Azzi v State of New South Wales

Catchwords

(2024) 98 ALJR 532 Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72(2005) 225 CLR 88 Bignell v New South Wales Casino Control Authority [2000] NSWCA 38(2000) 48 NSWLR 462 Bread Manufacturers of New South Wales v Evans [1981] HCA 69(1981) 180 CLR 404 Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 at 563 Craig v South Australia [1995] HCA 58(1995) 184 CLR 163 Grant v BHP Coal Pty Ltd [2017] FCAFC 42(2024) 98 ALJR 196 Kioa v West [1985] HCA 81(1985) 159 CLR 550 Kirk v Industrial Court (NSW) [2010] HCA 1(2010) 239 CLR 531 LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12(2024) 98 ALJR 610 Minister for Immigration and Border Protection v SZMTA [2019] HCA 3(2019) 264 CLR 421 Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11(2002) 209 CLR 597 O'Reilly v Commissioners of State Bank of Victoria [1983] HCA 47(1982) 153 CLR 1 Plaintiff S10/2011 v Minister for Immigration and Citizenship [2012] HCA 31(2012) 246 CLR 636 Plaintiff S157/2002 v Commonwealth [2003] HCA 2(2003) 211 CLR 476 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4

Judgment (12 paragraphs)

[1]

Background

One of the employees of the Department who reported to Mr Azzi was "Ms A" (to use the pseudonymous label employed by the primary judge). In August 2021 she had alleged to Mr Azzi that her husband had been verbally and emotionally abusive toward her and her children. Shortly after that Ms A also told him that her father, who lived in Germany, had suffered a stroke and she was going to apply for a travel exemption to go there. An exemption was necessary because of COVID-19 restrictions. She travelled to Germany with her children in September 2021, taking her work laptop. Mr Azzi approved of Ms A working remotely from there as, he said, did Mr Parker at the time. Mr Azzi notified the Department's "ICT" section that Ms A would be doing this, saying that he did not know how long this would go on but that it was initially agreed that it would be three months.
Some time later Ms A became the main departmental employee tasked with reviewing documents to produce in response to an order for papers issued by the Legislative Council on 20 October 2021. The task was substantial. She undertook the work by reviewing documents remotely from Germany.
In late 2021 - to quote Mr Azzi's letter of 4 April 2022 (explained below) - the Department "introduced a policy that limited access to DCS systems from international locations, this included SIRA as a division of DCS". Whether or not such a policy existed, and its terms, was a matter of dispute in the proceedings. That there should be such a dispute is odd, given that Mr Azzi himself referred to the policy in this letter, where the letter he was responding to had not referred to such a policy. A PowerPoint document was produced in the litigation by the Department headed "Request for working overseas". The document said that the NSW Government's position was that public servants should work in NSW, but where there were genuine compassionate grounds the Department "will consider short term arrangements for working overseas". It also said that the maximum period for such arrangements was three months. The document is not overtly about cyber security issues, but it does state twice that any request for approval has to include a "cyber security assessment". The document says that workers are covered by workers compensation "for the 3 months working while overseas". The version of the document in evidence was attached to an email dated November 2021, and appeared still to be in draft.
There is no dispute that Mr Parker directed Mr Azzi on three occasions to take steps to stop Ms A from working remotely in Germany. The directions were given orally on 17 January 2022, 3 February 2022 and 4 March 2022. There is a dispute in the proceedings as to the terms of the directions, especially as to whether Mr Parker directed Mr Azzi to take such steps immediately. The nature of that dispute is discussed below when addressing grounds 1-4.
On Wednesday 9 March 2022 Mr Parker sent an email to Mr Azzi which relevantly said: This morning you told me that [Ms A] continues to work for SIRA while in Germany. I re-iterated my previous repeated requirement that this stops and asked you to today send [Ms A] an email explaining she is not permitted to work overseas. Can you please send me a copy of any email you have sent? Also, do you know what leave arrangements are in place for [Ms A]?
The next day, 10 March 2022, Mr Azzi responded with a draft email which he proposed to send to Ms A. Mr Parker in turn offered his own draft. The draft was prefaced with, relevantly, the following remarks addressed to Mr Azzi: I told you on 17/1, 3/2 and again 4/3 that [Ms A] is not to do any work for SIRA while overseas in Germany. As late as yesterday, you advised [Ms A] is still doing work for us while in Germany. This must stop immediately due to cyber security risks and a lack of approval. We also need to sort out her leave and payment arrangements. There is no recent leave logged in the system and therefore I suspect [Ms A] may have been paid as if she was working for many months. We also need to ensure the laptop is secure.
Later on the same day Mr Azzi emailed Ms A in the terms proposed by Mr Parker, then let Mr Parker know that he had sent the email. He did not address Mr Parker's remarks about the three directions. He did not deny that they had been given.
The Department then began a disciplinary process against Mr Azzi. Pursuant to s 69(2) of the GSE Act, the person "who exercises employer functions in relation to an employee of a government sector agency is responsible for dealing with any misconduct by that employee in accordance with this section". As explained below when addressing ground 11, that person was the Secretary of the Department, Ms Hogan. Section 69(4) of the GSE Act sets out a range of relevant actions that the person "may" take where a finding of misconduct is made against an employee "in accordance with" the relevant rules, as follows: (a) terminate the employment of the employee (without giving the employee an opportunity to resign), (b) terminate the employment of the employee (after giving the employee an opportunity to resign), (c) impose a fine on the employee (which may be deducted from the remuneration payable to the employee), (d) reduce the remuneration payable to the employee, (e) reduce the classification or grade of the employee, (f) assign the employee to a different role, (g) caution or reprimand the employee.
