[2014] FWCFB 2194

The attached document has been amended to correct an error at paragraph [3], “16 January 2014” has been amended to “19 December 2013”.

Nathan Hill

Associate to Vice President Hatcher

Dated 10 April 2014

[2014] FWCFB 2194

FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.604 - Appeal of decisions

Michael King
v
Catholic Education Office Diocese of Parramatta T/A Catholic Education Diocese of Parramatta
(C2013/7604)
Catholic Education Office Diocese of Parramatta T/A Catholic Education Diocese of Parramatta
v
Michael King
(C2013/7781)

VICE PRESIDENT HATCHER
SENIOR DEPUTY PRESIDENT DRAKE
COMMISSIONER BULL

SYDNEY, 10 APRIL 2014

Appeal against decision [2013] FWC 8914 of Deputy President Lawrence at Sydney on 20 November 2013 in matter number U2013/6381.

Introduction

[1] Michael King was employed as a teacher at Patrician Brothers’ College, Blacktown (the College), on 27 January 1976. The College forms part of the Catholic Education Diocese of Parramatta (the Diocese), which was Mr King’s employer. Mr King remained in that employment for a period of 37 years until he was dismissed. The effective date of his dismissal was somewhat unclear, but payment of his salary ceased from 28 January 2013. The letter which informed Mr King of his dismissal, dated 18 December 2012, identified the reasons for his dismissal as follows (emphasis added):

[2] On 6 February 2013 Mr King made an application to the Fair Work Commission for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). That application was heard by Deputy President Lawrence in a hearing which extended over five days on 11-13 September and 8 and 11 October 2013. The Deputy President issued his decision (Decision) on 20 November 2013 1. In the Decision, the Deputy President found there to be a valid reason for the dismissal, found the dismissal nonetheless to be harsh, unjust or unreasonable, declined to order reinstatement as a remedy, and made an order2 (Order) that the Diocese pay Mr King the amount of $41,816 as compensation.

[3] On 10 December 2013 Mr King filed an appeal against the Decision insofar as it involved a refusal to make orders under s.391 of the Act for his reinstatement and for the payment of remuneration which he had lost because of his dismissal. On 19 December 2013 the Diocese filed a cross-appeal against the Decision. Because the cross-appeal was filed after the 21-day time period prescribed by rule 56(2)(a) of the Fair Work Commission Rules 2013, the Diocese requires an extension of time to be granted under rule 56(2)(c). This decision concerns these appeals. Permission to appeal under s.604 of the Act is required in respect of each appeal.

Factual background

[4] As demonstrated by the letter of dismissal, the termination of Mr King’s employment arose out of his conduct in driving students of the College from Western Sydney to and from Bilgola Beach to participate in the activities of the Bilgola Surf Life Saving Club (the Club) in contravention of directions issued by the College. From about 2007 to early 2012, students at the College participated in surf lifesaving training at or in connection with the Club. This activity was initiated and organised by Mr King, initially with the condonation if not the imprimatur of the College. From time to time Mr King drove students in his car to and from lifesaving activities on weekdays out of school hours, and also on some weekends.

[5] The Deputy President made a finding at paragraph [47] of the Decision which was not challenged in the appeals that Mr Santo Passarello, the Principal of the College, issued a direction to Mr King at a meeting in early March 2012 that from then on he was not to have students in his car, and that he should no longer be involved in surf lifesaving activities at the Club with students of the College. The Deputy President found that “Any doubts as to the operative direction was removed later in the week”, and that the directions were re-affirmed at a meeting on 27 April 2012. These further findings were similarly not challenged in the appeals.

[6] The context in which those directions to Mr King were made is important. Notoriously, institutions associated with the Catholic Church in Australia have been the subject of very serious and damaging allegations of child abuse, including sexual abuse, over the last decade and more. The College itself has faced allegations that a number of its teachers had engaged in child sexual abuse in the 1980s. In early 2012 the NSW Police Sex Crimes Squad established Strike Force Avia to investigate these allegations as well as allegations involving another Catholic Primary School. The Diocese was made aware of this. Subsequently several of the teachers were charged with criminal offences, and one of them has pleaded guilty. Information about those matters was provided to parents of students at the College.

[7] Additionally, specific child protection issues had arisen in respect of Mr King. Firstly, in late 2009 an allegation was made by a student that he had been inappropriately touched by Mr King while they were alone at the College. This allegation was investigated by the Diocese and found to be false. However, the incident led to Mr Passarello having to discuss with Mr King the potential risks associated with being alone with students, even for short periods of time. Secondly, in January 2012, the College was advised that a further allegation that Mr King had assaulted and/or interfered with a person who had been a student at the College was being investigated by Strike Force Avia. This caused the Diocese to make a decision at a meeting on 29 February 2012 that the College was to sever any association it had with surf lifesaving, and that Mr King was to be directed that he could not be involved any longer in surf lifesaving activities and could not transport students to and from surf lifesaving activities at the Club. It was this direction which Mr Passarello communicated to Mr King in early March 2012.

