Dietz v Health Secretary in respect of the Nepean Blue Mountains Local Health District

Industrial Relations Commission (NSW)|2023-06-06

DECISION

Professor Hans Dietz has applied for leave to appeal, and if leave is granted, appeals the decision of Commissioner O'Sullivan in Dietz v Health Secretary in respect of Nepean Blue Mountains Local Health District [2022] NSWIRComm 1107 (where the context requires, "Commissioner O'Sullivan's decision"). In that decision, the Commissioner dismissed proceedings which had been brought by Prof Dietz pursuant to s 84 of the Industrial Relations Act 1996 ("Act") on the basis that the same issues that arose in those proceedings had been finally determined by Commissioner Webster in Hans Peter Dietz v Secretary, Ministry of Health in respect of Nepean Blue Mountains Local Health District [2021] NSWIRComm 1068 (where the context requires, "Commissioner Webster's decision").

Determination

We have determined to grant leave to appeal and to uphold the appeal. Our reasons follow.

Commissioner Webster's decision

On 1 July 2020, Prof Dietz brought proceedings in the Commission pursuant to s 84 of the Act. He contended that the Show Cause Letter was a threat of dismissal. He sought an order from the Commission under s 89(7) of the Act that the Health Secretary not dismiss him from his employment in accordance with that threat. The matter was allocated to Commissioner Webster.
On 13 September 2021 Commissioner Webster's decision was handed down. The Commissioner stated: "69. The respondent has indicated its intention to terminate the applicant's employment. …In summary, the reasons for the threatened dismissal provided by the respondent are: (1) The Patient A complaint allegation; (2) The Conference conduct allegation; (3) The applicant's previous disciplinary history, including the unreasonable refusal of the applicant to accept identified interpersonal shortcomings and complete remedial actions; (4) Concern about the reputation of the NBMHLD, the applicant's response to these matters in the proceedings and that patients and staff will continue to experience similar interactions with the application [sic - applicant] that have occurred previously; and (5) The loss of trust and confidence in the applicant and the irreparable damage to the employment relationship caused by the applicant not being willing to accept his behaviours contribute to complaints about him and his unwillingness to complete the required training. … What orders and or recommendations should be made in view of the Commission's finding in these proceedings? 130. The applicant's interactions with Patient A and his conduct at the conference in Newcastle alone are not a sufficient basis to terminate his employment fairly. The respondent did not discharge its onus to establish that the conduct alleged occurred. The conduct admitted by the applicant is not sufficiently grave to warrant the termination of his employment on either basis, even when accumulated. Accordingly, I have decided it is appropriate to restrain the respondent from terminating the applicant based on that alleged misconduct. 131. I have considered the evidence of Ms Hyman and the reasons she gave as to why she would be inclined to accept the recommendation to terminate the applicant's employment… It should be noted that these were not only informed by the investigation report, but also the applicant's previous disciplinary history, concerns about the reputation of the NBMLHD and the applicant's responses in these proceedings. I am of the view that these concerns are well founded and have been established as reasonable concerns supported by the evidence in these proceedings. However, it note [sic] that it is clear that Ms Hyman's view about the applicant's relationship with the respondent was at least in part formed by the matters found to be substantiated in the investigation report that have not been proven in these proceedings. 132. I do have serious concerns about the ongoing viability of the employment relationship between the applicant and the respondent. The fractures in the relationship were demonstrated by the applicant's lack of acceptance of previous warnings relating to his conduct towards staff, his failure to undertake remedial action as directed to address those concerns, his unwillingness to accept his obligations to co-operate with the respondent with regards to matters such as the investigation process itself, informing the respondent when he intends to publicly criticise their policies and keeping them appraised of complaints made against him to relevant professional bodies. 133. I have considered very closely the impact any decision to terminate the applicant may have upon him, those within his team and the many patients who he would otherwise assist through the public health system. I am of the view that there is a proper basis to conclude that the necessary elements of trust and confidence in the relationship have been considerably damaged. Accordingly, I have decided not to exercise my discretion to make an order restraining the respondent from terminating the applicant on the basis of: (1) The applicant's previous disciplinary history, including the unreasonable refusal of the applicant to accept identified interpersonal shortcomings and complete remedial actions; (2) Concern about the reputation of the NBMLHD, the applicant's response to these matters in the proceedings and that patients and staff will continue to experience similar interactions with the application that have occurred previously; and (3) The loss of trust and confidence in the applicant and the irreparable damage to the employment relationship caused by the applicant not being willing to accept his behaviours contribute to complaints about him and his unwillingness to complete the required training. 134. However, I have also concluded that it may be that the parties are able to work through these matters with the benefit of this decision and the passage of time that has elapsed since the applicant was initially stood down. Accordingly, I have decided to make a recommendation the parties participate in formal mediation with a view of establishing whether the relationship can be restored effectively. The respondent should now proceed to conclude the disciplinary process in view of this decision. Orders 135. I make the following order: (1) The respondent is restrained from terminating the applicant on the basis of the allegations of misconduct made against him by Patient A and his conduct at the 'Natural birth: 'What women need to know' in Newcastle run by a law firm, Catherine Henry Lawyers in November 2017. 136. I make the following recommendation: (1) The parties confer with a view of arranging a mediation with the aim of exploring whether the employment relationship can be restored effectively."

