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Hold on to your hats folks – this is a doozy!
In the outset, this case would have been thrown out if the company had in place (in my opinion):
• Contract of Employment clause that included “Biometric Testing that went to timekeeping (and also include drug testing).
• Biometric Data Collection Policy.
• Biometric Data Collection Consent Form.
This is a very long blog, and so I have summarised it in up front and provided greater detail for practitioners of the fine art of representing employers (Greg Reiffel Consulting being one such entity 😊).
Readers Digest version
• Casual employee with record of not taking a single day off, refuses to use the electronic timekeeping system introduced by his employer. This system being a biometric system that uses an algorithm based on a fingerprint scan.
• The conciliation fails so the matter is referred to arbitration.
• The first hearing (arbitration) finds in favour of the company and the matter is dismissed.
• The ex-employee appeals the decision, and the Full Bench allows the appeal (second hearing), as it enlivens the public interest: by “important, novel and emerging issues in the Commission’s unfair dismissal jurisdiction”. I have also reported on the “hurdles” required to get permission to appeal.
• The third hearing is the same Full Bench which decided that because the fingerprint scanning was in breach of the Privacy Act, then it was not a “lawful” direction. The Full Bench then referred the matter to another Commissioner for determination of compensation. This Full Bench decision also confirms that the employees who have complied with the fingerprint scanning policy have provided their “implied Consent”.
• The Commission sets up a “directions” (fourth) hearing. The Commissioner is continually frustrated by the applicant and the applicant’s brother who purported to represent the applicant. In short, the applicant seemed more intent on self-aggrandising than any attempt to get his job back (with full backpay), noting by this time 12 months had elapsed.
• The Commissioner allows a two-week adjournment for the company to get advice from a QC which is granted (to the chagrin of the applicant). The company decides not to pursue any action in reviewing the previous Full Bench decision.
• Finally (the fifth hearing), the Commissioner, despite his obvious distaste of the employee, decides not to reinstate the employee and orders the full six-month penalty.
• The company, having argued that this should be the penalty, would be happy that this is the end of the matter.
• Commissioner Simpson, on the other hand, was less than impressed with the applicant and his brother’s antics, threatened that if they were to behave in this matter in any future matters before the Fair Work Commission, and acted in such a manner, they would be subject to 12 months jail.
• And…also the ex-employee filed in the Federal Court, but no news on that yet!
The Encyclopedia Britannica version
The respondent company had introduced a new company policy to introduce fingerprint scanners to record work site attendance. Employees at the work site were directed to register their fingerprint records as part of the new system.
The applicant (ex-employee) argued that biometric data was sensitive personal information under the Privacy Act 1998 (Cth) (the Privacy Act) and the respondent was not entitled to require that information. The respondent tried to address the appellant’s concerns by providing a document from the fingerprint scanner supplier explaining the nature of the data collected. The respondent then issued the appellant with a verbal warning, and later issued written warnings due to the appellant’s non-compliance with the new company policy. The appellant was subsequently dismissed due to the refusal to use the biometric fingerprint scanner.
• The ex-employee applied for an unfair dismissal on 5 March 2018 (this being the 21st day from the dismissal, just “in time”).
• He had been employed by the company from 19 November 2014 to 12 February 2018.
• In October 2018, the company announced that it would introduce the new system. The ex-employee refused to use the system from the outset stating that he was concerned about the collection and storage of his personal information by the scanners and the company.
As the headline states – this matter was prosecuted by the ex-employee through:
• Firstly, mediation (ie conciliations conference).
• Secondly, arbitration (248 paragraphs concluding in the company’s favour).
• Thirdly, appeal to the Full Bench of the Fair Work Commission which allowed the appeal due to the grounds of appeal raising “important, novel and emerging issues in the Commission’s unfair dismissal jurisdiction”
• Fourthly, a re-hearing of the case by the Full Bench of the Fair Work Commission which found that fingerprint scanning is in breach of the Privacy Act and therefore the direction to use this technology was unlawful. Having so found, the Full Bench remitted the matter to another hearing for compensation.
• Fifthly, a hearing being the outcome of the previous Full Bench decision (where the Commissioner was VERY unhappy with the behaviour of the ex-employee and his brother during the course of the hearing), decided that reinstatement was inappropriate and ordered that the company pay to the employee the sum of $24,117.08 plus 9.5% superannuation.
The main points being:
• The ex-employee was self-represented (ie zero cost – except for the filing fee).
• The company endured the expense of a legal representative, not to mention the downtime and negative attention that the cases provided – hands up all who use bio-metric scanners…
• Once the Full Bench found that the direction to use the scanner was “unlawful” (as it breach the Privacy Act), the company’s main argument went out the window, ie “failure to follow a reasonable and lawful direction”.
• So, what does this mean for the thousands (?) of companies that use such technology?
• When researching this story, I came across the same situation happening in (you gusssed it) the good ol’ USA:
Further information on Biometric Testing
Office of the Australian Information Commissioner:
As mentioned, the first arbitration found in the company’s favour
Mr Jeremy Lee v Superior Wood Pty Ltd T/A Superior Wood. (U2018/2253). Hunt, C. 1 November 2019.
In the this, the first formal arbitration, the Commissioner found that the applicant’s dismissal was not harsh, unjust or unreasonable was fairly dismissed after failing to comply with site attendance policy – ie he refused to use biometric fingerprint scanners to record site attendance. The commissioner recognised that no consent was given by the employee to the company for the collection of sensitive information. Notwithstanding, the Commissioner found that the site attendance policy was reasonably necessary for employer’s payroll and safety functions and that the employee refused to follow lawful workplace policy. The employee was given multiple warnings and opportunities to follow site attendance policy.
Ex-employee digs in, the company persists
Between November 2017 and February 2018, the ex-employee and several managers of the company discussed the ex-employee’s refusal to use the scanners. The parties were unable to resolve the ex-employee’s concerns about the scanners and the employer’s insistence that the scanners be used by all employees. On 12 February 2018, the ex-employee was issued with a letter of termination dismissing him from his employment on the grounds that he had failed to adhere to the company’s Site Attendance Policy.
