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Kliszka; Secretary, Department of Education, Employment and Workplace Relations and [2011] AATA 56 (4 February 2011)

Last Updated: 4 February 2011

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 56

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2010/1414

GENERAL ADMINISTRATIVE DIVISION
)

Re
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Applicant
And
JAN KLISZKA

Respondent

DECISION

Tribunal
Senior Member R W Dunne

Date 4 February 2011

Place Adelaide

Decision
The Tribunal sets aside the decision under review.

..............................................
R W DUNNE
(Senior Member)

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – respondent’s employment terminated – respondent applied for Newstart Allowance – applicant decided that respondent became unemployed due to misconduct as employee – 8 week non-payment period imposed on Newstart Allowance – respondent refused to work reasonable amount of overtime – whether respondent’s refusal to work reasonable overtime amounts to misconduct – whether respondent in severe financial hardship – decision under review set aside.
Social Security Act 1991 (Cth) s 14A(1) and (7)
Social Security (Administration) Act 1999 (Cth) ss 42B, 42S

Social Security (Administration) (Ending Unemployment Non-payment Periods – Classes of Persons) (DWEER) Specification 2009 (No 1), s 4
MacPherson v Coal & Allied Mining Services Pty Ltd (No 2) [2009] FMCA 881
Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 2 ALD 60
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
North v Television Corporation Limited (1976) 11 ALR 599
Re Secretary, Department of Employment and Workplace Relations and Payne [2007] AATA 1745
Re Secretary, Department of Family and Community Services and Foley [2002] AATA 626
Re Secretary, Department of Family and Community Services and Broadhead [2003] AATA 663
Re Adams and Secretary, Department of Family and Community Services [2004] AATA 846


REASONS FOR DECISION


4 February 2011
Senior Member R W Dunne

INTRODUCTION

  1. The respondent (Jan Kliszka) commenced employment with Seeley International SA (“Seeley”) on 7 May 2007 as a technician on the assembly line, until the termination of his employment on 21 December 2009. Seeley completed an employment separation certificate, dated 6 January 2010, in relation to Mr Kliszka in which it is recorded that his employment was terminated due to misconduct because he “refused to work reasonable overtime”. After an investigation into the circumstances of the termination, an officer of the applicant (“Centrelink”) decided that Mr Kliszka became unemployed due to his misconduct as an employee, and so imposed an 8 week non-payment period on his Newstart Allowance. Mr Kliszka appealed to the Social Security Appeals Tribunal (“SSAT”), which set aside Centrelink’s decision and held that an 8 week non-payment period should not be applied on his Newstart Allowance. Centrelink has applied to this Tribunal for review of the decision of the SSAT.
  2. At the hearing before me, Ms T Birss appeared for Centrelink and Ms M Riley (from Welfare Rights Centre) appeared for the respondent. I received into evidence the T documents (Exhibit A1) and the supplementary T documents (Exhibit A2) lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975, together with the following exhibits:

ISSUES FOR THE TRIBUNAL

  1. The issues before the Tribunal are as follows:

(a) Was the respondent’s employment terminated as a result of his misconduct as an employee?

(b) Is the respondent’s Newstart Allowance subject to an 8 week non-payment period due to his misconduct?

(c) If the termination of the respondent’s employment is due to his misconduct, are there grounds to waive the 8 week non-payment period?

