Fair Work Commssion appeals and the Federal Court

What follows in this post is an extract from the decision of the Full Federal Court of Australia by an employee who at first won an unfair dismissal case in the Fair Work Commission, and then lost the employer’s appeal against the decision by the employer, and having appealed to the Federal Court, lost that appeal on the basis that although the Full Bench had imposed its view of the effect of the evidence, it had the right to do so.

The case is an excellent analysis of the supervisory powers of the Federal Court  over the Fair Work Commission’s jurisdiction and is commended reading to practitioners.

Per Flick J

  1. “The Applicant in the present proceeding is Mr Trevor Knowles; the First Respondent is BlueScope Steel Limited (“BlueScope Steel”).  Mr Knowles commenced employment with BlueScope Steel in about March 1988.
  1. Mr Knowles most recently was employed to drive overhead cranes to move steel coils within a warehouse.  In September 2019 he was operating a crane to load coils onto an entry saddle.  He hoisted the tongs of the crane without first travelling sideways away from the coil, that sideways movement being a practice known as “long travelling”.  To operate the crane in that manner was contrary to the Critical Safety Procedure CSP031 – Moving Coils/Loading Trucks with Tongs or C-Hook & Unloading AGV Stands (the “Critical Safety Procedure”).  Mr Knowles had operated the crane in the same manner previously.
  1. In September 2018 he had also been given a “Final Warning for Unacceptable Behaviour” for an earlier incident in breach of another Critical Safety Procedure.  Following an investigation into the events that occurred in September 2019, the services of Mr Knowles were terminated in October 2019.
  1. He made an application to the Fair Work Commission (the “Commission”) pursuant to s 394 of the Fair Work Act 2009 (Cth) (the “Fair Work Act”) claiming that his dismissal was unfair.  The Commission agreed and ordered (inter alia) that he be reinstated:  Knowles v Bluescope Steel Limited [2020] FWC 1015. BlueScope Steel sought permission to appeal pursuant to ss 400 and 604 of the Fair Work Act.  Permission was granted and the Full Bench of the Commission upheld the appeal and (inter alia) ordered that Mr Knowles’ application for unfair dismissal be dismissed:  BlueScope Steel Limited v Knowles [2020] FWCFB 3439.
  1. Mr Knowles has now applied to this Court seeking relief under s 39B of the Judiciary Act 1903 (Cth). He seeks an order quashing the decision of the Full Bench. In very summary form, he contends that the Commission committed no “error of fact” – let alone any “significant error of fact” – and that it was not open to the Full Bench to disturb the findings made by the Commission.  In the alternative, he contends that a number of the Full Bench’s findings of fact were not open to it by reason of irrationality, illogicality or unreasonableness.  Conversely, BlueScope Steel contends that once Mr Knowles conceded that he had breached the Critical Safety Procedure there was a valid reason for his dismissal, and that it was thereafter open to the Full Bench to conduct a re-hearing of the matter and to make the findings that it did.  Alternatively, BlueScope Steel contends that there was no error of fact committed by the Full Bench and that, even if there be such error, any error would be an error within the jurisdiction vested in the Full Bench.
  1. It is concluded that relief should be refused and that the proceeding should be dismissed.  It is concluded that the Full Bench committed no error such as to attract an order quashing its decision.

The Fair Work Act

  1. The provisions of the Fair Work Act of central relevance to the present proceeding are to be found in Pt 3-2, namely that Part which deals with “Unfair dismissal”.
  1. Within that Part, s 381 sets forth as follows the object of that Part:

Object of this Part

(1)        The object of this Part is:

(a)          to establish a framework for dealing with unfair dismissal that balances:

(i)         the needs of business (including small business); and

(ii)        the needs of employees; and

(b)        to establish procedures for dealing with unfair dismissal that:

(i)         are quick, flexible and informal; and

(ii)        address the needs of employers and employees; and

(c)          to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.

(2)          The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.

Sections 385 and 386 define (respectively) what constitutes “unfair dismissal” and the meaning of the term “dismissed”. Section 387 sets forth the criteria for considering whether a dismissal was “harsh, unjust or unreasonable”.

  1. Division 4 of Pt 3-2 sets forth the “Remedies for unfair dismissal”, including the making of an order by the Commission that an employee be reinstated. Section 399 provides for a hearing before the Commission and – importantly for present purposes – it is s 400 which sets forth “appeal rights”.
  1. When entertaining an appeal, however, it is s 400(2) which imposes a constraint upon the power of the Full Bench in respect to its review of findings of fact made by the Commission and constrains that power to “a significant error of fact”.  It is that sub-section which assumed central importance in the present proceeding before this Court.  That section in its entirety provides as follows:

Appeal rights

(1)          Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2)          Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.

  1. Section 400(1) and the prohibition against granting permission unless “it is in the public interest to do so” has been the subject of considerable judicial observation:  e.g., Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54, (2011) 192 FCR 78. The opinion or state of satisfaction as to a matter being “in the public interest” is “a jurisdictional fact or criterion to be satisfied before an appeal is heard and orders made on the appeal”:  Australian Postal Corporation v D’Rozario [2014] FCAFC 89 at [14], (2014) 222 FCR 303 at 309 (“D’Rozario”) per Besanko J. His Honour had earlier concluded that:

[7]        … the grant of permission to appeal is a precondition to the exercise of the appellate power of the FWC. …

In respect to one of the respondents in D’Rozario, the Full Bench had granted permission to appeal without considering whether it was in the public interest to do so. That was held to be a jurisdictional error: [2014] FCAFC 89 at [26] per Besanko J; at [81] to [83] per Jessup J; at [127] per Bromberg J, (2014) 222 FCR at 312, at 327 to 328, and at 335. Bromberg J there also helpfully made the following further observations in respect to the fact that s 400(1) itself set forth “no factual reference”:

[102] There is no factual reference included in s 400(1) of the FW Act. What is required by s 400(1), as the applicant acknowledged, is the formation of a broad value judgment or opinion as to whether the public interest favours the grant of permission to appeal.

