Editors --- "Meaning of 'misconduct as a worker': use of the Guide" [2007] SocSecRpr 44; (2007) 9(4) Social Security Reporter, Article 2

• SECRETARY TO THE DEWR and PAYNE
• Background
• The issue
• The evidence
• Legislative background
• The Department’s submissions
• Tribunal’s consideration
• Formal decision

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Meaning of ‘misconduct as a worker’: use of the Guide

SECRETARY TO THE DEWR and PAYNE

(2007/1745)

Decided: 10th September 2007 by S. A. Forgie

Background

Payne was employed by MPL in April2006. The letter offering him employment referred him to various policies and a code of conduct that made up the terms and conditions of his employment.

During the first 2 months of his employment his supervisor made notes on his file about concerns the employer had with aspects of his behaviour. On 20 June 2006 his manager conducted a review of his work and recommended his employment continue while making suggestions for improving his performance. On 11 August 2006 he was counselled for having been late for work several times. He was warned that his performance would be monitored and if his punctuality did not improve dramatically he may face further disciplinary action. Between 16 and 18 August 2006 he sent at least 2 emails to colleagues which were considered by the employer to be abusive and in breach of the relevant policy. His employment was terminated on 18 August 2006following a meeting at which he agreed that he had breached the code of conduct and various policies. The employer completed an Employment Separation Certificate for Centrelink on 23 August 2006. The reason given for the termination was not ‘misconduct’ but ‘summary dismissal’.

Payne applied for newstart allowance (NSA) and a delegate of the Secretary of the DEWR decided that Payne was unemployed due to his misconduct as a worker and therefore NSA was not payable to him for an 8 week period commencing on the day after his employment was terminated. On 11 January 2007 the SSAT set aside this decision on the basis that Payne was not unemployed for this reason and the Secretary appealed to the Tribunal.

The issue

The issue in this case was whether at the time he applied for NSA Payne was unemployed due to his misconduct as a worker.

The evidence

Payne did not attend the hearing. The Tribunal had before it the documents filed by the Secretary including the documents which formed part of Payne’s terms and conditions of employment, emails sent by him, various reports of his manager and the letter sent to him following his termination.

Legislative background

The Tribunal considered the legislative framework within which section 629 of the Social Security Act1991 (‘the Act’) appears and noted that Part 2.12 of the Act is concerned with NSA. To qualify for NSA a person must meet the criteria specified in s.593 and be unemployed.

The Tribunal then noted the provisions that set out circumstances where NSA is not payable to a person even though they are qualified. The relevant provision in this matter was s.629(1)(c). Section 629(1) provides:

‘A newstart allowance is not payable to a person, for the period of 8 weeks starting in accordance with section 630, if the person:

(a) commits a newstart participation failure (the repeated failure), having committed newstart participation failures (the earlier failures)on 2 or more other occasions during the period of 12 months preceding that failure; or

(b) is unemployed due, either directly or indirectly, to a voluntary act of the person; or

(c) is unemployed due to the person’s misconduct as a worker;

(d) has refused or failed, without reasonable excuse, to accept a suitable offer of employment; or

(e) fails, [without reasonable excuse]:

(i) to commence, complete or participate in an approved program of work for income support payment that the person is required to undertake; or

(ii) to comply with the conditions of such a program.’

The start date of the eight week period is set by s.630 and generally, in a case involving the application of s.629(1)(c), the period commences at the time that the Secretary determines that NSA is not payable to a person because of that provision. Where however the person was not receiving NSA at the time he or she became unemployed then the period starts when the person becomes unemployed.

The Department’s submissions

On behalf of the Secretary it was submitted that the Tribunal should have regard to the ordinary meaning of the word ‘misconduct’. The representative of the Secretary referred the Tribunal to Drake and Minister for Immigration and Ethnic Affairs 19792 ALD 60 (Drake’s case) and submitted that in seeking guidance on the application and object of s.629(1) of the Act the Tribunal should take into account relevant Government policy, which is not inconsistent with the provisions or objects of the Act. He submitted that the relevant policy was contained in ‘The Guide to Social Security Law’ (‘the Guide’) and referred the Tribunal to paragraphs 3.213.10 and 1.1.U.40. These paragraphs explain the ‘intention’ of the policy and give some examples of when a person could be said to have become unemployed through misconduct.

Tribunal’s consideration

In a lengthy decision the Tribunal first looked at the principles underpinning the interpretation of s.629(1)(c)generally and ‘misconduct’ in particular.

In response to the Department’s submission that regard could be had to the Guide (i.e. government policy) to assist with interpretation of s.629(1)(c) the Tribunal had to consider the circumstances in which a decision maker can look to extrinsic material when construing a statute (to ascertain its object and purpose) and also what status the Guide had and the use to which it could be put by a decision maker.

It noted the relevant provisions of the Acts Interpretation Act 1901 (the AI Act) and then turned to a detailed consideration of the principles of statutory interpretation developed by the common law. The Tribunal noted that when interpreting an Act, regard may be had to a wide range of extrinsic material.