The hearing heard evidence from the ex-employee and five other witnesses.
The ex-employee had put to the company in writing (a conspiracy theorist or realist?) the following:
“I am unwilling to consent to have my fingerprints scanned because I regard my biometric data as personal and private.
If I were to submit to a fingerprint scan timeclock, I would be allowing:
• Unknown individuals and groups to access my biometric data,
• The potential trading/acquisition of my biometric data by unknown individuals and groups, indefinitely.
Information technology companies gather as much information/data on people as they can. Whether they admit to it or not. (see Edward Snowden)
Such information is used as currency between corporations.
All the largest technology companies – such as Apple, Google, Facebook, Telstra, Samsung – are in a race to access and store as much data on individuals as they can. This info is then traded and exchanged.
So if I were to consent to a fingerprint scan, my fingerprint would be scanned and stored for use immediately (regardless of assertions to the contrary), or it would be scanned and stored for use at a later time”.
The company responded:
“I would like to address your concerns re the implementation of Biometric scanning for payroll purposes. As you know the company has embarked on this common method to improve efficiency and accuracy of our payroll for approx. 400 employees.
You have raised some concern relating to your fingerprint security and use by others. I wish to outline some of the facts to help you make a decision on your own security concerns.
I have included a document from the supplier which outlines:
– The information gathered is not a fingerprint but a set of data measurements which is processed via an algorithm.
– There is no possible way the data measurements can be converted or used as a fingerprint.
– The company and its supplier cannot use your data measurements for any other purpose other than linking your payroll number to a clock in/out time.
I trust this will address your concerns over the process.”
Australian Privacy Principles
The ex-employee referenced the Australian Privacy Principles (APP) within the Privacy Act 1988, including:
• 13G Serious and repeated interferences with privacy.
• Section 15 of the Privacy Act provides that an APP entity must not do an act, or engage in a practice that breaches an APP. Section 6A of the Privacy Act provides that an act or practice breaches an APP if, and only if, it is contrary to, or inconsistent with that principle.
• The APP’s are set out in Schedule 1 to the Privacy Act. There are 13 of them. APP1 requires APP entities to take reasonable steps to implement practices, procedures, and systems relating to their functions or activities that will ensure compliance with the APP’s and enable them to deal with inquiries or complaints about compliance with the APP’s. APP1 compels APP entities to have clear and up-to-date privacy policies about the management of personal information by the entity.
Company is a subsidiary
The ex-employee agrees that whilst the Privacy Act exempts employee records, from the company that employed him, it does not apply to the parent company that administers the payroll. He also argued that if his biometric data was deemed to be an employee record, then the company’s direction to use the scanners was still unreasonable because the company failed to provide the ex-employee sufficient information that would satisfy a reasonable person that the company was complying with its obligations under the Privacy Act.
The question of reinstatement
The Commissioner’s view on reinstatement in this situation was:
“It was submitted that the evidence of Superior Wood managers is they have lost trust and confidence in Mr Lee because of his refusal, alone amongst his peers, to comply with the Site Attendance Policy for no good reason. An employee who elects to be exempted from a policy directed towards honesty, accuracy and safety, which policy causes no harm to them, cannot expect to retain the requisite degree of confidence on the part of their employer”. [My emphasis].
The Commissioner’s comments of company policies
Whilst the Commissioner acknowledged that the central consideration is whether Superior Wood’s action, in attempting to collect Mr Lee’s biometric information through the use of the scanners was inconsistent with its obligations under the Privacy Act; the Commissioner noted the following:
“In the case of Woolworths (t/as Safeway) v Brown (Woolworths), a Full Bench of the Australian Industrial Relations Commission considered how and when an employer’s policy will be reasonable to have been complied with, and stated:
‘What is reasonable will depend upon all the circumstances including the nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument governing the relationship. A policy will be reasonable if a reasonable employer, in the position of actual employer and acting reasonably, could have adopted the policy. That is, a policy will only be unreasonable if no reasonable employer could have adopted it. A policy will not be unreasonable merely because a member of the Commission considers that a better or different policy may have been more appropriate. As the Full Bench observed in the XPT Case, albeit in a somewhat different context, it is not the role of the Commission “…to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable.’ [Emphasis added].
The Commissioner finding
“In light of the Full Bench’s decision in Woolworths, I consider that the Site Attendance Policy is not unjust or unreasonable. It is entirely reasonable for the employer to improve upon an inherently unsafe obligation to run to the front administration office in the event of an emergency, locate a paper sign-on sheet and attempt to ascertain who is at work over a site of significant size. On the evidence before the Commission, supervisors can immediately see who from their area of work is present in the workplace using the information collected through adherence to the Site Attendance Policy and displayed on a supervisor’s phone.
“Further, the improved integrity and efficiency of the payroll across [the Group] is a persuasive matter to find that the introduction of the Site Attendance Policy was neither unjust or unreasonable. I find that Superior Wood either directly or through its related body corporate entities held a right to manage its affairs by the introduction of the Site Attendance Policy, requiring all individuals who work at the various premises to comply with it. I would not accept that an individual’s refusal to comply with the policy would render any subsequent dismissal, with adequate caution, invalid”. [Emphasis added].
The Commissioner also conceded that the information collected by the scanners meets the definition of “sensitive information” under section 6 of the Privacy Act; and
“Having regard to the issue of whether the introduction of biometric scanners at the Superior Wood premises is ‘reasonably necessary’, I have no hesitation in so finding. For the same reasons stated earlier, the [Group] wished to consolidate its payroll. Superior Wood was the last entity to have the scanners introduced, and after a suitable period of time where there was duplication, it was a reasonable course for the employer to then remove the paper payroll system to join in with its parent entity activities. Once Superior Wood and the Finlayson Group was satisfied the biometric scanning was properly implemented, the entities wished to do away with all manual payroll handling. Once that decision was made, I do then consider the collection of the biometric information to be reasonably necessary for its functions or activities”.