The relevant procedural requirements are set out in Pt 8 of the Government Sector Employment (General) Rules 2014 (NSW) (GSE Rules). Rule 38 is about the initial stage of handling such allegations. The person exercising employment functions - labelled "the employer" - is required to make an initial assessment as to whether to proceed with a matter. If such a decision is made, the employee is to be advised "of the details of the allegation of misconduct", and "of the action that may be taken under section 69(4) of the Act against the employee" (r 38(3)). The employee then "is to be given a reasonable opportunity to make a statement in relation to the allegation" (r 38(4)). The employer may, as a result of any such statement, decide whether to proceed with the matter or not (r 38(5)).
Rule 39 empowers the employer to conduct such inquiries as thought appropriate for the purpose of determining whether misconduct has occurred. However, the rule also prohibits the holding of a "formal hearing" involving legal representation and the examination and cross-examination of witnesses.
Rule 40 provides for the making of findings. It relevantly provides: 40 Findings by employer (1) The employer may, in dealing with an allegation of misconduct - (a) make a finding of misconduct by the relevant employee (in which case the employee is to be notified of the finding in writing) … (2) The employer may not take any action under section 69(4) of the Act in relation to an employee unless - (a) the employee is notified of the proposed action to be taken, and (b) the employee is given a reasonable opportunity to make submissions in relation to the proposed action, and (c) if any such submissions are made, the employer has taken those submissions into consideration.
The GSE Rules thus provide for a multi-stage process: 1. an initial assessment stage, where the employer decides whether to proceed with addressing an allegation of misconduct pursuant to the prescribed process; 2. if a decision has been taken to proceed, an investigation and findings stage involving notification to the employee, giving them a reasonable opportunity to make a statement (after receipt of which the employer may decide to take the matter no further), combined with such other inquiries as the employer considers appropriate, leading then to the making of findings as to whether there has been misconduct; 3. if misconduct is found, a penalty stage where the employee is to be notified of any proposed action to be taken under s 69(4) of the GSE Act and given a reasonable opportunity to respond prior to the making of a decision on the appropriate act.
The appellant submitted that these procedural requirements should be read consistently with the general legal requirements of procedural fairness which presumptively apply as a matter of statutory construction in the absence of clear statutory intent to the contrary. That submission was not disputed and should be accepted: note eg Plaintiff S157/2002 v Commonwealth [2003] HCA 2; (2003) 211 CLR 476 at [26]-[37]; Plaintiff S10/2011 v Minister for Immigration and Citizenship [2012] HCA 31; (2012) 246 CLR 636 at [97]; AB v Independent Broad-based Anti-corruption Commission [2024] HCA 10; (2024) 98 ALJR 532 at [26]. That conclusion follows naturally from both rr 38(4) and 40(2) referring to the employee being given a "reasonable opportunity" to respond. Those words can readily be seen to import notions of procedural fairness as developed at common law.
On 29 March 2022 Mr Azzi received a letter dated 25 March 2022, notifying him that misconduct proceedings had been commenced against him pursuant to r 38(3) of the GSE Rules in respect of three particularised allegations (the Allegations Letter). Mr Azzi was provided with an opportunity to make a statement in response to the allegations before a final decision was made. The allegations are set out below at [55]. In short the misconduct alleged was that Mr Azzi had failed to follow lawful and reasonable directions given by Mr Parker on three occasions: 1. an instruction on 17 January 2022 that Ms A was not to do any work for SIRA, with immediate effect, unless approval was given by the ICT (ie information technology) and "People and Culture" (ie HR) sections; 2. a direction on 3 February 2022 that Mr Azzi was immediately to stop Ms A doing any work for SIRA whilst residing in Germany; 3. a direction on 4 March 2022 that Mr Azzi needed to stop Ms A doing any work for SIRA.
The letter went on to state that the conduct described in those allegations may constitute a breach of s 7 of the GSE Act as well as the Department of Customer Service Code of Ethics and Conduct. Most pertinently, the latter stated that one of the "professional responsibilities" of employees was to "obey any lawful direction or instruction given to you".
Mr Azzi provided his response to the allegations in a letter dated 4 April 2022 (the Misconduct Response Letter). As explained below when addressing grounds 1-4, Mr Azzi did not expressly deny the allegations as made. He indicated that he had told Ms A to limit her remote access to platforms other than those of SIRA and the Department (the documentary review she was undertaking involved another platform). He noted that the work being performed in response to the Legislative Council order was being conducted solely by Ms A. He had contacted a Director in the ICT section about the remote access issue, who had told him that secure overseas access was only available in "5 Eyes" countries (which did not include Germany) and that he should contact the HR section. He emphasised that he considered he owed a legal duty of care to both Ms A and her children to take account of the threat of domestic violence against them if they returned to Australia. Those duties were said to stem from, amongst other things, s 19 of the Work Health and Safety Act 2011 (NSW) and s 43 of the Crimes Act 1900 (NSW). The latter prohibits exposing a child under 7 years to danger of serious injury or death without reasonable excuse. He had been "mindful of Mr Parker's instructions" but had sought to be "sensitive to her circumstances". He asserted that he had been transparent in providing updates to Mr Parker.
