BETWEEN : DIRECTOR GENERAL DEPARTMENT OF JUSTICE

CIVIL SERVICE ASSOCIATION OF WESTERN AUSTRALIA INCORPORATED

BETWEEN : THE DIRECTOR GENERAL DEPARTMENT OF JUSTICE

THE CIVIL SERVICE ASSOCIATION OF WESTERN AUSTRALIA INCORPORATED

Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

Citation : [2005] WAIRC 01813

Industrial law (WA) - Jurisdiction of the Public Service Arbitrator - Construction of s 80E of the Industrial Relations Act (WA) - Powers of Industrial Appeal Court where ground of appeal is made out - Whether any injustice suffered by the appellant - Whether appellant had right to be heard as to allegations of impropriety

Industrial Relations Act 1979 (WA), 80E

Public Sector Management Act 1994 (WA), s 7, s 8, s 9, s 21, s 64, s 97

Public Sector Management (Examination and Review Procedures) Regulations 2001 (WA)

Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596

Attorney-General for the State of New South Wales v Quin (1990) 170 CLR 1

Balog v Independent Commission Against Corruption [1990] HCA 28; (1990) 169 CLR 625

Chairperson, Aboriginal and Torres Strait Islander Commission v Commonwealth Ombudsman (1995) 63 FCR 163

Civil Service Association of Western Australia Incorporated v Director General, Ministry of Justice (2002) 82 WAIG 2858

Department of Health v Arumugam [1988] VicRp 42; (1988) VR 319

Director General of the Department of Justice v The Civil Service Association of Western Australia (Inc) (2005) 85 WAIG 1906

Erbs v Overseas Corporation Pty Ltd (1986) EOC 92-181

Fenwick v Beveridge Building Product Pty Ltd (1985) 62 ALR 275

Shaw v Police Integrity Commission [2005] NSWSC 782

Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170

Polyukhovich v The Commonwealth of Australia [1991] HCA 32; (1991) 172 CLR 501

Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336

Civil Service Association v The Director General for Community Development [2002] WASCA 241

1 This is an appeal from a decision of the Full Bench of the Western Australian Industrial Relations Commission made on 14 June 2005, on appeal from a decision of Commissioner Harrison, who was then acting as the Public Service Arbitrator. There were two identical appeals; by consent, IAC 8 of 2005 was discontinued, and the Court dealt with IAC 7 of 2005 only. The background to the matter is as follows. It involved the selection of a person for a level 7 vacancy in the Ministry of Justice (now called the Department of Justice).

2 A Mr Jones was interviewed by a selection panel, following the recommended selection process within the Department of Justice. The panel considered him the best candidate, and did not consider that it was necessary to contact his referees. It forwarded a recommendation to the Acting Executive Director of the Department of Justice that Mr Jones be selected. The Acting Executive Director possessed delegated authority from the appellant to appoint an officer to fill the vacancy. The Acting Executive Director endorsed the recommendation and it was forwarded to the Human Resources Department for further action.

3 Mr Jones was advised by a recruitment officer that he had been recommended for the position. The letter also advised that applicants who had not been recommended could lodge a formal application for review by a certain date, and went on to advise that "in view of the requirement to offer unsuccessful applicants the opportunity for review you will appreciate your appointment is not yet assured". Mr Jones understood from this letter that he would be appointed to the position, subject to there being no application for review prior to the relevant date. That was both the inference to be drawn from the letter, and, it appears, the standard procedure within the department. However, although there were no such applications, Mr Jones was not appointed.

4 The appellant sent a memo to the chair of the selection panel. In it, the appellant noted that he had been advised of the recommended appointment of Mr Jones. He asserted that it had previously come to his attention that there were "some concerns" regarding Mr Jones' skills and abilities. He outlined what he considered those concerns to be. He requested the selection panel to seek written referee reports from persons whom he nominated. He attached a form of referee report to be completed by the referees, and asked to be advised of "your recommendation" (it is not clear whether he meant the recommendation of the entire panel, or of the chair) regarding Mr Jones' suitability, before any appointment was confirmed.

5 The findings of the Arbitrator were that two of the four nominated referees had limited knowledge of Mr Jones' ability, and that the referee reports did not contain adverse comments in relation to a selection criterion which seemed to have been of particular interest, relating to "relationship building and networking". The selection panel apparently met to review the reports, but determined not to review its original decision, as it considered it had already fulfilled its function.

6 The Executive Director, having returned to work, then sent a memorandum to the recruitment officer advising that, as there were "issues" about Mr Jones' capacity to fill the position, and as he was considering a restructure of the relevant section with the possibility that the level 7 position might be abolished, "all things considered" he had decided "not to proceed" with filling the vacancy. Mr Jones was then sent a letter from the Director of Human Resources, advising him that, despite the earlier letter, the position would not be filled and that the Executive Director felt that Mr Jones was "unable to meet the requirements of the vital aspects of the essential criteria" (whether this is intended as a reference to a number of criteria, or only the networking criterion already referred to, is not clear).

7 The letter advised that the appointment was subject to the Public Sector Management (Examinations and Review Procedures) Regulations 2001 (WA) and that it was therefore open to Mr Jones to make application for a review if he was of the opinion that the "Recruitment, Selection and Appointment Standard" had been breached. The letter advised that his claim, if any, should be lodged by 5 pm, 19 December 2002.

8 Mr Jones did not make a claim pursuant to the regulations. In January of 2003, the level 7 position was abolished.

9 The Arbitrator made a number of findings. They included:

• the appellant acted inappropriately and contrary to statutory requirements by writing his initial memo and initiating a review of the selection process;

• the appellant did not have power to interfere in the selection process;

• the appellant's actions were contrary to a number of provisions of the Public Sector Management Act 1994 (WA) ("the PSM Act") and of the Western Australian Public Sector Code of Ethics ("the Code");

• the appellant did not act in an open and transparent manner towards Mr Jones by nominating two of the four nominees, did not ensure Mr Jones' right to due process, did not act in an open and accountable manner towards Mr Jones, and did not ensure that the department's administrative responsibilities were clearly defined;

• there were certain findings in the passive voice relating to Mr Jones, such as that he "was denied due consideration and courtesy", but without nominating the person or persons whose actions had resulted in that denial;

• the Arbitrator found that she had jurisdiction to review the appellant's actions and to make the findings which she had made;

• the appropriate remedy was that Mr Jones should be appointed to a substantive level 7 position, effective from the date that the abolished position would have been filled by him had his appointment proceeded.

