Attorney General's Department of NSW v Lupcho Dafkovski

(a) whether the applicant [Mr Dafkovski] is precluded by the Government and Related Employees Appeal Tribunal Act 1980 ("GREAT Act") from proceeding with his application under s84 of the Industrial Relations Act 1996 ("the Act");

(b) whether the Commission in the exercise of discretion under s85(3) of the Act should accept the present application made out of time; and

(c) whether the applicant [Mr Dafkovski] was dismissed unfairly within the meaning of Pt 6 of Ch 2 of the Act. 7 As to the first two issues, Grayson DP found that Mr Dafkovski was not precluded by the GREAT Act from commencing proceedings for unfair dismissal and exercised his discretion to accept the application out of time. In relation to the application of the GREAT Act, Grayson DP held (at [14]): Having considered the competing contentions and having regard in particular to the statutory objective of avoiding duality of proceedings, I am persuaded that the construction for which Mr Hatcher contends is the proper one in the circumstances. This is not a case where appeal rights have been substantively exercised under the GREAT Act. Rather there has been an express written election by the applicant to forego those rights and as may be apparent, I do not accept the respondent's argument that the procedural stop of filing a notice of appeal under the GREAT Act amounts to a substantive exercise of the right of appeal as contemplated by the opening words of s 25(3). 8 It is not necessary for the purpose of the present proceedings to examine his Honour's decision to allow the application out of time, as the appellant has not challenged his Honour's decision in this regard on appeal. 9 As to the third issue, namely, whether Mr Dafkovski's dismissal was harsh, his Honour observed that the appellant Department bore the onus of proving to the requisite standard the allegations of misconduct itemised in the appellant's notice of termination. Grayson DP summarised these as (at [19]): 1. During the period April 2004 and May 2005 the applicant sexually harassed or harassed Ms Mary Odichou and Ms Samar Khazma. His actions are said to be in breach of the Department's Code of Conduct and Ethics and the Harassment Prevention Policy. The details are: a) During the period April 2004 to January 2005 he sent text messages and/or made comments to Ms Odichou which contained sexual connotations including "I love you", "miss you", "it's me" or words to that effect;

b) During the period April 2004 to May 2005 he made comments to Ms Khazma which contained sexual connotations including "your so fucking hot I want to fuck you" or words to that effect;

c) On or about 9 July 2004 outside normal working hours he harassed Ms Odichou in that he continued to contact her by mobile telephone after being advised to cease;

d) In December 2004 whilst attending the Shark Bar in Liverpool Street, Sydney he sexually harassed Ms Khazma in that he put his hand down her skirt and pinched her bottom;

e) Whilst attending the Shark Bar in Liverpool Street he sexually harassed Ms Odichou in that he would touch her in ways, such as putting his arms around her and attempting to kiss her. Ms Odichou told him to stop as his actions made her uncomfortable;

f) He intimidated Ms Odichou and Ms Khazma as they were apprehensive about his intentions when he asked them to attend his office; g) His behaviour towards Ms Odichou and Ms Khazma left them powerless and their work was affected to the extent that they were unable to continue working with him as their manager.

2. In June 2004 or there about, he caused damage to a motor vehicle owned by a member of the public and his actions have brought the Department's name into disrepute. His actions are said to be in breach of the Department's Code of Conduct and Ethics. The details are:

a) Ms Nahren Saliba and Ms Odichou drove him to his home in the Wollongong area following repeated telephone calls from him. Upon exiting Ms Saliba's motor vehicle he slammed the car door with force, which caused damage to the door. 10 After an extensive review of the evidence presented at first instance as to the allegations raised by Ms Odichou and Ms Khazma, Grayson DP made the following findings:

(a) it would be unsafe to conclude that the allegations against the respondent, insofar as they relate to Ms Khazma, have been made out. There are too many doubts;

(b) the appellant was correct in asserting that the evidence plainly gives rise to the inference that the respondent was seeking sexual gratification in circumstances where both he and Ms Odichou were in separate married relationships; where the respondent was Ms Odichou's supervisor at work and where there was a sixteen-year age difference between them. As to this, Grayson DP commented (at [66]): In so doing I indicate as before that I accept Ms Odichou's evidence and to the extent that it is at odds with the applicant's evidence, I generally prefer it. I say generally because there are aspects of her evidence which do not have the same character of reliability as others but to my mind, those aspects are essentially peripheral and do not derogate from the main thrust of her evidence going to conduct on the applicant's part.

(c) As to the evidence of Ms Odichou, his Honour found (at [76]): I am of the view, on balance, that Ms Odichou was a reasonably frank and candid witness and to the extent that her evidence is at odds with the applicant's, I prefer it. I do not accept and to my mind the evidence does not permit the conclusion for which Mr Hatcher contends namely, that Ms Odichou made her complaint to Deputy Registrar Cooke on 24 January 2005 substantially for the purpose of assuaging her husband's anger and in some way proving to him that his suspicions about her extra-marital activities were unfounded.

(d) As to whether the respondent's misconduct justified dismissal, Grayson DP found (at [77]-[78]): Having so concluded, however, the matter has a substantial way to travel before it can be said that the applicant's conduct amounted to misconduct justifying dismissal particularly after Ms Khazma's allegations have been rejected. For a start and as Mr Hatcher submitted with some persuasive force, the allegations that the applicant intimidated the complainants; made them apprehensive about his intentions when he asked them into his office; left them powerless and (by slamming the door of Ms Saliba's car) brought the Department into disrepute are to put it as neutrally as I can, lacking in evidentiary foundation again particularly after Ms Khazma's allegations have been rejected. The remaining allegations insofar as they relate to Ms Odichou involve firstly, sending text messages and making comments containing sexual connotations; secondly, making annoying phone calls on 9 July 2004 and thirdly, touching her and attempting to kiss her. As I have already indicated I accept Ms Odichou's evidence that these things occurred and I accept that on the occasions and in the circumstances they occurred, she was made to feel uncomfortable. Her discomfort was elevated to the level of annoyance and anger on occasions and emotional distress on other occasions and it cannot be said in my opinion that because these things occurred outside the workplace, the respondent has no relevant legitimate interest in them. To the contrary, it must be accepted that the applicant's out of hours conduct towards Ms Odichou had a direct and adverse impact on workplace relations. It is not conduct, however, and paying due regard as I must to the principles contained in the Anti Discrimination Act 1977, which warranted the termination of an eighteen year otherwise unblemished career in the respondent's employ and as much was impliedly recognised in early 2005 when Ms Odichou's complaints or at least some of them, were initially dealt with at the local level. I am of the view and find accordingly, that the applicant's dismissal was harsh.

