FEDERAL COURT OF AUSTRALIA

Cook v Australian Postal Corporation [2018] FCAFC 208

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    Order 2 made on 23 March 2018 in proceeding NSD 1978 of 2016, to the extent it is still operative, be vacated.

3.    There be no order as to costs of the appeal.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1    The appellant, Quentin Cook, worked for the respondent, Australia Post, for almost 38 years until he was dismissed on 17 December 2015. He applied to the Fair Work Commission for his reinstatement and for remedies for unfair dismissal under Pt 3-2 of the Fair Work Act 2009 (Cth). The Commissioner, heard evidence and submissions in April 2016, and in a written decision given on 18 August 2016, granted the application for unfair dismissal in part by finding that the dismissal had been unfair because it had been without notice, but refused to reinstate Mr Cook, giving him only the benefit of payment in lieu of the period of notice to which he would otherwise have been entitled (see: Quentin Cook v Australian Postal Corporation t/a Australia Post [2016] FWC 5692).

2    Mr Cook sought leave under s 400 to appeal under s 604 of the Act, but the Full Bench of the Commission refused to grant that leave, holding that it was not in the public interest to do so (see: Quentin Cook v Australian Postal Corporation t/a Australia Post [2016] FWCFB 7203). Mr Cook appears to have sought judicial review of both the Commissioner’s decision and that of the Full Bench. The primary judge refused that relief and ordered Mr Cook to pay Australia Post’s costs.

The issues in the appeal

3    Mr Cook argued that the primary judge erred relevantly in three respects, namely, first, that he misconstrued s 725 as requiring an employee to elect between seeking relief under Pt 3.2 or Pt 6.4 of the Act, when the Act did not entail such a result. Secondly, he argued that his Honour erred in holding that the Commissioner did not have to have regard to Mr Cook’s assertion that s 772(1)(d) and or (e) applied to his circumstances. And thirdly, he contended that his Honour erred in failing to find that if the first two arguments failed, the Act was invalid to the extent it supported that failure, because it did not conform with the implied Constitutional freedom of association as a corollary to the implied Constitutional freedom of communication on government and political matter.

The scheme of the Act

4    Relevantly, s 3(e) of the Fair Work Act provided that the object of the Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:

(e)  enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms

5    Section 385 provided that a person had been unfairly dismissed if the Commission was satisfied that the person had been dismissed and the dismissal was harsh, unjust or unreasonable. Then, s 387 provided the criteria for considering whether a dismissal was harsh, unjust or unreasonable, as follows:

387    Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC 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 the FWC considers relevant.

6    The Commission had power to order remedies for unfair dismissal including reinstatement (s 391) and payment of compensation (s 392). A person who had been dismissed could apply to the Commission for an order under Div 4 of Pt 3-2 for a remedy within 21 days after the dismissal took effect or such further period as the Commission allowed under s 394(3).

7    Part 6 of the Act dealt with, among others, rules concerning applications for remedies under the Act and Div 2 prevented certain applications where other remedies were available. Under s 725 a person who had been dismissed was not allowed to make an application or complaint of a kind referred to in, relevantly, s 729, in relation to the dismissal if any other of ss 726 to 728 or 730 to 732 applied. Section 729 applied in the circumstances of this case because Mr Cook had made an unfair dismissal application.

8    The purpose of ss 725 and 729 can be gleaned from the heading to Div 3 (in which they appear in Subdiv B), namely, “preventing multiple actions”. Part 6-4 provided additional provisions relating to termination of employment. Division 2 had the object, as expressed in s 771, of giving effect to certain International Labour Organisation conventions including the Convention Concerning Termination of Employment at the Initiative of the Employer done at Geneva on 22 June 1982. Relevantly, s 772(1) provided:

772    Employment not to be terminated on certain grounds

(1) An employer must not terminate an employee’s employment for one or more of the following reasons, or for reasons including one or more of the following reasons:

(a) temporary absence from work because of illness or injury of a kind prescribed by the regulations;

(b) trade union membership or participation in trade union activities outside working hours or, with the employer’s consent, during working hours;

(c) non-membership of a trade union;

(d) seeking office as, or acting or having acted in the capacity of, a representative of employees;

(e) the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;

(f) 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;

(g) absence from work during maternity leave or other parental leave;

(h) temporary absence from work for the purpose of engaging in a voluntary emergency management activity, where the absence is reasonable having regard to all the circumstances.