10 The appellant appealed to the Full Bench on a number of grounds. They were broadly to the effect that the Arbitrator erred in finding she had jurisdiction to consider the application when the appellant asserted that the Arbitrator was precluded from doing so by s 80E(7) of the Industrial Relations Act 1979 (WA) ("the Act"); that she erred in finding she had jurisdiction to "judicially review" the appellant's decision; and that she erred in the conclusions which she reached as to the obligations resting upon employing authorities under the PSM Act and in making the order that Mr Jones be appointed to a level 7 position. There was a cross-appeal by the respondent, concerning the Arbitrator's conclusions about the appellant's ability himself to perform a function which he had delegated to the Executive Director. That issue involved the construction of s 59(1)(a) of the Interpretation Act 1984 (WA). The cross-appeal was dismissed.

11 So far as the appellant's appeal was concerned, the Full Bench generally upheld the Arbitrator's findings. So far as the findings of fact were concerned, it went, the appellant submits, further than the Arbitrator had done, and made findings which were not open to be made in the absence of any factual foundation in the reasons of the Arbitrator herself.

12 The Full Bench findings, of concern to the appellant, fell into two categories. The first related to the whole question of the abolition of the level 7 position, which the Full Bench found was done in breach of many of the provisions of the PSM Act and the Code and which it found had, in effect, been done in order to prevent Mr Jones from obtaining the position. The appellant submits in relation to that category of findings, that the Arbitrator's findings below were in relation to the non-appointment, rather than in relation to the abolition of the position.

13 The second category of findings related to employees other than the appellant, there being a finding that certain other employees, including the Executive Director and the Director of Human Resources, had breached provisions of the PSM Act and the Code by, for example, treating Mr Jones unfairly. In relation to these findings it is submitted that they were made without hearing the employees in question. For reasons which will appear, it is, in our view, not necessary to deal with that issue. However, it is desirable to note that the findings relating to those other employees are, it would appear from the reasons of the Full Bench, findings which are critical of the process as a whole (and to that extent appear to be consistent with the Arbitrator's findings that Mr Jones was treated unfairly, for example) and are therefore necessarily critical of the part played by those employees in the process. However, there is not, in our view, any finding which could be understood as one of dishonesty, or malice, or conscious impropriety on the part of those employees.

14 The only way in which the Full Bench varied the Arbitrator's decision, was that instead of ordering that Mr Jones be appointed to a substantive level 7 position, the Full Bench declared the abolition of the particular level 7 position to be void, and ordered that Mr Jones be appointed immediately either to it, or to another level 7 position with commensurate salary and the same duties, from 22 December 2004.

15 The grounds of appeal are prolix, and overlap. That may stem in part from the limited nature of the appeal which lies to this Court from the Full Bench. A number of the grounds dealing with an alleged denial of a right to be heard, in particular, may be lacking in clarity because, if they were clearly articulated, they might more readily be perceived as alleging errors of law or fact, rather than as denials of the right to be heard.

16 However, there are a number of grounds which allege an error in law in the construction of the provisions of the Act which give the Arbitrator and the Full Bench jurisdiction in relation to industrial matters concerning government officers. It appears to us that those grounds do clearly allege errors which would fall within s 90(1)(b) of the Act. They are grounds 1, 2, and 7, which are as follows:

1. The Full Bench erred in law in finding that the Public Service Arbitrator had jurisdiction to inquire by way of judicial review into the refusal of the Appellant's delegate to appoint Mr Neville Jones.

(a) The Public Service Arbitrator is not vested with this jurisdiction either specifically or generally by section 80E(5) of the Industrial Relations Act or otherwise.

(b) Appointment decisions made pursuant to section 64 of the Public Sector Management Act are not amenable to judicial review.

2. The Full Bench erred in law in not finding that section 80E(7) and section 23(2a) of the Industrial Relations Act prevented the Public Service Arbitrator from enquiring into and dealing with the refusal of the Appellant's delegate to appoint Mr Neville Jones.

(a) Section 80E(7) provides the Public Service Arbitrator and section 23(2a) that the Commission do not have jurisdiction to enquire into and deal with any matter in respect of which a procedure referred to in section 97(1)(a) of the Public Sector Management Act is or may be prescribed under that Act.

(b) Such a procedure has been prescribed by the Public Sector Management (Examination and Review Procedures) Regulations in relation to the Recruitment, Selection and Appointment Standard made under the Public Sector Management Act which prescribes the minimum standard of 'merit, equity and probity' for selection and appointment in the Public Sector.

(c) Notwithstanding sections 8 and 9 of the Public Sector Management Act and the Public Sector Code of Ethics the review conducted and the findings of breach made by the Public Service Arbitrator concerned the Recruitment, Selection and Appointment Standard as in substance they involved the 'merit, equity and probity' of the decision not to appoint Mr Jones and the Full Bench erred in not so finding.

...

Excess Jurisdiction

7. If there was jurisdiction to judicially review the decision not to appoint Mr Jones the only order that could be made by the Full Bench was to declare the decision void.

Particulars

(a) In judicially reviewing a discretionary decision a Tribunal is unable to substitute its decision for that of the primary decision maker and the Tribunal can only require the decision under review to be made according to law.