[8] On 23 March 2012 Mr King was informed at a meeting about the latest allegation which had been made against him, and instructed that he was stood down on full pay pending the Police investigation of the allegation. At the meeting on 27 April 2012, to which we have earlier referred, Mr King was told that he could return to his normal teaching duties at the College, and it was in that context that the direction concerning his non-involvement in surf lifesaving activities at the Club and transporting students there was re-affirmed. At the meeting Mr Passarello also suggested that Mr King should undergo further one-on-one child protection training, which was subsequently organised. The Police took no further action in relation to the allegation.

[9] The College subsequently became aware that Mr King had not complied with the directions concerning his involvement in surf lifesaving and the transportation of students. The Diocese had been contacted by Strike Force Avia on 20 November 2012 and informed that it was investigating another allegation that Mr King had been witnessed indecently assaulting two students in the late 1980s. Later that day Mr Passarello and Ms Karen Wroughton, who had responsibility for employment relations functions in the Diocese, held a meeting with Mr King to inform him as to what had occurred. Mr King was instructed that he was again stood down on full pay. At a later stage in the meeting Mr King informed Mr Passarello and Ms Wroughton that he had been transporting students to the Club for surf lifesaving, and asked them to contact the parents of students named on a list which he provided to tell them he would not be able to transport the students the next Sunday. The Diocese made contact with parents of students on the list later that day, and at least three parents confirmed that Mr King had been driving their sons to surf lifesaving activities.

[10] Mr King was interviewed at a disciplinary meeting about his continued participation in surf lifesaving activities and transportation of students on 5 December 2012. At this interview he admitted that he had been driving students to surf lifesaving activities, sometimes without a parent present. His explanation for his conduct was that he thought the directions he had been given no longer applied because the College no longer had any link to the surf lifesaving activities. In a finding at paragraph [49] of the Decision which was not challenged in the appeals, the Deputy President rejected this explanation as “disingenuous”. In a further finding at paragraph [50] of the Decision not challenged in the appeals, the Deputy President accepted evidence given by Mr Passarello (and by necessary implication rejected evidence given by Mr King) that Mr Passarello had on 21 September 2012 not given approval for Mr King to participate in further surf lifesaving activities.

[11] At the end of the disciplinary interview on 5 December 2012, Ms Wroughton indicated to Mr King that it was likely that he would be dismissed, but that the decision was to be made by Mr Greg Whitby, the Executive Director of the Diocese. Mr Whitby ultimately made the decision to dismiss Mr King, and he signed the dismissal letter on 18 December 2012. Mr King received the letter on Christmas Eve. Mr King received four week’s pay in lieu of notice upon payment of his salary ceasing from 28 January 2013.

[12] On 5 February 2013 Detective Inspector Paul Jacob of the NSW Police Sex Crimes Squad wrote to Mr King’s union representative to inform him that the investigation into the most recent allegation against Mr King had been completed and was now closed, and no further action was contemplated concerning the allegation. Mr King was never interviewed by Police in relation to the allegation.

The Decision

[13] The Deputy President, after identifying the major facts, summarising the parties’ submissions and reviewing some of the authorities referred to by the parties (including the decision in Rose v Telstra Corporation Ltd 3), considered the question of whether there was a valid reason for Mr King’s dismissal relating to his capacity or conduct as required by s.387(a) of the Act. The Deputy President found that the Diocese and the College had a clearly stated written policy requirement that teachers not transport students in their vehicles absent express permission to do so, that Mr King had breached directions consistent with the policy, and that his explanation for that breach was disingenuous. He concluded on the basis of those findings that Mr King “wilfully disobeyed a clear direction from the employer not to transport students in his own car to surf lifesaving activities”.4

[14] The Deputy President then considered and rejected Mr King’s argument that there was an insufficient connection between the direction and his disobedience thereof and his employment at the College to justify dismissal. The Deputy President’s reasoning was as follows:

[15] The Deputy President concluded that there was a valid reason for the dismissal. 5 He then went on to consider the other matters required to be taken into account under s.387. In relation to paragraphs (b) and (c) of s.387, the Deputy President was critical of the procedures adopted by the Diocese to effect the dismissal, finding among other things that the allegations against Mr King were not sufficiently particularised, the potential consequences for him were not made clear and the meeting with Mr Whitby offered in the dismissal letter never took place. For those reasons the Deputy President concluded that in all the circumstances Mr King had not adequately been notified of the reason for his termination before the decision was taken to dismiss6, and that Mr King had no real opportunity to respond to the reason for dismissal.7

[16] Paragraphs (d), (e) and (f) of s.387 were found not to bear upon the fairness of the dismissal. In relation to paragraph (g), the Deputy President dealt with two matters he considered to be relevant. The first was the length and quality of Mr King’s employment with the College:

[17] The second issue concerned the “influence that events in the general community and the public focus on the College appear to have had on the decision to dismiss”. 8 After describing the evidence concerning the extensive and negative media publicity which the College had attracted because of the sexual abuse allegations against various teachers and the allegations specifically made against Mr King, which we have earlier described, the Deputy President said:

[18] The Deputy President stated that it was for those reasons that he found that the dismissal was harsh, unjust or unreasonable. 9 He then went on to consider whether the remedy of reinstatement should be ordered:

[19] Having determined that it would not be appropriate to order reinstatement, the Deputy President then considered the remedy of compensation. He identified Mr King’s loss in the following way:

[20] The Deputy President then calculated compensation taking into account the matters required under s.392 of the Act and in accordance with the principles stated in Bowden, G v Ottrey Homes Cobram and District Retirement Villages Inc. T/A Ottrey Lodge 10. The amount of compensation ordered was $41,816, which essentially represented 26 weeks pay reduced by the amount of $5,000 on account of Mr King’s misconduct pursuant to s.392(3).

