Dec 1572/97 S Print P7680
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal against a decision [Print P1881]
issued by Commissioner Dight on 13 June 1997
Department of Social Security
(C No. 60390 of 1997)
s.170CE Application for relief re termination of employment
Department of Social Security
(U No. 60032 of 1997)
VICE PRESIDENT ROSS
DEPUTY PRESIDENT DRAKE
COMMISSIONER PALMER SYDNEY, 24 DECEMBER 1997
Appeal re alleged unlawful termination
This decision deals with an appeal by the Department of Social Security (DSS) against an order made by Commissioner Dight on 13 June 1997 (Print P1881) which required the appellant to, among other things, reinstate Mr Dean Uink to the substantive position which he occupied immediately prior to his termination of employment.
Mr Uink commenced employment with the DSS at its regional office in Grosnells, Western Australia, on 2 December 1991. He started work as an Administrative Officer Grade 2 (ASO 2) in the Department's Newstart section, processing unemployment forms which required a basic level of assessment. Shortly after commencement he became an ASO3, dealing with counter inquiries from clients of the Department. Later he became an Aboriginal and Torres Strait Islander Liaison Officer (an AILO) at ASO 4 level. In this position it appears he was required to liaise with outside agencies and communities and maintain an outreach service, including access and equity for aboriginal customers; in addition he was available to assist other staff in dealings with aboriginal customers.
After eighteen months as an AILO Mr Uink was moved back into the Newstart section as an ASO 4 supervisor. As such he was required to approve and determine new claims, deal with the more complex claims assessments, offer technical advice to subordinate staff and to undertake general supervisory duties.
During the period January until June 1996 Mr Uink was the acting Administrative Officer in the Gosnells office on two occasions for several weeks each time. This involved the reconciliation of accounts, repayments by clients of the Department, the taking of minutes of meetings, personnel movements and the like. In his evidence before Commissioner Dight Mr Uink maintained that he was also required by the deputy regional manager to assist the Newstart section in a relief capacity and as required from time to time.
On 6 January 1997 Mr Uink was charged with misconduct under the Public Service Act on three separate charges as follows:
"I ...[the authorised officer]...being of the opinion that Dean Uink...may have failed to fulfil his duty as an officer, HEREBY CHARGE Dean Uink with having failed to fulfil his duty as an officer within the meaning of...
...[Charge A] Section 56 (f)(i) of the Act in that between 1 February 1996 and 4 July 1996 he contravened the provision of Regulation 8A(b) of the Public Service Regulations, being a provision that is applicable to him.
Particulars of the charge are that he processed or handled a case in relation to [VDB], a friend or close personal acquaintance and a client of the Department (including accessing [VDB's] computer record on the dates specified in the Schedule), contrary to the provision of the Departmental Instruction CL96007, an instruction applicable to the performance of his duties."
Note: the Schedule referred to the following dates, all in 1996: 2 February, 7 and 23 May, 19 and 20 June, 1, 2 and 3 July.
"...[Charge B] Section 56 (d) of the Act in that on or about 23 May 1996 he engaged in improper conduct as an officer.
Particulars of the charge are that he approved payment of a Job Search Allowance under sections 513 (1)(a) and 513 (1)(b)(i) of the Social Security Act to [VDB], a friend or close personal acquaintance and a client of the Department, which Mr Uink knew or ought to have known he was not entitled to receive.
...[Charge C] Section 56 (d) of the Act in that on or about 19 June 1996 he engaged in improper conduct as an officer.
Particulars of the charge are that on or about 19 June 1996 he approved payment of a $1000.00 Lump Sum Advance Payment under section 520(3)(a)(b)(c) of the Social Security Act to [VDB], a friend or close personal acquaintance and a client of the Department, which Mr Uink knew or ought to have known he was not entitled to receive." [see Exhibit K6 in the proceedings below]
"VDB" refers to a former employee and customer of the DSS. The Departmental instruction referred to in Charge A provides:
"To avoid situations where there is or could be a conflict of interest between a staff member's duty as a departmental officer and their personal connection with a customer, staff must not handle the cases of persons with whom they have a relationship in a private capacity. This includes family members, friends, close personal acquaintances or persons with whom they are connected through community organisations such as service clubs or sporting associations."
Central to each of the charges, and the substance of charge A, is the relationship between Mr Uink and a DSS customer referred to as VDB. The question of whether VDB was entitled to the benefits approved by Mr Uink was central to charges B and C.
At the commencement of the appeal proceedings the parties tendered an agreed statement of facts [see Exhibit R1]. The agreed statement is in the following terms:
"Statement of Facts
1. Dean Uink commenced employment with the Department of Social Security on 2 December 1991.
2. Between January and June of the year 1996 Dean Uink was employed in the position of acting Administrative Officer at the Gosnells office of the Department of Social Security.
3. According to computer records Dean Uink accessed Departmental records of a Mr Van Den Berg on 2 February 1996, 7 May 1996, 23 May 1996, 19 June 1996, 20 June 1996, 2 July 1996 and 3 July 1996.
4. On 19 June 1996 Dean Uink sought assistance relating to an issue to do with the processing of an overpayment record of Van Den Berg from other departmental officers - Jeanette Wojcikowski, K Woods and Mike Jones (section manager, review).
5. Dean Uink was interviewed by the Federal Police on 20 November 1996 and questioned in relation to his dealings with Van Den Berg. No charges were laid as a result of this interview.
6. Following a charge of misconduct within the meaning of sections 55 and 56 of the Public Service Act 1922 laid by Carol Needham against Dean Uink, an inquiry was commenced on 6 January 1997.
7. Mr Van Der Ende, as Inquiry Officer, was subject to the procedures outlined in the Public Service Commission's Discipline Handbook (third edition 1988).
