Stay Granted Pending Appeal in Unfair Dismissal Case

In an unfair dismissal case, the Commissioner granted a stay on terms, requiring partial payment of the award and the remainder to be held in trust pending the appeal outcome, balancing the interests of both parties.

Industrial Relations Commission of New South Wales

CITATION: [NAME] [2006] NSWIRComm 6

APPELLANT [COMPANY] PARTIES: RESPONDENT [NAME](S): IRC 6808 of 2005

CORAM: Staff J

CATCHWORDS: Appeal - Stay - Test whether demonstrate adequate reasons for stay to warrant exercise of discretion - Balance of convenience - Prospects of success - Stay granted on terms

Bellambie Bowling Recreation & Sports Club Ltd v Grammel (2001) 107 IR 104 CASES CITED: [COMPANY] v National Union of Workers, New South Wales Branch (2001) 104 IR 400 [COMPANY] v Andreas Costopoulos [2004] NSW IRComm 91 [NAME] [2005] NSWIRComm 1196

HEARING DATES: 10/01/2006

DATE OF JUDGMENT: 01/10/2006

EXTEMPORE JUDGMENT DATE: 01/10/2006

APPELLANT [NAME] In person LEGAL REPRESENTATIVES: RESPONDENT Solicitor: [redacted] [COMPANY]

JUDGMENT:

- 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: STAFF J

10 January 2006

Matter No IRC 6808 of 2005

[COMPANY] AND [NAME]

Application by [NAME] for leave to appeal and appeal against a decision of [NAME] given on 13 December 2005 in matter IRC 5660 of 2004

EX TEMPORE DECISION

[2006] NSWIRComm 6

1 On 23 December 2005, [NAME] ("the appellant") lodged an application for leave to appeal and, if granted, appeal against a decision of [NAME], given on 13 December 2005 whereby [NAME] ("the respondent"), was awarded the sum of $18,000 as compensation in respect of an application brought by the respondent for relief from unfair dismissal: [NAME] [2005] NSWIRComm 1196. The appellant was also ordered to pay the respondent's costs. This decision concerns an application made by the appellant for a stay of that decision. The Commissioner's Decision 2 The Commissioner found that the respondent's services as a [NAME] and [NAME] Manager with the appellant were terminated on 9 September 2004, after 16 months service. The Commissioner set out the background to the respondent's dismissal, noting that during the period of the respondent's employment, she had received three increases in salary over a relatively short period of employment which increased her salary from $40,000 upon commencement, on 6 May 2003, to $53,182 from April 2004. 3 The primary contention of the respondent was that the turning point in her employment relationship came after she informed [NAME], the Manager of the company, on 9 August 2004, that she was pregnant. 4 The Commissioner found that this contention was, to some extent, borne out by the timing of when the respondent started to receive adverse comments from the appellant and it was consistent with a marked deterioration in the relationship between the parties over a relatively short three week period after the appellant was advised of the respondent's pregnancy. 5 The Commissioner observed that it was a highly contested case. The question of comparative credibility of the respondent and [NAME] was an essential part of the Commissioner's appreciation of the situation where a relatively normal relationship could easily and quickly deteriorate to the point where the appellant felt justified in dismissing the respondent. Such termination was on the basis of the alleged need to maintain the efficiency of her small business operation, which the appellant said was seriously affected by the alleged failures by the respondent. 6 The Commissioner found the respondent's evidence was delivered with caution and without embellishment. On the other hand, the Commissioner found [NAME]'s evidence showed a tendency towards exaggeration. This led the Commissioner to prefer the evidence of the respondent. 7 The Commissioner analysed evidence of the warnings given to the respondent prior to her pregnancy and also after the appellant had been informed that the respondent was pregnant, finding that there were more concrete instances of mistakes and warnings in the last three weeks of the respondent's employment. 8 The Commissioner was unconvinced in respect of the earlier warnings and failures claimed by [NAME], who he found had rewarded the respondent with wage increases and the use of her motor vehicle. 9 The Commissioner rejected the applicant's contention that a reasonable person would have understood that their job was in jeopardy over the level of earlier warnings delivered by [NAME], that is, warnings prior to the announcement of her pregnancy. 10 The Commissioner found that there was a shortfall of convincing detail or direct speech in respect of the claim that the respondent bullied [NAME], a junior employee of the appellant. 11 The Commissioner preferred the respondent's evidence of how [NAME] escalated between the respondent and [NAME], which led him to conclude that the differences between the respondent, a more senior employee and the much more junior employee, [NAME], should have been handled differently by the appellant. 12 The Commissioner concluded that there were two general weaknesses in the case mounted by the appellant. The first was that nothing occurred in the last couple of weeks of the respondent's employment meriting dismissal. The second general flaw that the Commissioner observed was that the actions taken before dismissal by the appellant were not only inadequate, but executed over a very short period of time from the point where the Commissioner could actually be convinced that problems of any genuine concern surfaced. In the Commissioner's view, "it is more likely than not that her treatment was at least influenced by her pregnancy, but if not, it behoved the respondent to be more careful in her decision making against Ms [NAME]'s longer term interests." (at [87]). 13 In the circumstances, [NAME] made the following orders at [107] - [108]: [107] (1) The respondent [COMPANY] in Matter No. IRC 5660 of 2004 is to pay to the applicant, [NAME] an amount of eighteen thousand ($18,000) within twenty-one (21) days of this decision.