The question of whether an individual consents to the collection of the information
The Commissioner found that the employees provided implied consent to the collection of their sensitive information by attending a meeting during November 2017 and registering their fingerprint algorithm to be used by the scanners. With the Commissioner adding:
It should be noted that the information collected by the scanners was not held by Superior Wood (the company). The information was instead held by a third-party company, ‘AUS IT’, and the Finlayson Timber and Hardware Company (of which the company was a subsidiary). Superior Wood had not notified Mr Lee that the data collected by the scanners was held on servers owned by the Finlayson Timber and Hardware Company and maintained by ‘AUS IT’.
Despite the flaws relating to the Privacy Act, the Commissioner chose a more practical path:
“Many employers have been using biometric data for decades or more, and it would be highly improbable that each of those employers owned the scanning equipment, the servers on which the data was held, or had any relationship with the provider of the biometric system the employer had installed”.
“Superior Wood could not lawfully force Mr Lee to consent to the collection of his sensitive information and to comply with the Site Attendance Policy. It did not do so. It informed him that if his consent was not forthcoming, and he failed to comply with the Site Attendance Policy, dismissal was a likely outcome. It failed to inform Mr Lee pursuant to the Privacy Act of the responsibilities it and other associated entities would meet”.
“Overall, Superior Wood decided that the method of site attendance verification that would be implemented at its workplace was the biometric scanning system. It was within its rights as an employer to install the scanners and to create a policy governing the use of the scanners which its employees were mandated to follow in the course of their employment. [My emphasis].
“The policy itself is not unlawful, simply the manner in which the employer went about trying to obtain consent may have constituted a breach of the Privacy Act. Any such breach might constitute a matter that could be examined by the Australian Information Commissioner and Privacy Commissioner”.
“It mattered not who owned the equipment, Mr Lee would never provide his consent. Mr Lee refused to provide his consent, which he is entitled to do. He did, however, then fail to meet his employer’s reasonable request to implement a fair and reasonable workplace policy”.
“In all the circumstances, and having regard to any potential breaches of the Privacy Act, I find there was a valid reason for the dismissal”.
At paragraph , the Commissioner quoted a speech given by the then Deputy Privacy Commissioner, Mr Timothy Pilgrim to the Biometrics Institute on 27 May 2010. [see the decision for this: https://www.fwc.gov.au/documents/decisionssigned/html/2019fwc5095.htm.
Full Bench gives permission for fingerprint scanning refuser to appeal
Jeremy Lee v Superior Wood Pty Ltd t/a Superior Wood. (C2018/6600).  FWCFB 95. Sams, DP; Gostencnik, DP and McKinnon, C. 17 January 2019
The ex-employee (applicant) then appealed against the decision of Commissioner Hunt. As regular readers would know, appeals are inherently difficult in nature – both in terms of granting of permission and also having the decision in chief reviewed (quashed).
These proceedings deal only with permission to appeal considerations. While the appellant provided no written submissions and for the most part argued the merits of his appeal, his oral submissions provided the ex-employee the opportunity to sufficiently address the questions the Full Bench must determine at this point, of whether it is in the public interest to grant permission to appeal of the Decision and, in doing so, whether an arguable case of relevant error has been made out.
The full Bench found that there was an arguable case of appealable error as grounds of appeal raise “important, novel and emerging issues in the Commission’s unfair dismissal jurisdiction”.
At the outset of the proceedings, it was apparent that the appellant had not filed any submissions in support of his appeal. He claimed he had been unaware of the requirement to do so, or to attend the hearing to argue his case. The Full Bench gave the applicant permission for an adjournment until later that day to get his grounds of appeal together.
As mentioned, appeals are notoriously hard to “enliven the public interest”. The following points were used by the Full Bench in this instance:
• An appeal under s 604 of the Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker (this is so because on appeal the Commission has power to receive further evidence).
• There is no right to appeal and an appeal may only be made with the permission of the Commission.
• The Commission must not grant permission to appeal from a decision made by the Commission in relation to unfair dismissal unless it considers it in the public interest to do so.
• An appeal of an unfair dismissal decision involving a question of fact can only be made on the ground that the decision involved a significant error of fact.
• This is “a stringent one”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.
• Some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.”
• It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
• An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal.
In this matter, the Full Bench decided in the ex-employee’s favour, the Full Bench was persuaded that there was an arguable case of appealable error identified in the appeal as to:
• Whether the request to comply with the respondent’s Site Attendance Policy was lawful and/or reasonable, in all the circumstances of the case, and in the context of the appellant’s refusal to provide consent to the disclosure of his personal biometric data.
• Whether the Commissioner’s findings as to the application of the Privacy Act were relevant, and/or appropriately balanced with the exercise of the Commissioner’s discretion under the Unfair Dismissal provisions of the Fair Work Act.
• To the extent the Privacy Act is relevant, whether the exemption in s 7B in respect to an ‘employee record held by the organisation and relating to the individual’ includes the process by which the employee record is obtained or created.
• Whether an employee’s refusal to provide consent to the collection of sensitive ‘information about an individual’ in APP 3.3 is a breach of the respondent’s Site Attendance Policy.
• Whether the ‘consent’ required by APP 3.3 includes ‘implied consent’, in circumstances where the employees have registered their fingerprint algorithm to be used by the scanners without first having been notified as required under the Privacy Act.
• This case is the first occasion the Full Bench of the Commission has considered the essential question posed by the Commissioner’s Decision; namely, whether the refusal of an employee to provide their biometric data through the scanning of fingerprints for the purposes of recording a person’s presence at the workplace, constitutes a valid reason for dismissal:
“We are satisfied that the appeal raises important, novel and emerging issues, not previously the subject of Full Bench consideration or guidance”.
In summary (and predictably (?)), the Full Bench decided to grant permission to appeal based on the lawfulness of the Site Attendance Policy versus the Privacy Act. Thus, enlivening the “public interest”.
