Industrial Relations Commission New South Wales Medium Neutral Citation: Silling v Corrective Services NSW (No 2) [2013] NSWIRComm 7 Hearing dates: On the papers Decision date: 12 February 2013 Jurisdiction: Industrial Relations Commission Before: Boland J, President Decision: Orders The respondent shall pay the applicant's costs of the proceedings in this matter incurred from 25 July 2011 on a party and party basis as agreed or, failing agreement, as assessed. Catchwords: COSTS - UNFAIR DISMISSAL - Application by applicant for costs on the basis that respondent unreasonably failed to agree to a settlement of the claim - Whether proceedings finalised and Commission functus officio - Consideration of Uniform Civil Procedure Rules regarding entry of judgments - Requirement to file notice of motion under r 36.16(3A) of UCPR dispensed with - Lack of evidence regarding costs issue - Commission not bound by formal rules of evidence - Whether settlement offer by applicant reasonable - Respondent's case weak - Refusal by respondent to countenance settlement - Policy underpinning s 181(2)(c) of Industrial Relations Act 1996 - Discretion exercised to order respondent to pay applicant's costs Legislation Cited: Crimes Act 1900 Crimes (Sentencing Procedure) Act 1999 Industrial Relations Act 1996 Public Sector Employment and Management Act 2002 Cases Cited: Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 Bankstown City Council v Paris [1999] NSWIRComm 585; (1999) 93 IR 209 Carlton and United Beverages Ltd v Brunt [2007] NSWIRComm 135; (2007) 164 IR 184 Department of Health v Perihan Kaplan (No 4) [2011] NSWIRComm 63 Four Sons Pty Ltd v Sakchai Limsiripothong (No 2) [2000] NSWIRComm 131; (2000) 100 IR 400 IGA Distribution Pty Ltd and Moses (No 3) [2003] NSWIRComm 230; (2003) 130 IR 145 Orr v Homes [1948] HCA 16; (1948) 76 CLR 632 Public Employment Office Department of Attorney General and Justice (Corrective Services NSW) v Silling [2012] NSWIRComm 118 Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [1988] HCA 2; (1988) 77 ALR 190 Roads and Traffic Authority of New South Wales, Council of the Shire of Evans & Pioneer Road Services Pty Ltd v Palmer (No 2) [2005] NSWCA 140 Silling v Corrective Services NSW [2011] NSWIRComm 1056 Wentworth v Rogers (No 3) (1986) 6 NSWLR 642 Youssef v Western Sydney Area Health Service (No 3) [2004] NSWIRComm 124; (2004) 133 IR 210 Category: Costs Parties: Michael John Silling (Applicant) Department of Attorney General and Justice (Corrective Services NSW) (Respondent) Representation: Mr A Hatcher SC (Applicant) Mr S Prince of counsel (Respondent) W G McNally Jones Staff Lawyers (Applicant) I V Knight Crown Solicitor (Respondent) File Number(s): IRC 1199 of 2011 DECISION 1Michael Silling was dismissed from his position of Senior Correctional Officer at the Goulburn Correctional Centre by Corrective Services NSW ("the respondent") on the 17 June 2011. He sought reinstatement to his former position. In Silling v Corrective Services NSW [2011] NSWIRComm 1056, Bishop C found the dismissal was "harsh and unjust and unreasonable" (at [173]). The learned Commissioner made the following orders: 1. Pursuant to ss 89 (1), (3) and (4) of the Industrial Relations Act 1996, the respondent, Corrective Services NSW, shall reinstate the applicant, Michael Silling, to his former position of Senior Correctional Officer at the Goulburn Correctional Complex on terms no less favourable to those which would have applied had the applicant not been dismissed on 17 June 2011. 2. The respondent, Corrective Services NSW, shall pay to the applicant, Michael Silling, the amount he would have otherwise received had he not been dismissed, less any other earnings received during the period from dismissal to reinstatement. 3. Pursuant to s.89(4) of the Industrial Relations Act 1996, the applicant's period of service shall be treated as not to have been broken by his dismissal. 4. The reinstatement of the applicant, Michael Silling shall be effected no later than 21 days from today's date. 5. These orders take effect on and from today's date, 16 December 2011. 2The respondent sought leave to appeal and to appeal from the decision and orders of Bishop C. In Public Employment Office Department of Attorney General and Justice (Corrective Services NSW) v Silling [2012] NSWIRComm 118, the Full Bench refused leave to appeal. In doing so, the presiding judge, Haylen J, stated at [2]-[3]: [2] The termination of Mr Silling's employment appears to have been ill-considered and somewhat of an over-reaction. The view seems to have been taken that Mr Silling had, in effect, three criminal convictions, when two of the matters were in fact dealt with by way of a bond without proceeding to conviction. The appellant was unable to convincingly establish why the same out-of-hours conduct dealt with so leniently by the Local Court would warrant the harshest industrial penalty, namely, the loss of employment. The disproportionate nature of this penalty was palpable. [3] The findings of the Commissioner that the termination was harsh, unjust and unreasonable and the Commissioner's decision to re-instate were reasonably open to her. Having regard to the substance of the Commissioner's decision, no error has been demonstrated that warrants the granting of leave to appeal. 