Department of Justice - Office of Corrections v Valerie Hepburn - [1999] FCA 114 - FCA 1999 case summary

Federal Court of Australia|1999-04-14|Before: Spender J, Black CJ, Goldberg JJ

Introduction 1 On 2 April 1998 Spender J declared that the appellant Department's termination of the employment of the respondent contravened s 170DE(1) of the Industrial Relations Act 1988 (Cth) ("the Act"). His Honour directed that the Department reinstate the respondent and made consequential orders. 2 The respondent was a prison officer employed by the Department at Pentridge Prison. On 31 May 1996 a Disciplinary Tribunal ("the tribunal") constituted by two delegates of the Secretary of the Department found that the respondent had committed an act of misconduct by associating with a person on parole and that the appropriate penalty was immediate dismissal. 3 The respondent sought reinstatement and compensation pursuant to s 170EA(1) of the Act. On 20 February 1997 a Judicial Registrar of this Court dismissed her application. She sought review of that decision under s 377 of the Workplace Relations Act 1996 (Cth). The review resulted in the orders of his Honour now under appeal. His Honour's judgment is reported at (1998) 81 IR 32.

Association with Mr Jamieson 4 The respondent, now in her early fifties, was employed by the Department as a prison officer from 1 March 1988. She was promoted to the position of Senior Medical Support Officer in June 1989. In August 1994 she received a commendation from the Officer‑in‑Charge of the Metropolitan Reception Prison in relation to the performance of her duties. She had responsibility for training and supervising prison medical support officers within her jurisdiction. Her work history with the Department was consistent and stable. 5 Among the prisoners at Pentridge was a Mr Darran Jamieson who was serving an eight year sentence for manslaughter. The evidence before his Honour did not disclose Mr Jamieson's age or anything as to the circumstances of his offence. 6 The respondent had been for some ten years a friend of Mr Jamieson's mother. In about November 1993 the mother telephoned the respondent, told her that Darran was in Pentridge, and asked her to help him if she could. There was no contact between the respondent and Mr Jamieson until mid 1994 when she treated him at the prison clinic for a minor injury to his finger. She did not mention his mother at this stage. 7 On 18 September 1994 Mr Jamieson was released on parole for a period of two years. He thus became, for this period, an "offender" within the meaning of s 3 of the Corrections Act 1988 (Vic). Shortly before his release Mr Jamieson again attended the medical clinic and saw the respondent. On this occasion she told him that she knew his mother and that his mother had asked her to help him if she could. She gave him her telephone number. She advised him that if he needed any help after his release he should contact her. 8 What then ensued was described by the respondent in a statement subsequently given to the Department. The correctness of this account was not challenged in the hearings before the tribunal and his Honour. The respondent said: "Following Darran's release he resided in East Bentleigh and approximately a week after his release he telephoned me and told me that he was unhappy with his accommodation and was worried about being put in a position where he would be breaching his parole. I saw Darran on a number of occasions after his release on parole. I understand [sic] that he was travelling to and from the country and was very unsettled. In approximately February 1995 Darran advised me that he did not feel that he could reside at East Bentleigh any longer and it was agreed that he could move in to a unit which I rented with my daughter. The unit has two bedrooms and a sofa bed in the lounge room. Darran slept on the sofa bed. He did not stay every night, but three or four nights per week. This went on until approximately late July or early August. He then moved in full time and my daughter moved out in September." 9 On 9 December 1995 the police raided the respondent's residence. A search warrant had been obtained to search the premises for specified illicit drugs. No such drugs were found. Charges were however laid against the respondent alleging possession of prescription drugs. These charges were contested and had not yet been resolved by the time of the hearing before Spender J. The raid confirmed the Department's suspicion that Mr Jamieson was living with the respondent. The respondent said that until she was told by a senior prison officer who accompanied police on the raid she was not aware that it was a breach of discipline to associate with a person on parole. In the subsequent disciplinary proceedings before the tribunal, and in this Court, the Department was prepared to accept that the relationship between the respondent and Mr Jamieson was not a sexual one.