A briefing note summarising the misconduct allegations against Mr Azzi and his response was provided to the Secretary, Ms Hogan. The briefing note recommended that a finding of misconduct be made against Mr Azzi, that a proposed action to terminate his employment under s 69(4)(a) of the GSE Act be approved, and that Mr Azzi be sent the "Misconduct Findings Letter" - a draft of which was attached - setting out the findings and the proposed action, and seeking his response. On 31 May 2022 Ms Hogan accepted each of those recommendations by signing the briefing note.
On 6 June 2022 the Misconduct Findings Letter was sent to Mr Azzi. The letter was expressed in the first person narrative and signed only by Mr Dent as Chief Executive of SIRA. The letter addressed Mr Azzi's response before concluding that the relevant misconduct was nevertheless substantiated. The letter stated: While I appreciate you have stated [Ms A] was working on a significant piece of work for SIRA and that immediately ceasing her work for SIRA from Germany may have resulted in SIRA failing to meet the requirements of the [Legislative Council production order], this does not form a satisfactory reason for failing to follow a lawful instruction. Similarly, in light of [Ms A's] personal circumstances, while supporting [Ms A] is most certainly required and encouraged, where reasonable, it is an insufficient basis for overruling or disregarding the instruction of your manager, Mr Parker.
The letter concluded: As a result of the above misconduct, I am proposing disciplinary action against you pursuant to section 69(4) of the GSE Act. Specifically, I am proposing to terminate your employment (without giving you an opportunity to resign) pursuant to section 69(4)(a) of the GSE Act (Proposed Action). The Proposed Action has been approved by Ms Emma Hogan, Secretary.
In accordance with r 40(2) of the GSE Rules Mr Azzi was given an opportunity to make a submission in relation to the proposed action before a final decision on the proposed action was made.
On 17 June 2022 a responsive letter was sent by solicitors retained by Mr Azzi (the Kennedys Letter). It asserted that the directions were "neither lawful nor reasonable" in circumstances where the Department had already approved Ms A's relocation to Germany and knew that she had been at imminent threat of domestic violence. It asserted that Mr Azzi was not told that the directions were to take immediate effect. It said that the directions were complied with as Mr Azzi had taken steps in response, including "to exit/wind down [Ms A] from work".
A second briefing note was prepared for Ms Hogan, attaching materials related to the misconduct proceedings including the Kennedys Letter. This briefing note recommended that Ms Hogan do the following: 1 Note the information contained within this briefing note and attached supporting material. 2 Approve the misconduct action, the termination of Mr Azzi's employment (without giving Mr Azzi the opportunity to resign) pursuant to Section 69(4)(a) of the [GSE Act]. 3 Approve the attached letter to be signed by the Chief Executive, State Insurance Regulatory Authority (SIRA) advising Mr Azzi of the action (Tab A).
Ms Hogan accepted all those recommendations on 12 July 2022 by signing underneath them, with one important qualification, stated in the following remarks beneath her signature: Thanks. I think this case is a challenging one, in that Mr Azzi may have been well intentioned in his support of his employee's personal circumstance. I'm approving this BN, but have asked Adam Dent (by phone) to consider whether offering Mr Azzi an opportunity to resign is a reasonable option, and will leave it with him as the CEO of SIRA to make this decision. …
On the same day a letter headed "Misconduct Proceedings: Final Decision" was sent to Mr Azzi, communicating the First Decision (the First Termination Letter). The letter was again expressed in the first person and signed by Mr Dent as Chief Executive Officer of SIRA. After setting out the allegations and addressing Mr Azzi's submissions, the letter concluded as follows: I confirm I have carefully considered the available information, including your submissions of 17 June 2022. I have made the decision to terminate your employment with an opportunity to resign, pursuant to section 69(4)(b) of the GSE Act. This decision has been approved by Ms Emma Hogan, Secretary.
Thus Mr Dent had opted for the less severe action of termination with an opportunity to resign, as raised by Ms Hogan when signing the briefing note, as opposed to the action of termination without opportunity to resign, as had been recommended in the note.
It appears that by (although possibly much earlier than) August 2022 Ms A had returned to Australia where she continued to work for the Department.
Mr Azzi commenced proceedings in October 2022 to challenge the validity of his termination, alleging, amongst other things, that the decision was made by Mr Dent (rather than Ms Hogan) without authority.
Another briefing note was prepared for Ms Hogan, who approved it on 30 November 2022. Accepting the recommendations in the briefing note, she signed a letter to Mr Azzi dated that day and captioned "Termination of your employment" (the Second Termination Letter). It stated: I have been informed that you now contend that the termination of your employment was invalid. Whilst I do not accept that position, against the possibility that you remain an employee of the Department, and to avoid any continuing uncertainty about your employment, I have considered whether your employment (assuming it remains on foot) should now be terminated. I have carefully considered the available information, including your submissions of 17 June 2022 and the letter to you from Mr Dent dated 12 July 2022. I have also considered the fact you were given the opportunity to resign, and you did not elect to do so. Following that consideration, I have decided to terminate your employment without an opportunity to resign, pursuant to section 69(4) of the GSE Act. I agree with and adopt the reasons for the decision to terminate your employment in the letter of 12 July 2022. To the extent that it remains on foot, your employment with DCS is terminated effective close of business today.
No notice had been provided to Mr Azzi that another decision was contemplated. In response Mr Azzi commenced further proceedings in the Supreme Court challenging the validity of the Second Decision. In the course of the proceedings the State was ordered to provide a statement of reasons for this decision. That statement in effect just adopted the findings and reasons expressed in the termination letters sent on 12 July 2022 and 30 November 2022.