[108] (2) The respondent is to pay the applicant's costs, to be agreed or as assessed for the preparation and conduct of the hearing of this matter on 16th June and 1st September, 2005. The Application for Appeal 14 The grounds for the appeal, as specified in the application for leave to appeal and appeal are as follows: The Applicant was detrimental to the functioning of a very small, financially struggling business. The Applicant continuously bullied and harassed a staff member. This staff member was suffering from stress as a result of this treatment. The Applicant was terminated legally. Emails were handed over as proof of the warnings and a witness also explained that she was bullied. Submissions 15 [NAME], the owner of the appellant, appeared in person and sought a stay on the basis that the decision was incorrect and the application vexatious. 16 [NAME] submitted that if a stay was not granted, the appellant would not be able to continue to trade. [NAME] did not provide any evidence to the Commission regarding the appellant's finances. 17 [NAME], solicitor, opposed the application for a stay. [NAME] submitted that the Commissioner had made findings of fact and credit findings and that the appeal did not raise important considerations and was not in the public interest. 18 [NAME] submitted that the principles for determining a stay were to be found in Bellambie Bowling Recreation & Sports Club Ltd v Grammel (2001) 107 IR 104 and [COMPANY] v Andreas Costopoulos [2004] NSWIRComm 91. Relevant General Principles 19 I am prepared to accept, for the purposes of the stay application, the principles set out by Walton J, Vice-President in [COMPANY] v National Union of Workers, New South Wales Branch (2001) 104 IR 400 particularly at [49] - [51] and [59] - [62] where his Honour said: [49] The principles relevant to determining an application for stay upon an appeal brought pursuant to s190 of the Act have been recently stated by a Full Bench of the Commission in Court Session in State of New South Wales (Department of Public Works and Services and Department of [NAME]) v WorkCover Authority of New South Wales (Inspector Page) (2001) 101 IR 131 at par 15 as follows: "The facility of a stay of a challenged decision, in whole or in part, is afforded by s190 of the Industrial Relations Act . The principles on which a stay is allowed have been often stated - in short, a sufficient reason needs to be shown to delay the decision made at first instance from being effective pending the determination of the appeal: see Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 and Water Industry Salaried Officers' Union v [COMPANY] of New South Wales (1987) 22 IR 178. As was observed by the Full Commission ( Fisher P, Hungerford J and Buckley CC) of the former Commission in [COMPANY] of New South Wales v New South Wales Teachers' Federation (1993) 50 IR 404 at 404: 'Shortly stated the approach in considering a stay application is that the appellant is required to demonstrate reasons to warrant the exercise of discretion in his favour. Specifically unlike the former position, an appellant is not now required to establish special or exceptional circumstances to warrant the imposition of a stay. The question then is whether the appellant has established or demonstrated reasons supporting an appropriate case for a stay.' In the result in that case, the Full Commission considered the circumstances in terms of the balance of convenience as favouring a stay and said (at 405) that 'if a stay were not granted however then a series of applications drastically affecting the rights of industrial parties to represent the interests of their members or potential members would produce major consequences and may indeed have subsequently to be unravelled'." [50] I respectfully adopt this statement of the principles to be applied in the determination of an application for stay on an appeal for the purposes of determining the present application.

[51] The question further arises, however, as to whether it is appropriate to consider the prospects for success of the appeal in determining whether to grant an application for a stay. 20 Later at par [59] his Honour said: [59] In my view, the Court of Appeal did not establish, in [NAME], a rigid or immutable rule or principle against any preliminary consideration of an appellant's prospect for success on appeal, where the appellant seeks a stay of the decision at first instance. Nor did other decisions following [NAME], such as [NAME] v [NAME]. For example, the court in [NAME] considered it appropriate that a preliminary assessment be made as to whether an appellant had an arguable case in order for a court to evaluate the specific terms of a stay that would fairly adjust the interests of the parties. 21 His Honour went on at par [61] and [62] to note: [61] …However, it is reasonably clear from the authorities earlier discussed that the Commission may be required to consider the prospects for success of an appeal in certain cases. The Commission may be required to consider such matters where the appeal would in all likelihood be a futility… Furthermore, it may be necessary to consider the prospects of success of the appeal in a preliminary way in order to appropriately consider the balance of convenience or competing rights and interests of the parties in a particular case.