Mr King’s appeal - submissions

[21] Although Mr King’s notice of appeal identified an extensive number of appeal grounds, his written and oral submissions focused on two main propositions. The first was that the directions issued by the Diocese to Mr King concerning his participation in the Club’s lifesaving activities and transporting students to and from such activities were not lawful directions with which Mr King was required to comply, with the consequence that any contravention of those directions could not have constituted a valid reason for dismissal. It was submitted that once the College had divorced itself from any association with surf lifesaving activities, it became a private activity beyond the control of the College. In circumstances where the students who were involved in the surf lifesaving activities did so with the approval of their parents, and there was no suggestion of any impropriety on the part of Mr King, no relevant connection could be made between the subject matter of the directions and Mr King’s employment. Mr King relied in particular on Rose v Telstra Corporation Ltd 11 in which the Australian Industrial Relations Commission (Ross VP) had identified the circumstances in which out-of-hours conduct might justify dismissal, none of which, Mr King submitted, were applicable in this case.

[22] The second proposition was that the Deputy President’s failure to make a reinstatement order in favour of Mr King constituted a manifest injustice in that the penalty of dismissal was out of proportion to Mr King’s conduct in breaching directions (assuming them to be lawful), in circumstances where Mr King had been employed as a teacher for 37 years, he had been a good, dedicated and loyal employee, there was no evidence of any impropriety in his behaviour towards students, his dismissal had destroyed his prospects of ever obtaining alternative employment as a teacher, and the financial consequences of dismissal had been ruinous. There was no proper objective basis, Mr King submitted, for the conclusion that the relationship of trust and confidence could not be re-established; the Deputy President had relied upon a self-serving statement by Mr Passarello that was tainted by Mr Passarello’s admission that his trust in Mr King had been diminished by reason of him being the subject of a Police investigation, even though there was no finding of any wrongdoing. Mr King relied on the majority judgment of a Full Bench of the Commission (Lawler VP and Roberts C) in Lawrence v Coal & Allied Mining Services Pty Ltd t/a Mt Thorley Operations/Warkworth 12 for the proposition that a decisional outcome so at odds with what may be considered to be a proper outcome such as to be capable of being described as a “manifest injustice” constituted an error in the exercise of the discretion as identified by the High Court in House v The King.13 Mr King also submitted that the Deputy President erred in not considering an alternative submission made by him at first instance, namely that if reinstatement to a teaching position at the College was not practicable, he could under s.391 be reinstated to a position in another school operated by the Diocese or to a position at the Diocese’s administrative office.

[23] The Diocese submitted that the Deputy President’s determination that the directions issued to Mr King were lawful was correct. Mr King’s involvement in transporting students to and from surf lifesaving activities, and his co-ordination of those activities more generally, including the promotion of the Club amongst students, had arisen directly from the teacher-student relationship he had with them. The Diocese, it submitted, had a legitimate interest in any dealings between its teachers and its students both inside and outside of the school, and was entitled to make directions which established appropriate boundaries upon any such dealings without having to wait for inappropriate conduct to occur before it did so. Secondly, it submitted that the Deputy President’s decision not to reinstate Mr King was not attended by any House v The King error. The Deputy President’s conclusion that the loss of trust and confidence in Mr King prevented his reinstatement was properly based upon Mr Passarello’s and Ms Wroughton’s evidence demonstrating their concern about Mr King’s wilful breach of the directions given to him and his failure to maintain appropriate boundaries with students in contravention of the Diocese’s child protection policies. The precautionary measures which would need to be put in place were Mr King reinstated in order to ensure that students were protected, parents re-assured and the College’s reputation protected were, as the Deputy President found, impracticable, and there had been no challenge in the appeal to the Deputy President’s conclusion in this respect.

Mr King’s appeal - consideration

[24] The import of Mr King’s challenge to the Deputy President’s conclusion that the relevant directions given by the Diocese to Mr King were lawful, such that breach of those directions constituted a valid reason for his dismissal, was not made entirely clear in his submissions. The question of whether “there was a valid reason for the dismissal related to the person's capacity or conduct” is a matter which the Commission is required by s.387(a) to take into account in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable. A finding of appellable error on the part of a first instance decision-maker on the issue of “valid reason” would usually lead to the conclusion that the decision-maker’s overall conclusion as to the unfairness of the dismissal was also in error and would have to be quashed and re-determined. However in this case Mr King has the benefit of a conclusion by the Deputy President that his dismissal was harsh, unjust or unreasonable. We are not asked by Mr King to quash the Deputy President’s conclusion in that respect.

