Industrial Relations Commission New South Wales Medium Neutral Citation: Schoeman v Secretary, Department of Justice [2014] NSWIRComm 1028 Hearing dates: 23 October 2014 Decision date: 31 October 2014 Jurisdiction: Industrial Relations Commission Before: Newall C Decision: Appeal upheld Catchwords: Public sector disciplinary appeal - remitted from Industrial Court to be determined according to law - punishment of dismissal - dismissal for misconduct - misconduct not made out - whether disciplinary regime punitive or protective - in dealing with disciplinary appeals Commission to have regard to all circumstances, not just question of misconduct - statutory provisions addressing obligations of public servants - role of trust and confidence in employment relationship - overall employment relationship considered - appeal upheld - punishment of dismissal set aside. Legislation Cited: Industrial Relations Act 1996 ss. 98, 100B, 100C, 100D, 146 Public Sector Employment and Management Act 2002 ss.3B, 41 Public Sector Employment and Management Amendment (Ethics and Public Sector Commissioner) Act 2011 Cases Cited: Secretary, Department of Justice v Schoeman [2014] NSWIRComm 40 Calman v Commissioner of Police [1999] HCA 60; (1999) 167 ALR 91 Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 Schoeman v Director-General, Department of Attorney-General and Justice [2013] NSWIRComm 1018 Wentworth v NSW Bar Association (Supreme Court of NSW, Campbell J, 23 December 1992, unrep) Category: Principal judgment Parties: Ms F Schoeman - appellant Secretary, Department of Justice - respondent Representation: Mr D Nagle - appellant Mr S Benson - respondent Maurice Blackburn Lawyers - appellant Crown Solicitor's Office - respondent File Number(s): IRC 100 of 2013 DECISION 1This is an appeal by Fiona Schoeman against the decision of the Director-General, Department of Attorney-General and Justice, as that office was at the time styled, to dismiss her from her employment. 2The appeal is brought under Part 7 of the Industrial Relations Act 1996 ('the Act'). The employer is now properly styled Secretary, Department of Justice. 3Ms Schoeman was dismissed for reason, as her letter of termination sets out, that an allegation of misconduct against her was held to be sustained. That misconduct was said to be that Ms Schoeman had failed to comply with numerous lawful and reasonable directions. 4In a decision handed down on 26 September 2013 (Schoeman v Director-General, Department of Attorney-General and Justice [2013] NSWIRComm 1018) the Commission upheld Ms Schoeman's appeal and made orders reinstating her in her employment, with consequential orders as to salary and continuity of service. The Commission at first instance found that as a matter of fact the misconduct alleged against Ms Schoeman had not occurred. The Commission relevantly held: I have found that there was no misconduct. There is no basis for the imposition of any punishment. The Commission simply has no power to impose any sort of punishment - which would be the effect of failing to set aside the decision to dismiss - in circumstances where there was no misconduct. 5The decision at first instance was the subject of appeal to the Industrial Court. The Court, in a judgment handed down on 8 August 2014, upheld the appeal and remitted the matter back to the Commission as presently constituted to determine according to law. The proceedings on remitter were heard on 23 October 2014. This decision is the outcome of those proceedings. 6In upholding the appeal, the Court did not disturb the Commission's finding that the misconduct for which Ms Schoeman was dismissed did not occur. In the remitted proceedings the respondent did not assert that Ms Schoeman had committed any misconduct, either as initially alleged or at all. 7Nor did the Court disturb the finding that the Director-General invalidly exercised his powers under the Public Sector Employment and Management Act 2002 ('the PSEMA') for reason that the directions he gave Ms Schoeman were unreasonable. 8However, the Court found that the first instance proceedings had been wrongly determined at law. 9Relevantly, the Court held: The provisions of Pt 7 of the IR Act concerning disciplinary appeals do not evince a legislative intention to limit the scope of an appeal in the manner contemplated by the Commissioner and, in particular, do not contemplate an appeal being foreclosed by a determination of whether or not an employee had, contrary to any opinion formed by the Director-General, engaged in misconduct. (Judgment, paragraph 184(1)) .... Further, I am unable to discern a legislative intention to confine an appeal to, as the Commissioner found, a review only in the specific allegations of misconduct upon which punishment was based, and by implication only materials which formed the basis for that decision. Based upon the foregoing analysis of the statutory scheme in Pt 7 of the IR Act, the Commission is not entitled to disregard matters relevant to the exercise of its discretion to determine an appeal in relation to 'a dismissal' under s 100C, which include relevant evidence as to supervening facts: see Murray at 464. In this case, the December and January letters were relevant because of the protective nature of the jurisdiction and were particularly relevant to the matters referred to in s 41(a) and (b) and because they were relevant to the making of a determination under s 100C(2).... This is not to suggest that a misinformed opinion of the Director-General as to misconduct may not play a role in such deliberations, but that the analysis undertaken may not begin and end at that point. Other affirmative factors for the