(b) In making an order to appoint Mr Jones the Full Bench exceeded its jurisdiction because section 80E(7) of the Industrial Relations Act provides an Arbitrator and section 23(2a) of the Commission do not have jurisdiction to inquire into or deal with any matter in respect of which a procedure referred to in section 97(1)(a) of the Public Sector Management Act is or may be prescribed under that Act, such a procedure having been prescribed in the Public Sector Management (Examination and Review Procedures) Regulations, in connection with Recruitment, Selection and Appointment in the Public Sector.

(c) An order requiring the appointment of Mr Jones was otherwise in excess of jurisdiction on the grounds contained in paragraph 6."

17 It can be seen that there are two broad issues raised by these grounds of appeal. The first is the power of the Arbitrator to make findings of illegality and to engage in what was called "judicial review". The second is the specific question of the effect of s 80E(7) on the PSM Act. There is some interplay between these issues, as a result of the way in which the Full Bench resolved the latter question. However, it is convenient to consider the first before turning to the second.

Jurisdiction of Arbitrator to "judicially review"

18 As we understood the submission, it was alleged that the Arbitrator, and on appeal the Full Bench, lacked power to make what were called "specific findings" of unlawfulness or illegality, in effect by way of declaration that an act was unlawful or was void. Because of the particular findings which were made in this case, reference was made by the appellant to the case of Balog v Independent Commission Against Corruption [1990] HCA 28; (1990) 169 CLR 625. As summarised and applied in later cases, the "Balog principle" is to the effect that if there is a potential for damage to an individual's reputation without the safeguards of an open court, "power to report findings of individual guilt should not be implied into a statute" (Chairperson, Aboriginal and Torres Strait Islander Commission v Commonwealth Ombudsman (1995) 63 FCR 163 at 173, Shaw v Police Integrity Commission [2005] NSWSC 782 at [65]).

19 As we understand the reasons of the Full Bench at [62] through to [75], the conclusion was that there was power to engage in "judicial review", including the power to do such things as make bare declarations of illegality. In our view, that conclusion was wrong. However, in our view, that conclusion was also irrelevant in the circumstances of this case, and the challenge to the powers of the Arbitrator and of the Full Bench by the appellant is misconceived.

20 Briefly, it seems to us that it is trite that it is inherent in the powers conferred upon this Court by Pt III of the Supreme Court Act 1935 (WA) that it has power to review the decisions of inferior courts, tribunals, and public authorities in order to ensure that they do not exceed the jurisdiction conferred upon them by law. The purpose and scope of judicial review is to enforce the law governing the exercise of power. Its concern is not with avoiding administrative injustice or error, although that may be a by-product of the exercise of the power: Attorney-General for the State of New South Wales v Quin (1990) 170 CLR 1 at 35 - 36 per Brennan J.

21 The jurisdiction of the Arbitrator, by contrast, is the jurisdiction conferred by s 80E of the Act. Not surprisingly, one does not find in that section the words "judicial review" or any words indicative of the power of the Arbitrator to grant prerogative relief, or to make declarations. The question which then requires consideration is what it is that s 80E permits.

22 Aside from making the obvious point as to the absence from s 80E of any words of the kind to which we have referred, the appellant made two other submissions. The first was that the Balog principle meant that, particularly where the finding might concern the lawfulness or unlawfulness of the actions of a particular individual, the Arbitrator was unable to make a finding that there had been unlawfulness or contravention of particular provisions of the PSM Act. The second was that s 80E must necessarily be read as excluding the power of the Arbitrator to engage in what was called "judicial review", because by s 80E(1) the jurisdiction of the Arbitrator was exclusive, and to read the section otherwise would be to exclude the jurisdiction of this Court, a result which Parliament was not likely to have intended.

"80E. Jurisdiction of Arbitrator

(1) Subject to Division 3 of Part II and subsections (6) and (7), an Arbitrator has exclusive jurisdiction to enquire into and deal with any industrial matter relating to a Government officer, a group of Government officers or Government officers generally.

...

(5) Nothing in subsection (1) or (2) shall affect or interfere with the exercise by an employer in relation to any Government officer, or office under his administration, of any power in relation to any matter within the jurisdiction of an Arbitrator, but any act, matter or thing done by an employer in relation to any such matter is liable to be reviewed, nullified, modified or varied by an Arbitrator in the course of the exercise by him of his jurisdiction in respect of that matter under this Division."

24 The definition of "industrial matter" in the Act is a lengthy one, but in its core meaning is "any matter affecting or relating or pertaining to the work ... of employers or employees in any industry or of any employer or employee therein ... ".

25 Division 3 of Pt II is concerned with the making of general orders, broadly with respect to matters such as suspension, discipline and dismissal; subs (6) of s 80E permits the Arbitrator to refer matters to either the Commission in Court Session or to the Full Bench, and subs (7) will be referred to shortly.

26 The first observation to be made about the exclusive jurisdiction of the Arbitrator conferred by subs (1) is that it is unlikely, having regard to the subject matter and to indications in the Act itself, that it is intended to exclude any power conferred on any other body by other legislation to inquire into any matter relating to the work of government officers. For example, it seems unlikely that it was intended to exclude the particular jurisdiction conferred on other bodies by statutes such as the Equal Opportunity Act 1984 (WA), or the Occupational Safety and Health Act 1984 (WA). Even less likely is it that it was intended to exclude those provisions of the Criminal Code (WA) which relate directly to certain aspects of the work of government officers, in that they are directed to the prevention of the misuse of the office (eg, s 83 - corruption). Within the Act itself, ss 80H and 80I set up a Public Service Appeals Board, and confer upon the Board jurisdiction to hear and determine, inter alia, appeals by public service officers in relation to decisions of employing authorities concerning (among other matters) conditions of service other than salary. Appeals of that kind would plainly involve inquiring into industrial matters, and it can hardly be thought that s 80E(1) was intended to exclude the jurisdiction of such a Board to perform its function.