Other cases of prison officer discipline 10 Not long before the charges against the respondent were made there was a widely publicised episode involving a prison officer called Heather Parker. Ms Parker formed a sexual liaison with one Gibb, then a prisoner. She smuggled into the prison explosives which were used by Gibb and another prisoner to effect an escape. During the breakout a policeman was shot. In the trial of the present case it was put in cross-examination to Ms Janelle Morgan, one of the tribunal members, that the Parker‑Gibb liaison came to light before the breakout, but Ms Parker was not dismissed, merely transferred. Ms Morgan did not know whether this was the case. 11 There was also evidence before his Honour of three other cases involving sexual associations between prison officers and prisoners, three cases of assault by prison officers on prisoners, and one case of a prison officer forging a medical certificate. To the knowledge at the time of the officers who dealt with the respondent, all of the offending prison officers received transfers, reprimands, or sanctions other than dismissal.

Legislation 12 Regulation 6D of the Corrections Regulations 1988 (Vic) provided: "… an officer working in a prison or with prisoners must not - … (m) associate or correspond with a prisoner or offender except in the course of his or her duties or with the written authority of the Director‑General." 13 Regulation 34.1 of the Public Sector Management Regulations 1993 (Vic) provided: "A staff member who … (c) commits any act of misconduct; … commits a breach of discipline and is liable to disciplinary action in accordance with the provisions of this Part." 14 Section 3 of the Corrections Act 1986 (Vic) provided: "'correctional order' means any of the following - (a) a community‑based order; (b) a parole order; (c) an intensive correction order; … 'offender' means a person of whatever age who is the subject of a correctional order. 'prisoner' means a person who by virtue of section 4 is deemed to be in the custody of the Director‑General." 15 Regulation 38.1 of the Public Sector Management Regulations 1993 (Vic) provided for the imposition of a range of penalties in respect of the commission of breaches of discipline as follows: "If, following an inquiry under this Part, the person conducting the inquiry is satisfied on the balance of probabilities that the staff member has committed a breach of discipline, that person may make one or more of the following determinations - (a) issue a reprimand; (b) impose a fine not exceeding 40 penalty units; (c) transfer the staff member to another position in the Department or, a position in another Department with the approval of the Department Head of that other Department, at the same or similar level of salary; (d) reduce the staff member in position and salary; (e) reduce the staff member in salary; (f) dismiss the staff member." 16 Section 170DE(1) of the Act provided: " An employer must not terminate an employee's employment unless there is a valid reason, or valid reasons, connected with the employee's capacity or conduct or based on the operational requirements of the undertaking, establishment or service." 17 Section 170DE(2) provided that a reason was not valid if the termination was, having regard to all the circumstances of the case, "harsh, unjust or unreasonable". However this subsection was held by the High Court to be unconstitutional: Victoria v Commonwealth (1996) 187 CLR 416 at 517 ‑ 518. 18 By s 170EDA(1)(a) the onus is on the employer to prove that there was a valid reason, or valid reasons, for the termination.