(e) As to the question of remedy, Grayson DP undertook the following analysis (at [79]-[83]): 79 Turning then to the question of remedy, it is submitted by Mr Benson in the event the dismissal is found to be unfair that the relief provided ought be tempered by the evidence overall. The respondent further submits that if reinstatement is contemplated, it ought be on conditions involving formal warnings and counselling and no back pay ought be awarded. 80 As to the former of those propositions, Mr Hatcher submitted that the applicant sees practical merit in the conditions proposed. As to the latter, Mr Benson submitted that the applicant's statement that he remained unemployed since his dismissal was misleading and deceptive given the evidence later obtained (and relied upon) by the respondent that the applicant and his wife were at all material times the legal and beneficial owners of a company that in November 2005 purchased a bistro and retail tobacconist in Wollongong. Further and as video surveillance conducted by the respondent's investigator revealed, the applicant worked in the bistro carrying out a range of duties normally associated with restaurant employees. 81 When taken in cross-examination to this aspect of his evidence the applicant (by then aware of the respondent's knowledge of his business activities) sought to explain his non-disclosure by saying among other things, that neither he nor his wife drew a wage from the business and he therefore thought of himself as technically unemployed. Mr Benson submitted that the Commission would regard that as a matter of choice on the applicant's part and would consider the value of his work contribution to the business by reference to the rates prescribed by the Restaurant Employees (State) Award . The Commission would also infer that any effort made by the applicant to mitigate his loss by seeking employment was artificially limited by his efforts in seeking to establish the commercial viability of his business venture. In that regard, the applicant said his attempts to find work were concentrated in the Illawarra region where jobs were in short supply. He did not explain, thus leaving open the above inference, why he imposed such a limitation given that his employment with the respondent was for many years in the heart of Sydney. 82 Having regard to those things and to the fact of the applicant's misconduct and the nature of it, I agree with Mr Benson that an order for back pay ought not be made. 83 The respondent is therefore ordered to reinstate the applicant in his former position on terms not less favourable to him than those that would have been applicable had he not been dismissed. I make no order as to lost remuneration and I make no order as to continuity of employment. 84 I further order that the applicant's reinstatement be on the following conditions: 1. That he be formally warned that he will be accountable for any future conduct involving his interaction with subordinate staff (whether at or outside work) which impacts adversely on workplace relations; 2. That he be formally counselled on the obligations of a supervisor under both the respondent's Code of Conduct and the Harassment Prevention Policy; and 3. That he be formally warned that encouragement of or acquiescence in the circulation at work of emails or other communications containing sexually explicit or other offensive material will ground serious disciplinary charges. Appeal and cross-appeal 11 The appellant's appeal was narrowed during the course of proceedings from an appeal against the whole of the decision and orders of Grayson DP to relate only to the following two grounds:

(a) the Deputy President erred in rejecting the jurisdictional contention of the appellant, namely, that the Commission did not have the power to hear the application because of s25(3) of the GREAT Act; and

(b) the Deputy President erred in finding the dismissal was harsh in the circumstances of the case as he found them, and insofar as the relief consequential upon that finding. 12 Importantly, the appellant has not appealed against his Honour's findings that the allegations of misconduct made by Ms Khazma were not made out nor against the factual findings in relation to the allegations made by Ms Odichou. 13 The respondent has brought a cross-appeal against Grayson DP's decision not to award back-pay and not to make an order for continuity of employment. Mr A Hatcher of counsel, who appeared for the respondent, also brought a notice of contention as part of the respondent's answer to the appellant's appeal challenging certain of the factual findings made by Grayson DP in relation to the respondent's conduct vis-à-vis Ms Odichou. 14 Given the distinct issues raised by the parties' respective appeals, we intend to deal with each issue separately and, in the case of the respondent's cross-appeal, we will deal with leave to appeal as part of our consideration of the substantive cross-appeal. Leave to appeal for appellant's appeal 15 Before turning to the substantive issues raised by these proceedings, we shall deal with the appellant's application for leave to appeal. The appellant submitted that leave to appeal should be granted as:

(a) the appeal raises important questions concerning the interaction of s25 of the GREAT Act with Pt 6, Ch 2 of the Act;

(b) the Commission ought to intervene to correct a jurisdictional error by his Honour in the discharge of his statutory functions below; and

(c) assuming the respondent had the right to bring his application below, his Honour failed to apply proper principle and to give any, or sufficient, weight to material evidence when addressing the question whether the dismissal was "harsh" in the circumstances and this error should be corrected on appeal. 16 In support of its submissions, the appellant referred the Full Bench to the following observations in Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 (at 326) (which were followed in Humphries v Cootamundra Ex-Services & Citizen's Memorial Club Ltd (2003) 128 IR 37 at 53): The extent to which, if at all, those errors be ultimately established is not a matter to be finally determined on the question of leave but only on a full hearing of the appeal. In themselves we are satisfied they raise serious issues to be tested, are reasonably arguable and are of the nature proper to attract leave to appeal. 17 The respondent opposed the granting of leave to appeal on the basis that:

(a) the jurisdictional aspect of the appellant's appeal concerning the alleged statutory prohibition contained in s25(3) of the GREAT Act is not of sufficient merit to warrant the grant of leave to appeal; and

(b) the challenge to Grayson DP's finding that the dismissal was harsh does not raise any matter which would justify the grant of leave to appeal as there are no substantial issues of principle or law raised by the appeal. 18 We consider that leave to appeal should be granted with respect to the appellant's jurisdictional challenge based on s25(3) of the GREAT Act as there is a clear public interest in clarifying the operation of s25(3) of the GREAT Act and the interplay between that sub-section and s90 of the Act. The issue is one of importance to the unfair dismissal jurisdiction of the Commission for those employees who fall under the jurisdiction of the GREAT Act. We grant leave to appeal with respect to the first issue in the appeal. 19 We have reservations as to whether leave to appeal should be granted in respect of the second ground of appeal on the basis that it does not appear to raise any substantial issues of principle or law, but rather turns on questions of fact. However, this aspect of the appeal raises some significant public policy issues about harassment cases in the public sector and we have, therefore, decided that leave should also be granted in this respect. Accordingly, we grant leave to appeal. Jurisdictional issue: Effect of s25(3) of the GREAT Act

20 The appellant contended that Grayson DP erred in rejecting the appellant's contention that the respondent was prohibited by s25(3) of the GREAT Act from instituting the proceedings for unfair dismissal in this Commission. 21 By way of background, we set out ss 24(1) and 25(2) and (3) of the GREAT Act: 24 Right of appeal (1) Notwithstanding anything contained in any other Act, an employee may, subject to and in accordance with this Part, appeal to the Tribunal against a decision of his or her employer, being a decision of a kind referred to in section 23(1). 25 Alternative rights of appeal (2) Where: (a) an employee elects, in writing, to forego a right of appeal under section 24 in respect of a decision of a kind referred to in section 23(1), or (b) an employee makes an appeal or institutes other proceedings or proceedings are instituted on the employee's behalf in respect of a decision of a kind referred to in section 23(1) under an Act or law or an industrial award or agreement referred to in subsection (1), the employee may not thereafter appeal to the Tribunal under section 24 in respect of that decision.