27 It seems likely, having regard to the considerations mentioned, that the expression "exclusive jurisdiction" in s 80E(1) was intended to do no more than exclude the general jurisdiction of the Commission, pursuant to s23, to inquire into and deal with industrial matters generally. That conclusion is fortified by an examination of s 80D, which prescribes the appointment of a Public Service Arbitrator within the Commission, to hold office for a period not exceeding two years and to be eligible for reappointment. It appears that it was thought desirable to ensure that some expertise developed in a particular member of the Commission in relation to matters involving government officers, and perhaps that there should be some continuity in dealing with such matters, so that it was thought preferable to select an individual Commissioner rather than to leave such matters within the jurisdiction of the Commission generally. Section 80E(1) may be directed at achieving only that end. There is therefore no need to be concerned that a finding about the power of the Arbitrator to make determinations would have any effect upon the jurisdiction of this Court to engage in the process of judicial review.

28 Turning, then, to the question of the proper construction of s 80E(5), read with s 80E(1), in our view the controversy which has arisen relates to a false issue. As we have noted, there is no power conferred by the Act upon the Arbitrator to engage in anything in the nature of "judicial review", or to make a bare declaration. That is jurisdiction of a kind quite different from the merits-based inquiry contemplated by s 80E. To the extent that the reasons of the Full Bench might be read as suggesting that there is such power, they are in error.

29 However, the powers of the Arbitrator are very wide. They are to inquire into and deal with any industrial matter. To the extent necessary, the exercise by an employer in relation to a government officer of a power relating to that industrial matter may be reviewed, nullified, modified, or varied by the Arbitrator.

30 An inquiry into an industrial matter will, where that industrial matter is affected by other legislation, or where the actions of persons involved in the industrial matter are, in some respect, governed by other legislation, involve an inquiry into what was done, in that legislative context. In order to determine how to "deal with" an industrial matter, the Arbitrator must find relevant facts. If it is the case that a relevant factual finding suggests that a person has been guilty of unlawful or improper conduct, that is a finding which it is open to the Arbitrator to make, not as an end in itself, but as a step in determining how the industrial matter is to be dealt with.

31 Where, as is presently the case, the way in which officers in the public service deal with each other is the subject of principles and requirements contained in legislation such as the PSM Act, it will often be desirable for the Arbitrator to consider whether the behaviour of individuals involved in the industrial matter has been in conformity with those principles and requirements. Again, findings of that kind would not be made as an end in themselves, but would be made in order to determine how, in the broad statutory context, it would be appropriate to deal with the industrial matter.

32 It will on occasion, as part of that process, be necessary for the Arbitrator to undertake a consideration of the relevant statutes, so as to ascertain how they apply to the facts as found. That exercise is undertaken, not in order authoritatively to declare the meaning of the statutory provision, but again as a step in the process of ascertaining what is required, in the statutory context, to deal with the industrial matter.

33 Those conclusions may on occasion lead to the view that it is necessary in order to deal appropriately with the industrial matter, to nullify, modify, or vary an action or decision of an employer, pursuant to s 80E(5). That subsection does not confer any independent jurisdiction to quash those decisions, but only to do so to the extent necessary to ensure that the industrial matter is dealt with as contemplated by s 80E(1). Similarly, the word "reviewed" in s 80E(5) is plainly not intended to confer some independent power to review any decision of an employer, but only a power to review (and, if necessary, to differ from) the decision where it is necessary to do so as part of the process of dealing with an industrial matter.

34 When s 80E(1) and (5) are understood in the way in which we have endeavoured to explain, the controversy about the Arbitrator's power of "judicial review" simply disappears. There is plainly no such independent power. Equally plainly, however, some of the questions which would be determined by a Court undertaking judicial review of the actions of government officers may be questions which it is necessary for an Arbitrator to consider and determine in order to deal with an industrial matter relating to those government officers. Those questions are dealt with by the Arbitrator, however, not in order to make an authoritative and binding determination concerning them, but as steps in the process of determining how the industrial matter is to be dealt with.

35 Turning now to the question of s 80E(7), that subsection reads as follows:

"(7) Notwithstanding subsections (1) and (6), an Arbitrator does not have jurisdiction to enquire into or deal with, or refer to the Commission in Court Session or the Full Bench, any matter in respect of which a procedure referred to in section 97(1)(a) of the Public Sector Management Act 1994 is, or may be, prescribed under that Act."

36 Before turning to s 97(1)(a) of the PSM Act, it is desirable to give a broad overview of some of the provisions of that legislation. The long title of the PSM Act is "An Act to provide for the administration of the Public Sector of Western Australia and the management of the Public Service and of other public sector employment; to repeal the Public Service Act 1978; and to provide for related matters". Section 6(2) provides that, except to the extent to which a provision of the PSM Act specifies otherwise, the PSM Act "applies to and in relation to matters dealt with by this Act". There is therefore no general exclusion of the Act, but rather it is provided that it generally applies unless the PSM Act specifies otherwise. That provision must, of course, now be read subject to the express exclusion in s 80E(7).

37 Sections 7 to 9 inclusive provide respectively for the "principles of public administration and management" to be observed in relation to the public sector, the "principles of human resource management" that are to be observed in relation to the public sector, and "the principles of conduct" that are to be observed by all public sector bodies and employees. A number of the grounds of appeal raise the question of the extent to which these provisions are intended to be expressive of more than mere pious hope, and the question of what, if any, consequences the legislature contemplated might flow from a failure to comply with those principles.

38 It was conceded by the appellant that there are indications in the PSM Act that ss 7 - 9 are intended to have some binding force and effect. For example, s 30 provides that the Chief Executive Officer of a department or organisation "shall comply" with the principles set out in s 7, s 8 and s 9. Were it not for provisions of that kind, one might readily have assumed that the legislature intended that the only sanction for failure to comply with those principles would be adverse consideration and report by the Commissioner for Public Sector Standards, whose functions we shortly describe.