Professor Dietz's dismissal

At 4.05pm on 13 September 2021, the solicitors for the Health Secretary, Bartier Perry, sent an email to Prof Dietz's union, the Australian Salaried Medical Officers' Federation ("ASMOF"), referencing the recommendation at [136] of Commissioner Webster's decision. The email enquired whether ASMOF had instructions from Prof Dietz "as to whether he is interested [in mediation] and on what basis would he be proposing to convince our client that employment could be restored given the overall findings".
In an email sent in reply at 4.26pm on 13 September 2021, ASMOF informed Bartier Perry that while it did not have formal instructions at that stage, it understood Prof Dietz was "amenable to mediation as recommended by Commissioner Webster".
At 2.40pm on 14 September 2021, the NBMLHD sent an email to Prof Dietz attaching a letter dated the same day, informing him that his employment was terminated effective immediately and that he would receive a payment in lieu of notice. The reasons given in the letter for Prof Dietz's dismissal were to the same effect as those contained at [133(1)-(3)] of Commissioner Webster's decision.
Between 14 and 17 September 2021, Bartier Perry and ASMOF exchanged further email correspondence in respect of Commissioner Webster's recommendation. It suffices to say that mediation was not arranged, at least in part because ASMOF sought the withdrawal of the letter of termination prior to any mediation, which the Health Secretary refused to do.