9    Under s 773, if an employer terminated an employee’s employment and the employee or an industrial association entitled to represent his or her industrial interests alleged that the employee’s employment had been terminated in contravention of s 772(1), the employee or industrial association could apply to the Commission for it to deal with that dispute within 21 days after the employment had been terminated or such further period as the Commission allowed (see: ss 773 and 774).

Background

10    The circumstances in which the present issues arise emerge from the reasons of the Commissioner. He found that Mr Cook had worked for Australia Post for almost 38 years as a postal delivery officer or a postman. The Commissioner found that Mr Cook’s employment appeared to have involved a long history of activities associated with the representation of his co-workers in respect to workplace-related issues, and:

The applicant undertook the admirable role of what may be described and understood to be a workplace representative, whereby he provided help to his co-workers by acting on their behalf. This workplace representative role of the applicant did not appear to involve any connection with an organisation of employees registered under the Act.

11    The Commissioner found that in substance that activity changed in its nature in about mid-2014. He found that on 28 April 2014, Mr Cook had become the sole shareholder and director of a company named ELISA Pty Ltd, trading as Employee Legal Industrial Services Australia. In May 2014, the Commissioner found that Australia Post became aware of what it understood to be an expansion of Mr Cook’s workplace activities to include payment for service arrangements between some of his co-workers and Mr Cook, or a company or organisation that he controlled.

12    On 10 June 2014, Mr Bold, the area manager with responsibility for Mr Cook, met with him and discussed the nature of his activities as a representative, which appeared to have extended to the provision of industrial and legal services on a paid basis. Mr Bold, the Commissioner found, told Mr Cook that that amounted to a conflict of interest and warned him that his activities in conducting paid representation services breached the relevant policies of Australia Post and jeopardised Mr Cook’s employment. Mr Cook rejected those assertions.

13    The Commissioner found that on 22 June 2015, Mr Bold wrote to Mr Cook, giving him notice that he was required to attend a warning counselling interview to discuss what was alleged to be unacceptable behaviour arising from his representative activities in a conciliation before the Commission the previous month, and again, concerning the alleged conflict of interest. The counselling interview occurred on 13 July 2015 and the Commissioner found that a warning letter was sent to Mr Cook the next day, confirming that Australia Post considered his activities as a paid employee representative constituted a conflict of interest that breached Australia Post’s code of ethics. The letter of 14 July 2015 advised Mr Cook that any further breaches of the employer’s code of ethics could result in his dismissal.

14    Following some concerns that appear to have been raised in subsequent months internally within Australia Post as to Mr Cook’s activities, in October 2015 it began a disciplinary inquiry into his alleged conduct. The Commissioner found that Mr Cook attended an interview with the person conducting the inquiry who subsequently issued a report. The inquirer examined seven allegations and found each of them to have been proven. The inquirer considered that Mr Cook’s conduct constituted serious and wilful misconduct and that an appropriate penalty, which he recommended, was dismissal. The manager with delegated authority to decide the appropriate penalty (the delegate) considered that report and asked Mr Cook to make any representations which he wished on the question of the recommended penalty that was under consideration, but he did not do so.

15    The Commissioner found that on 17 December 2015, the delegate wrote to Mr Cook saying that he agreed with the inquirer’s recommendations and therefore summarily dismissed Mr Cook for serious and wilful misconduct effective from close of shift on that day. Mr Cook was paid all his accrued entitlements.

16    In his reasons, the Commissioner summarised the cases for both of the parties. Mr Cook had helpfully separated the substantive complaints into two sets, “lunch-related offences” and “representative-related offences”. It is not necessary to discuss the lunch-related category.

17    The Commissioner recorded Mr Cook’s submissions on the representative-related issues, that Australia Post’s actions in seeking to rely upon his conduct involving his representative activities would breach s 772(1)(d) and (e) of the Act, and that consequently, he could not be dismissed because of his representative role because there was a statutory right for a person such as himself to represent employees and for them to be represented by persons of their choice. Mr Cook also challenged the assertion that he had a conflict of interest and contended that his dismissal was harsh, unjust and unreasonable. He submitted that the conflict of interest aspect of his dismissal was always “a red herring”.

