CASES: Bengtsson v Australian Tax Office

ssification of the office held by him and, if there is a salary range applicable to the office so specified, determining that he be paid a specified salary within that range; or (d) direct that the officer be dismissed from the Service. (4) Where the relevant Secretary gives a direction of a kind referred to in paragraph (1)(c) or (d) in respect of an officer, he shall furnish to the officer particulars of his reasons for giving that direction. (5) A direction under this section in respect of an officer takes effect: (a) if the officer has no right of appeal against the direction - on the day on which the officer is furnished with particulars of the reasons for the giving of the direction; or (b) if the officer has a right of appeal against the direction and appeals - on the lapsing or withdrawal of the appeal or on a Disciplinary Appeal Committee confirming the direction, whichever happens first; or (c) in any other case - at the end of the period within which the officer may appeal against the direction to a Disciplinary Appeal Committee. (6) The fact that an officer is, or is not, counselled, or that other action is, or is not, taken against an officer, under this section, in respect of a criminal offence shall not be taken to preclude the Commissioner, a body, a Secretary or another person, from having regard to the conviction or finding, to the nature and seriousness of the offence and to the circumstances in which the offence was committed in the course of exercising a power or performing a function conferred on it or him by this Act or by the regulations if those matters are relevant to the manner in which the power should be exercised or function should be performed. (7) .... 63D. (1) ... (2) An officer may appeal to a Disciplinary Appeal Committee against a decision made in respect of him: (a) if the decision relates to a charge of misconduct - on either or both of the following grounds: (i) that the charge should have been dismissed; or (ii) that the action directed to be taken in relation to the charge is unduly severe; or (b) in any other case - on the ground that the action directed to be taken in respect of him is unduly severe. (3) A Disciplinary Appeal Committee shall hear each appeal submitted to it under subsection (2) and may confirm, vary or set aside the decision against which the appeal is made. (4) Where a decision in respect of an officer is varied by a Disciplinary Appeal Committee in such a manner as to direct the taking of action of a kind referred to in paragraph 62(6)(a) or 63(1)(c), the direction takes effect in respect of the officer immediately it has been given. (6) Where an officer appeals to a Disciplinary Appeal Committee under subsection (2) against a decision on the ground that the action directed to be taken in respect of him is unduly severe, the Committee shall take into consideration any evidence given on the hearing of the appeal: (a) of matters relating to the previous employment history and general character of the appellant; (b) if the officer was, under section 63B, suspended without salary in respect of the misconduct or offence to which the decision relates - of any loss of earnings arising from that suspension; and (c) if the officer is to be transferred to another office - of the expenses that will be incurred by the officer in connexion with that transfer. (7) A Disciplinary Appeal Committee shall give reasons, in writing, for its decision on an appeal under this section." By Notice of Motion filed by the respondent on 30 August 1994 the respondent sought to summarily dismiss the application relying on the jurisdictional argument that, as a member of the Australian Public Service, the applicant had available to her an adequate alternative remedy (see section 170EB of the Act). This argument was dealt with and disposed of by Judicial Registrar Parkinson in her decision in Bengtsson v Australian Tax Office (1994) 57 IR 457. The subsequent review of the Judicial Registrar's decision upholding the jurisdiction of this Court to proceed to hear and determine the claim alleging unlawful termination, was aborted by the respondent following the handing down of the decision of the Full Court of the Industrial Relations Court of Australia in Maggs v Comptroller General of Customs 128 ALR 586; finding as it did that Division 3 Part VIA of the Act confers a right of action in this Court on Commonwealth public servants dismissed pursuant to the Public Service Act. Maggs case is also authority for the proposition that the date of termination is the date when the direction to dismiss takes effect. The respondent defended the proceeding on all issues asserting the existence of a valid reason, the affording of natural justice in the sense that the applicant had an adequate opportunity to be heard and respond to the allegations of misconduct alleged against her and also denying that there was any objective basis for saying that the termination was harsh, unjust or unreasonable. Before any evidence was called the applicant, through her counsel Mr Staindl, informed the Court that there would be no submission by the applicant that she was not afforded procedural fairness in this case. Notwithstanding that limited concession early in the piece, in his final submissions Mr Staindl further