Section 170CE(7) provides that an application of that kind must be lodged within 21 days after the day on which the termination of employment took affect. The application was lodged 26 days after the date of termination, 5 days after the expiry of the period prescribed by s.170CE(7). Section 170CE(8), however, provides that the Commission may accept an application that is lodged out of time if the Commission considers that it would be unfair not to do so. The Commissioner was asked to exercise the discretion in s.170CE(8) and accept the appellant's application. The Commissioner decided not to accept the application and it is that decision which is the subject of the notice of appeal.

[2] The appellant is 56 years of age and her first language is Greek. She was employed by the respondent as an over-locker machinist from 15 March 1993 until 24 February 2000. On 11 February 2000 the respondent informed its employees, including the appellant, that it might be necessary to reduce staff and called for volunteers for redundancy. No one volunteered. On 16 February 2000 the respondent again called unsuccessfully for volunteers. On 22 and 23 February the appellant was absent on sick leave. On 24 February, about two and a half hours into her shift, she was summoned to the office. She asked and was granted permission for the shop steward to be present. The respondent's managing director, Mr Schiavello, and Mr Schiavello's sister-in-law represented the respondent. According to the appellant's version Mr Schiavello told her that if there was to be a redundancy she would be the first to go because of her performance. The appellant was asked to comment and she said that she would like another chance, she had been on a new machine for only 7 days, that it hurt her legs and that other workers were slower. Mr Schiavello then said that he was the boss and it was not the appellant's business. What the appellant said next is disputed. She testified that she said:

"What have I got to say to you, if you want me to go tell me to my face."

Mr Schiavello testified, however, that the appellant did not say that but rather:

"Please yourself if you want to sack me then sack me. I try my best. If you want me to go I'll go."

[3] At the end of the appellant's shift Mr Schiavello told the appellant that her employment was terminated forthwith and he gave her a cheque. She was paid 5 weeks pay in lieu of notice and 8 weeks severance pay. The appellant testified that Mr Schiavello escorted her from the building and she was not able to say goodbye to anyone or talk to the shop steward. Mr Schiavello denied that he restricted the appellant's action in the way she described.

[4] The appellant said in a witness statement filed on her behalf that:

"I was informed by my union representative at the time, Richard Watts, and believe that he telephoned Schiavello on 28 February to ask him why I was dismissed."

Later in her statement the following appears:

"I asked Watts to put an application in for unfair dismissal and to my knowledge he did so. I am not aware of the dates on which he did so or of any reason for any delay in filing my application form. I left that up to Watts."

The reference to the union is to the Textile Clothing and Footwear Union (the TCFUA). The version of events given by the appellant during the proceedings before the Commissioner differed in some respects from the version in her witness statement. This was particularly so in relation to her contact with the TCFUA concerning the lodgement of her application. Although she did not give oral evidence the appellant asserted through her counsel that she rang the TCFUA on the day of the termination of her employment and spoke to a woman called Dorothy or Dottie. A few days later she went into the union office when she was asked to do so and had a meeting with Dorothy, gave her all of the details and left the matter in her hands. She also asserted, again through her counsel, that Mr Watts was the person at the TCFUA who was signing the forms and she did not see him until the conciliation conference when he appeared on her behalf. These assertions were inconsistent with the parts of her written statement set out earlier in this paragraph.

[5] In the proceedings before Commissioner Foggo the respondent was not in a position to challenge directly the appellant's conflicting accounts of her dealings with Dorothy or Mr Watts. The respondent's representative asserted from the bar table that a female person from the TCFUA had called Mr Schiavello to inquire as to the reason for the termination of the appellant's employment and Mr Schiavello had explained the situation. In a witness statement provided to the Commissioner Mr Schiavello stated that the first time he heard that the appellant was challenging her redundancy was when he received the notice from the Commission. The only other potentially relevant matter is that neither the woman referred to as Dorothy nor Mr Watts was called by either party to give evidence.

[6] In deciding not to accept the application the Commissioner found that the appellant had not demonstrated an acceptable reason for the delay in lodging the application. In this regard the Commissioner made specific mention of the fact that the TCFUA is well versed in the requirements of the Act and there is nothing in the evidence which indicates why the application was not filed within time. It seems that the Commissioner also found that the appellant had not actively contested the termination of her employment until the application was filed and subsequently served on the respondent. Finally, the Commissioner found that the termination in this case was due to redundancy, the steps taken by the respondent to select the appellant for redundancy were reasonable and in those circumstances she was not persuaded that the application had merit.