LEGISLATION

  1. The principal legislation that is relevant in this case is contained in s 42S of the Social Security (Administration) Act 1999 (“Administration Act”), which reads:
“42S Unemployment resulting from a voluntary act or misconduct
         (1)  A participation payment is not payable to a person for the period mentioned in subsection (3) if the Secretary determines that:
                     (a)  the person is unemployed as a result (whether direct or indirect) of a voluntary act of the person; or
                     (b)  the person is unemployed as a result of the person's misconduct as an employee.
Note: The Secretary may continue the participation payment pending the outcome of an application for review (see sections 131 and 145 of the Administration Act).
Limitations on determination
        (2)  Despite paragraph (1)(a), the Secretary must not make a determination under that paragraph if the Secretary is satisfied that the voluntary act was reasonable.
Period of non-payment
   (3)  The participation payment is not payable to the person for the period (the unemployment non-payment period ) of 8 weeks beginning on:
                     (a)  the day that the person becomes unemployed as a result of the person's voluntary act or misconduct; or
                     (b)  if the person is receiving a participation payment at the time of the voluntary act or misconduct--the first day of the first instalment period that begins after the day the Secretary makes the determination, if the Secretary considers that day is more appropriate than the day mentioned in paragraph (a).
Note 1:The Secretary may end an unemployment non-payment period under subsection (4).
Note 2: For the day the Secretary makes the determination, see section 42Y.
Ending unemployment non-payment periods
(4)  The Secretary may end a person's unemployment non-payment period if:
                     (a)  the Secretary determines that serving the unemployment non-payment period would cause the person to be in severe financial hardship; and
                 (b)  the person is in a class of persons specified by legislative instrument under subsection (5).
Note: For in severe financial hardship see subsection 14A(7) of the 1991 Act.
    (5)  For the purposes of subsection (4), the Secretary may, by legislative instrument, specify a class of persons.”

  1. Subsections 14A(1) and (7) of the Social Security Act 1991 (“Act”) have the effect that, for the purposes of s 42S of the Administration Act, a person is “in severe financial hardship” if the value of the person’s liquid assets does not exceed $2,500 (for a single person who does not have a dependant child), or in any other case, $5,000.
  2. The Secretary has made a legislative instrument under s 42S(5), which specifies classes of persons for the purposes of paragraph 42S(4)(b). That legislative instrument is Social Security (Administration) (Ending Unemployment Non-payment Periods – Classes of Persons) (DEEWR) Specification 2009 (No 1). Section 4 of that Specification reads:
“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 family and caring 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.”

BACKGROUND

  1. The background facts in this case are not in dispute. Mr Kliszka is 55 years of age and is of Polish descent. He speaks and understands English in the context of the workplace. He was employed with Seeley on a permanent full-time basis, his usual working hours being 7:00am to 3:30pm, Monday to Friday. Seeley is a manufacturer of evaporative air-conditioning units and its business is seasonal. When Mr Kliszka commenced employment with Seeley, the Seeley International SA Enterprise Agreement, 2006 (“2006 Enterprise Agreement”) was operative, having been certified by the South Australian Industrial Relations Commission on 24 March 2006. Until May 2009, the 2006 Enterprise Agreement governed the terms and conditions of Mr Kliszka’s employment with Seeley.
  2. In June 2009, Seeley negotiated a new Enterprise Agreement (“2009 Enterprise Agreement”) with its employees. The 2009 Enterprise Agreement was lodged with and subsequently approved by the Workplace Authority on 5 May 2009. Mr Kliszka failed to work on Saturday, 12 December 2009 and, on 14 December 2009, was issued with a written warning by Seeley (Exhibit R3). In its terms, the warning indicated that Mr Kliszka had been advised that he was required to work Saturday, 19 December 2009 and that if he did not work on that day he would be instantly dismissed on Monday, 21 December 2009. Mr Kliszka failed to work on Saturday, 19 December 2009 and, on 21 December 2009, his employment with Seeley was terminated.

