MATTER : An application for a writ of certiorari against Railway Appeal Board

THE WESTERN AUSTRALIAN GOVERNMENT RAILWAYS COMMISSION

Administrative law - Prerogative writs and orders - Certiorari - Dismissal for misconduct - Whether dismissal of employee void - Employment relationship subject to statutory regime - Whether employer entitled to dismiss permanent employee for misconduct without following disciplinary procedures - Whether Railway Appeal Board had jurisdiction to hear appeal - Contract of employment silent but provisions contained in award - Application of award provisions - Denial of natural justice - Failure to follow prescribed procedures - Dismissal unlawful and void

Byrne v Australian Airlines [1995] HCA 24; (1995) 185 CLR 410 distinguished

Ridge v Baldwin [1963] UKHL 2; [1964] AC 40 applied

Government Railways Act 1904, s 73, s 77, s 82, s 83

Industrial Relations Act 1979, s 23(3)(d)

1 MALCOLM CJ: This is the return of an order nisi by Murray J dated 29 October 1998 that the first and second respondents do show cause before this Court why a writ of certiorari should not be issued to remove into this Court for the purpose of being quashed the decision of the first respondent delivered on 24 July 1998 on the grounds that:

"(1) The first respondent was wrong in law in holding that the dismissal of the second respondent by the applicant should be declared null and void and the decision to terminate his employment should be reversed.

(2) The first respondent was wrong in law in purporting to exercise jurisdiction to hear the second respondent's appeal.

(3) If ... the first respondent had jurisdiction to hear the second respondent's appeal, the first respondent was wrong in law in failing to properly inquire or inquire at all into the circumstances of the second respondent's dismissal.

(4) The first respondent was wrong in law in holding that, before the applicant could dismiss the second respondent, it was obliged to conduct a departmental inquiry either to give effect to the rules of procedural fairness or pursuant to section 82 of the [Government Railways Act 1904] ('the Act').

(5) If ... the first respondent did have jurisdiction ..., the first respondent was wrong in law in holding, in effect, clauses 42 and 43 of the [Government Railways Locomotive Enginemen's] Award [1973-1990] (as purportedly incorporated in the [Western Australian Government Railways Commission Freight Railway System] Agreement [1995]) were legally binding on the applicant and the second respondent.

(6) The first respondent erred in law in holding that the applicant was estopped from contending that clauses 42 and 43 of the Award (either as purportedly incorporated into the Agreement or otherwise) had no legal effect."

2 The second respondent, Mr Chance, was a level 5 Locomotive Operator based at the Avon Yard of the Applicant. He was employed under the Western Australian Government Railways Commission Freight Railway System Agreement 1995 ("the Agreement"), which was registered by the Western Australian Industrial Relations Commission ("WAIRC") on 22 March 1996 with effect from 18 February 1996.

3 Mr Chance was dismissed from his employment by letter dated 13 March 1998 from the Acting General Manager (Central) which stated:

I refer to the incident on Tuesday 17 1998 where you used extremely abusive language in a manner that was aggressive and intimidating towards the Employee Relations Officer at Avon Yard.

The Employee Relations Officer was performing his duties correctly and as a matter of courtesy was notifying you that your shift for that day was extended ...

During the interview conducted on February 26 you were given the opportunity to explain your actions. Your explanation cannot be accepted by Westrail as a satisfactory reason for your behaviour. Your attitude and unacceptable behaviour towards your work, management and other employees on this and other occasions is totally unacceptable. Further to this, your stated unwillingness to modify your future behaviour leaves Westrail no alternative but to terminate your employment.

Your employment with Westrail is terminated from the date you receive this letter and you will be paid two weeks wages in lieu of the prescribed notice."

4 The circumstances leading to this letter were that on 18 February 1998 the Employee Relations Officer, Mr Cooper, reported to the Area Manager of Northam, Mr Keady, that on 17 February he had caused a note to be delivered to Mr Chance's house. The note advised Mr Chance's shift later that day was extended for one hour. Mr Cooper said Mr Chance responded by approaching and phoning him three times, abusively protesting the fact that the note had been left at his house. He also said he would not be working his shift that day because he was on sick leave.

5 A memorandum dated 18 February 1998 from Mr M. T. Beard, also of Avon Yard, to the Area Manager confirmed the substance of Mr Cooper's report, but added that Mr Chance had complained because the note had been left on his back wire door. A further report from Mr Wilson, the Locomotive Operator Specialist, Avon, to the Area Manager said that Mr Chance complained that hanging notes on his back door would alert thieves to the fact that he was not home.

6 In a letter dated 18 February 1998 to Mr Chance, Mr Keady said:

"It has been reported to me that at 1330, 1430 and 1500 [sic: 1430, 1500 and 1530] hours on Tuesday 17 1998, when notified ... that your shift for that day was extended, you approached the Employees relations Officer [sic] and used extremely abusive language in a manner that was both aggressive and intimidating.

You are required to submit in writing to this office your explanation as to why you behaved in this manner ... ."

7 Mr Chance responded by letter dated 19 February 1998:

"... [I]f Westrail's Officers and employees are not satisfied in [sic: with] the manner in which I deal with them when I am OFF DUTY then I strongly suggest you advise them not to place themselves in a position where they have to deal with me when I am off duty."

8 By a letter dated 20 February 1998 Mr Keady reported these matters to the General Manager and said:

"It is my recommendation that, given Mr Chance's performance over the past twelve (12) months where he has continually sabotaged Westrail's Operation both verbally and in refusing to comply with instructions given, his services be terminated forthwith."

9 There are no details about the alleged "sabotage" or "refusing to comply", nor were particulars of these put to Mr Chance at any stage. No charge was put to Mr Chance, nor was he shown these reports, or asked if he admitted or denied the allegations.

10 By a letter dated 23 February 1998 to Mr Chance, Mr Keady called Mr Chance to a meeting on 26 February 1998 to explain his actions. The letter also said that, in light of a warning given to Mr Chance on 6 February 1998 for refusing to work beyond a nine hour shift on 14 December 1997, "this disciplinary action may involve the termination of your employment."

11 Mr Chance attended the meeting with Mr Keady. Afterwards, by a letter dated 28 February 1998 to the General Manager, Freight Services, Mr Keady reported that Mr Chance had explained his behaviour to be the result of being angry that the note had been placed in a prominent position on his door which he believed broadcast his absence and invited burglary. Mr Keady said he doubted "the bona fides of" Mr Chance. He also said that Mr Chance's "extremely uncooperative" behaviour over the previous 12 months, of which he gave no details, confirmed his prior recommendation that Mr Chance be terminated.

12 By contrast, in a memorandum to the Acting General Manger dated 6 March 1998 the Employee Relations Co-ordinator said that:

"In considering the matter of Mr Chance's dismissal the following needs to be considered:

. Mr Chance produced a medical certificate for his absence from duty on the day of the incident [on 17 February 1998].

. The incident of abusive language is his first (documented) offence for this type of offence.

. His discipline record is not that excessive to suggest dismissal is warranted."

13 Mr Chance appealed to the first respondent, the Railways Appeal Board, pursuant to s 77 of the Act, disputing the facts giving rise to the decision to terminate him and the severity of that punishment.