[25] When this difficulty was raised with Mr King’s counsel, he said that the challenge to the lawfulness of the directions was at least relevant to the Diocese’s cross-appeal. That could only be so if it was raised by way of a notice of contention or its equivalent, which it was not; in any event that does not establish a requisite connection with Mr King’s appeal. We consider, although it was not expressly put this way by Mr King, that the real import of the challenge to the lawfulness of the relevant directions was that the Deputy President’s decision not to order the remedy of reinstatement was to a substantial degree founded upon his finding that Mr King had breached lawful directions. We will approach this aspect of Mr King’s appeal this way, noting that the parties had fully joined issue concerning the lawfulness of the directions in their submissions.

[26] It is well established that an employee has an obligation, implied by law, to comply with the lawful and reasonable directions of his or her employer. The circumstances in which an employer’s direction will be lawful were described by Dixon J in The King v Darling Island Stevedoring and Lighterage Company Limited; Ex Parte Halliday and Sullivan 14 in the following terms:

[27] The expressions in the above passage “relates to the subject matter of the employment” and “within the scope of the contract of service” have been regarded as synonymous in respect of the limitation expressed. 15 The scope of employment is a somewhat broader conception than just the course of the performance of duties under the employment contract.16 Textbooks have described the scope of the employment of an employee as determined by the nature of the work the employee is engaged to do, the terms of the contract, and customary practices or the course of dealings between the parties.17 It does not extend to private or personal activities of the employee not affecting his or her work. In Australian Tramway Employees’ Association v Brisbane Tramways Company Limited18, Higgins J sitting as President of the Court of Conciliation and Arbitration said:

[28] The circumstances in which an employer may make lawful directions in respect of the off-work activities of employees will therefore usually be very limited. In McManus v Scott-Charlton 19 the Federal Court (Finn J) said: “I am mindful of the caution that should be exercised when any extension is made to the supervision allowed an employer over the private activities of an employee. It needs to be carefully contained and fully justified”. In Appellant v Respondent20 a Full Bench of the Australian Industrial Relations Commission said that “it is only in exceptional circumstances that an employer has a right to extend any supervision over the private activities of employees”. Statements of this nature suggest that there must necessarily be a significant connection with or effect upon the employee’s employment in order for an employer’s direction concerning the out-of-hours activity and conduct of an employee to fall within the scope of the employment and thus be lawful.

[29] The nature of the employment in question, and the statutory, contractual and other legal obligations applicable to such employment, affect the scope of the employment and the capacity of the employer to issue lawful directions concerning out-of-hours conduct. Police officers, for example, who in contemporary circumstances are engaged under contracts of employment, have obligations (originating from the common law office of constable) to keep and preserve the peace and comply with lawful orders from those with authority over them even when they are off-duty. 21 In respect of public servants, some of the powers given to the Crown as employer exist for public interest and not just employment-related purposes, with the result that the scope of supervision over public servants’ private activities may extend beyond what is countenanced by an employee’s implied contractual duty of fidelity and good faith.22

[30] In respect of teachers and the teaching authorities which employ them, legal duties which apply to the teaching authority vis-a-vis students operate to give the scope of employment a broader than usual scope. Firstly, a teaching authority has a non-delegable duty to take reasonable care to protect students from the wrongful behaviour, including criminal behaviour, of third parties such as teachers. Any breach of that duty which results in harm to the student will result in the teaching authority being liable for damages for negligence. 23 The duty is not confined to school hours or teachers’ hours of duty at the school.24 Secondly, as in any employment relationship, the teaching authority is vicariously liable for the conduct of a teacher committed in the course of his or her employment. In State of New South Wales v Lepore three of six members of the High Court (Gleeson CJ, Gaudron and Kirby J) who considered the issue of the vicarious liability of a teaching authority in connection with the intentional criminal conduct of teachers towards students (such as sexual abuse) held that liability could arise if there was a close or sufficient connection between the conduct and the teacher’s employment. Gleeson CJ said:25

[31] Kirby J held that vicarious liability formulated in this way “might extend to incidents outside school premises occurring on sports days, vacations and other events involving potential intimacy, made possible by the employment relationship” 26. Gaudron J took a narrower approach based on estoppel, but nonetheless contemplated circumstances in which liability might arise:27

[32] Gummow, Hayne and Callinan JJ took a contrary view, holding that unauthorised and intentional criminal conduct on the part of an employee towards a student could not fall within the scope of the teacher’s employment and could not therefore give rise to vicarious liability on the part of the employing teaching authority.

[33] We consider that the Diocese’s non-delegable duty of care towards its students, and the contestable possibility of it being vicariously liable for any criminal conduct of its teachers towards students that was closely connected to the teacher’s employment, were fundamental features of Mr King’s employment with the Diocese which operated to extend its scope to any conduct by him in respect of a student which arose out of his relationship with the College and its students, whether or not this conduct took place in school hours or during his working hours. The consequence of this is that instructions by the Diocese to him regulating such conduct for the purpose of discharging the Diocese’s duty of care and avoiding liability were lawful.

