AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal
Pamela T Wilson
and
Australian Taxation Office
Appeal by Pamela T Wilson against the decision [Print PR906158] of
Commissioner Bacon on 5 July 2001 in U No. 40222 of 2000
(C2001/4097)
VICE PRESIDENT McINTYRE |
||
SENIOR DEPUTY PRESIDENT HARRISON |
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COMMISSIONER LAWSON |
SYDNEY, 9 NOVEMBER 2001 | |
Appeal - s.170CE application for relief - termination of employment - employee serving a period of probation - employment terminated after period of probation ended - unsatisfactory performance provisions in certified agreement - failure of employer to apply them to employee - failure of employer to terminate employment in manner required by Public Service Act 1999 - whether error in views reached about these matters - whether error in view that termination not harsh, unjust or unreasonable - order quashed - whether termination was harsh, unjust or unreasonable - remedy - ss.45, 170CA, 170CE, 170CG, 170CH, 170JF - Public Service Act 1999, ss.22,29
DECISION
INTRODUCTION
[1] This is an appeal (for which leave to appeal is required) by Pamela T Wilson against a decision of 5 July 2001 (PR906158) of Bacon C dismissing an application by her under s.170CE(1)(a) of the Workplace Relations Act 1996 (the WR Act). Ms Wilson's application sought relief in respect of the termination of her employment by the Australian Taxation Office (the ATO).
[2] The provisions of the WR Act referred to in this decision are those in effect at the time of the events referred to. The WR Act has since been amended by the Workplace Relations Amendment (Termination of Employment) Act 2001.
[3] Ms Wilson was admitted to practice as a barrister of the Supreme Court of Queensland in October 1987 and, after admission, completed a Master of Commercial Laws. In early 2000, Ms Wilson obtained an EL1 (executive level 1) position with the GST Rulings Unit of the ATO in Brisbane. According to the advertisement for the position which Ms Wilson obtained, its important functions are:
[4] The ATO's offer of employment to Ms Wilson was contained in a letter dated 3 February 2000 which included:
"Your employment is subject to:
Probation
You will be on probation for a period of 3 months from the date you commence employment. During this period, if the ATO is not satisfied with your work performance or conduct, your engagement will be terminated."
[5] As appears from this letter Ms Wilson was on probation for a period of 3 months from the date she commenced employment. Ms Wilson commenced employment on 21 February 2000. Accordingly, her period of probation ended on 20 May 2000.
[6] In force during Ms Wilson's employment by the ATO was a certified agreement called the ATO (General Employees) Agreement 1998 (the ATO Agreement or the 1998 Agreement). The ATO Agreement contained, among other things, provisions relating to unsatisfactory performance by employees and how this was to be handled by the ATO. We note here that, after we reserved our decision, McIntyre VP sent the following fax to the parties:
Both parties advised us that the correct position was as set out in this fax. They also expressed the view that, while the relevant provisions of the 1998 Agreement were not identical to those of the 2000 Agreement, they were similar.
[7] On 19 May 2000, the ATO wrote a letter to Ms Wilson attaching a notice of termination of employment dated 19 May 2000 as follows:
"NOTICE OF TERMINATION OF EMPLOYMENT
Public Service Act 1999 - Section 29(1)
I, Geoffrey William Hatfield Mills, being a person delegated to exercise powers under Section 29 of the Public Service Act 1999;
GIVE NOTICE TO YOU, Pamela Wilson, Executive Level 1, GST Rulings Unit that:
1. Your engagement as an employee with the Australian Taxation Office was subject to the condition that you would be on probation for a period of 3 months; and
2. Having had regard to your work since your engagement, it has been determined that you are considered unsuitable for the duties you are undertaking; and
3. In accordance with the provisions of section 29(1) and section 29(3)(f) of the Public Service Act 1999, your employment is terminated on the ground that you have failed to meet one of the conditions of your employment.
Date of Effect
Termination of your employment will take effect at 9.30am on 19 May 2000.
If the date of effect is less than 14 days after the day on which you are given this notice of termination, you will be paid compensation in lieu of the notice required."
[8] The ATO's notice of termination was not received by Ms Wilson until 22 or 23 May 2000; that is, after the end of her 3 month period of probation.
[9] Ms Wilson filed her application under s.170CE(1)(a) of the WR Act on 9 June 2000. The ATO raised the threshold jurisdictional objection that Ms Wilson was excluded from the operation of the relevant provisions of the WR Act because, to put it briefly, when her employment was terminated she was serving a period of probation of 3 months or less; see s.170CC(1)(b) of the WR Act and regulation 30B(1)(c) of the Workplace Relations Regulations. This objection was dismissed by Hoffman C in a decision of 31 October 2000 (Print T2762) and his decision was confirmed on appeal by a Full Bench (Giudice J, President, Williams SDP and Bacon C) on 26 February 2001 (PR901127). In so deciding, the Full Bench determined that Ms Wilson's employment was terminated on the date on which the ATO's letter and accompanying notice were communicated to her; that is on 22 or 23 May 2000.
THE DECISION OF BACON C
[10] Following the Full Bench decision of 26 February 2001, Ms Wilson's substantive application for relief under s.170CE(1)(a) of the WR Act came before Bacon C who dismissed it in his decision of 5 July 2001.
[11] Bacon C, in his decision, under the heading "Background":
(1) referred to the 3 month period of probation; and
(2) said "it is clear that the applicant was terminated for unsatisfactory work performance during the period of probation".