informed the Court that no submission would be made on any breach of section 170DE(1) of the Act, confining his submissions to section 170DE(2) of the Act. That there was a termination of the applicant's employment at the initiative of the respondent was not a matter of contest. Because the applicant originally contended that there had been a contravention of section 170DE(1) of the Act, the respondent had the carriage of the proceeding in first being required to establish on the balance of probabilities that there was a sound, defensible and well-founded reason for termination of the this woman's seven or so years of employment. Following the concessions made in the applicant's submissions and having regard to the evidence called, I am satisfied that the respondent discharged the onus of proof it carries under this section of the Act. WITNESSES Ten witnesses gave evidence to the Court. The three called by the respondent were: (a) Jacqueline Hunter Petrie (Petrie), a charge nurse and neighbour of the applicant at Nyora; (b) Gloria Betty Di-Irio, an employee of the Australian Tax Office who was a team leader and in charge of the general enquiries counter at the respondent's Dandenong office from about 1993 onwards; (c) Evan James Davies, employed by the Australian Tax Office and placed at the Dandenong office from 1988 onwards. He is now working as the manager of the student education unit at that office, having previously been manager of personnel counter services training team. The respondent also sought and was granted leave to call two further witnesses to prove the transcript of the proceedings before the Disciplinary Appeal Committee, which transcript was subsequently tendered in evidence (Exhibit R8). On her part the applicant gave evidence and called four further witnesses: (a) Dorothy Firmin (Firmin), an ASO Class 5 employed by the Australian Tax Office from 1982 onwards. She was a team leader and part of the enquiries section at Dandenong encountering the applicant at that office from 1988 onwards; (b) Dr Ronald David Francis, a psychologist who saw the applicant and prepared a report on 8 August 1994; and (c) Sarah Thompson Smith, an ASO Class 4 employed the Australian Tax Office for some eight years who met the applicant in late 1990. Smith was nominated as a harassment officer at the Dandenong office; and (d) Ann Marie May, an ASO Class 3 employed by the Australian Tax Office who met the applicant at the Dandenong office in the early 1990s. On 27 January 1994 before a Magistrate in the Magistrates' Court at Moe the applicant pleaded guilty to multiple federal offences, namely: (a) a breach of sub-section 251L(1) of the Income Tax Assessment Act 1936 by demanding a fee when unregistered as a tax agent between 23 September 1992 and 31 October 1993; (b) a breach of sub-section 76D(1) of the Commonwealth Crimes Act 1914 in that she intentionally, without authorisation, accessed a computer on or about 23 March 1993; (c) a breach of sub-section 1347(1) of the Social Security Act 1991 in that she obtained payment of a benefit which was not payable from 1 July 1991 to 12 December 1991; (d) a breach of paragraph 8K(1)(A) of the Taxation Administration Act 1993 in that she made a false statement to a taxation officer on or about 1 March 1993; (e) a breach of paragraph 239(1)(B) of the Social Security Act 1947 in that she obtained payment of benefit which was not payable from 23 November 1990 to 30 June 1991; and (f) a breach of sub-section 1347(a) of the Social Security Act 1991 in that she obtained payment of a benefit which was not payable from 13 December 1991 to 26 April 1993. The applicant was convicted on the abovementioned offences and released on a good behaviour bond with an order for reparation of $12,603 as well as $600 in costs. In February 1994 the applicant was served by the respondent with notices under section 63 of the Public Service Act (see Exhibit "RHS3" to the affidavit of Robyn Helen Stewart sworn on 30 August 1994 and filed in this proceeding). These notices collectively concerned the convictions recorded informing the applicant that, amongst other things, the Delegate of the Secretary to the Australian Tax Office proposed to consider whether she would be justified in taking any disciplinary action against the applicant under sub-section 63(1) of the Public Service Act. The applicant availed herself of the opportunity provided by the legislation and the Delegate to furnish, through her legal counsel Mr O'Grady, a detailed written statement and submission dated 18 February 1994 seeking to ameliorate the consequences of any disciplinary action (see Exhibit "RHS4" to the affidavit of Robyn Helen Stewart sworn on 30 August 1994 and filed in this proceeding). A number of the factual matters asserted on the applicant's behalf in the abovementioned statement and submissions are contested by the respondent in this proceeding and are canvassed in more detail in this judgment below. By a Notice of Direction under sub-section 63(1) of the Public Service Act, the Delegate directed that the applicant be dismissed in respect to the six offences dealt with (see Exhibit "RHS5" to the affidavit of Robyn Helen Stewart sworn on 30 August 1994 and filed in this proceeding). Not being content with the Delegate's directions, on 18 March 1994 the applicant