8. Mr Van Der Ende interviewed Dean Uink and Ms Sophie Narkle on 21 January 1997.
9. On the 22 January 1997 the Inquiry Officer, Mr Van Der Ende, interviewed the following person in relation to the charges against Dean Uink:
10. On 29 January 1997 an officer appointed to hold an inquiry (the inquiry officer) concluded that Uink had failed to fulfil his duty as an officer within the meaning of section 56(f)(i) of the Public Service Act 1922 in that he had contravened the provisions of regulation 8A(b), the particulars being that Uink had processed or handled a case in relation to Peter Van Den Berg, a friend or close personal acquaintance and a client of the Department (including accessing Mr Van Den Berg's computer record on the dates specified in the schedule), contrary to the provisions of Departmental Instruction CL 960007, an instruction applicable to the performance of his duties. The schedule specified access on 2 February 1996, 23 May 1996, 19 June 1996, 20 June 1996, 1 July 1996, 2 July 1996 and 3 July 1996. The inquiry officer directed that Uink be dismissed from the Public Service (Charge `A').
11. On 29 January 1997 the inquiry officer concluded that Uink had failed to fulfil his duty as an officer within the meaning of section 56(d) of the Public Service Act 1922 in that on or about 23 May 1996 he engaged in improper conduct as an officer. Particulars of the charge were that Uink had approved payment of Job Search Allowance under sections 513(1)(a) and 513(1)(b)(i) of the Social Security Act to Peter Van Den Berg who was a close personal friend and had no entitlement to a Job Search Allowance payment which Uink knew or ought to have known he was not entitled to receive. The inquiry officer directed that Uink be dismissed from the Public Service (Charge `B').
12. On 29 January 1997 the inquiry officer concluded that Uink had failed to fulfil his duty as an officer within the meaning of section 56(d) of the Public Service Act 1922 in that on or about 19 June 1996 he engaged in improper conduct as an officer. Particulars of the charge were that on or about 19 June 1996 Uink approved a payment of a $1,000.00 Lump Sum Advance payment under sections 520(3)(a), (b) and (c) of the Social Security Act to Peter Van Den Berg a friend or close personal acquaintance and a client of the department which Uink knew or ought to have known he was not entitled to receive. The inquiry officer directed that Uink be dismissed from the Public Service (Charge `C')."
The appeal was heard in Perth on 31 July 1997 and 4 September 1997.
Decision Subject to Appeal
The Commissioner made the following Decision, Finding and Order on 13 June 1997 (Print P1881):
This is an application pursuant to s.170CE(1)(a) of the Act for relief in respect of termination of the employment of Mr Dean Uink (the applicant) by the Department of Social Security (the respondent).
Following failure to resolve the matter at conciliation proceedings the applicant elected to proceed to arbitration to determine whether the termination was harsh, unjust or unreasonable pursuant to s.170CFA.
Having considered all the evidence, submissions and material supplied by the parties I find, pursuant to s.170CG(3) as follows:
That the termination of the applicant's employment was harsh, unjust or unreasonable.
In particular I find that:
1. On balance, the applicant did not misconduct himself in that
(a) the evidence does not support a conclusion that a private relationship existed between the applicant and the customer/client of the respondent referred to in the proceedings, at the relevant time; and
(b) the evidence does not support a conclusion that the applicant performed his duties in a manner which demonstrated wilful or improper disregard for his obligations as an employee.
2. The applicant was not given a proper or adequate opportunity to respond to the basis of the respondent's allegations concerning his conduct.
1. Pursuant to s.170CH(3) the Commission orders that the Department of Social Security reinstate Dean Uink by reappointing him to the substantive position he occupied immediately prior to the termination of his employment.
2. Pursuant to s.170CH(4)(a) the Commission orders that the Department of Social Security pay to Dean Uink an amount in respect of remuneration lost by him between the date of termination and the date of reinstatement, less the amount of any remuneration he otherwise earned or gained during that period."
The Commissioner published the reasons for her decision on 17 June 1997 [Print P1965].
During the hearing of the appeal the appellant applied for leave to adduce further evidence pursuant to s.45(7) of the Act. The evidence in question was an affidavit sworn by Mr Van Der Ende and material relating to the Department's policy concerning lump sum payments.
The application was opposed by the respondent.
The material in the affidavit and the policy statement were available at the time of the hearing before Commissioner Dight but were not put before her. The appellant submitted that the Commissioner should have called for the material.
We refused leave to tender the new material. In our view it is the responsibility of the parties to call all relevant evidence at the hearing before the Commission. The process is not inquisitorial. In addition, one of the annexures to the affidavit sought to be tendered was tendered during the proceedings below but without any of the documents that are now attached to it. The attached documents were not produced to the applicant in the discovery process below.
We indicated to the appellant that should leave to appeal be granted and the appeal succeed the Full Bench would hear the matter on its merits and the application to tender the affidavit and the policy statement could be renewed.
Submissions on Appeal
In relation to the question of leave to appeal the appellant submitted that leave should be granted because it is important, in the public interest, that:
· the Department's instructions to its officers and employees concerning conflict of interest and the accessing of customer records be strictly adhered to and that in the event of their breach appropriate disciplinary action be taken;
· the Commission make it's decision concerning appeals from decisions terminating employment according to law;
· the Department's officers and employees determine entitlements to allowances and lump sum payments only if they meet the qualifications specified in the relevant provisions of the Social Security Act 1991; and
· where the Department's officers make decisions concerning allowances and lump sum payments otherwise than in accordance with the provisions of the Social Security Act 1991 that they be subjected to appropriate disciplinary action.
The submissions advanced in support of the merits of the appeal can be conveniently grouped into four categories:
· the fairness of the enquiry conducted by Mr Van Der Ende;
· the role of the Commission in determining, by arbitration, whether a termination was harsh, unjust or unreasonable;
· evidentiary issues; and
· the appropriate test for misconduct.