EVIDENCE

Evidence of Richard Holland

  1. Mr Holland is employed by Seeley as General Manager, Human Resources. He is familiar with the respondent’s history of employment with Seeley and the circumstances in which that employment was terminated. He referred to the 2006 Enterprise Agreement (Exhibit A2), which had been approved by a majority of Seeley employees. Clause 6.10.3 of the 2006 Enterprise Agreement provided that employees may be required to work a reasonable amount of overtime, depending on their own personal circumstances. Clause 17.3 provided that Seeley would endeavour to give employees 48 hours notice of the requirement to work weekends. Little overtime had been worked on weekends before May 2009. Clause 14.2 made provision for the banking of overtime. Under these arrangements, the banked hours would be taken as paid leave on days during the quiet production period.
  2. Mr Holland referred to the 2009 Enterprise Agreement (Exhibit A1, T8). This Agreement had been negotiated by employee representatives and Seeley management at various meetings. Clause 6.10.3 of this Agreement again provided that employees may be required to work a reasonable amount of overtime. However, under clause 17.9.1 of the 2009 Enterprise Agreement, the first 50.7 hours of overtime worked each year would be banked, at the rate of 1.5 hours for each hour worked, instead of being paid, and was intended to cover potential stand-downs. The banked arrangement was a sticking point, but 70 percent of employees voted in favour of the 2009 Enterprise Agreement, which was approved by the Workplace Authority. The respondent was involved in the voting procedure by employees. The intention of the banked overtime clauses was to ensure that there were sufficient employees available at times of high demand for Seeley’s products, and to provide a “safety net” for workers who may otherwise be stood-down without pay in quieter times. Mr Holland said that, since 10 October 2009, more than seven Saturdays had been involved with overtime work and the respondent had not volunteered for or undertaken overtime on any of those Saturdays. In December 2009, Seeley experienced record demand and, as a result, overtime shifts were scheduled. In his witness statement (at paragraphs 10 and 14) Mr Holland said:
“10. ... We at first would ask for volunteers from the permanent workforce; if there were insufficient numbers for the proposed overtime, the relevant line manager would ask employees to work. We understand that on occasion employees may have other commitments on the particular day, and we attempt to accommodate that, but there is a general expectation that employees will be required to undertake a certain amount of overtime.
...
14. When advised of the requirement to work overtime, Mr Kliszka refused to work overtime. He was previously known by his managers to have a disinclination to work overtime under the arrangements contained in the Enterprise Agreement. He was reminded of the terms of the Enterprise Agreement, namely that he could be required to work reasonable overtime. Mr Kliszka’s response was ‘this is not a concentration camp’ and ‘there should be laws against working Saturdays in Australia’.
...”

  1. On 2 December 2009, the Seeley General Manager Operations, Mr Grieto Lukje, verbally advised the respondent that he would be required to work six hours overtime on Saturday, 12 December 2009. This direction to work overtime complied with the relevant provisions of the 2009 Enterprise Agreement. Mr Kliszka was advised that, if he did not comply with the requirement to work overtime on 12 December 2009, he would be issued with a formal warning. If he subsequently refused a similar request, his employment would be terminated. Mr Kliszka did not present himself for the overtime shift on 12 December 2009. Other employees who had been advised of the requirement to work overtime on that day did attend and completed the shift. On 14 December 2009, he was given a written warning for his non-attendance on 12 December 2009. He acknowledged receipt of the warning by signing the “Disciplinary Advice” (Exhibit R3). On 14 December 2009, Mr Kliszka was advised that he would be required to work six hours overtime on Saturday, 19 December 2009. He did not present himself for the overtime shift on that day. On Monday, 21 December 2009, he was asked if there was any reason for not presenting for the overtime shift. He offered no explanation, other than his refusal to work any overtime. His employment with Seeley was then terminated.
  2. Mr Holland said that, since the 2009 Enterprise Agreement was concluded, Seeley had had its first season of quieter demand and the company reverted to three or four day weeks for a period of time. He said the vast majority of employees acknowledged the advantage that banking overtime gave them and that they were able to maintain their regular weekly pay when working shorter weeks.
  3. In cross-examination by Ms Riley, Mr Holland said that overtime on Saturdays was also available to casual employees. However, preference was given to permanent employees (clause 6.10.3 of the 2009 Enterprise Agreement). The number of casual employees who worked on Saturdays could vary each week. He was questioned about Mr Grant Batty, who had only worked overtime on one or two Saturdays between October 2009 and December 2009. Mr Holland said that the respondent was the only employee who had refused to work any Saturday during this period. He said that the respondent would have had no difficulty in understanding the requirement that he work on Saturdays when he was requested to do so. He had no language difficulty with the directions that were given to him.