[2]

Grounds 1-4: legal unreasonableness by absence of an obvious inquiry

The gravamen of grounds 1-4 in the notice of appeal is that the respondent failed to undertake an obvious inquiry into a critical fact such that both Decisions were invalid for legal unreasonableness. While the criteria for an error of this kind have been described as "including that the potential fact was readily ascertainable and was critical or central to the decision", such criteria "merely reflect the usually high threshold for a conclusion that a power has been unreasonably exercised as a matter of law": Ismail v Minister for Immigration, Citizenship and Multicultural Affairs [2024] HCA 2; (2024) 98 ALJR 196 at [25] (citations omitted). One of the grounds of appeal is that the primary judge erred by addressing this issue as an allegation of a failure to accord procedural fairness, as opposed to an argument of legal unreasonableness in the sense explained. In addressing these grounds it suffices to focus on the argument as it was put on appeal.
Mr Azzi's core argument in this Court was as follows: This case meets that unusually high threshold. The "critical fact" in this case was the question of credit: was Mr Parker to be believed or Mr Azzi? If Mr Azzi was believed, there was no misconduct as he complied with the directions. … On any view, the issue of credit, and in particular, Mr Parker's credit arose squarely on the facts known to the Crown: Mr Azzi denied the direction had been made in the terms put to him and there was no doubt that the cyber security "policy" which Mr Parker relied upon was non-existent and instead there was only a policy about tax issues.
I address the lack of significance of the "policy" below, when addressing grounds 5-7. As already noted, Mr Azzi himself referred to this policy in his Misconduct Response Letter. In any event, the focus of submissions was on the suggestion that Mr Azzi denied the directions had been made in the terms put to him, in particular as regards whether Mr Parker directed an immediate cessation of work by Ms A. The minor premise of the argument is that there had been such a denial so that an issue arose as to who should be believed out of Mr Parker and Mr Azzi. The major premise is that this was a "critical fact" for which further obvious inquiries could have been undertaken, with the failure to do so rendering the subsequent Decisions invalid. The minor premise is not made out. It is unnecessary to examine the major premise.

[3]

Grounds 5-7: procedural fairness

Grounds 5-7 concern procedural fairness. Ground 6(c) raises an issue that is particular to the Second Decision. That ground is addressed below together with ground 11. Leaving that aside, Mr Azzi alleged that the decision-maker did not afford him a fair hearing because before the First Decision was made he should have been given: 1. a copy of the policy under which the directions to him were allegedly made; and 2. a copy or summary of Mr Parker's email of 8 March 2022 containing his account of conversations with Mr Azzi over which Mr Azzi allegedly made prejudicial admissions as to misconduct.
There was no dispute that procedural fairness requires in the ordinary case that an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 629; Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; (2005) 225 CLR 88 at [15]-[17].