We propose to deal with the arguments advanced in respect of each of the above matters in turn.
Fairness of the Inquiry
It was submitted that the Commissioner erred in finding that Mr Uink was denied procedural fairness in relation to the inquiry into the three charges against him. It was argued that the Commissioner failed to take into account the following evidence:
- Mr Uink was provided with a copy of the charges and particulars detailing the substance of the allegations against him;
- Mr Uink was given access to the claims by VDB which he approved;
- Mr Van Der Ende discussed some of the contents of his interviews with some DSS officers with Mr Uink at the interview with him on 22 January 1997.
- Mr Van Der Ende allowed Mr Uink to examine a copy of the statement of Ms Narkle; and
- Mr Van Der Ende took the statement by Mr Hughes into account.
It was argued that when regard is had to all of the relevant evidence it is clear that Mr Uink was fully aware of the nature of the charges against him and was given every opportunity to respond to them. Procedural fairness did not require Mr Van Der Ende to advise Mr Uink of every individual piece of evidence which contradicted his claim that he and VDB were not friends [see Kioa v West (1985) 159 CLR 550; Nicholson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR 233; Schaale v Hoechst Australia Ltd (1993) 47 IR 249].
If, contrary to the appellant's submissions, it is concluded that Mr Uink was denied procedural fairness in relation to the inquiry into the charges against him then it was submitted that such a denial of procedural fairness did not result in the termination being harsh, unjust or unreasonable [see Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 429-430 per Brennan CJ, Dawson and Toohey JJ; and at 468 per MrHugh and Gummow JJ].
The procedures to be adopted in conducting a Departmental disciplinary inquiry are dealt with in the Public Service Discipline Handbook [see Exhibit K2 in the proceedings below]. Paragraph 4.76 states:
". . . the inquiry Officer may adopt such procedures as he or she considerate appropriate in the particular case. While the legislation envisages that an inquiry should be as informal as possible, it is recommended that Inquiry Officers observe the administrative law rules of natural Justice to the fullest extent that is practicable in the circumstances. Thus, an Inquiry Officer should ensure that the charges officer is given the opportunity of ascertaining the relevant issues in the case against him or her and is informed of the nature and content of the material which is being used in the inquiry . . . Consistent with this recommended approach, copes of all documents intended to be used in the inquiry should be provided to the charged officer at the time the inquiry is notified to him or her . . ."
Paragraph 4.81 provides that the Inquiry Officer is not bound by the rules of evidence and may inform himself or herself in any manner he or she sees fit. It also states that primary sources of evidence are preferable to secondary ones, disputed facts should if possible be corroborated and hearsay evidence should only be used for corroboration or where otherwise unavoidable.
In the decision subject to appeal the Commissioner concluded that Mr Uink had not been provided with:
- the benefit of receiving all of the relevant details forming the basis of the Department's allegations;
- a proper investigation; or
- a proper opportunity to respond before his employment was terminated.
In reaching this conclusion the Commissioner took into account the following factors:
"· The charges related to events which were six months old at the time they were investigated by John Van Der Ende. That of itself is not necessarily a difficulty, but it means that extra care must be taken in a case such as this to ensure that all the relevant material relating to the detail of the allegations is available to those involved, particularly the person subject to the inquiry and the person conducting it.
· In Mr Uink's case he did not have access to copies of the claims in question. He only had the CRAM report, as did Mr Van Der Ende (and the Commission as constituted). Mr Uink requested further information prior o the charges being made; it was not given to him. He also asked that Mr Van Der Ende contract Mr Hughes; this was not done. Mr Uink denied he was provided with the notes of interviews with other staff, Ms Conroy's report, or the Lemon Report, at the time the inquiry was being conducted. Mr Van Der Ende's evidence confirmed this, at least in so far as Ms Conroy's report was concerned. Yet all of this material formed the bases of Mr Van Der Ende's dismissal determination. A number of witnesses acknowledged that in order to comment six months after the event about the determination of a particular claim, it would be essential to look at the actual paperwork. Ms Conroy said it would be unfair otherwise." [Print P1965 at 24-25]
In our view the Commissioner's conclusion was reasonably open to her.
Two particular matters relating to the Inquiry merit comment. The first relates to Mr Uink's request to the Inquiry Officer that he have regard to a statement from Mr Hughes. In the proceedings below Mr Hughes gave evidence which corroborated Mr Uink's testimony in a number of respects, including:
- the absence of a friendship with VDB;
- the requirements and processes for dealing with transactions on Newstart and lump sum advances; and
- the bulk approval processes used in the Gosnells Newstart section.
The Inquiry Officer did not contact Mr Hughes in relation to his statement, nor did he identify the statement as one of the matters he had regard to in reaching his conclusion [see Exhibit R2 in the proceedings below]. Mr Hughes statement was shown to a policy expert, Ms Conroy, and the Inquiry Officer accepted Ms Conroy's views in preference to those advanced by Mr Hughes in his statement. The following exchange took place during the course of Mr Van Der Ende's evidence in the proceedings below:
"Mr Keogh: Mr Hughes made a statement that was proffered to you?
Mr Van Der Ende: That's correct.
Mr Keogh: You did not interview Mr Hughes?
Mr Van Der Ende: Mr Hughes wasn't available at the time. He was in Canberra but I did examine his statement.
Mr Keogh: You examined his statement?
Mr Van Der Ende: I did.
Mr Keogh: Did you understand his statement?
Mr Van Der Ende: I did, and I actually showed his statement to Ms Conroy and asked for her comments on that statement.
Mr Keogh: And his statement relates to the fact that he says, did you doubt his statement?
Mr Van Der Ende: Yes, I did.
Mr Keogh: You doubted the credibility of it?