Commissioner O'Sullivan's Decision

On 5 October 2021 Prof Dietz filed another application under s 84 of the Act, seeking to be reinstated to his employment. Those proceedings were allocated to Commissioner O'Sullivan.
On 29 November 2021, the Health Secretary filed a notice of motion seeking, amongst other things, the summary dismissal of the proceedings before Commissioner O'Sullivan. The "grounds and reasons" in the notice of motion relevantly included the following: "1. The proceedings disclose no cause of action and the Applicant is estopped from bringing the proceedings by reason of the doctrine of res judicata; the Applicant's claim under s 84 of the IR Act has already been determined in Hans Peter Dietz v Secretary, Ministry of Health in respect of Nepean Blue Mountains Local Health District [2021] NSWIRComm 1068 (Dietz Judgment). 2. Further, or in the alternative, the proceedings disclose no cause of action and the Applicant is estopped from bringing the proceedings by reason of the doctrine of issue estoppel, as the Dietz Judgment determined, as between the Applicant and the Respondent, that: (a) the dismissal of the Applicant on the basis of (1) the Applicant's previous disciplinary History; (2) concerns about the reputation of the Nepean Blue Mountains Local Health District (NBMLHD), and (3) the Respondent's loss of trust and confidence in the Applicant and irreparable damage to the employment relationship, would not be harsh, unreasonable or unjust … and the Applicant is estopped from contending otherwise. 3. Further, or in the alternative, the proceedings are otherwise an abuse of process as the Applicant seeks to re-litigate matters that have already been determined by the Commission in the Dietz Judgment." (Emphasis in original)
Commissioner O'Sullivan's decision was handed down on 29 November 2022. The Commissioner determined to uphold the Health Secretary's notice of motion. He ordered that Mr Dietz's application be dismissed. The Commissioner's reasons included the following: "Issues 32. Considering the submissions of both parties and the authorities, it is apparent that the following two issues are key to determining the Motion, whether it be on the grounds of either form of estoppel or abuse of process: (1) did the Earlier Decision determine the issue required to be determined in these proceedings?; and if the answer to this is yes, then (2) did such determination have the requisite level of finality? 33. If the answer to both is yes, then the Motion must be successful and the Application must be dismissed. Alternatively, if the answer to either is no, then the Motion must be dismissed and the Application be programmed for hearing. … Identical Issue 36. Both this application and the Earlier Application were brought pursuant to section 84 of the IR Act and as such, both ultimately require the determination of whether the dismissal/threatened dismissal of the applicant was/would be harsh, unjust and/or unreasonable (Burge v NSW BHP steel Pty Ltd [2001] NSWIRComm 117). Then ss s 87(1) of the IR Act then requires the Commission to either make one of the orders available under s 89, dismiss the application or make any other order the Commission can make. 37. Turning to the Earlier Decision, Commissioner Webster provides a background to the Earlier Application and then sets out the law relevant to her consideration and summarises what that approach will be as follows: 42 Neither party directed the Commission to any caselaw relating to the Commission's discretion to make an order pursuant to s 89(7) of the Act. I consider the jurisprudence of the Commission as it relates to applications of dismissals to be directly applicable to applications relating to threatened dismissals. Given the Commission is required to consider whether the threat of dismissal is harsh, unreasonable or unjust, it will be important in such matters to first establish that there has been a threat of dismissal. If a threat of dismissal has been identified, it will be necessary to examine the reasons provided by the employer for the threat, whether those reasons have a basis in fact and whether a fair process has been adopted prior to the threat of dismissal being made: s 88. Matters of proportionality and harshness will also be relevant to consideration of threatened dismissal proceedings, as it is in any Unfair Dismissal matters where the employment has been terminated. 38. The Commissioner clearly sets out that the process she was undertaking in the Earlier Decision was to determine whether the threat to dismiss the applicant was harsh, unjust and/or unreasonable. This included considering each of the reasons, procedural fairness issues, harshness and proportionality. 39. Given ss 87(1) of the Act, Commissioner Webster found that to dismiss the applicant in accordance with the threat would be harsh etc, then the Commissioner was required to make an order under section 89 or any other order available. Conversely, if the ground was not harsh etc, then no order is to be made and the application should be dismissed. 40. After dealing with each of the five various grounds, the Commissioner determined not to make any order in relation to the Dismissal Grounds, although she did made a recommendation. 41. A recommendation, by its' very nature, is non-binding and is not an order, thus it is not an outcome which falls within one of the outcomes contained in ss 87(1). 42. Although not expressly stated, the Commissioner, by deciding not to make an order in relation to the Dismissal Reasons had obviously determined that to dismiss the applicant on the basis of these would not be harsh, unjust and/or unreasonable. Had the Commissioner intended that the respondent could not dismiss the applicant for the reasons of the Dismissal Grounds, then she would have been obliged and would have made an order to this effect. … 45. Determination of the issue required in this application would require the Commission to determine the same issue that Commissioner Webster did in the Earlier Decision i.e. the dismissal of the application on the basis of the Dismissal Grounds harsh, unjust and/or unreasonable. Finality … 47. That the Commissioner in the Earlier Decision made a recommendation which is not binding on the parties does not detract from the conclusion that she must have determined that dismissing the applicant on the basis of the Dismissal Grounds would not be harsh, unjust or unreasonable. The recommendation can be seen as an attempt by the Commissioner to dissuade the respondent to take a path other than dismissing the applicant. … 50. The Commissioner in the Earlier Decision referred to the decision not to make the orders pursuant to ss 89(7) as an exercise of discretion, but such a characterisation is not correct. The learned Commissioner was required by ss 87(1) to make an order if she found that the Dismissal Grounds were harsh etc and alternatively make no order if she did not. It is not the case that the Commissioner could have found that, on the basis of the Dismissal Grounds, a dismissal would be harsh etc and not make an order, this is not a permissible option open to the Commission. … 52. The Earlier Decision had the requisite level of finality of the issues sought to be agitated in this application. Conclusion & Orders 53. As the answer to both issues 1 and 2 above is yes, the Motion is successful. 54. I order that the notice of motion filed 28 November 2021 is upheld and the application filed on 5 October 2021 is dismissed…" (Reproduced verbatim)
In these extracts, "Earlier Decision" is a reference to Commissioner Webster's decision. The terms "Dismissal Grounds" and "Dismissal Reasons" refer to the reasons for dismissal contained in the letter of termination of 14 September 2021.