(3) Where an employee appeals to the Tribunal under section 24 in respect of a decision of a kind referred to in section 23(1), the employee may not thereafter, in respect of that decision, appeal or institute other proceedings or proceedings may not be instituted on his or her behalf under an Act or law or an industrial award or agreement referred to in subsection (1). 22 In summary, the appellant made the following submissions in support of its jurisdictional argument:

(a) the Deputy President erred in finding that the respondent had exercised an "express written election when the PSA sent to the Registrar of GREAT the Notice of Discontinuance dated 24 February 2006". Rather, the appellant submitted, the requisite election contemplated in s25 of the GREAT Act was made upon the filing of the Notice of Appeal which purported to be "subject to and in accordance with" Pt 3 of the GREAT Act as stipulated in s24;

(b) it was upon the filing of the Notice of Appeal that the irrevocable election contemplated by the statutory scheme was made. It was incorrect to find that the filing of the Notice of Appeal in GREAT was no more than a "procedural step" as the Notice of Appeal expressly sought a reinstatement order from that tribunal;

(c) the language of s25(3), namely, that "where an employee appeals to the Tribunal under Section 24" means an appeal "subject to and in accordance with" Pt 3 of the GREAT Act. The right to appeal is thus made "in accordance with" Pt 3 when the employee makes an appeal by lodging with the Registrar a Notice of Appeal in the approved form (see s28) and within the mandatory time limit of 28 days after being notified of the decision (s29);

(d) the statutory construction advanced by the appellant is consistent with the legislative purpose of avoiding a multiplicity of proceedings. Upon the respondent's argument the operative effect of s25(3) would only come into effect where an appellant before GREAT had "fully exercised" the right of appeal under s24. In other words, the respondent's contention envisaged the possibility that towards the end of a lengthy hearing before GREAT an appellant could not only discontinue those proceedings but then put the employer to the trouble and expense of having to defend proceedings in other jurisdictions (including that of the Commission);

(e) the temporal limitation within s25(3) is manifest by the utilisation of the word "thereafter" as well as the reference to "institute other proceedings". It is relevant that in the judgment of Handley JA in Clarence v Electricity Commission (NSW) (1990) 33 IR 94 at 102 he indicated the word "institute" accorded with the general principle referred to in Brooks v Bagshaw [1904] 2 KB 798 at 801 that: The institution of the prosecution seems to me to mean ordinarily the commencement of the proceedings by which a person is brought before the court. His Honour also referred to in this regard Ex parte Gobbert; re Wilks and Another [1941] SR (NSW) 140 at 142. The Notice of Appeal in GREAT meets that criteria and subjected an appellant to that tribunal's jurisdiction to make the orders sought;

(f) there is no conflict between s90 of the Act and s25(3) of the GREAT Act. The history of s90 can be traced back to s20A(4) of the Industrial Arbitration (Reinstatement Awards) Amendment Act 1978: see Clarence per Kirby P at 96. As Kirby P noted it was against this background that the GREAT Act and cognate legislation was enacted by Parliament;

(g) it follows, therefore, that there was no "inconsistency" between the earlier manifestation of s90 of the Act and s25(3) of the GREAT Act. Section 90 of the Act deals with the powers of the Commission whereas s25(3) of the GREAT Act deals with constraints on public servants who elect to appeal to GREAT. Certainly the Court of Appeal saw no inconsistency in Clarence with the earlier manifestation of s90 of the Act; and

(h) the statutory prohibition in s25(3) of the GREAT Act continues to have force and effect and precluded the respondent from "thereafter" instituting the Application for Relief for Unfair Dismissal before the Commission after he had commenced proceedings before GREAT by the filing of the Notice of Appeal in that Tribunal. 23 In summary, the respondent submitted:

(a) section 25 of the GREAT Act operated to prevent the respondent from re-commencing his appeal in GREAT having elected to forego his GREAT appeal right by filing a notice of discontinuance. It did not, however, affect his right to initiate unfair dismissal proceedings under the Act;

(b) the statutory prohibition in s25(3) is not enlivened by the mere fact of the respondent lodging an appeal notice in GREAT. The logical consequence of the appellant's submissions in this regard is that the respondent becomes subject to the statutory prohibitions in both ss 25(2) and (3). That is, he is barred both from exercising appeal rights in GREAT, because of his election to forego such rights as constituted by his notice of discontinuance, and from exercising any "appeal" rights elsewhere, including under the Act, because of the mere fact that he filed (and discontinued) an appeal notice in GREAT;

(c) whilst it may be accepted that the legislative purpose of s25 of the GREAT Act is to avoid multiplicity (or duality) of proceedings, it is clear that that purpose was not intended to be achieved by artificially depriving the relevant employee of any right at all to a hearing with respect to a decision to dismiss on disciplinary grounds. The relevant intention of the Parliament with respect to s25 of the GREAT Act was as set out by Grayson DP by reference to the second reading speech of the then Premier, Mr Wran. The appellant's submission would entirely frustrate that intention, in that, if adopted, it would mean that an employee's access to industrial rights to contest a disciplinary dismissal would be barred, notwithstanding that the employee had expressly chosen to forego his GREAT appeal right;

(d) the appellant's submission as to the temporal limitation in s25(3) and the operation of the word "institute" is incorrect. The prohibition in s25(3) of the GREAT Act is enlivened " Where the employee appeals to the Tribunal " and "institute" is not used in this context. It is only used in respect of the effect of the operation of the prohibition;

(e) the phrase " Where an employee appeals to the Tribunal " as used in s25(3) of the GREAT Act is to be construed, so far as the words permit, in conformity with the legislative intention: Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297 at 320-1 per Mason and Wilson JJ. Further, the GREAT Act is beneficial legislation which is therefore to be construed beneficially, in favour of the maintenance of rights, rather than narrowly: Clarence per Kirby P; Smith v Allan, Secretary, Treasury of New South Wales (1993) 31 NSWLR 52 at 63 per Kirby P. The interpretation of s25(3) advanced by the appellant ought, therefore, to be rejected. It involves a narrow construction which would be destructive of employee rights and contrary to the legislative intention. It would also create disharmony between ss25(2) and 25(3), in that an employee's election to forego GREAT appeal rights under s25(2) would preserve industrial rights, but the mere filing of an appeal notice which is shortly after abandoned would, on the appellant's approach, prohibit the exercise of industrial rights under s25(3) (and also further appeal rights to GREAT under s25(2));

(f) an approach whereby the phrase " Where an employee appeals to the tribunal " is interpreted as referring to the substantive exercise of GREAT appeal rights - that is, having the appeal heard and determined by GREAT - is to be preferred. An appeal is a substantive right, not merely a matter of procedure: The Colonial Sugar Refining Company Limited v Irving [1905] AC 369. This approach, adopted by Grayson DP, is open on the language of s25(3), is consistent with the legislative intention, avoids disharmony between ss 25(2) and 25(3), and preserves the right of an employee to substantively exercise the right to contest a disciplinary dismissal in one proceeding but not in a multiplicity of proceedings;

(g) the adoption of the construction of s 25(3) of the GREAT Act for which the appellant contends would lead to a manifest inconsistency between that provision and s90 of the Act. It is clear that, on the facts here, s90 of the Act - which serves the same purpose as s25 of the GREAT Act, namely to avoid duality of proceedings in relation to a dismissal - did not operate to prohibit the respondent's unfair dismissal case under the Act from proceeding: see Public Employment Office, Department of Corrective Services v Boda (2005) 150 IR 169 (the appellant's submission would render the outcome in Boda incorrect). There is nothing in the appellant's submission which demonstrates how this inconsistency can be avoided. The issue did not arise in Clarence for consideration as it does here;