Evidence of Linda Martin

  1. Ms Martin is employed by Seeley as an assembly manager. She was Mr Kliszka’s assembly manager and is familiar with his employment history with Seeley and the circumstances under which he was dismissed. She had three team leaders responsible to her, including Chris Szymanski, who was Mr Kliszka’s team leader. Mr Kliszka spoke reasonable English and, like Mr Szymanski, was Polish. Mr Szymanski had been present with her when she had discussed the Saturday overtime issue with Mr Kliszka. The discussion to work on Saturdays would have taken place during the week before 2 December 2009, but he had refused. In the working year commencing October 2009, he had been asked on several occasions by Ms Martin and Mr Szymanski to work a Saturday overtime shift. In her witness statement (at paragraphs 9 and 10) she said:
“9. ... Chris Szymanski and I had a spreadsheet which detailed the employees hours and when they were requested to do overtime. Chris Szymanski showed me the spreadsheet detailing that Mr Kliszka had been asked to work a Saturday overtime shift several times and had refused on each occasion.
  1. Mr Kliszka’s refusal to work overtime became a discussion topic with quite a few of the other Technicians, as he was the only employee who had refused on each occasion to work a Saturday overtime shift.”
  2. Ms Martin said the requests she made of Mr Kliszka to work overtime on Saturdays were reasonable. She had only asked him to work one out of three Saturdays, when overtime on four Saturdays was normally required of FEAC employees.
  3. Later in her witness statement, Ms Martin said (at paragraphs 11-12):
“11. In December 2009, we experienced a very busy period at Seeley. As a result, Saturday overtime shifts were required to cope with the workload.
12. On 2 December 2009, Grieto Lukje, General Manager Operations, advised Mr Kliszka that he would be required to work 6 hours overtime on Saturday 12 December 2009. This was during a counselling session with Mr Kliszka which I was present at. Mr Kliszka was advised that if he did not comply with the requirement to work overtime on 12 December 2009 he would be issued with a formal warning. If he subsequently refused a similar request he would be dismissed.”

  1. At the meeting that took place with Mr Szymanski on 14 December 2009, Mr Kliszka was warned that he would be dismissed if he did not work overtime on Saturday, 19 December 2009. He said he would not do any overtime on a Saturday. She said in her witness statement (at paragraphs 16-17):
“16. ... I recall having a discussion with Mr Kliszka, telling him that all his managers were happy with his work and the only problem was his refusal to work reasonable overtime. I said that if he just worked one in three Saturdays, he would not lose his job. He had received a written warning and he was aware if he did not turn up for another overtime shift, he would be dismissed.
17. On 18 December 2009 I counselled him again regarding the requirement to work overtime the following day. He was reminded that having already been given a warning for not presenting for the overtime on 12 December 2009, he would be dismissed if he did not present for overtime on 19 December 2009 without a reasonable excuse.”

  1. When cross-examined by Ms Riley about the counselling session on 14 December 2009, Ms Martin said that Mr Kliszka understood the reason why he was required to work overtime on Saturdays. She said that he could have had someone present from the consultative committee if he had required support at the session.

Evidence of Mr Kliszka

  1. Mr Kliszka’s evidence was that he started at Seeley as a casual employee in 2006, and became a permanent employee in 2007. He worked approximately 40 hours per week, which he thought included paid overtime. However, he found that this work included two hours overtime each day which was banked and used for rostered days off. He said all the workers on the assembly line did the same work and he was not a “leading hand”. Other workers would have enough work on Saturdays if he did not work. They would be upset if he did work on Saturdays because many worked every day. The assembly line comprised five workers. They worked slower on Saturdays because there was only one assembly line on those days.
  2. As to work on Saturdays, volunteers were used first. Other workers were asked to work a few days before and some on Fridays. In his case, in 2009, he was not asked to work on 10 October 2009 and 24 October 2009, but was asked to work on 28 November 2009. Problems occurred in December when overtime was required, but other workers were not upset having to work on Saturdays. He could not remember whether overtime on Saturdays was required in early 2009, but he was told by Linda Martin that he had to work three Saturdays for the year. As to other requirements for overtime on Saturdays, he was asked to work on 5 December 2009. He was not directed to work on 12 December 2009, but was told by Ms Martin that he must work on that day.
  3. Mr Kliszka reiterated that he did not want to work on Saturdays. When he came to Australia in 1983, he met two friends from Poland and they regularly play golf together on a Saturday. They play golf with another Polish friend, as a foursome, about every third week and an extra weekend if one of the group has a birthday. One of the group had a birthday on 28 November, and another had a birthday on 19 December. He was told he must work on 12 December and would have done so if he had been asked normally.
  4. Mr Kliszka said that he had only received one verbal warning from Linda Martin. He received the first and final warning and the Disciplinary Advice from Ms Martin and Mr Szymanski, but he did not ask about having a witness present at the meeting. He did not believe that his employment would be terminated as a result of his refusal to work on Saturdays. He did not tell Ms Martin or Mr Szymanski that he wanted to play golf on Saturdays. He said he did not sign the 2009 Enterprise Agreement and was told the Seeley plant would shut down if employees did not sign the Agreement. He said he was told on 21 December 2009 that he was no longer working. He said he was told by Ms Martin that he would not be paid his holiday pay. He made an application for unfair dismissal to the Industrial Relations Commission, but was unassisted and the application was out of time. He is currently unemployed and has had to access his superannuation and the drawdown facility on his mortgage to make ends meet.
  5. In cross-examination by Ms Birss, Mr Kliszka said that, if fewer assembly line workers were working on Saturdays, others would come from other places and would work. When he was referred to the Disciplinary Advice (Exhibit R3), he said he had signed the document because he was told to do so. He said he had worked Saturdays in other companies when asked to work and had engaged in voluntary overtime before which would be banked.
  6. In re-examination, Mr Kliszka said that he had no trouble reading English. When referred to the statement to Centrelink at Exhibit A1, page 28, he admitted that he had signed it, but did not write the statement.