The Appeal

Prof Dietz seeks leave to appeal, and if leave is granted, appeals Commissioner O'Sullivan's decision on two grounds, namely: "1. The Commission erred in finding that the issue to be determined in the Applicant's application for relief in relation to unfair dismissal dated 5 October 2021 is 'identical' to the issue determined by the Commission on 13 September 2021, in the sense necessary to establish either cause of action estoppel or an abuse of process. 2. The Commission erred in finding that the Commission's decision on 13 September 2021 determined the issue of whether the dismissal of the Applicant would be 'unfair' on a final basis, in the sense necessary to establish either cause of action estoppel or an abuse of process."

Leave to appeal

Pursuant to s 188 of the Act, an appeal to a Full Bench of the Commission may be made only with the leave of the Full Bench. The Full Bench is to grant leave to appeal if, in its opinion, the matter is of such importance that, in the public interest, leave should be granted.
The principles governing the granting of leave to appeal were summarised by the Full Bench in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Roads and Maritime Services [2015] NSWIRComm 16 at [10]-[11] and by Walton J in Secretary of the Ministry of Health v The New South Wales Nurses and Midwives' Association (2022) 320 IR 249; [2022] NSWSC 1178 at [21]. We will not reproduce those passages.
The appeal gives rise to a question as to when the determination of a threatened dismissal application under s 84 of the Act will preclude subsequent proceedings under that provision when the threatened dismissal is effected. This is a significant issue that has wider implications for the jurisprudence of the Commission beyond the interests of the immediate parties.
Further, we have determined, for reasons which follow, that Commissioner O'Sullivan erred in his decision, including in his construction of the Act. Correcting those errors is both in the public interest and a matter "going to the proper administration of justice": Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263; [2005] NSWIRComm 409 at [5].
For these reasons we have determined that the matter is of such importance that, in the public interest, leave to appeal should be granted.

Principles to apply on appeal

An appeal to a Full Bench "is not by way of a new hearing": s 191(1) of the Act. The Full Bench "cannot merely substitute its decision on the matter, but must follow the principles applying to appeals from discretionary decisions, whether or not further evidence is received": s 191(3).
Commissioner O'Sullivan's decision did not involve the exercise of a discretion. It was the determination of a controversy between the parties as to whether Prof Dietz was estopped from bringing those proceedings (either on the basis of res judicata/cause of action estoppel or issue estoppel), or whether in the alternative the proceedings should be dismissed as an abuse of process. In determining that controversy, Commissioner O'Sullivan was required to construe the effect of Commissioner Webster's decision, which he did in part based on a construction of relevant provisions of the Act.
It follows that the question for the Full Bench is whether Commissioner O'Sullivan reached the correct decision, not whether the decision was reasonably open to him: Minister for Immigration and Border Protection v SZVFW & Ors [2018] HCA 30 at [17]-[18] and [48]-[50]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Anor v Sunset Power International Pty Ltd trading as Delta Electricity [2018] NSWIRComm 1072 at [26].

Cause of action estoppel, issue estoppel and abuse of process

In his written submissions on appeal, Prof Dietz summarised the principles to apply in determining whether an action estoppel or issue estoppel arises, or whether proceedings amount to an abuse of process. The Health Secretary did not take issue with those submissions. It is convenient to reproduce them, to the extent that they are germane to the basis on which we have determined the appeal, as follows: "Cause of action estoppel and issue estoppel … 18. Cause of action estoppel 'operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the [previous] proceeding and which was determined by the judgment'. For a cause of action estoppel to arise, it must be shown that the judgment or determination which was said to create the estoppel was final, that the right or obligation determined in that judgment or determination is identical to the right or obligation to be determined in subsequent proceedings and that the parties 'or their privies' in the two sets of proceedings are the same. 19. Issue estoppel 'operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment'. The consequence of its operation is that a 'judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies'. As Wigney J explained in CDPP v Citigroup: The essential difference between cause of action estoppel and issue estoppel is that the former precludes the assertion of a right or obligation that was determined in the first proceeding, whereas the latter precludes the raising of an issue of fact or law that was necessarily determined in the first proceeding. Save for that difference, the elements are essentially the same … … 22. In this context, 'identical' means identical. In Co-ownership Land Development Pty Ltd v Queensland Estates Pty Ltd, Walsh J said: In order that the principle of issue estoppel may apply it is not enough that an issue in a second action is very similar to an issue in a first action. It must be possible to assert without doubt that the issues are identical. … Abuse of process 25. The doctrine of abuse of process is distinct from the estoppels discussed above. It is 'inherently broader and more flexible than estoppel'. It is 'capable of application in any circumstances in which the use of a court's procedures would be unjustifiably oppressive to a party or which would bring the administration of justice into disrepute'. Although 'insusceptible of a formulation which comprises closed categories', it has been recognised that 'making a claim or raising an issue which was made or raised and determined in an earlier proceeding … can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel'. … 27. A useful list of 'guiding considerations' can be found in the NSW Court of Appeal's decision in Rippon v Chilcotin Pty Ltd. They are: (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue; (b) the opportunity available and taken to fully litigate the issue; (c) the terms and finality of the finding as to the issue; (d) the identity between the relevant issues in the two proceedings; (e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; (f) the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principle of finality of judicial determination and public confidence in the administration of justice; and (g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process. Of course, that list was not intended to be either prescriptive or exhaustive." (Emphasis in original, footnotes omitted)