[103]    In Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54 (19 April 2011) Buchanan J (with whom Marshall J and Cowdroy J agreed) described (at [44]–[45]), the public interest test in s 400(1) of the FW Act as follows:

The nature of the task committed to the Full Bench at this stage of the appeal process (i.e. assessing whether a “public interest” test was met) was a discretionary one involving a broad value judgment, as has recently again been emphasised. …

[104] Whilst the descriptor “jurisdictional fact” may be used in relation to a statutory criterion like that contained in s 400(1), the doctrine of jurisdictional fact can have no application to s 400(1) because the criterion there set out lacks any factual reference.

As to the argument that making a finding for which there is “no evidence” can expose jurisdictional error, his Honour continued:

[110]    It seems to me that an absence of evidence, even in relation to a critical finding, will only found jurisdictional error where the decision-maker’s reliance upon that finding has affected the exercise of the power conferred so as to result in the decision-maker “exceeding the authority or powers given by the relevant statute”: Yusuf [(2001) 206 CLR 323] at [82].

[111]    The reliance by a decision-maker upon a finding unsupported by evidence may be shown to have affected the exercise of the power conferred because it is demonstrative of a misconception by the decision-maker of the function required by the statute.

His Honour then referred to “an uncontested assertion” made by Counsel for the Respondents and continued:

[122]    The respondents’ uncontested assertion may well have been erroneous and that may well have led the majority into making an erroneous finding. However such an error, if made, was an error made within jurisdiction. Whether or not the “emerging trend” existed was not a jurisdictional fact for the reasons already stated. It is not for this court, on judicial review, to test the factual foundation that was open for the majority to rely upon and which, it seems, it did rely upon to reach its view that permission should be granted.

  1. Consistent with the approach of Bromberg J in D’Rozario, in Lambley v DP World Sydney Limited [2013] FCA 4 (“Lambley v DP World”), Katzmann J concluded in respect to s 400(1):

[42]      Here, too, the Full Bench expressly recognised the limits of its functions and powers. It correctly understood that its functions were to decide whether it was in the public interest to grant permission to appeal and whether the Deputy President had made an error of the kind described in House v The King. It considered a ground of appeal which, if successful, would determine the outcome of the appeal. It concluded that the particular ground should succeed because the Deputy President had made a relevant error. In coming to that conclusion, it was not doing something it lacked the power to do. It was deciding matters within its jurisdiction, albeit incorrectly.

Her Honour subsequently concluded in Baker v Patrick Projects Pty Ltd [2014] FCAFC 165, (2014) 226 FCR 302 at 308 to 309:

No jurisdictional error or error of law on the face of the record

[31]      The Full Bench was precluded from entertaining the appeal unless it granted permission to appeal and to do that it had to be satisfied that it was in the public interest to do so. Its satisfaction about the issue was therefore a statutory precondition to the grant of permission. But as the Full Court of the ACT Supreme Court recently observed, it is not always a simple matter to decide whether a statutory precondition is a jurisdictional fact: Director of Public Prosecutions (ACT) v Martin (2014) 9 ACTLR 1 at [255] …

[33]      As Buchanan J said in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78 at [44] the decision as to whether it is in the public interest to grant permission to appeal plainly involves assessment and value judgments on the part of the Full Bench. …

[34]      That is the position here. The existence of the public interest in granting permission to appeal is not a jurisdictional fact to be determined to the satisfaction of this Court. So much was found by the Full Court in Australian Postal Corporation v D’Rozario (2014) 222 FCR 303 at [8] (Besanko J); [47] (Jessup J) and at [95]–[104] (Bromberg J). As Perram J noted in Australian and International Pilots Association v Fair Work Australia (2012) 202 FCR 200 at [147], citing Australian Heritage Commission v Mount Isa Mines Ltd (1995) 60 FCR 456, where the task reposed in a decision-maker:

… is a difficult and complicated one involving the careful assessment of complex facts and the formation of opinions and value judgments on a potentially wide range of matters, this will suggest that Parliament intended that the decision-maker would have power to make its own determination of that matter.

[35]      His Honour also noted at [147] that:

[T]he specialist qualifications of the members of an administrative tribunal may well be an indicator that it is this body, with its expertise, that is to resolve the issue at hand.

[36]      Applying those principles in this case, it is highly unlikely that Parliament would have intended that a court engaged in judicial review should decide whether it is, in fact, in the public interest to grant permission for leave to appeal to the Commission. Neither is there any other basis upon which the Court can interfere. …

Dowsett and Tracey JJ agreed with Katzmann J.  See also:  Pal v Commonwealth of Australia [2020] FCA 1483 at [59] per Anderson J.

  1. But s 400(2) has received comparatively less judicial consideration.
  1. Section 400(2) received some attention in BP Refinery (Kwinana) Pty Ltd v Tracey [2020] FCAFC 89, (2020) 276 FCR 9 (“BP v Tracey”).  In that case, the Full Bench of the Commission had departed from a finding made by a Deputy President that there was a valid reason for Mr Tracey’s dismissal:  Tracey v BP Refinery (Kwinana) Pty Ltd [2020] FWCFB 820 at [30]. Besanko, Perram and Jagot JJ there summarised the argument then advanced in respect to s 400(2) and resolved that argument as follows ((2020) 276 FCR at 17):

Ground 2

[21] BP’s argument is that in deciding whether there was a valid reason for Mr Tracey’s dismissal the Full Bench ignored s 400(2) of the FW Act. As noted, it was common ground that the question whether the video involved contravention of BP’s Code of Conduct and other policies such as to justify Mr Tracey’s dismissal involved issues of fact. Accordingly, s 400(2) was engaged. According to BP the Full Bench simply ignored s 400(2) as it did not mention the provision in its reasons and did not make any finding to the effect that the Deputy President’s decision involved a significant error of fact, as required by s 400(2).