[12] Under the heading "Valid reason related to capacity", Bacon C:
(1) referred to the requirement included in s.170CG(3)(a) of the WR Act that the Commission must have regard to whether there was a valid reason for the termination related to the capacity of the employee;
(2) referred to evidence relating to the standard of Ms Wilson's work; and
(3) concluded that her termination was for a valid reason.
[13] Under the heading "Employee notified of that reason", Bacon C:
(1) referred to a number of meetings between officers of the ATO and Ms Wilson during her employment and to other events; and
(2) said that he was satisfied that Ms Wilson was notified of the reason for her termination and was given an opportunity to respond to the ATO's conclusion that her performance was below the required standard.
[14] Under the heading "Was the applicant warned about her performance?", Bacon C:
(1) expressed the view that Ms Wilson was warned about her performance and was provided with an opportunity to improve it; and
(2) said it is "an unusual case" and that it was necessary to consider the facts in the context that Ms Wilson was serving a 3 month probation.
[15] Under the heading "Procedural fairness", Bacon C said:
"[20] It is the respondent's submission that the applicant was terminated pursuant to ss.29(1) and 3(f) of the Public Service Act 1999 because of her unsatisfactory performance during her three months of probation. The applicant did not receive the letter of termination until after the probation had expired. Contextually there can be no doubt that the decision to terminate the applicant's employment was taken and was attempted to be effected during the period of probation. However because the applicant did not attend for work on 19 May the employment was not terminated during the period of probation. As a result, the applicant argues that the decision to terminate pursuant to the Public Service Act 1999 which is grounded on her poor performance during the probation period was unlawful and/or a nullity.
[21] The role in the Commission in these proceedings is to `ensure that in consideration of an application in respect of a termination of employment to provide a fair go all around to both the employer and the employee concerned' (see s.170CA(2)). In the circumstances in this matter it would not provide a fair go all around to the respondent to have the matter determined on the basis submitted by the applicant. In my view the decision of the respondent must be considered in the context in which it was made. The decision to terminate was made in the context of an employee serving a period of probation. The error (if error be the right word) of the respondent is that it failed to serve the applicant with the instrument terminating her employment during the period of probation.
[22] The Full Bench was compelled to take a legal approach to this question when deciding whether or not the applicant was excluded by Regulation 30(B)(1)(c). I do not believe that I am required to take a strictly legal approach to this question when considering whether or not the termination was harsh unjust or unreasonable. The Act requires that these applications be determined on the principal consideration of a fair go all around. In my view the applicant's submission would result in a failure of the Commission to provide a fair go all around to the respondent. It was not for the respondent to know at the time that the letter of termination was written and the decision to terminate was made that the decision would not be able to be conveyed to the applicant until after the probationary period had ended. The termination must properly be considered in the context in which it was made. The applicant's submission on this point is not accepted."
[16] Under the heading "The certified agreement", Bacon C said:
"[23] The applicant submits that the respondent failed to provide to her a number of provisions contained in The Australian Tax Office (General Employees) Agreement 1998 (the agreement). Specifically the agreement contains a number of provisions which go to performance development and management systems, performance counselling and unsatisfactory performance procedures. The respondent was unable to establish that probationary employees are exempt from these provisions of the agreement. Nevertheless it is difficult to reconcile many of the specific provisions in the agreement with the concept of probationary employment. Especially when the probationary employment is of only three months duration. The applicant's offer of ongoing employment contained the following clause:
`Probation
You will be on probation for a period of three months from the date you commence employment. During this period if the ATO is not satisfied with your work performance or conduct your engagement will be terminated.'
[24] Yet under the provisions of the agreement an employee whose work performance has become unsatisfactory and who has received a final written warning is entitled to receive a period in which to achieve the required standard. This period will generally be three months except where the Director determines that a shorter period is appropriate. That provision does not sit comfortably with a three month period of probation.
[25] The applicant's employment was made pursuant to the Public Service Act 1999. That legislation specifically allows for engagement subject to probation (s.22(6)). Section 29(3) specifically allows for the termination of an employee for failure to meet a condition imposed under 22(6). I am satisfied that the respondent was entitled to act in accordance with the provisions of the Public Service Act 1999. If there was a failure to provide any of the specific provisions of the certified agreement (if that agreement was applicable to the applicant's circumstances) then I am of the view that any such failure was minor and related to process rather than substance. I am unable to find that such failure was so significant or of such substance that it would support a finding that the termination was harsh, unjust or unreasonable.
[26] It is not sufficient to establish that a failure to apply the agreement occurred. There is still an onus on the applicant to establish that such failure caused the termination to be harsh, unjust or unreasonable. There is no need for me to determine whether there was in this case a failure to provide to the applicant the provisions of clauses 94 and 95 of the certified agreement. Even if such a failure occurred, I am not satisfied that such failure caused the applicant's termination to be harsh, unjust or unreasonable."
[17] Under the heading "Conclusion", Bacon C said:
"[27] For the foregoing reasons I am satisfied that:
1. There was a valid reason relating to the applicant's capacity; and
2. The applicant was notified of that reason; and
3. The applicant was given an opportunity to respond to the reasons relating to her capacity; and
4. The applicant had been warned about her unsatisfactory performance before the termination; and
5. There are other relevant matters to be considered.
[28] Having regard to the above matters and for the foregoing reasons I have concluded that the termination of the applicant's employment was not harsh, unjust or unreasonable. Accordingly the application is dismissed."