What did Commissioner O'Sullivan decide?

Commissioner O'Sullivan's decision did not articulate the precise basis on which he upheld the Health Secretary's notice of motion. He did not separately analyse the forms of estoppel relied on by the Health Secretary, or the doctrine of abuse of process. Instead, the Commissioner identified two "key" issues which he regarded as common to either form of estoppel and abuse of process, as set out in the questions at [32] of his decision. The notice of motion was upheld, and the proceedings dismissed, in consequence of the Commissioner answering "yes" to both of those questions. There was no finding, in terms, as to whether the proceedings gave rise to an estoppel (and if so, what type of estoppel) or amounted to an abuse of process.
It is not, however, necessary to explore further this aspect of Commissioner O'Sullivan's decision in order to determine the application for leave to appeal and appeal. For the reasons which follow, we have found error in the Commissioner's reasoning which precluded a finding of cause of action estoppel, issue estoppel or abuse of process.

The requirement for issues in the proceedings to be identical

Prof Dietz submitted in the proceedings before Commissioner O'Sullivan, as he did on appeal, that for cause of action estoppel, issue estoppel or an abuse of process to arise, it was necessary to demonstrate that the issue determined in the first proceedings was identical to that which was sought to be determined in the second proceedings. It is apparent to us that the first question posed at [32] of Commissioner O'Sullivan's decision was intended to reflect that requirement. This inference is available for three reasons: first, the Commissioner referred at [25] and [28]-[30] of his decision to Prof Dietz's submissions in this regard; second, the Commissioner addressed the question under the heading "Identical Issue"; and, at [45] of his decision he referred to the proceedings before him and Commissioner Webster as involving "the same issue".
In this context, the first question posed at [32] of Commissioner O'Sullivan's decision can properly be paraphrased as: Did Commissioner Webster's decision determine the identical issue required to be determined in the proceedings before Commissioner O'Sullivan?
In answer to this question, Commissioner O'Sullivan's decision reflected two conclusions (summarised at [45]): first, that the issue before him was whether Prof Dietz's dismissal on the basis of the "Dismissal Grounds" was harsh, unreasonable or unjust; and, second, the "same issue" had already been determined in Commissioner Webster's Decision. On a proper and complete reading of his decision, Commissioner O'Sullivan must be regarded as having found that the issue to be determined in the proceedings before him was identical to that which had been determined by Commissioner Webster, sufficient to establish either cause of action estoppel or issue estoppel, or to render the proceedings an abuse of process.
Ground 1 of the appeal seeks to challenge those conclusions.
We accept that the Commissioner erred in drawing the conclusions summarised at [45] of his decision.

The "Dismissal Grounds"

The "Dismissal Grounds" to which Commissioner O'Sullivan referred at [45] of his decision were those described in the letter of termination dated 14 September 2021. These in turn reflected the contents of [69(3)-(5)] and [133(1)-(3)] of Commissioner Webster's decision (reproduced at [7] above).
At [69] of her decision, Commissioner Webster summarised five reasons for the (then) threatened dismissal of Prof Dietz which had been put forward by the Health Secretary. For convenience, we will refer to those as "Reason (1)", "Reason (2)" and so on.
Commissioner Webster decided (at [130]) to "restrain" the Health Secretary from dismissing Prof Dietz for the conduct alleged in Reasons (1) and (2), on the basis that the Health Secretary had not discharged her onus to establish that the alleged conduct occurred. The Commissioner determined (at [133]) "not to exercise [her] discretion to make an order restraining the [Health Secretary] from terminating [Prof Dietz]" on the basis of Reasons (3)-(5).