18    The Commissioner also recorded the submissions of Australia Post on the representative-related matters, including one that rejected Mr Cook’s arguments, as having any relevance in respect of s 772(1)(d) or (e).

19    The Commissioner gave detailed reasons for concluding that all five of the lunch-related issues had been established. He rejected one of the two substantive representative-related arguments by finding in Mr Cook’s favour that on one occasion, although he had spent about half an hour more on an approved work break representing an employee in an application before the Commission to stop bullying, that activity did not amount to a sufficiently serious breach of his employment obligations.

20    However, the Commissioner found that the gravamen of the seventh allegation (allegation 7), which is the critical one for present purposes, was that during September 2015, Mr Cook had engaged in further paid representative activities in providing assistance to a fellow employee in circumstances where Australia Post had previously warned him that it considered that conduct to represent a conflict of interest of such a serious nature that it jeopardised his employment. The Commissioner found:

[56] The role of a workplace representative is often difficult as it frequently involves direct challenge to the representative’s own employer. Ordinarily, the workplace representative undertakes to speak on behalf of her or his fellow workers on a voluntary basis, without any direct fee or reward being provided to the representative from those being represented. The workplace representative (aka job delegate or shop steward) who is speaking on behalf of fellow workers often engages in an activity which is directly contrary to the interests of her or his employer. The resulting tensions are often difficult to manage, and employment law in Australia has generally recognised that certain protections should be provided in respect to persons exercising representative roles on behalf of fellow workers.

[57] For many years the applicant had engaged in the role of a workplace representative, albeit outside of the registered organisations regime. It appeared that the employer had, quite correctly, recognised the workplace representative role of the applicant, and generally afforded him the appropriate accommodations and protections. However, the workplace representative role of the applicant altered significantly and dramatically with the establishment of a payment for service arrangement via what can be referred to as ELISA.

[58] The workplace representative role of the applicant was transformed once the applicant was receiving payment or other direct reward from those that he was representing. Essentially, the applicant had obtained secondary employment, the purpose of which was directly inimical to the interests of the employer. In the context of the registered organisations regime, the applicant had moved from being a workplace representative to a paid Union official. The applicant’s position was plainly untenable and represented a manifest conflict of interest.

[59] It should also be recognised that the conflict of interest concerns would not be confined to the actions of the applicant against the interests of the employer. There is further prospect for conflict of interest concerns to arise for any one of the applicant’s co-workers that he represented, and for whom he was unsuccessful. This potential difficulty was to some extent realised and commented upon in the Decision of Johns C in the case of Mr Robert Buellsbach v Australian Postal Corporation t/a Australia Post.

[60] Although the applicant refused to openly acknowledge the conflict of interest, his own evidence revealed an unfortunate attempt to disingenuously conceal his fundamental understanding of the conflict that had been created once he started obtaining financial benefit from his representative activities. The applicant stated; “I have never received, solicited or accepted any money to represent the legitimate industrial interests, grievances or enquiries of any employee at work.” During cross-examination, the applicant sought to defend this statement on the basis that he did not receive payment for representation activities conducted “at work” as opposed to representation activities that he conducted away from the workplace. Despite there being no practical capacity to distinguish whether payments made to ELISA were applied only to representation activities conducted away from the workplace, the underlying and inescapable inference of the statement acknowledges the conflict associated with receiving money to conduct an activity inimical to the interests of the employer.

[61] Consequently, allegation seven involving the applicant conducting a paid employee representative role in blatant defiance of the warnings provided by the employer, represented serious and wilful misconduct. The particular misconduct established in allegation seven would, of itself, provide valid reason for dismissal. In the context of the various other aspects of the applicant’s misconduct involving refusal to follow the reasonable instructions of the employer in respect to his duties as a [postal delivery officer], all but one of the seven allegations particularised in the letter of dismissal provided multiple facets upon which valid reason for the dismissal can be substantiated. (citations omitted)

21    The Commissioner then found that each of the six grounds which he upheld, including allegation 7, constituted in itself a valid reason for Mr Cook’s dismissal, and that each amounted to serious misconduct for the purposes of considering the issues under s 387(a) of the Act. The Commissioner then considered each of the other paragraphs of s 387. In relation to s 387(h), he found that there was one glaring error in the way in which Australia Post had dealt with Mr Cook, namely, as we have already said, it failed to give him notice in circumstances where he had been permitted to work right up to the moment at which he was given his termination letter.

