Marroun v State Transit Authority

1. [1]

   THE COURT: The appellant was, as at 11 April 2015, an employee with the State Transit Authority (“the STA”), at its Kingsgrove depot. On the day in question, he took a load of unclaimed lost property from the depot, ostensibly to be disposed of in accordance with standard procedure by leaving it at local charity bins. The property was in fact not ready to be disposed of and was not disposed of in local charity bins. This conduct resulted in disciplinary proceedings against the appellant, who, on 20 May 2015, was dismissed from his employment.

2. [2]

   The appellant appealed against the disciplinary action to the Industrial Relations Commission. That Commission accepted that the penalty was too severe, and that a reprimand would have been sufficient. Nevertheless, the Commission also found that the appellant had lied in his account of his conduct and that the relationship of trust necessary for continued employment had been destroyed. Accordingly, the Commissioner declined to interfere with the order made by the employer and dismissed the appeal. [1]

3. [3]

   The appellant then sought to appeal to the Industrial Court from a decision of the Commissioner on a question of law. That appeal was ultimately heard and determined by Walton J, the appellate jurisdiction of the Industrial Court having been transferred to the Supreme Court in 2016. Walton J dismissed the appeal. [2]

4. [4]

   On the critical issue, Walton J concluded that (i) the appellant had failed to identify a relevant decision of the Commission on a question of law; (ii) in so far as the appellant sought to claim procedural unfairness on the part of the Commission, that did not constitute a decision on a question of law, and (iii) there was, in any event, no procedural unfairness.

5. [5]

   The primary judge did not rely on his first conclusion, but disposed of the proceedings on the other bases. The primary judge was in error with respect to each of those three findings. There was, however, a separate and fundamental error which underlay the Commission’s approach. It will be addressed first.

(a) procedural history

1. [6]

   Prior to his dismissal, the appellant was employed in the Transport Service, to exercise functions of the STA, pursuant to s 68C(1) of the Transport Administration Act 1988 (NSW). The decision to dismiss the appellant was made by a delegate of the Transport Secretary exercising “employer functions of the Government”, pursuant to s 68C(3) and (4).

2. [7]

   Provisions (somewhat skeletal) relating to disciplinary matters are to be found in the Transport Administration (Staff) Regulation 2012 (NSW), made pursuant to s 68P of the Transport Administration Act. It will be necessary to make further reference to those regulations below.

3. [8]

   The appeal brought by the appellant from the dismissal decision was heard by a Commissioner of the Industrial Relations Commission, pursuant to s 98(1) of the Industrial Relations Act 1996 (NSW). The orders available to the Commission in determining such an appeal are to be found in s 100C(2) of the Industrial Relations Act, the scope of which is critical to one aspect of the present proceedings.

4. [9]

   The Commissioner having dismissed the appeal, the appellant then exercised a right of further appeal to the Commission in Court Session, pursuant to s 197B of the Industrial Relations Act, as it stood in February 2016. The scope of that appeal was also of importance to the resolution of the present proceedings, being limited to an appeal “against any decision of the Commission in the proceedings on a question of law.” A hearing was conducted by the Industrial Court (as the Commission in Court Session was then known) in July 2016, with final submissions being filed in August 2016. On 8 December 2016, before judgment had been delivered, the jurisdiction of the Industrial Court was transferred to the Supreme Court. [3] Proceedings pending in the Industrial Court, which had not been determined as at that time, became proceedings in the Supreme Court and the judicial officer who had constituted the Industrial Court determined the matter in the Supreme Court. [4] Judgment was delivered in the Supreme Court on 15 December 2016.

5. [10]

   The appeal from the judgment of Walton J was therefore an appeal from a judge in the Division. The appeal was brought pursuant to s 101(3A) of the Supreme Court Act 1970 (NSW) which allowed for an appeal to this Court “as provided by this section”.

(b) leave requirement

1. [11]

   The appellant foresaw the possibility that this language might, in appropriate circumstances, engage the requirements for leave, pursuant to s 101(2). As there was an issue as to whether the judgment under appeal involved an amount of $100,000 or more, the appellant filed an affidavit seeking to demonstrate that leave was not required, but also (informally) and contingent upon a finding that leave was required under s 101(2)(r), a summons seeking such leave.