exercised her right to appeal against the decision under section 63D of the Public Service Act on the grounds that the action directed by the Delegate in each case was unduly severe (see Exhibit "RHS6" to the affidavit of Robyn Helen Stewart sworn on 30 August 1994 and filed in this proceeding). This led to a hearing before the Disciplinary Appeal Committee on 12 and 13 May 1994 with a decision made by the Disciplinary Appeal Committee on 23 June 1994 confirming five of the six directions and setting aside the second of the directions made (see Exhibit "RHS7" to the affidavit of Robyn Helen Stewart sworn on 30 August 1994 and filed in this proceeding). The direction of the Delegate set aside by the Disciplinary Appeal Committee was the one referring to the offence for the unauthorised accessing of the computer screen on or about 23 March 1993 in breach of section 76D(1) of the Commonwealth Crimes Act 1914. PROCEDURAL MATTERS On or about 13 February 1994 the respondent filed and served a Notice to Admit Facts and Authenticity of Documents pursuant to Order 18, Rule 2 of the Industrial Relations Court Rules. The document sets out a number of facts and documents the truth and authenticity of which were not challenged by the applicant in accordance with the Court's Rules of procedure. At hearing the applicant's counsel indicated to the Court that there had been a change of representation after the service of the Notice; there being a number of facts referred to in that Notice and, in particular, paragraphs 18(c) (d) and (e), 19, 22 and 23 which the applicant now sought to contest. One of the purposes of the Notice rule is to allow the parties to dispose of any non-contentious matters prior to hearing. This in turn reduces the Court time and costs spent on proof of these matters. It also has the effect of allowing the party seeking the admissions the comfort of not calling witnesses and evidence in order to provide additional proofs. Whilst I am sympathetic with the applicant's position, her new solicitors did not raise this matter at any time following their letter dated 5 March 1996 to the Court giving notice of change of representation. None of the matters raised by the applicant in my view were sufficient to displace the presumptions associated with the filing and service of such a document without a response. Accordingly, I have proceeded to judgment on the basis that all the matters referred to in the Notice to Admit Facts and Authenticity of Documents are and should be treated as having been admitted. Even if I were disposed to exercise any discretion to preclude the admissions the applicant sought to contest at hearing, my findings on other matters and the evidence called otherwise provide more than sufficient justification for the termination as well as a basis for finding that it was not harsh, unjust or unreasonable in all the circumstances. BACKGROUND The applicant is a 30 year old woman who has had to confront significant physical adversity. She has shown considerable personal fortitude in dealing with the physical effects of a series of strokes suffered by her from 13 July 1989 through to at least May 1990. Medically it seems that whilst still a teenager she was diagnosed as having an inoperative arteriovenous malformation of the blood vessels in the brain. This condition did not prevent the applicant from marrying in 1986 and bearing a daughter in 1987. Prior to her child's birth the applicant was employed as a calculator operator and from 14 December 1987 she commenced employment with the Australian Tax Office, initially working in the prescribed payments section at the same classification she bore at the date of her termination; namely ASO Class 1. The series of strokes suffered initially incapacitated the applicant from any form of employment and subsequently left her with some functional disability to the left side of her body. However, it is clear from her evidence and her presentation in Court that she has in the years since the strokes reached a level of physical function which would allow her to resume her duties at the Australian Tax Office if capacity to perform these duties was the only issue. Moreover, there was no suggestion that at any time she lacked or now lacks the mental acuity to perform her work functions and to understand the purport of her actions. If anything, at hearing the applicant demonstrated that she is a woman of intelligence who was and is willing to use that intelligence in a manipulative and untruthful way if it suits her purposes. THE EVIDENCE Insofar as there is any conflict between the evidence given by the respondent's witnesses and the applicant, I have accepted the thrust of their evidence in preference to the applicant's evidence. This is because the applicant lacked candour when giving her evidence on disputed factual matters. Further, on close analysis the explanations given for her behaviour in a number of relevant areas lacked consistency and plausibility. THE EVENTS LEADING UP TO TERMINATION After suffering the series of strokes the applicant received extensive treatment eventually returning to full-time duties at the Dandenong branch of the Australian Tax Office from late 1990 until the termination of her employment in 1994. The period of her illness and incapacity was not without incident. On 2 October 