"Valid reason" 19 In a passage subsequently applied in a number of cases, including the present case, Northrop J said in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 at 373: "Section 170DE(1) refers to 'a valid reason, or valid reasons', but the Act does not give a meaning to those phrases or the adjective 'valid'. A reference to dictionaries shows that the word 'valid' has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: '2. Of an argument, assertion, objection, etc; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.' In the Macquarie Dictionary the relevant meaning is 'sound, just or well founded; a valid reason'. In its context in s 170DE(1), the adjective 'valid' should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s 170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between a employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must 'be applied in a practical, commonsense way to ensure that' the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s 170DC." 20 However, as a consequence of the striking down of s 170DE(2), a determination which operates, in relation to the employee concerned, in a way that is "harsh, unjust or unreasonable" is not necessarily not "valid": Cosco Holdings Pty Ltd v Do (1997) 150 ALR 127 at 138 ‑ 141, 151, a decision of a Full Court of this Court. In Qantas Airlines Ltd v Cornwall (1998) 83 IR 102 a subsequent Full Court followed Cosco. Their Honours said (at 6 ‑ 7): "But the section requires the employer's reason to be valid, and thereby focuses upon the employer and the basis of his decision, rather than upon its consequences for the employee. What has to be examined is the validity of the reason, and its connection with the employee's capacity or conduct or its basis in operational requirements of the employer. In a case, such as the present, where conduct is relied on, that will entail a consideration of the nature of the conduct in the full context in which it actually occurred. But it will not, according to the decision in Cosco Holdings (and see also Evans v Alto Parts Pty Limited (1998) 77 IR 401 at 404), entail reference to factors personal to the employee, bearing on the nature or extent of the hardship caused by the dismissal. In this, too, Cosco Holdings was following the High Court, the majority of which, in a passage we have quoted, condemned the 'harsh, unjust or unreasonable' criterion just because it 'goes not to the reason for termination but to the overall effects of the termination', and thereby 'does not implement the terms of the Convention'." (Emphasis in original.) 21 The intervening decision of the Industrial Relations Court of Australia in Murdoch University v Mainsbridge (unreported, 12 June 1998) was not followed by the Full Court in Cornwall. 22 Finally, it is to be noted that in Allied Express Transport Pty Ltd v Anderson (1998) 81 IR 410 another Full Court pointed out (at 413) that the "… entire relevant factual matrix must be considered in determining whether the employee's termination is for a valid reason."