[34] It also clear to us that any interaction between a teacher and a student which made the teacher vulnerable to a serious complaint by a student, founded or unfounded, had such a significant connection to the Diocese’s interests as to bring it within the scope of the employment. The reputation of the College amongst parents, students and the community generally had by 2012 seriously been damaged by allegations of sexual abuse. Mr King’s own reputation as a teacher had also been damaged by unsubstantiated allegations against him. In those circumstances we accept that it was of the utmost importance to the Diocese, as far as possible, to prevent situations whereby teachers were alone with students in a non-teaching situation and were thereby exposed to the possibility of such allegations being made against them. We consider the position here to be analogous to that considered by the Industrial Relations Court of Australia (von Doussa J) in Puccio v Catholic Education Office. 28 In that case, a teacher had been dismissed because of a breach of his school’s direction that there be no physical contact at all with students except in emergency circumstances. The teacher claimed that his dismissal was unfair. In relation to the teacher’s case that the breach of the direction was justified in the circumstances, the Court said that “it fails to recognise the importance of the direction to the protection of the teacher and his employer, the school, from complaints harmful to their respective reputations”.29 The direction not to transport students was consistent with the school’s established policy prohibiting this absent express permission. The existence of that policy confirmed that the direction was within the scope of the employment since, if it was not a term of Mr King’s employment contract, it was at least part of the dealings between the parties.

[35] We do not accept Mr King’s submission that once the College had entirely divorced itself of any connection with the Club’s surf lifesaving activities, Mr King’s transport of the students in his car became an entirely private activity outside the scope of the employment in relation to which only the approval of the students’ parents was required. Firstly, it was clear that his relationship with the students involved in the lifesaving activities was not formed independently of the College; it was a product of contact between Mr King and the students at or arising directly out of attendance at the College. Secondly, the reputational risks for the College, which we have earlier identified, remained irrespective of the fact that the activities were not authorised or condoned by the Diocese. Thirdly, the Diocese knew, unlike the parents of the students, but was not in a position to disclose, that Mr King had been the subject of allegations that were being investigated by the Police.

[36] Mr King’s submission that, because he had not engaged in any improper conduct towards any student, there was no basis to dismiss him under the principles enunciated in Rose v Telstra Corporation Ltd misses the point. Rose was concerned with the question of whether engagement in criminal misconduct by an employee outside of the workplace constituted a valid reason for dismissal. In the analysis in that decision, the question of whether the employee’s conduct was in contravention of the implied duty of fidelity and good faith as enunciated by Dixon and McTiernan JJ in Blyth Chemicals v Bushnell 30 was of principal importance. Drawing on the relevant authorities, the Commission stated the proposition that out-of-hours conduct could not justify dismissal unless the conduct was “of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee”. Here however, Mr King was not dismissed because of any alleged criminal misconduct constituting a breach of the duty of fidelity and good faith. He was dismissed because he failed to discharge his obligation to comply with lawful directions. That he did not engage in any impropriety with any student did not bear upon the question of whether the directions which he breached were lawful.

[37] Accordingly we consider that the direction to Mr King to cease transporting students to and from lifesaving activities was a lawful direction with which he was required to comply. It was Mr King’s wilful disobedience to that direction which caused the Deputy President to conclude that there was a valid reason for the dismissal. We therefore reject the first aspect of Mr King’s appeal.

[38] Consideration of the second aspect of the appeal, being Mr King’s challenge to the Deputy President’s refusal to grant him the remedy of reinstatement, necessarily proceeds (having regard to our conclusion as to the first aspect of the appeal) on the premise that Mr King wilfully disobeyed a lawful direction to him by his employer. As earlier stated, Mr King submitted that, even if that was the case, the Deputy President’s conclusion on the question of reinstatement represented an error in the exercise of his discretion because it constituted a “manifest injustice”.

[39] It would rarely be the case that House v The King discretionary error would be found on the basis of a “manifest injustice” in respect of a decision accompanied by full reasons. The well-known passage from the judgment of Dixon, Evatt and McTiernan JJ in House v The King 31 which identifies the circumstance in which appellate intervention in relation to a discretionary decision is permissible firstly identifies a number of specific types of appellable error:

[40] The judgment then went on to say (underlining added):

[41] It is this latter part of the judgment that Mr King relies upon to ground his argument concerning “manifest injustice”. Where a decision is accompanied by full reasons, the basis upon which the decision has been reached will usually be apparent, and any specific error in the exercise of the discretion will be identifiable. In that circumstance, consideration of whether the decision or outcome was “unreasonable or plainly unjust” will usually be unnecessary. 32 It is only where the outcome is demonstrated to be wholly outside the range of outcomes reasonably available to the first instance decision-maker that the “manifest injustice” ground of error will allow an appeal to be upheld without specific error being identified.33 In the unfair dismissal context, if not generally, this will only occur in rare cases.34

[42] We do not consider that this is one of those rare cases. The Deputy President found, correctly, that there was a valid reason for the dismissal based upon Mr King’s wilful disobedience of lawful directions concerning the maintenance of proper boundaries with students. That necessarily gave rise to an important consideration in the context of remedy, namely whether Mr King could in the future be trusted to comply with directions of that nature if reinstated. Mr Passarello and Ms Wroughton gave evidence that they could have no confidence in Mr King in this respect. We consider that it was open to the Deputy President to accept this evidence, and to refuse to reinstate Mr King to his position as a classroom teacher on that basis. Having regard to the deliberate nature of Mr King’s previous conduct and his disingenuous explanation for it, we consider that this loss of confidence on the part of Mr King’s former employer was “soundly and rationally based”. 35 Mr King’s length of service with the College and the damage done by the dismissal to his reputation and his future employment prospects as a teacher were certainly matters weighing strongly in favour of his reinstatement, but not so strongly that they necessarily outweighed the legitimate concerns which the Diocese held about his past and potential future conduct and rendered reinstatement the only just and reasonable outcome. We do not consider that the Deputy President’s decision to refuse reinstatement and order instead a substantial amount of compensation was manifestly unjust.