2. [12]

   Section 101(3A) applies to “industrial proceedings within the meaning of Chapter 6A of the Industrial Relations Act”; s 355B(d) in that Chapter identifies proceedings under s 197B of the Industrial Relations Act. Section 101(3A) therefore applies to these proceedings. However, there is a wide range of industrial proceedings referred to in s 355B, including proceedings dealing with registration of industrial organisations and election of officers, which may not involve any particular sum of money. Generally, all cases not having a readily ascertainable monetary value (including appeals involving the liberty of the individual) require leave under s 101(2)(r). There is no reason to suppose that the effect of s 101(3A), in conferring an entitlement to appeal “as provided by [s 101]”, was not to apply the provisions of s 101(2). Accordingly, the appellant was right to seek leave to appeal on the basis that the amount involved was uncertain.

3. [13]

   Because, for reasons identified below, the appeal raises at least two issues of general public importance, and because the consequences for the appellant personally are not insignificant, it is appropriate to grant leave to appeal and to treat the notice of appeal as properly filed pursuant to that leave. (The respondent did not oppose a grant of leave, if required.)

(c) proceedings in supervisory jurisdiction

1. [14]

   As noted above, there was a live issue before the primary judge (Walton J) as to whether an appeal under s 197B of the Industrial Relations Act, limited to a decision of the Commission on a question of law, permitted an appeal based on a failure to accord procedural fairness. The primary judge concluded that it did not, a finding which was expressly challenged on the appeal. However, lest that aspect of the appeal fail, the appellant sought to protect himself by filing a summons in the supervisory jurisdiction of the Court seeking relief with respect to the decision of the Commission, pursuant to s 69 of the Supreme Court Act. In particular, he sought an order in the nature of certiorari quashing the decision of the Commission.

2. [15]

   For reasons explained below, that course was unnecessary because, properly understood, s 197B allowed for the appeal alleging procedural unfairness, on the particular basis identified by the appellant. Further, the appellant was entitled to succeed on an entirely separate ground, namely that the Commission misconceived the scope and nature of its jurisdiction. The summons in the supervisory jurisdiction may therefore be dismissed as unnecessary.

3. [16]

   Had it been necessary to rely upon the Court’s supervisory jurisdiction, the summons could not have been heard in this Court. That is because the need for the summons would only have arisen in the event that the appeal against the judgment of the primary judge fails. For this Court to set aside the decision of the Commission would be to make a decision inconsistent with the judgment of the primary judge, which would still stand, the appeal having been dismissed. (It was not suggested that this Court had jurisdiction under s 69 to set aside a judgment of a judge of the Supreme Court in a Division.) The Court would not exercise its jurisdiction to create inconsistent judgments of a superior court. In any event, for the reasons noted above, the summons was unnecessary and should be dismissed.

4. [17]

   It follows that, however informally sought, it is appropriate to grant the appellant leave to appeal and to deal with the appeal as argued by reference to the grounds in the notice of appeal filed on 13 March 2017, albeit without leave.

Decision of Commissioner

1. [18]

   It will be necessary to refer below to various aspects of the Commissioner’s reasons. Shortly stated the Commissioner determined that the responsible officer of the STA had concluded that the appellant’s conduct involved “carelessness, not conscious bad intent.” [5] He noted that the written report recommending dismissal did not include a finding that the appellant’s conduct “could be characterised as misconduct.” [6] The Commissioner then stated: [7]

2. [19]

   At least implicitly, the Commissioner accepted that if the matter were to be disposed of on that basis alone, the appeal would have been allowed and the dismissal set aside. In fact the Commissioner concluded, having regard to the statutory scheme, that his function on appeal was “not confined to the review of the allegation and the decision made by the employer.” [8]

3. [20]

   The Commissioner then found that, although the appellant had an obligation to be candid with his employer in answering questions as to what he had done with the property he had taken (his conduct having been recorded on CCTV), the appellant was “not candid.” [9] The Commissioner found that he had “provided to the STA a partially fabricated account of what occurred.” He had invited the STA to speak to his wife, which it did, knowing that his wife would also give a partially fabricated account. [10] The Commissioner concluded: [11]

4. [21]

   He stated that the appellant’s conduct in lying about the fate of the property was “a fundamental breach of his obligations under his contract of employment” and “destructive of the necessary confidence between employer and employee.” [12] The Commissioner concluded: [13]

5. [22]

   The Commissioner gave a further reason for refusing to uphold the appeal. That reason relied on two abusive statements posted by the appellant on Facebook two months after his termination and referring by name to the General Manager, Fleet Operations for the STA and the investigating officer in the appellant’s case.