[4]

The policy

The complaint relevantly articulated in the notice of appeal is that the decision-maker breached the duty of procedural fairness by not informing Mr Azzi of: the policy upon which it contended its direction to immediately terminate the working arrangements of Ms A without notice to her was lawful and reasonable and where it was clear that the Appellant had not seen or been given a copy of the policy upon which the direction was allegedly based and, in fact, had been misled as to it terms (which were not concerned with cyber security).
Attached to the briefing note provided to Ms Hogan prior to her approving the proposed action of terminating Mr Azzi's employment was a document headed "Proposed Action Submissions Analysis: Mark Azzi (SIRA)" (the Submissions Analysis). It was prepared by someone within the HR section of the Department. It analysed the Kennedys Letter. The document included the following: 1.17 As communicated to Mr Azzi, Mr Parker's directions for [Ms A] to immediately cease working from Germany was based on a policy change at [the Department], it was not a decision unique to [Ms A]. The policy change was based on cyber risk and people and culture implications. Any employee seeking to work from overseas was required to obtain approval from ICT and People & Culture and consideration would only be given to such an arrangement in exceptional circumstances and on a short-term temporary basis. Given this, Mr Parker directed Mr Azzi to behave in accordance with practice.
Mr Azzi argued that no such formal written policy existed, and if and to the extent it did exist it should have been made available to Mr Azzi because it was the basis of Mr Parker's directions and in any event presumptively informed the First Decision. These arguments are not only in some tension with each other, they are devoid of merit.
As already noted, the only relevant policy document produced in the litigation by the Department is the PowerPoint presentation referred to above at [25], which is not overtly addressed to cyber security issues, although the need for a cyber security assessment prior to approving overseas work is specified. That being said, the Submissions Analysis said that the "policy change was based on cyber risk and people and culture implications", so it was not suggested to be purely a cyber-focused policy. The PowerPoint presentation appeared to be still in draft as at 11 November 2021.

[5]

Mr Parker's email of 8 March 2022

Mr Azzi's complaint here was that part of the content of an email from Mr Parker to the HR section dated 8 March 2022 was set out in the Submissions Analysis which was provided to Ms Hogan prior to the First Decision. Neither that email nor the Submissions Analysis were provided to Mr Azzi prior to that decision being made. The email sets out Mr Parker's version of an exchange he had with Mr Azzi on 4 March 2022. The most pertinent part of the reported exchange, which is set out in the Submissions Analysis at [2.3], is as follows (emphasis added): Azzi: Darren, I've got to tell you something that won't make you happy. Parker: that is okay, what is it? Azzi: you know you said not to allow [Ms A] to work for us in Germany, well I've let her continue Parker: Why is that? Azzi: She is really good. I've sought more staff for ages now but that hasn't happened. [Ms A] is in a difficult situation. … Azzi: [Ms A] will be back in two weeks. Parker: You need to stop [Ms A] doing any work for us. Azzi: You can say that you've told me to stop this immediately. Parker: Will you stop access? Azzi: It's only two weeks and I need her. Parker: You know this isn't okay? Azzi: You can say you have told me. Parker: You need to stop [Ms A] doing any work for us.
The Submissions Analysis goes on to say at [2.4] that it is "clear from the above that the directions were to take effect immediately and that Mr Azzi was aware of this requirement, but wilfully and deliberately decided not to comply".
In this Court Mr Azzi submitted that the whole of the claimed exchange at [2.3], along with the conclusion expressed at [2.4], should have been disclosed to him prior to the First Decision being made. Counsel for Mr Azzi accepted at the hearing that Mr Azzi was not entitled to Mr Parker's email itself. Rather, it was said he required "a summary that properly summarises the critical matters" in order to meet the case against him. Mr Azzi submitted that the allegations regarding the terms of the directions and his supposed admissions were adverse to him and were credible and relevant and potentially significant to the making of the Decisions.
The problem with the submission is that, as counsel for the respondent submitted, the substance of Mr Parker's account of his directions as recorded in his email had in fact been put to Mr Azzi in the Allegations Letter. When setting out Allegation 3, the Letter said that "you advised Mr Parker that despite the First Instruction and the Second Instruction referred to in allegations 1 and 2 above, you had allowed [Ms A] to continue to undertake work for SIRA while residing in Germany". That captures the statement recorded in the email that "you know you said not to allow [Ms A] to work for us in Germany, well I've let her continue". And the Letter goes on to state that during the meeting "Mr Parker stated to you words to the effect 'You need to stop [Ms A] doing any work for us'". That is a precise reproduction of what the email records Mr Parker as saying twice to Mr Azzi. Thus the relevant contents of the 8 March 2022 email as recorded in the Submissions Analysis were disclosed, as the primary judge concluded at [68].