Reasons of the trial judge 23 His Honour observed (81 IR at 36) that it was not for the Court to decide whether termination should occur or not. If the view adopted by the tribunal was rational and reasonable, the employer had established a valid reason for the purposes of s 170DE(1). If in fact the tribunal decided reasonably that the breach of discipline by the respondent required her dismissal, the decision to terminate would have been for a valid reason. 24 After summarising the evidence his Honour continued (at 38): "It is necessary to deal at some length with aspects of the Disciplinary Tribunal hearing on 31 May 1996. In its reasons, the tribunal members said: 'In considering this matter the tribunal formed the opinion that this type of breach of the regulations was an act of significant misconduct. This type of breach of the regulations has a significant impact on the security, good order and management of prisons and offenders and significantly undermines the integrity of the prison service. There is a documented history of this type of association severely and adversely affecting the duty of care which the prison service owes to offenders. It is [sic] also undermines the trust and confidence Corrections staff must have in each other if they are to perform there [sic] duties in a safe and appropriate manner. The tribunal does not accept that an officer employed in a prison environment for 8 years in unaware that it is fundamentally wrong to form an association of this type with an offender. After considering the range of penalties available in relation to a breach of discipline this tribunal has determined that in this instance the only appropriate penalty is to dismiss Ms Hepburn from her employment as a Senior Medical Support Officer. This penalty is to take effect from the close of business on 31 May 1996.' I have had regard to the whole of the evidence, and have sadly come to the conclusion that the decision to dismiss Ms Hepburn was not based on a genuine consideration of the circumstances of her case and of a penalty appropriate to those circumstances. The decision to terminate her employment was made in order to avoid the embarrassment in this case which the Department of Justice had experienced in the Heather Parker case. The word 'sadly' earlier in this paragraph is intended to reflect my view that the unfair way Ms Hepburn was treated was motivated by a deep desire on behalf of the Tribunal members that the department not be the subject of criticism, to the extent that a rational and objective consideration of Ms Hepburn's breach of discipline, and whether it justified dismissal, was never given. The evidence before me establishes serious deficiencies in the decision-making process. The nature of the relationship in question, the absence of actual harm to discipline or prison security, the low level of any potential for harm in the circumstances of the case, the good work record and personal qualities of the applicant, the nature and extent of the consequences to her of dismissal, the desirability of parity or equality of treatment with other disciplinary breaches in the prison system, were each given no or scant genuine consideration." (Emphasis added.) 25 His Honour then referred to evidence of Ms Morgan to the effect that she was not sure at the time whether the relationship between Mr Jamieson and the respondent was sexual and "in my mind it didn't matter". His Honour said (at 39): "This attitude by Ms Morgan really illustrates her formulistic approach to her task, in that it was cut and dried that any association required dismissal. The nature of this association must be contrasted with that of Heather Parker, who, on the material before me, had a sexual relationship with a notorious criminal, Peter Gibb, inside the prison, smuggled explosives into the prison, and participated in the detonation of those explosives so as to enable the prisoner and one other, Archie Buckley, to escape. During the escape, a prison officer was shot. The evidence is unclear as to what happened to Ms Parker as a consequence of her conduct. In this case, it was accepted by Mr Vincent, who describes his position at the relevant time as Governor in Investigations and Inspection Unit, Corrections, Department of Justice, that there was no suggestion that Ms Hepburn 'ferried' anything from Mr Jamieson to prisoners within the gaol. He further accepted that there was no direct breach of prison security as a result of Ms Hepburn's association with Mr Jamieson. While I accept that any association by a prison officer with a person on parole may have some potential for blackmail of the prison officer, and thus pose some potential threat to prison security, that possibility is, in the circumstances of this case, quite remote, and any threat which could underpin any blackmail would be different in kind to other circumstances." (Emphasis in original.) 26 His Honour then referred to the "grudging attitude" of Ms Morgan to the respondent's good employment history, an attitude which, his Honour said (at 40): "… not only demonstrated a lack of consideration of relevant factors fairly and objectively, but also a continuing desire to justify the decision to terminate Ms Hepburn's employment, to be effective immediately." His Honour thought that view was reinforced by a passage of evidence in which Ms Morgan was asked about the respondent's letter of commendation. 27 His Honour then referred to the question of the consequences to the respondent of the termination. His Honour said (at 40 ‑ 41): "Ms Morgan said she did not take any notice of the consequences to Ms Hepburn of dismissal. Her evidence included the following: 'Q. Did you not even turn your mind to the question of what would happen to her entitlements if you dismissed her? A. No. … Q. So you did not turn your mind at all to whether or not, for example, it affected her superannuation entitlements? A. No, not specifically, no. Q. Or unspecifically? A. No. Q. You did not care? A. No, it's not that I didn't care. Q. You just did not think it was something you should take into account? A. No." His Honour then discussed and rejected an argument that there was want of procedural fairness by reason of the tribunal failing to give any prior indication that it was considering dismissal. 28 His Honour continued (at 41): "However, the penalty was objectively unreasonable, a result brought about by the cumulative effect of the deficiencies earlier set out." His Honour then quoted passages in which Ms Morgan was questioned about the Heather Parker case. Ms Morgan said that she took into account the "consequences on the prison service" of that matter and the "impact it had on the prison service". 29 His Honour noted (at 43) Mr Griffin, the Chief Executive Officer of the Public Correctional Agency, as saying that he had no confidence in the ability of the respondent to do her job, the lack of confidence arising from the fact that she associated with an offender. Mr Griffin thought "certainly" that the respondent's case was similar to, or on a parallel with the Heather Parker case. 30 His Honour, after referring to evidence as to other cases of discipline of prison officers (see above) said (at 44): "There is a lot of wisdom in the pithy statement that the punishment must fit the crime. The notion of equal justice, the idea that unequal treatment under the law is unfair, is a deep-seated tenet of our community. It is reflected in the criminal law, but it is by no means confined only to crime." 31 His Honour then cited the observations of Mason J in Lowe v The Queen (1984) 154 CLR 606 at 610 ‑ 611 and Sheppard J in Trade Practices Commission v Axive Pty Ltd (1994) ATPR ¶41-368 at 42,795. His Honour concluded (at 44): "It is trite that every case has to be decided on its own facts. But the evidence of these five instances, imprecise as it is to detail, lends force to the submission, which I accept, that there was such a disconformity between the actual breach of discipline of which Ms Hepburn was guilty and the penalty imposed on her as to require the conclusion that termination of her employment was not for a valid reason. Mr Parry, for the respondent, made the submission that every case of association with an offender requires dismissal. It is a submission that I simply do not accept. In my opinion, the admitted breach of reg 6D was not, in all the circumstances of the case when looked at dispassionately and objectively, a basis which justified the dismissal of Ms Hepburn. The decision to terminate Ms Hepburn's employment was not as a result of a proper assessment of Ms Hepburn's conduct: the decision to terminate was based, not on a view that her conduct called for dismissal, but on the incorrect basis that, because the Heather Parker instance of association with a prisoner had occasioned such embarrassment to the Department, any later incident of association, no matter how removed from the features of the Heather Parker case, had to be visited with condign punishment." 32 Finally his Honour dealt with the issue of reinstatement and whether it was "impracticable" within the meaning of s 170EE(1) and (2). His Honour said (at 44 ‑ 45): "The meaning of 'impracticable' and the principles applicable to matters of trust and confidence, and the proper approach to an employer's claim that reinstatement is impracticable are discussed by the Full Court in Perkins v Grace Worldwide (1997) 72 IR 186 at 189-192. 'Impracticable' does not mean 'impossible', yet comprehends more than being 'difficult' or 'inconvenient'. Notwithstanding Mr Griffin's claim, his evidence generally and his assertion that the case of Ms Hepburn may be equated to that of Heather Parker, in particular, lead me to conclude that his lack of confidence and trust is not soundly or rationally based. While I acknowledge the importance of confidence and trust, I therefore do not accept that the claimed loss of confidence and trust has a proper basis, and I do not believe that the admitted breach of discipline by Ms Hepburn makes reinstatement impracticable. Ms Hepburn is entitled to an order of reinstatement." 33 We now turn to the issues raised on the appeal.