The Tribunal considered that the Guide might be a document of the Secretary for the guidance of those exercising delegated powers.

The Tribunal did not accept the Department’s submission that it could have regard to the Guide in interpreting the meaning of a provision in the Act nor could the Guide be used to discover the object or purpose of the section. The Tribunal could (and did) look to the Second Reading Speech and the Explanatory Memorandum and Supplementary Explanatory Memorandum accompanying the Bill to ascertain the object and purpose of the section. Based on this the Tribunal concluded that Parliament intended that NSA not be paid to those who repeatedly do not participate in the process of finding employment. It noted that policy and guidelines cannot be used to identify the boundaries and content of the legislation nor can they be used to interpret a particular provision of the legislation.

The Tribunal next turned to consider the use to which the Guide could be put.

The Tribunal noted that the general principle is that the power to give directions and make guidelines is determined by reference to the subject matter, scope and purpose of the statute. A decision-maker is free to adopt a policy to guide it in the exercise of its discretion provided the policy is consistent with the Act and does not require it to take irrelevant circumstances into account. The Tribunal quoted a passage from Drake’s case which set out the way in which the Tribunal must carry out its duties:

‘... the Tribunal is not, in the absence of specific statutory provision, entitled to abdicate its function of determining whether the decision made was, on the material before the Tribunal, the correct or preferable one in favour of a function of merely determining whether the decision made conformed with whatever the relevant general government policy might be’.

The Tribunal noted that if the policy accords with the law then it should inform the Tribunal of the standards and values that the Minister considers important in making a decision and that should be applied unless there is a very good reason to depart from them. This encourages consistency of the decisions made under a particular power and promotes a sense that decision-making will be fair.

The Tribunal considered the meaning of s.629(1)(c) and noted that on its face a person will not be paid NSA for a period of eight weeks ‘if that person is unemployed due to the person’s misconduct as a worker’. The section does not give the decision-maker any discretion.

This required a finding about the ordinary meaning of the word ‘misconduct’ as it was used in s.629(1)(c). The Tribunal considered several dictionary definitions and also set out at length passages from the judgment of Smithers and Evatt JJ in North v Television Corporation Ltd (1976)11 ALR 599 a case which was concerned with whether an employer’s summary termination of a journalist’s employment on the ground of misconduct had been in breach of the relevant Award.

The Tribunal adopted the approach taken by Smithers and Evatt JJ and began by looking at the context in which ‘misconduct’ is used in s.629(1)(c), namely one of Parliament’s specifying five particular circumstances in which NSA will not be paid to a person for an eight week period. Of these only s.629(1)(b) and (c) are instances of misconduct so the Tribunal considered that Parliament intended to deal separately with misconduct and did not intend to qualify the reference to misconduct by the addition of words such as ‘serious’, ‘wilful’ or ‘voluntary’. It noted that there may be circumstances where the Tribunal would have to consider whether the misconduct amounted to serious misconduct namely, if an employee’s conditions of employment were such that employment could only be terminated in situations of serious misconduct. In these cases a consideration of whether there had been serious misconduct would be relevant in determining whether the employment was in fact terminated due to misconduct or whether it had been terminated for some other reason.

Section 629(1)(c) applies where the person’s misconduct was ‘misconduct as a worker’ and the person is unemployed ‘due to’ (because of) that misconduct as a worker. The Tribunal stated that this was a question of fact in each case and it was necessary for the Tribunal to look at the terms of the contract of employment in the context of Payne’s duties and to any reasons given by MPL for the termination.

The Tribunal noted that although it was not required in this case to decide whether the Guide was in accordance with s.629 of the Act, the Guide attempted to specify what amounts to misconduct in the abstract. Whereas in the Tribunal’s view what amounts to misconduct and to a person’s being unemployed due to misconduct at work can only be answered against the background of a particular employee’s circumstances in a particular workplace.

In Payne’s case the Tribunal took the view that, based on the evidence, Payne did misconduct himself over a period of time when it came to computer use and his behaviour to other employees, as well as by being late for work on several occasions. It found that Payne chose to act as he did knowing that his performance was under review and having been given a verbal warning.

The Tribunal found, after having regard to the course of events culminating in the termination of his employment, that his being unemployed was due to his misconduct as a worker, namely his failure to comply with the employer’s policies and Code of Conduct.

As the circumstances specified in s.629(1)(c) were met NSA was not payable to Payne for a period of eight weeks. As he was not receiving NSA at the time he became unemployed, the effect of s.630(3)(b) was that the eight week period commenced at that time i.e. the day after the termination and so, on 19 August 2006.

Formal decision

The Tribunal set aside the decision of the SSAT dated 11 January 2007 and substituted a decision that NSA was not payable to Payne for a period of eight weeks starting on 19 August 2006 on the basis that he was unemployed due to his misconduct as a worker. It remitted the matter to calculate the amount, if any, of NSA overpaid to Payne.

[C.E.]