[43] Nor do we consider that Mr Passarello’s admission that his trust in Mr King had been affected by the unfounded child abuse allegations made against him prevented the Deputy President from accepting his evidence, together with that of Ms Wroughton, as demonstrative of a loss of trust and confidence on the part of the employer that rendered the grant of reinstatement inappropriate. The Decision at paragraph [95] makes it clear that the Deputy President accepted their evidence on the basis of their contention that “they would not be confident that the applicant would follow directions to maintain appropriate boundaries with students”. As earlier stated, there was a sound and rational basis for that contention. For that reason we do not consider that Mr Passarello’s admission vitiated the conclusion on the remedy of reinstatement reached by the Deputy President.

[44] The final point made by Mr King was that the Deputy President erred in not giving consideration to the alternative propositions that he be reinstated to another school in the Diocese or to the Diocese’s head office. We accept this submission in part. Insofar as the Deputy President accepted that there was a loss of trust and confidence based upon a lack of confidence that Mr King would follow directions to maintain appropriate boundaries with students, we consider that to be a conclusion which necessarily applied to reinstatement to any teaching position in the Diocese, not just a teaching position at the College. The Deputy President’s statement in paragraph [95] of the Decision that he considered such trust and confidence to be “crucial in [the] school/teacher/student relationship” makes that clear. However, to the extent that Mr King raised as an alternative the possibility of being reinstated to another position in the Head Office or elsewhere in the Diocese that was not a teaching position and did not involve unsupervised interaction with students, it is apparent that that alternative was neither expressly nor implicitly considered by the Deputy President in the Decision. There was some evidence that a number of such positions existed. The Deputy President’s reliance upon the Diocese’s lack of confidence in Mr King’s capacity or willingness to maintain appropriate boundaries with students as preventing reinstatement could not have been of significance or relevance to that potential alternative. In failing to consider and determine that aspect of Mr King’s case, the Deputy President fell into error.

[45] That error was one of significance, in that it caused Mr King an injustice by denying him the possibility of obtaining what would have been for him a preferred and highly beneficial outcome. We consider therefore that permission to appeal should be granted in the public interest under s.400(1) of the Act. We uphold Mr King’s appeal in this respect. We will order that this aspect of the matter be referred back to the Deputy President for consideration and determination. We will do so on the basis that if the Deputy President determines that an order for reinstatement should be made on the alternative basis identified (with or without any ancillary compensation and/or continuity orders under s.391), then it will be necessary for him to revoke the Order under s.603 of the Act; but that if the Deputy President determines to refuse reinstatement, then the Order shall remain in effect as the outcome of Mr King’s unfair dismissal application.

The Diocese’s cross-appeal - submissions

[46] The Diocese submitted that the Deputy President erred in finding that Mr King’s dismissal was harsh, unjust or unreasonable, in that he:

(1) failed to have regard, or sufficient regard, to the nature and gravity of Mr King’s breach of the directions given to him;

(2) failed to have regard, or sufficient regard, to the importance of child protection issues for the Diocese, and the importance of the directions given to Mr King;

(3) based his conclusions on two significant errors of fact - firstly, that in determining to dismiss Mr King insufficient weight was given by the Diocese to Mr King’s service and contribution and, secondly, that the Diocese’s decision to dismiss Mr King was influenced by the unfounded child abuse allegations against him;

(4) failed to have regard for the admitted further breach of a direction to promote the activities of the Club to students;

(5) erred in finding that the dismissal was summary in nature and took effect from the date of the sending of the dismissal letter; and

(6) erred in finding that Mr King was not adequately notified of the reason for his termination before the decision was taken to dismiss him and in finding that Mr King had no real opportunity to respond to the reason for his dismissal.

[47] The Diocese also made the more general submission that the Deputy President’s finding that the dismissal was harsh, unjust or unreasonable was itself, in all the circumstances, “unreasonable and plainly unjust” and not reasonably available.

[48] In respect of the extension of time application, the Diocese submitted that it had initially decided not to appeal the Decision, and only decided to appeal when it was served with Mr King’s appeal. Its cross-appeal had been filed only eight days outside of the prescribed 21-day period, and this had not caused any prejudice to Mr King. In relation to permission to appeal, the Diocese submitted that permission to appeal should be granted because its appeal raised a question of importance and general application, namely the weight that should be attributed to breaches of directions and other disciplinary matters which occur in the context of a school authority’s child protection obligations, because the Decision was attended by sufficient doubt to warrant its reconsideration, and because substantial injustice may result if Mr King was granted permission to appeal and his appeal allowed without granting the Diocese permission to appeal in order that the Full Bench could determine for itself whether the dismissal was harsh, unjust or unreasonable.

