JUDGMENT No. 20S. 24 '© @neccscovonsococce! eeeccscooccs CATCHWORDS PUBLIC SERVICE - tenure of office - notification of redundancy - decision that applicant be retired almost three years later - whether decision beyond power because power not exercised within reasonable period Public Service Act 1922 (Cth), s.76W, s.76X Administrative Decisions (Judicial Review) Act 1977 (Cth) Reid v Moreland Timber Co. Pty. Ltd. (1946) 73 CLR 1, 13 INDUSTRIAL LAW - whether matter within jurisdiction of Federal Court or Industrial Relations Court - no accrued or associated jurisdiction - need for legislative amendment Terrence John Lee v Harvey Jacka and Commonwealth of Australia No. G196 of 1994 Beaumont J Sydney 5 October 1994 PRINCIPAL Reastry HE FEDERAL RT _ OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No. G196 of 1994 Swe ww BETWEEN: TERRENCE HN Applicant AND: HARVEY JACKA First respondent COMMONWEALTH OF AUSTRALIA Second respondent CORAM: BEAUMONT J. DATE: 5 OCTOBER 1994 PLACE: SYDNEY MINUTES OF ORDER THE COURT ORDERS: 1. Declare that the decision of the first respondent made on 28 September 1993 purporting to retire the applicant from the Australian Public Service was invalid. 2. Order that the respondents pay the applicant's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA H_ W. DISTRICT REGISTRY GENERAL DIVISION No. G196 of 1994 Swe we SS BETWEEN: TERREN'! LEE Applicant AND: HARVEY JACKA First respondent MM Ww L F AUSTRALIA Second respondent CORAM: BEAUMONT J. DATE: 5 OCTOBER 1994 REASONS FOR JUDGMENT INTRODUCTION The first respondent, the Executive Director of the Australian Geological Survey Organisation ("AGSO"), purported to retire the applicant, Dr Lee, from the Commonwealth Public Service as from 27 October 1993, pursuant to s.76W(1) of the ic Service Act 1922 (the "Act"). The applicant now seeks judicial review of that decision pursuant to the inistrative Decision udicial Review) Act 1977 (the "AD[JR] Act") on the grounds that the procedures laid down by law for the making of the retirement decision were not followed. The applicant seeks an order setting aside the decision and reinstatement. (Originally, but no longer, the applicant also sought in the proceedings (commenced on 7 April 1994) relief under the Industrial Relations Act 1988 by way of the imposition of a penalty for an alleged breach of a Public Service Redundancy Award. In my opinion, it was not possible to combine this claim, now exclusively justiciable in the Industrial- Relations Court,-with one under the AD[JR] Act. This Court's implied accrued jurisdiction, or statutory associated jurisdiction, cannot now extend to an industrial relations claim. This is an inconvenient result where, as here, there is in each claim a common substratum of facts. Although some Federal Court judges are also members of the Industrial Court, there remain problems even if such a judge were to hear a dispute involving two such claims. For instance, would there be separate appeals, one to the Full Federal Court in the AD[JR] Act claim, but another appeal to the Full Industrial Relations Court? Further, should the special costs rule applicable in industrial relations matters also be applied in the Federal Court AD{[JR] proceedings? These matters should receive legislative attention.) BACKGROUND The history of the dispute between the parties may be summarised as follows. Prior to August 1992, AGSO operated as the Bureau of Mineral Resources, Geology and Geophysics ("BMR"). In 1983, BMR employed Dr Lee as a senior research scientist under the Act. In early 1990, BMR informed the Professional Officers Association, now part of the Public Sector, Professional, Scientific, Research, Technical, Communications, Aviation and Broadcasting Union (the "Union"), of which Dr Lee was a member, that BMR was proposing a redundancy program in regard to a portion of its staff. In the ensuing months, BMR and the Union continued to discuss the proposed retrenchment program. In June 1990, the Union advised BMR that it did not object to the proposal "on the basis of the advice to date ... subject to all Award procedures [a reference to the Australian Public Service Redeployment and Retirement (Redundancy) Award 1987 ('the Award')} being observed and the provision ... of ... the details of the final arrangements agreed with the PSC [the Public Service Commission] and Department of Finance". In a letter to the Union dated 29 August 1990, BMR nominated certain officers, including Dr Lee, as_ being "excess" in accordance with the proposed redundancy program. The letter