[62] Where it is appropriate to assess the prospects for success of an appeal in considering an application for a stay, the assessment so made will be entirely preliminary. Consideration 22 In my view, it is appropriate to make an assessment of the appellant's prospects for success in this matter. That consideration is relevant to the question of the balance of convenience and the terms of any stay. Such an assessment is necessarily preliminary as the Commission has not fully heard the parties on the Application for Leave to Appeal or the merits of the appeal. 23 There are two primary grounds for the appeal. First, it is contended that the respondent was detrimental to the functioning of a very small, financially struggling business. The difficulty with this contention is that it was common ground that the respondent was rewarded with three significant wage increases within the first 12 months of her employment and also given use of the company's motor vehicle. 24 The second aspect of the challenge to the decision, at first instance, concerned the respondent continuously bullying and harassing a staff member which resulted in the staff member ([NAME]) suffering from stress as a result of this treatment. [NAME] gave evidence before the Commissioner. Her evidence was analysed by the Commissioner in his decision. The Commissioner concluded that the issues between the respondent and [NAME] were more reflective of a personality clash and that [NAME]'s complaint to [NAME] lacked serious substance in the absence of detailed conversations. 25 The Commissioner preferred the respondent's account of how [NAME] escalated between the two employees concluding that the differences between her longest serving key staff member (the respondent) and the much more junior, much more recent appointee, [NAME], should have been handled differently. 26 There are challenges to findings of fact made by the Commissioner. 27 I consider that the factual matters that I should act on for the purposes of the stay application are the Commissioner's findings. First, because there is no presumption in the filing of a notice of appeal, even where the appeal has arguable prospects of success, that the first instance decision was wrong, or that it would be set aside. Second, and which must be seen to be relatively cumulative upon the first consideration, the respondent worked for the appellant without significant criticism of her personal performance or the satisfactory nature of her work for a period in excess of one year, during which time she received significant salary increases. It was only in a relatively short period prior to her termination that there appears to be a criticism of her work. 28 I now turn to consider the question of the balance of convenience. I consider the balance of convenience favours the respondent in relation to the compensation order made by the Commissioner. Upon the preliminary assessment made at this stage of the proceedings, whilst the appellant's prospects for success may not be said to be overly strong, this consideration needs to be balanced against the length of the respondent's employment and the circumstances surrounding her termination. The potential difficulties with the appellant's prospects for success on the appeal (as assessed at this stage of the proceedings) is a factor significantly in favour of rejecting the application for a stay with respect to the orders for the payment of money, at first instance. 29 There was no evidence before me that the respondent may have an incapacity to repay the moneys ordered by the Commissioner if the appeal was successful. 30 In all the circumstances and, taking into account the respective interests of the parties, I have determined to grant the stay sought by the appellant on terms. The terms of the stay will be that the appellant pay the sum of $12,000 to the respondent. The balance of the amount awarded by [NAME] ($6,000) should be paid into an interest bearing account with a solicitor from the appellant and a solicitor from the respondent being joint trustees in respect of the account. The payment of the moneys would be on the basis that the money would only be paid out of the account in accordance with the orders of the Commission. The account should be structured in a way where the money bears interest. 31 I therefore grant a stay of the orders made by [NAME] on 13 December 2005 on the following terms. The appellant is to pay moneys to the respondent on the following basis:

1. Within 14 days of today's date, the appellant shall pay $12,000 of the amount awarded by [NAME] to the respondent.

2. The balance of the amount awarded to the respondent after complying with order 1, will be paid into an interest bearing account arranged by its solicitor. The moneys in such an account are not to be paid out except upon an order of this Commission and in accordance with that order. A solicitor shall act as trustee for the appellant in respect of the account. Similarly, a solicitor shall act as trustee to the account on behalf of the respondent. The respondent shall nominate a solicitor to act as trustee to the account within seven days of the date of this order. In the event that no nomination is made by the respondent within that time, the appellant's solicitor shall be the sole trustee to the account.

3. The solicitor for the appellant shall advise the [NAME] in writing within 21 days of the date of this decision of the above moneys being paid to the respondent and the balance being paid into an interest bearing account referred to earlier and a copy of that correspondence shall be forwarded to the respondent's solicitor.

4. The Commission grants liberty to apply generally in relation to the appeal if there is any matter that needs to be dealt with. 32 The Commission orders that the orders made by [NAME] in IRC 5660 of 2004 be stayed until further order of the Commission upon the terms that the appellant shall pay $12,000 of the amount awarded by [NAME] to the respondent and the balance into an interest bearing account by no later than 4.00 pm on 24 January 2006. 33 Formal directions will be made in the near future. In the meantime, the appellant and the respondent should assume that the time for the filing and serving of appeal books and written submissions will operate from the date of today's decision. In respect of the appeal books, I grant an additional six weeks for that purpose as an interim measure. If further time is required, an application can be made to the Judge dealing with the directions.

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