3Backman J, who delivered the main judgment, indicated at [37] that "the appellant has failed to establish any error to warrant appellate intervention". The third member of the Full Bench, Stanton C, agreed with the decision and orders of Backman J. 4Before Bishop C, the applicant applied for an order for his costs of the proceedings at first instance incurred from 25 July 2011, on a party and party basis under s 181(2)(c) of the Industrial Relations Act 1996. That section provides: (2) However, the Commission when it is not in Court Session may award costs only in the following cases: ... (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals) who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious, or ... 5Bishop C was unable to deal with the question of costs prior to her retirement in January 2013. Consequently, the parties agreed that another member of the Commission could deal with costs and do so on the papers, which included written submissions on costs filed by the parties. It would appear that under the general law if an ancillary, severable and distinct matter is severed and not dealt with in an earlier proceeding, it may be determined by another judge: Orr v Homes [1948] HCA 16; (1948) 76 CLR 632; Wentworth v Rogers (No 3) (1986) 6 NSWLR 642. In any event, s 176(1) and (2) of the Act provide: 176 Reconstitution of Commission during hearing (1) The President of the Commission may replace the member, or one of the members, constituting the Commission after the hearing of a matter has commenced if the member becomes unavailable for any reason, or ceases to be a member, before the matter is determined. This subsection does not apply to proceedings before the Commission in Court Session unless the parties consent. (2) The Commission as so reconstituted is to have regard to the evidence and decisions in relation to the matter that were given or made before the Commission was reconstituted. ... 6 This decision deals with the outstanding costs issue. Applicant's submissions 7The applicant indicated he had made an offer of settlement on 25 July 2011, three days after a conciliation conference before the Commission, which had been unsuccessful. The offer was in the following terms: I confirm that my client is prepared to resolve this matter on the following basis: 1. Our client be reinstated to his original position as a Senior Correctional Officer, without any back pay; 2. Our client agrees to a one grade demotion, to First Class Correctional Officer Year 1, for a period of 6 months, after which he would return to being a Senior Correctional Officer. 3. Our client's record with CSNSW to be 'wiped clean', so that there can be no more reliance on any of the matters that our client has been charged with, and convicted of, by a court nor the matter that our client says he never received any counseling for. As you and CSNSW are aware, our client is undergoing anger management counseling (sic) and has been prescribed medication, which has led to a dramatic improvement in his demeanour and has generally assisted him in dealing with any anger and depression issues. Our client is prepared to make it a condition of his reinstatement that he continue such counseling (sic). As we pointed out in the conciliation conference, our client has an exemplary record of service with CSNSW, which can be verified by the general manager and manager of security at Goulburn CC. We believe this is a reasonable proposal. 8The applicant submitted that no direct response was ever received to his offer. In proceedings before the Commission on 16 August 2011, the respondent merely indicated it was not prepared to settle the matter and so the application was listed for hearing. The applicant contended the respondent never made a counter offer and never made any offer of settlement with respect to the matter at all. 9The applicant described an application for costs under the first limb of s 181(2)(c) of the Act as involving a two step process: first, there must be a finding as to the "jurisdictional gateway", viz., that the party against whom a costs order is sought "unreasonably failed to agree to a settlement of the claim" and, secondly, the Commission having made that finding must then consider whether, in the exercise of its discretion, costs should be awarded: see Bankstown City Council v Paris [1999] NSWIRComm 585; (1999) 93 IR 209 and Four Sons Pty Ltd v Sakchai Limsiripothong (No 2) [2000] NSWIRComm 131; (2000) 100 IR 400. 