Bender and Department of Family and Community Services [1999] AATA 119 (8 March 1999)

Last Updated: 9 March 1999

Administrative

Appeals

Tribunal

DECISION AND REASONS FOR DECISION [1999] AATA 119

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q98/772

GENERAL ADMINISTRATIVE DIVISION )

Re ROBERT BENDER

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Dr EK Christie, Member

Date 8 March 1999

Place Brisbane

Decision The Tribunal sets aside the decision under review and in substitution therefor decides that an 18% reduction to the applicant's newstart allowance should not have been applied.

(Sgd) EK CHRISTIE

MEMBER

CATCHWORDS

SOCIAL SECURITY - newstart allowance - whether applicant's voluntary act of leaving employment was reasonable - whether activity test breach rate reduction applicable - meaning of "reasonable"..

Social Security Act 1991 s 628

REASONS FOR DECISION

8 March 1999 Dr EK Christie

1. This is an application by Robert Bender to review a decision of the Social Security Appeals Tribunal ("the SSAT") made on 7 July 1998. The SSAT affirmed the decision made by an Authorised Review Officer on 25 May 1998. This decision affirmed the previous decision of a Commonwealth Services Delivery Agency (Centrelink) delegate of the Secretary to the Department of Social Security on 14 April 1998:

* to impose a rate reduction of 18% to newstart allowance in respect of an activity test breach.

2. The evidence before the Tribunal comprised the documents lodged pursuant to Section 37 of the Administrative Appeals Tribunal Act 1975, the "T" Documents.

3. At the hearing the applicant represented himself. He gave evidence by conference telephone from Tennant Creek. The Department of Family and Community Services ("the Department") was represented by Mr S Letch, a Departmental Advocate.

Issues before the Tribunal

4. The only issue for the Tribunal to decide was whether it was reasonable for Mr Bender to have ceased his employment at the Tennant Creek Hotel on 12 December 1997 i.e. whether Mr Bender's unemployment was due to an act which was unreasonable.

Facts

5. The general facts were not in dispute and may be stated briefly. Mr Bender took up a cleaning job at the Tennant Creek Hotel from 8 December 1997.

6. The hours associated with the cleaning job were not as many as anticipated by Mr Bender and he left the position on 12 December 1997.

7. Mr Bender subsequently applied for and was granted newstart allowance ("NSA") from 26 December 1997. Centrelink ultimately considered his resignation to constitute a first activity test breach so that an 18% rate reduction to NSA was imposed.

8. Mr Bender was born on 31 January 1948. At the time of the hearing he was aged 53.

Evidence of Robert Bender

9. Mr Bender arrived in Australia from England in 1972. From 1973 to 1986 he had been employed by Telstra, more or less continuously, as a telephone installer. After 1986 he had mainly been employed in cleaning, maintenance and catering at mine sites in Western Australia, South Australia and the Northern Territory.

10. In more recent years he had been employed in cleaning and maintenance and as a handyman/gardener in hotels, motels and at mine sites. He estimates that he had been employed for 75-80% of the time he had been in Australia. He had never been sacked from employment over time.

11. Mr Bender endorsed the following findings of the SSAT (Document T2, Folio 17 paragraph 17):-

"a) Mr Bender started work at the Tennant Creek Hotel 8 December 1997;

(b) Mr Bender ceased work at the Tennant Creek Hotel on 12 December 1997;

(c) Mr Bender's reason for ceasing work was that he was dissatisfied with the reduced number of hours available to him on 12 December 1997 when the owner allowed a friend to do some of the work previously allocated to Mr Bender;

(d) the licensee told Mr Bender that the situation might be repeated and that he might arrive at work to find out that his work for the day had already been completed;

(e) Mr Bender could have continued to work at the Hotel, possibly with reduced hours, until such time as he found other work;

(f) Mr Bender had not previously been subject to an activity test breach rate reduction period."

12. Mr Bender said that he had been employed by the licensee of the Tennant Creek Hotel under an oral agreement upon which his hours of employment were defined. Mr Bender told the Tribunal that oral agreements for work were the normal practice in a small town stating that his current employment agreement with the NT Police at Katherine was also an oral agreement.

13. Mr Bender said that, based on his oral agreement, he had expected to work at the Tennant Creek Hotel for seven days a week for around 35 hours.

14. Mr Bender said that although he was employed by the licensee, he worked for the Hotel Manager. Mr Bender said that when he arrived at the Hotel to find his allocated work already done by someone else, the response he received from the Hotel Manager was that he was unaware who had one the work - or that it had been done.

15. Mr Bender said that he could not then obtain a "concrete statement" from the licensee that his work hours would be guaranteed. Consequently, he sought a guarantee from the Manager that the work would only be done by him.

16. During cross-examination, the Departmental Advocate put the proposition to Mr Bender that it would have been reasonable for him to stay employed at the Hotel whilst looking for alternative work. Mr Bender responded that as neither the licensee nor the hotel manager could give him a direct answer on his guaranteed hours of work, for him to then remain in this job would represent an "intolerable situation". In addition, the hotel owner lived in Italy and consequently was not contacted by Mr Bender to resolve the problem.

17. A further proposition put to Mr Bender in cross-examination was whether paid employment was better than to have no job at all. Mr Bender stated that without any guarantee of his hours of work, he may have found himself employed for such a short time his wages could be less than a social security entitlement.

18. A final question asked of Mr Bender in cross-examination was whether it was unreasonable on his part to have resigned on the first occasion the issue arose. Mr Bender responded by asking whether the Department had some threshold for the number of times a problem arose before it would be acceptable for a person to resign.