Same Full Bench re-hears the unfair dismissal application on fingerprint scanning/Privacy Act
Jeremy Lee v Superior Wood Pty Ltd t/a Superior Wood. (C2018/6600).  FWCFB 2946. Sams, DP; Gostencnik, DP and McKinnon, C. 1 May 2019
This, the third hearing (and second Full Bench decision), scrapped the original “Hunt” decision.
Whilst finding that the company’s procedural process was fair, that is, the way they went about enacting the dismissal. This did not weigh against the fact that the direction to use the fingerprint scanner was against the Privacy Act and there the directions provided for the applicant to use the scanner was not a lawful decision.
The Full Bench also agreed with the applicant that the company and its various entities and suppliers could not guarantee that the biometric data could/would not be used for other purposes.
It was also noted that the applicant’s contract of employment, whilst stating that the employees must comply with company policies (etc.), in this case the contract was signed some time before the introduction of the new policy. Which brings into contention the validity of policies made after an employee’s engagement?
The Full Bench also interpreted that the Privacy Act required the consent to the collection of employee biometric information by Superior Wood to be used for the purpose of automated biometric verification or biometric identification. Finding that:
“…we consider the direction to Mr Lee to submit to the collection of his fingerprint data, in circumstances where he did not consent to that collection, was not a lawful direction. Moreover, we consider that any ‘consent’ that he might have given once told that he faced discipline or dismissal would likely have been vitiated by the threat. It would not have been genuine consent. [My emphasis].
The safety argument was also rejected by the Full Bench, stating that:
“We do not necessarily agree that it was ‘inherently unsafe’ to have to run from the front office in the event of an emergency to locate the sign in and out sheets. However, we are satisfied that there was a sufficient evidentiary basis for the Commissioner to find that the scanners, through their capacity to display attendance records on supervisor’s phones, offered safety benefits, even though the main function was clearly to improve its payroll operation”.
In summarising its reasons for finding that the dismissal was unfair and unreasonable, the Full Bench stated:
“…the evidentiary basis for concluding that collection of Mr Lee’s fingerprint data was reasonably necessary for Superior Wood’s functions or activities was not compelling. It is clear that Superior Wood’s introduction of the scanners was administratively convenient for FTH, who operated the payroll system on its behalf. We also accept that had the direction to Mr Lee been lawful, it might also have been reasonable to decline to make an exception for him in circumstances where he was the only one of approximately 400 employees seeking a different method. However, neither of those matters establish that it was ‘reasonably necessary’ for Superior Wood to proceed with the collection of Mr Lee’s fingerprint, particularly in circumstances where other options had been identified and had not yet been considered”.
In terms of the other employees providing their “implied” consent by using the finger scanning, the Full Bench agreed with this premise.
The Full Bench then remitted the matter to Commissioner Simpson to determine the question of what remedy, if any, should be ordered having regard to the Full Bench’s findings.
Back to arbitration to determine “remedy”
Jeremy Lee v Superior Wood Pty Ltd t/a Superior Wood. (U2018/2253).  FWCFB 5095. Simpson, C. 22 July 2019
The sole purpose of this hearing was to determine the question of what remedy, if any, should be ordered having regard to the Full Bench’s findings.
Once again, the applicant came unprepared and tested the Commissioner’s patience on numerous occasions both by the attitude/inferences/demands made by the ex-employee and (for some reason) his brother, who was acting on his behalf at this stage of the proceedings.
Some on these behaviours, etc included:
• The granting of two week’s adjournment allow the company to seek advice from a QC as to their rights of appeal. The company later advised (at the commencement of the directions hearing on 12 June) that the Respondent would not be seeking a review of the Full Bench decision. That is, the company would accept its “fate” in the FWC.
• That the Commissioner did not consent to his request for adjournment, as it was only a directions hearing (at first instance) and the ex-employee was unprepared. The ex-employee then criticised the Commission and demanded that the hearing commence the next day, which the Commissioner rejected.
• The Commissioner then, at the ex-employee’s request, explained remedies or powers were available to me in deciding the matter. The Commissioner advising:
“I referred Mr Andrew Lee to relevant sections of the legislation and that evidence and transcript and submissions already before the parties contained material relevant to remedy. I directed the Applicant to the Unfair Dismissal Benchbook on the Fair Work Commission website. I went on to explain the Commission could order reinstatement, order continuity of service, and also make an order for lost income, or alternatively order compensation”.
• Sent email correspondence to the Commissioner’s Chambers stating that he had requested that the last directions be held as a public hearing and be published on the FWC website and his request was not granted and he was promised an audio recording of the hearing which he had not received as promised and to please forward it as soon as possible.
• He further requested that the hearing on 12 June (a directions hearing) be a public hearing with the transcript to be published on the Fair Work Commission website. The email also requested that the hearing (the directions hearing) start at 1.00 pm to give plenty of time for the matters to be covered in full.
• On 4 June 2019 email correspondence was sent from Chambers advising the Applicant of the process for obtaining the audio recording of the directions hearing on 29 May. The Applicant was also advised that the directions hearing on 12 June 2019 would remain listed at 3.00 pm as it is for the purpose of directions and programming only. The Applicant was also advised the matter would be heard as a public hearing in a hearing room at the Commission in Brisbane and parties may participate by phone or attend in person.
At the hearing on 12 June 2019 Mr Andrew Lee (the ex-employee’s brother) appeared by telephone on behalf of his brother, who was also attending by phone and the company was again represented in person by a lawyer.
Mr Andrew Lee raised a question of whether the Commission needed to reconsider the matter of legal representation given that the Applicant is now self-represented.
The Commissioner indicated that it was proceeding on the basis the matter of legal representation had not been disturbed. It was submitted for Mr Lee that the decision of Commissioner Hunt had been quashed and any leave to appear was quashed along with it. Mr Andrew Lee pressed his objection that the Respondent should not be granted leave.