"73.(1) The Commission may appoint, suspend, dismiss, fine, transfer without payment of transfer expenses, or reduce to a lower class or grade, any officer or servant of the Department, ...

"77. Any person who, being permanently employed on a Government Railway, is, under section seventy-three of this Act,-

may, in the prescribed manner, appeal to an Appeal Board constituted as hereinafter provided...

No person shall be deemed 'permanently employed' within the meaning of this section unless he has been continuously employed for three months."

15 Section 78 of the Act deals with the constitution of the Appeal Board. Section 81 provides that the decision of any two members of the Appeal Board will be the decision of the Board. Section 83 provides that:

"The Appeal Board may confirm, modify or reverse any decision appealed against, or make such other order as they think fit and the decision of the Appeal Board shall be final."

16 At the hearing of the appeal Mr Chance's representative argued that the applicant was required to comply with the procedures set out in cl 42 and cl 43 of the Award, and that the applicant's failure to comply with cl 43 rendered the termination "null and void ab initio". Clauses 42 and 43 of the Award were purportedly incorporated into the Agreement by virtue of cl 4(2) and Sch A of the Agreement, which is headed "Award Clauses to Remain in Effect".

17 The applicant's representative responded that cl 42 and cl 43 of the Award were not applicable to the employment contract between the applicant and Mr Chance because of s 23(3)(d) of the Industrial Relations Act 1979 ("the IRA") which provides that:

"The [WAIRC] in the exercise of the jurisdiction conferred on it by this part shall not -

(d) regulate the suspension from duty in, discipline in, dismissal from, termination of, any employee or any one of a class of employees if there is provision, however expressed by or under any other Act for or in relation to a matter of that kind and there is provision, however expressed by or under that other Act for an appeal in a matter of that kind;"

18 It was argued for the applicant before the Appeal Board and this Court that, because s 73, s 77, s 82 and s 83 of the Act provide a statutory regime of disciplinary powers, procedures, and rights of appeal, s 23(3)(d) of the IRA operated to oust the jurisdiction of the WAIRC. Therefore, the WAIRC could not validly register that part of the Agreement which purported to adopt the Award provisions dealing with disciplinary and appeal matters, in particular cl 42 and cl 43. The applicant's representative referred to Western Australian Fire Brigades Board v The Fire Brigade Employees Industrial Union of Workers of Western Australia (1981) 61 WAIG 852 at 853.

19 The Chairman of the Board (with whom one member agreed and from whom the other dissented) held that cl 42 and cl 43 of the Award applied and the applicant was obliged to follow the procedure set out in them. The Chairman said this was because:

"[t]he inclusion of these two clauses in the ... Agreement estops the Respondent [applicant] from arguing that these two clauses are of no application and can not be relied on by the Applicant [Mr Chance]."

20 This conclusion was the subject of ground 6 in the order nisi. The Chairman also referred to r 3 of the Western Australian Government Railways Rules 1994 ("the Rules") in the Schedule to the Government Railways By-law 54 made pursuant to the Government Railways Act 1904. Rule 3 relevantly provides that:

Any of the above actions may be taken by the Commission for any of the following offences:-

(i) being under the influence of intoxicants or drugs that might impair the proper performance of their duty, or

(3) Any employee who has been continuously employed for three months or more and who has been dismissed, regressed, suspended causing loss of pay, transferred without payment of transfer expenses or fined, may, in the prescribed manner, appeal to the Railway Appeal Board.

(6) To the extent that this rule applies to a Commission employee, it is subject to any relevant award of the Western Australian Industrial Relations Commission or any industrial agreement that may be in force."

21 It would appear then that the Rules, which are made pursuant to the Regulations under the Act, make the disciplinary proceedings under the Rules subject to the Award. Consequently, the Rules adopt the disciplinary provisions in the Award. Those provisions are contained in cl 42 and cl 43 as follows:

The head of the branch shall have power to reprimand, fine, suspend from duty, reduce in grade, or dismiss any worker, and to remove any driver or driver's assistant from a locomotive footplate. Provided always that the notification to a worker of any such action shall be in writing, and shall state the reason for same being taken.

(1) Each worker shall himself provide, when called upon, with the least possible delay, any report or statement which may be required by the officer in charge.

(2) When a worker against whom a charge is pending has made a statement to an officer in charge and which statement the officer in charge has taken down in writing, such worker shall either be furnished with a copy of such statement or be allowed to take a copy of it.

(3) If in the opinion of the foreperson or, where there is no foreperson appointed, the Area Manager, the action of any worker should be reported to the head of the branch, it shall be done -

(a) where a worker is stationed at a main depot, within seven days of the foreperson's or Area Manager's first knowledge of the occurrence; ...

(b) where the worker is stationed at a sub depot, within ten days of the first knowledge of the occurrence by the person in charge of such sub depot.

The worker shall at the same time be notified by the foreperson or Area Manager that the worker is reported, otherwise such report shall be null and void; ... When a charge has been made against any worker such worker shall be supplied with a copy of such charge and any reports upon which it is based. No charge shall in any case be laid after the expiration of 30 days from the date occurrence.

(6) Where a worker exercises the right of appeal, no deduction shall be made from the worker's wages in respect or any fine until a final decision has been given.

22 Having found that cl 43 applied, the Chairman found that cl 43(3) had not been complied with by the applicant when dismissing Mr Chance because, first, the "foreperson" had not notified the Head of Branch or Mr Chance when reporting him. Clause 43(3) provides that if these procedures are not complied with, "such report shall be null and void." Secondly, Mr Chance had not been supplied with a copy of the "charge" or any reports on which it was based. The Chairman concluded that the applicant's non-compliance with cl 43 meant:

"the proceedings adopted by the [applicant] are 'null and void'. Because of this ... Mr Chance's dismissal should be declared to be 'null and void' and the decision to terminate his employment should be reversed."

23 The Chairman added that this clause was a reflection of the principles of natural justice that the applicant was obliged to apply in any event. Finally, the Chairman found support for his findings in s 82 of the Act. Section 82 is a procedural and facilitative provision which provides, inter alia, that the first respondent "may admit evidence taken at any departmental inquiry at which the appellant was present ...". The Chairman said:

"I would have thought that such an inquiry was necessary under the rules of Natural Justice [sic] and although section 82 does not specifically direct the Commission to conduct such an inquiry it seems to assume that such an inquiry is held, and it is this inquiry from which the appeal is taken."

24 The basic issue here is whether the Appeal Board did have power to, and did correctly exercise that power to reverse the decision of the applicant to dismiss Mr Chance.