MS WILSON'S APPEAL
[18] The grounds in Ms Wilson's notice of appeal are:
"1. That the Commissioner erred as a matter of fact in finding that the Applicant was not at work on the 19th May 2000.
2. The Commissioner erred as a matter of fact in finding that the Applicant attended G.S.T. training which was available for all Applicants.
3. The Commissioner erred as a matter of fact that the meeting between the Applicant and Mr Sawyer on the 14th April 2000 was to make the Applicant aware of her performance being unsatisfactory.
4. The Commissioner erred as a matter of fact that the two assessments completed for Mr McGowan were provided to Ms Blines and Mr Sawyer and that there was a discussion between Mr Sawyer and Ms Blines on those assessments.
5. The Commissioner erred as a matter of fact in not taking account of the evidence of Mr Hamey in respect to the assessments carried out for Mr McGowan.
6. The Commissioner erred as a matter of law in that he found that he was not required to take a strictly legal approach to the question of (The question being whether or not the Applicant was terminated in the period of probation) when considering whether or not the termination was harsh unjust or unreasonable.
7. The Commissioner erred as a matter of law in finding that the employer was entitled to assess the employee as if they were probationary and not apply the provisions of clauses 94 and 95 of the Certified Agreement in respect to her assessment.
8. There is a public interest in the appeal in the principle that:
(a) the learned Commissioner should exercise his powers in accordance with the provisions of the Workplace Relations Act 1996.
(b) the learned Commissioner should make factually accurate assessments based on the evidence and exercise his discretion reasonably.
9. Such other grounds as the Honourable Full Bench of the Australian Industrial Relations Commission may deem fit.
10. The applicant requests that the Full Bench find that the order of Commissioner Bacon dated 5th July 2001 be set aside and that on the basis of the errors of fact and law the Full Bench exercise its powers and reinstate the Applicant to her former position with such other necessary orders that ensure that the Applicant is not financially disadvantaged by the termination."
[19] The appeal was heard by us in Brisbane on 5 September 2001. Mr J Shepley of counsel appeared by leave for Ms Wilson and Mr J Logan SC by leave for the ATO.
[20] Provisions of the WR Act directly applicable to this appeal include ss.45(2) and 170JF(2). Section 45(2) states:
"(2) A Full Bench shall grant leave to appeal under subsection (1) if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted."
Section 170JF(2) states:
"For the avoidance of doubt, an appeal to a Full Bench under section 45 in relation to an order made 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."
(We will treat Bacon C's decision to dismiss Ms Wilson's application as an order dismissing it.)
[21] As will be seen, we have come to the view that, as a consequence of views Bacon C reached about the unsatisfactory performance provisions in the ATO Agreement and as to whether the ATO complied with the Public Service Act 1999 (the PS Act) in terminating Ms Wilson's employment, he was in error in deciding to make the order dismissing Ms Wilson's application.
BACON C'S VIEWS ABOUT THE UNSATISFACTORY PERFORMANCE PROVISIONS IN THE ATO AGREEMENT
[22] The correctness of these views is raised by the seventh ground of Ms Wilson's appeal which contends that Bacon C "erred as a matter of law in finding that the employer was entitled to assess the employee as if they were probationary and not apply the provisions of clauses 94 and 95 of the Certified Agreement in respect to her assessment". This ground arises from the views (which we have set out earlier) expressed by Bacon C under his heading "The certified agreement".
[23] We noted earlier that the provisions of the certified agreement to which the parties referred before Bacon C (that is, those set out in attachment D to Ms Wilson's affidavit sworn 28 March 2001) were those in the 2000 Agreement and not those in the 1998 Agreement. We also noted that both parties expressed the view that, while the relevant provisions of the 1998 Agreement were not identical to those of the 2000 Agreement, they were similar. We have ourselves compared the relevant provisions. In the next paragraph we set out clauses 95 and 96 of the 1998 Agreement. The corresponding clauses in the 2000 Agreement are, in substance, identical. In this circumstance we are satisfied that the views expressed by Bacon C about the provisions before him (that is, those in the 2000 Agreement) would have been the same had the correct provisions (that is, those in the 1998 Agreement) been before him.
[24] The ATO Agreement (that is, the 1998 Agreement) is an agreement made pursuant to s.170LJ of the WR Act between the ATO and a number of unions. It was certified pursuant to Division 2 of Part VIB by Deegan C on 28 August 1998. It is expressed to cover and be binding on the employer, various unions and employees of the ATO (subject to some irrelevant exceptions) who are employed in classifications below APS executive level 2. (Ms Wilson, as previously noted, was employed at executive level 1, which is a level below executive level 2.) In Section N - Employee Performance of the ATO Agreement, are provisions relating to that topic, including:
"95. Performance Counselling
95.1 Employees are entitled to know if their Team Leader thinks their work performance is at risk of falling below the general standard expected for a classification level (or the specific requirements for a particular job).
95.2 Employees should be given help to improve their work performance to a satisfactory level through fair procedures that protect the interests of the ATO, its employees and its clients.
95.3 Where informal discussions with employees about their work performance does not lead to an acceptable improvement in performance, formal work performance counselling or inefficiency procedures should take place.
96. Streamlined Inefficiency Procedures
Preamble
This Agreement introduces revised inefficiency procedures intended to focus the responsibility for management of under performing employees at the workplace level. The revised procedures provide for team leaders to be more responsible for the direct management of under performing employees while providing employees with a formal framework under which issues concerning assessment of their efficiency can be properly managed.