The Commissioner ruled that the company was represented by a lawyer at first instance, the Appeal decision did not deal with that matter, and the decision to grant legal representation at first instance is undisturbed. After the Commissioner had ruled on the matter Mr Andrew Lee continued to argue with this ruling and [the Commissioner] “I explained that I had made a decision and if he wished to challenge that he needed to appeal that decision”.
The Commissioner then explained to Mr Lee’s brother (Ed: a pre-emptive strike?):
“I explained to Mr Andrew Lee that in the event I was to determine the Applicant should be reinstated there is also power to order continuity of employment and restoration of lost pay. I explained that restoration of lost pay is not capped at six months. I also explained that if I determined that reinstatement is not appropriate then it is correct that the maximum compensation is six months’ pay. [my emphasis].
“I explained that it is appropriate to get further evidence and submissions because events that have occurred since the hearing at first instance may be relevant to the final determination. I explained that I needed to take into account for example any other income the Applicant has earned since the time of the first decision. I explained that the Respondent was entitled to cross examine the Applicant about that. Mr Andrew Lee queried whether [the company] would be available for cross examination, and I advised that it was for the Respondent to decide whether it wished to call further evidence, however it was also open to the Applicant to seek an order that Mr Finlayson give evidence however it would need to make an argument about why that evidence would be relevant. I explained that if the Applicant did not give any further evidence concerning the period since the time of the hearing in June 2018 then the Commission would not have evidence about that and it might not help his case”.
“Mr Andrew Lee stated that the Commission was saying the Applicant should be available for cross examination without any orders. I explained to Mr Andrew Lee that he did not fairly represent what I had said, and I explained that I did not intend to compel the Applicant to give further evidence.
“I indicated that I intended to issue directions for the filing of further material. Mr Andrew Lee interrupted me and again returned to submitting that any further delay was costing his brother. I explained that I was not going to determine the matter without giving both parties the opportunity to file further material relevant to the time since the hearing in June 2018.
“Throughout Mr Andrew Lee continued to object to the program and continued to argue with the ruling on the matter and returned to making further submissions to the effect that delay was costing the Applicant. Mr Andrew Lee then said that he wished to speak to what had been done to his brother by both the Respondent and the Commission. I refused to hear any further submissions and adjourned the directions hearing”. [My emphasis].
The ex-employee, on 18 June 2019 the Applicant sent email correspondence to my chambers as follows:
“Dear Cmr Simpson
I requested the hearing be public and the audio recording and transcript be provided to me and made available to the public. Having requested the transcript from your associate earlier today, Andrew Dawson suggested I need to fill out a form and request it from Eqip.
Eqip is at your direction, so trying to tell me I have to ask them for a copy is to misrepresent your authority. As I understand it, you have carriage of the matter, and as a party, I am entitled to a copy of the transcript of any proceedings. [My emphasis].
I am requesting you provide me with a copy of the transcript of the Directions Hearing 12 June 2019 @ 15:00 onwards.
The Commissioner responded that the parties were at liberty to obtain copies of the transcript at their own cost and advised that the parties may request access to a free copy of the audio of the hearing be provided using the audio order form and a copy was attached to the email.
Not to be outdone, the ex-employee then, on 19 June 2019, sent an email to the Commissioner which stated in part:
“Dear Cmr Simpson
Please find attached Orders to Attend and Orders to Produce, the Applicant requests for the 10 July 2019 Arbitration Hearing.
These requests and a statement reiterating what has already been submitted and what has occurred will form the basis of the Applicants presentation.
I also assert that any delay in my reinstatement on the basis of my continuation of employment is at my great expense. It has occurred and continues under the management of the Commission since the ruling of my unfair dismissal and against my strenuous and repeated objections. The submissions included here are only made as a result of the Commissions insistence on the unnecessary delay of my reinstatement. [my emphasis].
The ex-employee then applied or orders requiring that Irene Falk, the Federal Privacy Commissioner; Commissioner Jennifer Hunt; and Mr Skene Finlayson, a director of the Respondent to make themselves available for examination by the ex-employee at the hearing. His reasoning being:
“The grounds for seeking the orders to attend in the case of Irene Falk include that ‘Her evidence and opinion needs to be heard in this matter of national significance.’ It was also submitted that the Commissioner’s office is central to and inextricably linked to the matter at hand and her opinion on the Respondent’s conduct and an appropriate remedy must be ascertained. The Applicant also stated that Irene Falk’s evidence would clearly identify where responsibility for the unfair dismissal of the Applicant rests.
“In the case of Commissioner Hunt the order was sought it seemed because of the Commissioner causing delay in the determination of the matter, and it was said this was relevant to remedy”.
The request was denied.
The ex-employee, also requested “legal advice provided by DWF Law to the Respondent in relation to the Respondents’ introduction of biometric scanners to the workplace, or any other legal advice sought by the Respondent for the same purposes.” This request was not dealt with in this decision. (ED: It would have interesting from a “legal privilege” point).
The ex-employee requested that the hearing for compensation “be a public hearing and that the audio and transcript from the hearing be publicly available on the FWC website and that members of the public and media may attend”.
The ex-employee then added:
“…that the remedy hearing/proceedings and any outcomes actually form part of the Full Bench Decision and as such must be available for public scrutiny. The Applicant said that as the Commission is a publicly funded tribunal, purporting to decide on matters in an open and transparent manner, his request for the audio file(s) and transcript(s) of all hearings is fair, reasonable and proper”.
The plot thickens
It then came to the Commissioner’s attention of two Federal Court matters appearing to relate to this matter.
The Commissioner advised that it was his preliminary view that if the Federal Court matters concern an appeal of the decision in relation to the Full Bench, then the current application should be stayed until the matters before the Federal Court were resolved and invited both parties to be heard on the issue and requested a response in writing by the following day 26 June 2019.
The company replied by email on 26 June 2019 advising that they had not been provided with a copy of the proceedings, had no knowledge of them, and were not in a position to comment on what impact the federal court proceedings may or should have on the current proceeding.