[22] The Full Bench’s reasons at [30] are set out above. As the submissions for Mr Tracey put it, the finding in [30] that the “Deputy President’s erroneous determination that there was a valid reason for Mr Tracey’s dismissal was fundamental to her decision that his dismissal was not unfair” is, in substance, a finding of a significant error of fact. To this may be added the fact that s 400(2) is a basal pre-condition to an exercise of power by the Full Bench to correct an error of fact. It would not lightly be inferred that the Full Bench had simply overlooked this basal pre-condition to the exercise of its power. When this context is recognised it is readily apparent that the Full Bench was expressing its satisfaction in [30] of its reasons that the Deputy President’s factual error was significant to the decision she made.

[23]      For these reasons ground two of the application must also be rejected.

In an earlier decision, Besanko J in Australian Postal Corporation v Gorman [2011] FCA 975, (2011) 196 FCR 126 at 135 (“Gorman”) stated as follows:

[44] I am not to be taken as suggesting any view as to the merits. That is not my function. It is my function to determine whether the Full Bench made a jurisdictional error. In my opinion it did because it did not apply, as it was obliged to do, the requirements in s 400(1) and (2) of the Act. Both of those requirements are jurisdictional because both delineate the powers and functions of the Full Bench on hearing an application for permission to appeal and an appeal: Craig v South Australia (1995) 184 CLR 163; Kirk v Industrial Court of New South Wales (2010) 239 CLR 531 at [72] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.

  1. The Full Court in Linfox Australia Pty Ltd v Fair Work Commission [2013] FCAFC 157, (2013) 240 IR 178 (“Linfox”) had also considered s 400(2). Dowsett, Flick and Griffiths JJ there rejected an argument that s 400(2) should be construed through the prism of “jurisdictional fact”.  Their Honours concluded (at 189 to 190):

[39] It may be noted that the Originating Application includes a reference to the concept of “jurisdictional fact”. Linfox submitted that the Full Bench’s “satisfaction” that there was an error by the Commissioner is a “precondition to the exercise of the Full Bench’s powers under s 607 of the Act” and constituted a jurisdictional fact. Accordingly, so the argument went, it was for the court to determine whether the Full Bench of Fair Work Australia had fallen into jurisdictional error. It was put by Linfox that the court had to determine whether the Full Bench’s opinion that there was no error by the Commissioner was an opinion which had been properly formed.

[40]      The court has great difficulty in seeing the relevance of the concept of “jurisdictional fact” in this context. Its use by Linfox should not be permitted to obscure the fact that the correct legal position is that:

(a)          the appellate jurisdiction of the Full Bench of Fair Work Australia required the identification of some error of law or fact on the part of the Commissioner before the Full Bench could intervene (noting that the effect of s 400(2) is that an appeal on a question of fact must involve a significant error of fact); and

(b)          the court’s jurisdiction to review the Full Bench of Fair Work Australia’s decision requires the identification of a jurisdictional error (or an error of law on the face of the record, which was not raised in the proceeding).

[41]      There is considered to be an element of confused thought … in Linfox’s invocation of the concept of “jurisdictional fact” in this context. …

[42]      … The task of this court is to review the decision of the Full Bench for jurisdictional error. The court’s task is not to review the Commissioner’s decision with a view to determining for itself whether a jurisdictional fact exists. Nor was that the task of the Full Bench. As the High Court emphasised in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; 99 IR 309 at [31] and [32], the Full Bench would fall into jurisdictional error if, for example, it misconceived its role, misunderstood the nature of its jurisdiction, or failed to apply itself to the relevant question; but the limited nature of that review jurisdiction is important as is reflected in the passages from the joint judgment of Gleeson CJ, Gaudron and Hayne JJ in that decision which are set out in [12].

  1. Section 400(2) thus imposes a “basal pre-condition” to an exercise of power by the Full Bench:  BP v Tracey at [22]. Section 400(2) “delineate[s] the powers” of the Full Bench:  Gorman at [44]. A failure on the part of the Full Bench to even give consideration to whether there was a “significant error of fact” would constitute jurisdictional error:  cf. D’Rozario.
  1. The task of the Full Bench when entertaining an application for permission to appeal pursuant to s 400(1) and, if permission is granted, its task in thereafter resolving “an appeal on a question of fact” subject to the constraint imposed by s 400(2), is fundamentally different to the task entrusted to this Court when entertaining judicial review. It is, with respect, “confused thought” to view either s 400(1) or s 400(2) as imposing a “jurisdictional fact” with respect to which this Court can simply substitute its own view for that of the Full Bench:  Linfox at [41]. Section 400(2), like s 400(1), sets forth a requirement which calls for a “broad value judgment” (D’Rozario at [102]) with which this Court when undertaking judicial review should be hesitant to disturb. It should only do so if the Full Bench made an error of the kind identified in Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 at [31] to [32], (2000) 203 CLR 194 at 208 to 209 (“Coal & Allied”) and Linfox at [42], namely misconceiving its role, misunderstanding the nature of its jurisdiction or failing to apply itself to the relevant question. If the Full Bench approaches the task in that manner when considering s 400(2), any error would most likely be an error within jurisdiction: Toms v Harbour City Ferries Pty Ltd [2015] FCAFC 35 at [97], (2015) 229 FCR 537 at 558 (“Toms v Harbour City Ferries”).
  1. Sections 604 and 607 should also be mentioned. Section 604 entitles a person aggrieved by a decision of the Commission to appeal. Section 607 sets forth the “Process for appealing or reviewing decision”:

Process for appealing or reviewing decisions

(1)          An appeal from, or a review of, a decision of the FWC, the General Manager or the Registered Organisations Commissioner may be heard or conducted without holding a hearing only if:

(a)          it appears to the FWC that the appeal or review can be adequately determined without persons making oral submissions for consideration in the appeal or review; and

(b)          the persons who would otherwise, or who will, make submissions (whether oral or written) for consideration in the appeal or review consent to the appeal or review being heard or conducted without a hearing.