39 It is certainly the case that ss 7 - 9 appear to display confusion concerning the function of legislation. Legislation is, of course, generally understood in the community as providing binding and enforceable rules of conduct, usually with some form of sanction or relief available where there has been a failure to comply. A reading of ss 7 - 9 suggests that those instructing Parliamentary Counsel had something else in mind. For example, the principles set out in s 9 commence with the "principle" that employees "(a) are to comply with the provisions of - (i) this Act and any other Act governing their conduct". It is startling, to say the least, that it was thought necessary to pass a law which states that persons to whom the law applies are to comply not only with it, but with other laws which also apply to them. It is of the essence of laws that persons are required to comply with them, where they apply to those persons. At the other extreme, s 9 also provides that all public sector bodies and employees "(c) are to exercise proper courtesy, consideration and sensitivity in their dealings with members of the public and employees". While it is, of course, extremely desirable that public sector employees (and indeed all members of the community) exercise courtesy and sensitivity in their dealings with others, it is also somewhat startling to see something as nebulous as a requirement of "sensitivity" enshrined as a legislative requirement.

40 Whatever force they might otherwise have, however, ss 7 - 9 are of considerable importance in relation to the functions of the Commissioner for Public Sector Standards. That office is created by s 16 of the PSM Act and is itself not an office in the public service. The functions of the Commissioner are set out in s 21 and are, among others, the following:

"21. Functions of Commissioner

(1) The functions of the Commissioner are, having regard to the principles set out in sections 7, 8 and 9 

(a) to establish public sector standards setting out minimum standards of merit, equity and probity to be complied with in the Public Sector in 

(i) the recruitment, selection, appointment, transfer, secondment, performance management, redeployment, discipline and termination of employment of employees; and

(ii) such other human resource management activities relating to employees as are prescribed,

and monitor compliance with those public sector standards;

(b) to establish codes of ethics setting out minimum standards of conduct and integrity to be complied with by public sector bodies and employees, and monitor compliance with those codes;

(c) to assist public sector bodies to develop, amend or repeal codes of conduct 

(i) setting out minimum standards of conduct and integrity to be complied with by themselves and their employees; and

(ii) consistent with codes of ethics established under paragraph (b),

and monitor compliance with those codes;

...

(e) to monitor compliance by public sector bodies and employees with the principles set out in sections 8(1)(a), (b) and (c) and 9;

... "

Paragraphs (g) - (i) require the Commissioner to report from time to time to the responsible Minister on the compliance or non-compliance by the public sector body and its employees with certain principles contained in s 8 and s 9; to report from time to time to each House of Parliament on those matters; and to report annually to each House of Parliament on the compliance or non-compliance by public sector bodies and employees with certain principles contained in s 8 and s 9 and also with public sector standards, codes of ethics and codes of conduct.

41 Section 21(11) explains the relative status of standards, codes of ethics and codes of conduct. A public sector standard prevails over an inconsistent code of ethics or code of conduct, while a code of ethics prevails over an inconsistent code of conduct.

42 Whatever else ss 7 - 9 may require, they at least appear to prescribe considerations to which the Commissioner must have regard when establishing public sector standards.

43 It is against that background that s 97(1) provides:

"97. Functions of Commissioner concerning relief in respect of breach of public sector standards

(1) The functions of the Commissioner under this Part are --

(a) to make recommendations to the Minister on the making, amendment or repeal of regulations prescribing procedures, whether by way of appeal, review, conciliation, arbitration, mediation or otherwise, for employees and other persons to obtain relief in respect of the breaching of public sector standards;

(b) to appoint persons for the purpose of implementing procedures referred to in paragraph (a); and

(c) to monitor the operation of procedures referred to in paragraph (a)."

44 Translating all of that back to s 80E(7) of the Act, it can then be seen to provide that an Arbitrator does not have jurisdiction to inquire into any matter in respect of which a procedure for employees to obtain relief in respect of the breaching of public sector standards is or may be prescribed.

45 There was some discussion in the present appeal of whether the words "or may be" were intended to convey that the jurisdictional limitation existed in respect of any matter concerning which it was possible to prescribe a procedure pursuant to s 97(1)(a), or only to exclude jurisdiction where such a procedure was from time to time actually prescribed. Although it is not strictly necessary to determine the question, in our view it must mean the latter. That is, it is intended to exclude the jurisdiction of the Arbitrator only where a procedure "is" (that is, at the time of the enactment of s 80E(7)) or "may be" at some time after the enactment of that provision prescribed, rather than to exclude jurisdiction wherever such a procedure "could be" prescribed.

46 We reach that conclusion primarily because of the wording of subs (7), since in that context the words "may be" appear to us to more appropriately be understood as connoting a temporal limitation, rather than extending the subject matter limitation. Also as a matter of public policy, when one has regard to the nature of public sector standards described by s 21 of the PSM Act, to exclude the jurisdiction of an Arbitrator wherever a procedure in respect of such a standard could be prescribed would be, in effect, to exclude the jurisdiction of the Arbitrator entirely in respect of industrial matters concerned with minimum standards of merit, equity and probity in recruitment, discipline and other human resource management matters. That would be effectively to exclude the jurisdiction of the Arbitrator in relation to a very significant proportion of industrial matters. It is unlikely that the legislature intended such a wide exclusion of jurisdiction in circumstances where employees did not in fact have available to them any alternative relief prescribed pursuant to s 97.

47 However, in the present case, it is submitted that there is a relevant procedure.

48 In the Government Gazette of 20 April 2001, there is prescribed pursuant to s 21 of the PSM Act a "Recruitment, Selection and Appointment Standard" which reads as follows:

"Outcome

The most suitable and available people are selected and appointed.

The Standard

The minimum standard of merit, equity and probity is met for recruitment, selection and appointment if:

• A proper assessment matches a candidate's skills, knowledge and abilities with the work-related requirements of the job and the outcomes sought by the public sector body, which may include diversity.

• The process is open, competitive and free of bias, unlawful discrimination, nepotism or patronage.

• Decisions are transparent and capable of review."