1989 the applicant made her first return to work, lasting only a short period of time. A case history detailing her medical progress between 31 July 1989 and 30 May 1990 was tendered in evidence by the applicant (Exhibit A2) showing that on 12 October 1989 the applicant contacted the respondent informing it that "... her neurosurgeon recommended that she was unfit and should never work again". This contact set in chain a process whereby the applicant was examined by the respondent's doctors and as a result of their recommendations and the then recommendation of her own treating surgeon, steps were taken by the respondent to retire the applicant on the grounds of invalidity. Some months later, after further treatment, the applicant opposed the steps taken to retire her, filing an appeal against the decision to retire her with the Merit Protection Review Agency. It was not until the latter part of 1990 that the respondent and the applicant resolved what was then a dispute between them concerning her fitness to work because of the perceived risk of further haemorrhage. The details of the resolution of the conflict were committed to writing in a letter dated 2 November 1990 (Exhibit A3). At hearing the applicant at first sought to establish that the respondent had in some way initiated the retirement process on the grounds of invalidity while she was in Perth seeking specialist treatment; without any reference to her. In doing so she sought to contradict the contents of the case history tendered in evidence by her on the basis that it reflected a true record of the events occurring in the period it covered. This is just one instance of inconsistency on her part. On the evidence, I am satisfied that the applicant was responsible for initiating the retirement process before she obtained treatment in Perth and, it was not until some months later that she had a change of heart, deciding to oppose that course in circumstances where the respondent's medical examiners were not then satisfied that she was medically fit to perform her duties. If nothing else, it does seem that this episode set the tone for future conflict between the parties. It was not contested that the applicant in the performance of her duties at the Australian Tax Office at Dandenong performed well. She was obviously keen to learn and those witnesses who had the opportunity to work with her attested to her intelligence and aptitude for the tasks she was required to perform. Whilst the evidence of her witnesses concerning her ability to perform her duties was no doubt intended to advance her case on the question of the harshness of the decision to terminate, it also incidentally showed that it was more likely than not that this woman had a good understanding of her employer's policies and requirements and that there could be no question of ignorance or misunderstanding leading to the commission of the offences for which she was convicted. The applicant offered a number of explanations for the various offences, again directed to the issue of whether, in all the circumstances, the termination of her employment was harsh. The first direction for dismissal relates to demands for the payment of a fee when the applicant was not registered as a tax agent. It was claimed by the applicant that in 1992 she was working for the Australian Tax Office when a number of her neighbours approached her asking her to prepare their tax returns. It was suggested by the applicant that she did this as a favour and not for reward. Subsequently, the applicant fell out with the neighbours concerned and, in particular, the Petries whose dog she blamed for destroying a leg splint needed by the applicant to walk with. According to the applicant the neighbour Petrie had conceded that her dog was at fault and had further agreed to pay for the splint valued at $590.00; resiling from this agreement at a later date. This forced the applicant to issue proceedings in the Magistrates' Court in an attempt to recover her loss as well as two days' loss of wages for the period when she could not attend work without the leg splint. Of the five taxpayers for whom it was alleged the applicant prepared returns only Petrie gave evidence. However, the admissions obtained before hearing confirm that the applicant prepared at least five returns seeking payment for each one and receiving payment for three of them. It was Petrie's evidence that she and her husband, Samuel Petrie, were approached by the applicant on a number of occasions with the suggestion that the applicant prepare their returns. They agreed and all was well until the incident with their dog after which they received invoices (see Exhibit B to the respondent's Notice to Admit Facts and Authenticity of Documents) and a letter of demand from a solicitor (Exhibit R1) seeking payment of a fee of $170.00 for preparation of their returns. Within weeks of the abovementioned demand and invoices the Petries also received invoices purporting to be from the applicant's husband for repair work allegedly performed by him totalling $157.50 (Exhibit R3). These were also followed up by a letter of demand from the solicitors purportedly written on behalf of the applicant's husband. The applicant's action against the Petries in the Magistrates' Court arising out of the damage allegedly suffered by her as