Final warning
96.1 If, at any time, an employee's work performance becomes unsatisfactory, a written final warning will be issued to the employee by the Director.
96.2 An employee's work performance will be considered to be unsatisfactory if they fail to attain or sustain a standard of efficiency that a person may reasonably be expected to attain or sustain in the performance of those duties.
96.3 Before issuing a final warning, the Director must be satisfied that:
(a) the procedure to date has been fair and free from bias; and
(b) the employee has seen and had an opportunity to comment on the team leader's recommendation; and
(c) the employee has been given an opportunity to put his or her case to the Director and to raise any factors which may have materially prejudiced the employee from achieving the expected standard.
96.4 The written warning will:
(a) detail the problems with the employee's performance;
(b) confirm the standard required to be achieved to be satisfactory;
(c) specify how long the employee has got to reach the standard. This period will generally be 3 months, except where the Director determines that a shorter period is appropriate. In these cases the written warning will include the reasons for the shorter period; and
(d) set out the likely consequences if the employee does not reach the required standard.
Assessment Period
96.5 The team leader will then assess the employee's performance on a fortnightly basis, or on a shorter period if appropriate. In circumstances where, in the opinion of the Director, there would be a benefit from the employee's performance being assessed by an independent assessor, the Director will appoint an assessor from outside the immediate work area. The employee will be given an opportunity to comment on each progress report. Progress reports, including any employee comments, will be provided to the Director as they are produced.
96.6 The employee may not be transferred to another job, assigned to other duties or offered a voluntary redundancy except as part of the performance management plan.
96.7 Requests for annual leave, purchased leave or long service leave may be approved, but will not extend the assessment period unless this is agreed with the Director or unless the leave had been approved prior to the commencement of the formal inefficiency process.
96.8 Absences due to illness will not extend the period beyond 2 months, except where:
(a) any single absence is for more than five working days; and
(b) the employee's fitness for duty has been reviewed by the Australian Government Medical Officer, if the Director considers it necessary.
Where Performance Has Improved
96.9 If performance has improved to the required standard, no further action will be taken.
Action if Performance Still Unsatisfactory
96.10 If performance is still unsatisfactory at the end of the assessment period, the employee will be given seven days to show cause why action should not be taken against them.
96.11 The action that may be taken against the employee includes, but is not limited to, the following:
(a) transfer to a more suitable work unit; or
(b) reduction in salary and/or classification; or
(c) termination of employment on the grounds of inefficiency."
[25] The ATO did not purport to apply these provisions to Ms Wilson (although it submitted that the substance of them had been applied to her - a matter to which we will return).
[26] What happened in Ms Wilson's case can be outlined as follows:
(1) on 5 April 2000, Ms Wilson entered into a performance agreement with her manager, Mr Kent Sawyer, which, among other things, specified work activities and performance measures and indicators and contained a development plan specifying a next review date of 12 May 2000;
(2) Ms Wilson's performance was monitored and, in general, the ATO was of the view that it was not up to standard;
(3) on 14 April 2000, a meeting took place between Mr Sawyer and Ms Wilson. Mr Sawyer's record of the meeting includes:
"I met with Pamela today to provide feedback on her performance in her position as Senior Adviser, GST Rulings Unit.
I explained to Pamela that her probation ran to 20 May 2000 and that, up to now, in my opinion, she has not been able to perform to the standard required of the position.
...
My concluding comments were that if I were to make a recommendation today, it would be that Pamela could not satisfactorily carry out the duties of an EL1 in the Rulings Unit (I note these are set out in her performance agreement). However, I thought it in the interests of natural justice that she be given the opportunity to do some further work of an opinion type for other senior officers in GST Rulings, on questions that need answers and are of a kind that may form part of a public ruling. This work could enable others to form an opinion of Pamela's ability, in the sense that I may have misjudged Pamela's performance.
...
I have given Pamela a copy of this report.";
(4) on 17 April 2000, a follow-up meeting to that of 14 April 2000 between Mr Sawyer and Ms Wilson took place. Mr Sawyer's record of this meeting includes:
"Pamela asked that we meet this morning as a follow up from our interview of Friday last. At the outset Pamela said that she had thought about our feedback discussion on Friday and decided that she would like to move to a different team.
...
I sought reasons why Pamela had wanted to move. Pamela said her sole reason was that I wouldn't change my view.
In response to Pamela's view, I stated that I had not made a final decision and that my mind remained open.
...
After further reflection, Pamela suggested that she would like to stay with Team 3.
...
I have given Pamela a copy of this record.";
(5) the monitoring of Ms Wilson's performance continued. She was asked to prepare opinions on a number of questions. The ATO remained of the view that her performance was not satisfactory;
(6) on 10 May 2000, Mr Sawyer wrote a memorandum to Mr G Mills, Acting Assistant Commissioner, GST Rulings and Determinations Unit, Brisbane, which concluded:
"Ms Wilson has not demonstrated a sufficient level of skills required to satisfactorily perform the role of the EL1 officer in the GST Rulings Unit. In particular she has not demonstrated to me sufficient:
By virtue of paragraph 29(3)(f) of the Act I recommend that Ms Wilson's employment be terminated as she has failed to meet a condition imposed under subsection 22(6).";
(7) on 12 May 2000, Mr Mills wrote the following letter to Ms Wilson:
"Re: Probationary Appointment
I am writing to inform you that as the Director, I am currently reviewing your continuing employment with the Australian Taxation Office (ATO).