22    The Commissioner then concluded that Mr Cook had been dismissed summarily for serious misconduct and in particular he found that:

[72] The employer’s finding of serious misconduct in respect to allegation seven regarding the applicant conducting a paid employee representative role in blatant defiance of the warnings provided by the employer, has, of itself, established valid reason for the dismissal of the applicant. Further, other particular incidents of misconduct of the applicant aggregate to represent an elevated level of serious misconduct that would, ordinarily, justify summary dismissal.

23    However, in refusing Mr Cook the remedy of reinstatement, the Commissioner found in the end that the particular nature of the serious misconduct in allegation 7 had provided a proper basis upon which Australia Post legitimately would have lost trust and confidence in Mr Cook, and therefore the remedy of reinstatement would not be appropriate, saying:

[73] However, the employer invoked a summary dismissal in circumstances where the employee had not been suspended from duty, and thus it was deprived of the capacity to dismiss without notice. This particular procedural error made by the employer has rendered what would have otherwise been an entirely fair dismissal with notice, to be an unreasonable and unjust summary dismissal.

[74] Therefore, the summary dismissal of the applicant must be held to have been unreasonable and unjust. The applicant is entitled to remedy for unfair dismissal.

Remedy

[75] The applicant has sought reinstatement as remedy for his unfair dismissal. In this instance, there was a valid reason for the dismissal of the applicant involving serious misconduct. The particular nature of that serious misconduct has provided proper basis upon which the employer would have legitimately lost trust and confidence in the applicant. Therefore, any remedy of reinstatement would be inappropriate. Alternatively, in the particular circumstances of this case, the appropriate remedy would be some limited amount of compensation.

The Full Bench’s decision

24    The Full Bench noted that the Commissioner had given consideration to the transformed nature of Mr Cook’s role as a paid workplace representative. It found that it was open to the Commissioner to conclude that Mr Cook’s new role represented a conflict of interest despite Mr Cook’s assertions to the contrary, and that Mr Cook’s continuing to perform the role in defiance of warnings from his employer would jeopardise his employment and represented serious misconduct. The Full Bench did not consider that the Commissioner’s finding that Australia Post would have lost trust and confidence in Mr Cook constituted a significant error of fact.

25    It also found the Commissioner had made reference to the submissions by both parties concerning s 772(1)(d) and (e). It found that those provisions did not fall within Pt 3-2 of the Act: “so while the Commissioner did not directly deal with the submissions the parties made regarding them, we do not consider that it was necessary for him to do so in order to determine the application before him”. It concluded that it would refuse leave and said that the Commissioner:

[A]ppropriately in our view, took issue with Mr Cook carrying out this function [of being a representative] only after he began receiving payment from those whom he was representing in secondary employment on the basis that it represented a conflict of interest.

26    The Full Bench found that there was no arguable case of appellable error of a nature that would attract the public interest consideration, and accordingly, it refused his application.

The proceeding before the primary judge

27    Australia Post initially sought that Mr Cook’s application for judicial review be summarily dismissed. A judge of the Court rejected that application. Her Honour found that there was a “vexed” relationship between ss 378 and 772, so that it was arguable, for the purposes of considering summary dismissal, that the Commission had no power to find that the termination of Mr Cook’s employment was unlawful under s 772(1) in the absence of an application under s 773, however, that it was not appropriate to determine such an argument on a summary dismissal basis. Cf: Cook v Australian Postal Corporation [2017] FCA 509 at [75].

28    The proceedings then came before the primary judge, who considered each of the grounds advanced to challenge the Commissioner’s and Full Bench’s decisions. His Honour, in seeking to summarise Mr Cook’s arguments, noted that he had been troubled by a disturbing fluctuation in the manner in which they sought to rely on s 772, a criticism with which it is difficult not to sympathise. He concluded that none of the errors asserted had been established. His Honour reasoned that neither the Commission nor the Full Bench had been required to consider s 772 or whether Mr Cook’s employment had been terminated because he was acting as a representative of employees or had filed a complaint against an employer.