[49] Mr King submitted firstly that the extension of time required by the Diocese for its appeal should not be granted because it had given no acceptable explanation for its delay apart from opportunism; however it was conceded that Mr King had not suffered any prejudice as a result of the delay. As to the substance of the appeal, Mr King submitted that no House v The King error had been demonstrated, that in the absence of any suggestion of impropriety the gravity of the breach of the directions was overstated, and that the Deputy President was correct in concluding that the Diocese had not taken into account the length and quality of Mr King’s service and had not given him a proper opportunity to explain to them what the effect of the dismissal upon him would be.

The Diocese’s cross-appeal - consideration

[50] We grant the Diocese an extension of time to appeal under rule 56(2)(c) of the Fair Work Commission Rules 2013. In the particular circumstances of this case, we do not think it was unreasonable for the Diocese to reconsider its decision not to appeal upon being served with Mr King’s notice of appeal. Mr King’s appeal was filed and served on 10 December 2013, 20 days after the Decision was issued. That meant that it was not practicable for the cross-appeal to be filed within the prescribed 21-day time period. The cross-appeal was filed nine days after the appeal, and eight days out of time. That is not very long, and in any event the delay, as Mr King properly conceded, did not cause him any prejudice.

[51] We do not accept the Diocese’s submissions that the Deputy President failed to have regard, or sufficient regard, to the nature and gravity of Mr King’s breach of the directions, or the importance of those directions and child protection issues generally for the Diocese. The Deputy President’s findings that the breach of the directions constituted a valid reason for Mr King’s dismissal, that “In all the circumstances it was entirely appropriate for the Diocese to place the utmost importance on the implementation of its child protection policies” 36, that “these general issues are central to the College and Diocese’s reputation in the community and duty of care to students”37, that “an education authority has an overriding duty to ensure that the privileged position of trust in which teachers are placed is not breached”38, and that it “must protect its students from potential harm and protect itself from any potential liability for such harm”39 demonstrate in the clearest possible terms that the Deputy President took these matters into account and gave them very significant weight.

[52] We further do not accept that the Deputy President relied upon two significant errors of fact as contended by the Diocese. The Deputy President’s conclusion that the Diocese gave insufficient weight to Mr King’s service in deciding to dismiss him is best characterised not as a finding of primary fact but rather as a secondary inference drawn from the evidence concerning the dismissal process. That evidence may be summarised as follows: Mr King’s service was not discussed at the disciplinary interview with Mr Passarello and Ms Wroughton which occurred on 5 December 2012 (apart from the mere identification of his length of service); Ms Wroughton’s evidence did not disclose that any consideration was given to Mr King’s service when she recommended to Mr Whitby that he be dismissed; and the dismissal letter drafted by Ms Wroughton and signed by Mr Whitby did not make any reference to Mr King’s service. In those circumstances, we consider that the Deputy President’s conclusion was reasonably available on the evidence.

[53] It was likewise reasonably open for the Deputy President to draw the inference that the decision to dismiss Mr King was influenced by the allegations against him which were investigated by the Police. Mr Whitby, the ultimate decision-maker, did not give evidence. Ms Wroughton recommended dismissal to him, but the conversation between her and Mr Whitby in which this was discussed was not described in her evidence except in the most general terms. In her statement of evidence Ms Wroughton in describing the reasons for her loss of trust and confidence in Mr King made express reference to the allegation being investigated by the Police at the time of the dismissal. Mr Passarello did likewise, and further admitted in cross-examination that his trust in Mr King had been diminished by the earlier allegation made against him in 2012. We consider that that evidence made open the inference that these matters were in the minds of the decision-makers when the decision to dismiss was made.

[54] We accept that the Deputy President did not make express reference in the Decision to Mr King’s breach of the further direction not to promote the activities of the Club to students. However, we consider that for all practical purposes the breach of that direction involved essentially the same conduct as the breach of the direction not to transport students to and from the Club’s activities. The Diocese effectively conceded as much in its written submissions. 40 It is unlikely therefore that this omission could have affected the Deputy President’s conclusion that the dismissal was unfair. Further, while we consider that the Deputy President’s conclusion that the dismissal was summary in nature and took effect from the date the dismissal letter was sent is open to question, it does not appear to us to bear upon the Deputy President’s conclusion that the dismissal was unfair. The Diocese acknowledged this in its written submissions.41

[55] The Deputy President’s conclusions in relation to the matters required to be taken into account under paragraphs (b) and (c) of s.387 were, we consider, reasonably available. The essential flaw in the Diocese’s dismissal procedure was that it failed to put Mr King squarely on notice that he was at risk of dismissal and give him a proper opportunity to provide a response as to why he should not be dismissed. Mr King was never told in advance of the disciplinary interview on 5 December 2012 that the matters to be discussed at the interview were considered significant enough that they might warrant dismissal. Dismissal was not mentioned during the interview. Nor, as the Diocese properly conceded in its submissions, were all the matters relied on as reasons for dismissal discussed at the interview. 42 It was only after the interview had ended that dismissal was mentioned. There was a dispute in the evidence of the participants as to what precisely was said, but the evidence of Mr Passarello is instructive. His version in his statement of evidence was as follows:

[56] Mr Whitby did not make any contact with Mr King to provide him with the proffered opportunity to make a submission as to why he should not be dismissed. The next step was that the dismissal letter was sent on 18 December 2012. The letter offered Mr King a meeting with Mr Whitby to discuss the latter’s “findings”, but it was never suggested there was any possibility that the decision to dismiss might be changed. As earlier stated, the meeting never took place. All in all, this amounted to rather cavalier treatment of an employee with 37 years’ service.