(2)        The FWC may:

(a)        admit further evidence; and

(b)        take into account any other information or evidence.

(3)        The FWC may do any of the following in relation to the appeal or review:

(a)          confirm, quash or vary the decision;

(b)          make a further decision in relation to the matter that is the subject of the appeal or review;

(c)          refer the matter that is the subject of the appeal or review to an FWC Member (other than an Expert Panel Member) and:

(i)          require the FWC Member to deal with the subject matter of the decision; or

(ii)         require the FWC Member to act in accordance with the directions of the FWC.

If it be established that the Full Bench, for example, failed to discharge its functions by not addressing the question required for determination, its decision may be quashed:  e.g., Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50, (2020) 275 FCR 385.

  1. Importantly for present purposes, however, is a well-established recognition on the part of this Court that it may review “outcomes on appeal”, but that review of the reasons and outcomes on appeal are “not readily susceptible to narrow challenges on the grounds of ‘jurisdictional error’”:  Toms v Harbour City Ferries.  Buchanan J, with whom Allsop CJ and Siopis J agreed, there referred to the evolution of the “fair go all round” test, now enshrined in s 381(2) of the Fair Work Act, and continued:

[42]      Those matters are important for an assessment of the errors which the Full Bench of the FWC is said to have made in the present case, and the argument that it lacked power or authority to review or reverse the findings made at first instance which were relevant to the required, overall, evaluation to be made about whether the applicant’s dismissal was unfair, and whether he should be reinstated. It should be accepted that parliament intends that examination of the merits of unfair dismissal cases should be the particular province of the FWC, and proceed upon a practical and pragmatic foundation. That examination necessarily extends to the possibility of review of reasons and outcomes on appeal. Those are matters not readily susceptible to narrow challenges on the grounds of “jurisdictional error”.

  1. On the facts of that case, Mr Toms was a ferry master.  In July 2013 he had not been rostered on duty but nevertheless agreed to come to work to replace another employee.  The evening before, however, he had smoked marijuana because of shoulder pain.  He misjudged an approach to a wharf and struck a pylon.  No one was injured but the incident was reported.  Harbour Ferries had adopted a drug policy of “zero tolerance” and dismissed Mr Toms.  He claimed the dismissal was unfair.  The Fair Work Commission agreed.  The Full Bench, however, disagreed.  It did not view favourably what it characterised as a “deliberate disobedience” by Mr Toms of the “zero tolerance” policy.  In dismissing an application seeking to set aside the decision of the Full Bench, Buchanan J observed (at 552 to 555):

The appeal decision

[70] The appeal lay to a Full Bench with the permission of the FWC (s 604(1)). However, s 400(1) provides that in an unfair dismissal case the FWC must not grant permission to appeal unless satisfied that it is in the public interest to do so.

[71]      The Full Bench was so satisfied.

[72]      In my view, a conclusion that it was in the public interest to grant permission to appeal was not a neutral circumstance. Although it did not serve to indicate that the appeal must succeed, it certainly demonstrates that a particular threshold of importance and general significance had been crossed. Although, at one level, the exercise of appellate power is directed to the correction of error, that is only true in a particular sense. The exercise of a power to hear and determine an appeal is more correctly described as one to consider arguments about error. In some cases it may be thought important to confirm a particular outcome, or the reasons for it. In others, it may be necessary or desirable to consider or resolve the emergence of differing approaches to a particular question, whether at first instance or at appellate level. In yet other cases, a need to correct error might satisfy the test.

[73]      Whatever the particular justification in a particular case for a conclusion that it is in the public interest to grant permission to appeal, it may be only a short further step to the identification of a particular error of approach or outcome, and the substitution of a different result.

[77]      The Full Bench thought the policy about drug and alcohol use was highly relevant. It thought that the absence of proven impairment of the applicant was not relevant. Those conclusions identified error in the approach taken by the Deputy President and in the decision-making process. It is plain that the Full Bench was not speaking of relevance in a strict legal sense (cf Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24). Rather, the Full Bench was indicating what matters were important enough to be potentially determinative in the overall evaluation to be made.

[81]      It is clear that “deliberate disobedience” of the respondent’s policy by a senior employee was viewed by the Full Bench as the central factor to be assessed and not, as Deputy President Lawrence had found, whether the drug use had a demonstrated or likely bearing on the incident. At [24] the Full Bench also listed each of the other matters referred to as taken into account by Deputy President Lawrence. It is apparent from [28] that the Full Bench determined that they did not provide a reason to intervene against the application and enforcement of the respondent’s policy.

[82]      Those conclusions, and the manner of their expression, are consistent only with a finding by the Full Bench that Deputy President Lawrence had made errors in the decision-making process, errors in his findings and conclusions and an error in the exercise of his discretion to reinstate the applicant.

(emphasis in original).

His Honour concluded that none of the errors raised by Mr Toms exposed jurisdictional error on the part of the Full Bench, and went on to conclude, in part, as follows (at 558):

[95]      The Full Bench was therefore obliged to only intervene if satisfied there was error. It seems to me to be clear beyond reasonable argument that the Full Bench held the view that Deputy President Lawrence had fallen into error. As I said earlier, the effect of the Full Bench’s reasoning is that it clearly decided that Deputy President Lawrence made errors in the decision-making process and an error in his finding that the dismissal was harsh, unjust or unreasonable. It followed, inevitably, that Deputy President Lawrence made an error in ordering reinstatement. The precondition for such an order was not established. On the contrary, the termination of employment was found by the Full Bench not to be harsh, unjust or unreasonable.