[6]

Grounds 9-10: lawfulness and reasonableness of the directions

Grounds 9-10 related to the lawfulness and reasonableness of the directions, assuming they were in the terms as alleged by Mr Parker and put to Mr Azzi in the allegations. Mr Azzi said that the decision-maker should have found that the directions were unlawful because they were made in contravention of: 1. cll 43.2 and 65 of the Crown Employees (Public Service Conditions of Employment) Reviewed Award 2009; and 2. section 25(2) of the Anti-Discrimination Act, being a form of indirect discrimination.
It was asserted that the decision-maker therefore did not have jurisdiction to dismiss Mr Azzi for disobeying the directions.
A central plank of Mr Azzi's argument on these grounds was the submission that "[i]f the alleged directions had in fact been given to Mr Azzi but they were not lawful or reasonable directions, then the finding of misconduct could not lawfully be made". In response the respondent asserted that it, as employer, could "make the decision as to whether a reasonable and lawful direction had been issued to the appellant". These points raise issues of some complexity which were not fully grappled with in the parties' submissions.
For the reasons that follow, Mr Azzi has not established that the three directions given by Mr Parker were unlawful, in the sense of being contrary to any applicable legal norm. That suffices to resolve the issues of legality here without seeking to resolve the further questions raised by his argument, such as how the claimed breach of a legal norm meant that the two Decisions were afflicted with jurisdictional error. Quite what the notion of a direction not being "reasonable" added to the argument was not clear and was not developed. It is not necessary to consider that issue further.

[7]

The Award

Mr Azzi submitted that not allowing Ms A to work from home in Germany breached cl 43.2, and that the "the undisclosed policy upon which the directions were allegedly given was not made lawfully pursuant to clause 65".
Clause 43 of the Award provides as follows: 43. Room at Home Used as Office 43.1 Where no Departmental office is provided in a particular location - Where it is impractical to provide an office in a particular location, employees stationed in such a location may be required to use a spare room at their home as an office. In such cases, the Department will be responsible for providing furniture, telephone and other equipment, as required. In addition, an allowance as specified in Item 12 of Table 1 - Allowances of Part B Monetary Rates is payable for the use of a room at home as an office. 43.2 Where an office exists in a particular location - Where a Departmental office or offices already exist in a particular location but the employee and the manager agree that the staff member could work from home on a short term or longer term basis, the arrangement shall be negotiated in accordance with the provisions of the Flexible Work Practices, Policy and Guidelines. The allowance set out in subclause 43.1 of this clause shall not apply in these circumstances. 43.3 Requirements - Arrangements under subclauses 43.1 or 43.2 of this clause shall be subject to: 43.3.1 A formal agreement being reached in respect of the hours to be worked; and 43.3.2 The work health and safety, provision of equipment requirements and any other relevant conditions specified in Part 2, Section 7 Working from Home in the Flexible Work Practices, Policy and Guidelines.
It is apparent that cl 43.2 is directed to situations where a person is employed to work in a particular location where a relevant departmental office is to be found, as opposed to where there is no such office, which situation is addressed in cl 43.1. In such a situation if the worker reaches an agreement with their manager that they can work from home, then the significance of cl 43.2 (taken together with cl 43.3) is as follows: the arrangement is to be negotiated in accordance with the identified "Flexible Work Practices, Policy and Guidelines"; work health and safety issues are governed by the Policy; the allowance referred to in cl 43.1 is not payable; and a formal agreement is to be reached in relation to hours worked.

[8]

The Anti-Discrimination Act

Section 25(2) of the Anti-Discrimination Act renders it "unlawful" for an employer to discriminate against a person on the ground of sex, including in the terms or conditions of their employment. Section 24(1)(b) of the Act defines such discrimination to include indirect discrimination, that is, where the perpetrator: requires the aggrieved person to comply with a requirement or condition with which a substantially higher proportion of persons of the opposite sex … comply or are able to comply, being a requirement which is not reasonable having regard to the circumstances of the case and with which the aggrieved person does not or is not able to comply.
Mr Azzi submitted that a decision to prevent an employee from working overseas detrimentally affect female employees disproportionately, given statistically more women suffer from domestic violence (and thus need to keep distance from their abuser) than men. He argued that the directions that Mr Azzi stop Ms A from working overseas was a discriminatory act against her on the basis of sex, as a male employee who was working overseas would be able more readily to comply with such directions.
There is no evidence that Ms A ever made a discrimination complaint. And, as the primary judge noted (at [89]), there is no evidence she has foregone wages as a consequence of the directions. It is notable that in the email that Mr Parker drafted for Mr Azzi to send to Ms A on 10 March 2022 it said "[y]ou last explained to me that you will be back in Australia in the next couple of weeks and ready to re-commence work". Although the evidence is not clear as to when Ms A actually returned, it appears that it was then thought that she would be returning soon. Counsel for Mr Azzi made a point that the first direction was given on 17 January 2022, and it is not clear what the understanding then was. Even allowing for that, overall there is no evidence she suffered any material disadvantage. In these circumstances there is no proper foundation to make out a discrimination claim, even if it was open to a third party to seek to make out such a claim.
Moreover, remedies for contravention are set out in the Act itself. As counsel for Mr Azzi herself put it, "we are not seeking relief under the Anti-Discrimination Act". Mr Azzi did not identify a legal basis for saying that if Mr Parker's directions had been discriminatory then the Anti-Discrimination Act would have rendered them invalid. The respondent pointed to authority of this Court to the contrary: Bignell v New South Wales Casino Control Authority [2000] NSWCA 38; (2000) 48 NSWLR 462 at [38] and [137]. However, it should be noted that that case related to an earlier iteration of the Act, and there are some material differences to the relevant version of the Act here.