went on to state this: "It is not the intention of [BMR] to pursue the redundancy provisions in those cases where staff refuse the initial offer [for voluntary retirement]. However this will be dependent on the ability of the individual to contribute actively to [BMR's] programs. Where it can be demonstrated that this is not possible, involuntary redundancy may _ be considered." On 22 October 1990, the Union informed BMR that it did not agree that certain officers, including Dr. Lee, were redundant and opposed any further redundancy proceedings in regard to those officers, including Dr Lee. In November 1990, the PSC gave BMR approval to offer Dr Lee voluntary retrenchment. On 8 November 1990, BMR informed Dr Lee that he was "considered excess to [BMR's} staffing -requirements" and that BMR had "therefore determined that [he] should receive an offer of voluntary retirement" in accordance with cl.7 of the Award. Shortly thereafter, BMR provided Dr Lee with details of counselling and superannuation arrangements regarding voluntary retirement. In a letter dated 15 January 1991, Dr Lee declined BMR's offer of voluntary retirement, and further stated that this rejection had "already been conveyed to [BMR] by [the Union] in a letter dated 22 October 1990." In a letter to Dr Lee in May 1991, BMR stated that Dr Lee would be aware that he had "been identified as being potentially excess to [its] staffing requirements," and accordingly informed him that it was "[{its] intention to pursue involuntary retrenchment in accordance with the ... Award ... ."" BMR similarly notified the Union of its intentions in regard to Dr Lee. In June 1992, BMR sought approval from PSC to give notice of retirement to Dr Lee in accordance with s.76W(1) of the Act. By letter dated 5 January 1993, BMR, now operating as AGSO, informed Dr Lee that his seven month retention period, to which he was entitled under the Award, had commenced on 8 December 1990, allegedly one month after Dr Lee first received notice that he was "excess"; however, AGSO stated that it would allow Dr Lee a further six months in which to seek other employment. In February 1993, the Union lodged written objections with the Department of Primary Industries and Energy in regard to the procedures followed by AGSO in respect of Dr Lee's proposed retrenchment. In particular, the Union stated that AGSO (then BMR) had indicated that it would not offer redundancies to staff who did not agree to such a course of action. Additionally, the Union asserted that the January 1993 letter from AGSO was the first indication that Dr Lee was "excess to requirements", and that the May i991 letter from BMR indicated that Dr Lee was only "potentially excess." It followed that the retention period began to run from January 1993 rather than from 8 December 1990. Because Dr Lee had now reached the age of 45, he also was entitled to the longer thirteen month retention period provided in the Award. AGSO responded to this letter by stating that the redundancy action fully complied with the Award; the action followed consultation with PSC, and was the subject of detailed discussion with the Union and Dr Lee; further, AGSO had provided Dr Lee with superannuation and counselling information; the January 1993 letter was not intended to limit Dr Lee's rights, "but rather to provide an additional amount of time over and above the retention period in recognition of the elapse of time which had occurred since the original advice ... and because of the difficulties during the course of the retention period." In September 1993, having been unable to find Dr Lee other employment, AGSO obtained approval from PSC to retire Dr Lee involuntarily. Dr Lee was so notified, and purportedly was retired, as from 27 October 1993. LATIVE HEME (1) e Public rvice Act 2 Section 76W of the Act is located in Division 8C of Part III of the Act. That Division deals with the "Redeployment and Retirement" of certain officers deemed redundant. Section 76W, which deals with the powers of the Secretary and the Public Service Board (now the Public Service Commissioner), relevantly provides as follows: "(1) Where the relevant Secretary is satisfied of a relevant matter in relation to an officer, the evant cretary ma ... retire the officer from Service. [Emphasis added] [Although the first respondent is not himself a "Secretary," it is common ground that, by an instrument of delegation, the first respondent had conferred upon him all the powers of a Secretary that are material for present purposes. ] (2) Where: (4) a Secretary: (i) has been unable to find alternative Suitable employment for an excess officer in the Secretary's Department; and (ii) proposes to exercise the power under subsection (1) in relation to the officer; and (b) the officer has not consented to the exercise of that power; the Board [Commissioner] shall take such action as is reasonable to find alternative suitable employment for the officer in the Service, and the Secretary shall not exercise the power under subsection (1) in relation to the officer unless the Board [Commissioner] is satisfied that it would not be in the interests of the efficient administration of the Service to transfer the officer ... to another Department. (3) Where the Board [Commissioner] is: (a) satisfied of a relevant matter in relation to an officer; and (b) satisfied that it would be in the interests of the efficient administration of the Service to do sO; the Board [Commissioner] may, having considered whether it would be in the interests of the efficient administration of the Service to transfer the officer ..., by notice in writing given to the officer, reduce the officer's classification. (4) The powers conferred on a Secretary or the Board [Commissioner] by this section are subject to any applicable industrial award. (5) A notice given to an officer under this section takes effect as provided by the regulations. (6) In this section, "relevant matter", in relation to an officer, means any of the following matters: (ad) that an officer is an excess officer." [An "excess officer" is defined in s.7(3) of the Act. Except in one respect to be dealt with later, nothing turns on this definition for present purposes. ] Section 76X, which deals with the issue by the Board [Commissioner] of administrative instructions and directions, relevantly provides as follows: "(1) The Board [Commissioner] may cause to be published in the Gazette written administrative instructions, not inconsistent with this Act, in relation to the exercise of powers conferred on Secretaries by this Division. (2) -The Board - [Commissioner] may, by notice in writing, give to a Secretary directions in relation to the exercise of powers conferred on Secretaries by this Division. (3) A Secretary exercising, or proposing to exercise, a power conferred by this Division: (a) shall comply with any administrative instructions expressed to be binding on Secretaries and with any directions given to the Secretary under subsection (2) that are expressed to be binding; and {Emphasis added] (b) shall have regard to any other administrative instructions, and to any other directions given to _ the Secretary under subsection (2)." (2) The Administrative Instructions and the Award In accordance with ss.76W(4) and 76X of the Act, the relevant Award provisions and Administrative Instructions ("AI"), which were published in the Gazette on 20 July 1987, are as follows: (a) Voluntary Retrenchment Offer and Subsequent a Retrenchmen Clause 7 of the Award prescribes these procedures for extending a voluntary offer of retrenchment: "7(a) The Secretary and the Board [Commissioner] shall take such action as is reasonable to assess the redeployment prospects of officers (including to other departments) and discuss those prospects with the union. (b) Subject to subclause 6(e), the Secretary may, with the approval of the Board [Commissioner] after the provisions of sub-clause (a) have been fulfilled, invite officers to elect to be retired in accordance with this clause. -(Clause 6 deals with consultations with unions. By cl.6(e), unless otherwise agreed, an officer cannot be invited to volunteer or be advised of retrenchment until one month after the union had been advised of the proposal. ] (c) Where a Secretary invites an officer to elect to be retired, the officer shall have one month in which to advise the Secretary of his or her election, and the Secretary shall not give notice or retirement under section 76W of the Act before the end of the one month period. (ad) Subject to subclause 6(e), where the Secretary approves an election to be retired and gives notice of retirement under section 76W of the Act, the period of notice shall be 28 days. ..."" In regard to subsequent involuntary retrenchment, c1.8(g) of the Award provides: "An excess officer shall not be retired involuntarily if he or she has not been invited to elect to be retired with benefits in accordance with clause 7 [of the Award], or has made such an election and the Secretary refuses to approve it." Clause 3.43 of the AI provides for severance and benefits in regard to