respondent will also be relevant such as character references and her employment record. (Judgment, paragraphs 184(7) and (8)) ... The respondent submitted that a "finding of misconduct is a fundamental precondition for the taking of disciplinary action". By that submission, the respondent may be taken as contending that the making of an invalid decision as to misconduct by the Director-General removes any jurisdictional foundation for the institution or determination of disciplinary action. I specifically reject this contention. Section 46(2) of the Act does not require a Department Head to make a finding or a decision with respect to an allegation of misconduct (see s 46(1)), but rather to form an opinion... No submission was made in this case that the requisite opinion was not formed by the Director-General. (Judgment, paragraph 184 (10) ... The jurisprudence of the Commission is such that the fact of an employee not being guilty of a charge of misconduct will be a significant factor in support of exercising a discretion in their favour (see Pastrycooks at 84; see also Budlong v NCR Australia Pty Limited [2006] NSWIRComm 288 at 87; George Maitland v Royal Blind Society of New South Wales [2004] NSWIRComm 368 at [19] and Burge at 5). (Judgment, paragraphs 184(13)(e)) 10The Court further relevantly held: Director General, Department of Ageing, Disability and Homecare v Lambert [2009] NSWCA 102 is authority having compelling force in the present proceedings and should result in the conclusion that the jurisdiction of the Commission under Part 7 is protective in nature. (Judgment, paragraph 186) 11And, as to the correct approach to appeals under Part 7, at paragraph 185: There was no requirement that the Commissioner make a finding that the respondent had engaged in the misconduct as charged before exercising his protective function under Pt 7 of the IR Act. The making of such a finding did not extinguish the protective jurisdiction the Commissioner was required to exercise under Pt 7 of the Act... the Commissioner failed to have regard to the December and January letters and other matters relevant to the exercise of a protective function such as the respondent's overall relationship with the Department. 12I observe that as a consequence, a particular finding of the Commission at first instance - that it was inappropriate and procedurally unfair of the Director General to consider in his Determination the contents of Ms Schoeman's letter to him of 17 December 2012 - was erroneous. I do not now proceed on the basis that Ms Schoeman was subjected to procedural unfairness for that reason. 13The Court also added: In any event, it has long been held in the jurisprudence of the Commission in unfair dismissal matters that the Commission may have regard to events occurring after a dismissal (see Bankstown City Council v Paris [1999] NSWIRComm 368, (1999) 100 IR 363 at 370 ). It is not clear to me whether that is a general statement of the law as it now applies to disciplinary appeals, given the significantly different statutory provisions attaching to unfair dismissals and the tests set out in s.89 of the Act. I have in any event, however, approached the matter remitted to me on the basis that the Court expressly held that the letters written by Ms Schoeman to the Director-General both during her employment and after her termination are to be taken into account. I have, as I set out in more detail below, taken them into account. Approach to decision on remitter 14I now turn to determine the appeal according to the law as it has been comprehensively set out by the Court. 15Specifically, but without derogation from any part of the Court's judgment, I determine the matter on the basis that the jurisdiction exercised by the Commission under Part 7 of the Act is protective, as opposed to punitive, and that, essentially as a consequence, it does not follow that this appeal, or any appeal, must be upheld because an employee was dismissed or otherwise punished for misconduct which did not actually occur. Rather, the question of whether the misconduct occurred is one of a range of matters that is to be considered in an appeal under Part 7, although, as the Court held, in considering an employee's appeal a finding that the alleged misconduct did not occur 'will be a significant factor in support of exercising discretion in their favour.' (Judgment, paragraph 184(13)(e)). 16It might be thought that where a department head has dismissed an officer for misconduct, and the officer has in fact not committed that or any misconduct, such a dismissal might effect such a significant unfairness that it of itself, even considered in the overall circumstances and in the context of a protective jurisdiction, necessarily warranted the upholding of an appeal. That would be an approach to which, I admit, I would instinctively be drawn. I would go so far as to see such an approach as protective of the proper functioning of the public service and therefore of the public. However, I emphasise that I have expressly not decided this case on that basis, but rather, as will be apparent from my reasons below, have had regard to the existence or otherwise of the alleged misconduct as no more than one of a range of matters that must be considered on an appeal. Facts 17The Commission's findings of fact at first instance were not disturbed on appeal. They are set out in paragraphs 4 to 82 of the decision at first instance. I do not set them all out again here. 18The essence of the facts may be expressed thus: Ms Schoeman had worked for some 20 years for the Department as a court reporter/typist. There was no criticism of her performance of the work she was