6. [23]

   Although it was but lightly touched on in the appellant’s written submissions in this Court, [14] the basis on which the Commissioner dismissed the appeal before him raised an issue as to whether he had exercised his functions according to law.

(a) actions of employer

1. [24]

   In order to understand the scope and nature of the appellate function of the Commission in dealing with a disciplinary appeal (also referred to as the Commission’s jurisdiction) it is necessary first to identify the powers of the employer with respect to disciplinary action. The relevant powers in relation to the appellant are to be found in Pt 5 of the Transport Administration (Staff) Regulation 2012 (“the TAS Regulation”). Relevantly Pt 5 provides:

2. [25]

   The appellant was given written notice of the particulars of his alleged behaviour, in accordance with cl 30(1). On 15 April 2015, an officer of State Transit wrote to him setting out what amounted to a charge in the following terms:

3. [26]

   On 16 April 2015 the appellant responded in writing to the allegations and, on 23 April, was interviewed by the officer. On 19 May 2015 another officer, with delegated responsibility for disciplinary decisions, signed and provided to the appellant a document headed “Notice of punishment”. The rest of the document was in two parts. The first part followed the precise form of the notice of allegation except that it identified the appellant by name and classification and continued “has been found to have breached”, setting out the two requirements (a) and (b) in the allegations. It identified “details of the breach” in the precise terms of allegation (1) and the particulars of allegation (1). The notice then stated:

4. [27]

   The appellant sought to appeal to the Commission. The notice of appeal was a printed form, covering one page, which, in item 5, sought an indication of “the type of discipline decision being appealed against”; the appellant ticked the box against the word “Dismissal”. Item 6 was headed “Orders Sought”, against which the appellant wrote “reinstatement to previous position.”

(b) functions of the Commission

1. [28]

   The appeal to the Industrial Relations Commission from the decision of the employer was brought under Ch 2, Pt 7 of the Industrial Relations Act, dealing with “Public Sector Disciplinary Appeals”. Disciplinary appeals are dealt with in Div 3. In particular, s 98(1) gives a public sector employee a right to appeal to the Commission “against an appealable decision of his or her employer.” The term “appealable decision” is defined in s 91(1) to mean a decision of a kind referred to in s 97(1). Amongst the decisions identified in s 97(1) is “(f) a decision to dismiss the employee”.

2. [29]

   It was common ground that the proceeding before the Commission was a fresh hearing of the allegation of misconduct. Whether any further allegation could have been laid by the employer was not raised, because no further allegation was laid.

3. [30]

   This conclusion was supported by reference to the decision of the High Court in Calman v Commissioner of Police, [15] a case dealing with the nature of an appeal under s 24 and s 48 of the Government and Related Employees Appeal Tribunal Act 1980 (NSW) (“the GREAT Act”), which were the predecessors of s 98(1) and s 100C respectively of the Industrial Relations Act. [16] Nothing turns on minor differences in form between s 24(1) of the GREAT Act and s 98(1) of the Industrial Relations Act.

4. [31]

   In relation to the current operation of s 100C, there was a live issue as to the scope of the third option provided by that section, namely making “such other decision with respect to the appeal as it thinks fit.” The operation of s 48(2) was to be viewed by reference to the following section, s 48A. Read together they provided:

5. [32]

   In Calman, the Court stated:

6. [33]

   Section 100C and s 100D of the Industrial Relations Act state:

7. [34]

   The procedural powers, equivalent to those relied upon in Calman, are now to be found in Ch 4, Pt 5 “Procedure and powers of Commission”. Arguably persuasive support for the conclusion that an appeal under s 98(1) provides for a fresh hearing of the disciplinary matter is to be found in s 100G, which provides that the employer must present its case first at a hearing, and s 100C(3), which states (as set out above) that even where there is a finding of procedural unfairness, the Commission is not required to allow the appeal solely on that basis and may “proceed to decide the appeal on its merits”.