What was the effect of Commissioner Webster's decision?

Prof Dietz submitted on appeal that Commissioner Webster did not decide that termination on the basis of Reasons (1) and (2) would be harsh, unreasonable or unjust, while termination on the basis of reasons (3)-(5) would not be. Rather, in respect of Reasons (3)-(5), the Commissioner should be understood as having deferred deciding whether it would be open to terminate Prof Dietz on those bases until after a mediation had been conducted (and failed). It followed, it was submitted, that Commissioner O'Sullivan's finding to the contrary was in error.
The Health Secretary submitted on appeal that Commissioner Webster had been required to and did consider whether dismissal on the basis of Reasons (3)-(5) would be harsh, unreasonable or unjust. By "dismissing" Prof Dietz's application in respect of those "grounds", Commissioner Webster had determined that no statutory cause of action under s 84 of the Act was available to him. The Health Secretary submitted that the same question arose in the proceedings before Commissioner O'Sullivan.
Commissioner O'Sullivan found, for the reasons set out in particular at [39], [42] and [50] of his decision, that Commissioner Webster must be taken to have found that dismissal on the basis of Reasons (3)-(5) would not be harsh, unreasonable or unjust. In short, Commissioner O'Sullivan reasoned that s 87(1) of the Act required Commissioner Webster to have made an order under s 89 had she determined that a dismissal on those grounds would be harsh, unreasonable or unjust. As she did not do so, it could be inferred that she had made the opposite determination. This construction of s 87(1) is incorrect.
Section 87(1) provides that when the Commission is satisfied that all reasonable attempts to settle an unfair dismissal claim by conciliation have been made but have been unsuccessful, the Commission "is to determine the claim by making an order under section 89, dismissing the application or making any other order it is authorised to make under this Act".
Relevantly for the proceedings before Commissioner Webster, s 89(7) provides that "[in] determining a claim relating to a threat of dismissal, the Commission may order the employer not to dismiss the employee in accordance with that threat". The use of the word "may" connotes that it is within the Commission's discretion whether or not to exercise that power: Interpretation Act 1987 s 9(1). The existence of that discretion allows for the possibility of the Commission finding that a dismissal would be harsh, unreasonable or unjust, but declining to make an order. It could instead decide to "dismiss the application" as contemplated by s 87(1) and so "determine" the proceedings.
This construction of the Act was ultimately accepted by the Health Secretary during the hearing of the appeal. The Full Bench had the following exchange with Senior Counsel for the Health Secretary: "MUIR C: Sorry, to labour the point for me, your submission is that 87 says that if the commission makes the determination that the dismissal is unfair, you might nevertheless dismiss the application because it doesn't determine that it's appropriate to make an order under 89. VILLA: No, what we submitted is that O'Sullivan C's para 50 is correct. So that if there is a finding in terms of s 84 the dismissal is harsh, informed by the matters referred to in s 88, then the appropriate determination of the claim would be the making of an order under one of the potential orders under s 89. Having regard to the flexibility that is built into that by subs (8). And otherwise, if it's not then the application should be dismissed. SLOAN C: So imagine a situation, Mr Villa, where the commission hears a case, determines that the employer had good grounds on which to [effect] the dismissal, and for that reason decides that reinstatement or re-employment would not be practical. But finds a procedural deficiency that would otherwise render the dismissal unreasonable. And then decides, [that] in the circumstances of that particular case, the employee has fully mitigated their loss by having secured alternative employment. You're saying that in those circumstances - notwithstanding that reinstatement would not be practicable, re-employment would not be practicable and there is no basis on which to award compensation - the commission would still be obliged to find a way to make an order under that section. VILLA: I suppose this gives rise to the operation of the parts of s 89 that were not in issue. Which is why I don't have an immediate response to the question. SLOAN C: I think it comes back to the point that Muir C was making. If the dismissal is found not to be harsh, unreasonable or unjust, then s 89 falls away. The only order that could properly be made under s 87 would be that the proceedings be dismissed. VILLA: Yes. SLOAN C: If however, the finding is that the dismissal was harsh, unreasonable or unjust, 89 is enlivened. Which on its terms confers a discretion as to a range of options. And in descending order, re-instatement, re-employment or compensation. Or it may elect to do none of those things and dismiss the application on the basis that there is no relief required. VILLA: Yes. In the circumstances where there is the positive finding of harshness, that residual power to dismiss must exist. I accept that. Conversely, where the contrary finding is made, then the automatic consequence must be dismissal of the application."
The premise of Commissioner O'Sullivan's second conclusion at [45] of his decision was his construction regarding the effect of s 87. That premise falls away. There is no alternative rationale in the Commissioner's decision for a finding that Commissioner Webster had determined that it would not be harsh, unreasonable or unjust for Prof Dietz to be dismissed on the basis of Reasons (3)-(5).
Indeed, it is possible to read Commissioner Webster's decision as coming to the opposite view. At [133] of her decision, the Commissioner stated that she had "decided not to exercise my discretion to make an order". This suggests that she had determined that "her discretion" under s 89(7) had been enlivened, but that she had decided not to exercise it. A condition precedent to the operation of s 89 is the finding that a dismissal was or would be harsh, unreasonable or unjust. On that reading, Commissioner Webster's decision is open to the interpretation that she determined that dismissal on the basis of Reasons (3)-(5) would in fact be harsh, unreasonable or unjust, albeit that she declined to make any orders.
There is at the very least ambiguity arising from Commissioner Webster's decision. Commissioner O'Sullivan's decision provided no sound basis for his conclusion that Commissioner Webster had determined that Prof Dietz's dismissal on the basis of Reasons (3)-(5) would not be harsh, unreasonable or unjust. On his reasoning, that conclusion was not available to him.