29    We should interpolate that there was no evidence that Mr Cook had filed any complaint against an employer so as to enliven s 772(1)(e), and we were not addressed on it in argument. That provision can be put to one side. His Honour found that there was nothing in the reasons in the letter of 17 December 2015, in which Australia Post dismissed Mr Cook, that called for any consideration to be given to a question about a contravention of s 772(1)(d) or (e). Mr Cook filed his application for unfair dismissal the day after he received the 17 December 2015 letter and it confined the basis for the relief sought to his having been unfairly dismissed for the purposes of Pt 3-2.

30    His Honour found that the criteria for consideration of whether a person had been unfairly dismissed were those in s 387, and that the existence of any reason for termination which might render the termination in contravention of s 772 was not a consideration the Commissioner was bound to take into account. Critically, the primary judge held that, the reasons Mr Cook put in his filed application for relief for unfair dismissal relied on his having acted as a representative of employees under s 772(1)(d). His Honour found that the Commissioner did not need to address that question and that he concluded that Mr Cook’s so acting was serious and wilful misconduct.

31    Therefore, his Honour found that there was no basis to attack the discretionary decision of the Full Bench to refuse to exercise its power under s 400 to grant leave. His Honour said that the Commission could not entertain in an application under Pt 3-2, an application in respect of a complaint under s 772 because it was precluded from doing so by the provisions of s 725. That finding has not been an issue in the appeal.

32    His Honour found that it was not a relevant consideration for the Commission to take into account any allegation of the reason for termination of employment being one of those set out in s 772 because s 387 had to be construed by reference to the objects of the Fair Work Act in ss 3 and 381, in respect of Pt 3.2 itself. He found that the Commissioner was only bound to take into account the matters to which Mason J referred to in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-41, which his Honour set out in his reasons.

33    The primary judge found that the Commissioner’s task did not include, when resolving an application under s 387, consideration of whether a reason for the dismissal was one of the reasons prohibiting termination of employment in contravention of s 772, because the Commission had to apply the terms of s 387. His Honour then reasoned:

76    The statutory scheme whereby an employee is faced with an election to either seek a remedy for unfair dismissal pursuant to Pt 3-2 or a remedy to resolve a dispute pursuant to Pt 6-4 (and the inability to pursue both remedies concurrently in contravention of s 725) supports a conclusion that the regime provided for in Pt 3-2 stands separate and apart from that provided for in Pt 6-4. It would considerably undermine the legislative insistence upon an employee making an election if an employee were to be permitted to merge the considerations of relevance to the pursuit of one remedy with the considerations of relevance to the other.

77    Even more broadly expressed, there is no statutory requirement which compels the Commissioner when considering a Pt 3-2 application to give consideration to the circumstances in which an employee may act as “a representative of employees”.

78    There is nothing in the terms of s 387 which requires matters of relevance to the pursuit of an application under s 773 to be necessarily taken into account. To employ the language of Mason J in Peko-Wallsend, the Commission when considering an unfair dismissal application is not “bound” to take into account matters of relevance to an application under s 773. Any consideration of matters of relevance to a s 773 application, moreover, may also render more complex, and undermine the informality of, an unfair dismissal application and run contrary to the objects of Pt 3-2 as set forth in s 381.

34    His Honour dismissed the second ground of review. He considered whether, contrary to his conclusion, the Commissioner was not bound to have regard to s 772(1)(d) or (e). His Honour found that, in fact, the Commissioner did have regard to the representative role that Mr Cook had undertaken and that the Commission’s reasons made that manifest. He said that the Commissioner found the conduct justifying Mr Cook’s dismissal was not his representative activities. Rather, because he had been paid for providing such services, first, the payment created a conflict of interest of such a serious nature that it jeopardised Mr Cook’s employment and, secondly, Mr Cook had obtained secondary employment, the purpose of which was directly inimical to the interests of the employer, as the Commissioner had found at pars [55] and [58]. His Honour also found the Commissioner had concluded that the conflict of interest and receipt of payment was sufficient, in itself, to justify Mr Cook’s dismissal.