8. [35]

   Before turning to the manner in which the Commission purported to exercise its powers, it is convenient to consider further what follows from the characterisation of the process identified in Calman. In colloquial terms, an appeal by way of fresh hearing means that the appellate body “stands in the shoes of” the original decision-maker. Where there is, as here, a specific charge or complaint before the employer, which has resulted in particular disciplinary action, it will be necessary for the Commission to consider that charge or complaint and, if it be upheld, determine what disciplinary action should be imposed. Generally, it is assumed that the appellate body has the same powers as the original decision-maker, no more and no fewer. One basis for that inference is the use of the term “appeal” to describe what is in substance a fresh hearing.

(c) the Commission’s determination

1. [36]

   After noting some preliminary matters, including the substance of the employer’s decision, the Commissioner accepted that his function was “to hear and determine the matter afresh on the materials before [him], not simply review the decision of the initial decisionmaker”, referring to s 100C of the Industrial Relations Act and the judgment of the High Court in Calman. The Commissioner also referred to a decision of the President of the Commission, Secretary, Department of Justice v Schoeman, [17] to which it will be necessary to turn shortly.

2. [37]

   Having reviewed the facts as revealed in the evidence before him, the Commissioner concluded:

3. [38]

   The Commissioner then identified an additional consideration, namely that another officer with the STA had failed to undertake her function properly and was therefore also in direct breach of the STA procedures, noting that no disciplinary action had been taken against her.

4. [39]

   As counsel for the respondent conceded, the Commissioner did not expressly find that the allegation made by the Authority had been proven, nor that any of the three particulars, to the extent that they were made out, constituted a breach of the relevant code or procedure. Nevertheless, he disallowed the appeal because of the uncharged misconduct noted above at [20]-[22].

5. [40]

   The question is how the Commissioner came to adopt an approach which appeared, in its terms, to be inconsistent with the nature of the Commission’s function as identified in Calman and as accepted by the Commission.

6. [41]

   In the Commission, the employer’s advocate noted, both in the course of oral submissions and in written submissions in reply, that the appellant was “seeking to be reinstated to his position.” It was in resisting such an order that the employer contended that “reinstatement or reemployment is not practical or appropriate given the loss of trust and confidence, which is ‘a necessary ingredient in any employment relationship’.” The employer referred to two authorities, including a decision of the Full Court of the Industrial Relations Court of Australia, Perkins v Grace Worldwide (Aust) Pty Ltd. [18] This submission was accepted by the Commission and formed the basis of its decision. The submission, and the authority relied on in support of it, were concerned with the practicability of an order to reinstate a worker claiming unfair dismissal, under s 89 of the Industrial Relations Act. [19] That provision appears in Pt 6 of the Act dealing with unfair dismissals.

7. [42]

   The Commissioner expressed his conclusions in the following passages:

8. [43]

   The reliance on Gilmore v Allied Express was also misplaced; that case dealt with the appropriate relief with respect to an unfair contract challenged under s 106, to be found in Ch 2, Pt 9 of the Industrial Relations Act.

(d) reliance on Schoeman

1. [44]

   The Commissioner stated (correctly) that he was bound by the approach adopted in Schoeman, a decision of the Industrial Court. In that case, the primary judge (then the President of the Commission) held that the Commissioner hearing Ms Schoeman’s appeal had erred in confining “the question he was required to consider solely to ‘whether the misconduct said to be the basis for punishment [was] made out’ (other than the related question, also concerning punishment, that, if misconduct was made out was the punishment imposed appropriate?).” The error, the President held, resulted from treating the jurisdiction as “punitive” rather than “protective”, in accordance with s 100C of the Industrial Relations Act. [20] In the reasons which followed this statement of conclusions, the President noted but rejected two steps in the submissions put forward by Ms Schoeman. The first step was that s 46(2) of the Public Sector Employment and Management Act 2002 (NSW) (“the Public Sector Act”), which provided that the department head “may, if the Department Head is of the opinion that the officer has engaged in any misconduct, decide to take disciplinary action with respect to the officer”, made a finding of misconduct a precondition to the taking of disciplinary action. [21] The second step in Ms Schoeman’s argument was that, once the Commission determined that no misconduct had occurred, “the disciplinary action imposed being dismissal could not stand, and nor could any other disciplinary action”. [22]

2. [45]

   In rejecting those submissions, the President stated: [23]

3. [46]

   This approach should not be accepted. It was inconsistent with the understanding of the appellate process outlined above; in a significant respect it misread the legislation and it was unsupported by authority.