25 It is convenient to deal with ground (2) first. Ground (2), that the Board had no jurisdiction to hear Mr Chance's appeal, was abandoned by the applicant. As counsel for the applicant accepted, Mr Chance was a permanent employee. In the case of such employees, where misconduct was the reason for, or a component of the justification given for the dismissal, whether or not the employee is paid in lieu of notice, the dismissed employee has a right of appeal to the Appeal Board: Wall v Commissioner of Railways (1905) 7 WALR 206, at 208 - 209 per Stone CJ; Pomykala v Railways Appeal Board (1952) 54 WALR 9; R v Railway Appeal Board; Ex parte Haran [1969] WAR 13. Ex parte Haran concerned the question whether a railways porter, who had been dismissed after conviction for violent and offensive behaviour arising out of an assault on a fellow employee, had a right of appeal against his dismissal. Wolff CJ (with whom Jackson and Negus JJ agreed) said at 14 - 15:

"[T]he point now urged ... is that the dismissal was a normal dismissal by the employer by 14 days' notice under the terms of the award and was not in any sense a punishment. But the Appeal Board found that it was and I consider that this finding is correct. Section 77 of the Act confers a right of appeal, inter alia, when a person who is permanently employed on a railway is dismissed under s 73. All that is required under s 77 to constitute permanent employment is continuous employment for three months."

Ground (1): Could the Dismissal be Declared Void?

26 Ground (1) is that the Board erred in declaring Mr Chance's dismissal null and void, and in reversing the decision of the applicant. The particulars of this ground were:

(a) The Board erred in holding that cl 42 and cl 43 of the Award applied to the termination, because the Board failed to take cl 6 of the Agreement into account.

(b) Mr Chance was dismissed with two weeks' pay in lieu of notice pursuant to cl 6(3) of the Agreement.

(c) The question whether the applicant had complied with cl 42 and cl 43 was irrelevant.

(d) Further or alternatively, that even if the dismissal was unlawful for lack of due process, the law does not treat such a dismissal as null and void.

(e) Even if cl 42 and cl 43 applied, failure to comply did not render the termination null and void.

27 Ground (1) involved three points. First, cl 42 and cl 43 of the Award did not apply because Mr Chance was dismissed with two weeks' pay in lieu of notice pursuant to cl 6(3) of the Agreement. Clause 6(3) gives the employer a right to terminate the contract of employment with two weeks' notice. Secondly, even if those clauses did apply, cl 42 is independent of cl 43 and gives a right to dismiss which is not subject to the procedural requirements of cl 43. Thirdly, even if cl 43 did apply and the dismissal was unlawful for failure to comply with it, the law does not treat such a dismissal as null and void.

28 Clause 6 of the Agreement is entitled "Contract of Employment". Clause 6 relevantly provides:

Full-time and part-time employees will be employed on a fortnightly contract of employment and either party may terminate this contract by giving two weeks' notice.

(a) The employer may dismiss an employee without notice for misconduct which, at law, or in contravention of the employer's rules or regulations, justifies summary dismissal.

(b) An employee dismissed on this basis will only be entitled to be paid for work up to the time of dismissal.

(9) Employment will be subject to the provisions of the Minimum Conditions of Employment Act 1993 together with statutory and employment rules, regulations and policies, as published from time to time." [my italics]

Does dismissal pursuant to cl 6(3) of the Agreement mean cl 42 and cl 43 of the Award do not apply?

29 The applicant contended that it had a contractual right to dismiss an employee with pay in lieu of notice, without more, pursuant to cl 6(3) of the Agreement, and therefore cl 43 of the Award did not apply. I do not accept that contention. Clause 6 of the Agreement does not give the applicant an unfettered and unrestricted right or power to dismiss an employee. It is subject to the Act. Clause 6(9) itself makes the applicant's and the employee's rights and powers subject to "statutory and employment rules, regulations and policies, as published from time to time."

"To the extent that this [discipline] rule applies to a Commission employee, it is subject to any relevant award of the [WAIRC] or any industrial agreement that may be in force".

31 There is no question that the Award is still in force. Even if the purported incorporation of the Award provisions by Schedule A of the Agreement is invalid (because of s 23(3)(d) of the IRA), the Agreement is subject to the Act and the Rules. The Rules expressly adopt the Award disciplinary provisions.

32 There is no "critical distinction", as counsel for the applicant put it, between dismissal with notice and without notice where, as here, it is uncontested that the dismissal was justified by an allegation of misconduct. In Gunton v Richmond-upon-Thames London Borough Council [1981] 1 Ch 448 it was held that the effect of making the contract of employment subject to regulations, which included disciplinary provisions, was that the employee could not lawfully be dismissed on a disciplinary ground until the procedure prescribed by the regulations been carried out: 462B-C, 472A-B, 473H-474A. See also Vine v National Dock Labour Board [1957] AC 488; Wall, supra; Ex Parte Haran, supra.

Are the procedures in cl 43 preconditional to dismissal?

33 The applicant contended that, even if regard must be had to the Award provisions, the applicant can dismiss a worker for cause pursuant to cl 42 without following the procedures in cl 43. This was said to be because cl 43 relates to disciplinary action falling short of dismissal. It was said that cl 42 independently empowered a head of branch to take disciplinary action against any worker, including dismissal, subject only to the requirement that "notification to a worker of any such action shall be in writing, and shall state the reasons for same being taken." Counsel said this was not unfair because the Act preserves the right of appeal under s 77, and s 83 provides a range of remedies, including reinstatement, which might be ordered after the merits of his appeal had been accepted.

34 In my opinion, it is incorrect to say that a charge against an employee, which might result from misconduct less serious than misconduct sufficient to justify dismissal, would require a particular set of procedural steps for reporting, charging, hearing and taking action against a worker, whereas the more drastic step of dismissing a worker for cause would not. The contention that the urged construction of the two clauses is not unfair, because there are appeal provisions, ignores the requirement that due process must be afforded before dismissal. An appeal comes late, by way of redress, and does not, by the mere fact of its availability, make the dismissal itself fair or in accordance with the requirements of the Act or natural justice. However, a defective dismissal may be remedied by way of appeal: Ridge v Baldwin [1963] UKHL 2; [1964] AC 40 at 79 per Lord Reid. See also Pillai v Singapore City Council [1968] 1 WLR 1278; King v University of Saskatchewan (1969) 6 DLR (3d) 120; Twist v Randwick Municipal Council [1976] HCA 58; (1976) 136 CLR 106 at 119 per Jacobs J; Murray v Greyhound Racing Board of Queensland [1979] Qd R 111; and Calvin v Carr [1979] UKPC 1; [1980] AC 574.

35 In my opinion, the proper construction of the Award is that cl 43 provides for a procedure to be applied as a precondition to the exercise of the power in cl 42 or, for that matter, cl 6(3) of the Agreement. This is apparent from the fact that there is no provision in cl 43 for taking any of the disciplinary measures of fining, suspending, dismissing or otherwise, whereas disciplinary procedures are provided for. Clause 42 provides for the full range of disciplinary measures, including the lesser disciplinary measures of suspension and so on. It was common cause that the applicant did not comply with the procedures set out in cl 43. It follows that the dismissal was unlawful.

Does failure to comply with procedural requirements mean the dismissal is null and void ab initio or merely voidable?

36 The applicant contended that, even if cl 43 of the Award did apply and was breached, the result was simply a breach of contract and a wrongful dismissal, but the dismissal is not null and void. It was submitted that Mr Chance was able to argue before the Appeal Board that he was unfairly dismissed and seek reinstatement. If Mr Chance argued that the dismissal was unfair for procedural reasons, this had to be determined together with a consideration of the substantive issues of the case. This contention was the basis of ground (3) and "the gist of the application", as counsel put it. In my opinion, the contention correctly states the law in respect of the common law contractual relationship of master and servant: Byrne v Australian Airlines [1995] HCA 24; (1995) 185 CLR 410.