Mr Van Der Ende: I asked for a policy expert's opinion, a systems expert's opinion on his comments and put weight on those - that opinion." [Transcript, 27 May 1997, 33 at lines 9-20]
The Inquiry Officer did not contact Mr Hughes to seek to resolve any inconsistencies between his statement and Ms Conroy's views. He simply accepted the views expressed by Ms Conroy.
The appellant submits there was no breach of procedural fairness in not seeking to interview Mr Hughes. The Inquiry Officer had a detailed statement from Mr Hughes. The respondent asked him to speak to Mr Hughes and he did not.
In our opinion it would have been an appropriate, prudent and fair course of action for the Inquiry Officer to speak to Mr Hughes to discuss and investigate those matters from his report with which he disagreed.
Mr Hughes was available. All it required was a telephone call to Canberra. This is particularly significant since the outcome of the investigation was termination, not some lesser penalty. A requirement to speak to a witness whose evidence you otherwise intend to disregard is not onerous.
If an employee raises an issue that can be investigated or a witness who can be interviewed about a matter raised in his defence an employer should attend to it where it is practicable to do so. There was no physical impediment or no need for speed that mitigated against the Inquiry Officer interviewing Mr Hughes in this case.
The second matter we wish to note concerns the failure to provide Mr Uink with documents which formed the basis of Mr Van Der Ende's dismissal determination. In this regard we refer to Ms Conroy's report in particular. The failure to provide this document appears to be a breach of the Department's own guidelines for the conduct of disciplinary inquiries.
We accept the appellant's submission that in conducting a disciplinary inquiry an employer is not required to adopt the standards applied to a judicial inquiry. In this regard we adopt the following remarks by Heerey J in Schaale v Hoechst Australia Ltd (1993) 47 IR 249 at 252:
"It would be harsh, unjust and unreasonable for an employer to dismiss an employee summarily in the ground of serious misconduct without taking reasonable steps to investigate those allegations and give the employee a fair chance of answering them: see Gregory at 413; 471; Wheeler v Philip Morris Ltd (1988) 32 IR 323 at 346; 97 ALR 282 at 306.
In my opinion the respondent's conduct in this regard did not breach the requirements of the award. The allegation against Mr Schaale was a clear and simple one. Did he breach security of climbing over the fence? The award has to operation "in a practical way in a commercial and industrial environment": Gregory at 413; 471. Employers are not required to have the skills of police investigators or lawyers. By inspecting the site of the alleged entry and taking statements from potential witnesses it seems to me the respondent acted quite reasonably. In the interview on the following morning the allegation was put very clearly to Mr Schaale and he persisted in an account which the respondent was reasonably entitled to reject."
It is clear from the above extract that what is required is that the employer take reasonable steps to investigate the allegations and give the employee a fair chance of answering them. That did not occur in this case. Both of the points we have referred to above highlight the inadequacy of the Inquiry. The Inquiry Officer did not do all that was necessary. All of the relevant material was not considered and this applicant was not given certain documents which were relied on by the Inquiry Officer. In our view the Inquiry was flawed and Mr Uink was not accorded procedural fairness. This failure was not a mere technical breach and when considered with the other circumstances in the case there was a sufficient basis for the Commissioner to conclude that the termination was harsh, unjust or unreasonable.
The Role of the Commission
It was submitted that an application under s.170CE(1) of the Workplace Relations Act 1996 (the Act) is not an application for merits review of the decision of the employer to terminate the employment of the employee, as is provided for by s.63D of the Public Service Act 1922. The question of whether a termination was `harsh, unjust or unreasonable' is to be determined in light of the facts as they appear at the relevant time. It was argued that provided an employer discharges the obligation to investigate the facts, a dismissal is not `harsh, unjust or unreasonable' merely because it later appears that the true facts differed from those which appeared at the time of the decision to terminate the applicant's employment: Gregory v Phillip Morris Limited (1988) 24 IR 397.
Two further general observations were advanced in relation to the role of the Commission in a 170CG arbitration.
First, where a dismissal is based upon the alleged misconduct of an employee, the employer will satisfy the evidentiary onus upon it if,:
- it is demonstrated that the employer conducted as full and extensive an investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances;
- the employer gave the employee every reasonable opportunity to respond to the allegations; and
- having done so the employer honestly and genuinely believed, and had reasonable grounds for believing on the information available at that time, that the employee was guilty of the misconduct alleged [see Byrne v Australian Airlines (1994) 47 FCR 300 at 331 per Beaumont and Heerey JJ (with whom Keely J agreed at 313); Bi-Lo Pty Ltd v Hooper (1994) 53 IR 224 at 229-230; Sangwin v Imogen Pty Ltd (No. SA 95/116 IR) unreported decision of von Doussa J, 8 March 1996 at pp 11-18].
Second, where the termination is for misconduct and the employer honestly believes, on reasonable grounds after sufficient inquiry, that the employee has been guilty of serious misconduct, a `valid reason' exists for the termination within the meaning of s.170CG(3) of the Act [see Sangwin v Imogen Pty Ltd].
In the circumstances of this case it was submitted that there had been a full and extensive investigation into the three charges made against Mr Uink carried out by Mr Van Der Ende. Mr Uink was given every reasonable opportunity and sufficient time to answer those charges. In making his decision in relation to the charges Mr Van Der Ende had reasonable grounds for believing, on the information available at the time, that Mr Uink was guilty of the misconduct alleged. The fact that the Commission, after conducting a review of the termination decision on the merits, reached a different conclusion to the one which Mr Van Der Ende arrived at, does not make Mr Uink's termination `harsh, unjust or unreasonable' within the meaning of the Act.