49 There is then prescribed by regulation the Public Sector Management (Examination and Review Procedures) Regulations 2001. The regulations deal with the notice to be given of decisions about appointments and selection. It provides that a public sector body is to give a written notice of a prescribed kind to each person who applies unsuccessfully to be appointed to fill a vacancy. A person may lodge a claim under that regulation if the person considers that a public sector body has breached a public sector standard established in respect of the recruitment, selection or appointment of employees. Such a claim may be made in relation to action taken by the body to appoint or not appoint a person to fill a vacancy, where the person is adversely affected by that action.

50 Other regulations then provide for the person making the claim to be given certain information, for the public sector body itself to consider and take steps to resolve the claim, and then if the claim is not resolved within a prescribed period, the public sector body is to ask the Commissioner to appoint an examiner to examine the claim. The functions of the examiner are then set out. The Commissioner considers the examiner's report and may either dismiss the claim or commence a further process which could eventually lead to the public sector body either giving notice to the affected person of action which will be taken by the public sector body to remedy the matter, or give notice to the person of why no action will be taken by the public sector body (reg 24(2)).

51 One can see in the circumstances of this case why the CSA, on behalf of Mr Jones, chose to approach the Arbitrator, rather than invoke the regulations. The Arbitrator has power to make decisions which will give effective relief to claimants. The regulations, by contrast, plainly contemplate that as a result of a somewhat lengthy process, it will ultimately be open to the public sector body to determine that nothing whatever will be done to assist the claimant. If that result is considered by the Commissioner to be unsatisfactory, the Commissioner may well refer to it in a report pursuant to s 21 of the PSM Act, but there is no power in the Commissioner to order a different result. While those drafting the regulations no doubt expected that relevant bodies will act in good faith and will genuinely attempt to resolve a matter, one can see why an aggrieved claimant would often prefer that the final decision rest with an independent body. However, s 80E(7) is not concerned with the respective merits of the procedures, but only with whether a procedure is prescribed.

52 Turning, then, to a proper construction of subs (7), the procedures referred to in s 97(1) are procedures "by way of appeal, review, conciliation, arbitration, mediation or otherwise". There are plainly elements of conciliation and mediation in the regulations which we have described. Section 97(1) refers to procedures "for employees and other persons to obtain relief". As we have noted, the "relief" which may ultimately be obtained under the regulations may be, in practical terms, that nothing is done. However, the expression "relief" must be read against the background of the preceding words, which include conciliation, mediation "or otherwise". It seems to us that a procedure which may result in a conciliated or mediated resolution, or which may, after the recommendation made by a reviewer, result in the public sector body taking action to afford relief should be regarded as falling within the statutory description. The procedure then, which is prescribed by the regulations appears to be a procedure of the type contemplated by s 97(1).

53 The "matter" in respect of which the procedure may be prescribed pursuant to s 97(1) is the matter of the "breaching of public sector standards". In the present case, there is a standard dealing with "Recruitment, Selection and Appointment", and that is the "matter" in respect of which the procedure is prescribed. That matter having been dealt with by the prescribing of a procedure pursuant to s 97(1)(a), it would follow, in our view, that the jurisdiction of the Arbitrator is therefore excluded in respect of it.

54 As we understand it, the Full Bench considered that there were two reasons why s 80E(7) did not operate to exclude the jurisdiction of the Arbitrator in the present case. The first is to be found in [77] of the reasons of the President, with whom Senior Commissioner Gregor agreed. That was that the present case was not a matter "which related in any way to any Public Sector Standards, at least in the manner and in the way in which it came before and was required to be considered by the Arbitrator". That approach reads s 80E(7) as excluding the jurisdiction of the Arbitrator only where a breach of a public sector standard is the allegation made to the Arbitrator. However, the subsection is not framed so narrowly. Rather, it excludes jurisdiction in relation to any "matter" in respect of which a procedure is prescribed. That is, it excludes jurisdiction in relation to the "matter", not in relation to particular allegations. The matter in this case is the breach of a very broad standard relating to the appointment of employees.

55 If the Full Bench's reasoning were correct on this point, s 80E(7) on one view would never have any work to do, since the "matter" before the Arbitrator will always be an "industrial matter" as defined by the Act, being, in effect, a matter affecting or pertaining to the work of employees, rather than a matter relating directly to breach of a public sector standard. Since ss 7 - 9 of the PSM Act are so broad in their scope, it would invariably be possible to frame a claim so as to allege breach of those principles, rather than to rely directly on breach of a public sector standard.

56 While s 80E(7) is in some respects not happily phrased, and while we acknowledge that as a matter of legal principle, it is undesirable to construe too broadly provisions which limit the right of persons to approach courts and tribunals, it seems to us that, having regard to the statutory context, s 80E(7) must be read as excluding jurisdiction in respect of a matter, wherever there is a matter in respect of which a relevant standard has been prescribed and in respect of which procedures of the type described in s 97(1)(a) have been prescribed. In this case, as we have noted, a standard has been prescribed in relation to selection and appointment, and the result of the prescription of procedures pursuant to s 97 of that standard is that the jurisdiction of the Arbitrator is excluded in relation to the whole of that "matter", regardless of the precise allegations of misconduct or unfair conduct which may be made in respect of it.

57 The second of the Full Bench's reasons for finding that s 80E(7) did not exclude the jurisdiction of the Arbitrator seems to have been that contained in an excerpt from the reasons for decision in an earlier case, which is quoted at [67] of the President's reasons (Civil Service Association of Western Australia Incorporated v Director General, Ministry of Justice (2002) 82 WAIG 2858) and which is dealt with to similar effect at [160] of the reasons of Commissioner Wood in Director General of the Department of Justice v The Civil Service Association of Western Australia (Inc) (2005) 85 WAIG 1906. The passage from the earlier case relevantly reads:

"However, the question for the Arbitrator was not and could never be whether there was a breach of the prescribed standards, because the prescribed standards could only be applicable to an act of transfer or purported act of transfer which was lawful and/or within power, not one which was void. S.97(1)(a) of the PSM Act does not operate in its terms, it is trite to observe, to deprive the Arbitrator of jurisdiction to determine whether there is a valid exercise of power under s 65 of the PSM Act. Indeed, it confers it."