Consequences to respondent 34 Counsel for the appellant argued that Spender J erred in taking into account the effect that termination would or might have on the respondent. In the light of Cosco and Cornwall, that submission is undoubtedly correct. (It should be pointed out that the decision of the Full Court in Cosco was handed down after the conclusion of argument before his Honour in the present case). There is no doubt that his Honour included the now forbidden consideration in the passage already quoted which commences: "The evidence before me establishes serious deficiencies in the decision making process." Counsel for the Department accepted that the other factors there listed were relevant but we consider that the forbidden consideration did play some part in his Honour's reasoning. 35 The question then arises whether this Court should exercise its appellate jurisdiction to grant a new trial under s 28(1)(f) of the Federal Court of Australia Act 1976 (Cth). Counsel for the Department, very properly, did not suggest that judgment should be entered for the Department. 36 The classic statement of the test to be applied by an appellate court where legal error has been established in the case of a trial by a judge without a jury is contained in the joint judgment of Dixon CJ and Kitto J in Paterson v Paterson (1953) 89 CLR 212 at 225 ‑ 226. After holding that certain cross-examination should not have been allowed their Honours said: "But in the end we have come to the conclusion that the learned judge's findings would have been exactly the same, had he disallowed the cross‑examination. We are not here dealing with the verdict of a jury, the reasons for which are not known. The learned judge has stated his reasons in full, and while it certainly cannot be said that nothing deduced from that part of the cross-examination enters into the reasons his Honour gives, it can safely be concluded not only that what he so deduced did not form an indispensable part of his opinion or of the process by which it was formed, but that all the other elements in the case, had this one been excluded, would have led him exactly upon the same path to the same result. In these circumstances it would not be right to order a new trial on the ground that the cross‑examination in question was wrongly admitted." 37 A somewhat different test may be applied where the trial is before a jury: Balenzuela v De Gail (1959) 101 CLR 226 at 235-237 per Dixon CJ, at 242-245 per Windeyer J and Reynolds v Reynolds (1973) 1 ALR 318 at 323 ‑ 324 where Mason J (with whom Menzies and Walsh JJ agreed) said: "Unlike the jury verdict, the judge's reasons provide a guide to the way in which he arrived at his decision and, in consequence, a basis for determining the likely effect on the decision of the rejected evidence, had it been admitted." See also Lynch v Howard (1980) 44 FLR 71 at 87. 38 Wherever the onus lies (see: Balenzuela at 234 - 5) we are in any event satisfied that the result would have been the same had his Honour not referred to the consequences to the respondent of termination. That, plainly, was not an indispensable part of his opinion or the process by which his opinion was formed. It is noteworthy that his Honour did not refer to any evidence as to what in fact were the consequences of termination upon the respondent. Matters such as loss of superannuation and inability to find other employment were not discussed (cf Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 28 ‑ 34). There is only reference to the tribunal's failure to consider the matter at all. 39 Moreover, the core of his Honour's reasoning was that the Department did not have regard to the particular circumstances of the respondent's case but decided to terminate her employment to avoid embarrassment to the Department such as had occurred in the Heather Parker case. This was a central finding of fact by his Honour, made after having heard evidence from Ms Morgan, one of the tribunal members. His Honour records in his reasons Ms Morgan's answer in cross‑examination: "What I think I was doing or what I knew I was doing at the time was in my mind referring still to the Heather Parker matters in terms of the impact it has on the prison service", and that Ms Morgan was not interested in what happened in other cases. His Honour drew attention to the circumstances of the respondent's case and in particular to the distinguishing feature that Jamieson, unlike Gibb, was not a prison inmate. In other respects his Honour had regard to considerations which were quite independent of any particular impact the termination might have had on the respondent in the light of her personal circumstances.