The reasons for the dismissal

We also consider that Commissioner O'Sullivan was wrong to conclude that the proceedings before him were limited to the issue of whether Prof Dietz's dismissal on the basis of Reasons (3)-(5) was harsh, unreasonable or unjust. This conclusion failed to address Prof Dietz's contention that the Health Secretary had misapplied Commissioner Webster's decision, so as to create a false distinction between Reasons (1) and (2) on the one hand, and Reasons (3)-(5) on the other.
In the proceedings before Commissioner O'Sullivan, the Health Secretary submitted that the Show Cause Letter "identified five reasons justifying termination"; that Commissioner Webster had only exercised her discretion in respect of two of those "grounds"; that Prof Dietz had been unsuccessful in establishing that it would be harsh, unreasonable or unjust to be dismissed on the remaining three "grounds"; the Health Secretary dismissed Prof Dietz "on those precise grounds"; that in bringing the proceedings Prof Dietz was required to establish that dismissal on those grounds was harsh, unreasonable or unjust; and, that question was determined in Commissioner Webster's decision.
In response, Prof Dietz submitted to Commissioner O'Sullivan that Commissioner Webster had not intended to "draw some bright line" between the conduct in Reasons (1) and (2) and the substance of Reasons (3)-(5). To do so, it was submitted, "would be to overlook the fact that there are clear links between the Patient A complaint and Conference conduct allegations and the concern about the respondent's reputation and the loss of trust and confidence in the applicant".
Similar submissions to those set out above were advanced by the parties on appeal.
We have difficulty accepting the Health Secretary's description of the Show Cause Letter as "identifying five reasons justifying termination". Attached to the Show Cause Letter was a schedule setting out the findings of misconduct that had been made against Prof Dietz. These are encapsulated by Reasons (1) and (2) as described by Commissioner Webster. While the Show Cause Letter raised the considerations reflected in Reasons (3)-(5), it did not separately identify them as being, in and of themselves, grounds for termination of employment. Rather, they were concerns said to arise from the findings of misconduct, or which informed the approach which Ms Clark (the author of the letter) considered she should take in relation to those findings.
The process of reasoning adopted by Commissioner Webster, and her summary of the Health Secretary's "reasons for the threatened dismissal" at [69] of her decision, cannot detract from the terms of the Show Cause Letter or allow it to be read other than in accordance with those terms. In any event, we observe that the interrelationship between Reasons (1) and (2) on the one hand, and Reasons (3)-(5) on the other, was acknowledged in part at [131] of Commissioner Webster's decision.
Commissioner O'Sullivan appears to have accepted the Health Secretary's submissions, summarised at [46] above, as that is the premise of his conclusion that the issue before him was whether Prof Dietz's dismissal on the basis of Reasons (3)-(5) was harsh, unreasonable or unjust. However, Prof Dietz had placed in issue the question of whether the Health Secretary had misread or misapplied Commissioner Webster's decision so as to draw a false dichotomy between Reasons (1) and (2) on the one hand and Reasons (3)-(5) on the other. Commissioner O'Sullivan did not address that contention.
It follows that the issue before Commissioner O'Sullivan was not limited in the way he described. Also in issue was whether Reasons (3)-(5) could stand apart from Reasons (1)-(2).