CONSIDERATION

Was the respondent’s employment terminated as a result of his misconduct as an employee?

  1. Because Mr Kliszka’s employment with Seeley was terminated as a result of his misconduct as an employee, this case involves the application of s 42S of the Administration Act and s 14A(7) of the Act. The reason why his employment was terminated, according to the Employment Separation Certificate prepared by Seeley (Exhibit A1, T6, page 27), was because he refused to work reasonable overtime.
  2. It is appropriate, at the outset, that I consider and make findings of fact relating to the relevant Enterprise Agreements under which Mr Kliszka was employed whilst with Seeley. When he commenced working as a permanent full-time employee on 7 May 2007, his employment was governed by the 2006 Enterprise Agreement. Under that Agreement, he was contracted to work an average of 38 hours per week, which was referred to as “Full Time Employment” (clause 6.1). He was to be paid his wages on the basis of a 38 hour week and all calculations for overtime and penalty rates were to be on that same basis (clause 9.1). Employees may be required to work a reasonable amount of overtime (clause 6.10.3). All hours worked in excess of ordinary hours were deemed to be overtime (clause 17.1). All overtime hours would be paid for at the rate of time and a half for the first three hours and double time thereafter on each occasion overtime was worked (clause 17.2). Seeley had to endeavour to give employees 48 hours notice of the requirement to work weekends. Where less than 36 hours notice was given, double time would apply at the commencement of overtime.
  3. A bankable hours arrangement applied to most employees covered by the 2006 Enterprise Agreement, including Mr Kliszka. One additional hour per day was to be worked and banked during summer, usually October to April each year, and taken as time in lieu during winter (clause 14.2.2). Employees would be paid for normal standard 7.6 hour days throughout the year. A rostered day off (“RDO”) would apply during the four week work cycle. Twelve RDOs would be taken during the twelve month period. Accruals for the RDOs would be 0.4 hours per day.
  4. When the 2009 Enterprise Agreement commenced in or around June 2009, Mr Kliszka’s employment was governed by that Agreement. The provisions of that Agreement are the same as (or similar to) those in the 2006 Enterprise Agreement, but the main differences involve the absence of the bankable hours arrangement and the inclusion of a banked overtime provision. Under this latter provision, instead of overtime being paid, as was the case under the 2006 Enterprise Agreement, the first 50.7 hours of overtime worked each year ending 30 September would be banked at the rate of 1.5 hours for each hour worked, and a maximum of 76 hours would be banked per employee per year. After the 50.7 hours cap was reached, overtime would be paid at the normal rates (time and a half for the first three hours and double time thereafter) on each occasion overtime was worked. The banked hours were intended to cover potential stand-downs, but could be used for any other purpose, subject to approval (clause 17.9.4).
  5. It was Ms Riley’s contention that Mr Kliszka worked from 7:00am to 3:30pm each day and this included overtime “each and every Monday to Friday”. It followed that she contended his timecard (Exhibit R1) recorded 2 hours overtime each week. I am unable to accept these contentions. Under the Enterprise Agreements, Mr Kliszka was required to work a 38 hour week, which comprised normal standard 7.6 hour days and accruals of 0.4 hours per day for RDOs. This equated to 8 hours per day or 40 hours per week and no overtime at all was recorded on Mr Kliszka’s timecard. He believed he was working 2 hours overtime each week, but he was working a 40 hour week, including accruals for RDOs, which is what he was contracted to do with Seeley. In fact, he did not work any overtime, Monday to Friday.
  6. In relation to overtime on weekends, on the evidence, Mr Kliszka was aware that assembly line employees may be required to work a reasonable amount of overtime. Although he may not have “signed” the 2009 Enterprise Agreement, it had been approved by the Workplace Authority (Exhibit A4) and he was bound by its terms. He had been asked by Ms Martin and Mr Szymanski on several occasions to work overtime on Saturdays, but had refused on each occasion. He had also been asked by Ms Martin to work overtime on one out of three Saturdays, when overtime for four Saturdays was normally required from other assembly line employees. He could understand and read English, so it could not be said that he did not understand the requests or directions about overtime that had been made.