a result of the Petries' dog chewing her splint, did not proceed because the applicant failed to attend the Court on the return of the summons. Petrie denied any knowledge of how the incident occurred and specifically denied making any admission or offer to pay for the damaged splint. In making her submissions to the Delegate (see Exhibit "RHS4" to the affidavit of Robyn Helen Stewart sworn on 30 August 1994 and filed in this proceeding), the applicant made no mention of the work allegedly performed by her husband for the Petries or the dog incident. Both before the Disciplinary Appeal Committee and the Court it was generally asserted by the applicant that she demanded payment for the preparation of the tax returns because the Petries had refused to make payments for the labour and material supplied to them by her husband. At hearing she also relied on the fact that she believed the Petries' dog had chewed her splint. The invoices sent for the work allegedly performed by the applicant's husband were not in evidence before the Disciplinary Appeal Committee. It is clear that these invoices and the associated solicitor's letter of demand post-date the demand for payment of fees for the applicant's preparation of the tax returns and the related solicitor's letter. If those documents had been before the Disciplinary Appeals Committee it would have been apparent then, as it is now, that the explanation for demanding payment for the preparation of the tax returns because the Petries owed her husband money and had not paid him is inconsistent with the order in which the invoices and the letters of demand were sent. The invoices purportedly sent by the applicant's husband, Erik Bengtsson, for work done by him bear the signature "E. Bengtsson.". In cross-examination the applicant was at first evasive when questioned as to whether the signatures on the two invoices were hers or that of her husband; eventually conceding that, "it looked like her writing". I am satisfied on the evidence that she did both write up and sign the invoices in her husband's name. The second direction for dismissal related to the applicant intentionally and without authorisation accessing the respondent's computer. The Disciplinary Appeal Committee on this direction found that the direction for dismissal was unduly severe and, therefore, it did not constitute a reason for termination. Notwithstanding this result, however, the circumstances surrounding the accessing of the computer are relevant to the case before the Court because of section 170DE(2) of the Act. There is no contest that on 23 March 1993 the applicant accessed the computer viewing the record of one of her neighbours, a taxpayer for whom she had prepared a return. In her submission to the Delegate (see Exhibit "RHS4" to the affidavit of Robyn Helen Stewart sworn on 30 August 1994 and filed in this proceeding), the excuse for accessing the computer in this way was to check the progress of the taxpayer's return. This explanation was expanded upon before the Disciplinary Appeal Committee and the Court with the applicant claiming that by March 1993 she had been told that the taxpayer's wife was working and receiving cash payments. Therefore, she asserted, the tax return she had prepared for the taxpayers had incorrectly claimed a Dependant Spouse Rebate. She not only accessed the computer but took steps to correct the error. I found it difficult to accept that she took the additional step of trying to amend the return to protect the taxpayer when that step in itself exposed the taxpayer to penalty and enquiry. As one of her neighbours and a friend of the Petries one possible explanation for the course the applicant adopted was as counsel for the respondent put it, "to get even". On balance I am not satisfied that the steps taken by the applicant with regard to both accessing the computer and seeking an amendment of the taxpayer's return were taken only with the taxpayer's benefit in mind. The fourth direction to dismiss is linked to the abovementioned matters because the false statement made was a Minute of Interview completed by the applicant on 1 March 1993 purportedly signed by the taxpayer and seeking amendment of his return. The signature was forged by the applicant. I do not accept that it was a common occurrence for employees to put taxpayer's signatures on these documents when enquiries were made either at the counter or by telephone. Indeed, the evidence of her own witness, Firmin, confirms that such an action was unacceptable. The third, fifth and sixth directions all relate to the payment of social security payments to the applicant for a period of two and half years after she returned to full-time work with the respondent on 23 November 1990. Initially the applicant was paid an invalid pension for the period of incapacity. She alleged that just prior to returning to work she wrote to the Department of Social Security requesting that it stop her pension payments. There is no record of this letter being received despite enquiries directed by the applicant to ascertain its whereabouts. Notwithstanding the continued receipt of the monies for some two and a half years, in circumstances where the applicant concedes that she knew she was not entitled to the money, the applicant claimed both before the Disciplinary Appeal Committee