19. In re-examination, Mr Bender told the Tribunal that because he lived in a small town, he did not want his work ethic unblemished. Over time he had acquired a good reputation for his cleaning work. His cleaning and maintenance work in the hotel would be judged by the hotel customers who might be unaware that the cleaning on any one day was done by an "alternative cleaner" and so form a misconception on the standard of his work - especially if it were poor and had not been done by him.

20. Mr Bender told the Tribunal the population of Tennant Creek was 3,000-3,500.

Contentions and Submissions of the Parties

21. Mr Letch submitted that, under the Act, a person wishing to qualify for Newstart Allowance must be available and willing to work where the work is suitable for them to do. This definition applied to both part-time and casual work.

22. Mr Letch contended that it was not reasonable for Mr Bender to resign his employment at the Tennant Creek Hotel because:

* work he expected to do was done by another person; and

* the failure of his employer to give an undertaking guaranteeing future work arrangements.

23. Mr Letch contended that there were options for Mr Bender to pursue if he were dissatisfied with his employment conditions, other than to resign and seek income support from the Government. These included:

* to continue working and to look for alternative employment; and

* to negotiate further with his employer over working arrangements.

24. The Departmental Advocate submitted that it was not reasonable for Mr Bender to expect payment of Newstart Allowance simply because he was dissatisfied with his working arrangements. He contended that if suitable paid work was available, an activity test penalty should apply where a person resigns without a sufficient reason i.e. Mr Bender's case.

25. Accordingly, he contended that as Mr Bender's resignation from his cleaning job at the Tennant Creek Hotel on 12 December 1997 was not reasonable, the SSAT decision should be affirmed.

26. Mr Bender referred to the actions of the licensee and manager. Specifically, they were unable to give him a guarantee as to the hours of employment he had negotiated with the licensee prior to commencing work. He contended that his employer - rather than himself, was being "unreasonable".

27. Mr Bender submitted that the issue was not simply about a reduction in work hours. At the heart of his resignation was his commitment to his job as a cleaner at the hotel, when he lived and worked in a small town.

28. Mr Bender submitted that where someone else did your cleaning job, and the work was done incorrectly, the townspeople would not know who was responsible. The nature and quality of his work could be assessed visually. However, they would know that he was a cleaner at that hotel. Accordingly, it was his contention that the townspeople would remember this and in turn, this would affect his possible employment prospects. Furthermore, his work reputation in a small town would suffer.

29. Mr Bender's concluding submission was that because his work reputation as a cleaner was at stake he decided he could not carry on and resigned his employment at the Tennant Creek Hotel.

The Law

30. Where a person becomes unemployed due to a voluntary act, the Social Security Act 1991 ["the Act"] provides for certain penalties to be imposed. The penalty is described at Section 628 of the Act as "activity test reduction".

"SECTION 628 UNEMPLOYMENT DUE TO VOLUNTARY ACT

628. If:

(a) a person's unemployment is due, either directly or indirectly, to a voluntary act of the person (the "voluntary act"); and

(b) the Secretary is not satisfied that the person's voluntary act was reasonable:

then:

(c) if the voluntary act is the person's first or second activity test breach in the 2 years immediately before the day after the voluntary act - an activity test breach rate reduction period applies to the person; or

(d) if the voluntary act is the person's third or subsequent activity test breach in the 2 years immediately before the day after the voluntary act - an activity test non-payment period applies to the person."

31. The parties agreed that the question of Mr Bender's unemployment as being a "voluntary act" was not in issue.

32. Accordingly, in Mr Bender's case, before an activity test rate reduction can be applied, consideration must be given to whether his voluntary act of becoming unemployed was "reasonable".

Consideration of the Issues

33. The objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times.

34. The Tribunal makes the following findings on the evidence before it:-

* that Mr Bender had negotiated his hours of employment with the licensee of the Tennant Creek Hotel, relying on an oral agreement;

* attempts by Mr Bender to obtain some guarantee of the employment hours agreed to were unsuccessful. The problem of employment hours could not be resolved with either the hotel licensee or manager;

* since 1986 Mr Bender's main employment had been in general maintenance as a cleaner/handyman at remote mining sites and at hotels and motels in inland Australia;

* Mr Bender had a commitment to his work and to maintain his reputation for the standard of his work;

* Mr Bender is aged 54. His work skills are primarily in the area of cleaning and general maintenance.

35. The Tribunal makes the further observation that in deciding whether the voluntary act of his resignation was reasonable, the above findings must be considered in the context of their impacts, given that he lives and works in a small, remote Australian town.

36. Accordingly, the Tribunal concludes that in Mr Bender's circumstances, perceptions of his standard of work - especially if it were unsatisfactory and had been performed by a hotel employee other than Mr Bender and through no fault of Mr Bender, could adversely affect his future employment and his work reputation as a cleaner in a small town. The Tribunal agrees with the submission of Mr Bender on the need to protect his reputation. Given Mr Bender's age and work skills, this need is a significant consideration.

37. The Shorter Oxford English Dictionary defines "reasonable" as:

"3. Agreeable to reason; not irrational, absurd or ridiculous."

38. The Tribunal considers its findings are consistent with the plain meaning of "reasonable".

39. Accordingly, the Tribunal concludes that for all the above reasons, Mr Bender's unemployment was not due to an act which was unreasonable.

40. The Tribunal sets aside the decision under review and in substitution therefor decides that an 18% reduction to Mr Bender's newstart allowance should not have been applied.

I certify that this and the 8 preceding pages are a true copy of the decision and reasons for decision herein of Dr EK Christie, Member.

Signed: Susan Gray

Associate

Date/s of Hearing 21.1.99

Date of Decision 8.3.99

Counsel for the Applicant

Solicitor for Applicant Applicant in Person

Counsel for the Respondent

Solicitor for the Respondent Mr S Letch, Departmental Advocate