4. [47]

   It is correct to say that s 100C(2) confers powers on the Commission in relation to a disciplinary appeal. Those powers are not at large; they must be exercised in deciding the disciplinary appeal before the Commission. The subject matter of the appeal, and thus the matter to be determined by the Commission, is the decision of the public sector employer to take specific disciplinary action. In Schoeman, the Public Sector Act, s 46(2), was unambiguous and unequivocal. It conferred power on the department head to take disciplinary action if the officer had engaged in misconduct. The employer had no power to take disciplinary action unless the officer had engaged in misconduct. It was the exercise of that power which was the subject of a disciplinary appeal and thus the subject matter with respect to which “jurisdiction” was conferred on the Commission. The powers conferred on the Commission were therefore limited to the exercise of that jurisdiction and to the disposal of the appeal. There is no legitimate reading of s 100C(2) which expands the jurisdiction of the Commission.

5. [48]

   To hold otherwise is inconsistent with the reasoning in Calman, where the High Court succinctly identified the function of the Tribunal hearing an appeal as “a fresh exercise of administrative power”. [24] It is not the exercise of a different power for the first time; so much is inherent in the description of the function as an “appeal”.

6. [49]

   In seeking to sustain wider powers than were conferred on the employer, the reasoning in Schoeman relied upon three authorities. The first, chronologically, was Smith v Allan, Secretary, Treasury of New South Wales. [25] That case concerned the scope of an appeal to the Tribunal under the GREAT Act, ss 24 and 48(2). At that time, s 48 of the GREAT Act did not contain subs (2A), now found in s 100C(3) of the Industrial Relations Act, expressly conferring powers in respect of an appeal where the Tribunal was satisfied that the employer had failed to accord the appellant procedural fairness. In Smith v Allan the primary question was whether on a fresh hearing, the Tribunal should simply start afresh, or could address a ground alleging procedural unfairness on the part of the employer in reaching the initial decision. A consequential question was what the Tribunal should properly do in circumstances where such a ground was upheld; should it remit the matter to the employer or deal with the merits of the appeal?

7. [50]

   Kirby P (with the agreement of Clarke JA and Samuels AJA) accepted that the Tribunal had power to determine an appeal by reference to that ground. [26] With respect to the second issue, the Court appears to have assumed that the matter would be remitted to the employer which would then exercise the power again. [27] Reference was made in that context to the power in s 48(2) to “make such other decision with respect to the appeal as it thinks fit”. Although the Court considered it likely that it would be sufficient to allow the appeal, [28] the reasoning of the President continued: [29]

8. [51]

   This understanding of the scope of the powers conferred on the Tribunal by s 48(2) was entirely conventional; it allowed for consequential orders giving effect to a determination that the decision under appeal had not been validly made. It offered no support for the broad conclusions reached in Schoeman.

9. [52]

   The second decision, a judgment of this Court handed down only six months after Smith v Allan, was Maritime Services Board v Murray. [30] This case involved an appeal by the employer after the Tribunal had set aside the penalty of dismissal it had imposed, which the Tribunal had described as “excessive for the misconduct alleged against the appellant.” [31] The Tribunal had ordered that the appellant be reinstated “as from the date of this decision”, but denied him any reimbursement of salary for the period from the date of his dismissal to the date of the decision, which it treated as “sufficient punishment for any misconduct on his part.” [32]

10. [53]

    The employer’s appeal was based, first, on the lack of an opportunity to address the Tribunal on penalty. That was identified as procedural unfairness. (The Court noted a doubt as to whether the ground was permissible on an appeal against a decision on a question of law, but, the point not having been taken, assumed that the appeal was valid.) The ground was dismissed on the merits.

11. [54]

    The second ground, which gave rise to the reasoning relied on in Schoeman, complained that the Tribunal had taken into account “extraneous matters”, which had arisen since the date of the dismissal decision. (They included the loss of salary and the rectification by the respondent of the error which had led to his dismissal, namely the failure to pay sales tax on a mobile phone.)