retrenchment at the end of the notice period. (b) Required Retention Period Clauses 8(b) and (c) of the Award state the applicable retention period for an excess officer [cl.3.11 and 3.12 of the AI refer to the above sections of the Award and 10. provide for the same retention period]: "(b) Except with the consent of the officer, ... an excess officer shall not be retired under section 76W of the Act until the following retention periods have elapsed: (i) in the case of an officer who has 20 or more years of service or who is over 45 year of age - 13 months; (ii) in the case of other officers - 7 months; [It is common ground that the applicant was born on August 1947.] (c) The retention periods specified in sub-clause (b) shall commence: (i) on the day an officer is advised in writing by the Secretary that he or she is an excess officer; or (1i) in the case of an officer who is invited by the Secretary to submit an election to be retired in accordance with clause 7 - one month after the day on which elections were invited, whichever is earlier." (c) Advice of Retrenchment Under the heading "Discussions with unions," cl.1.19 of the AI provides: "The aim should be where possible to resolve potential redundancy situations without the need for retrenchment and officers affected by potential redundancy should where appropriate be reassured of this intention. However, it is important that officers and unions be given realistic and honest advice about the redeployment prospect for the affected officers. If there are doubts about these prospects, open ended commitments to 'no retrenchments' or 'no enforced retrenchments' would clearly be inappropriate. Similarly, officers should not be given a commitment that there will be 11. 'no compulsory redeployment' if that is likely to be required to achieve their placement." In regard to information to be provided to officers, cl.2.8 of the AI provides: "It is important that the notice or letter inviting officers to submit an election to be retrenched indicate the processes that will be followed should an insufficient number of officers volunteer (or, as the case may be, the recipients themselves not volunteer), and point out that the Secretary had the right to refuse any election to be retrenched. ..." (d) Notification of Excess Status In regard to formal notification of excess status, c1.3.9 and 3.10 of the AI provide: "When an officer becomes excess the Secretary must advise the officer in writing of that fact. Under sub-clause 7(c) of the Award, this advice can be given no earlier than one month after the day the advice of the potential redundancies was given to the relevant union, unless a lesser period is agreed between the Secretary and the union. ... A copy of the advice, together with personal details of the officer including an outline of the officer's experience and qualifications, should be sent to the Board's {[Commissioner's] Regional Director." (e) Timing of Notification Clauses 3.1 and 3.2 of the AI provide for the timing of the notification of "excess" status: "It is essential that officers who declined an opportunity to take voluntary retrenchment, or were 12. not offered the opportunity in the first place, and are then identified as excess to the department's requirements, be advised of their excess status as quickly as possible. This is particularly important in the case of - -officers who -have declined. voluntary .retrenchment. Where these officers are then identified as excess to the department's requirements they are guaranteed retention in employment for 7 or 13 4months (depending on age and length of service) starting from the day one month after elections for voluntary retrenchment were invited. To ensure they know they must seek other work and to give then the maximum time in which to do this, there must be as little delay as possible between the day elections close and the day they receive formal advice they are excess." APPLI TT' NTENTION On behalf of the applicant it is contended, in essence, that the purported decision to retire him was, in law, bad for the following procedural reasons: (1) When exercising, or proposing to exercise powers conferred under Division 8C, including making, or proposing to make, the retirement decision, the first respondent was obliged, by virtue of s.76X(3) of the Act to comply strictly with any AI under s.76X(1). (2) Such AI were notified in July 1987. (3) In the exercise of the power leading to the making of the retirement decision, the first respondent did not: 13. (a) strictly comply with the provisions