Browne v Dunn 40 Counsel for the appellant complained of his Honour's finding that the decision to terminate was based not on a view that the respondent's conduct called for dismissal, but on the incorrect basis that the Heather Parker incident had occasioned embarrassment for the Department and that any later incident of association, no matter how removed from the features of the Heather Parker case, had to be the subject of "condign punishment". Counsel contended that his Honour was therefore saying that the reason for termination was not valid because it was not the real reason, that is, it was not genuine. The genuineness or otherwise of the tribunal's reason for the decision was not put to Ms Morgan. Therefore, it was argued, it was not open to the learned trial judge to find that the decision to terminate was not valid for that reason: Browne v Dunn (1893) 6 R 67. 41 Since the rule in Browne v Dunn is one designed to prevent or remedy obvious unfairness, it is remarkable that any such unfairness escaped the notice of whoever drafted the Department's notice of appeal. So there is perhaps some irony in a complaint of "not putting" when that complaint is itself not put in the document which the Rules require. 42 In any event, there is no substance in the point. While it is true that counsel who appeared for the respondent before the tribunal (and who also appeared on the appeal) did not put to Ms Morgan in as many words the conclusion which his Honour reached, a reading of the transcript leaves one in no doubt that there was a frontal attack on the tribunal about the way it had approached the respondent's case and the dominance of the Heather Parker case. In substance the case advanced before his Honour in cross-examination was that the tribunal had been unfair and irrational in equating the very different case of Heather Parker with that of the respondent. The cross-examination was vigorous, although certainly not beyond the bounds of legitimate advocacy. Having regard to the way the case was conducted, we think it was quite open and not at all unfair for his Honour to make the observation he did.

Reinstatement 43 His Honour's finding that reinstatement would not be "impracticable" really is a finding of fact following from his assessment of the witnesses and in particular Mr Griffin. Given his Honour's basic finding that the reason for termination was not valid, a further finding that a loss of confidence based on that reason did not make reinstatement invalid, seem to flow inevitably.

Order 44 The appeal will be dismissed. I certify that the preceding forty‑four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court

Counsel for the Applicant: A G Uren QC and B J Lacy

Solicitor for the Applicant: Ronald C Beazley, Victorian Government Solicitor

Solicitor for the Respondent: Woodhams O'Keefe & Co

Industrial Relations Act 1988(Cth)ss 170DE(1), 170EA(1), 170EDA(1)

Workplace Relations Act 1996(Cth)s 377

Corrections Act 1988(Vic)s 3

Corrections Regulations 1988(Vic)reg 6D

Public Sector Management Regulations 1993(Vic)

Department of Justice - Office of Corrections v Valerie Hepburn

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