  7. When the busy period in Seeley’s business was experienced late in 2009, Mr Kliszka was advised by Mr Lukje (on 2 December 2009) that he would be required to work 6 hours overtime on Saturday, 12 December 2009. This took place at a counselling session at which Ms Martin was also present. He was advised that, if he did not comply with the requirement to work overtime on 12 December 2009, he would be issued with a formal warning, and that if he subsequently refused a similar request he would be dismissed. Mr Kliszka had refused to work on Saturdays and he failed to attend the overtime shift on 12 December 2009. On 14 December 2009, he was given a first and final written warning for failing to work overtime on 12 December 2009, which he signed. On 14 December 2009, he was advised that he would be required to work 6 hours overtime on Saturday, 19 December 2009. He failed to present for overtime on that day. On Monday, 21 December 2009 his employment was terminated.
  8. Mr Kliszka had been required to work 6 hours overtime on certain Saturdays in December 2009. This requirement was, in my view, reasonable. In MacPherson v Coal & Allied Mining Services Pty Ltd (No 2) [2009] FMCA 881, Federal Magistrate Raphael had to consider the issue of reasonable additional hours work under s 226(4) of the Workplace Relations Act 1996. He found a lack of evidence that an additional 6 hours over the 38 hour norm was not reasonable. Applying the factors in s 226(4) to Mr Kliszka’s case, there was no health and safety risk to him in working the additional hours on Saturdays, his personal circumstances were that he wanted to play golf with friends instead of working, Seeley’s operational requirements when business became busy required him to work on occasional Saturdays and he had clear notice of the requirement to work the additional hours. Similar provisions to those in s 226(4) are contained in subsections 62(2) and (3) of the Fair Work Act 2009. Having regard also to the similar factors in s 62(3), the requirement to work additional hours overtime on the relevant Saturdays was, in my view, reasonable. Although Mr Kliszka may have believed he was already working overtime on week days, I find, as a matter of fact, that he was not. Moreover, he was wrong in believing he had the right to refuse to work overtime on Saturdays.
  9. It was Ms Riley’s contention that Mr Kliszka’s refusal to work reasonable overtime, in particular, his refusal to work overtime on Saturdays, falls short of misconduct as an employee and that the circumstances of his dismissal should not enliven the operation of s 42S of the Administration Act to impose an 8 week non-payment period on Mr Kliszka’s Newstart Allowance. In this regard, neither the Act nor the Administration Act contain a definition of the expression “misconduct as an employee”. However, the Guide to the Social Security Law, Centrelink’s policy manual, states at paragraph 1.1.U.40:
“For the purposes of NEWSTART ALLOWANCE and YA, unemployment due to misconduct refers to a situation in which a person contributes to their own unemployment through their own action or inaction at work. A job seeker who has been dismissed for misconduct can incur an 8-week non-payment period from the date of unemployment.
A person is regarded as becoming unemployed through misconduct if they have been dismissed or given the option of resigning, as a result of an action such as:

Although the Tribunal is not bound to apply policy guidelines (Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 2 ALD 60), the Tribunal will usually apply the guidelines unless there are cogent reasons for not doing so (see Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639-645). It was Ms Birss’ contention that Mr Kliszka’s refusal to work overtime on Saturdays amounted to a failure to deliver a reasonable amount of work, constituted an unauthorised absence from duty without good reason and threatened the reputation, viability or profitability of Seeley’s business.