The ex-employee replied by email on 26 June 2019. In brief summary the Applicant complained that delay by the Commission is inaction in favour of the employer, and went on to state:
“If your ruling is an attempt to pressure me into renouncing my appeals to the Federal Court, I would prefer you simply to ask me to do that. If you have the discretionary power to offer any alternatives, I’d like to know in plain english what these are. What alternatives are there to your stay on remedying my unfair dismissal.”
The following day the Applicant sent email correspondence to my Chambers. The email read as follows:
“Dear Commissioner Simpson,
Ever since I have been self-represented I have vociferously and repeatedly requested that all proceedings and hearing be fully public.
A full public hearing should include:
a. All hearings procedural or otherwise be accessible by the public and the media.
b. All audio from these hearings be made available on the FWC website for download by the public.
c. Transcripts be produced from all hearings and be published to the FWC website and available to the public.
d. A copy of the audio and transcripts from all hearings be provided to the parties, unconditionally, without any restrictions on publication. At present the FWC is requiring parties to sign the following: ‘I will not broadcast or otherwise publish, distribute, post or transmit, including via any online mode, an audio recording of Commission proceedings, and will not cause Commission audio recording to be broadcast or otherwise published, distributed, posted or transmitted.’
The FWC condition is a coercive restriction on the public’s access to the processes of the FWC, a body it empowers and funds. The FWC should be transparent and should not be attempting to hide its operations. In view of this:
1. Will the transcript of the 2 July 2019 be published on the FWC website?
2. Will parties be provided with the hearing audio and transcript without condition?
Please confirm ASAP.
As the ex-employee still had not addressed that federal court matters, the Commissioner (Ed; probably fed up this stage) restated his earlier position of the matter and determined that the he would proceed with the matter.
Findings of the Commissioner
Given the attention given to this matter, I have reproduced the Commissioner’s finding in full:
Is reinstatement of the Applicant inappropriate?
The mere fact that the position that was occupied by the Applicant has now been filled or no longer exists does not render an order for reinstatement inappropriate. As a Full Bench of the Australian Industrial Relations Commission observed, the adoption of such “would tend to defeat the remedial purpose of the legislation.” However, as noted by a Full Bench of the Commission, “[r]einstatement might be inappropriate… if the employer no longer conducts a business into which the employee may be reappointed.”
A Full Bench of the Commission has helpfully identified the following propositions relevant to the impact of a loss of trust and confidence on the appropriateness of an order for reinstatement:
• Whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is appropriate but while it will often be an important consideration it is not the sole criterion or even a necessary one in determining whether or not to order reinstatement.
• Each case must be decided on its own facts, including the nature of the employment concerned. There may be a limited number of circumstances in which any ripple on the surface of the employment relationship will destroy its viability but in most cases the employment relationship is capable of withstanding some friction and doubts.
• An allegation that there has been a loss of trust and confidence must be soundly and rationally based and it is important to carefully scrutinise a claim that reinstatement is inappropriate because of a loss of confidence in the employee. The onus of establishing a loss of trust and confidence rests on the party making the assertion.
• The reluctance of an employer to shift from a view, despite a tribunal’s assessment that the employee was not guilty of serious wrongdoing or misconduct, does not provide a sound basis to conclude that the relationship of trust and confidence is irreparably damaged or destroyed.
• The fact that it may be difficult or embarrassing for an employer to be required to re-employ an employee whom the employer believed to have been guilty of serious wrongdoing or misconduct are not necessarily indicative of a loss of trust and confidence so as to make restoring the employment relationship inappropriate.
The Full Bench concluded that, “[u]ltimately, the question is whether there can be a sufficient level of trust and confidence restored to make the relationship viable and productive. In making this assessment, it is appropriate to consider the rationality of any attitude taken by a party.”
I do not find either of the cases that the Respondent relied on concerning an employee’s failure to comply with a policy persuasive as the facts in this case are distinguishable. As found by the Full Bench, the Applicant was entitled not to comply with the policy in this case, and a direction to do so was an unlawful direction.
I also have not placed weight on the Respondent’s submission that if reinstated the Applicant will seek to persuade others not to comply with the policy for ulterior motives. In my view this is too speculative.
I also do not see the requirement for the Respondent to provide a payroll system to accommodate the Applicant if he were to be reinstated as a compelling argument against reinstatement given he is entitled not to provide his biometric data.
However the Form 51 document filed by the Applicant and directed at Mr Finlayson reveals an ongoing hostility toward Mr Finlayson, the sole director of the Respondent. The evidence is that during his employment, but for his termination for failing to follow a direction since found to be unlawful, there was no indication that there were any issues that would be a cause for concern in regard to the relationship of trust and confidence between the Applicant and the Respondent. Up to the point of the matter being remitted to me the evidence to that point would have weighed in favour of a finding that reinstatement would be appropriate.
However on 19 June 2019, some 17 months after his termination the Applicant filed the Form F51 in the context of a pending hearing on remedy after he had won the substantive argument that his dismissal was unfair, and included in the statement directed at Mr Finlayson that he was “deceitful, and dishonest”.
In answer to the question 1.3 on the Form F51 ‘How will the appearance of the person(s) assist the Commission in reaching the decision?’ the Applicant stated that “The witness evidence would clearly identify the conduct of the respondent and its impact on the applicant.”
The manner of the cross examination at the remedy hearing was at times conducted as if the question of whether the dismissal was unfair was yet to be decided.
Given the Applicant’s brother was present for the purpose of assisting him it can only be assumed he was representing the Applicant’s views. Much of the cross examination of Mr Finlayson by the Applicant and his brother was directed at obtaining from Mr Finlayson an acceptance that the biometric scanning system did not improve safety or the Respondent’s payroll efficiency, and secondly an admission from Mr Finlayson that the biometric scanner takes a finger print, and not as Mr Finlayson describes it, an algorithm to convert that to a binary code, and that it does not scan all of the finger print and it only scans certain points on the finger.