35    His Honour rejected the challenge to the Commissioner’s exercise of his discretion not to reinstate Mr Cook, noting that he had given consideration to that question and concluded against it. The primary judge found that, given the application that was before the Commissioner was one for unfair dismissal, the Full Bench had been correct in concluding that it had not been necessary for the Commissioner to deal with the submissions relating to s 772(1)(d) and (e) and that the Full Bench’s discretionary refusal to grant leave to appeal fell within the scope of a sound exercise of discretion under the principles in House v The King (1936) 55 CLR 499 at 504-505.

36    His Honour also rejected the Constitutional arguments that Mr Cook had advanced. He held, first, that there was no constitutionally protected freestanding right of association as Hayne J had said in Tajjour v State of New South Wales (2014) 254 CLR 508 at 566-567 [95]. That finding was not challenged on the appeal. Secondly, his Honour found that Pt 3-2 of the Fair Work Act had no impact on any freedom of association implied by the Constitution as a corollary of the implied freedom of political communication because, as the Commissioner had found, Mr Cook was still free to act as a representative of employees. His Honour said (at [98]): “[t]hat which characterised his conduct as “serious misconduct” was his placing himself in a position of conflict” (emphasis in original).

37    Finally, his Honour said that the ordinary practice is not to decide constitutional questions unless there exists a state of facts which makes it necessary to decide such a question in order to do justice in a given case and to determine the rights of the parties, citing what Dixon CJ had said in Lambert v Weichelt (1954) 28 ALR 282 at 283.

38    For those reasons, his Honour dismissed the proceedings.

The appellant’s submissions

39    The appellant argued that the primary judge erred in construing s 387 as excluding any consideration of s 772. He argued that, as the Commissioner recorded in the part of his reasons dealing with the submissions of the parties, Mr Cook had made a clearly articulated argument or claim that his dismissal contravened s 772(1)(d) or (e) and that nowhere in the reasoning section of the Commissioner’s decision did he address that argument. He contended that the Full Bench had erred in its conclusion that the Commissioner did not need to deal with that argument and that the primary judge, likewise, had erred in finding no error in the Full Bench’s and the Commissioner’s decisions as to the failure of the Commissioner to deal with that argument. Mr Cook argued that the primary judge had failed to read the Act as a whole and had not applied proper principles of construction to the conclusion that he reached. He contended that it had not been necessary for him to make any separate application under Pt 6-4 for the Commissioner to have had the obligation to consider his claim that a reason for his dismissal had been one of the prohibited reasons in s 772(1)(d) or (e). He contended that there was nothing in the wording of s 772(1)(d) to distinguish between the voluntary activities that he had undertaken prior to commencing his enterprise with ELISA and subsequently, namely, he submitted it was irrelevant whether he received payment or voluntarily acted as a representative of other employees.

40    Mr Cook also contended that the Constitutional point arose because, if his Honour’s reasoning were correct, the structure of the Act had somehow immunised the Commission, in an application for unfair dismissal under s 387, from being able to have regard to whether the activity complained of was protected by what was said to be the implied Constitutional freedom of association as a corollary of the implied Constitutional freedom of communication on government and political matters. He argued that the primary judge had found that Australia Post had been entitled to dismiss him because he had exercised his representative rights and that he had no remedy for doing so. He contended that communication by one employee to the employer concerning the rights of another employee under the Fair Work Act was within the implied Constitutional freedom of communication and that, to the extent that the primary judge’s construction of the Act were otherwise correct, it impermissibly burdened that freedom of communication, being the right to complain in support of an assertion of a workplace right. He contended that the source of the burden was somehow to be found in s 725 and he also argued that the purpose of the legislation, on the primary judge’s construction, was to restrict workers’ rights to avail themselves of their freedom of association in unfair dismissal cases and that this was not compatible with the Constitutional scheme.

Consideration

41    This is an appeal from the primary judge’s decision to refuse judicial review remedies to Mr Cook on the basis that his Honour found no occasion to grant Constitutional writs to the Commission or Full Bench. On the principles applicable to the present case, the appellant must demonstrate error on the part of the primary judge. It is also important to have regard to the fact that it is well settled that, in the context of administrative decision making, the Court is not astute to discern error in a statement by an administrative officer (including the Commission or the Full Bench, which is part of the executive arm of the Commonwealth under Ch II of the Constitution) which was not, and was not intended to be, a statement of reasons for a decision that is a broad administrative evaluation rather than a judicial decision: Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173 at 185 per French CJ, Bell, Keane and Gordon JJ.