  1. In North v Television Corporation Limited (1976) 11 ALR 599, the judgment of Smithers and Evatt JJ has been referred to as a relevant interpretation of “misconduct” in 629(1)(c), which is the predecessor to s 42S(1)(b) of the Administration Act. At pages 608-609, Smithers and Evatt JJ said:
“It is of assistance to consider the expression ‘misconduct’ by reference to subject matter to which it is related and the context in which it appears. The subject matter is the termination by one party against the will of another of a continuing contract of employment on the ground of breach of one of the terms of the contract. And the context is such as to indicate that certain breaches of a non-serious nature, some of which would be within the connotation of misconduct, are not regarded as grounds for termination. In such a situation it is reasonable to interpret the expression ‘misconduct’ as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment.
...
There was a tendency in argument to treat the terms of the written contract between Pemberton and the respondent as if they were irrelevant to the inquiry arising under cl 10(e). But although a definition of misconduct contained in that contract could not control the meaning of the expression ‘misconduct’ in cl 10(e) of the award, the question as to whether any particular conduct constitutes misconduct within the meaning of cl 10(e) does depend upon the terms of the contract of employment.
Until the terms of the contract are known and identified it is impossible to say whether or not any particular conduct is in breach thereof or is a breach of such gravity or importance as to indicate a rejection or repudiation of the contract.”

  1. In Re Secretary, Department of Employment and Workplace Relations and Payne [2007] AATA 1745, Deputy President Forgie also had to consider the question of “misconduct” in s 629(1)(c) of the Act. At paragraph 61, she said:
“61. I must also direct my attention to the terms of the contract of employment between the employee and the employer in the context of his duties as well as to any reasons given by the employer for the termination of the employment. His conduct must then be considered against a background of the terms of that contract in order to ascertain whether it is improper conduct or wrong behaviour in the context of his employment under that contract. That is not to say that every minor transgression of the contract will necessarily amount to misconduct as a worker. The transgression must be such that, in light of the contract, the nature of the work and any other relevant fact, the conduct is improper conduct. If the contract of employment or relationship between employer and employee leads to the conclusion that it is very important, or perhaps vital, that the employee meet certain standards of behaviour or exhibit certain qualities, those standards and qualities will be relevant in deciding whether a failure to show them amounts to misconduct. It is difficult to see that a mere failure to meet a production quota would come within the description of that sort of conduct. Deliberately taking some sort of action or engaging in some sort of inaction to delay production might conceivably do so. Arriving late for work on one occasion might not but, depending on the context, regular tardiness might amount to misconduct. It may be that a single action or inaction does not amount to misconduct but a combination of actions or inactions does.” (emphasis added)

  1. Ms Riley referred to s 42B of the Administration Act, which reads:
“42B Object of this Division
(1) The object of this Division is to encourage people to participate in employment and engage with employment services. It is also the object of this Division to secure compliance with a person’s obligations and requirements in relation to participation payments, and to ensure that those who do not comply are re-engaged with employment services as quickly as possible.
(2) However, this Division is not intended to punish a person who has a reasonable excuse for failing to comply with such obligations.”

She argued that Mr Kliszka had a reasonable excuse for failing to comply with his obligation to work overtime on Saturdays. I have no discretion to decide whether Mr Kliszka’s conduct was reasonable (see Re Payne in dealing with s 629(1) of the Act, the predecessor to s 42S(1) of the Administration Act). However, I note that, when asked on 21 December 2009 whether there was any reason for him not presenting for overtime on 19 December 2009, he offered no explanation. Had he explained that he had golf commitments on certain Saturdays, his circumstances may have been accommodated. He did not do this. I also note that, in a written statement to Centrelink dated 6 January 2010 (Exhibit A1, T6, page 28) he said:

“I was asked to work on Saturdays, but I didn’t want to because we don’t get paid overtime. I didn’t think I had to work on Saturdays as I worked 38 hours per week already. If they had asked me in a nicer way I would have agreed.”