The Applicant has not been satisfied by his success on Appeal before the Full Bench. As much was said at the remedy hearing when Mr Andrew Lee submitted on behalf of his brother that the Full Bench did not confirm that his brother owns his biometric data, and further that the Commission can claim that he (the Applicant) won but that was not the Applicant’s view.
The Applicant’s conduct is indicative of him having ongoing issues with Mr Finlayson because of the manner in which the biometric scanning system was introduced and the ongoing use of the system. The Applicant is not willing to put historical issues with Mr Finlayson behind him. From the evidence the system is currently in use by the entirety of the Respondent’s workforce. There is no doubt that as found by the Full Bench the introduction of the biometric system by the Respondent was seriously flawed when it upheld the Applicants appeal grounds 1, 2, 5 and 8. The Respondent was not exempt under the Privacy Act prior to the collection of an employee record, it did not have a policy in place, and it could not collect sensitive information without consent. The Respondent also failed to provide a notification of the collection of information.
However biometric scanners are not in and of themselves unlawful. I listened carefully to the evidence of Mr Finlayson and am satisfied that despite the Respondent having been found by the Full Bench to have failed to comply with the Privacy Act and Australian Privacy Principals, Mr Finlayson believed he could follow the course he did at the relevant time based on advice he had received and also believed that the new system would improve both safety and payroll efficiency.
The Full Bench decision made clear that it would be unlawful for the Respondent to seek to enforce its policy against the Applicant. Trust and confidence could have been re-established following the Full Bench decision. However I am satisfied that from the Applicant’s perspective, despite the Full Bench ruling in his favour, the issue is not resolved for him. I explained to the Applicant in the course of the remedy hearing that given the Full Bench decision I could order his reinstatement and the Respondent could not seek to require him to comply with the policy to use the scanner but that did not deter continued focus on the issue.
[Ed: Translation? “if he had kept his mouth shut and was a good boy he would have got his job back with full back pay?].
Rather than seeing the remedy hearing as an opportunity to convince the Commission that it should be satisfied trust and confidence could be restored between the Applicant and the Respondent, the Applicant appeared to be primarily focussed on seeking concessions from Mr Finlayson regarding the biometric scanning system, and not on whether reinstatement was appropriate or otherwise. Whilst the Applicant did provide evidence on the issue of trust and confidence, and there was cross examination of Mr Finlayson on the issue, it did not appear to be the primary focus for the Applicant. I am inclined to the view that the Applicant’s desire to continue to agitate issues concerning the use of the biometric scanning system at the remedy hearing is likely to hinder any restoration of the employment relationship despite his evidence to the contrary.
The strong language the Applicant directed at Mr Finlayson in the Form 51 so long after the events of February 2019 fortifies my view about that. Even if I was to accept the Applicant’s evidence that his comments regarding Mr Finlayson were confined to whether the scanner did not take a fingerprint, the statement was still unjustified in that context and inappropriate. I do not accept Mr Finlayson was being dishonest and deceitful as the Applicant stated on the issue. I accept Mr Finlayson’s evidence that what he said about the function that the biometric scanner performs is what he believed. It is consistent with what he had been told by people with supposed expertise even if the Applicant disagrees and even if the Applicant’s interpretation is correct and Mr Finlayson is wrong.
It is reasonable for Mr Finlayson to feel that the Applicant’s statement about him was offensive, objectionable, and damaged goodwill that might have otherwise existed between the parties before the statement was made.
There are also others factors which weigh against reinstatement. Mr Finlayson said if he is instructed to put the Applicant on he will have to put someone else off and his manufacturing business is struggling. Mr Finlayson said the Applicant worked in the dry mill part of the plant, and that part of the business is particularly under attack at the moment, and Mr Finlayson said that since the Applicant left they had lost the Corinthian business (a two million dollar contract) who have gone to imported product out of China, and the Respondent had tendered for Bunnings and they were not successful with the tender, and the moulding market is under attack and that if the Applicant had to come back he would have to put someone else off.
I accept Mr Finlayson’s evidence regarding the downturn in his business. Given the Respondent has been reducing its workforce it is notable that the Applicant was engaged prior to termination as a casual and not in a permanent position. [Ed: First mention of casual employment – as not applicable?].
On the basis of my findings above I have concluded that the Respondent has a rational basis for loss of trust and confidence in the Applicant. To add to that, the evidence supports the conclusion that the distrust is mutual. Because of that, and the other reasons set out above, I am satisfied an order for reinstatement is inappropriate in this case.
Is an order for payment of compensation appropriate in all the circumstances of the case?
Having found that reinstatement is inappropriate, it does not automatically follow that a payment for compensation is appropriate. As noted by the Full Bench, “[t]he question whether to order a remedy in a case where a dismissal has been found to be unfair remains a discretionary one…”
Section 392(2) of the FW Act requires all of the circumstances of the case to be taken into account when determining an amount to be paid as compensation to the Applicant in lieu of reinstatement.
The Applicant submitted in its written submissions of 15 June 2018 that if the Commission considers that reinstatement is inappropriate and that compensation is appropriate in all of the circumstances, the appropriate amount of compensation having regard to all of the criteria in s 392(2) including the Applicant’s length of service with the Respondent (about 3 and a half years as at June 2018), the remuneration that he would have received had he not been dismissed ($16,696.44), his efforts to mitigate the loss suffered because of the dismissal (which were reasonable in the circumstances in reference to paragraphs 31 to 47 of the Applicant’s amended reply statement), and the amount of remuneration earned between the dismissal and the order for compensation (submitted as being nil, apart from two weeks’ pay in lieu of notice ($1,855.16), is $22,261.92 calculated on the basis of the Applicant’s average income of $927.58 per week multiplied by 18 weeks which have elapsed since the dismissal, plus a further eight weeks to compensate him for the dismissal. The Applicant submitted that there is no evidence of any misconduct which would justify reducing the amount of compensation.