37 The present case is not concerned with a simple master and servant relationship the subject of a contract governed by the common law. It is one subject to a statutory regime under the Act which deals, inter alia, with disciplinary matters. In these circumstances, different considerations arise where the contract is governed by statutory provisions. In Byrne, supra, at 420 Brennan CJ, Dawson and Toohey JJ said:

"No doubt there are terms which are incorporated by statute in contracts of a particular kind so that the ordinary remedies for breach of contract are available in relation to them [eg, the Sale of Goods Act]. And apart from statute, a term may be implied by law as an incident of a particular class of contract [see Lister v Romford Ice & Cold Storage Co Ltd [1956] UKHL 6; [1957] AC 555 at 576; Liverpool City Authority v Irwin [1976] UKHL 1; [1977] AC 239; Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; (1982) 149 CLR 337 at 345-346], but we do not understand the appellants to be submitting that any such implication arises here. They rely upon the statutory force given to the award and say that, because the relationship between the parties is contractual, the provisions of the award - or at least some of them including cl 11(a) in this case - become terms of the contract enforceable by the use of contractual remedies as well as the remedies provided by statute.

A right to the payment of award rates is imported by statute into the employment relationship, which is contractual in origin, and, express promise apart, it is only in that sense that it can be said that award rates are imported into the contract of employment. The award regulates what would otherwise be governed by the contract. But award rates are imported as a statutory right imposing a statutory obligation to pay them. The importation of the statutory right into the employment relationship does not change the character of the right. As Latham CJ points out in his judgment in Amalgamated Collieries of WA Ltd v True [(1938) [1938] HCA 19; 59 CLR 417 at 423], the legal relations between the parties are in that situation determined in part by the contract and in part by the award. And as the judgment of the Privy Council in that case suggests, a provision in an award may also be made a term of the contract by agreement between the parties, but that is only to emphasise the distinction between an obligation imported by statute and one arising by agreement."

38 As will be seen, the differentiating feature in Byrne from the present case is that the employer in Byrne was not a statutory body.

39 A decision made or an action taken by a statutory body in breach of essential requirements of due process or in absence of jurisdiction is invalid and void. In Balmain Association Inc v Planning Administrator for the Leichhardt Council (1991) 25 NSWLR 615, Kirby P, Priestley and Handley JJA at 637 said:

"The High Court has said repeatedly that a statutory power to affect rights, privileges and legitimate expectations must be exercised in accordance with the common law requirements of natural justice and procedural fairness unless Parliament has clearly indicated to the contrary: see, eg, Haoucher v Minister of State for Immigration and Ethnic Affairs [1990] HCA 22; (1990) 169 CLR 648 at 651-52, 678-79... Something more than the repeal of earlier provisions for notice and a hearing is necessary to exclude the ordinary requirements of procedural fairness."

40 The principle to be extracted from the cases is that where, as here, a body or an employer is vested by statute with a jurisdiction of disciplinary action, a quasi-judicial function is vested which must be exercised in accordance with the statutory procedures and in compliance with the principles of natural justice. Obviously the former often embody the latter. To the extent that these requirements precondition the jurisdiction and are not complied with, the action is ultra vires and thus invalid or void ab initio: Ridge v Baldwin [1963] UKHL 2; [1964] AC 40, per Lord Reid at 66, 68, 72-73, 79 - 80; per Lord Morris of Borth-y-Gest at 113 - 114, 117, 121, 122 - 123, Lord Hodson at 132, 135 - 136, and Lord Devlin at 139; cf Lord Evershed at 86, 91 - 92 and Lord Devlin at 138, 140.

41 Thus, in Ridge v Baldwin the plaintiff chief constable was entitled to a declaration that his dismissal was a nullity. The employer had failed to comply with the statutory regime for disciplinary action provided for in the Municipal Corporations Act 1882 (Eng) and the Police Act 1915 (Eng) and regulations. In Howes v Gosford Shire Council (1961) 78 WN (NSW) 981 it was held that a challenge to the validity of a local council's decision to terminate one of its servants did not arise merely out of the contractual relationship, but also involves a claim that the council acted ultra vires its statutory power and so could attract a declaration.

42 There are some differences in the cases. In Williamson v The Commonwealth [1907] HCA 60; (1907) 5 CLR 174 the plaintiff claimed damages against the Commonwealth for wrongful dismissal from his office as Postmaster, and alternatively, a declaration that he remained in or was entitled to be reinstated to his office. He had initially been suspended on 30 January 1907 and criminally charged due to a shortfall in the Post Office books. He was discharged in the Court of Petty Sessions. He was charged a second time and found not guilty in the Court of General Sessions. The employer then gave the plaintiff notice on 2 May 1907 of charges pursuant to s 46 of the Commonwealth Public Service Act 1902 of improper conduct in relation to the money shortfall, negligence or carelessness in discharging his duties and using intoxicating beverages to excess. The plaintiff denied the charges and was then further suspended from duty. A Board of Inquiry found all the charges proved and dismissed the plaintiff.

43 Higgins J concluded that the power to dismiss the plaintiff Postmaster had to be exercised strictly in accordance with procedures under the Commonwealth Public Service Act. His Honour said at 180 - 181:

"In the present case, the order of dismissal is based on three charges in the letter of 2nd May 1907. But the plaintiff was not suspended for these three charges. He had been suspended on 30th January 1907 on a certain charge - one only; and the suspension was wrongly continued till 2nd May. I say wrongly, because the section contemplates that the suspension shall only be temporary, and that a copy of the charge should be 'forthwith' furnished to the officer; and no such copy was furnished; and the officer was not asked to admit or deny this first charge, but was prosecuted before the Courts on two abortive informations... Even if the loose words of the ... letter of 30th January can be treated as stating a definite charge (which I doubt), the plaintiff was not asked to admit or deny or to explain, and the necessary consequential steps were not taken."

44 Because the suspension from duty of an officer, on the charges for which he was subsequently dismissed, was required by the Public Service Act as a condition precedent to the dismissal, and that requirement was not complied with, the dismissal was wrongful. It was also wrongful because the officer was not properly charged and asked to admit or deny. Higgins J said at 180:

"the whole machinery [of disciplinary action] is made to hinge on an initial suspension of the officer.... [U]nless there be a suspension, the rest of the machinery prescribed for removal is not applicable... In short, if there be no suspension for the charges 'on which he is suspended'; and unless he be furnished with such a copy, there is no power to appoint a Board of Inquiry; and if there is no valid Board of Inquiry, the power of the Governor-General to dismiss does not arise." [my italics]

45 Higgins J, however, held at 185 that the dismissal being wrongful did not entitle the employee to a declaration that he remained in service:

"I know of no authority or ground for any such order or declaration; and I certainly shall not declare the plaintiff to be still in the Government Service when, according to his own allegation as well as my finding, he has been put out of the service and remains out."