(h) Grayson DP was correct in concluding that, if any inconsistency arose, it was to be resolved in favour of s90 of the Act, because, as the later provision in time, it impliedly repealed the earlier, and in addition s405 of the Act makes it clear that the unfair dismissal provisions of the Act are to have primacy over the GREAT Act: see Public Service Association of New South Wales v New South Wales Crime Commission (1993) 48 IR 363 at 370; and

(i) the fact that the appellant's approach to the construction of s25(3) of the GREAT Act leads to inconsistency with s90 of the Act is another reason why that approach is demonstrably incorrect. The approach taken by Grayson DP does not lead to any such inconsistency, but rather allows the two provisions to operate harmoniously with each other. Consideration: Jurisdiction 24 This jurisdictional aspect of the appeal involves a question of statutory interpretation and, specifically, the proper interpretation of s25(3) of the GREAT Act. In the context of the present proceedings, this question may be further narrowed to a question as to the proper meaning of the phrase, "appeals to the Tribunal under section 24" at the commencement of s25(3). In other words, what actions of an employee will constitute an appeal to the Tribunal for the purposes of the subsection so as to bring into operation the statutory bar? 25 The parties diverge as to what actions may satisfy this phrase. In essence, the appellant contended that an employee appeals to GREAT by the mere filing a notice of appeal whereas the respondent contended that the phrase should be interpreted as referring to the exercise of the substantive right to have the appeal heard and determined by GREAT so that it does not operate where an appeal is discontinued prior to that time. 26 The context of the phrase is that where an employee has appealed to GREAT under s24, a statutory bar comes into operation under s25(3) to the effect that the employee may not thereafter, in respect of the decision the subject of the appeal, appeal or institute other proceedings. A consideration of this issue arises in the present proceedings given that the respondent initially filed a notice of appeal with GREAT and shortly afterwards (before any conciliation or other proceedings had commenced) brought unfair dismissal proceedings before this Commission and discontinued the appeal before GREAT. 27 We reject the appellant's contention as to the construction of s25(3) and the circumstances in which the statutory bar operates for the reasons that follow. 28 We agree with the respondent's submissions that the following principles of statutory interpretation should guide our approach to s25(3):

(a) the words "appeals to this Tribunal" in s25(3) need to be read in their context, including in the context of the section and the GREAT Act as a whole: Fox v GIO Australia Ltd (2002) 56 NSWLR 512 (at [46]-[47]);

(b) where there are competing interpretations, it is legitimate to test those interpretations against the results which they produce, so that an interpretation which produces a result which is sensible and fair, and in accordance with the legislative intention, is going to be preferred: Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981)147 CLR 297 (at 321); and

(c) the GREAT Act is beneficial legislation which is therefore to be construed beneficially, in favour of the maintenance of rights, rather than narrowly: Clarence per Kirby P; Smith v Allan at 63 per Kirby P. 29 We deal firstly with the construction of the section and consider that the context in which the phrase "appeals to the Tribunal" appears in the GREAT Act tends against the interpretation advanced by the appellant for the following reasons:

(a) subsections (2) and (3) deal with two alternate situations and the context implies that they are meant to operate as alternatives, not simultaneously. Section 24 confers a right of appeal on specified employees in respect of certain decisions. Section 25(1) expressly acknowledges that the right in s24 does not derogate from or otherwise affect other rights of appeal. Section 25(2) then provides that if an employee elects, in writing, to forego a right of appeal under s24 or brings other proceedings, then the employee may not thereafter appeal to the Tribunal under s24 in respect of that decision. We consider that, by the respondent withdrawing this notice of appeal to GREAT and by commencing proceedings before the Commission, he had invoked s25(2) and he was no longer able to exercise his right of appeal under s24. Section 25(3) deals with the opposite situation to that dealt with by s25(2) - namely if an employee appeals to the Tribunal, the employee may not thereafter bring other proceedings. This context tends against "appeals to the Tribunal" being satisfied by the filing of a notice of appeal to GREAT. The reason for this is that if, as was the case in the present proceedings and in Boda , the notice is subsequently withdrawn before the appeal is heard and determined then s25(2) is invoked and that employee loses any available remedy by the combined operation of ss25(2) and (3);

(b) differing phrases are used in ss 25 and 26. The phrase "appeals to this Tribunal" is used in s25(3) whereas in s26(2)(a), reference is made to "the time for making an appeal against the decision has expired". If the legislature had intended that s25(3) was to be directed to the commencement or filing of a notice of appeal, it could have simply used the phrase it used in s26(2)(a). We consider that this is an indicator of a legislative intention that the reference in s25(3) is not to the filing of a notice of appeal;

(c) "appeal" is defined in s4 as an appeal under s20 or s24. "Notice of appeal" is also defined in s4 to mean a notice of appeal lodged with the Registrar under s28. The fact that these terms are separately defined tends against the interpretation sought to be placed on the phrase by the appellant since by including separate definitions, a reference to "appeal" was intended to connote something more than the mere filing of a notice of appeal; and