[96]      Apart from a proper understanding of the principles which apply to appellate review, the fact that evaluative judgments are required (both at first instance and on appeal) at each of the different stages in the hearing and determination of an unfair dismissal case has an important significance for any attempt at judicial review of the final outcome. Unless the Full Bench misunderstood its own role, including the way to approach its task of appellate review, the broad evaluative judgment required also from it is not readily amenable to the prerogative writs.

[97]      This is because if the Full Bench had made an error in its assessment, or errors in reaching its conclusion, they would normally be errors within jurisdiction and not an error or errors as to the nature of the jurisdiction which the Full Bench was required to exercise (Coal & Allied at [32]).

The significant errors relied upon

  1. The decision the subject of the application for permission to appeal in the present proceeding was, of course, the decision of the Commission.  The Full Bench accordingly extracted as follows the decision the subject of the application (without alteration):

[13]      The Commissioner concluded:

“[147] The Applicant did not cause a safety incident. The Coils did not tip, in fact, neither coil was raised even a millimetre. An invisible employee or an illusory recalcitrant visitor could not have been injured in this circumstance.

[148] If I am wrong and the Respondent did have a valid reason to terminate the Applicant, then I find that the termination was harsh and unfair based on the reasons … identified above, especially when the Applicant worked in accordance with his most recent accreditation.”

  1. In very summary form, the Full Bench set forth the path by which the proceeding came before it and in doing so outlined ([2020] FWCFB 3439 at [15] to [19]):
  • the grounds of appeal – the first two grounds seeking to challenge the conclusion of the Commission that BlueScope Steel did not have a valid reason for the dismissal of Mr Knowles.  Mr Knowles did not contest these two grounds.  The third and fourth grounds were directed to the alternative conclusion, namely that if there was a valid reason for dismissal, whether the dismissal was harsh and unfair.  The fifth ground of appeal challenged the conclusion that the dismissal was harsh.  The Commission then outlined appeal grounds six to thirteen.
  1. The Full Bench thereafter went on to address ([2020] FWCFB 3439 at [20] to [27]):
  • whether it was in the public interest to grant permission to appeal; and
  • its reasons for concluding that permission should be granted – including a recognition ([2020] FWCFB 3439 at [26]) that the decision of the Commission was of a “discretionary nature” and the need to identify an error of the kind described in House v The King (1936) 55 CLR 499. In doing so, the Full Bench concluded that the “appeal raises important questions about the construction and application of critical safety procedures in the workplace and an employer’s obligation to maintain a safe place of work”: [2020] FWCB 3439 at [27]. The application, it was concluded, was “a matter of general importance”.

The Full Bench further noted that:

  • Mr Knowles did “not seek to defend the Commissioner’s finding that BlueScope did not have a valid reason to terminate his employment”.

Before this Court, no challenge was made by Mr Knowles to these conclusions.

  1. The Full Bench thereafter separately addressed the Commissioner’s conclusions as to:
  • there being no valid reason for the dismissal of Mr Knowles (at paras [31] to [39]); and
  • whether his dismissal was, in the alternative, “harsh and unfair” (at paras [40] to [57]).

The Full Bench (at [57]) concluded that it was “appropriate for this full bench to redetermine the matter”.

  1. Even though Mr Knowles before the Full Bench did not “seek to defend the Commissioner’s finding that Bluescope did not have a valid reason to terminate his employment” (at para [30]), the Full Bench nevertheless considered for itself whether the Commissioner’s finding in this regard involved “significant error”.  A number of “significant errors” were discerned by the Full Bench.
  1. The “first reason” was directed to the Commission’s finding that Mr Knowles’ conduct did not cause a safety incident because there was no person “in the line of fire” at the time he was operating the crane:

[32]      Firstly, the Commissioner’s finding that Mr Knowles’ conduct did not cause a safety incident because there was no person “in the line of fire” constitutes a significant error of fact. Further, the Commissioner acted on a wrong principle in the assessment of the safety risks occasioned by Mr Knowles’ conduct.

The second reason addressed the finding by the Commission that Mr Knowles had not breached the Critical Safety Procedure.  In part, that reasoning was expressed as follows:

[35]      Secondly, the Commissioner’s finding that Mr Knowles had not breached CSP031 was based on a significant error of fact. This finding took into account Mr Knowles’ subjective understanding of CSP031, which was to hoist the crane’s tongs rather than long travel to clear the bore of a coil. In doing so, Mr Knowles applied his discretion above the express requirements of CSP031. However, the Commissioner found that BlueScope condoned Mr Knowles’ practice by not correcting his CSP031 annual re-accreditation response to the question “what would you do before hoisting after unloading a coil (with tongs or C hook)?” Mr Knowles responded, “make sure clear of coil.” Mr Knowles says that his response is incomplete and omits reference to long travelling.

[36]      The question invited Mr Knowles to address what he is required to do prior to hoisting. Mr Knowles’ answer to “make sure clear of coil” reflects the requirement in CSP031 which expressly states, “ensure the hook is clear of coil bore before hoisting.” Mr Knowles’ answer cannot reasonably be interpreted to mean that he would hoist (as opposed to first long travelling) to ensure the hook is clear of a coil. Indeed, Mr Knowles’ interpretation of CSP031 to hoist before long travelling is not evident in his response. Further, the theoretical assessment required Mr Knowles to answer questions on hazard identification. As set out in CSP031 Mr Knowles identifies, “fatality from tipped coil, collision with 66 crane, people in area, equipment damage” as the hazards for which the control measures in CSP031 exist. This lends supports to a finding that Mr Knowles was familiar with the content of CSP031 and the mandate to long travel to clear the bore before hoisting. Accordingly, Mr Knowles’ submission that BlueScope did not communicate this requirement cannot reasonably be sustained. The Commissioner’s finding that Mr Knowles’ conduct had been condoned by BlueScope is not available on the evidence.