engaged and paid to do. She was dismissed following the Director-General having, on advice, formed an opinion that she had committed misconduct which was the subject of allegations against her. She had not in fact committed any misconduct. Earlier in her employment, and then more specifically on 17 December 2011, when she was aware she was liable to be dismissed, and again on 17 January 2012, immediately after she had been dismissed, she wrote letters to the Director-General which were highly critical of the conduct and personal character of the Director-General and other senior Departmental officers. Consideration 19Counsel for the respondent submitted that what was to be considered in this appeal was whether, having regard to: (i)the maintenance of appropriate standards of conduct and work-related performance; (ii)the protection and enhancement of the integrity and reputation of the Public Service; and (iii)the protection of the public interest, and having regard to the circumstances of the case, the decision of the Director General to dismiss Ms Schoeman was correct, in which case the Commission should disallow the appeal; incorrect, in which case the appeal would be allowed, or whether it was appropriate to make such other decision with respect to the appeal as the Commission thought fit. 20It is clear that in considering an appeal against the decision of the Director-General to dismiss Ms Schoeman, the Commission is bound to have regard to the matters set out at (i)-(iii) above, which are elements drawn expressly from s.41 of the PSEMA, and in that context it is bound to consider the terms in which Ms Schoeman wrote to the then-Director-General, and indeed to consider all aspects of her employment. 21The Commission is bound to have regard to these matters not, however, standing alone, but as a part of the overall consideration of the decision under appeal, as the Court has made clear. That overall consideration must also include that the decision under appeal in this case is a decision to dismiss a public servant on the basis that she committed misconduct, when in fact she had committed no misconduct at all. As the Court has held, the fact of an employee not being guilty of a charge of misconduct will be 'a significant factor in support of exercising a discretion in their favour'. 22In the context of the overall assessment of all aspects of the matter and of Ms Schoeman's employment, counsel for the respondent submitted that consideration of the letters Ms Schoeman wrote to the Director-General should lead to the view that they were destructive of the necessary confidence between employer and employee in the context of public sector employment. 23In this context it was submitted that the content of the letters should give rise to a finding that Ms Schoeman was not of good character, in the sense that that was said in Wentworth v the NSW Bar Association (Supreme Court of NSW, Campbell J, 23 December 1992, unrep). 24Accordingly, it was said, assessed against the express prescriptions of the PSMA going to core values and ethical behaviour by public servants, Ms Schoeman's behaviour in writing the letters meant that she should not be restored to employment in the public service. In particular, counsel drew attention to section 3B of the PSEMA, which sets out public sector core values, under the group headings Integrity, Trust, Service and Accountability. It was put that Ms Schoeman's conduct in writing the letters demonstrated that she did not conform to those core values. 25I am unable to agree with these submissions. Ms Schoeman wrote the letters to a particular Departmental officer, the Director-General. She used language highly critical of that officer and others. She did so in circumstances where, first, she believed - mistakenly, as an investigation showed - that she had been subject to unjust and corrupt conduct. She then repeated the comments, and added further strong criticisms, in circumstances where she apprehended that she was going to be dismissed for misconduct that, as she pointed out in her correspondence with some precision, she had not committed. Her last letter was written immediately after her termination, after 20 years' service, for misconduct that she had not committed. 26What is determinative, however, is not that there might be some explanation for Ms Schoeman having expressed herself in strong and critical terms. Rather, the letters must be assessed on their face in the context of Ms Schoeman's obligations as a public servant. 27In making that assessment, it is relevant that this is not a case where Ms Schoeman published her criticisms in the media. She contained them in letters written and delivered to the Director-General by name and marked 'Private and Confidential'. I do not see that a public servant is forbidden, on pain of dismissal, to express criticisms, even strong and serious criticisms, of senior officers in a private and confidential letter to the head of department. The position would very likely be entirely different if the letters were threatening or were foully abusive, but they were neither. The letters do not in my view mean that the employment relationship cannot be maintained. Nor do they mean that Ms Schoeman must be excluded from her work in order to protect the public service or the public. I say that having express regard to, inter alia, sections 3B and 41 of the PSEMA. 28In assessing Ms Schoeman's conduct against her statutory obligations, the situation here is not, in my view, analogous to that in Wentworth. 