The last sentence of that quotation is not at all clear. Section 97, of course, confers no jurisdiction on the Arbitrator; indeed, the Arbitrator is not mentioned in that section. Leaving that observation aside, as we understand the passage quoted, it is to the effect that s 80E(7) can only exclude the jurisdiction of the Arbitrator to inquire into and deal with acts which are lawful, not acts which are unlawful, or acts which are void. As we understand the argument in the present case, the reference would not be to s 65 of the PSM Act, but to s 64, which deals with appointment.

58 It is not easy to see how a decision could be unlawful or void pursuant to either s 64 or s 65 of the PSM Act. Each of those sections confers power, in broad terms, to appoint or to transfer officers as the case may be. Section 64 does refer to appointment "in accordance with approved procedures", so that it may be arguable that a failure to comply with approved procedures would render the decision either unlawful, or "void". Further, it may well be that read in its statutory context, sections such as s 64 and s 65 permit appointment and transfer only in accordance with, for example, either the principles set out in ss 7 - 9, or at least in conformity with standards, codes of conduct and codes of ethics which are prescribed relating to those matters.

59 It does not seem to us that it is necessary to give detailed consideration to questions of this kind, however. Rather, we would conclude that the Full Bench was in error in its reasoning in relation to this question, for two reasons.

60 First, on its face, s 80E(7) is not concerned whether the inquiry is into a "matter" which is lawfully done or which is not lawfully done. Rather, the jurisdiction is excluded in relation to "any matter" in respect of which a procedure has been prescribed. Understood as we have explained it, the relevant "matter" in this case would be the matter of appointment and the standard relating to it. It might be determined during the course of the inquiry that the appointment was lawful or unlawful, as the case may be, but the jurisdiction is jurisdiction to embark on an inquiry into that matter. To read it as excluding jurisdiction only in relation to the "matter" of an appointment which had been determined to be lawful, would be to read into it a restriction which is simply not there.

61 Further, as a matter of policy, it would seem odd that the legislature should have wished to exclude the jurisdiction of the Arbitrator to deal with acts which were lawful, but allegedly unfair, while leaving intact the jurisdiction where there had been some ground for finding illegality, however technical.

62 For the reasons given, it is our view that the Commission erred in its construction of s 80E(1), (5) and (7) of the Act. In doing so, it considered a matter which both the Arbitrator and the Full Bench lacked jurisdiction to inquire into. We would therefore allow the appeal and quash the orders made. It is not necessary to deal with either the remaining grounds of appeal, or the cross-appeal, all of which are predicated on the assumption that the jurisdiction of the Commission was not excluded by s 80E(7).

63 It will be apparent from the joint judgment of the Presiding Judge, Wheeler J and Le Miere J ("the joint judgment") that this is an appeal from a decision of the Full Bench of the Australian Industrial Relations Commission made on 14 June 2005, on appeal from a decision of Commissioner Harrison, who was then acting as the Public Service Arbitrator. There were two identical appeals; by consent, IAC 8 of 2005 was discontinued, and the Court dealt with IAC 7 of 2005 only.

64 I have had the advantage of reading the reasons for decision in the joint judgment and am generally in agreement with them. This makes it unnecessary for me to set out in full the circumstances giving rise to this appeal. However, as my response to the grounds of appeal moves beyond the issues dealt with by the joint judgment, I feel obliged to provide my own reasons for decision.

65 I am of the view that both the Arbitrator and the Full Bench lacked jurisdiction to inquire into the complaint pursued by Mr Jones. Further, and in any event, I consider that the Arbitrator and the Full Bench erred in law in purporting to find that the appellant, as Director General of the Department of Justice, acted unlawfully and improperly.

66 Mr Jones was a permanent level 6 Public Service Officer employed by the Director General, Department of Justice. He applied for a level 7

vacancy as to the position of Principal Policy Officer. It emerges from the joint judgment that a selection panel interviewed him on 10 September 2002 and subsequently assessed him as the recommended applicant for the position.

67 It seems that the appellant had some concerns regarding Mr Jones' suitability and voiced these concerns in a memo dated 23 October 2002 to the Chairperson of the selection committee. This led to the Executive Director, Mr Harvey, sending a memo to the Director of Human Resources, Ms Withers, advising her that as there were issues about Mr Jones' capacity to fulfil the level 7 position, and as he (Harvey) was considering a restructure of the policy and planning area and the possibility that the level 7 position may be abolished, the level 7 position would not be filled.

68 On 5 December 2002 Ms Withers wrote to Mr Jones about these matters and advised that it was open to him as a disappointed applicant to seek a review of the process pursuant to the Public Sector Management (Examination and Review Procedures) Regulations 2001. On 16 January 2003 the proposed level 7 Principal Policy Officer position was abolished.

69 Mr Jones was not minded to seek relief pursuant to the examination and review process. Instead, he sought relief pursuant to provisions of the Industrial Relations Act 1979. The matter was referred to Commissioner Harrison as a Public Service Arbitrator for hearing and determination.

70 The Arbitrator held that she had jurisdiction to deal with the matter. On 26 May 2004 she provided relief by ruling that Mr Jones be appointed to the status of a level 7 employee. The appellant brought an appeal against this ruling before the Full Bench of the Industrial Relations Commission.

71 On 14 June 2005 the Full Bench dismissed the appeal but varied the order previously made. It ordered that the abolition of the level 7 position in question be declared void; that Mr Neville Jones be appointed to the level 7 Policy Officer position or to another level 7 position with commensurate salary with and the same duties as that position as and from 25 December 2004.