You commenced work with the ATO on 21st February 2000. Since that time you have had a number of difficulties working as a Senior Advisor, Executive Level 1. These concerns were first formally discussed with you on 14/4/2000 and since that time you have been provided with opportunities and assistance to rectify these difficulties.
I have enclosed a copy of a report to me from your manager, Mr Kent Sawyer which recommends that your employment be terminated for the following reasons:
You have not demonstrated a sufficient level of ability in 3 essential criteria ie:
· Analytical skills; and
· Leadership/mentoring skills.
Since receiving this report I have sought more detailed written comments from Ms Blines about both the early QA work and the more recent cases. A copy of the comments provided are attached.
I have also examined the results of two of your research cases and the written appraisals of them prepared by a very experienced Senior Officer. Copies of these documents are also attached.
Based on the above I am not completely satisfied that you are fit to continue as an employee of the ATO. As such I am considering terminating your probation under the provisions of section 29(3) of the Public Service Act 1999.
You have until close of business on Wednesday 17/5/2000 to provide me with any comments or additional information about your ability to perform the duties of your position before I make a final decision.";
(8) on 17 May 2000, Ms Wilson provided to Mr Mills a written response to his letter of 12 May 2000. In this response, she dealt in detail with comments on her work by ATO officers;
(9) on 18 May 2000, a meeting took place between Mr Mills, Ms Wilson, Mr M Hogan (a union official) and Ms J Thompson (an ATO officer). Mr Mills, according to his written record of the meeting, said that the purpose of it was:
"1. for me to go over Pamela's submission (received 4.20pm on 17 May),
2. for me to clarify anything and to make sure that I was understanding Pamela's meaning,
3. for me to give my thoughts on the submission; and
4. to allow Pamela one final opportunity to comment."
After the meeting had proceeded for a time, Ms Wilson left it and did not return; and
(10) on 19 May 2000, Mr Mills signed the notice of termination which we set out earlier in this decision. And, as we have earlier noted, this letter was not received by Ms Wilson until 22 or 23 May 2000; that is, after the end of her period of probation.
[27] Bacon C dealt with the performance improvement provisions of the ATO Agreement in his paragraphs [23] to [26]. In these paragraphs, he expressed a number of views including that:
(1) the unsatisfactory performance provisions in the ATO Agreement do not sit comfortably with a 3 month period of probation;
(2) the ATO was entitled, under s.29(3) of the PS Act, to terminate Ms Wilson's employment for failure to meet a condition imposed under s.22(6) of the PS Act;
(3) if there was a failure by the ATO to apply the unsatisfactory performance provisions of the ATO Agreement to Ms Wilson, it was "minor and related to process rather than substance" and was not so "significant or of such substance as would support a finding that the termination was harsh, unjust or unreasonable"; and
(4) there was no need to determine whether the ATO failed to apply to Ms Wilson the unsatisfactory performance provisions because, if such a failure occurred, it did not cause Ms Wilson's termination to be harsh, unjust or unreasonable.
[28] Before dealing with these views we refer to some provisions of the PS Act. Section 22(6) states:
"The engagement of an APS employee (including an engagement under section 72) may be made subject to conditions notified to the employee, including conditions dealing with any of the following matters:
(a) probation;
(b) citizenship;
(c) formal qualifications;
(d) security and character clearances;
(e) health clearances."
Section 29, so far as is relevant, states:
"(1) An Agency Head may at any time, by notice in writing, terminate the employment of an APS employee in the Agency.
Note: The Workplace Relations Act 1996 has rules and entitlements that apply to termination of employment.
(2) For an ongoing APS employee, the notice must specify the ground or grounds that are relied on for the termination.
(3) For an ongoing APS employee, the following are the only grounds for termination:
...
(c) non-performance, or unsatisfactory performance, of duties;
...
(f) failure to meet a condition imposed under subsection 22(6)".
[29] We now return to the views of Bacon C which we set out in our paragraph [27]. The first concerns the interrelationship between the unsatisfactory performance provisions in the ATO Agreement and Ms Wilson's 3 month period of probation. In our view, the unsatisfactory performance provisions of the ATO Agreement applied to employees serving a period of probation. There is nothing in the agreement to suggest otherwise. We note that a document called Candidate Information Kit issued in respect of various positions, including that to which Ms Wilson was appointed, by the recruiting agency, under the heading Employment Conditions, includes "The remuneration package and terms and conditions for all permanent ATO positions are governed by the ATO Certified Agreement (1998) ...".
[30] While s.22(6) of the PS Act permits the engagement of an employee to be made subject to conditions notified to the employee, including conditions dealing with probation, and Ms Wilson's employment was made subject to such a condition, the condition dealing with probation was, nonetheless, no more or less than a term of her contract of employment. In our view, it could not render the unsatisfactory performance provisions of the ATO Agreement inapplicable to her. It follows that, in our view, the unsatisfactory performance provisions were applicable to Ms Wilson.
[31] The significance of the 3 month period of probation is, of course, that, pursuant to s.170CC(1)(b) of the WR Act and regulation 30B(1)(c) of the Workplace Relations Regulations, while Ms Wilson was serving a period of probation, it excluded her from the operation of s.170CE(1)(a) of the WR Act. A termination of employment during a period of probation can, of course, be harsh, unjust or unreasonable. The legislation, however, excludes the terminated employee from the operation of s.170CE(1)(a) of the WR Act.
