Editors --- "Voluntarily unemployed: not reasonable to leave and not a special class of person: as a result of a stay the 8 week non-payment is a debt" [2011] SocSecRpr 14; (2011) 13(2) Social Security Reporter, Article 3

• STARKS and SECRETARY TO THE DEEWR
• Background
• Issues
• Legislation
• Unemployed due to a voluntary act?
• Was it reasonable?
• Can the non-payment period end early?
• Date of effect
• Decision

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Voluntarily unemployed: not reasonable to leave and not a special class of person: as a result of a stay the 8 week non-payment is a debt

STARKS and SECRETARY TO THE DEEWR

(2011/178)

Decided: 21st March 2011 by K. Bean

Background

Starks worked for CarersLink in the small town of Kadina from August 2006 to February 2010. Starks had initially enjoyed her work as office administrator and the management was supportive and appreciative. In April 2009 a new Coordinator, Jamieson, was employed (Starks trained Jamieson in the office systems used at CarersLink) and within six months was appointed to manager of the Kadina office. Starks was surprised when a meeting between the two women in December turned into a performance appraisal and she felt criticised during the meeting. Due to funding constraints Starks hours were to be reduced from 24hrs per week to 15hrs per week over four days. Starks had worked 15hrs previously (over 3 days) and believed that was preferable for the work concerned.

Starks was subject to an official work appraisal, in January 2010, conducted by Jamieson and Vogt, the CEO of CarersLink. A document prepared by Jamieson was read out; Starks said that the contents were not fair or accurate. Starks raised the question of the 15hrs over 4 days as being unproductive and not able to cover the daily tasks like the mail. Jamieson said something to the effect that Starks was not able to work three full days and Vogt apparently supported Jamieson’s proposal.

Starks believed that she had lost the support of her manager, that she was ‘being set up to fail’, that the configuration of hours had made the job untenable and she tendered her resignation. Vogt gave evidence by phone to the effect that the 2010 appraisal was an accurate reflection of Starks’ work performance and that it had been agreed that the office needed administrative support over four days. He explained that a new person was hired after Starks’ resignation and after eleven weeks the funding was increased and allowed the position to become five hours per day over four days. Vogt said he was surprised and disappointed when Starks resigned. When Starks approached Centrelink for newstart allowance she was subject to an 8 week non-payment period (NPP).

Issues

The issues before the AAT were:

• did Starks become unemployed due to a voluntary act?

• if so, was the act reasonable? and

• if not, were there grounds to end the NPP early?

Legislation

Section 42S (1) of the Social Security (Administration) Act 1999 (the Administration Act) provides that if a person becomes unemployed as a result of a voluntary act then a participation payment is not payable for 8 weeks beginning on the date the person became unemployed. If the voluntary act is deemed reasonable then s.42S (2) allows the participation payment to be continued. Pursuant to s.42S (4), the NPP may be ended if it would cause severe financial hardship and the person is in a class of persons as specified by Social Security (Administration) (Ending Unemployment Non-payment Periods – Classes of Persons) (DEEWR) Specification 2009 (No 1). Paragraph 4 sets out the relevant categories of person.

Unemployed due to a voluntary act?

Starks argued that her employment situation had become untenable and that she effectively had ‘no option’ but to resign. The AAT held that the resignation was a voluntary act on her part and that she could have remained employed with CarersLink.

Was it reasonable?

Starks argued the resignation resulted in part from the stress which had been imposed upon her by her employer, that she felt she was not a valued employee, that she had been subjected to a subtle form of bullying, in particular as a result of work being taken away from her and that the management had ceased to be supportive. The AAT held that cases cited in supportSecretary, Department of Family and Community Services and Broadhead [2003] AATA 663, Adams and Secretary, Department of Family and Community Services [2004] AATA 846 and Duncan and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 943 involved instances where the person felt that their job was under threat and they were under financial pressure to resign. The AAT held that the test to be applied is an objective one, namely, whether it was objectively reasonable for the employee to voluntarily end their employment, taking into account their state of mind at the time. The AAT held that, in this case, the job was suitable and that the resignation was not ‘reasonable’ within s.42S.

Can the non-payment period end early?

Under s.42S (4) of the Administration Act the Secretary can end a person’s unemployment NPP early if it would cause the person severe financial hardship, and the person is in a class of persons specified in the relevant legislative instrument.

4 Specification of classes of persons

(1) For paragraph 42S (4) (b) of the Act, the following classes of persons are specified:

(a) persons who have significant f a m i l y a n d c a r i n g responsibilities, including persons with a dependent child;

(b) persons who have an illness, impairment or condition that requires treatment, and who cannot afford the treatment after meeting their essential expenses;

(c) persons who have a cognitive, neurological, psychiatric or psychological impairment or mental illness that has been established by medical evidence;

(d) persons who do not have access to safe, secure and adequate housing, or are using emergency accommodation or a refuge.

(2) Without limiting paragraph (1) (d), a person is taken not to have access to safe, secure and adequate housing if:

(a) the housing to which the person has access:

(i) damages, or is likely to damage, the person’s health; or

(ii) threatens or is likely to threaten the person’s safety; or

(iii) does not provide the person with access to a reasonable level of personal amenities or the economic and social support that housing normally affords; or

(b) in the circumstances, the adequacy, safety, security or affordability of the housing to which the person has access is adversely affected or may be adversely affected; or

(c) the person does not have a right to remain, or a reasonable expectation of being able to remain, in the housing to which the person has access.

The AAT accepted that Starks would experience severe financial hardship but, although her husband suffered from poor health, her caring responsibilities were not ‘significant’. The AAT held that, although Starks had to defer her housing loan repayments for three months, there was no evidence to show that the NPP would adversely affect the security or affordability of the housing to which Starks had access.

Date of effect

The start date of the NPP would ordinarily be the date the employment ceased. But Starks had sought a review and had not served any part of the NPP. The Department argued that the NPP should start from the first instalment following the receipt of the AAT decision. The AAT held from the terms of ss.142 and 188 of the Administration Act that the Stay Order imposed pursuant to s. 41(2) of the AAT Act stayed the original decision as affirmed by the ARO. Subject to the operation of s.43(5C) of the AAT Act, the coming into operation of this decision brought to an end the stay on the original decision as affirmed by the ARO which, having regard to the dates of the non-payment period, would result in a debt being raised for the NSA paid to Starks during the appeal period. This was consistent with the approach taken by the Tribunal in Secretary, Department of Education, Employment and Workplace Relations and Kliszka [2011] AATA 58.

Decision

The decision under review was affirmed.

[M.R.]