[9]

Grounds 11 and 6(c)

Ground 11 raises an issue about whether it was Mr Dent rather than Ms Hogan who made the First Decision. It was common ground below and on appeal that Mr Dent was not authorised to make a decision to terminate Mr Azzi's employment under s 69(4) of the GSE Act. The proper decision-maker was "the person who exercises employer functions in relation to [the] employee" (s 69(2)). Pursuant to s 26 of the GSE Act, the Secretary of a department of the public service may exercise the employer functions on behalf of the respondent in relation to the employees of that department, including the power to terminate a person's employment. Thus at all material times the person authorised to make decisions in relation to Mr Azzi under s 69(4) was Ms Hogan. Section 27 permits delegation of the employer functions but provides that the rules "may limit a power of delegation or sub-delegation under this section". Rule 4(1)(c) of the GSE Rules in turn provides that the function of the termination of the employment of a senior executive "cannot be delegated". As Mr Azzi was a senior executive it was thus only Ms Hogan, as the relevant Secretary, who could exercise the power under s 69(4) to terminate his employment.
Before the primary judge Mr Azzi argued that the First Decision was not made by Ms Hogan. He said it was evident from the first person narrative of the 12 July 2022 letter that Mr Dent made the decision, with Ms Hogan merely approving it. The primary judge rejected that argument, holding that Ms Hogan made the decision by approval of the relevant briefing note (at [57]). Her Honour further held (at [58]) that Mr Dent acted as her agent in communicating that decision to Mr Azzi, pursuant to the principle recognised in Carltona Ltd v Commissioners of Works [1943] 2 All ER 560 at 563 and O'Reilly v Commissioners of State Bank of Victoria [1983] HCA 47; (1982) 153 CLR 1 at 11.
On appeal Mr Azzi submitted that there was no evidence of any such agency arrangement. Rather, he submitted that the briefing note and the letter showed that the decision was one of Mr Dent, where Ms Hogan was merely being "briefed" of that decision which she in turn approved. According to Mr Azzi, Ms Hogan effectively admitted not having considered herself to be the decision-maker of the First Decision by making the decision for a second time.
Section 69(4) provides that "the person who exercises employer functions in relation to the employee may take any of the following actions". Mr Azzi treated the issue as being who was the relevant person to make the decision to take the action. In the summons in his first proceeding he asserted that "the only person lawfully permitted to make the decision to terminate the employment of [Mr Azzi] was a Secretary of the Department" and that Mr Dent "was not lawfully permitted to make" the First Decision. The question of who made the decision is distinct from the issue of who communicated it and in what terms. That question of identifying the decision-maker is one of fact and characterisation.

[10]