46 His Honour said at 185 - 186 that the wrongfully dismissed employee was entitled to damages only.

47 In my opinion, the relief was limited by virtue of the nature of the plaintiff's claim, which was for damages and/or a declaration that the plaintiff remained in office. The latter claim was not the subject of any argument, nor were any authorities referred to. Higgins J concluded at 185 that a declaration that Mr Williamson was still in service was not available because:

"... under the ordinary law, a servant dismissed has an option between two remedies.... One ... on the contract for the wrongful dismissal; the other is to treat the contract as rescinded, and to sue for his actual service."

48 By "ordinary law", Higgins J was no doubt referring to the common law of master and servant. There was no argument based on administrative law. Williamson v The Commonwealth preceded Ridge v Baldwin by some 60 years. However, the result of Williamson may well have been the same today because Mr Williamson accepted the repudiation of the contract when he sued for damages. Consequently, he was not able to have it the other way by contending that the contract remained on foot, and seeking specific performance. Williamson left open the possibility that an unlawful or wrongful dismissal might be void. His Honour said at 180:

"... and unless he be furnished with such a copy, there is no power to appoint a Board of Inquiry; and if there is no valid Board of Inquiry, the power of the Governor-General to dismiss does not arise."

49 In Lucy v The Commonwealth [1923] HCA 32; (1923) 33 CLR 229 questions were referred to the High Court about the remedies available to the plaintiff, who contended he was unlawfully dismissed from the Commonwealth Postal Department by reason of his age. As to whether the plaintiff was entitled to a declaration that he was still in service, Knox CJ said at 237-238 that this:

"... would in effect, if not in form, amount to an order for specific performance of the contract of service or an injunction against committing a breach thereof, but it is well settled that, except for the purpose of preventing the breach or intended breach of a negative stipulation in the contract, such an order will not be made. It was suggested that the effect of sec 84 of the Constitution was to deprive the Executive Government of the power to remove the plaintiff from the Public Service, but in my opinion, that section did no more than introduce into the plaintiff's contract of service, certain terms, including a term that he should not be removed or dismissed from the service except for some cause specified in the State Acts."

50 Higgins J at 249 agreed, saying s 84 of the Constitution did not forbid the removal of an officer, nor make it illegal and inoperative. Starke J at 253 - 254 agreed. Knox CJ also said at 238:

"The position of the plaintiff in respect of his claim in this action is similar to that occupied by the servant of a private person who has been in fact dismissed from his service before the expiration of the period specified in the contract, and the remedy to which he is entitled is the same, namely, damages.... Moreover, it is difficult to see how the plaintiff can now be heard to allege that he is still in the Commonwealth Public Service, having regard to the form of his pleading and to his conduct in accepting from the Commonwealth payments made by reason only of his retirement... and engaging in employment [elsewhere]."

See also Isaacs J at 245 and Starke J at 253 - 254.

51 The following factors distinguish Lucy from the present case:

(1) no dismissal procedures were provided by s 84 Constitution or otherwise;

(2) the process of dismissal was complete, and the relationship severed; and

(3) Mr Lucy had accepted the repudiation by accepting the pension, obtaining work elsewhere and seeking damages.

52 The law on the question whether specific performance is available in respect of a contract of service, as stated by Higgins J in Williamson and by Knox CJ in Lucy, has evolved since those decisions. More recent authorities in England (eg. Hill v CA Parsons & Co Ltd [1972] Ch 305; Gunton per Buckley LJ: see below) and in Australia (eg. Turner v Australasian Coal and Shale Employees' Federation [1984] FCA 275; (1984) 55 ALR 635 which followed Hill v CA Parsons; Bostik (Australia) Pty Ltd v Gorgevski [1992] FCA 209; (1992) 41 IR 452 per Gray J; and Lane v Reverend Father Nazario Fasciale (1991) 5 VIR 33) have recognised the appropriateness of orders for specific performance in limited and particular employment circumstances. One example is where the relationship and confidence between the employer and employee has not been destroyed. This evolution in the law would not have produced a different result in Lucy because of the three factors listed above as distinguishing features, nor in Williamson because of factors similar to the second and third factors referred to above.

53 It was contended on behalf of the applicant that Byrne v Australian Airlines [1995] HCA 24; (1995) 185 CLR 410 denies the possibility of a finding or declaration that a wrongful dismissal is null and void. In Byrne two baggage handlers were summarily dismissed after allegedly being caught on video pilfering from luggage. They applied to the Federal Court for orders pursuant to s 178 and s 356 of the Industrial Relations Act 1988 (Cth) for a penalty for breach of the Award and for common law damages for breach of contract and statutory duty. They alleged that the dismissals breached cl 11 of the Transport Workers (Airlines) Award 1988, which prohibited harsh, unjust or unreasonable dismissal. It was argued that the breach was the airline's failure to observe the requirements of procedural fairness. The High Court was primarily concerned with questions whether an award clause was implied into the contract of employment and thus gave rise to an action for damages in the event of its breach, and whether a lack of procedural fairness alone could ground a claim for unfair dismissal.

54 The High Court held that, first, the Award clause did not ground an action for damages for breach of contract in the event of its breach because it was not imported (per Brennan CJ, Dawson and Toohey JJ, 420-421) or implied into the contract of employment. It was not an implied term of the contract in accordance with BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 per Lord Simon: see per Brennan CJ, Dawson and Toohey JJ at 422 - 423; and per McHugh and Gummow JJ at 440 - 457. The obligation to observe it arose by statute, not the intention of the parties. Nor was it custom: per Brennan CJ, Dawson and Toohey JJ at 423 - 424; and per McHugh and Gummow JJ at 440 - 441). There was no intention evinced in the Act to benefit employees by conferring on them a right of action at common law for breach of an obligation under an award. The very specific provisions dealing with penalties gave rise to the contrary implication: per Brennan CJ, Dawson and Toohey JJ at 424 - 425; and per McHugh and Gummow JJ at 457 - 462. By contrast, in the present case, Mr Chance was not seeking damages, nor was he arguing that the Award clauses were implied into his employment contract.

55 Secondly, it was held that the dismissals, even if in breach of the award, were not void, but ended the employment relationship, and so could not be regarded as repudiation giving rise, on acceptance, to a right of action for damages: at 426 - 429 per Brennan CJ, Dawson and Toohey JJ; and at 453 - 457 per McHugh and Gummow JJ. By contrast, the present employment relationship is not that of a simple master and servant, but rather one subject to a statutory regime.

56 Thirdly, it was held that the question whether the award had been breached could not be decided without considering the substantive issue whether there was sufficient evidence to justify dismissal: per Brennan CJ, Dawson and Toohey JJ at 430; and McHugh and Gummow JJ at 462 - 468. By contrast, the question in the present case is one of jurisdiction to dismiss, not the fairness of the dismissal as such.