In his evidence, Mr Kliszka said that he had not written the statement referred to above. However, he could read and understand English and he signed the statement. In the respondent’s statement of facts and contentions (at paragraph 39), Ms Riley asserts that the comments made by Mr Kliszka in the statement show that “he did not react in a considered manner”. I query what Mr Kliszka’s reaction did show, given that he said in his evidence he would have worked overtime on 12 December if he had been asked “normally”.

  1. Ms Riley referred me to decisions of this Tribunal involving conduct that was not considered to be “misconduct” for the purposes of the Administration Act (see Re Secretary, Department of Family and Community Services and Foley [2002] AATA 626, Re Secretary, Department of Family and Community Services and Broadhead [2003] AATA 663 and Re Adams and Secretary, Department of Family and Community Services [2004] AATA 846). Having reviewed these cases, bearing in mind that each case (including the present case of Mr Kliszka) must be considered on its own particular merits, I found the decisions to be of little assistance and I choose not to apply them.
  2. Having regard to the course of events culminating in the termination of his employment, I am satisfied that the termination, and so his being unemployed, was due to Mr Kliszka’s misconduct as an employee.

Is the respondent’s Newstart Allowance subject to an 8 week non-payment period due to his misconduct?

  1. The findings I made above lead me to conclude that the circumstances specified in s 42S(1)(b) have been met. As the Administration Act does not give me any discretion to conclude otherwise, the outcome is that Newstart Allowance was not payable to Mr Kliszka for a period of 8 weeks in accordance with s 42S(3). As Mr Kliszka was not receiving Newstart Allowance at the time he became unemployed, the effect of s 42S(3)(a) is that the 8 week period begins on the day he became unemployed as a result of his misconduct, and so on 21 December 2009.

If the termination of the respondent’s employment is due to his misconduct, are there grounds to waive the 8 week non-payment period?

  1. Ms Riley contended that the “hardship waiver” provisions contained in s 42S(4) of the Administration Act should apply to Mr Kliszka. She argued that Mr Kliszka has had to access his superannuation and the drawdown facility on his mortgage to make ends meet and this has caused him to be in severe financial hardship (within the meaning of that expression in s 4S(4)(a)). I note that, according to ss 14A(1) and (7) of the Act, a person is “in severe financial hardship” if the value of the person’s liquid assets does not exceed $2,500 (for a single person who does not have a dependent child). As I understand Mr Kliszka is a single person and does not have a dependent child, and no evidence has been given as to the value of his liquid assets, I find that he is not in severe financial hardship. In any event, for s 42S(4) to apply, Mr Kliszka must be in severe financial hardship and be in a class of persons specified in Social Security (Administration) (Ending Unemployment Non-payment Periods – Classes of Persons) (DEEWR) Specification 2009 (No 1). Having perused the classes of persons specified in that Specification, I am satisfied that Mr Kliszka was not in that class of persons. On the evidence available to me, he did not have significant family and caring responsibilities, he was not suffering from a medical illness, condition or impairment (other than controlled blood pressure – Exhibit A1, T5, page 24) and (as far as is known) he had access to safe, secure and adequate housing, being a home-owner with a mortgage.

DECISION

  1. For the reasons I have given above, I:

(a) set aside the decision of the SSAT dated 3 March 2010;

(b) substitute a decision that Newstart Allowance was not payable to the respondent for a period of 8 weeks beginning on 21 December 2009 on the basis that he was unemployed as a result of his misconduct as an employee; and

(c) remit the matter to the applicant to calculate the amount (if any) of Newstart Allowance overpaid to the respondent.


I certify that the 41 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member R W Dunne


Signed: ..............J Coulthard.........................................

Associate


Date of Hearing 16 November 2010

Date of Decision 4 February 2011

Counsel for the Applicant Ms T Birss

Solicitor for the Applicant Fox Tucker Lawyers

Advocate for the Respondent Ms M Riley

Solicitor for the Respondent Welfare Rights Centre


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