[7] The first ground of appeal is that the Commissioner erred in not concluding that the appellant had contacted the TCFUA on or about the day of the termination of her employment and asked the union to file an application for a remedy in relation to the termination on her behalf. It was submitted by implication that if the Commissioner had so concluded she would have been likely to find that it would be unfair not to accept the application, out of time though it was, because the delay in lodgement was not the appellant's fault. The second ground of the appeal is that the Commissioner took into account an irrelevant consideration in relying on the TCFUA's knowledge of the terms of s.170CE(7). As already noted, that section requires an application to be lodged within 21 days of the termination of the employment taking effect. It can be seen that the first two grounds of appeal relate to the question of whether the appellant had an acceptable reason for her failure to file the application within the time required by s.170CE(7). The third ground of appeal is that the Commissioner failed to take into account the appellant's evidence that she objected to the termination of her employment at the time it was communicated to her. The remaining grounds relate to the Commissioner's assessment of the merits of the case to be presented on the appellant's behalf in the event that the Commission were to accept her application out of time. They involve two contentions which it is submitted should have led the Commissioner to accept the application. The first contention is that the appellant's employment was terminated without notice and with effect from the end of the shift during which she was told of the termination. The second contention is that the respondent's evidence concerning the reasons for the appellant's dismissal, was inadequate.

[8] It is appropriate to reiterate that the power to accept an application which has been lodged out of time is a discretionary one. The exercise of the discretion in the applicant's favour requires the formation of an opinion that it would be unfair not to accept the application. Whilst matters such as whether there is an acceptable explanation for the delay, whether the applicant contested the termination from an early point, the possibility of prejudice to the respondent if the application were accepted out of time and the merits of the substantive application might all be relevant considerations, the fundamental issue remains whether the Commission concludes that it would be unfair not to accept the application: Telstra-Network Technology Group v Kornicki [Print P3168]. The onus is of course on the applicant. As the High Court has recently made clear in Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 74 ALJR 1348, in an appeal against a discretionary decision the exercise by a Full Bench of its powers under s. 45(7) is dependent upon appealable error on the part of the primary decision-maker. In explaining the notion of appealable error the majority of the Court said this:

"Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process. ... The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms:

`If the Judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.'" [para 21]

We have adopted the approach set out in the passage from House v The King in deciding this appeal.

[9] The evidentiary basis for the first ground of appeal, that the Commissioner erred in not concluding that the appellant had contacted the TCFUA on or about the day of her dismissal and asked the union to file an application on her behalf, has not been made out. The question of whether the appellant had contacted the union on or shortly after the date of termination and given instructions to lodge an application was a matter on which the applicant bore the onus. Her case was equivocal on those issues. On the one hand her witness statement indicated that she spoke to Mr Watts on or about 24 February 2000 who told her he had spoken to Mr Schiavello and that Mr Schiavello had explained to him why her employment had been terminated. In a later paragraph of the statement she said she had instructed Mr Watts to lodge a claim but she does not specify the date of the instruction. On the other hand her oral evidence suggested that she spoke to Dorothy about lodging a claim and not to Mr Watts. Neither Mr Watts nor Dorothy were called to give evidence. Furthermore Mr Schiavello's uncontested assertions were that although someone from the TCFUA rang to discuss the reasons for the termination of the appellant's employment, no suggestion was made that an application was to be lodged challenging the termination. In the circumstances the Commissioner was not obliged to find that the appellant had contacted the TCFUA on or about the day of termination of her employment and asked the union to file an application on her behalf.

[10] While it is not strictly necessary that we deal with the second ground of appeal, that the Commissioner erred in relying on the TCFUA's knowledge of the terms of s.170CE(7), it is appropriate that we make some comment about it. This ground was advanced on the basis that the Commissioner was influenced by a belief that the TCFUA was a responsible and experienced union which, if it had been instructed to file an application, would have been aware of the time required by s.170CE(7) and would have complied with it. We think this was a consideration which the Commissioner could properly take into account, particularly in light of the failure of the appellant to call Mr Watts or Dorothy to corroborate her version of events.

[11] We now turn to the third ground of appeal, that the Commissioner should have taken into account the appellant's evidence that she challenged the termination from the outset. As our summary of the evidence before the Commissioner illustrates, there was a conflict in the evidence as to whether the appellant at first acquiesced in the termination of her employment or challenged it from the outset. Although no sworn evidence was given, neither party suggested to the Commissioner that she should refrain from making findings of fact. The question of whether the appellant had acquiesced in the termination was clearly a matter relevant to the application and upon which the applicant bore the onus. Faced with a conflict of assertions we think the Commissioner was entitled at least to proceed on the basis that the appellant had not made out her case on the point.

[12] The final ground of appeal relates to the merits of the application under s.170CE including the circumstances surrounding the termination of the appellant's employment and the manner in which the termination was carried out. The first submission made by the appellant on the merits was that the manner of the respondent's termination of her employment was unfair, being in substance a dismissal without notice. We think the submission oversimplifies the situation and ignores a number of other matters which the Commissioner was required to take into account. On two previous occasions the respondent had called for volunteers for redundancy and the appellant must have been aware that retrenchments due to redundancy would occur. Mr Schiavello's evidence, admittedly contested, was that the appellant had acquiesced in the termination. Both of these considerations tend to reduce the significance of the fact that the termination of the appellant's employment took effect from the end of the shift.