In the proceedings before us Mr MacLiver, appearing for the appellant, conceded that if we confirmed the Commissioner's conclusion that Mr Uink was not accorded procedural fairness then his point in relation to the role of the Commission does not arise [see Transcript, 31 July 1997, 22 at lines 28-35]. If the inquiry was unfair then the Commission may investigate the merits of the matter itself. The appellant's concession in this regard accords with the authorities. If the relevant facts are not clear then the employer has an obligation to establish those facts before dismissing an employee. As Lord Mackay of Clashfern said in Smith v City of Glasgow District Council  IRLR 326 at 329:
"As a matter of law a reason could not reasonably be treated as sufficient reason for dismissing Mr Smith when it had not been established as true nor had it been established that there were reasonable grounds upon which the special committee could have concluded it was true." [cited with approval in Gregory v Phillip Morris (1980) 80 ALR 455 at 471 per Wilcox and Ryan JJ]
On the basis of our conclusions with respect to the fairness of the inquiry we do not need to deal with the submissions set out above. However, as the point was fully argued we will make some brief observations.
The appellant says that the termination cannot be harsh, unjust or unreasonable because it was determined in a reasonable fashion on the facts available at the relevant time. The employer relies on the following statement in Gregory v Philip Morris Ltd (1988) 24 IR 397 at 412 per Wilcox and Ryan JJ:
"The application of the paragraph requires consideration of the circumstances of each case, as they exist when the decision is taken to terminate the particular employee".
Further their Honours said at 413:
"The question whether a dismissal is harsh, unjust or unreasonable must be determined in the light of the facts as they appear at the relevant time. We accept that, if the relevant facts are not clear, it is the obligation of an employer bound by a provision such as cl 6(d)(vi) to establish those facts before dismissing an employee".
In this case the appellant submits that the Commissioner erred in concluding that the facts were different from those determined by the Inquiry Officer or she reached a different conclusion on the merits.
Counsel for the appellant also relied on the following extract from the decision of the South Australian Industrial Commission in Bi-Lo Pty Ltd v Hooper (1994) 53 IR 224 at 229-30:
" `In a case such as the present one where the employee is dismissed for misconduct in respect of dishonest dealing with the employer's property we do not believe it is a correct test to state as did the learned trial judge that the employer must prove, on the balance of probabilities, on the evidence submitted to the Commission, that the employee actually stole the goods, before it will escape a finding that a dismissal based upon such an alleged theft is to be treated as harsh, unjust or unreasonable.
There can be no doubt that in line with decided authority the ultimate task pursuant to s.31 is for the Commission to determine whether when viewed objectively the dismissal may be properly adjudged to fall within the statutory criteria of harsh, unjust or unreasonable.
An employee is entitled to both substantive and procedural fairness in respect of a dismissal. Substantive fairness will be satisfied if the grounds upon which dismissal occurs are fair grounds. Broadly speaking a dismissal will be procedurally fair if the manner or process of dismissal and the investigation leading up to the decision to dismiss is just.
Where the dismissal is based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances; it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking into account any mitigating circumstances either associated with the misconduct or the employee's work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable.
If a fact or facts come to light subsequent to the dismissal which cast a different light on the Commission of the alleged misconduct, such fact or facts will not necessarily or automatically render the dismissal harsh, unjust or unreasonable. In our view in such circumstances what will need to be considered is whether the employer, if it had acted reasonably and with all due diligence, could have ascertained those facts before the dismissal occurred.
The Commission is required to objectively assess the subjective actions and beliefs of the employer as at the time of dismissal and not at some subsequent time: see Gregory v Phillip Morris (1988) 24 IR 397 at 413; 80 ALR 455 at 471; see also Stearnes v Myer SA Stores Print No 9A/1973 at 5.
Whether the employer will satisfy that objective test will depend upon the facts of each case. The gravity of the alleged offence will dictate the nature and extent of the inquiry which the employer must conduct. An employer must ensure that an employee is given as detailed particulars of the allegations against him/her as is possible, an opportunity to be heard in respect of such allegations, and a chance to bring forward any witnesses he/she may wish to answer those allegations.' [cited with approval in Sangwin v Imogen Pty Ltd]
In our view the authorities relied upon by the appellant require some reconsideration in the light of the High Court's decision in Byrne v Australian Airlines Limited (1995) 185 CLR 410 in which the Court expressed approval of part of the judgment of von Doussa J in Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427 at 456.
In Lane v Arrowcrest Group Pty Ltd, von Doussa J considered the example of the dismissal of an accountant who held a position of trust where it was discovered after the dismissal that the accountant had been systematically embezzling money from the employer. His Honour said that it would be astonishing if the employer could not resist an allegation that the dismissal was harsh, unjust or unreasonable by pointing to those facts discovered after the dismissal, so long as they concerned circumstances in existence when the decision was made. His Honour concluded at 456:
"Whether the decision can be so justified will depend on all the circumstances. A circumstance, likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer's state of ignorance. A circumstance likely to weight against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred."
The above conclusion was approved by the High Court in Byrne v Australian Airlines Limited. At 430 their Honours Brennan CJ, Dawson and Toohey JJ said:
"And facts which existed at the time of the dismissal but which come to light only subsequently, might justify the dismissal when otherwise it would be harsh, unjust or unreasonable."
We note here that it would seem to us that facts which existed at the time of a dismissal but only come to light after the dismissal may also render the dismissal harsh, unjust or unreasonable.
Further their Honours McHugh and Gummow JJ said, at 465-468:
"It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.
The distinction between procedure and substance is elusive . . . In our view, it is unhelpful and contrary to the tenor of the Award to introduce it into cl 11(a).
That is not to say that the steps taken, or not taken, before termination may not in a given case be relevant to consideration of whether the state of affairs that was produced was harsh, unjust or unreasonable. Thus, it has been said that a decision which is the product of unfair procedures may be arbitrary, irrational or unreasonable. but the question under cl 11(a) is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. That is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking at the first issue before there is seen to be any need to enter upon the second . . .