The factual context in which the dismissal occurred

It is also necessary to have regard to the fact that Prof Dietz's dismissal occurred in a different factual context to that in which the threat of dismissal (with which Commissioner Webster dealt) had been made.
One of the "Reasons for Application" in the Application for Relief in Relation to Unfair Dismissal filed in the proceedings before Commissioner O'Sullivan was the failure by the Health Secretary to "consider and adopt the recommendation of Commissioner Webster in her decision". The Health Secretary joined issue with this contention in the Employer's Reply to Application for Relief in Relation to Unfair Dismissal filed in those proceedings.
This controversy was maintained in the proceedings before Commissioner O'Sullivan. The Health Secretary submitted that the contention that she failed to consider and adopt Commissioner Webster's recommendation was "contradicted by the evidence". The evidence she led in support of the notice of motion included the correspondence referred to at [8], [9] and [11] above. In oral submissions, counsel for Prof Dietz contended that "the institution of these proceedings was only necessary because the respondent chose to dismiss the applicant without abiding by the recommendation of the Commission".
The positions advanced by the parties before Commissioner O'Sullivan demonstrate that at issue before him was whether the Health Secretary had failed to consider and adopt Commissioner Webster's recommendation and whether, if so, this rendered the dismissal harsh, unreasonable or unjust. On the case presented by the Health Secretary, that issue required the resolution of a factual controversy.

Conclusions

The proceedings before Commissioner Webster and Commissioner O'Sullivan were each commenced pursuant to s 84 of the Act. The question respectively in each case was whether the threatened dismissal would be, or the dismissal was, harsh, unreasonable or unjust. However, the fact that the proceedings each called for the application of the same statutory test does not mean that they gave rise to identical issues.
Commissioner Webster's decision must be taken to have been determined on the evidence and submissions before her. Even were that decision to be read as having determined that Prof Dietz's dismissal on the basis of Reasons (3)-(5) would not be harsh, unreasonable or unjust, it would not necessarily follow that the same outcome must follow were the subsequent dismissal to take place in a different factual context.
Prof Dietz's dismissal took place in the context of Commissioner Webster's recommendation and conflict between the parties as to whether the mediation that had been recommended should take place prior to any dismissal being effected. A further issue in contention before Commissioner O'Sullivan was whether Commissioner Webster's decision had created, or had been inaccurately read as creating, a false dichotomy in the reasons advanced by the Health Secretary for Prof Dietz's dismissal. These were matters on which Prof Dietz relied in the proceedings before Commissioner O'Sullivan and must as a matter of logic have given rise to different issues than those determined by Commissioner Webster.
For the reasons set out above, we find that Commissioner O'Sullivan erred in answering the first question at [32] of his decision in the affirmative. It should have been answered in the negative, in which case, consistent with the Commissioner's reasoning and as accepted by the parties, the Health Secretary would have been unable to establish cause of action estoppel, issue estoppel or an abuse of process. It follows that the Commissioner ought to have dismissed the Health Secretary's notice of motion.

Ground 2 of the appeal

Our findings in respect of ground 1 are sufficient to dispose of the appeal. We will not traverse the issues raised by ground 2.

Orders

We make the following orders: 1. Leave to appeal is granted. 2. The appeal is upheld. 3. The decision of Commissioner O'Sullivan of 29 November 2022, that the application in matter 2021/00288596 be dismissed, is quashed. 4. The Health Secretary's notice of motion in matter 2021/00288596, filed on 29 November 2021, is dismissed. 5. The file in matter 2021/00288596 will be returned to Commissioner O'Sullivan for determination in accordance with this decision.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 23 June 2023

At a glance

Court

Decision date

Source

Judgment (20 paragraphs)

Parties

Cases Cited (10)