Ground 6(c): notice of the Second Decision

The grounds considered above were not made out as regards either Decision. Ground 6(c) was directed specifically to the Second Decision. It alleged that it was invalid for lack of procedural fairness because of the failure to provide any notice to Mr Azzi of the intention to make a further decision under s 69(4).
The primary judge rejected this argument, saying as follows: [60] I reject the plaintiff's submission that he was denied procedural fairness by not being forewarned of the Secretary's intention to re-make or ratify the first decision by making the second decision. The misconduct findings had already been made on 6 June 2022. Ms Hogan was not obliged to revisit these findings (which pertained exclusively to past conduct, rather than, say, continuing unfitness). Further, the plaintiff challenged the validity of the first decision, thereby creating both the occasion and the putative need for Ms Hogan to re-make or ratify the first decision, thereby ensuring that the termination of the plaintiff's employment was valid. The plaintiff, through his legal representatives, can be taken to have been aware of the possibility that Ms Hogan would take the action she did. Given the extensive process of procedural fairness which had been undertaken prior to the finding of misconduct and the termination, there was no need to engage in this process again before Ms Hogan made the second decision.
I respectfully disagree with her Honour. The Second Decision involved the taking of an action under s 69(4) of the GSE Act which, pursuant to r 40(2) of the GSE Rules, must not be done unless the relevant employee is notified of the proposed action and given a reasonable opportunity to make submissions in response. Mr Azzi was not notified of Ms Hogan's proposal to make the Second Decision nor given any opportunity to make submissions further to those he had made in relation to the First Decision. What occurred did not meet the requirements of the statutory scheme.
Counsel for the respondent argued that the "proposed action" which needed to be put to Mr Azzi here was in fact the same action which have already been put to him in the Misconduct Findings Letter on 6 June 2022, that is, notifying him of the proposed termination of his employment without an opportunity to resign pursuant to s 69(4)(a). But this argument does not sit well with the sequence of events. That proposed action was not undertaken; rather, the First Decision was that his employment be terminated with an opportunity to resign, pursuant to s 69(4)(b). The termination was to take effect at the close of business on 21 July 2022 if he had not resigned beforehand. The operative significance of the notification of proposed action had been overtaken by events, specifically the making of a different, less onerous decision to the proposal of which he had been notified. Subsequently, the Second Decision was different from the First. It was that his employment was terminated without an opportunity to resign and with effect at close of business on the day the letter was sent, 30 November 2022. It cannot be said that in these circumstances the Secretary had provided Mr Azzi a reasonable opportunity to make submissions on that proposed action.

[11]

Orders

The appeal should be dismissed. Ordinarily costs of the appeal would follow the event. The respondent sought to be heard separately on costs, regardless of the outcome of the appeal. Provision should be made for further brief submissions on costs of the appeal, but only after the parties have informed each other of their respective positions on the issue to see if agreement can be reached. The issue will then be determined on the papers unless good reason to the contrary is shown by either party.
The orders of the Court should be as follows: 1. Appeal dismissed. 2. The parties are to notify each other by 5pm on 23 July 2024 of what orders they propose should be made as to costs of the appeal. 3. If the parties do not agree on the appropriate order as to costs of the appeal, they each may file and serve written submissions of up to 3 pages on the issue, along with any evidence relied on, by 5pm on 30 July 2024. 4. The parties may file and serve any reply submissions, of no more than 2 pages, by 5pm on 2 August 2024.

[12]

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: 16 July 2024

Judgment

WARD P: I agree with Kirk JA as to the disposition of the appeal for the reasons that his Honour gives. I do not express a view as to whether, if error had been made out as contended for by Ground 11, relief would be refused as a matter of discretion as it is not necessary here to do so. I also agree with the supplementary observations of Leeming JA. The orders should be as Kirk JA has proposed.
LEEMING JA: I agree with the orders proposed by Kirk JA and, subject to what follows, with his Honour's reasons. What follows presupposes familiarity with those reasons. I wish to express my own reasons concerning ground 11, which maintained that Mr Adam Dent (the Chief Executive Officer of the State Insurance Regulatory Authority) and not Ms Emma Hogan (the Secretary of the Department) made the decision to terminate Mr Azzi's employment without authority to do so, and which raises a point of general principle. I also wish to make one point on jurisdictional error.
As Kirk JA explains, the "First Termination Letter" signed by Mr Dent included the statement "I have made the decision to terminate your employment with the opportunity to resign", adding that "This decision has been approved by Ms Emma Hogan, Secretary". But the question of power raised by this ground turns on what occurred, rather than how it was characterised by Mr Dent. There was no dispute as to what occurred. Mr Dent approved a briefing note which recommended the termination of Mr Azzi's appointment without giving him the opportunity to resign. Ms Hogan approved that recommendation, but added "I'm approving this BN, but have asked Adam Dent (by phone) to consider whether offering Mr Azzi an opportunity to resign is a reasonable option, and will leave it with him as the CEO of SIRA to make this decision". Contrary to his earlier recommendation, and in accordance with the discretion left to him by Ms Hogan, Mr Dent then advised Mr Azzi that his employment was terminated but with an opportunity to resign. In the event, Mr Azzi did not resign, but contested the lawfulness of his termination.
The power to terminate the employment of a senior executive was one of the "employer functions of the Government" defined in s 26(3) of the Government Sector Employment Act 2013 (NSW) and by s 26(1) the Secretary was authorised to exercise that function. Section 27(1)(a) conferred a full power of delegation of "any of the functions of the Secretary under this Act (other than this power of delegation)". However, s 27(4) provided that "The government sector employment rules may limit a power of delegation or sub-delegation under this section". The "government sector employment rules" were defined to be rules made by the Commissioner under s 12, and the rule upon which Mr Azzi relied was r 4(1)(c) of the Government Sector Employment (General) Rules 2014 (NSW) which provided that a function which could not be delegated under s 27 of the Act was "the termination of the employment of a Public Service senior executive under section 41, 68 or 69 of the Act".

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