12. [55]

    Kirby P noted that the post-decision material was “taken into account in determining the order which the Tribunal should make and not in deciding whether or not the appeal should be allowed.” [33] In that regard, the President referred to the powers conferred on the Tribunal, set out the passage from the reasons in Smith v Allan considered above, and continued: [34]

13. [56]

    This reasoning, entirely consistent with that in Smith v Allan, identified the power to make “any other decision it thought fit” as providing for consequential orders to give effect to the basis on which the appeal had been allowed. Murray is also authority for the proposition that post-decision events or conduct may be relevant to the consideration of penalty, but not to the consideration of the essential precondition to the imposition of a penalty, namely whether the disciplinary charge has been proven. That point of distinction assumed that the first task of the Tribunal was to be satisfied that the charge had been made out.

14. [57]

    The third case was the more recent decision of this Court in Director-General, Department of Ageing, Disability and Homecare v Lambert. [35] Lambert appears to have been relevant to the reasoning in Schoeman in two ways. One was a statement by Hodgson JA to the effect that an exercise of the powers conferred by s 100C should not derogate from the objects of the relevant part of the Public Sector Act in issue in that case (but not in this case). Secondly, and more generally, the reasoning in Lambert was relied upon for the proposition that the purpose for the exercise of disciplinary powers was not punitive action directed at the individual employee, but was protective of the public, in whose interests the employer exercised its functions. So much was derived from the statement of the objects of the part in the Public Sector Act, as explained by Hodgson JA. [36]

15. [58]

    Two points should be noted in this regard. First, the statement of objects in the Public Sector Act, Pt 2.7 (“Management of conduct and performance”) was as follows:

16. [59]

    Secondly, there was another aspect of the reasoning in Lambert which was not identified in Schoeman, but was directly relevant to its conclusion. The order made by the Tribunal had been to reinstate the officer, but subject to his employment being “on probation” for 12 months. With respect to that order, Basten JA stated (with the agreement of Tobias JA):

(e) conclusions as to excess of power

1. [60]

   There is no doubt that, in the present case, the Commissioner did not consider that the disciplinary action, namely dismissal, was warranted by the only conduct which formed the basis of the disciplinary charge, namely the conduct of the appellant on 11 April 2015. That finding should have led to an order allowing the appeal. The Commissioner did not take that course, but rather, on the basis that the appellant had given untruthful evidence (as to which more will be said below) and had abused his superiors in the STA by posts on Facebook, found the appellant had destroyed the trust on which the employment relationship was based and therefore the dismissal should stand.

2. [61]

   In adopting that approach, the Commissioner was applying the principles identified in Schoeman. Because those principles (as set out above) were based on a misconstruction of the statute and a misreading of relevant authorities, they led the Commissioner to exercise a jurisdiction he did not have and to fail to complete the function in fact conferred on him by statute. In respect of these matters Schoeman is wrong and should not be followed.

3. [62]

   To state the matter affirmatively, the Commissioner was required to determine whether the allegation made in writing, in accordance with cl 30 of the Regulation, had been proven to his satisfaction. If it had not, he was obliged to allow the appeal. If he considered that any of the particulars were established, he would have had to address whether some lesser form of disciplinary action was appropriate. Neither of those tasks was undertaken.

4. [63]

   As the decision of the Commission must be set aside, it is appropriate to note two other aspects of the manner in which the Commission dealt with the subsequent conduct of the appellant, which might have been relevant to a determination of the appropriate penalty.

5. [64]

   First, following the submissions of the advocate appearing for the employer, the Commissioner appeared to treat the order which was sought, namely reinstatement, as if such an order had been sought under Ch 2, Pt 6 of the Industrial Relations Act dealing with “unfair dismissals”. He also referred to authority dealing with the power of the court to declare void or to vary “unfair contracts”. While, broadly speaking, there may be an analogy between an unfair dismissal and a dismissal resulting from the wrongful exercise of disciplinary powers, the latter must be seen as a specific case of the more general classification and, being subject to its own statutory regime, the appellate process will not necessarily be governed by the same principles. In short, it is legally erroneous to rely upon such reasoning with respect to a disciplinary appeal. The question for the Commission was whether, pursuant to s 100C, to confirm the order of dismissal or substitute another order. It was not a question of ordering reinstatement for an unfair dismissal. The order made followed from a misconception as to the nature of the proceedings.