42    The primary judge concluded that the Commissioner was not bound to take into account s 772(1)(d) or (e) in the circumstances. Of course, in considering whether there was a valid reason for Mr Cook’s dismissal within the meaning of s 387(a), a dismissal that contravened s 772(1)(d) or (e) would not be one that occurred for a valid reason.

43    As we understand his Honour’s reasons, the primary judge proceeded on the basis that, having regard to the reasons which the Commissioner gave, those reasons demonstrated that he made no finding that the, or a, reason for Mr Cook’s termination was that he had acted in the capacity of a representative of employees or otherwise participated in proceedings against Australia Post involving any alleged violation of law or regulations or recourse to competent administrative authorities, such as appearing in the Commission. If it had been found that the reason or a reason for Mr Cook’s termination involved either s 772(1)(d) or (e), then the decision to terminate him may not have been valid, but that was not this case.

44    The Commissioner carefully considered the circumstances. True it is that in his reasoning process he did not return again to either s 772(1)(d) or (e). But, in substance, the Commissioner dealt with the subject matter in very careful reasoning that identified that the reason for his dismissal had nothing to do with Mr Cook’s representation of employees, participation in proceedings against Australia Post or acting as a representative. Rather, as the Commissioner had set out earlier in his reasons, at [8], Mr Cook had engaged in an admirable role of a workplace representative, when acting voluntarily. The vice which the Commissioner found was not that suggested at all. The reason on which the Commissioner acted was, as he said in [57]-[58], that Mr Cook “had obtained secondary employment, the purpose of which was directly inimicable to the interests of the employer” and that his new role working with ELISA had “altered significantly and dramatically, with the establishment of a payment for service arrangement”. The Commissioner found that these factors created a conflict of interest that was, in effect, both untenable and manifest.

45    There was no challenge to the Commissioner’s finding, before the primary judge or on appeal, that Mr Cook had engaged in and obtained secondary employment, the purpose of which was directly inimicable to the interests of Australia Post. Moreover, the Commissioner found that allegation 7 involved Mr Cook conducting a paid employee representative role in blatant defiance of warnings that his employer had provided and that this represented serious and wilful misconduct. The Commissioner was entitled to make those findings. In Blyth Chemicals Limited v Bushnell (1933) 49 CLR 66 at 81-82, Dixon and McTiernan JJ said (and see too: per Starke and Evatt JJ at 74 and Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at 190 [30], per French CJ, Bell and Keane JJ and 202 [65], per Kiefel J):

Conduct which in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal (Boston Deep Sea Fishing and Ice Co. v. Ansell [(1888) 39 Ch. D. 339 at 357-8 and 362-4]; English and Australian Copper Co. v. Johnson [(1911) 13 C.L.R. 490]; Shepherd v. Felt and Textiles of Australia Ltd. [(1931) 45 C.L.R. 359]). But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises.

46    Thus, it can be seen that the Commissioner’s decision was a decision about the breakdown of trust and confidence between Mr Cook and Australia Post and was not to do with either of the reasons in s 772(1)(d) or (e). Moreover, s 772(1) must be read as a whole. Although s 772(1)(b) identifies that a reason for dismissal cannot include trade union membership or participation in trade union activities outside working hours or, with the employer’s consent, during working hours, it could hardly be said that a person who engaged in paid secondary employment, while a full-time employee of an employer, would be simply acting as a representative of employees by fulfilling his paid engagements to represent those employees during working hours.

47    The Act cannot be construed as meaning that any association between a person having a representative role and his employment would preclude termination. The absurdity of the argument can be seen in asking where or whether Australia Post could ever have drawn the line to prevent Mr Cook, during ordinary working hours, performing representative activities, for which he was being paid in his secondary employment. If his argument about the reach of s 772(1)(d) were correct, any attempt to curtail those activities would place the employer in a position of having to pay an employee, as a full-time worker, while that person could, at the same time during his working hours, act as a full-time paid advocate against the employer’s interests and contrary to its instructions. Section 772(1)(d) and (e) require the motivation for the determination to have been the mere fact that the person was acting or had acted in the capacity of a representative of employees, as opposed to the situation here, which the Commissioner found in accordance with ordinary and longstanding principles in employment law to have been a breach of Mr Cook’s duties as employee.