57 As to the question whether a dismissal can be held to be void, in both joint judgments in Byrne their Honours discuss Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435. In that case, a majority of the High Court (Rich, Dixon, McTiernan and Williams JJ, Latham CJ and Starke J dissenting) held a dismissal invalid because the employer had not complied with a war-time regulation which required written permission be obtained from the Director General of Man Power prior to any dismissal. Dixon J at 471 reluctantly found himself bound by two English authorities concerning similar regulations:

"I am afraid that, but for the guidance of authority, I should have regarded the regulations as attempting to prevent the unpermitted discharge of a man from employment only by penalising it and not as making the relationship legally infrangible."

58 In Byrne Brennan CJ, Dawson and Toohey JJ referred to this passage and said:

"In speaking of 'the relationship', Dixon J had in mind the relationship of employer and employee as distinct from the contract of employment. It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and the minority in Automatic Fire Sprinklers Pty Ltd v Watson. As Latham CJ said at 454:

'An employer terminates the employment of a servant when he dismisses him, though... such a dismissal does not put an end to the contract between the parties. An argument that a dismissal because wrongful was a nullity was raised and rejected in both Williamson's Case [supra] and Lucy's Case [(1923) [1923] HCA 32; 33 CLR 229 at 237,248, 249, 252, 253]'."

59 Their Honours went on to quote the following passage in the judgment of Dixon J in Fire Sprinklers at 469:

"there is nothing in the general law preventing the wrongful dismissal of a servant operating to discharge him from service, notwithstanding that he declines to accept the dismissal as absolving him from further performance but keeps the contract open and remains ready and willing to serve."

"In England, the position was for a time not so clear, although the view taken in Australia appears now to be accepted there."

61 Assuming the minority view in Fire Sprinklers better represents the law, as Brennan CJ, Dawson and Toohey JJ suggested in Byrne at 428, that case is distinguishable from the present: The war-time regulations did not introduce a disciplinary regime into the employment relationship, but simply a precondition to dismissal, the failure of which gave rise to a penalty payable by the employer to the Commonwealth. The intent of the regulations was to regulate certain employment conditions as a matter of war-time public policy. The intent was not to benefit the individual employee: see also Ridge v Baldwin per Lord Reid at 73. So the logic and force of the reasons of the minority in Fire Sprinklers can be accepted and distinguished from the situation where, as here, the intention of the statutory regime is to regulate the relationship between the employer and employee.

62 In Byrne at 443 McHugh and Gummow JJ alluded to this all important distinction between the circumstances in Byrne and those in the present case:

"In Pillai v Singapore City Council [[1968] 1 WLR 1278 at 1284 [footnote: See also Heatley v Tasmanian Racing and Gaming Commission [1977] HCA 39; (1977) 137 CLR 487 at 511], their Lordships of the Judicial Committee said that the relationship of master and servant 'gives rise to no application of the principle of audi alteram partem on dismissal'. They referred [at 1282] to what had been said by Lord Reid in Ridge v Baldwin [supra, at 65]. There, after pointing out that dismissal of an employee might not be warranted by the terms of the particular contract, Lord Reid continued:

'[T]he question in a pure case of master and servant does not at all depend on whether the master has heard the servant in his own defence: it depends on whether the facts emerging at the trial prove the breach of contract.'

Ridge v Baldwin is, of course, a classic authority on the subject of procedural fairness in administrative law. But the decision was that the chief constable was an office-holder under s 191 of the Municipal Corporations Act 1882 (Eng) and the statutory power of dismissal carried with it an obligation of procedural fairness [at 79, 122-123, 132]...

It is true that, in this country, what one might call the overall relationship between employer and employee includes the effect which by statute must be given to a relevant award made under the federal or a State system."

63 In Byrne at 428 Brennan CJ, Dawson and Toohey JJ referred to Gunton and Automatic Fire Sprinklers as authority for the proposition that, even if a wrongly dismissed employee chooses to keep the contract of employment on foot, he or she cannot claim any remuneration in respect of the period after the wrongful dismissal. This is because the right to receive remuneration for services is dependent upon the services being rendered. In Gunton, the plaintiff was a college registrar employed under a contract of service terminable with one month's notice. The contract was subject to regulations which prescribed procedures for dismissal on disciplinary grounds. It was held that the plaintiff could not be lawfully terminated on disciplinary grounds until the procedures prescribed had been carried out, and the dismissal was accordingly wrongful: see at 462B-C per Buckley LJ; and at 472A-B, 473G-474A per Brightman LJ. Buckley LJ said at 470:

"... the effect of the incorporation in the contract of the disciplinary regulations was to entitle the plaintiff not to be dismissed on disciplinary grounds until the disciplinary procedures prescribed ... had been carried out. Some preliminary stages of those procedures were never carried out. Accordingly... the plaintiff was entitled ... when he was excluded from his employment, to insist upon a right not to be dismissed on disciplinary grounds until the disciplinary procedures were recommenced and carried out in due order...."

64 It was also held that an unlawful repudiation of a contract of service which was not accepted by the innocent party did not automatically terminate the contract: see 467D, 468A-D, 469-470 per Buckley LJ; and 475A-B per Brightman LJ.

65 Having arrived at that conclusion, Buckley LJ at 468 set out five reasons why wrongful dismissals are special instances of repudiation. For example, the master will seldom want the servant back; the servant cannot sue for wages as a debt because the right to wages is conditional upon rendering the services; and the servant has a duty to mitigate by seeking another job. Hence, Buckley LJ said at 469, "the court should easily infer that the innocent party has accepted the guilty party's repudiation," whether by reason that they are seeking damages or have another job.

66 In Gunton, the plaintiff was found to have waived the right to a declaration that he remained in service by taking the appeal and seeking damages: per Buckley LJ at 469B; and Brightman LJ at 472B, 474G. This is in clear contrast to the present case where Mr Chance expressly challenged the decision to terminate him as invalid and thus did not waive his right to compliance with the required procedures.

67 This disposes of the argument that because courts are unwilling to grant orders for specific performance of employment contracts, there can be no finding that a dismissal is void.

68 Byrne and Ridge v Baldwin represent different types of case. The principles and findings of the former are only of limited applicability here. In Byrne the dismissed workers were effectively dismissed and excluded from the workplace. They were seeking contractual damages for breach of an award prohibition against unfair dismissal on the basis that the award provision was implied into the contract of employment, and they had not been given a hearing before being terminated. There was no statutory regime governing the employment relationship, apart from the Workplace Relations Act 1996 (Cth) which was of general application, which regime was held to contradict the baggage handlers' argument. And, importantly, there was no contractual or statutory provision for a particular disciplinary procedure to be adopted by the employer as a precondition to exercising the right of dismissal.

69 The facts and relevant circumstances of the present case are more in common with Ridge v Baldwin. In both cases the employment relationship was regulated by a statute which dealt with disciplinary matters. In this case, Mr Chance challenged the validity of his dismissal before the Appeal Board on the basis of the applicant's failure to comply with preconditions to such a dismissal. He made a jurisdictional challenge to the decision to dismiss him. He was not before a court seeking a declaration or damages. His dismissal was not complete, or the relationship ended: see G J McCarry, Aspects of Public Sector Employment Law, 1988 ("Aspects") at 116. McCarry says in Aspects at 145:

"Where an employing authority's decision is subject to appeal or executive approval it will not have the effect of immediately terminating an officer's appointment".