[57] Having regard to the above matters, and because the decision as to whether the dismissal was unfair was a discretionary one in relation to which the Deputy President had some latitude as to the decision to be made 43, we consider that the Deputy President’s conclusion that Mr King’s dismissal was harsh, unjust or unreasonable was one that was reasonably available to him to make. We do not consider that the Diocese has demonstrated any error in the Decision which caused the exercise of the discretion to miscarry. For that reason, the cross-appeal does not attract the public interest as required by s.400(1) of the Act, and permission to appeal is refused.

Orders

[58] In relation to Mr King’s appeal, we order as follows under s.607(3) of the Act:

(1) Permission to appeal is granted.

(2) The appeal is upheld in respect of that part of the Decision concerning the determination of the appropriate remedy.

(3) The matter is referred back to Deputy President Lawrence for him to consider and determine whether an order may be made under s.392 of the Act reinstating Mr King to a position in the Diocese’s Head Office or elsewhere in the Diocese which is not a teaching position and does not involve unsupervised interaction with students, and, if such an order is made, whether any ancillary compensation and continuity orders should also be made under s.392.

(4) The Deputy President shall proceed on the basis of the existing evidence and such further evidence as he may decide to admit.

(5) If the Deputy President decides to make an order for reinstatement under s.392, then he shall revoke the Order under s.603 of the Act; but if the Deputy President decides not to make such an order, then the Order shall remain in effect as the outcome of Mr King’s unfair dismissal application.

[59] In relation to the Diocese’s cross-appeal, permission to appeal is refused.

140120_121417.jpeg

VICE PRESIDENT

Appearances:

J. Phillips SC with A. Barwick solicitor for Michael King

P. Moorhouse of counsel with D. Lynch for the Catholic Education Office Diocese of Parramatta t/a Catholic Education Diocese of Parramatta

Hearing details:

2014.

Sydney:

19 February.

 1   [2013] FWC 8914

 2   PR544735

 3   Print Q9292 [1998] AIRC 1592

 4   Decision at [51]

 5   Decision at [61]

 6   Decision at [71]

 7   Decision at [73]

 8   Decision at [82]

 9   Decision at [89]

 10   [2013] FWCFB 431

 11   Print Q9292 [1998] AIRC 1592

 12   [2010] FWAFB 10089

 13   (1936) 55 CLR 499

 14   (1938) 60 CLR 601 at 621-2 per Dixon J

 15   McManus v Scott-Charlton [1996] FCA 1820, 70 FCR 16 at 21E

 16   See Moreton Bay College v Teys [2008] QCA 422 at [51]-[52]

 17   Sappideen, O’Grady, Riley and Warburton, Macken’s Law of Employment. 7th ed. at 8.280 (the same passage in an earlier edition having been quoted with approval in Van Tran v Calum Textiles Pty Ltd [1997] IRCA 78; Irving, The Contract of Employment at 7.6 p.343

 18   (1912) 6 CAR 35 at 42, quoted with approval in McManus v Scott-Charlton at 21F

 19   [1996] FCA 1820, 70 FCR 16 at 29C

 20   (1999) 89 IR 407 at 416

 21   See e.g. Police Regulation 2008 (NSW), clauses 7 and 8.

 22   McManus v Scott-Charlton [1996] FCA 1820; 70 FCR 16 at 25

 23   State of New South Wales v Lepore (2003) 212 CLR 511 at 522 per Gleeson CJ, 564-6 per McHugh J

 24   Ibid at 564 [142] per McHugh J

 25   Ibid at 546 [74]

 26   Ibid at 619 [321]

 27   Ibid at 561 [132]

 28   (1996) 68 IR 407

 29   Ibid at 417

 30   (1933) 49 CLR 66 at 81-82

 31   (1936) 55 CLR 499 at 505

 32   Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, 165 FCR 560 at [76] per Graham J

 33   Construction, Forestry, Mining & Energy Union v Cahill [2010] FCAFC 39, 269 ALR 1 at [51] per Middleton and Gordon JJ, with whom Moore J relevantly agreed at [1]

 34   Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28] per Lawler VP and Roberts C

 35   Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 191

 36   Decision at [53]

 37   Ibid

 38   Decision at [55]

 39   Ibid

 40   Diocese’s submissions on the cross-appeal, paragraph 58

 41   Ibid paragraph 53

 42   Ibid paragraph 58

 43   Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19] per Gleeson CJ and Guadron and Hayne JJ

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