10It was submitted that the applicant's offer to settle was reasonable having regard to the following matters: (a) the offer was more favourable than the outcome of the case in that it involved no back-pay and a demotion; (b) it was always "on the cards" that the applicant would obtain a finding of unfairness given hid long and unblemished employment record; (c) the fact that the respondent was unable to present any substantive case that the applicant's out of hours conduct would ever have any consequence for the performance of his work duties - a matter presumably known to the respondent at the time the offer was made - meant that an order for his reinstatement was always at the least a realistically possible, if not probable, outcome. 11Further, it was submitted that it was apparent the respondent never intended to settle the case on any basis at all, let alone any basis that was reasonable. 12In relation to the Commission's discretion, the applicant referred to Carlton and United Beverages Ltd v Brunt [2007] NSWIRComm 135; (2007) 164 IR 184 at [34] and contended that, faced with a reasonable offer that corresponded with the strength of the applicant's case, the respondent not only failed to accept the offer but made no counter-offer and announced its intention not to settle at all. It was submitted that conduct did not constitute any attempt by the respondent to take seriously its obligation to try to settle the proceedings. 13The applicant submitted that inherent in the respondent's conduct in failing to accept the offer put to it and refusing to countenance settlement was a failure to make a proper objective assessment as to the strength of its case. Senior counsel for the applicant submitted: That case was weak indeed, particularly having regard to its inability to call the decision maker, Deputy Commissioner McLean, to explain the reasons for his decision to dismiss Mr Silling and to identify what it was about Mr Silling's out-of-hours conduct that made his continuing employment untenable. 14The applicant submitted in response to the respondent's submissions that there was no question jurisdiction existed to make the costs orders sought. Submissions for the respondent 15The respondent's submissions focused on what it contended was a lack of jurisdiction to make the costs orders. The respondent submitted that what the applicant was seeking to do was re-open proceedings in order to pursue costs. It was submitted the applicant did not raise costs before Bishop C nor before the Full Bench on appeal. The proper course, it was submitted, would have been to make application for costs on delivery of the appeal decision: see IGA Distribution Pty Ltd and Moses (No 3) [2003] NSWIRComm 230; (2003) 130 IR 145 at [3]-[5]. It was noted that the Act permits a Full Bench on appeal to deal with a costs application in relation to first instance proceedings: Youssef v Western Sydney Area Health Service (No 3) [2004] NSWIRComm 124; (2004) 133 IR 210 at [25]. 16Reference was made to what the Full Bench said in Department of Health v Perihan Kaplan (No 4) [2011] NSWIRComm 63 at [17] in relation to an application for costs at first instance after the matter had been dealt with on appeal: [W]e consider that the failure to bring any issue on appeal by the appellant, in that respect, and our conclusion not to disturb the foundational finding of Ritchie C as to the unfairness of Ms Kaplan's dismissal, results in there being no proper basis for the appellant's application for costs at first instance. 17The respondent submitted it followed that, notwithstanding r 12.2(1) of the Industrial Relations Commission's Rules 2009, which provides "The Commission may exercise its functions as to costs at any stage of proceedings or after the conclusion of proceedings", the proceedings at first instance are not only concluded, they have been rendered final by the appeal decision. Reference was made to Roads and Traffic Authority of New South Wales, Council of the Shire of Evans & Pioneer Road Services Pty Ltd v Palmer (No 2) [2005] NSWCA 140 at [15]-[17]. 18Counsel for the respondent submitted: Orders must be treated as final when those orders have been the subject of an appeal which has been heard and determined. The Commissioner is functus officio and has no jurisdiction to hear an application for costs. No application for reopening the case has been made and any such application would need to be supported by evidence, which is not the case here. 19In the alternative, the respondent submitted the application did not meet the grounds that justify an award of costs under s 181(2)(c) of the Act. Further, the fact that the respondent did not accept the offer of 25 July 2011 should not be treated as evidence capable of satisfying the Commission that the respondent would have refused an offer no matter how reasonable, as suggested by the applicant. The reasonableness of the offer should be assessed against the responsibilities of the employer. Reinstatement was not