70 Even if it could not be said that Gunton represents the law in Australia and that an invalid exercise of statutory power renders a termination of employment void, in this case the Board clearly had power under s 83 of the Act to "confirm, modify or reverse any decision appealed against." The Macquarie Concise Dictionary (2nd ed) defines the verb "reverse" as:

"to turn in the opposite position; transpose ... to revoke or annul (a decree, judgment, etc.) ..."

71 In my opinion, the Chairman correctly found that cl 43 applied. Clause 43(3) had not been complied with by the applicant in terminating Mr Chance because, first, the "foreperson" had not notified the Head of Branch or Mr Chance when reporting him. In that event cl 43(3) provides that, "such report shall be null and void". Further, the second respondent had not been supplied with a copy of the "charge" or any report on which it was based. In these circumstances, it follows that the Appeal Board was bound to find the dismissal invalid and void, uphold the applicant's appeal and reverse the decision.

72 Although it may be unnecessary to say so, I also consider that the failure to afford natural justice by the customary public sector disciplinary practice contemplated by the Rules under the Act of reporting, taking an admission or denial, charging, inquiring and hearing the employee before dismissing, obliged the Appeal Board to find the dismissal null and void and reverse the decision.

Ground (3): Is the Appeal Board bound to inquire into the circumstances and merits of appeal?

73 The third ground of the application was that the Appeal Board erred in failing to make inquiries into the circumstances of the dismissal. Counsel for Mr Chance said this was the gist of the application, namely that the Appeal Board should not have disposed of the matter having only considered the procedural question.

74 The question of the propriety and validity of the Appeal Board's decision is to be determined by asking whether the applicant's failure to follow the steps required by clause 43 or the principles of natural justice amounted to a mere procedural defect in an otherwise proper exercise of jurisdiction, or a fatal flouting of a jurisdictional or statutory precondition which rendered the decision to terminate invalid. Arguably, if it were a mere defect in an otherwise proper exercise of its jurisdiction under s 73 of the Act, the Board would be required to determine whether to reverse the decision by having regard to both the substantive and procedural issues, as held in Byrne. See also Lord Evershed in Ridge v Baldwin at 86, 91 - 92. On the other hand, Williamson, supra, is authority for the proposition that there needs to be strict compliance with statutory procedural requirements, and the other authorities demonstrate a consistent principle.

75 As already stated, I consider that the failure to comply with cl 43 obliged the Appeal Board to find that the report was void and all that followed from it was invalid, including the decision to dismiss. Alternatively, it was open to the Appeal Board (on the authority of Ridge v Baldwin or Haoucher, supra) to find that the essential requirements of natural justice and due process had been ignored by the applicant and, therefore, the decision to terminate was invalid.

76 Even if it were the function of the Appeal Board to determine the unfairness of a dismissal, as a completed action, it was open to the Board to be satisfied that the lack of due process in this instance was of itself sufficient to invalidate the decision, either because the failure to comply meant that the applicant did not have jurisdiction to dismiss, or because the lack of due process itself rendered the dismissal unfair on the facts before this Court. The jurisdictional question did not involve any inquiry into the merits.

77 Although this conclusion suffices to dispose of ground (3), it is necessary to say that, in my opinion, the role of the Appeal Board is subtlely but relevantly different from an industrial relations commission or a court seized of a contractual or industrial law application for a remedy for unfair dismissal. It is apparent from the wording of the Act and the Form A appeal notification that the Appeal Board does not deal with a dismissal per se, but a decision to dismiss. It assesses not the fairness but the correctness of the finding of guilt and the appropriateness of the decision to dismiss. In these circumstances it is clear that the disciplinary procedure is not completed until the appeal process is completed and "confirmed": see s 83 and Aspects at 145. In these circumstances it is sufficient if the Appeal Board is satisfied that the relevant procedures have been disregarded and the decision to dismiss has been made without authority. That was the position in this case. Therefore ground (3) has not been made out.

Ground (4): Is the applicant obliged to conduct an inquiry before a dismissal?

78 Ground (4) of the application was that the Appeal Board was wrong in holding the applicant was obliged to conduct a departmental inquiry either to give effect to the requirements of procedural fairness or pursuant to s 82. It was contended in the first particular that s 82(1) of the Act is merely facilitative and evidentiary, and does not cast any duty upon the applicant to undertake any departmental inquiry. Nor is Mr Chance's right to appeal dependant upon an inquiry having been conducted. Secondly, it was contended that the requirements of procedural fairness depend on the circumstances and that it cannot be said a departmental inquiry was required without considering all the circumstances of the dismissal.

79 Although s 82 may only be a facilitative and evidentiary provision, it does presume that a departmental inquiry has been held. Due process and natural justice are required to be complied with, and as a matter of practice this means that the employee must be afforded an inquiry if he or she denies the charge. In this respect, the following principles applicable to dismissal for misconduct in the public sector emerge from the cases to which I have referred and in McCarry, Aspects, Ch 6; and Macken, McCarry & Sappideen, The Law of Employment (4th ed) 1997 (esp 172 - 208; 293 - 295).

(1) Unless the common law right of dismissal at pleasure is expressly preserved, observance of the principles of natural justice and due process is required (McCarry: Aspects, 144 - 145).

"the acts, matters or things alleged as the foundation of the charge.... In particular, it should be regarded as insufficient and impermissible to allege, and therefore to facilitate the adduction of evidence of, more than one instance of the commission of the same offence because each would indifferently fit the charge laid".

R v Little; Ex parte Fong [1983] VicRp 20; [1983] 1 VR 237 at 247 and 252.

(4) The employee must be given the opportunity of admitting or denying the charge. This is not fulfilled by requiring an explanation for behaviour already determined, without hearing, to be misconduct.

(5) If the employee denies the charge, it is mandatory to hold an inquiry, although it need not be a formal one: eg. R v Public Service Board; Ex parte White [1987] 1 Qd 262.

(6) The charge must be found proved to the satisfaction of the inquirer, and although it is often said these are quasi-judicial proceedings, the charge only need be proved on the balance of probabilities. Although no formal rules of evidence are applied, the principles of natural justice and due process must be observed, not only regarding guilt or innocence but also regarding the appropriate penalty: Bridges v Commonwealth [1907] HCA 20; (1907) 4 CLR 1195 at 1205 per Griffiths CJ, 1212 per Barton J, and 1217 per O'Connor J.

(7) Statutory or regulatory requirements for these inquiries may impose mandatory procedural requirements, depending on their scope, form and purpose, and if so, failure to adhere to them will render any purported exercise of the power invalid: Gunton, supra; Williamson v Commonwealth, supra; Ridge v Baldwin, supra; Howes v Gosford Shire Council, supra; Pemberton v A-G (Tas) [1978] Tas SR 1 at 9, 11, and Gratton v Cessnock Council (1964) 81 WN (Pt 1) (NSW) 346.

(8) The question of the appropriateness of the punishment, if it arises, is whether the kind and degree of misconduct justifies summary dismissal and this depends on the nature and environment of the employment relationship. "[T]here is no fixed rule of law defining the degree of misconduct which will justify dismissal": Clouston & Co v Corry [1906] AC 122 at 129 per Lord James. Dixon and McTiernan JJ said in Blyth Chemicals v Bushnell [1933] HCA 8; (1933) 49 CLR 66 at 81 - 82:

"Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground for dismissal .... But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence ... It is not sufficient that ground for uneasiness as to its future conduct arises."