[32] In our view, the situation is properly analysed as follows:
(1) the unsatisfactory performance provisions of the ATO Agreement are applicable to all employees covered by the agreement, including employees serving a period of probation;
(2) a failure by the ATO to comply with the provisions with respect to an employee may render harsh, unjust or unreasonable the termination of that employee for unsatisfactory performance;
(3) if such a termination occurs during a period of probation within regulation 30B(1)(c), the employee is excluded from bringing an application under s.170CE(1)(a) on the ground that the termination was harsh, unjust or unreasonable;
(4) if, however, such a termination occurs after the expiry of a period of probation under regulation 30B(1)(c), the employee is (subject to other provisions of the legislation) not excluded from bringing an application under s.170CE(1)(a) on the ground that the termination was harsh, unjust or unreasonable;
(5) in the present case, Ms Wilson's employment was terminated after the end of a period of probation within regulation 30B(1)(c) and (no other provision of the legislation preventing her) was not excluded from bringing her application under s.170CE(1)(a) on the ground that her termination was harsh, unjust or unreasonable; and
(6) the question, accordingly, is - did the ATO's failure to apply the unsatisfactory performance provisions of the ATO Agreement to Ms Wilson, either of itself or in conjunction with other considerations, render Ms Wilson's termination harsh, unjust or unreasonable.
[33] The second view (see subparagraph (2) of our paragraph [27]) reached by Bacon C was that the ATO was entitled, under s.29(3) of the PS Act, to terminate Ms Wilson's employment for a failure to meet a condition imposed under s.22(6) of the PS Act.
[34] We have earlier set out s.22(6) and the relevant part of s.29 of the PS Act. The ground in s.29(3) of the PS Act relied on by the ATO in terminating the employment of Ms Wilson was that she failed to meet a condition imposed under s.22(6), meaning the probation provision in its letter of offer of employment of 3 February 2000.
[35] As we have said, Ms Wilson's employment was terminated after the end of her period of probation. Assuming in the ATO's favour (without so deciding) that Ms Wilson had failed to meet a condition imposed under s.22(6) of the PS Act, this ground was, in our opinion, incapable of being relied upon to terminate her employment after the end of her period of probation. (It would, however, have been open to the ATO, either during or after Ms Wilson's period of probation, to rely on the ground specified in s.29(3)(c) of the PS Act; that is, "non-performance, or unsatisfactory performance, of duties". It did not, however, do so.)
[36] The third view (see subparagraph (3) of our paragraph [27]) reached by Bacon C was that any failure by the ATO to apply to Ms Wilson the unsatisfactory performance provisions of the ATO Agreement was "minor and related to process rather than substance". The unsatisfactory performance provisions of the ATO, however, are all about process; that is, the process for dealing with unsatisfactory performance. They embody an agreement as to the manner in which a case such as Ms Wilson's is to be dealt with. The ATO did not purport to apply them to Ms Wilson. It did, however, follow procedures which have some parallels to the unsatisfactory performance provisions in the ATO Agreement although they were compressed into a relatively short period. Ms Wilson was, for instance, made aware on a number of occasions of the ATO's view that her performance was unsatisfactory. She was given opportunities to improve her performance. She was told that her continuing employment was under review. She was given an opportunity to respond to the views of other ATO officers and did so. Nevertheless, she did not have applied to her the unsatisfactory performance provisions of the ATO Agreement, in that, in particular, the ATO did not:
(1) issue to Ms Wilson a written final warning (clause 96.1) containing the information required by clause 96.4; in particular, specifying a period that would generally be 3 months or, if shorter, including the reason for specifying a shorter period;
(2) provide fortnightly (or more frequent) assessments of Ms Wilson's performance and give Ms Wilson an opportunity to comment on each report (as required by clause 96.5); or
(3) give Ms Wilson 7 days to show cause why action should not be taken against her (as required by clause 96.10).
[37] In our view, in these circumstances, there was not a minor but a substantial failure by the ATO to apply the unsatisfactory performance provisions of the ATO Agreement to Ms Wilson.
[38] The fourth view (see subparagraph (4) of our paragraph [27]) reached by Bacon C was that there was no need to determine whether the ATO failed to apply the unsatisfactory performance procedures to Ms Wilson because, if such a failure occurred, it did not cause Ms Wilson's termination to be harsh, unjust or unreasonable. We have dealt with this view in discussing earlier ones. For the reasons we have given, the ATO was, in our opinion, required to apply to Ms Wilson the unsatisfactory performance procedures in the ATO Agreement and its failure to do so was a substantial failure.
[39] Accordingly, it is, in our opinion, seriously arguable (the term used in Miller v Australian Industrial Relations Commission (2001) 104 IR 415 at paragraph 51) that Bacon C was in error in his view that any failure to apply to Ms Wilson the unsatisfactory performance provisions of the ATO Agreement did not render Ms Wilson's termination harsh, unjust or unreasonable.
BACON C'S VIEWS ABOUT THE ATO'S COMPLIANCE WITH THE PUBLIC SERVICE ACT IN TERMINATING MS WILSON'S EMPLOYMENT
[40] The correctness of these views is raised by the sixth ground of appeal; that is, that:
"The Commissioner erred as a matter of law in that he found that he was not required to take a strictly legal approach to the question of (The question being whether or not the Applicant was terminated in the period of probation) when considering whether or not the termination was harsh unjust or unreasonable."