29Ms Wentworth was found to be not of good character for two reasons which were not separated; that she habitually made grave and unsubstantiated allegations against persons, and that she could not be trusted to tell the truth. She was being judged against the criterion of admission to the NSW Bar. Not only is the test different, but Ms Schoeman has not been found to lie. The decision in Wentworth does not provide any basis to find that Ms Schoeman is 'not of good character'. 30The question was posed to counsel for the respondent, if, absent anything else, a junior employee had written the letters to a department head that Ms Schoeman wrote, what would be the sanction properly to be imposed? Counsel was not required to answer, but in my view the answer could not properly be 'dismissal'. That question is not the basis on which I have determined the matter, but it does give a perspective to the measure of gravity of the conduct that was said to stand against the appeal being upheld. Indeed, no disciplinary or even remedial action was taken against Ms Schoeman for writing the earlier letters, to which letters, despite counsel for the appellant's submission that they should be excluded from my consideration, I have had regard. The employment relationship 31The Commission in dealing with a matter pursuant to Part 7 of the Act is expressly not required to apply the tests relevant to the restoration of the employment relationship set out in s.89 of the Act. Under s.89, the Commission is given a statutory obligation to consider practicability. That is not the case here. The parliament has chosen not to make such a weighing exercise part of the statutory regime applying to appeals. If, of course, there were evidence of circumstances which rendered the restoration of the employment contract impossible, that would necessarily be part of the Commission's consideration of an appeal against a dismissal. That is not, however, the case here. 32Ms Schoeman was highly critical of certain officers. However, her daily work does not require her to come into contact with any of those officers, even those few mentioned in her letters who are still in the Department's employ. I observe that on the evidence the Director-General and the most senior of the other officers criticised by Ms Schoeman no longer work for the Department. 33The Department is a very large organisation. Ms Schoeman is, with respect to her, a junior employee. I accept that the statutory structure under which she was employed did not differentiate between the levels of seniority of officers as to the ethical framework within which they were expected to conduct themselves: Public Sector Employment and Management Amendment (Ethics and Public Sector Commissioner) Act 2011. I do not see that Ms Schoeman has breached her statutory obligations. In considering whether the employment relationship can be restored and maintained, I observe that Ms Schoeman is not required to interact with senior officers of the Department in carrying out her daily duties. 34No criticism is made of Ms Schoeman's performance of her daily work; rather the opposite. The Department has already undertaken not to place her in the one location where she might come into contact with persons about whom she has expressed an adverse opinion. 35The employment relationship is in most cases capable of withstanding some friction and doubts: Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186. Each case is to be assessed on its own merits: Perkins loc cit. Here there is no suggestion that Ms Schoeman did not and will not in future meticulously carry out her duties. No evidence was advanced to say that the employer does not trust her to do so. Resolution of the appeal 36It is apparent from the words of subs.100C(2) of the Act that an appeal before the Commission is an appeal de novo. That is, the Commission is to hear and determine the matter afresh on the materials before it, not simply review the decision of the initial decisionmaker: see Calman v Commissioner of Police [1999] HCA 60; (1999) 167 ALR 91. 37The Commission may, in relation to a disciplinary appeal, allow or disallow the appeal or make such other decision with respect to the appeal as it thinks fit. The Commission is therefore not constrained merely to accept or reject the initial decision. It may impose any decision it thinks fit, including a harsher penalty than that which the initial decisionmaker imposed. 38To decline to uphold the appeal leaves Ms Schoeman dismissed. Following the approach enunciated by the Court, balancing the affirmative aspects of her employment against the letters she wrote, which were the sum of the matters said to lie against upholding the appeal, and having regard to the fact that she did not commit any misconduct, a matter which the Court has held should be, in relation to an appellant employee, 'a significant factor in support of exercising a discretion in their favour', I do not see that I can do otherwise than uphold the appeal, and I do so. In circumstances where Ms Schoeman has committed no misconduct, I do not see that the Commission should impose any alternative disciplinary action upon her. Orders 39The Orders that I make in this matter are as follows. 1. The appeal is allowed. 2. The decision of the Director-General to dismiss Ms Schoeman dated 10 January 2013 is set aside. 3. The respondent is directed to pay to Ms Schoeman an amount of remuneration equivalent to the amount which she would have received, but for the decision of the Director-General to dismiss her, between 10 January 2013 and the date of this decision, less any monies paid to her since 10 January 2013. 4. Ms Schoeman's continuity of employment with the respondent is taken to be unbroken. PETER NEWALL Commissioner 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: 18 November 2014