(d) the phrase "appeals to the Tribunal" is used in s25(3) whereas the expression is not used in Division 3, "Procedure relating to the making of appeals". Division 3 sets out some of the procedural aspects as to filing an appeal and does not use the phrase "appeals to the Tribunal". Instead, s28 refers to "an employee may make an appeal by lodging … a notice of appeal in the approved form"; s31 refers to "notice of appeal being lodged" and "hearing of the appeal". Further, s31 permits determinations to be made "in relation to an appeal" as to who shall preside as chairperson at the sitting of the Tribunal "for the purpose of hearing the appeal". We agree with the respondent that an inference can be drawn that when the legislature dealt with the discrete aspects for initiating an appeal, it used different language and that if it had intended that the reference in s25(3) related only to filing a notice of appeal, it would have specifically referred to that filing, just as it had done in Division 3. 30 The appellant contended that the phrase "where an employee appeals to the Tribunal under Section 24" means an appeal "subject to and in accordance with" Pt 3 of the GREAT Act as this is the language used in s24. The appellant then submitted that the right to appeal is thus made "in accordance with" Pt 3 when the employee makes an appeal by lodging with the Registrar a Notice of Appeal in the approved form (see s28) and within the mandatory time limit of 28 days after being notified of the decision (s 29). We reject this contention as it, in effect, reads the phrase "appeals to this Tribunal" as making an appeal to this Tribunal. As already pointed out, there is a clear distinction between the use of these phrases as is evident from a comparison between ss 25 and 26. 31 Further, we reject the appellant's contention as to the role played by the word "thereafter" in ss 25(2) and (3). In effect, the appellant submitted that ss 25(2) and (3) operated such that an employee needed to take one of the actions referred to in ss25(2)(a) or (b) prior to commencing an appeal before GREAT. We do not accept that the word "thereafter" in s25(2) has this effect and instead consider that it simply means that upon the happening of an event specified in ss25(2)(a) or (b), the consequences set out in s25(2) will follow. 32 For these reasons, we are satisfied that the phrase "appeals to the Tribunal" should not be interpreted as being satisfied or activated by the mere filing of a notice to appeal and certainly does not operate in relation to an appeal which has been discontinued as in the present circumstances. 33 We observe that this interpretation achieves the legislative intention of s25. In this regard, counsel for the respondent referred us to the Full Bench's decision in Boda. The factual background in Boda is relevantly identical to the present situation, however, the challenge to the Commission's jurisdiction was made based on the operation of s90 rather than s25(3). Whilst we accept the appellant's submission that the appellant's contention in these proceedings was not dealt with in Boda, we do not accept the appellant's submission that, on this basis, Boda is irrelevant to the present question. 34 Instead, we accept the respondent's submission that Boda makes some important observations which are relevant to purpose and how s25 should be construed. The issue in Boda was whether s90(a) of the Act applied to preclude Ms Boda from continuing unfair dismissal proceedings before the Commission (on the basis that she had commenced proceedings before GREAT which were discontinued). The Full Bench found that the purpose of s90 was "the avoidance of the possibility of two (or more) courses being available to access a remedy in relation to the same event - in short, the prevention of duality of proceedings" (at [29]). As to the approach to be taken in interpreting s90, the Full Bench commented (at [33]): …The appellant conceded in written submissions that in determining the proper construction of the Act a purposive approach should be adopted, and acknowledged Commissioner Ritchie's observation (with which we agree) that the mischief sought to be remedied is the duplication of proceedings. Here, there is no prospect of dual proceedings, and the Commission now represents the only opportunity for the respondent to have the circumstances of her dismissal reviewed. As Schmidt J tacitly observed in Owens v NSW Police Service , one of the objects of the Act is to provide a framework for the conduct of industrial relations which is fair and just. We do not consider that it would be fair or just for the respondent to be denied this opportunity, and nor do we accept the appellant's submission that sub-section (b) should be read literally, without reference to temporal considerations, in order to produce such a result. To accept Ms Anderson's submission that the mere initiation of alternative proceedings (regardless of their status) deprives the Commission of jurisdiction would be to accept an interpretation prone to arbitrary and inequitable results, as this case illustrates. Although we acknowledge Ms Anderson's submissions that the appellant expended time, costs and resources in the original proceedings before GREAT, we do not accept that the legislature intended these matters to prevail, unequivocally, over the policy considerations discussed above. This view is reinforced by the undisputed fact that the Act tolerates duplication of proceedings at least until immediately before an arbitration commences. 35 We agree with the observations of the Full Bench in Boda and consider that the purpose of s25(3) of the GREAT Act is similarly to avoid a duality of proceedings seeking a remedy in respect of the same decision. This can be readily discerned from the following extract from the second reading speech of the then Premier Mr N K Wran QC when introducing the bill which became the GREAT Act (Legislative Assembly, 20 February 1980):

As to the problem of dual access, the Government has decided that there should be an option in disciplinary cases so that a person may elect to forego a right of appeal to GREAT and let his union pursue the matter on his behalf through the Industrial Commission of New South Wales. 36 Turning back to the terms of s25(3), we consider that the reference to "appeals to the Tribunal" is not satisfied by the mere commencement of an appeal to GREAT which are subsequently discontinued. To interpret the phrase in this limited way could, as the present case illustrates, lead to a result where an employee is left with no avenue to pursue. This goes well beyond the legislative purpose of avoiding duality of proceedings, particularly where the employee is simultaneously barred by s25(2) from recommencing proceedings before GREAT. 37 Counsel for the appellant made a number of submissions relating to the legislative history of s25, including referring us to the NSW Court of Appeal decision in Clarence and sought to draw support for his interpretation of the section by reference to this history. We do not consider that it is necessary to undertake this review to resolve the question as to the proper interpretation of s25(3) for the reasons already given. We also do not consider that Clarence in any way assists the appellant's contentions and, indeed, consider the following comment by Kirby P (at 6) to be consistent with our approach to the provision: When this history of legislation is remembered it reinforces the conclusion that, whilst an alternative track for the resolution of reinstatement and, other employment disputes through the Industrial Commission was envisaged, the employee affected should only be deprived of his or her valued privilege under the GREAT Act by a clear decision "made by the individuals involved". 38 The appellant had sought to draw support for their interpretation from Kirby P's description of the right of appeal to GREAT as a very valuable privilege (at 5). However, we consider the following observations of Kirby P to be also consistent with our approach to the provision: The provisions of the GREAT Act should so far as possible be construed, in the event of ambiguity, to preserve those special features and not to deprive an employee such as the appellant of such privileges, except by clear legal provision. 39 In the present context, therefore, we do not consider that the respondent's actions in filing a notice of appeal and shortly afterwards withdrawing the notice of appeal to GREAT brought into operation the statutory bar in s25(3). 40 Before turning to the other aspects of this appeal arising for consideration, we observe that in finding that the phrase "appeals to the Tribunal" is not satisfied by the mere commencement of an appeal to GREAT, the question may arise as to what does constitute "appeals to the Tribunal". Does the phrase require a full hearing and determination or something less? The respondent contended that an appeal is a substantive matter and the phrase connotes the hearing and determination of the matter. In disagreeing with this contention, the appellant submitted that this could lead to the perverse result that following a full hearing of an appeal but before the determination of the appeal, an employee could withdraw their appeal and would not be barred by s25(3) from commencing fresh proceedings in another jurisdiction or jurisdictions. Given the facts before, we do not need to resolve this question as the respondent filed a notice of discontinuance before the hearing of his appeal had commenced.

41 The second aspect of the appellant's appeal relates to its contention that Grayson DP erred in finding that the dismissal of the respondent was "harsh". 42 The appellant made the following submissions in support of this contention:

(a) the appellant infers that his Honour was satisfied that the dismissal was neither unreasonable nor unjust as he limited his finding (at [78]) to a characterisation that the respondent's dismissal was 'harsh';

(b) his Honour erred when he expressly found that the respondent had "an eighteen year otherwise unblemished career" in the appellant's employ. It is apparent from his Honour's analysis that he gave substantial weight to that erroneous finding of fact in his evaluation as to whether or not the dismissal was harsh. In submissions before Grayson DP, the appellant addressed the question of whether or not, on the evidence, the dismissal was harsh, unreasonable or unjust. In those submissions the appellant noted that in approaching that task in the normal course the Commission might be expected to give weight to the length of service of the respondent, however, the appellant specifically submitted that on the evidence this was not such a case. The appellant based that submission on the concession of the respondent that he would not assert as a material fact in issue that he had never engaged in any inappropriate behaviour involving other staff in his employment with the appellant. This concession was to avoid that forensic issue being before the Commission and was the foundation for the exclusion of the statements of three proposed witnesses for the appellant (Ms Lew, Mr Wotton and Mr Hartley). In this regard, the respondent agreed to the deletion from his statement of the contention, "I have never engaged in an inappropriate way towards staff" to avoid that being a fact in issue;