In Ex parte Haran, supra, at 18 Negus J said:

"the word 'misconduct' is wide enough to include almost any act or omission which indicates that the employee is not worthy to be trusted to carry out his duties in a reasonably proper manner".

This includes misconduct off duty if it impacts on the employment contract: Wall v Westcott (1982) 1 IR 252 at 256; R v Teachers Appeal Board; Ex parte Bilney (1983) 35 SASR 492 at 496; 6 IR 476, at 478; see also North v Television Corp Ltd (1976) 11 ALR 599 at 609 per Smithers and Evatt JJ who approved Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 2 All ER 285 at 287 - 289 per Lord Evershed MR. It is vital to begin the inquiry by ascertaining what work the employee is required to perform and what is essential to the contract, and also to be satisfied that the breach manifests an intention not to perform the contract in future. See also Privy Council in Jupiter General Insurance Co Ltd v Andeshire Bomanji Shroff [1937] 3 All ER 67 at 73 - 74 per Lord Maugham.

(9) Insulting or objectionable language may constitute misconduct depending on the standards of conduct and language used in every day intercourse, in particular, at that workplace and accounting for the "give and take atmosphere" of the modern workplace: Drury v BHP Refractories Pty Ltd (1995) 62 IR 467 at 473; Australian Labour Law Reporter, paras 1-705 to 1-725, esp 1-709, 1-717, which refers to BHP v SUA (1975) AILR par 255; Wilson v Racher (1974) ICR 428; FLAIEU (NSW) v Ettalong Beach War Memorial Club Ltd (1977) AILR par 259; John Lysaght (Australia) Pty Ltd v Federated Ironworkers Association (1973) 15 AILR par 323; Farley v Lums (1917) 19 WALR 117; Pepper v Webb [1969] 1 WLR 514.

(10) The charged employee, if found guilty, is entitled to be heard on the appropriate penalty. McCarry, Aspects at 142 says:

"A disciplining body needs to keep in mind the distinction between the finding of guilt and the imposition of the penalty. The worker will be entitled to a proper hearing on both aspects."

See Malone v Marr [1981] 2 NSWLR 894; Hall v New South Wales Trotting Club Ltd [1977] 1 NSWLR 378; Calvin v Carr [1979] 1 NSWLR 1; Hercules v Brennan (1983) 25 AILR 100.

(11) If found guilty, the employee has a right of appeal.

80 In my opinion, the circumstances of this case were such that an inquiry was required both on grounds of procedural fairness and to comply with the disciplinary regime under the Act and Rules. Therefore, ground (4) fails.

Grounds (5) and (6): s 23(3)(d) of the IRA and estoppel

81 Although it appears that s 23(3)(d) of the IRA has the effect of preventing the adoption of Award disciplinary clauses by registering an industrial agreement, in my view, the disciplinary clauses of the Award are adopted by the Rules attached to the Act and are therefore binding on the parties. Therefore it is not necessary to decide whether there is an estoppel known to law of the nature referred to by the Chairman in his reasons.

82 The Act and the Rules attached to it provide a statutory regime to govern the employment relationship between the applicant and Mr Chance. Clause 43 of the Award applied to that relationship by virtue of the adoption of it in r 3(6). The applicant did not comply with cl 43 in dismissing Mr Chance.

83 Even absent that clause, the applicant was entitled to natural justice and due process before a decision to dismiss him could be made. The usual practice in the public sector is that an employee is reported and given the opportunity of admitting or denying a written charge expressed with sufficient particulars. The employee is given the opportunity of being heard at an inquiry both on the question of guilt and on the question of the appropriate penalty. A decision to dismiss must be based on reasonable grounds established by an inquiry which affords due process; be supported by reasons given in writing; and is subject to any appeal rights of the employee. The dismissal does not become complete until it is confirmed on appeal, if there is one, and if no appeal, when the appeal period expires.

84 The applicant's failure to comply with the requirements of cl 43, and/or the requirements of natural justice, was more than a mere procedural defect in an otherwise proper exercise of jurisdiction. Strict compliance with the statutory regime was required. In this case, Mr Chance was not informed that he had been reported; not given a copy of that report; not presented with a charge or charges stated with sufficient particulars; not asked whether he admitted or denied any misconduct; not given a hearing or afforded an inquiry at which he was given the opportunity of addressing all the matters which the applicant took into account in making its decision; and not given the opportunity of being heard as to the appropriate penalty, if in fact the charge of misconduct was proven.

85 It is also fatal to the applicant that, first, Mr Keady, the Area Manager and the person who requested an explanation from Mr Chance by letter dated 18 February 1998, wrote to the General Manager on 20 February 1998 recommending Mr Chance's dismissal. This was before Mr Keady wrote to Mr Chance summoning him to a meeting "to explain [his] actions". In other words, Mr Keady, who was the inquirer into the charge or allegation of misconduct, had made up his mind before hearing Mr Chance. Secondly, Mr Keady in both his letters recommending dismissal dated 20 and 28 February 1998 referred to other allegations of misconduct in vague and general terms like "sabotage verbally", "failing to comply with instructions" and "being uncooperative", to justify his recommendation that Mr Chance be terminated. But these contained no particulars. Mr Chance was not given the opportunity of addressing these matters. Thirdly, no adequate inquiry was held at which Mr Chance had the opportunity of responding to the reports relied on by Mr Keady, or at which the contrary opinion of the Employee Relations Co-ordinator that Mr Chance should not be dismissed, was adduced.

86 Because the applicant did not comply with natural justice and statutory preconditions to dismissing Mr Chance as an employee, its jurisdiction to dismiss did not arise, and the wrongful dismissal is a nullity. This is not an ordinary case of master and servant, but an employment relationship subject to a statutory regime, as in Ridge v Baldwin. Even if that be wrong, or the present case could be distinguished on the facts from Ridge v Baldwin, or if Williamson and Lucy were binding authority negating the decision in Gunton that specific performance is available in certain employment contracts, nevertheless the Board had statutory power under s 83 of the Act to "reverse" the decision to dismiss. Further, arguments based on Byrne that a completed dismissal cannot be the subject of a declaration overlook the fact that in the circumstances of the present case, a dismissal is not complete under the statutory regime until the appeal process is finished.

87 The Appeal Board was not required to consider the substantive issues of Mr Chance's appeal once it was satisfied that the applicant had acted in disregard of procedural preconditions to the exercise of its power or jurisdiction to dismiss, or had failed to comply with the essential requirements of natural justice and due process, which failures in themselves were sufficient to invalidate the dismissal. The decision of the Appeal Board was correct.

88 For these reasons I would discharge the order nisi.

89 PIDGEON J: I would discharge the order nisi. I do so for the reasons published by the Chief Justice with which reasons I agree.

90 WALLWORK J: I agree with the reasons for judgment of Malcolm CJ. There is nothing I wish to add to those reasons.