accepted as an option by the employer as being incompatible with the employee's duties. It was further submitted that the "wiping clean" of the applicant's record was not a course available or within the jurisdiction of the Commission nor was it ordered, therefore it was not unreasonable of the respondent not to agree to it. 20Finally, it was submitted that the principle underlying an award of costs was to recompense the successful party for expense incurred in bringing or conducting the proceedings. In the absence of evidence the Public Service Association (PSA) intended to recoup its legal costs incurred from Mr Silling, the Commission should not exercise its discretion to award costs. Consideration 21As s 181(2)(c) of the Act provides, the Commission may award costs against a party to proceedings under Pt 6 of Ch 2 who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim. However, in the present proceedings the respondent contends that the opportunity for applying s 181(2)(c) has passed because a final decision has been made and it is not open to the applicant to have the proceedings re-opened in order to pursue costs. 22The respondent relies on the principle stated by Barwick CJ in Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 at 531, viz: Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed. 23In the same case, Menzies J stated at 531-532: This appeal is not concerned with the power of a court to alter orders in pending litigation. It is concerned with the power of a court to make an order in litigation which, without any error or lack of jurisdiction, has been regularly concluded and is no longer before the court. To recognize the problem is, I think, to solve it. However wide the inherent jurisdiction of a court may be to vary orders which have been made, it cannot, in my opinion, extend (to) the making of orders in litigation that has been brought regularly to an end. 24As I noted earlier, the respondent also relies on Roads and Traffic Authority of New South Wales, Council of the Shire of Evans & Pioneer Road Services Pty Ltd v Palmer (No 2) where it was stated at [15]-[17]: [15] As a general rule, the Court has no power to vary a judgment or order once it has been entered. This is based on the principle of finality of litigation. In Bailey v Marinoff (1971) 125 CLR 529 at 530 Barwick CJ said - "Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed." [16] See also Gamser v Nominal Defendant (1977) 136 CLR 145 at 147, 154; FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 279; DJL v The Central Authority (2000) 201 CLR 226 at 245; Meehan v Glazier Holdings Pty Ltd (2002) 54 NSWLR 146 at 151-2. [17] Part 52A r 5 provides that the Court may, in any proceedings, exercise its powers and discretions as to costs at any stage in the proceedings or after the conclusion of the proceedings. The rule is relevantly concerned with costs orders after the substantive decision has been given, and must be subject to finality from entry of costs orders already made. New South Wales Insurance Ministerial Corporation v Edkins relevantly held that a judge was not functus officio after making costs orders if, although unknown to the judge, a costs argument remained to be heard. There was no question of entry of judgment. 25I should note that r 5 of Pt 52A of the Supreme Court Rules 1970 was in similar terms to r 12.2 of the Industrial Relations Commission Rules in that both rules provided that the Commission/Court may, in any proceedings, exercise its powers and discretions as to costs at any stage in the proceedings or after the conclusion of the proceedings. However, as it was determined in Roads and Traffic Authority of New South Wales, Council of the Shire of Evans & Pioneer Road Services Pty Ltd v Palmer (No 2) the rules are relevantly concerned with costs orders after the substantive decision has been given, and must be subject to finality from entry of costs orders already made. 26That case involved, inter alia, an application to vary costs orders after the Court of Appeal had entered such orders. Nevertheless, the Court held, in the circumstances of that case, it could entertain an application for costs under the slip rule: see Raybos Australia Pty Ltd v Tectran Corporation Pty Ltd [1988] HCA 2; (1988) 77 ALR 190 at 191. 