6. [65]

   Furthermore, there is an irony in insisting that a disciplinary appeal is governed by the specific objects in the former Public Sector Act and yet to import principles relating to the nature of the employment contract as considered in cases dealing with applications for relief under Ch 2, Pt 6.

7. [66]

   Secondly, in considering the ground relating to procedural unfairness, it will be necessary to address the manner in which the subsequent conduct of the appellant could be dealt with on appeal. It is sufficient for present purposes to note that the Commissioner placed substantial and apparently determinative weight on his assessment of the appellant’s responses when the employer made inquiries about the incident (“Mr Marroun actively sought to deceive his employer”) and identified that act of deception on his part as "a fundamental breach of his obligations under his contract of employment” and “destructive of the necessary confidence between employer and employee.” [37]

8. [67]

   There was no doubt that the appellant’s creditworthiness was in issue at all stages. Nevertheless, and understandably, the adverse finding was only made in the reasons for decision given by the Commission in disposing of the appeal. Orders were made without giving the appellant an opportunity to address the Commission as to how such findings should affect the final order. Further, the phrase “actively sought to deceive” clearly implies a deliberate attempt to deceive. Although the appellant gave evidence and was cross-examined at some length, that proposition was never put to him. While a hearing before the Commission is not to be conducted as if it were a court proceeding, principles of basic fairness require that a party be offered the opportunity to deny or explain any suggestion that he has lied, whether in response to an inquiry from his employer, or on oath in giving evidence. That was not done.

(a) ground 3 – procedural unfairness

1. [68]

   In substance, the dismissal was allowed to stand not because of the findings made by the Commissioner as to the allegation upheld by the employer, which had resulted in his dismissal, but because the Commissioner was satisfied that the appellant had in other respects acted in such a way as to destroy a fundamental aspect of the employment relationship. However, although his credibility was in issue at all stages, he was not put on notice that if findings were to be made against him of the kind in fact made by the Commissioner, his dismissal might be justified on that basis.

2. [69]

   That situation bore a striking resemblance to one aspect of Smith v New South Wales Bar Association. [38] The appellant was a barrister against whom a disciplinary charge had been laid, namely that he held a retainer to appear before a magistrate in a particular matter, when that was not so. This Court ordered the disbarment of the appellant, in part because it held that he had deliberately lied to the Court in relation to conduct which was the subject of the separate charge. The High Court accepted that the finding that the appellant had lied was not properly made on the evidence. Nevertheless, the joint reasons of Brennan, Dawson, Toohey and Gaudron JJ continued: [39]

3. [70]

   As further explained by Deane J: [40]

4. [71]

   Deane J also explained in more detail what should have happened in order to regularise the proceeding: [41]

5. [72]

   The same reasoning operates in the present case; it follows that there was a denial of procedural fairness which, if properly raised, vitiated the order made in the Commission. The primary judge should have so held, although his attention was not drawn to Smith.

(b) ground 2 – decision on a question of law

1. [73]

   It was accepted by the primary judge, correctly, that an appeal against a decision on a question of law could be made in circumstances where the tribunal below had not expressly identified and determined a question of law. As explained in Grygiel v Baine, [43] in a passage adopted in Lambert: [44]

2. [74]

   Procedural unfairness, in the legal sense, will constitute an error of law because it will vitiate the basis of the decision under review. [45] Thus, in Re Refugee Review Tribunal; Ex parte Aala [46] procedural unfairness arose because the Tribunal had, through an innocent mistake, falsely assured the applicant that it had certain documents and had read them. As a result, the applicant desisted from tendering the documents and making submissions as to their content. The High Court accepted that there was procedural unfairness, and granted certiorari to quash the decision of the Tribunal.