(footnotes omitted)

  1. The Full Bench then went on to separately address the alternative finding of the Commission, proceeding upon the basis that there was a valid reason for termination and giving consideration to whether the termination was harsh and unfair.  In addressing this alternative case, the reasons of the Full Bench continued on (in part) as follows:

[44]      …In any event, the Commissioner found that BlueScope condoned Mr Knowles’ practice of hoisting by not correcting his annual re-accreditation relating to CSP031 [footnote 59].

[45]      We have earlier concluded that the Commissioner’s finding that BlueScope condoned Mr Knowles’ practice involved a significant error of fact and overlooked a material consideration.

[47]      The evidence makes clear that there is no other way to know whether the hook is clear of the coil other than to long travel. By hoisting the tongs of the crane Mr Knowles breached CSP031 and created a risk of the coil tipping. By focusing on the fact that the coil did not tip and concluding that damage can be occasioned to the coils by long travelling or hoisting, the Commissioner overlooked the requirement for strict compliance with CSP031. The Commissioner’s analysis merely focused on the outcome of Mr Knowles’ conduct and ignored the evidence as to why BlueScope has a mandated requirement to long travel, which is to avoid a topple risk. Accordingly, the Commissioner’s conclusion that if Mr Knowles breached CSP031, the breach was of such minor magnitude is contrary to the evidence and involves a significant error of fact.

Footnote 59 was a reference back to para [134] of the Commission’s reasons for decision.  Paragraphs [133] and [134], together with para [123], of the Commission’s reasons (in turn) provide as follows:

[123]    I am satisfied that the Applicant operated within his interpretation of CSP031. His commentary in relation to when he hoists or long travels is consistent with his answers on his annual re-accreditation, which was recently approved by Mr Cadwallen, as well as the evidence on the video footage of the Incident. Also, the Applicant was a witness in the recent unfair dismissal case of Mr Habak. He understands the importance of complying with the CSPs. The Applicant was also on a final warning for a breach of CSP027 some 50 weeks earlier. The Applicant was also aware that his movements were regularly watched by his Team Leader, Mr Cadwallen and that there are a number of video cameras that are permanently recording the movement of coils in the area. I do not accept that the Applicant would knowingly and blatantly breach a CSP. It would not be appropriate for the Respondent to condone the Applicant’s work methods both in theory and in practice and then terminate him based on a strict and narrow interpretation of the CSP.

[133]    Even if the Applicant has breached CSP031, the breach is of such minor magnitude that termination is a harsh outcome. The Applicant’s apparent breach would be that he hoisted the tongs rather than long travelling away from the Threader Coil and Coil 1. In relation to Coil 1, the CSP is silent of what process to follow if the tongs get caught. Mr Meta’s evidence is that an employee is expected to use their skills and experience if the CSP is silent. That is what the Applicant did. In relation to the Threader Coil, the Applicant hoisted without long travelling. As a result of this action, the coil did not tip. The padding on the back of the tong rubbed along Coil 2, but this would have also occurred whether the Applicant had adopted to long travel. The Applicant claims that hoisting is the manner in which he disengages the tongs from the core of a coil on the majority of occasions. It is hard to believe that neither Mr Cadwallen or Mr Meta have never witnessed the Applicant operate in this manner, particularly Mr Cadwallen who is on the floor the majority of the time during the Applicant’s shifts.

[134]    I also find that the Respondent has condoned this practice of the Applicant’s by not correcting his annual re-accreditation. The Applicant’s answer is not correct. In a school or university exam it would be marked as wrong because it did not contain the important and relevant information, which was “open tongs fully then use long travel to clear the bore”. Instead, Mr Cadwallen marked the answer as correct and the Applicant continued to work in this manner.

  1. Although on one approach the Full Bench when identifying the first “significant error” at para [32] of its reasons was only addressing the question as to whether there was a valid reason to dismiss Mr Knowles, and not any question as to whether any dismissal was harsh and unfair, reservation may be expressed as to whether the Full Bench was attempting to draw such a clear line of analysis, or whether such a clear division could be drawn between the two lines of analysis.  The reference in para [32] of the reasons to whether there was any other person “in the line of fire” and the Commissioner’s “assessment of the safety risks” seems very much to have been picked up and to have formed part of the Full Bench’s consideration as to whether the dismissal was harsh and unfair:  e.g., at paras [45] and [47].  The decision in Toms v Harbour City Ferries is but an example of where a policy directed to ensuring safety could not be divorced from a finding that a decision to terminate the employee’s services was not unfair or harsh even though a breach of the policy had not occasioned any injury, as was the fact in the present case.
  1. This reasoning of the Full Bench accordingly sets forth what it found to be three significant errors of fact (in addition to the finding that there was no “safety incident”) in respect to the Commission’s finding, namely:
  • that Mr Knowles had not breached the relevant Critical Safety Procedure ([2020] FWCFB 3439 at [35] and [36]); and
  • that BlueScope had condoned Mrs Knowles’ practice ([2020] FWCFB 3439 at [36] at [45]); and
  • that any breach of the Critical Safety Procedure by Mr Knowles was of a “minor magnitude” ([2020] FWCFB 3439 at [47]).

There can be no question that these findings were “significant”. Although the Commission first addressed the question of whether there was a valid reason for the termination, a matter which Mr Knowles before the Full Bench did not put in issue ([2020] FWCFB 3439 at [30]), the finding and reasons formed part of the Full Bench’s overall assessment as to whether the termination was harsh and unfair. The final two “significant error[s] of fact” also formed part of the assessment by the Full Bench as to whether the termination was harsh and unfair.