(c) in finding that the dismissal was harsh his Honour appears to have found that the penalty of dismissal was disproportionate to the gravity of the misconduct in respect of which the appellant acted. In carrying out such an evaluation upon proper principle there needed to be a consideration of the significance of the respondent breaching the appellant's Code of Conduct and Ethics and the Policy on Ensuring a Harassment Free Workplace. His Honour had noted that the starting point of the appellant's case before him was that the charges of harassment or sexual harassment against the respondent involved breaches of those policies. His Honour noted that these policies were designed to ensure an harassment free workplace and expressly proscribed such conduct and warned that it would not be tolerated in any form. Furthermore, his Honour noted that the applicant accepted that he was at all material times aware of the code and the policy; that he was aware of their objectives in seeking to promote harmony within the workplace; and, that he was aware he would be held accountable for any transgression. Given that the foundation for these policies was statutory obligations arising under the Anti-Discrimination Act 1977 and, indeed, the right of employees to "quiet enjoyment" in their employment, the failure of his Honour to have regard to such material evidence caused the weighing process to miscarry; (d) Grayson DP failed to take a number of matters relating to the nature of the harassment into consideration in his assessment as to whether the dismissal was "harsh". It was fundamental to the appellant's approach below that the sexual harassment and/or harassment of Ms Odichou had to be seen in the context of the appellant's policies to ensure a harmonious workplace and to comply with its statutory obligations. To the extent that the appellant relied under those policies upon supervisory staff (including the respondent) to meet its statutory obligations then, the breach of such policies by a senior supervisor who was aware of his responsibilities and chose to ignore them demonstrated a disregard of an essential condition of the respondent's employment. His Honour failed to make such a finding, thus diluting the true gravity of the respondent's misconduct, and causing the exercise of jurisdiction to miscarry; and (e) on the evidence and upon the application of proper principle, the Commission ought to have found that the decision of the appellant to dismiss the respondent was not "harsh" in the circumstances. 43 In reply, the respondent made the following submissions relating to this aspect of the appeal:

(a) taking the findings of fact made by Grayson DP, and assuming they were correct, there was no error in his Honour's decision;

(b) Grayson DP specifically found at [78] that the respondent's dismissal was harsh. In reaching such a finding in an unfair dismissal case, the Commission was not confined to the considerations referred to by the appellant in its submissions. As Watson J stated in Metropolitan Meat Industry Board v Australian Meat Industry Employees' Union, New South Wales Branch (1973) AR (NSW) 231 at 233, "even if there are grounds for terminating the contract of employment, it is still open to the tribunal to examine the severity or otherwise of the step of dismissal". Thus, to the extent that Grayson DP made findings that the respondent had engaged in unsatisfactory conduct, it was open to his Honour to find at [78] that "It is not conduct, however … which warranted the termination of an eighteen year otherwise unblemished career in the Respondent's employ and as much was impliedly recognized in early 2005 when Ms Odichou's complaints or at least some of them, were initially dealt with at the local level";

(c) contrary to the appellant's submissions, his Honour was clearly entitled to find that the respondent's career was "unblemished". The appellant's reasons for decision for the respondent's dismissal (which was attached to a letter dated 20 December 2005 in which the respondent was informed of his dismissal), summarised his career with the appellant, and stated: "There is no information contained in Mr Dafkovski's personnel file that would indicate previous incidents or concerns in regard to his performance, conduct or behaviour."

(d) this evidence was consistent with the respondent's own evidence and it was not the subject of any issue in the proceedings. There was no evidence before the Commission to contrary effect. It was therefore an established fact, based on evidence adduced below by both parties, that the respondent's record of employment was, prior to his dismissal, without blemish. Grayson DP was entitled to take this matter into account in assessing whether the dismissal was harsh, and indeed, he would have fallen into error had he not done so: see e.g. Australian Workers Union, NSW (on behalf of Stojanovski) v Bluescope Steel (AIS) Pty Ltd (2004) 137 IR 211 at [30]-[32];

(e) the appellant in its submissions misstated the "concession" made by the respondent. The matter arose when objection was taken by the respondent to certain material sought to be adduced by the appellant. The appellant sought to justify admission of the material, inter alia , on the basis that it was in reply to single sentences contained in paragraphs 25 and 37 of the respondent's statement of evidence. The respondent replied to that as follows: "My friend says it is in reply to a sentence in paragraphs 25 and 37 in Mr Dafkovski's statement. If that is the only way this gets in, I am prepared to say that I will not read the relevant parts of statement. I will undertake not to read those sentences and that would allow your Honour to be completely assured it has not properly given rise to any fact in issue." However, the respondent otherwise contended that the material sought to be adduced by the appellant was completely inadmissible on a number of grounds and thereafter his Honour refused to admit the material in question. The parts of the sentences in the respondent's statement referred to were subsequently not read;

(f) the "concession" amounted to no more than an undertaking not to read parts of two sentences of Mr Dafkovski's statement so as to ensure that that they did not themselves give rise to a fact in issue to which the appellant needed to reply by way of the material it sought to adduce. That undertaking was adhered to. However, there was no concession by the respondent that he was not entitled to rely upon the fact of his 18 years of service, or the fact that, prior to his dismissal, there was nothing adverse on his record concerning his performance, conduct or behaviour. Nor was there any concession that the respondent would not seek to rely upon any other relevant evidence in the proceedings. In any event, even if the "concession" alleged had been made, it would not affect the correctness of Grayson DP's finding. The concession alleged is one that a denial of a certain type of conduct would not be asserted. However, leaving aside the specific allegations which were the subject of Grayson DP's decision - which allegations were specifically denied by the respondent - there was no need for the respondent to deny anything else, when there was nothing else before the Commission for him to deny. Nor would that have permitted Grayson DP to disregard the uncontested evidence that was before the Commission concerning the respondent's record of employment;

(g) there is no basis to the further submission of the appellant that Grayson DP failed to take into account the appellant's Code of Conduct and Ethics and its Harassment Prevention Policy, which policies are said to be founded upon statutory obligations arising under the Anti-Discrimination Act . Further: (i) his Honour expressly paid due regard to the principles contained in the Anti-Discrimination Act , as the appellant submitted below that he should, in coming to the conclusion that the dismissal was harsh: see [78]; (ii) his Honour also adopted the alternative submission of the appellant below that the respondent be the subject of formal counselling concerning the obligations of a supervisor under the appellant's Code of Conduct and Ethics and its Harassment Prevention Policy: see [84]; and (iii) while the appellant's policies were a relevant matter, it was open to Grayson DP to find that dismissal of the respondent for any breach of those policies was harsh without calling into question the importance of those policies: see, for example, Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (on behalf of Sandra Gay) v Department of Corrective Services (2006) 153 IR 125;

(h) the findings made by Grayson DP at [65]-[78] show that, to the extent relevant, the matters that the appellant contended were not taken into account were borne in mind by his Honour. In taking those matters into account, however, his Honour correctly weighed them against a number of other considerations: (i) many of the allegations which founded the appellant's decision to dismiss Mr Dafkovski were found to be without evidentiary foundation: see [77]. No challenge is made to Grayson DP's findings in this respect; (ii) insofar as Ms Odichou was concerned, the issue had been initially dealt with at the workplace level in early 2005, with a "no contact" direction being issued. This direction had been complied with: see [78], [41]; (iii) the conduct in relation to which Grayson DP made findings was all out-of-hours conduct, albeit that his Honour found that it had workplace consequences: see [78]; and