Procedures adopted in carrying out the termination might properly be taken into account in determining whether the termination thus produced was harsh, unjust or unreasonable. The submissions for the respondent in the present appeals appear to concede this. But the burden of the respondent's submissions is that there was error in determining the issue without regard to the very material circumstances of the finding of the primary judge as to the complicity of the appellants in pilfering.
Those submissions should be accepted. This means that the primary judge was bound to consider whether, on the evidence given at the trial, the respondent could resist the allegation of breach of cl 11(a), provided that the evidence concerned circumstances in existence when the decision to terminate the employment was made."
In our view the question of whether or not a termination was `harsh, unjust or unreasonable' within the meaning of s.170CG is to be determined on the basis of the circumstances in existence when the decision to terminate the employment was made. In this regard the Commission is not bound by any determination of facts made by an inquiry conducted by the employer.
The Commission is bound to consider whether, on the evidence in the proceedings before it, the termination was `harsh, unjust or unreasonable' provided that the evidence concerns circumstances in existence when the decision to terminate the employment was made.
Facts which existed at the time of the dismissal but which only come to light after the dismissal might either:
· justify the dismissal when otherwise it would be harsh, unjust or unreasonable; or
· render the dismissal harsh, unjust or unreasonable.
Findings made by an inquiry established by the employer will be relevant to the Commission's determination of the issues before it provided it is established that:
- the employer conducted a full and extensive investigation into all of the relevant matters as was reasonable in the circumstances;
- the employer gave the employee every reasonable opportunity to respond to allegations; and
- the findings were based upon reasonable grounds.
As we have already noted that above elements were not present in the inquiry relevant to this case.
Even where the findings of an employers enquiry are reasonable the Commission may conclude that a termination of employment on the basis of those findings was harsh because the penalty was disproportionate to the misconduct [Byrne v Australian Airlines Ltd at 465 per McHugh and Gummow JJ].
A number of points were advanced in relation to the Commissioner's alleged failure to take into account relevant evidence [see pp 4-9 of Exhibit A2], in particular:
- by restricting her considerations to whether there was a relationship between Mr Uink and VDB of a private or personal nature the Commissioner did not consider the evidence which demonstrated that Mr Uink and VDB were `close personal acquaintances' including evidence as to a friendship between Mr Uink and VDB;
- in considering charge B the Commissioner failed to take into account evidence that VDB was employed full-time by the Department and that at the time of his application for job search allowance he was still employed on a full-time basis and his contract of employment did not terminate until 14 June 1996. If such findings had been made the only conclusion open to the Commissioner in relation to charge B was that the charge had been proven; and
- in considering charge C and whether Mr Uink had approved payment of a $1,000 lump sum advance to VDB which Mr Uink knew or ought to have known that VDB was not entitled to receive the Commissioner failed to have regard to the relevant evidence.
Before turning to the arguments advanced by the appellant we wish to briefly state our view regarding the role of an Appeal Bench in relation to findings of fact made by a member at first instance.
As noted in Pham v Taubmans Pty Ltd [print P2322, 27 June 1997 per Ross VP, Drake DP and Cargill C], an Appeal Bench would be very reluctant to reverse a finding of fact made by a member at first instance and would only do so if satisfied that any advantage enjoyed by the member below as a result of hearing the relevant evidence was not sufficient to justify the findings made. As his Honour Mr Justice McHugh said in Abalos v Australian Postal Commission [(1990) 171 CLR 167 at 178:
". . . where a trial judge had made a finding of fact contrary to the evidence of a witness but has made no reference to that evidence, an appellate court cannot act on that evidence to reverse the finding unless it is satisfied `that any advantage enjoyed by the trial by reason of having seen and heard the witnesses could not be sufficient to explain or justify the trial judge's conclusion."
Further, a finding of fact made by a member at first instance based, even partly, on the credibility of witnesses should not be set aside on appeal even where the Appeal Bench thinks that the probabilities of the case are strongly against that finding of fact. If a finding made by a member at first instance depends to any substantial degree on the credibility of a witness, that finding must stand, unless it can be shown that the member at first instance:
- acted on evidence inconsistent with facts incontrovertibly established by the evidence;
- acted on `glaringly improbable' evidence; or
- failed to use or palpably misused the advantage the member at first instance enjoyed in hearing the witnesses give evidence [see Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479; Elitegold Pty Limited v CM Holdings Pty Ltd and Anor  ATPR 40,753 at 47,759].
Where a member at first instance resolves a conflict of evidence between witnesses the subtle influence of demeanour on the member's determination cannot be overlooked. This is so even where the member at first instance made some observations about the demeanour of the witnesses and their manner of giving evidence but did not expressly rely on demeanour in making any findings of fact: Jones v Hyde (1989) 85 ALR 23 at 27.
Further, it does not necessarily follow that because a member at first instance makes no express reference to demeanour and credibility that such factors played no part in any findings of fact made: Martin v Option Investments (Aust.) Pty Ltd [No. 2}  VR 464 at 468; Ablos v Australian Postal Commission (1988) 171 CLR 167 at 179. As Lord Sumner put it in SS Honestroom v SS Sagaporack  AC 37 at 47:
". . . not to have seen e witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility for reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge's conclusions of fact should, as I understand the decisions, be let alone."
The position is different when questions of credibility have been decided and the matter which remains for decision is what inferences should be drawn from facts which have been found and are no longer in contest. In such circumstances an Appeal Bench is in as good a position as the member at first instance to decide on the proper inferences to be drawn from facts which are undisputed or which, having been disputed, are established by the member below. Of course in deciding what is the proper inference to be drawn the Appeal Bench will give due respect and weight to the conclusion of the member at first instance. But if after taking such matters into account an Appeal Bench concludes that the decision subject to appeal was wrong, they should correct it: Warren v Coombes (1979) 142 CLR 531 at 552-553; The Saints Gallery Pty Ltd v Plummer (1988) 80 ALR 525.