and the Court that she did not know how to stop the payments being made. These payments only ceased after the respondent commenced its own enquiries and notified the Department of Social Security. Having regard to the applicant's obvious intelligence and communication skills the explanation for the continued dishonest receipt of the monies is not credible. On the evidence it is unlikely that she ever wrote any letter of notification to the Department of Social Security at any time before her employer gave notice to that Department. HARSH, UNJUST OR UNREASONABLE - SECTION 170DE(2) In determining whether the applicant has discharged the burden of proof she carries to show that the termination was harsh, unjust or unreasonable the Court must look at all the relevant circumstances and weigh any mitigating circumstances against the gravity of the misconduct giving rise to the decision to terminate (see Bostik (Aust.) Pty Ltd v Gorgevski (No.1) (1992) 36 FCR 20 at page 28 and Byrne v Australian Airlines Limited and Frew v Australian Airlines Limited (1995) 131 ALR 422 at pages 463 and 464). Once there is evidence of serious misconduct and more particularly in this case evidence contradicting the explanations offered in mitigation of the offences, it is difficult to see how the allegation that the dismissal was harsh, unjust or unreasonable can or should be sustained. No doubt the termination of an employee's employment in virtually all cases gives rise to some degree of hardship. Nevertheless, the fact that the applicant's personal circumstances may warrant a compassionate approach on the part of the employer in considering termination, cannot of itself outweigh the seriousness of the offences and the need of this particular employer to maintain high standards of honesty and integrity in its employees who regularly interface with the community. Bearing all these matters in mind, my finding is that the applicant has not discharged the onus of proof she carries under section 170DE(2) of the Act and her claim is dismissed. Before concluding my reasons for judgment, it is appropriate for me to address one aspect of the submissions made on behalf of the respondent. Mr Lawrence of counsel argued that it was the decision of the Disciplinary Appeal Committee which was, in his words, "under consideration" at hearing. Because the Disciplinary Appeals Committee did the following in: (a) taking all matters into account they were asked to take into account; (b) not failing to consider matters they were required to consider; (c) not taking into account irrelevant matters; and (d) properly balancing all the considerations substantive; not to mention procedural fairness, was afforded the applicant. He argued that within the legislative scheme for the review of the decision to dismiss, the Disciplinary Appeal Committee, in accordance with section 63D of the Public Service Act, took into consideration the applicant's prior employment history and the applicant's general character. In other words, its considerations were directed to matters to be considered by this Court in determining whether the termination was harsh in all the circumstances. Essentially, Mr Lawrence's submission was that where an employer has pre-termination procedures in place which apparently offer both substantive and procedural fairness, it would be a rare or an aberrant case in which the employer arrives at the wrong decision or acts harshly in all the circumstances. I have difficulty in accepting the overall thrust of the abovementioned submission. First, because the Court does not review the decision or sit in appeal from the decision of the employer, and whilst the findings of the Court may produce the same result, the process by which the Court arrives at its decision is entirely different because of the different legislative charter it follows. Secondly, the determination of matters to do with the harshness of the termination may refer to a wider range of matters; such as the employee's future employment prospects and evidence of matters occurring since termination. This means that the Court does not confine its attention to whether the decision of the employer (in this case the Delegate's decision confirmed by the Disciplinary Appeal Committee) was harsh, but must also consider whether the termination which is something more than just the decision to terminate is harsh, in all the circumstances. At hearing it is open to the employee to call evidence and witnesses not previously relied upon when the employer made its decision to terminate. Accordingly, notwithstanding my findings that the employer in this case did not act harshly in all the circumstances, I have not accepted all of the reasoning supporting the submission it made to the Court. MINUTES OF ORDERS THE COURT ORDERS THAT: 1. The applicant's application is dismissed. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding seventeen (17) pages are a true copy of the reasons for judgment of Judicial Registrar Millane. Associate: ................................................... Dated: 1 May 1996 Solicitors for the Applicant: Howie & Maher Counsel for the Applicant: Mr D. Staindl Solicitors for the Respondent: Australian Government Solicitor Counsel for the Respondent: Mr B. Lawrence Date of hearing: 4 & 5 March 1996 Date of judgment: 1 May 1996