(i) the judgment under appeal was an exercise in discretionary decision-making. The whole process of discretionary decision-making is one in which no one consideration and no combination of considerations is necessarily determinative of the result, so that the decision-maker is allowed some latitude as to the choice of decision to be made: Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission and others (2000) 203 CLR 194 at 205 per Gleeson CJ, Gaudron and Hayne JJ. Error in the exercise of his Honour's discretion is not demonstrated by the appellant contending, as it effectively does, that certain considerations ought to have been given greater weight than his Honour chose to give them, or that his Honour should not have given as much weight to other considerations in the way that he did. 44 In the alternative, the respondent brought a notice of contention to the effect that if the Commission was to find that his Honour erred in concluding that the dismissal was harsh, then the respondent disputed some of the factual findings against the respondent to the extent he referred to sexual gratification or sexual connotations. Consideration 45 Despite the parties' lengthy submissions on this aspect of the appeal, we consider that the issue can be resolved in short order. As the Full Bench recently confirmed in NSW Attorney General's Department v Miller [2007] NSWIRComm 33 (at [32]), in an appeal involving a mixed question of fact and law, an appellate court will substitute its own judgments only if the trial judge has fallen into error of law or has made a finding of fact that is clearly wrong or is not reasonably open on the evidence. Otherwise, the appellate court or tribunal should not intervene. 46 We consider that the appellant's objections to Grayson DP's decision effectively amount to a contention that Grayson DP should have placed greater weight on certain considerations and less weight on other considerations without demonstrating any error of law or fact. 47 Further, the appellant has appealed the finding that the dismissal was harsh in circumstances where:

(a) the respondent was dismissed on the basis of complaints from Ms Odichou and Ms Khazma;

(b) Grayson DP found, and the appellant has not challenged on appeal, that the allegations by Ms Khazma were without foundation and dismissed the allegations arising from Ms Khazma's complaints;

(c) Grayson DP found some, but not all, of the allegations made by Ms Odichou proved and the appellant has not challenged Grayson DP's findings this regard;

(d) following Ms Odichou initially raising her complaints, the matter was resolved internally in January 2005 to the satisfaction of all parties by the respondent giving a "no contact" undertaking, an undertaking which the appellant did not dispute that the respondent complied with; and

(e) Ms Odichou raised her complaints again only after she was informed that similar complaints had also been made by another woman, however, those complaints were subsequently found by Grayson DP to be without foundation. 48 In these circumstances, we consider that there was a compelling basis for Grayson DP to find that the appellant's dismissal of the respondent was harsh, notwithstanding that the complaints related to sexual harassment. In this regard, we agree with the respondent that there is a reasonable inference to be drawn that had Ms Khazma not made the complaints (which were rejected), the complaints against the respondent would have been completely resolved by the "no contact" undertaking given in January 2005. The appellant did not challenge the proposition that Ms Odichou had no complaints about the respondent for anything that occurred after the January 2005 meeting at which the "no contact" undertaking was given. In our view, this was a relevant matter which his Honour did, and quite appropriately could, take into account in finding that the dismissal was harsh. 49 The appellant also contended that his Honour gave insufficient weight to the relevant requirements of the Anti-Discrimination Act and the appellant's harassment policy. We agree with the respondent that Grayson DP recited the requirements of the policy, including that conduct outside the workplace may still constitute harassment if it impacts on workplace relations (at [23]). Further, in his ultimate findings, his Honour expressly refers to the principles contained in the Anti-Discrimination Act (at [78]). We further agree with the respondent that the conditions attaching to the reinstatement order (at [84]) are illustrative of Grayson DP taking those requirements into account. Accordingly, we reject the appellant's submission in this regard. 50 This finding should not, however, be taken to belie the importance of adherence to the appellant's policies on sexual harassment. Regard to policies against sexual harassment is critically important and those policies must be given full force and effect. However, in the present case, Ms Odichou's complaints were resolved under the appellant's policy to everyone's satisfaction and it was only on the basis of the subsequent allegations by Ms Khazma, which were later found to be false, that Ms Odichou's complaints were reconsidered. Viewed in this light, we are satisfied that Grayson DP properly had regard to the appellant's policies. 51 The appellant also challenged Grayson DP's finding that the respondent had an unblemished 18-year record of service. We consider that it was open to Grayson DP to make that finding and do not consider that it was excluded by virtue of the agreement between the parties as to the calling of certain evidence. That agreement was confined to the limited terms in which it arose. We agree with the respondent's submission that the appellant's notice of termination itself supported the notion that his record of service was unblemished by containing the following: There is no information contained in Mr Dafkovski's personnel file that would indicate previous incidents or concerns in regard to his performance, conduct or behaviour. 52 When this record is taken into account, it was completely open to Grayson DP to find that the dismissal was harsh and we find there was no error in the Deputy President's decision in this regard, whether in law, principle or fact. 53 We observe that the appellant had raised that the seniority of the respondent's position needed to be taken into account and that, when properly considered, it should have tended against a finding that his dismissal was harsh. This was on the basis that the respondent held a senior position and had a number of junior staff, including women, under this supervision. 54 We are satisfied that Grayson DP had regard to the respondent's position in his consideration of the various factors to be taken into account. The seniority of the respondent's position was plainly a factor to be taken into account, particularly given that the alleged misconduct was sexual harassment. It may be that in some circumstances, the seniority of the employee's position would play a more prominent role in supporting a finding that the dismissal was not harsh, however, given the other factors present in this case, particularly those factors we have earlier referred to, we consider that Grayson DP did not err in this regard. 55 On this basis, therefore, we dismiss the appellant's appeal against Grayson DP's finding that the dismissal was harsh. 56 We note finally that given this conclusion it is strictly unnecessary for us to resolve the respondent's notice of contention as it was put in the alternative. However, given the respondent's cross-appeal, we propose to briefly consider the respondent's notice of contention. 57 In effect, the respondent disputed some of the factual findings against the respondent to the extent he referred to sexual gratification or sexual connotations on the basis that there was no evidence to support this. The respondent referred us to the email communications between Ms Odichou and the respondent as supporting the notion that it was not appropriate to characterise the respondent as a sexual predator. The respondent also sought to base this contention on the fact that evidence was accepted that Ms Odichou did not regard the respondent's harassment of her as sexual harassment. 58 As to the respondent's notice of contention, the appellant submitted that a finding of sexual harassment was not contingent upon there being a finding of sexual propositions or that the individual involved characterised the harassment as sexual harassment. The respondent also referred us to aspects of Ms Odichou's evidence which was accepted by Grayson DP, including that the respondent said to her "inappropriate things" such as "I love you" and would touch her in ways that made her feel uncomfortable (at [29]). 59 Whilst we agree with the respondent that the emails clearly indicate some mutuality in communications between the respondent and Ms Odichou at a professional and collegiate level over some of the complaint period, we do not think the respondent has established that a negative finding was not available to Grayson DP. 60 In the circumstances, it is unnecessary for us to resolve the respondent's notice of contention, however, we observe that we have concerns as to the merits of the contention. The respondent's cross-appeal

61 The respondent brought a cross-appeal challenging that aspect of the Deputy President's orders not to award back-pay and not to make an order for continuity of employment. 62 The respondent made the following submissions:

(a) Grayson DP refused to make an order for back-pay as he found the respondent failed to mitigate loss and given the fact of the respondent's misconduct and the nature of it. As to mitigation, Grayson DP erred in the following respects: (i) his Honour appears not to have accepted that the purchase and operation by the respondent of a small business was itself an attempt by him to mitigate loss. There is no authority for the proposition, in the context of an unfair dismissal case or otherwise, that mitigation requires the seeking of alternative employment in the strict sense; and (ii) the uncontested evidence was that neither Mr Dafkovski or his wife nor any member of his family had drawn a wage from the business, nor was income otherwise derived from it and that he had been living off his savings;

(b) in the light of that evidence, the consideration raised by the appellant below that the work performed by Mr Dafkovski should be valued at the rates prescribed by the Restaurant Employees (State) Award was irrelevant, and ought not to have been taken into account by his Honour;

(c) alternatively, to the extent that the award rates of pay (which were significantly lower than the respondent's rate of pay in his position in the Attorney General's Department) were at all relevant, they should have served only to reduce the amount of back-pay ordered, not to eliminate it completely;

(d) the "inference" drawn by his Honour that the respondent's attempts to find alternative employment were "artificially limited" by reference to his work in the business was not properly or fairly drawn. The respondent's evidence was that he had attempted to find work in the local region, but without success. This was not a matter put to him by the appellant below in cross-examination, so that the respondent did not have an opportunity to deal with it. Notwithstanding this, the appellant asked below that the inference be drawn. It was not open to draw the inference in those circumstances, and the fact that it was drawn meant that a denial of procedural fairness occurred;

(e) it is unclear as to how the issue of "misconduct" came to bear on the issue of back-pay. Grayson DP did not actually find that the respondent had engaged in "misconduct" as such; indeed, his Honour effectively found that the conduct about which he made findings did not amount to "misconduct justifying dismissal": [77]; see also [78]. For that reason, his Honour erred in taking "misconduct" into account in the exercise of his discretion. Nor did his Honour give any reasons identifying why "misconduct" operated wholly or partly to prevent an order for back-pay being made. That constituted further error; and

(f) the decision to refuse to make an order for continuity under section 89(4) was not accompanied by any reasons at all. That constituted error. Further, there was nothing in the evidence which provided any basis for refusing an order for continuity. His Honour's decision was therefore not open. A continuity order would normally accompany an order for reinstatement in order to make it properly effective (irrespective of whether back-pay is ordered). The failure to make an order for continuity will potentially have anomalous and unfair consequences for Mr Dafkovski. For example: (i) many public sector pay scales are based on years of service. The lack of a continuity order may mean that Mr Dafkovski's prior service is not taken into account for that purpose, with consequences for his rate of pay; and (ii) if prior service is not recognised as being continuous, then that may affect Mr Dafkovski's leave entitlements. 63 The respondent also submitted that the errors identified provided a proper basis for the grant of leave. Jurisdictional error occurred in at least two respects: denial of procedural fairness, and a failure to give reasons. Further, the other errors involved a failure to take into account relevant matters, the taking into account of irrelevant matters, and an error of legal principle (concerning mitigation). 64 In reply, the appellant submitted:

(a) in reaching a decision as to back-pay and continuity of employment, the Deputy President made a discretionary decision and as such had considerable latitude as to the decision to be made. In accordance with proper principle, the correctness of his Honour's decision in this regard can only be challenged by showing error in the decision-making process: Coal & Allied at 205.

(b) it is beside the point for the respondent to assert there was "uncontested evidence" that the respondent had not "drawn a wage" from his business venture. That was a matter of his choice; but, he could not argue that his work had no value. The provisions in the Restaurant Employees (State) Award demonstrated that work in a cafe was valued by the Commission;

(c) his Honour was justified in drawing the inference that the respondent artificially limited any effort to mitigate his loss by restricting his searches to the Illawarra region and by seeking to establish the commercial viability of his business venture. The respondent's evidence in this regard was neither frank nor candid. His Honour quite rightly found that the respondent did not explain why he imposed such a geographic limitation on his job search given that his prior employment had for many years been in the heart of Sydney and given that the submission was based on the respondent's own evidence, no issue of procedural fairness arises;

(d) it is implicit in his Honour's decision that it was only by the "narrowest of margins" that he found the dismissal harsh: cf NSW Attorney General's Department v Miller . Again, given that his Honour was exercising a broad discretion his Honour did not err in taking into account his findings of "misconduct" in determining the appropriate relief. His Honour gave sufficient reasoning for his decision agreeing with the appellant's counsel below;

(e) the appellant refers to the respondent's submission relating to his Honour's decision of not giving express reasons for "refusing" to make an order for continuity under s89(4). No doubt this was due to the fact that neither party made express submissions on how the statutory discretion in s89(4) ought be exercised. The onus lay on the respondent to make express application and to support that application with cogent reasons (which he failed to do). It is not to the point for the respondent to assert that a continuity order would "normally" accompany an order for reinstatement. The statutory provision does not so stipulate. The further submissions of the respondent that the failure to make an order for continuity "will potentially" have anomalous and unfair consequences is a matter of mere speculation by the respondent. By the very nature of the appellant's appeal, it is the appellant's view that the respondent should be most grateful for the orders made in his favour. The absence of any expression of contrition, or apology to either Ms Odichou or the Director General, gives the appellant no confidence that the respondent has learnt any lesson from his breaches of discipline. 65 The appellant opposed the grant of leave to appeal on the basis that the respondent had not demonstrated appealable error that would warrant the interference with the orders made by the Deputy President below in such a way as to make them more favourable to the respondent. Consideration

66 As both parties have accepted during the hearing, the determination of appropriate orders on reinstatement by Grayson DP was an exercise in discretionary decision-making and unless an appealable error is demonstrated, there is no basis on appeal to change that decision: see Coal & Allied. 67 Despite the respondent's submissions as to mitigation, we do not consider that Grayson DP erred in his approach to his determination as to whether an order for back pay should be made. Accordingly, we refuse leave to appeal on this basis as it was properly open to him given his findings as to the respondent's conduct. 68 As to an order for continuity of employment, we have decided to grant leave to appeal. We agree with the respondent that it is usual to make an order for continuity of employment in circumstances where a reinstatement order is made (as opposed to an order for re-employment). We are not satisfied that Grayson DP identified a proper basis for departing from this course in his reasons. 69 For these reasons, we refuse leave to appeal his Honour's decision not to award back pay but uphold the appeal as to continuity of employment. We substitute our own conclusion as to continuity of employment. We consider that these orders reflect a proper balance of considerations.

Matter No IRC 3681 of 2006 1. Leave to appeal is granted. 2. The appeal is dismissed.

Matter No IRC 3700 of 2006 1. Leave to appeal is allowed to the extent set out in these reasons. 2. The appeal is dismissed to the extent set out in these reasons. 3. The appeal is upheld in relation to no order being made as to continuity of employment. 4. The order contained in the final sentence of paragraph [83] of Grayson DP's decision delivered on 7 December 2006 is quashed and the following order substituted in lieu thereof: Mr Lupcho Dafkovski's period of employment with the Attorney General's Department of New South Wales is to be taken as not having been broken by the dismissal provided that Mr Dafkovski shall not be entitled to the payment of any salary for the period since his dismissal until his reinstatement as ordered by Grayson DP.

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