Flick J of the Federal Court of Australia has quashed a decision of the Full Bench of Fair Work Australia (FWA) (now the Fair Work Commission (FWC)), on the basis that failure to properly consider the question of whether the employer should be legally represented had rendered the hearing unfair.

Implications for employers

This decision acts as a reminder to employers that they cannot assume that the FWC will grant permission for an employer to be legally represented at a hearing before the FWC. This permission will not be granted lightly. Employers need to be prepared to satisfy the FWC of one or more of the relevant criteria, as set out below. Further, it may well be that the FWC is more stringent about application of those criteria following this decision.

Background: relevant law

Under section 577 of the FW Act, the FWC must (among other things) perform its functions and exercise its powers in a manner that is “fair and just”.

Under section 596 of the FW Act, an employer may only be represented before the FWC by permission of the FWC. In considering whether to grant that leave, the FWC must have regard to the criteria in section 596(2) of the FW Act are met, namely:

  • it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or
  • it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or
  • it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

Background: facts

Mr Warrell, who was functionally illiterate and brain damaged, was employed as a gardener by the Second Respondent, Bacto Laboratories. After his services were terminated by a letter, Mr Warrell sought to challenge his dismissal. He mistakenly lodged an unfair dismissal application with the Fair Work Ombudsman instead of FWA (as it then was). He then applied to FWA for an extension of time to lodge his claim.

Decision of FWA at first instance

Senior Deputy President Drake heard Mr Warrell’s application for an extension of time and his application for the grant of a remedy in respect of his unfair dismissal claim together.

A lawyer sought leave to appear on behalf of Bacto Laboratories at the hearing, pursuant to section 596. No express permission was granted by SDP Drake, but the lawyer was thereafter permitted to conduct the hearing, including cross-examining Mr Warrell, presumably pursuant to implied permission.

SDP Drake refused Mr Warrell’s application for extension of time, in large part due to her finding that Mr Warrell’s substantive application lacked merit. SDP Drake further held that the termination of Mr Warrell’s employment was not “harsh, unjust or unreasonable”, a necessary element of an unfair dismissal under section 385 of the FW Act.

Subsequent proceedings before the Full Bench of FWA and the Federal Court

An application seeking permission to appeal from SDP Drake’s decision was heard and rejected by a Full Bench of FWA in October 2011. An application by Mr Warrell to have that hearing adjourned was refused by the Full Bench.

Mr Warrell appealed that decision, and Perram J of the Federal Court of Australia set aside of the Full Bench decision on the basis that it had denied Mr Warrell procedural fairness in refusing the adjournment application.

Further decision of the Full Bench of FWA

In June 2012, a fresh Full Bench of FWA heard Mr Warrell’s application seeking permission to appeal from SDP Drake’s decision. Mr Warrell applied on the grounds that SDP Drake had not:

  • proceeded in a manner which was “fair and just” as required by s 577 of the FW Act, in that she had allowed Mr Warrell to proceed to conduct his case unrepresented when he was “clearly unable to conduct his case”; and
  • provided reasons for concluding that the termination of Mr Warrell’s services was not “harsh unjust or unreasonable”

This Full Bench also refused Mr Warrell permission to appeal, holding that it was not satisfied that her Honour failed to conduct the hearing in a fair and just manner. This was because:

  • an unfair dismissal application is different to a trial for a criminal offence in a court;
  • Mr Warrell obtained the assistance of a solicitor to prepare material for his case, and was assisted in the conduct of his case by SDP Drake in an appropriate manner; and
  • Mr Warrell made no attempt to have a support person to assist him and made no application for an adjournment to obtain representation.

The Full Bench also concluded that SDP Drake applied the correct test for the existence of a valid reason for the dismissal, a relevant criterion in the test for summary dismissal.

Mr Warrell appealed to the Federal Court.

Decision of the Federal Court

In this proceeding, Mr Warrell made the arguments he had previously raised in June 2012. In addition, he:

  • argued that the hearing before SDP Drake was not “fair and just” by reason of Bacto Laboratories having been impliedly granted “permission” to appear by a lawyer, contrary to s 596(2) of the FW Act; and
  • advanced a broader submission in relation to hearings generally where the discretion to grant permission has miscarried.

Flick J found in favour of Mr Warrell, holding that:

  • the more confined submission should prevail and that it was therefore not necessary to resolve the broader submission;
  • the Full Bench of FWA had erred in concluding that the hearing before SDP Drake was “fair and just”, as it failed to take into account:
    • the fact that Mr Warrell was functionally illiterate and brain damaged;
    • the failure on the part of SDP Drake to make findings of fact relevant to her apparent conclusion that the requirements imposed by s 596(2) had been satisfied; and
    • the manifest advantages that Bacto Laboratories would have in cross-examining Mr Warrell and the manifest difficulties confronting Mr Warrell in his questioning of a representative of Bacto Laboratories;
  • a decision whether to grant leave for legal representation was not a mere procedural one. The normal position was that a party may appear via a legal representative only at the FWC’s discretion and if the requirements imposed by s 596(2) have been taken into account and considered;
  • there was no evidence that SDP Drake had considered the section 596(2) requirements in this case. The potential for unfairness to Mr Warrell had its roots in this failure at the outset and in the potential prejudice thereafter experienced by Mr Warrell in being effectively cross-examined by Bacto Laboratories’ lawyer, which resulted in findings adverse to the credit of Mr Warrell. The failure to address whether permission should be granted or refused had the consequence that the hearing was not “fair and just” as required by s 577(a); and
  • in relation to an alternative submission, there were likely sufficient findings of fact to support the conclusion that Mr Warrell had engaged in “misconduct”, but the basis for the conclusion that the termination was not considered “harsh, unjust or unreasonable” was “open to greater uncertainty”. Ultimately, it was unnecessary to resolve this submission.