27In Roads and Traffic Authority of New South Wales, Council of the Shire of Evans & Pioneer Road Services Pty Ltd v Palmer (No 2) the Rules under consideration were the Supreme Court Rules 1970. The successor to those Rules, insofar as civil proceedings are concerned, is the Uniform Civil Procedure Rules 2005 (UCPR). Those Rules provide for the formal entry of judgments or orders of courts that are subject to those rules. Rule 36.11 of the UCPR provides: 36.11 Entry of judgments and orders (1) Any judgment or order of the court is to be entered. (2) Unless the court orders otherwise, a judgment or order is taken to be entered when it is recorded in the court's computerised court record system. (2A) If the court directs that a judgment or order be entered forthwith, the judgment or order is taken to be entered: (a) when a document embodying the judgment or order is signed and sealed by a registrar, or (b) when the judgment or order is recorded as referred to in subrule (2), whichever first occurs. (3) In this rule, a reference to a judgment or order of the court includes a reference to any judgment, order, determination, decree, adjudication or award that has been filed or registered in the court, or of which a certificate has been filed or registered in the court, as referred to in section 133 (2) of the Civil Procedure Act 2005. (4) This rule does not limit the operation of rule 36.10. 28Part 36 of the UCPR applies to the Industrial Relations Commission whether or not it is sitting as the Commission or the Commission in Court Session: see Schedule 1 of the UCPR. The orders of Bishop C were entered into the Commission's computerised record system (CITIS) on 19 December 2011. The orders of the Full Bench refusing the respondent leave to appeal were entered on 31 October 2012. 29Prima facie, therefore, the proceedings are concluded and there is no power in the Commission to re-open them. I note, however, from the file of the proceedings, that on 22 December 2011, three days after the orders of Bishop C were entered, the applicant's solicitors wrote to the Associate of the Commissioner requesting the matter be relisted in order that the applicant might apply for costs. It appears from the file that this request was adjourned by the Commissioner pending the outcome of the respondent's appeal. 30On 14 November 2012, following the appeal decision, the Commissioner relisted the matter (1199 of 2011) in response to the applicant's request of 22 December 2011 regarding costs. The Commissioner set down a timetable for the filing and serving of written submissions regarding costs and that the Commissioner would determine the matter on the papers. The respondent agreed to this process. 31Rule 36.16(3A) of the UCPR provides: (3A) If notice of motion for the setting aside or variation of a judgment or order is filed within 14 days after the judgment or order is entered, the court may determine the matter, and (if appropriate) set aside or vary the judgment or order under subrule (1), as if the judgment or order had not been entered. 32The applicant did not file and serve a notice of motion seeking costs orders, as he should have. His solicitors merely wrote to the Commissioner's Associate on 22 December 2011. However, given the request regarding costs orders was made within the 14 days prescribed by r 36.16(3A) and that at no stage was there any objection taken by the respondent to the Commissioner dealing with the costs question on the papers in the absence of any motion, I am prepared to dispense with the requirement to file and serve a notice of motion: see s 14 of the Civil Procedure Act 2005. 33Accordingly, I am prepared to consider the applicant's contention that the respondent unreasonably failed to agree to a settlement of the applicant's claim. In being prepared to do so, I should note that there was no evidence put on by either party relating to the costs issue. Nevertheless, it was not denied by the respondent that the applicant made a settlement offer on 25 July 2011, in the terms stated earlier and there was no suggestion by the respondent that the applicant was incorrect in claiming the respondent made no counter offer and that the respondent indicated on 16 August 2011 before the Commission that it was not prepared to settle the matter. As the Commission is not bound by the rules of evidence and is "to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms" (see s 163(1) of the Act) I am prepared to accept the offer claimed by the applicant was made, that the respondent at no time made a counter offer and that the respondent had indicated it was not prepared to settle the matter. 34 In Paris the Full Bench stated at 218: Construing the relevant part of s 181(2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of that party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad powers and discretions under s 181(1) are available for exercise. ... We emphasise that there will be many circumstances in which parties to litigation, including unfair dismissal proceedings, may appropriately take a firm position generally, including on the question of conciliation or settlement. Nevertheless, such a position runs significant risks in terms of the exercise of the power and discretion under s 181(2)(c). This is particularly so where such a position is assumed without due regard to the policy of the Act which requires parties to take seriously their obligation to attempt to settle the proceedings. That in turn involves an obligation to consider in an objective way the strengths or limits upon the case that they will be propounding should the matter proceed to arbitration. 