[13] The second submission made by the appellant on the merits challenged the genuineness and adequacy of the grounds relied upon by the respondent for terminating the employment. We think that the Commissioner was entitled to form the view that the respondent's explanation of its need to reduce its staff was credible. But we do not think it was open to her to find that the reasons advanced by the respondent for selecting the appellant were to be preferred to the appellant's version of events. According to that version the appellant had been unfairly selected. It was open to the Commissioner to find, as she did, that the termination of the appellant's employment arose from the respondent's need to reduce staff, because that matter was not put in issue. But we do not think it was proper to find that the selection of the appellant for redundancy was reasonable when the success or failure of the appellant's case on that point rested upon the resolution of a number of contested issues. It follows that the Commissioner's further finding that the appellant's claim lacked merit was wrong. In the proceedings the Commissioner heard submissions, including assertions on instructions, and read witness statements filed by the appellant and the respondent. The statements were unsworn and the declarants were not cross-examined. The Commissioner could not make a finding that the appellant's case had no merit because it was possible that when all of the evidence was in the appellant might have persuaded the Commissioner that her selection for redundancy, allegedly having been based on her performance, was unfair. Once that possibility is recognized it is clear that the appellant's case on the merits could not be dismissed at that stage.

[14] In considering whether to accept an application which has been lodged outside the time prescribed in s.170CE(7) the Commission may consider whether, on the basis of the material relied on by the parties, the applicant has a sufficient case on the merits although the discretion should be exercised having primary regard to the circumstances which led to the late lodgement: see by analogy Bearings Incorporated (Australia) Pty Ltd v Treloar [Print P8600] - a case concerned with an application for the late exercise of an election under s.170CFA(8). It should be emphasised that in considering the merits the Commission is not in a position to make findings of fact on contested issues, unless evidence is called on those
issues. Evidence is rarely called on the merits and there are sound reasons why the Commission should not embark on a detailed consideration of the substantive case in an application pursuant to s.170CE(8). In particular, it is undesirable that parties be exposed to the requirement to present their evidentiary cases twice. There are other matters, however, which might affect the exercise of the Commission's discretion directly, in particular those matters which led to the late lodgement. If the applicant does not call evidence on contested issues relevant to those matters the Commission may nevertheless make findings based on the opposing contentions of the parties or conclude that on a particular issue the applicant has not made out its case. In these proceedings the allegation of representative error and the assertion that the termination was contested at the outset were both matters directly relevant to the case for late acceptance. As we have indicated earlier, it was open to the Commissioner to draw conclusions adverse to the appellant on those matters even though no evidence was called by either party. But for the reasons we have given it was not open to the Commissioner to make a finding that the substantive application had no merit.

[15] There is a further reason why the Commissioner's finding on the merits should not be allowed to stand. If the finding is left undisturbed it would serve as an encouragement to other applicants for late acceptance pursuant to s.170CE(8) to put the whole of their evidentiary case and seek to cross-examine the respondent's witnesses to reduce the possibility of an adverse finding on the merits.This would lead to unjustifiable delay and expense.

[16] We think that the Commissioner's approach on the question of merit involves an error of the kind described in the passage from House v The King set out earlier in this judgment. It is appropriate to grant leave to appeal and to decide ourselves whether the appellant's application should be accepted pursuant to s.170CE(8).

[17] We have decided that the application should not be accepted. Our reasons are as follows. We do not consider that the appellant has produced an acceptable explanation for the delay in filing the application. The appellant's case was equivocal and there was nothing in her statement or the instructions relayed to the Commissioner through her counsel which clearly identified the date upon which she gave instructions to the TCFUA to file an application on her behalf. Any ambiguity in her case could have been remedied by obtaining a statement from a relevant official of the TCFUA. The absence of such a statement is significant. Since the appellant bore the onus of proof we find that no acceptable explanation has been demonstrated for failure to file the application within the statutory time limit. On the material before us we would not be prepared to make a finding that the appellant had not actively contested the termination and we are prepared to assume that she did. We adopt the Commissioner's finding, being uncontested, that the respondent had a genuine business or economic requirement to reduce staff. We are unable to conclude whether the process which led to the appellant's selection for redundancy was attended with unfairness or not. We have also taken into account the fact that the appellant was paid a total of 3 month's wages by the respondent on termination of her employment. In the circumstances of this cases, we think the appellant's failure to demonstrate a reasonable explanation for the delay in lodgement should be given great weight.

[18] The appropriate course is to confirm the Commissioner's decision and we do so.

BY THE COMMISSION:

PRESIDENT

Appearances:

J. Bornstein, of counsel, for the appellant.

J Hoy with O Schiavello for the respondent.

Hearing details:

2000:
Melbourne
September 27.

Printed by authority of the Commonwealth Government Printer

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