of cl.1.19 of the AI in that prior to the purported making of an offer to submit an election to be retrenched, the applicant was given directly or -indirectly "open-ended" commitments to the effect that "no enforced retrenchments" would apply in AGSO. (b) comply with cl.2.8 of the AI in that the letter received by the applicant on 8 November 1990, which purported to invite the applicant to submit an election to voluntary retrenchment, did not contain the required information; (c) strictly comply with the provisions of cl.3.1 and 3.2 of the AI in that a period of six months lapsed after the election for voluntary retrenchment was invited and the notification relied on by the first respondent did not state that the applicant was "excess" to the Department's requirements; (d) strictly comply with the provisions of cl1.3.9 and 3.10 of the AI in that the applicant was not given formal advice of "excess" status under the Act and the notification relied on by the first respondent did not state that the applicant was "excess" to the Department's requirements; 14. (e) strictly comply with cl.3.11 and 3.12 of the AI in that the applicant was entitled to a retention period of thirteen months and the notice of retirement took effect -prior to the end of the retention period; (£) strictly comply with cl1.3.43 of the AI in that the applicant had not been given an opportunity to elect to be retrenched with severance payments and should now have been given the opportunity to take voluntary retrenchment with severance payments and the giving of such opportunity is a condition precedent to the giving of notice leading to involuntary retirement. (4) It followed that the retirement decision was unlawful in that the procedures required by law to be observed in connection with the making of the decision were not observed and the decision was not authorised by the enactment in pursuance of which it was purported to be made. (5) The powers conferred on the first respondent under s8.76W of the Act to retire the applicant were subject, by virtue of s.76W(4), to any applicable industrial award. This meant the powers of the Secretary may not be exercised contrary to any prohibition, limitation or qualification in an applicable industrial award. 15. (6) The Award was an applicable industrial award for the purposes of s.76W(4). (7) The first respondent did not "invite officers to elect to be retired in accordance with this clause" as required by cl.7(b) of the Award. The terms of any invitation under cl.7(b) must be in complete agreement with cl.?7. The "notice of offer - voluntary retirement" received on 8 November 1990 was not an invitation to elect to be retired in accordance with cl.7 in that it did not set out many of the matters contained in cl.7 of the Award and was not in complete agreement with cl.7. (8) The retirement decision was accordingly made contrary to the strict prohibition in the Award contained in cl.8(g) in that the first respondent was retired involuntarily without being invited to elect to be retired in accordance with cl.7. (9) Further, the retirement decision was made contrary to the strict prohibition in the Award contained in cl.8(b) and 8(c) in that the applicant was involuntarily retired prior to the retention period {of 13 months] elapsing. (10) It followed that the retirement decision was made contrary to procedures that were required by law to be observed in connection with the making of the decision and was 16. not authorised by the enactment in pursuance of which it was purported to be made. CONCLUSIONS As has been noted, the present questions are concerned only with the legalities of the first respondent's actions. We are not here concerned with their "merits". As J. Buchanan and D. Campbell say in Retraining Redeployment and Retrenchment Practices, 1992 [at 72] "[t]he retrenchment of staff is a devastating event for those losing employment and often for those dismissing them." But the question here is whether the law has been observed in carrying out the administrative action. On behalf of the respondents, it is accepted that, in exercising the power to retire conferred by s.76W(1), the first respondent had to comply with the relevant provisions of the Award [see s.76W(4)] and with those AI which were expressed to be binding on Secretaries [s.76X(3)(a)J; and that the first respondent had to "have regard to" any other AI that were material [8.76X(3)(b)]. In my opinion, the present question is to be determined by looking at the whole of the conduct of the parties, but taken in its industrial