3. [75]

   This form of appeal may be distinguished from an appeal under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth), which provides for an “appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal”. As the Full Court of the Federal Court has explained, in that scheme the subject matter of the appeal is the question of law; the appeal is not restricted to a decision of the Tribunal on a question of law. Thus in Haritos v Federal Commissioner of Taxation [47] a five-judge bench said:

4. [76]

   The circumstances in this case may be compared with those which arose in Minister for Immigration and Citizenship v Li. [50] Ms Li required a “skills assessment” in order to obtain a particular residence visa. She had sought an assessment on the basis of false information, which assessment had been rejected. She then sought an adjournment of the Tribunal hearing with respect to her visa application to allow her a further opportunity to obtain a skills assessment based on genuine information. The Tribunal denied the adjournment and rejected her visa application in the absence of the necessary skills assessment. The question before the Tribunal had been whether she had in fact had a reasonable opportunity to obtain a skills assessment. The High Court held that a reasonable opportunity had been denied, resulting in procedural unfairness. The Tribunal’s decision to reject the visa application was therefore set aside. In these circumstances, it is clear that, whether expressly or implicitly, the decision of the Tribunal to refuse the adjournment necessarily involved a decision that to do so would not be procedurally unfair. The decision could therefore have been challenged under a statutory appeal from a decision on a question of law, had such a course been available.

5. [77]

   In the present case, in proceeding to dismiss the appeal on the basis of uncharged conduct, the Commissioner had implicitly determined that there was no procedural unfairness in taking that step. It follows that the appellant was entitled to challenge that decision and to allege procedural unfairness.

6. [78]

   The contrary conclusion reached by the primary judge was based on a proposition derived from his earlier judgment in Elleray v Rail Corporation of New South Wales. [51] Elleray held, in categorical terms that “the challenge by the appellant to an alleged denial of procedural fairness … does not constitute a decision on a question of law.” [52] The judge further noted that there had been “no challenge to the correctness of Elleray”. For the reasons already given, the principle stated in Elleray is too broad; procedural unfairness is not an undifferentiated category of error which cannot ever give rise to an implicit decision on a question of law. The case should not be followed on that point; the specific complaint must be addressed in each case.

7. [79]

   The primary judge was, therefore, in error in failing to allow for the possibility of an appeal on that ground. The error arose because of a failure to consider the precise nature of the decision under challenge. That explanation leads to the third question, as to whether the error was properly pleaded.

(c) ground 1 – identification of error

1. [80]

   Appellate courts have complained on many occasions about the inadequacies of notices of appeal. There are many reasons which warrant such concerns, which have particular force where the available grounds of appeal are limited. It is essential that the appellant establish an arguable ground that falls within the limits of the statutory regime. It is also important that the respondent have sufficient notice of the ground to be relied upon. Nevertheless, it is a large step to characterise the deficiencies in a particular case as sufficient to warrant the dismissal of the appeal as incompetent, particularly in circumstances where the respondent has not sought to strike out the notice. Although the primary judge was critical of the notice in the present case, he in fact proceeded to address each of the grounds in turn. [53] Accordingly, it is desirable to address the challenge raised by this ground.

2. [81]

   The primary judge identified, under the heading “Procedural fairness”, grounds 4-10 in the notice of appeal. Those grounds reflected what had been identified, with the same paragraph numbering, as “Questions raised by the appeal”. It is sufficient for present purposes to refer to questions 4 and 5:

3. [82]

   There were, no doubt, infelicities in the drafting of these questions. For example, each referred to “findings” made by the Commissioner, whereas each might more properly have identified the decision based on the findings. Further, the reference to the absence of “challenge or argument” (in question 5) appears to have a complaint about the cross-examination and the submissions, rather than the absence of an allegation basing a disciplinary charge. On the other hand, question 4 expressly referred to “no allegation” of such dishonesty having been made.

4. [83]

   In any event, the inadequacy of the pleading did not lead to the rejection of the appeal by the primary judge; rather, the ground was rejected on the basis that there had been no procedural unfairness. The correct response was that the complaint about the pleading was unwarranted.

Conclusion

1. [84]

   For these reasons, the appeal should be allowed and the following orders should be made:

   1. (1)

      Grant leave to appeal from the judgment in the Common Law Division given on 15 December 2016.

   2. (2)

      Allow the appeal and set aside orders 1 and 2 made on 15 December 2016.

   3. (3)

      In place thereof:

   4. (4)

      Remit the matter to the Industrial Relations Commission for reconsideration of appropriate orders in the appellant’s appeal under s 98 of the Industrial Relations Act 1996 (NSW), according to law.

   5. (5)

      Order that the respondent pay the appellant’s costs of the proceedings in this Court.