35On 25 July 2011, the applicant made the settlement offer quoted earlier in this decision. It is critical to ask whether the settlement offer that involved reinstatement of Mr Silling was reasonable in all the circumstances. 36Mr Silling, 49, "had an absolutely unblemished 15 year record as a Senior Correctional Officer at the Goulburn Correctional Complex, clearly one of the most challenging locations in the State. His employment record is exemplary" (Bishop C at [133]). 37In 1998, in relation to an assault charge against his wife, Mr Silling received what Bishop C described as "a s 556A Recognizance Order for 18 months with the supervision of the NSW Probation and Parole Service". He was issued with a Letter of Warning from the then Senior Assistant Commissioner, Mr Woodham, in relation to that incident. Bishop C referred to this as being a "conviction". Section 556A of the Crimes Act 1900, which was the predecessor provision to s 10 of the Crimes (Sentencing Procedure) Act 1999, empowered a court that considered that a charge had been proved, in certain circumstances, to take steps without proceeding to a conviction. So it was wrong to refer to the order under s 556A as a conviction. 38In 2008, Bishop C found that Mr Silling had been "convicted in Goulburn Local Court for Common Assault (Domestic Violence) against his daughter and received a s 10 good behaviour bond for 12 months". Like its predecessor, s 10 of the Crimes (Sentencing Procedure) Act does not involve a conviction for an offence. Where a court finds a person guilty of an offence the court may, without proceeding to conviction, make certain orders including placing the offender on a good behaviour bond (s 10(1)(b)). 39At [13] of her decision Bishop C then noted: [13] Deputy Commissioner Ian McLean advised Mr Silling by letter of 20 November 2008, that disciplinary action was being considered against him and he was invited to make a submission before any final decision was made.... The matter did not proceed to any internal disciplinary action against Mr Silling by CSNSW due to an "administrative oversight". 40At [14] of her decision, Bishop C recorded that in February 2011: Mr Silling was convicted in Goulburn Local Court for Common Assault (Domestic Violence) against his wife and received a Section 9 Good Behaviour Bond for 9 months with the supervision of the NSW Probation and Parole Service. 41Section 9 of the Crimes (Sentencing Procedure) Act provides: Good behaviour bonds (1) Instead of imposing a sentence of imprisonment on an offender, a court may make an order directing the offender to enter into a good behaviour bond for a specified term. (2) The term of a good behaviour bond must not exceed 5 years. (3) This section is subject to the provisions of Part 8. This provision contemplates a conviction. 42Bishop C recorded that in March 2011, Deputy Commissioner McLean advised Mr Silling that disciplinary action was being considered in relation to the "three court convictions" and an "internal disciplinary matter" in accordance with s 48 of the Public Sector Employment and Management Act 2002. Further, that in June 2011 Deputy Commissioner McLean notified Mr Silling that in consideration of the penalty for the court convictions and the "internal disciplinary matter" he was to be dismissed from the Public Service. 43In summarising her findings at [174]-[176], Bishop C stated: [174] In summary, that conclusion has been arrived at on the basis that dismissal was too harsh a penalty for the out-of hours conduct, there has not been the necessary connection established between such conduct and Mr Silling's employment, there has been no evidence put forward as to the reasons why dismissal was considered necessary and no evidence that the conduct in question has already, or will, adversely affect the integrity and reputation of both the Public Service and CSNSW nor why it is in the public interest to dismiss a man with a 15 year unblemished record at a senior level in CSNSW. [175] There are also procedural unfairness issues raised by the total absence of any reason being provided by CSNSW in the 10 June 2011 letter of dismissal (other than the mere fact of the 3 convictions and "employment matters") as to why it considered that it was necessary to dismiss him from his position after 15 years unblemished and exemplary service. Nor was any acknowledgement given to Mr Silling as to whether or not the written and oral submissions he had made had in fact even been considered by Deputy Commissioner McLean before the decision to dismiss was made. [176] In reaching the conclusion that the dismissal of Mr Silling was harsh and unjust and unreasonable, I have also taken the following matters into account (which are applicable to each of those three terms): Mr Silling has a 15 year totally unblemished work history with CSNSW