48    The principles of statutory construction require the court to have regard to the text of the legislation and its context and purpose, particularly where the text is ambiguous. In the circumstances here, the Commissioner made a factual finding that did not leave any scope to argue that a reason for Australia Post terminating Mr Cook’s employment was to be found in either s 772(1)(d) or (e). For that reason, the Commissioner was not required, in the course of giving an administrative decision, to traverse that ground. His findings, at [56]-[61] and [71]-[75], was that no part of the reason for termination of Mr Cook’s employment involved either of the prohibited reasons in s 772(1)(d) or (e) and, therefore, that section could not have been operative in undermining the validity of Australia Post’s decision to terminate Mr Cook’s employment.

49    The conflict of interest that the Commissioner found, namely that Mr Cook had engaged in secondary employment while a full-time employee, did not amount to a proscribed reason under s 772(1)(d) or (e), or otherwise affect the validity of the decision to dismiss him.

50    In those circumstances, it is neither necessary nor desirable to address Mr Cook’s convoluted Constitutional argument which does not arise on the facts and may not arise on the law: see also Adams v Director of the Fair Work Building Industry Inspectorate (2017) 351 ALR 379 at 401-408 [66]-[89], where North, Dowsett and Rares JJ discussed an analogous Constitutional argument and rejected it.

51    We agree with the primary judge that it is not necessary to decide Constitutional questions unless there is a state of facts which makes it necessary to decide such a question in order to do justice in the given case and determine the rights of the parties: Duncan v New South Wales (2015) 255 CLR 388 at 410 [52] per French CJ, Hayne, Kiefel, Bell, Gageler, Keane and Nettle JJ.

52    For these reasons, the appeal must be dismissed.

Australia Post’s application for an order for costs

53    Australia Post has applied for an order for costs of the appeal pursuant to s 570(2)(b) of the Fair Work Act. That provides that a party may be ordered to pay costs only if the Court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs. Otherwise the provisions of s 570(1) apply, so that there be no order for costs in proceedings under the Act.

54    Australia Post argued that there were two reasons why the power to order Mr Cook to pay its costs of the appeal should be exercised, namely, first, that the appeal was incompetent or hopeless and secondly, because on 26 July 2018, Australia Post had made an offer of compromise under Pt 25 of the Federal Court Rules 2011 and had written a letter on the same day making a Calderbank offer in the same terms (see Calderbank v Calderbank [1976] Fam 93).

55    Australia Post argued that the case was hopeless because it repeated the contentions that the primary judge had rejected and had a fatal flaw, namely Mr Cook’s approach to relying on the provisions of Pt 6-4 as a basis for challenging the reasoning of the primary judge and the validity of the decisions of the Commissioner and the Full Bench.

56    The letter accompanying its offer of compromise asserted that Australia Post had incurred significant costs but did not itself articulate or identify exactly how the very large sum asserted had been arrived at, or allow any examination of the reasoning process for that.

57    While Mr Cook has been unsuccessful in his appeal, we are not persuaded that his case was unhelpful or foredoomed to fail (see Walton v Gardiner (1993) 177 CLR 378 at 392). The principal question for decision was a matter of statutory construction as to what, if any, role s 772(1) might play in proceedings under Pt 3-2 of the Act. While we have rejected Mr Cook’s argument, we are not persuaded that it was hopeless or would otherwise be able to be characterised as unreasonable. Although the same could not be said of the Constitutional point, it played a minor role in the appeal. Moreover, it would not be right in proceedings under the Fair Work Act to hold that a failure to accept an offer of compromise amounted to itself an unreasonable act warranting a departure from the statutory principle that the Court should not order one party to pay the other’s costs in proceedings under the Act. There is nothing in the circumstances of this case that suggests that the mere service of an offer of compromise or the making of an offer to compromise in accordance with principles in Calderbank [1976] Fam 93 elevate the failure to accept either offer to being characterised as unreasonable or as sufficient to displace the statutory general rule.

58    For these reasons, Australia Post’s application for an order for costs should be refused.

Associate:

Dated:    23 November 2018