We make two final observations in relation to the review, on appeal, of findings of fact.
1. There is no obligation to make findings about inconsistencies in evidence in respect of peripheral matters which throw no light on the real issues in the case: Jones v Hyde (1989) 63 ALJR 349 at 351.
2. In the event of an inconsistency between a witness's evidence and a member's findings of fact, then the member must be taken to have rejected that evidence: Abalos v Australian Postal Commission (1990) 171 CLR 167 at 178-179.
We have applied the general observations set out above to the determination of the matter before us.
In response to the appellant's submissions that there was no evidence to support the Commissioner's findings the respondent tendered two documents. Exhibit R3 is a Summary of Evidence in support of the Commissioner's findings. Exhibit R4 is a response to the matters of evidence raised by the appellant.
The appellant submitted that the Commissioner did not take a balanced view of the evidence. She selected various parts of the evidence and rejected others. In our view the Commissioner did consider all the evidence. By inference she has rejected the evidence that she has not positively accepted. In our view the findings and conclusions made by the Commissioner were reasonably open to her.
The first particular issue identified by the appellant relates to the Commissioner's decision to restrict her consideration to whether there was a relationship between Mr Uink and VDB of a private or personal nature. The appellant submitted that the Commissioner should have considered the evidence which demonstrated that Mr Uink and VDB were `close personal acquaintances'.
We do not think that the Commissioner erred in the manner suggested by the appellant. We have already set out Departmental Instruction CL96007 [see pp 2-3 infra]. In the proceedings below a number of witnesses gave evidence in relation to Instruction CL97007.
Mr Robert Hentry said that the relevant aspect of the Instruction focussed in whether the officer has a relationship in a private capacity. If there was a personal or private relationship then the possibility of a conflict of interest arose. If there had been a previous work friendship but there was no private relationship between a customer and an officer, there would not be a conflict. Mr Hentry is a DSS Area Privacy Officer.
Mr Trevor Sainsbury, the Gosnells Regional Manager, took a narrower interpretation of the Instruction than that advanced by Mr Hentry. Mr Sainsbury said that he would be concerned about a supervisor dealing with a claim by a former employee. He did not limit his concern to circumstances in which more than a work relationship existed.
The Commissioner preferred Mr Hentry's interpretation of the National Instruction for the following reasons:
"Mr Hentry's position as DSS Area Privacy Officer carries specific responsibilities in relation to privacy requirements and investigation of complaints raising privacy issues, whereas Mr Sainsbury, as the Gosnells Regional Manager, has no doubt many managerial responsibilities, of which privacy standards is but one. Their evidence was similar, but I found Mr Hentry's perception of the issues clearer. Mr Hentry was very clear on the point that paragraph 10, headed "Friends, Relatives and Acquaintances" centred upon whether the officer has a relationship in a private capacity. He explained that if there is a personal or private relationship, there is the possibility of a conflict of interest. If there had been a previous work friendship, but there was no private relationship between a customer and an officer, there would not be a conflict. Mr Griffith testified that there was no clear policy that an officer must not do work for a work colleague." [Print P1965 at 21]
The Commissioner applied Mr Hentry's interpretation of the National Instruction to the matter before her and concluded:
"I can find no direct evidence of a private or personal relationship between Mr Uink and VDB. There was certainly plenty of hearsay evidence and reference to assumptions made by various staff about a friendship out of work.
On the other hand -
· Mr Sainsbury volunteered he knew that some staff refused to put phone calls from VDB through to Mr Uink. I consider this tends to support Mr Uink's evidence that he had requested his staff to handle VDB's telephone inquiries themselves and not to put the calls through to him;
· There is reference in both Mr Uink's and Mr Hughes' evidence (K7 and K8) that VDB had a poor attendance record and there is a suggestion that the former two were somewhat irritated by this; Ms Wojcikowsky said VDB's attendance was "spasmodic" and it was evident to her that "his heart wasn't really in it";
· Mr Hughes, who had worked quite closely with Mr Uink in the Newstart section, said it did not occur to him that Mr Uink and VDB were close friends (transcript page 185); and
· Mr Uink emphatically denied there was more than a work relationship with VDB.
In my view the evidence as a whole does not support a conclusion that, as Mr Rodwell would put it, "there is more likely a relationship between Mr Uink and [VDB] than not". In any event, mere suspicion is not enough to justify dismissal: see Keely J, ABEU v Westpac Banking Corporation 1988 AILR 425.
I cannot conclude on the evidence before the Commission that a personal or private relationship existed between Mr Uink and VDB. Consequently there was no conflict of interest for Mr Uink to refer to a supervisor. Therefore the termination in this regard was unreasonable." [Print P1965 at 22]
In our view the approach taken by the Commissioner, and her conclusion, were reasonably open to her.
The other issues raised by the appellant relate to the payment to VDB of the job search allowance and the lump sum advance payment. These issues are central to charges Bond C in the proceedings below. Mr Uink's evidence was that he had simply applied the local practice adopted by staff at the Gosnells office. Mr Hughes, an ASO 4 in the Newstart section at the Gosnells office, corroborated Mr Uink's testimony in relation to the requirements and processes for dealing with transactions on Newstart and lump sum advances.
Ms Catherine Conroy also gave evidence, on behalf of the Department, about eligibility for Newstart allowance and lump sum payments. Ms Conroy disagreed with the interpretation applied by Mr Uink and Mr Hughes. Ms Conroy also said:
- it was possible that a determining officer would make a mistake in the processes of determining a large number of new claims;
- in a given set of circumstances she may not grant a claim but another officer might be justified in doing so; and
- the lump sum advance payment criteria was confusing.