[41] This ground arises from the statements made by Bacon C in his paragraph [22], the last of 3 paragraphs under his heading "Procedural fairness". In these paragraphs (set out in our paragraph [15]), Bacon C:
(1) noted Ms Wilson's argument that, as her employment was not terminated during the period of probation, the decision was "unlawful and/or a nullity";
(2) said that the decision to terminate Ms Wilson was made in the context of an employee serving a period of probation and that "The error (if error be the right word) of the respondent is that it failed to serve the applicant with the instrument terminating her employment during the period of probation."; and
(3) said that where "The Full Bench was compelled to take a legal approach to this question when deciding whether or not the applicant was excluded by Regulation 30B(1)(c). I do not believe that I am required to take a strictly legal approach to this question when considering whether or not the termination was harsh unjust or unreasonable. The Act requires that these applications be determined on the principal consideration of a fair go all around. In my view the applicant's submission would result in a failure of the Commission to provide a fair go all around to the respondent. It was not for the respondent to know at the time that the letter of termination was written and the decision to terminate was made that the decision would not be able to be conveyed to the applicant until after the probationary period had ended. The termination must properly be considered in the context in which it was made. The applicant's submission on this point is not accepted.".
[42] We express the following views about these matters:
(1) section 29(2) of the PS Act required the ATO to specify the ground or grounds relied on for the termination of employment of Ms Wilson;
(2) the only ground relied on was that Ms Wilson "failed to meet one of the conditions of your employment";
(3) the "condition" which Ms Wilson allegedly failed to meet was the provision in her letter of offer called "Probation";
(4) this ground was available to terminate Ms Wilson's employment only while she was serving a period of probation;
(5) Ms Wilson's employment was not terminated until after the end of her period of probation;
(6) this being so, her employment was not terminated in a manner provided for by the PS Act;
(7) accordingly, Ms Wilson's termination was, as she submitted, unlawful; and
(8) the question in these circumstances is - was the termination harsh, unjust or unreasonable.
[43] We take the final sentence in Bacon C's paragraph [22] ("The applicant's submission on this point is not accepted.") to mean that he did not accept Ms Wilson's submission, noted in his paragraph [20], that her termination was "unlawful and/or a nullity". In our previous paragraph we, among other things, concluded that Ms Wilson's termination was unlawful.
[44] Accordingly, it is in our opinion seriously arguable (see, again, Miller v Australian Industrial Relations Commission) that Bacon C, in rejecting Ms Wilson's submission that her termination was unlawful, was in error in concluding that Ms Wilson's termination was not harsh, unjust or unreasonable.
LEAVE TO APPEAL?
[45] We have concluded that Bacon C:
(1) was in error in holding that any failure by the ATO to apply to Ms Wilson the unsatisfactory performance provisions of the ATO Agreement was minor;
(2) was in error in rejecting Ms Wilson's submission that the ATO's termination of her was unlawful; and
(3) accordingly, for each of these reasons, it is seriously arguable that Bacon C was in error in concluding that Ms Wilson's termination was not harsh, unjust or unreasonable.
[46] We are, in these circumstances, of the opinion that the matter is of such importance that, in the public interest, leave to appeal should be granted (s.45(2) of the WR Act). We grant leave.
OUR DECISION UNDER SECTION 45(7)
[47] Section 45(7) of the WR Act includes:
"On the hearing of the appeal, the Full Bench may do one or more of the following:
(a) confirm, quash or vary the decision or act concerned;
(b) make an award, order or decision dealing with the subject-matter of the decision or act concerned".
[48] We earlier expressed the view that it is seriously arguable that Bacon C was in error in concluding that Ms Wilson's termination was not harsh, unjust or unreasonable because he was in error in his views, (1) that the ATO's failure to apply to Ms Wilson the unsatisfactory performance provisions of the ATO Agreement was minor and, (2) that Ms Wilson's termination was not unlawful. The first of these errors is, we think, an error of the type described in House v R (1936) 55 CLR 499 (a failure to take into account a material consideration; that is, the nature, significance and purpose of the unsatisfactory performance provisions) and the second is an error of law.
[49] Because these views, which we have found to be in error, played a part in Bacon C's conclusion that Ms Wilson's termination was not harsh, unjust or unreasonable, we will, pursuant to s.45(7)(a), quash Bacon C's order. Having done so, we have decided, pursuant to s.45(7)(b), to make an order dealing with the subject-matter of it.
[50] We turn to s.170CG(3) of the WR Act which at the relevant time stated (it has since been amended):
"In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:
(a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee - whether the employee had been warned about that unsatisfactory performance before the termination; and
(e) any other matters that the Commission considers relevant."
[51] As to the circumstances specified in s.170CG(3)(a), we respectfully agree with Bacon C's view that there was a valid reason within that section. Grounds 1 to 4 of Ms Wilson's notice of appeal challenge views expressed by Bacon C under his heading "Valid reason relating to capacity". Ground 5 of the appeal is that Bacon C did not take into account the evidence of Mr Hamey. However, even if we were to accept Ms Wilson's contentions in these 4 grounds, they do not lead us to the view that Bacon C erred in concluding that there was a valid reason related to Ms Wilson's capacity. The evidence satisfies us that Ms Wilson's performance was unsatisfactory and that, accordingly, there was a valid reason for her termination related to her capacity. We should add that the ground on which the ATO terminated Ms Wilson ("failed to meet one of the conditions of your employment") does not, in our view, constitute a valid reason related to Ms Wilson's incapacity because, as we said in our paragraph [42], this ground was only available while she was serving a period of probation. Section 170CG(3)(a), however, refers to "a valid reason", not to the reason relied on by the employer. As we have said, we agree with Bacon C that there was "a valid reason" related to Ms Wilson's capacity.