Whilst the Respondent in its earlier submissions referred to the formula in Sprigg v Licensed Festival Supermarket as refined in Ellawala v Australian Postal Corporation, in closing submissions at the remedy hearing it advised the Commission that it consented to the payment of six months to the Applicant. The Respondent submitted that the Applicants’ pay rate was $24.41 cents including the casual loadings and the Applicant regularly worked 38 hours per week. This is consistent with the Applicant’s calculation of a weekly rate based on 38 hours per week. I adopt the formula in Sprigg.
There was no evidence of performance or misconduct issues that may have led to the Applicant’s employment ending prematurely. He was engaged as a regular and systematic casual employee and there was no clear evidence of his role being in jeopardy at the time of termination. He had been engaged for approximately three and a half years at the time of termination. There has been evidence of job reductions since his termination however I am satisfied it is likely he would have remained employed for at least another 12 months. That results in remuneration of $48,234.16.
The uncontested evidence is that the Applicant did not earn any income in the twelve months following his dismissal. Social security payments are not included in the amount of remuneration earned. The Applicant received two weeks’ notice pay at the time of termination which equates to $1,855.16. Subtracting that amount from $48,234.16 equals $46,379.
There is no need to make any deduction for contingencies because the twelve month period following the Applicant’s termination expired on 12 February 2019 and that date has passed at the time of the issuing of this decision.
I have considered the impact of taxation but have elected to settle a gross amount of $46,379 and leave taxation for determination.
The amount ordered by the FWC to be paid to a person must not exceed the lesser of the total amount of 26 weeks remuneration or half of the income threshold immediately before the dismissal. The high-income threshold as at 12 February 2018 was $142,000. Half of $142,000 is $71,000. $46,379 does not exceed half of the high-income threshold, however exceeds the total amount of remuneration for any period of employment with the employer during the 26 weeks immediately before dismissal, which based on an amount of $927.58 multiplied by 26 which equals a sum of $24,117.08.
Having applied the formula in Sprigg, I am nevertheless required to ensure that “the level of compensation is an amount that is considered appropriate having regard to all the circumstances of the case.”
Effect of the order on the viability of the Respondent’s enterprise
There is no dispute and I am satisfied that an order for compensation would not have an effect on the viability of the employer’s enterprise.
Efforts of the Applicant to mitigate the loss suffered by the Applicant because of the dismissal
There was no dispute that the Applicant had taken appropriate steps to mitigate his loss. This is consistent with his evidence in the hearing in June 2018. In the Applicant’s amended reply statement of 14 June 2018 he again gave evidence that since his dismissal he had been trying to get a job but opportunities are few in Gympie and the surrounding areas and was again confirmed at the hearing of 10 July 2019 without opposition.
Other relevant matters
I am satisfied that the amount of compensation that I have determined above takes into account all the circumstances of the case as required by s.392(2) of the FW Act.
Compensation – is the amount to be reduced on account of misconduct?
I am not satisfied that there was any misconduct of the Applicant contributed to the employer’s decision to dismiss.
I have concluded that the Applicant should be paid $24,117.08 plus 9.5% superannuation by the Respondent within 14 days of this decision being issued. An order [PR710580] will be issued separately and concurrently with this decision to that effect.
[Ed: HERE’S THE STING IN THE TAIL…]
On a separate matter I must address the conduct of the Applicant and his brother throughout the proceedings before me. I have been careful to separate this matter from my considerations of the appropriate remedy, however it is still appropriate that it be addressed. Given the nature of allegations made by the Applicant against the Commission itself I have set out in some detail the nature of communications between the Applicant and the Commission prior to the remedy hearing. In the course of the matter before me the Applicant and his brother have at times conducted themselves in a manner that is inconsistent with the Fair Work Commission’s Fair Hearing Practice Note which states that parties and their representatives are required to participate in a responsible way to assist the Commission to provide a fair hearing for all parties.
The practice note also requires parties to, among other things, treat the Commission and other parties/representatives with courtesy and respect. Some of the Applicant’s and his brother’s conduct could be described as merely robust advocacy which is completely acceptable however at other times they overstepped the mark. Throughout the matter before me the Applicant and his brother appeared to be fixated with the Commission’s practices for providing transcript to parties and demanded audio recordings of the directions hearings, and accused the Commission of being secretive when my approach was entirely in keeping with standard practice of the Commission.
The Applicant made no attempt to bring to the attention of the Commission or the Respondent that he filed applications in the Federal Court and provided no explanation for ignoring my direction to file material concerning his Federal Court appeals. The Applicant ignored my directions, and an extension to that direction to file a statement or submissions.
At both of the directions hearings and the substantive hearing before me the Applicant and his brother at times conducted themselves in a manner which displayed contempt, acting rudely, aggressively, and attempting to speak over me and seeking to continue to argue with the Commission after a ruling had been made. The tone and content of email correspondence has also been inappropriate. Allegations have been made about the conduct of Commissioner Hunt, the Full Bench, and myself which are without foundation.
There is no doubt the Applicant was treated unfairly by his termination in February 2018, and the process of having to endure three substantive hearings and other administrative hearings to obtain a remedy has been a long road. However that is no excuse for the Applicant and his brother’s behaviour toward the Commission. In the course of the hearing on 10 July I sought to advise the Applicant and his brother that the legislation addresses inappropriate conduct before the Commission however I did not direct them to any specific sections of the legislation.
I am not expressing a view at this stage on any specific conduct to this point, and ultimately it is not a matter for the Commission itself to determine, however if the Applicant or his brother intend to engage in further communications with the Commission or make further applications to the Commission I draw their attention to s.674 dealing with Offences in relation to the Commission so that they are now fully aware of those provisions for any future interactions they may have with the Commission.[All bolding is my emphasis]. [Ed: Whilst not set out in the “other matters” of the remedy, section 674 of the Fair Work Act 2009, provides for 12 months jail for breaches involving:
• Insulting or disturbing an FWC Member or Delegates of the FWC.
• Using insulting language.
• Interrupting matters before the FWC.
• Creating or continuing a disturbance.
• Improper influence of FWC Members etc.
And, whilst on the subject: section 675 also provides 12 months jail for “Contravening a FWC order”].