The Commissioner dealt with this aspect of the matter before her in the following terms:
"On the evidence one might possibly conclude that Mr Uink made a mistake in approving VDB's claims. However that was not what he w On the evidence one might possibly conclude that Mr Uink made a mistake in approving VDB's claims. However that was not what he was charged with, it was not what was investigated, nor was it the reason for his termination: the charge and the determination was that he had knowingly approved the claims despite (alleged) ineligibility. In any event I would not feel confident in so concluding, given Mr Uink's evidence, the strongly expressed views of Mr Hughes and Mr Birch and the ambiguities and confusion about eligibility acknowledged by other witnesses such as Ms Conroy.
Mr Rodwell submitted that "an experienced officer would have had no difficulty in making a correct assessment and determination". There is no evidence that Mr Uink encountered any particular difficulty in determining VDB's claims. There is unchallenged evidence that determining officers consulted among themselves on aspects of claims quite often. I accept Mr Hughes' evidence that he and Mr Uink discussed VDB's Newstart claim. Such consultation was not said to be unusual.
On this aspect of the case, I am more inclined to accept evidence about the actual practices utilised by staff to deal with their claims workload from officers who are actively engaged in dealing with customers and the processing of claims on a day to day basis, rather than the evidence of those who may have an equally detailed technical knowledge but are somewhat removed from the counter environment." [Print P1965 at 24]
The approach adopted by the Commissioner was reasonably open to her. The Commissioner was entitled to prefer the evidence from the officers actively engaged in dealing with customers, rather than the evidence of those more removed form the counter environment.
We also note that in the course of his submissions Mr MacLiver referred to a Departmental policy in respect of advance lump sum payments which was inconsistent with the relevant provision of the Social Security Act [see Transcript, 31 July 1997, 32 at lines 15-35, and 33 at lines 1-26].
Test for Misconduct
In considering whether there was misconduct by Mr Uink in the performance of his duties in terms of charges B and C the Commissioner applied a test of whether Mr Uink and performed his duties in a manner which demonstrated a wilful or improper disregard for the essential conditions of his contract of service in the sense referred to in North v Television Corporation (1976) 11 ALR 599. The appellant submitted that the application of such a test amounted to a legal error and the test which the Commission was bound to apply was whether, in the event that the conduct set out in charges B and C was established, such conduct amounted to `improper conduct as an officer' within the meaning of s.56(d) of the Public Service Act 1922.
We do not agree with the appellant's submission on this point. The Commission's task in arbitrating s.170CE(1) claims is to determine whether or not the termination was `harsh, unjust or unreasonable' having regard to the factors set out in s.170CG(3). There is no warrant for in imposing an additional requirement upon the Commission that it determine whether or not the relevant conduct amounted to `improper conduct as an officer' within the meaning of the Public Service Act 1922.
Section 170JF deals with appeals from orders arising from the determination of whether a termination was harsh, unjust or unreasonable. It states:
"(1) An appeal to a Full Bench under section 45 may be instituted by any person who is entitled under section 170JD to apply for the variation or revocation of an order under this Part.
(2) For the avoidance of doubt, an appeal to a Full Bench under section 45 in relation to an order make by the Commission under Subdivision B of Division 3 may be made only on the grounds that the Commission was in error in deciding to make the order."
Section 45(2) provides that a Full Bench shall grant leave to appeal if `in its opinion, the matter is of such importance that, in the public interest, leave should be granted'. Having regard to the terms of s.170JF(2) we think that leave to appeal should generally not be granted unless the appellant satisfies the Commission that there is an arguable case that the member at first instance had either made a legal error or had acted upon a wrong principle, given weight to irrelevant matters, failed to give sufficient weight to relevant matters or made a mistake as to the facts or that the decision was plainly unreasonable or unjust. In the absence of an arguable case of either legal error or that the discretion was miscarried the Commission would not grant leave merely to substitute its decision for the decision under appeal.
Leave to appeal is not a mere formality and a substantive submission is required if leave is to be granted.
The requirement for an arguable case of either legal error or that the discretion has been miscarried means that the appellant must demonstrate that their case has a reasonable prospect of success. This requirement is rigorously applied in order to ensure that the standing and purpose of Commission proceedings at first instance are not diminished by automatic or unwarranted access to an Appeal Bench.
We are satisfied that the conclusion reached by the Commissioner in the decision subject to appeal was reasonably open on the material before her.
The appellant failed to establish an arguable case of either legal error or that the discretion was miscarried. Accordingly, we have decided to refuse leave to appeal and we dismiss the appeal. The stay order issued in transcript on 7 July 1997 is set aside.
BY THE COMMISSION:
P. MacLiver, of counsel, for the appellant.
A. Hodge, of counsel, and M. Keogh for D. Uink.
July 7 (videoconference);
Appeal - termination of employment - unfair dismissal - unlawful termination - administrative officer, Commonwealth employment - appeal against reinstatement - employee charged with misconduct under PS Act - held onus on parties to adduce evidence at original hearing - fairness of termination to be based on circumstances existing when decision to terminate made - AIRC not bound by any determination of facts arising from employer's inquiry and no additional requirement on AIRC to determine whether officer's conduct improper under PS Act - Appeal Bench reluctant to reverse findings of fact in original hearing and in as good a position as member at first instance to decide inferences arising from facts - Commissioner considered all the evidence and decision reasonably open to her - DSS should have afforded applicant procedural fairness - leave to appeal should only be granted where member at first instance appears to have made a legal or factual error or acted ultra vires - appellant failed to make such a case - leave to appeal refused - appeal dismissed - stay order set aside.
Appeal by Department of Social Security against decision and order of Dight C in Print P1881
C No 60390 of 1997
24 December 1997
Printed with the authority of the Australian Industrial Relations Commission
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