[52] As to the circumstances specified in ss.170CG(3)(b), (c) and (d) we respectfully agree with Bacons C's conclusions that Ms Wilson was notified of "that reason", was given an opportunity to respond to any reason related to her capacity and had been warned about her unsatisfactory performance before the termination.
[53] Section 170CG(3)(e) refers to "any other matters that the Commission considers relevant". There are, in our view, two such matters:
(1) that the ATO failed in a substantial way to apply to Ms Wilson the unsatisfactory performance provisions of the ATO Agreement (see our paragraphs [22] - [39]); and
(2) that the ATO failed to terminate Ms Wilson's employment in accordance with the requirements of the PS Act (see our paragraphs [40] - [44]).
[54] Not to apply the substance of the unsatisfactory performance provisions of the ATO Agreement to Ms Wilson meant that she did not have the benefit of having applied to her the detailed and structured steps to be followed before an employee could be terminated on the ground of unsatisfactory performance. And, not to terminate Ms Wilson in accordance with the requirements of the PS Act was to terminate her employment unlawfully.
[55] Having dealt with the requirements of s.170CG(3) we record that we have also borne in mind s.170CA(2) ("fair go all round").
[56] We have come to the conclusion that, notwithstanding our views (which adopt those of Bacon C) about the circumstances in s.170CG(3)(a) to (d), that, (1) the failure of the ATO to apply to Ms Wilson the unsatisfactory performance provisions of the ATO Agreement and, (2) the failure by the ATO to terminate her employment in accordance with the requirements of the PS Act, each rendered her termination harsh, unjust or unreasonable. We so determine.
[57] We therefore turn to the matter of remedy. This matter was the subject of submissions at first instance. Ms Wilson submitted that, if her termination were found to be harsh, unjust or unreasonable, the appropriate remedy was reinstatement. In her submissions, she said she was prepared to be reinstated as an EL1 to any tax office, including an interstate one. The ATO, on the other hand, submitted that reinstatement would be inappropriate and that any remedy should be payment in lieu of reinstatement. On appeal, these submissions were repeated.
[58] The matter of remedy is dealt with in s.170CH of the WR Act which, so far as is relevant, states:
"(1) Subject to this section, the Commission may, on completion of the arbitration, make an order that provides for a remedy of a kind referred to in subsection (3), (4) or (6) if it has determined that the termination was harsh, unjust or unreasonable.
(2) The Commission must not make an order under subsection (1) unless the Commission is satisfied, having regard to all the circumstances of the case including:
(a) the effect of the order on the viability of the employer's undertaking, establishment or service; and
(b) the length of the employee's service with the employer; and
(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and
(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and
(e) any other matter that the Commission considers relevant;
that the remedy ordered is appropriate.
(3) If the Commission considers it appropriate, the Commission may make an order requiring the employer to reinstate the employee by:
(a) reappointing the employee to the position in which the employee was employed immediately before the termination.
(b) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination.
(4) If the Commission makes an order under subsection (3) and considers it appropriate to do so, the Commission may also make:
(a) any order that the Commission thinks appropriate to maintain the continuity of the employee's employment; and
(b) subject to subsection (5) - any order that the Commission thinks appropriate to cause the employer to pay to the employee an amount in respect of the remuneration lost, or likely to have been lost, by the employee because of the termination.
...
(6) If the Commission thinks that the reinstatement of the employee is inappropriate, the Commission may, if the Commission considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay the employee an amount ordered by the Commission in lieu of reinstatement.
(7) Subject to subsection (8), in determining an amount for the purposes of an order under subsection (6), the Commission must have regard to all the circumstances of the case including:
(a) the effect of the order on the viability of the employer's undertaking, establishment or service; and
(b) the length of the employee's service with the employer; and
(c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and
(d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and
(e) any other matter that the Commission considers relevant.
(8) In fixing an amount under subsection (6) for an employee who was employed under award conditions immediately before the termination, the Commission must not fix an amount that exceeds the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the employee; or
(ii) to which the employee was entitled;
(whichever is higher) for any period of employment with the employer during the period of 6 months immediately before the termination (other than any period of leave without full pay); and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period - the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations."
[59] Section 170CH(2) prohibits us from making an order that provides for a remedy of a kind specified in ss.170CH(3), (4) or (6) unless we are satisfied, having regard to the circumstances specified, that the remedy ordered is appropriate. Section 170CH(7) requires us, in determining an amount in lieu of reinstatement (assuming this remedy arises) to have regard to all the circumstances specified.
[60] We are unable, for the moment, to take the matter of remedy further because we do not have all the information we need to have regard to the circumstances specified in ss.170CH(2) and (7); in particular in relation to the circumstances specified in paragraphs (a), (c), (d) and (e) of these sections.
[61] We therefore direct Ms Wilson, within 21 days of today, to provide to us and the ATO complete submissions in relation to remedy and the ATO, within 21 days of receipt of Ms Wilson's submission, to provide to us and her a complete response. If Ms Wilson wants to reply, she is to do so fully within 7 days of the receipt of the ATO's response.
[62] Finally, we urge the parties to settle this long-running litigation.
BY THE COMMISSION:
VICE PRESIDENT
Appearances:
Mr J Shepley of counsel for Pamela T Wilson
Mr J Logan SC for the Australian Taxation Office
Date and place of hearing:
Brisbane:
2001
September 5
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