  1. The question to be resolved was whether it is open to this Court to review the findings of fact made by the Full Bench that there were “significant errors of fact”, accepting that the finding of the Full Bench involved a “broad value judgment”:  D’Rozario at [102].
  1. That question is to be answered adversely to Mr Knowles – so long as the Full Bench was proceeding in a manner according to law in making those findings, the fact finding task remained within the jurisdiction of the Full Bench.

Factual error & jurisdictional error?

  1. It is respectfully concluded that it was open to the Fair Work Commission to make the findings of fact that it did.  Had an application been made to this Court seeking judicial review of one or other of those findings, it would in all likelihood have been concluded that the findings of fact were open to be made; that the task of making those findings was entrusted by the Legislature to the Commission; and that any attempt by this Court to set aside those findings would have trespassed into the arena of impermissible merits review of a decision of the Commission.
  1. But once the Full Bench had granted permission to appeal, it was the task of the Full Bench to undertake a complete re-hearing of the Commission’s decision:  cf. Coal & Allied Operations Pty Limited v Australian Industrial Relations Commission [2000] HCA 47, (2000) 203 CLR 194 at 204. Albeit in the context of commenting upon like provisions in the former Workplace Relations Act 1996 (Cth), Gleeson CJ, Gaudron and Hayne JJ there concluded:

[17]      Because a Full Bench of the Commission has power under s 45(6) to receive further evidence on appeal, an appeal under that section is properly described as an appeal by way of rehearing. And because there is nothing to suggest otherwise, its powers under sub-s (7) are exercisable only if there is error on the part of the primary decision-maker. And that is so regardless of the different decisions that may be the subject of an appeal under s 45.

In undertaking a re-hearing, the powers of the Full Bench were nevertheless constrained by s 400(2). And s 400(2) imposes “a basal pre-condition to an exercise of power by the Full Bench”: BP Refinery v Tracey at [22]).

  1. The same reservations may presently be again expressed, in respect to a submission that s 400(2) sets forth “jurisdictional facts”, as were expressed by Bromberg J in D’Rozario in respect to s 400(1). Just as s 400(1) contains “no factual reference” but requires “a broad value judgment”, the requirement in s 400(2) as to there being a “significant error of fact” also contains no certain “factual reference” but rather an evaluative judgment as to the significance of an error of fact. In this respect ss 400(1) and 400(2) should attract a comparable interpretation and application. The very use of the term “significant” invites, with respect, “a broad value judgment”.  A failure, for example, on the part of the Full Bench to even consider whether there be an error of fact on the part of the Commission and whether that error can be characterised as significant, or a finding that an error of fact is significant without there being any evidence to support that conclusion may expose jurisdictional error and an order quashing the decision of the Full Bench:  cf. D’Rozario.  But the Full Bench in the present case did give consideration and made findings as to whether there was a “significant error of fact”.  Any erroneous finding on the part of the Full Bench for which there was some evidence, even an erroneous assertion as to a fact, would in such circumstances be an error within jurisdiction:  D’Rozario at [122]. None of the findings made by the Full Bench could be properly characterised as irrational or unreasonable. Each of the findings made by the Full Bench as to there being “significant error(s) of fact” involved a “broad evaluative judgment” with which this Court should be hesitant to interfere.
  1. The submission advanced on behalf of Mr Knowles that the identification of “a significant error of fact” is a jurisdictional fact to be determined to the satisfaction of this Court is rejected.
  1. Section 400(2) nevertheless forever imposed an important constraint upon the powers of the Full Bench in the present proceeding. Even given the concession of Mr Knowles as to the breach of the Critical Safety Procedure and there being a valid reason for his dismissal, the re-hearing thereafter undertaken by the Full Bench (cf. Coal & Allied [2000] HCA 47 at [17], (2000) 203 CLR 194 at 204) was a re-hearing constrained by the requirement to identify a “significant error of fact” before departing from a finding made by the Commission.  So long as the Full Bench proceeded in a manner according to law and made a finding of fact different to that of the Commission, that fact-finding task was a matter within the jurisdiction of the Full Bench:  cf. Lambley v DP World at [42]. So long as that fact-finding task was undertaken in a manner according to law, this Court should not itself trespass into the factual merits of the findings made. The findings made by the Full Bench as to there being “significant error[s] of fact” were findings made within the jurisdiction (and power) of the Full Bench.
  1. There was indeed a tension in the manner in which the argument was advanced on behalf of Mr Knowles. The tension was between his oral submission that s 400(2) set forth jurisdictional facts in respect to which this Court could reach its own state of satisfaction, and his written submissions, which seemed to proceed from the assumption that any challenge to the findings as to “significant error[s] of fact” made by the Full Bench had to establish jurisdictional error.  Hence his written submissions asserted that there was (for example) “no evidence” upon which the Full Bench could make certain findings or that those findings were “illogical”.
  1. Just as the former submission as to s 400(2) setting forth jurisdictional facts has been rejected, so too should his submissions that the findings made by the Full Bench expose jurisdictional error. It is concluded that the Full Bench committed no jurisdictional error in making each of the findings of fact identified by it as being “significant”.  Each of those findings were open to it to be made.
  1. The principal challenge advanced on behalf of Mr Knowles was a challenge to the finding of the Full Bench, a finding contrary to that of the Commission, that BlueScope Steel had not condoned the work practices of Mr Knowles and had not condoned his breach of the Critical Safety Procedure.  The argument was put at three levels, namely:
  • that the Full Bench overlooked evidence;
  • that its conclusion was illogical; and
  • that its decision was internally incoherent.
  1. More specifically, the focus of the argument was the submission that the Full Bench at para [36] of its reasons for decision had failed to address (in particular) evidence that more senior employees of BlueScope Steel had seen Mr Knowles operate the crane in the manner which occasioned concern.  There is certainly no reference at para [36] to this evidence.  The difficulty with the argument, however, is that para [44] of the reasons of the Full Bench incorporates (albeit only by way of footnote [59]) a reference to the findings of the Commission on this issue at para [134] of its reasons.  Although no express reference is made by the Full Bench to para [133] of the Commission’s reasons (or para [123]), no conclusion should be reached that the Full Bench considered para [134] in isolation and without having taken into account the findings of the Commission in the immediately preceding paragraph.  Although the finding of the Commission at para [135] of its reasons would itself have been difficult to challenge on an application seeking judicial review because the finding was one which was reasonably open to it, it is equally the case that it is difficult to challenge the conclusion of the Full Bench that the Commission committed an error of fact and that that error was significant.  The contrary finding of the Full Bench could not, with respect, be described as “illogical” or “internally incoherent”:  cf. Minister for Immigration and Citizenship v SZMDS [2010] HCA 16, (2010) 240 CLR 611 at 648 to 650. Crennan and Bell JJ there observed:

[131]    … If probative evidence can give rise to different processes of reasoning and if logical or rational or reasonable minds might differ in respect of the conclusions to be drawn from that evidence, a decision cannot be said by a reviewing court to be illogical or irrational or unreasonable, simply because one conclusion has been preferred to another possible conclusion.

[135]    … Whilst there may be varieties of illogicality and irrationality, a decision will not be illogical or irrational if there is room for a logical or rational person to reach the same decision on the material before the decision maker. A decision might be said to be illogical or irrational if only one conclusion is open on the evidence, and the decision maker does not come to that conclusion, or if the decision to which the decision maker came was simply not open on the evidence or if there is no logical connection between the evidence and the inferences or conclusions drawn. …

The fact that a court “may emphatically disagree with a decision reached by a decision-maker does not lead to the conclusion that it is unreasonable, irrational or illogical”:  A v Corruption and Crime Commissioner [2013] WASCA 288 at [123], (2013) 306 ALR 491 at 521 per Martin CJ and Murphy JA.

  1. It is certainly not for this Court to now seek to prefer one finding of fact over another; to do so would be to make the Court an arbiter on the merits, preferring the merits of one finding of fact over another. The Court’s task is relevantly confined to simply determining whether the Full Bench had operated within the constraint imposed by s 400(2).
  1. No jurisdictional error is thus exposed.  The Full Bench did not “overlook” evidence or make a finding which was either “illogical” or “internally inconsistent”.
  1. Whether or not this Court would have preferred the factual findings of the Commission as opposed to those of the Full Bench is not to the point.  Both the Commission and the Full Bench exercised the jurisdiction entrusted to them by the Commonwealth Legislature.  Relevantly, no error is exposed in the findings or conclusions of the Full Bench as to whether BlueScope Steel had “condoned” the breach by Mr Knowles of the Critical Safety Procedure.
  1. The remaining three challenges advanced on behalf of Mr Knowles attract the same conclusion.  These three challenges were that:
  • the Full Bench’s conclusion that the Commissioner’s finding that Mr Knowles’ conduct was “totally different” to that of other employees was “at odds with the evidence” and involved “erroneous” reasoning;
  • the Full Bench erred in departing from the finding of the Commission that Mr Knowles’ breach of the Critical Safety Procedure was of a “minor magnitude”; and
  • the Full Bench erred in making a finding that “the Commissioner inferred, absent any evidence, that BlueScope discriminated against Mr Knowles because of his involvement as a witness in an unfair dismissal proceeding as a union delegate”.

Although, it is submitted in support of the first of these challenges that the Full Bench must have “misunderstood its function” in preferring to consider the facts in a different way to the Commission, it does not follow that the conclusion of the Full Bench was “not open … and as such [was] irrational, illogical or unreasonable”.  Whether the incident which occasioned Mr Knowles being given a “final warning” was “totally different” – as found by the Full Bench – to other incidents was a matter for the Full Bench to determine, given the expertise of its members.  The second of these challenges is at odds with the decision in Toms v Harbour City Ferries in which this Court endorsed the emphasis given by the Full Bench in that case to the importance of preserving safety protocols, even in the absence of injury to others.  The final challenge seizes upon the finding of the Commissioner that he could “find no overt or clear evidence of the Applicant being discriminated against because of his role as a union delegate”.  Given the absence of any finding by the Commission, it is difficult to identify the basis upon which the Full Bench drew the inference that it did, namely that the Commissioner took into account this “irrelevant [matter] in determining the harshness of Mr Knowles’ dismissal”.  Although the finding of the Full Bench is thus open to question, any error of fact made by the Full Bench would be an error within the jurisdiction entrusted to it.  It is to be recalled that so “long as there is some basis for an inference – in other words, the particular inference is reasonably open – even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place”:  Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356 per Mason CJ.

CONCLUSIONS

  1. Leave has previously been granted during the course of the proceeding to the Applicant to amend his Application.  No further order is necessary in that regard.
  1. No error has been identified which has exposed the Full Bench as not addressing the questions required for determination or not recognising the need to identify a “significant error of fact” before departing from a finding made by the Commission.  And no error has been exposed in the manner in which the Full Bench resolved each of the four “significant error[s] of fact” it identified in the decision of the Commission – or, at the very least – any error on the part of the Full Bench which went beyond the jurisdiction entrusted to it.
  1. The only remaining order thus to be made is to dismiss the proceeding.”

 

Knowles v BlueScope Steel Limited [2021] FCAFC 32 delivered 12 March 2021 per Logan, Flick and Kerr JJ