and during that time had received commendations and undertaken additional training at his own initiative to enhance his skills but which was also of benefit to CSNSW. In relation to each incident of domestic violence he self-reported to the Police in a timely fashion and co-operated fully in the consequences that then flowed including pleading guilty to the charges laid. In relation to each incident of domestic violence he self-reported immediately to his managers at the Goulburn Correctional Complex. The convictions he received were all at the lower end of the scale available to the Local Court. He co-operated fully and appropriately with the terms of the Bonds imposed by the Courts and the Probation and Parole requirements (as evidenced by the notes attached to the affidavit of Mr Cosgrove). He received a warning after the first assault conviction in 1998 but there is no evidence that the fact of this conviction subsequently adversely affected his work performance or reflected on the integrity or reputation of either the Public Service or CSNSW in any way. Whilst he was issued with a 'show cause' letter following the 2008 assault conviction, for some unknown "administrative oversight" (never fully explained) no disciplinary action of any kind was taken. There is no evidence that the fact of this second conviction subsequently adversely affected his work performance or reflected on the integrity or reputation of either the Public Service or CSNSW in any way. There has been no evidence advanced as to the reasons why it was considered necessary for CSNSW to dismiss Mr Silling. There has been no evidence advanced as to the reasons why it was considered by CSNSW that dismissal was the appropriate penalty to be imposed given the range of alternative penalties available under the PSEM Act. There has been no evidence advanced as to why the fact of his three criminal convictions means that Mr Silling would be unable to continue to carry out his duties as a Senior Correctional Officer in the same exemplary way that he had done for the previous 15 years. There has been no evidence advanced as to any adverse affect Mr Silling's reinstatement would have in relation to his work colleagues, superiors or the inmates at the Goulburn Correctional Complex. There has been no evidence from those with whom he worked or by whom he was supervised by that there was any impracticability in reinstating Mr Silling. There was no evidence that the remedial actions Mr Silling has taken and continues to take to address his issues and make positive change for the future has been acknowledged or taken into account in any way by the decision maker. Mr Silling has been dismissed from a secure Public Service position and from what was his long term career. Mr Silling is genuinely remorseful for his actions and has taken remedial action which is on-going to address his issues and make positive change for the future. Mrs Silling has taken redundancy from her position as a Senior Correctional Officer at the Goulburn Correctional Complex and therefore will no longer experience the work stresses she maintained had contributed to the first two incidents. Mr Silling lives in a regional area and has been unable to obtain comparable alternative employment other than casual labouring. Mr Silling's chances of securing comparable alternative employment within the region are remote. Mr Silling's dismissal has resulted in some considerable financial losses in comparison to his former entitlements and will continue to do so given his difficulty in finding comparable employment. 44In relation to the practicability of reinstatement, Bishop C stated: [181] It is difficult to have regard to the public interest in this matter as there has just been no evidence presented to the Commission, as is usually the case where reinstatement is sought, as to any consequences for the employer, other employees etc., or indeed just why reinstatement is impracticable. [182] Similarly when having regard to Perkins , again there is no actual evidence from anyone at CSNSW, particularly those at the Goulburn Correctional Comples who would be working with Mr Silling or supervising him or exercising authority over him as to any issue going to trust and confidence, or indeed any concern, as to his ability to perform his duties as a 'law enforcement officer'. There is no actual evidence from Deputy Commissioner Mclean either written or oral, mere assertions made on his behalf that there is a loss of trust or confidence such as to preclude Mr Silling's reinstatement. [183] I therefore find that it would not be impracticable to reinstate Mr Silling to his former position of Senior Correctional Officer with Corrective Services NSW, and at his former location of the Goulburn Correctional Complex. 