context. For this purpose, it is legitimate, I think, to look at the substance, rather than merely the form, of the communications which 17. passed between the parties in an industrial matter with a view to ascertaining, in an objective sense, what they intended to say and do. A relevant starting point for present purposes is the written communication to the applicant dated 8 November 1990 in which an officer of BMR expressed a "Notice of Offer - Voluntary Retirement" in these terms: "In accordance with [AI] ... I hereby formally advise you that you are considered excess ... and I have therefore determined that you should receive an offer of voluntary retirement. You are now invited to elect to be retired in accordance with clause 7 of the ... Award .... Under the ... Award you now have one month to provide advice of your decision ...." So far as it went, this notice complied with the provisions of cl.7(b) of the Award, the material terms of which have been previously noted. Further, the one month period mentioned in cl.7(c) was observed in this case, although, as we have seen, one of the applicant's complaints is that too much time elapsed. Prima facie then, the provisions of cl.8(g) of the Award, noted above, also were complied with in that the applicant had been "invited to elect to be retired with benefits in accordance with clause 7." However, in the absence of consent, the requirement of a retention period specified in cl.8(b)(i) and (ii) of the 18. Award, that is, 13 and 7 months respectively, had to be complied with except if the Secretary, after consulting the Union and the PSC, was of the opinion that there was insufficient productive work available (cl.8(i)). It will be recalled that by ci.8(c) the retention period commenced on the earlier of (i) the date on which the officer is advised that he or she is an "excess officer" or (ii) one month after the date on which an officer is invited to retire pursuant to cl.7. (As earlier indicated, a question arises as to the statutory definition of "excess officer" in s.7(3) of the Act. Although that definition refers to employment in a Department, and BMR was an agency in a Department, no invalidity flowed from the statement in the Notice of Offer dated 8 November 1990 that the applicant was "considered excess to the Bureau's staffing requirements ...." The fact that the AI and the Award were there mentioned provide sufficient indication, in my view, that a reference to the Department's position was intended (see Wingadee Shire Council v Willis (1910) 11 CLR 123 at 140, 144, 148)). Yet even if it be assumed, in the respondents' favour, that the notice of offer dated 8 November 1990 was valid, the purported retirement decision was not made until almost three years later in September 1993. In my view, it was beyond the power of the first respondent to exercise that 19. power after such a long period, in my view unreasonably so, had elapsed. As has been noted, the AI referred to "the need to act quickly" in this area so as "{t]o ensure [the officers) know they must seek other work and to give them the maximum time to do this" (cl.3.2). Whether or not the relevant AI were "expressed to be binding" (s.76X(3)(a)) or to be "f{had] regard to" (s.76X(3)(b) - cf. Clarke v Howard (1993) 42 FCR 369 at 386), the power to retire in s.76W(1) is, in my opinion, subject to the usual implication that it must be exercised within a reasonable time (see Laurinda Pty. Ltd. v Capalaba Park Shopping Centre Pty. Ltd. (1989) 166 CLR 623 at 641; Gollin & Company Ltd. v Karenlee Nominees Pty. Ltd. (1983) 57 ALJR 711 at 715; Perri v Coolangatta Investments Pty, Ltd. (1982) 149 CLR 537 at 543; Louinder v Leis (1982) 149 CLR 509 at 530; Reid v Moreland Timber Co. Pty. Ltd. (1946) 73 CLR 1 at 13). In my view, a period of almost three years from the initiation of the relevant process was more than a reasonable time for a decision to retire to be made. It follows that the retirement decision was beyond power. In the circumstances, it is not necessary to consider the other arguments advanced on behalf of the applicant. 20. I propose to make a declaration of the invalidity of the purported retirement decision. I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Beaumont. ~-. - Associate la 2 Hiee Ca / Dated: 5 October 1994 Counsel and Solicitors Mr. J. Pearce instructed by for Applicant: Geoffrey Edwards & Co. Counsel and Solicitors Mrs. J. Bonsey instructed by for Respondents: Australian Government Solicitor Date of hearing: 2, 21 September 1994 Date Judgment delivered: 5 October 1994