45On appeal, I have already referred to what the presiding judge said about the "ill-considered" decision to terminate Mr Silling and the palpably disproprtionate nature of the penalty. Backman J dealt in considerable detail with each of the respondent's contentions regarding asserted errors by Bishop C and found they were not errors and/or did not warrant appellate intervention. Stanton C agreed with Backman J. Leave to appeal was refused. 46Having regard to the decisions both at first instance and on appeal, the prospect of the respondent being successful in having its decision to dismiss Mr Silling upheld was weak. This is especially so when the proposition that his out of hours conduct meant he was unable to carry out his duties as a Senior Correctional Officer according to the required standard of conduct lacked evidentiary support, and where the proposition that his conduct reflected adversely on the integrity or reputation of either the Public Service or Corrective Services NSW lacked substance. 47The maker of the decision to dismiss Mr Silling, Deputy Commissioner McLean, did not convey to Mr Silling why his conduct rendered his continuing employment untenable, or even what was perceived to be the connection between that conduct and his employment. Deputy Commissioner McLean was not called in the proceedings to explain his reasons for deciding to dismiss Mr Silling or to otherwise justify those reasons. 48One can presume that the respondent was aware of the shortcomings of its case at the time the settlement offer was put and when it indicated to the Commission in August 2011 that it was not prepared to settle. But even if that was not the case and the weakness in its case was not known until the eve of the arbitrated hearing, there remained the opportunity to re-enter conciliation and explore settlement. 49It appears to me that Mr Silling's offer to settle was a reasonable one in the circumstances - it was more favourable to the respondent than the actual outcome of the case - and invited at least some response from the respondent if only by way of a counter-offer. But it is apparent the respondent turned its face against any prospect of settling. The respondent submitted the fact that it did not accept the offer of 25 July 2011 should not be treated as evidence capable of satisfying the Commission that the respondent would have refused an offer no matter how reasonable. I am unable to accept that proposition when at a "report back" before the Commission on 16 August 2011, the respondent indicated to the Commission that it was not prepared to settle the matter, and it was listed for hearing on that basis. The respondent did not deny it had indicated it was not prepared to settle and so I think a reasonable inference is available, in the absence of contradictory material, that the respondent was not interested in any attempt to settle. 50In circumstances where the respondent was not able to show objectively why Mr Silling's conduct rendered his continuing employment untenable, the respondent had an obligation to take that into account in considering the case it could present at arbitration. The lack of a material connection between out of hours conduct and employment, beyond abstract notions of inconsistency with provisions of the Public Sector Employment and Management Act, the existence of reasonably well settled case law (Paris, Four Sons Pty Ltd v Sakchai Limsiripothong (No 2)) and the respondent's refusal to countenance settlement, meant that it ran the significant risk that costs would be awarded against it. 51One can understand and agree that an employer is entitled to stand firm in refusing to settle an unfair dismissal claim where it has made a proper, objective assessment of its case and concludes there is a reasonable chance of success in any arbitration. But where the chances are non-existent or at best slim, according to what the Full Bench stated in Paris, due regard has to be given by the employer to the policy of the Act "which requires parties to take seriously their obligation to attempt to settle the proceedings". 52The decision of Bishop C at first instance was wholly against the respondent. On appeal, the respondent was not even successful in gaining leave to appeal. The termination of Mr Silling was described as "ill-considered and somewhat of an over-reaction". The consideration in those two decisions, and the outcomes, reflect the fact that the respondent's case was weak. In the face of a reasonable settlement offer by the applicant, the respondent had an obligation to at least engage in an attempt to settle. It declined to do so. I consider the respondent unreasonably failed to agree to a settlement of the claim. Accordingly, in my discretion, I propose to orders costs against the respondent. Orders 53The Commission orders that the respondent shall pay the applicant's costs of the proceedings in this matter incurred from 25 July 2011 on a party and party basis as agreed or, failing agreement, as assessed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 February 2013