72 The Director General then appealed to the Industrial Appeal Court. I note in passing that by s 90(1) of the Industrial Relations Act the right of appeal is expressed in this way:

"1. Subject to this section, an appeal lies to the Court in the manner prescribed from any decision of the President, the Full Bench, or the Commission in Court Session -

(a) on the ground that the decision is in excess of jurisdiction in that the matter the subject of the decision is not on an industrial matter;

(b) erroneous in law in that there has been an error in the construction or interpretation of any Act, regulation, award, industrial agreement or order in the course of making the decision appealed against; or

(c) on the ground that the appellant has been denied the right to be heard,

73 By s 90(3a), if any ground of appeal is made out but the Court is satisfied that no injustice has been suffered by the appellant or person who is a member of or represented by the appellant, the Court shall confirm the decision the subject of the appeal unless it considers that there is a good reason not to do so.

74 The latter provision indicates that the Industrial Appeal Court is obliged to keep the justice of the situation under active notice, and it is partly for this reason that I feel obliged to address all of the matters that were fully argued on the appeal. Counsel for the appellant submitted forcefully that the appellant and his colleagues Mr Harvey and Ms Withers had been treated unjustly because findings of personal impropriety had been made against them which were not warranted by the evidence and in respect of which they had not been heard.

75 It will be apparent from the joint judgment that the grounds of appeal are prolix and overlap. This obliges me to focus upon the issues and to deal with the various grounds of appeal accordingly.

76 The first ground of appeal is that the Full Bench erred in law in finding that the Public Service Arbitrator had jurisdiction to enquire by way of judicial review into the refusal of the appellant's delegate to appoint Mr Jones. Particulars in support of this ground were to the effect that the Public Service Arbitrator is not vested with this jurisdiction either specifically or generally by s 80E(5) of the Industrial Relations Act or otherwise. Further, appointment decisions made pursuant to s 64 of the Public Sector Management Act 1994 are not amenable to judicial review. The second ground of appeal bears upon the jurisdictional issue also.

77 Section 23(1) of the Industrial Relations Act provides that, subject to this Act, the Industrial Relations Commission has cognisance of and authority to enquire into and deal with any industrial matter. By s 7 an "industrial matter" is broadly defined to mean any matter affecting or relating to the work, rights or duties of employers or employees. Section 26 provides that in the exercise of its jurisdiction the Commission is to act according to equity and good conscience. By s 26(3), where the Commission, in deciding any matter before it proposes or intends to take into account any matter or information that was not raised before it on the hearing of the matter, the Commission shall, before deciding the matter, notify the parties concerned and afford them the opportunity of being heard in relation to that matter or information.

78 Division 2 of Pt IIA of the Industrial Relations Act allows for the appointment of Public Service Arbitrators. Section 80E(1) provides that subject to Div 3 of Pt II and sub-sections (6) and (7), an Arbitrator has "exclusive jurisdiction" to enquire into and deal with any industrial matter relating to a government officer. I note in passing that the provisions of Div 3 of Pt II confer powers upon the Commission in Court Session to make general orders relating to industrial matters including (pursuant to s 51A) general orders as to public sector discipline.

79 Section 80E(5) provides that nothing in the provision just mentioned shall affect or interfere with the exercise by an employer in relation to any government officer of any power in relation to any matter within the jurisdiction of an Arbitrator, but any act, matter or thing done by an employer in relation to any such matter is liable to be reviewed, nullified, modified or varied by an Arbitrator in the course of the exercise by him of his jurisdiction.

80 Section 80E(7) provides that notwithstanding sub-section (1) an arbitrator does not have jurisdiction to enquire into or deal with, or refer to the Commission in court session or the Full Bench, any matter in respect of which a procedure referred to in s 97(1)(a) of the Public Sector Management Act 1994 is, or may be, prescribed under that Act.

81 The latter provision clearly allows for the possibility that a discrete regime for resolving industrial matters and disputes may be set up for public sector employees pursuant to provisions of the Public Sector Management Act having regard to the reality that government officers and employees are usually affected by special rights and obligations.

82 This perception is reinforced when one turns to the Public Sector Management Act. Section 7 sets out the principles of public administration and management to be observed in and in relation to the public sector. Section 8 sets out the principles of human resource management that are to be observed in and in relation to the public sector. More particularly, s 8(1)(a) provides that all selection processes are to be directed towards and based on a proper assessment of merit and equity. By s 8(1)(c) employees are to be treated fairly and consistently and are not to be subjected to arbitrary or capricious administrative acts. Section 21 of the Act provides for the establishment of public sector standards to be complied with in the recruitment and treatment of employees having regard to the principles of public administration.

83 It was common ground at the hearing of the appeal that by Government Gazette dated 20 April 2001 Public Sector Standards in Human Resource Management were established pursuant to s 21 of the Public Sector Management Act. The HRM Standards lay down standards in respect of recruitment, selection and appointment. The outcome to be achieved is that the most suitable and available people be selected and appointed. The HRM Standards require as to recruitment, inter alia, that the process be open, competitive and free of bias, unlawful discrimination, nepotism or patronage; decisions must be transparent and capable of review.

84 Section 97(1)(a) of the Public Sector Management Act provides that the functions of the Commissioner for Public Sector Standards include making recommendations to the Minister about regulations prescribing procedures for employees and other persons to obtain relief in respect of the breaching of public sector standards.

85 It was common ground at the hearing of the appeal also that Public Sector Management (Examination and Review Procedures) Regulations 2001 have been promulgated which allow for the lodging of claims in respect of alleged breaches of public sector standards. The regulations make provision for the examination of claims and for review of the same. I will look at the regulations in more detail shortly. I note in passing at this stage that the nature and extent of the relief available pursuant to the regulations is not entirely clear.

86 The appellant submitted that, having regard to s 80E(7) of the Industrial Relations Act, the jurisdiction of a Public Service Arbitrator (which might otherwise have been available) was excluded in the circumstances of the present case. The appellant's submission was put succinctly at par 26 of the appellant's outline of submissions in this way:

"A procedure has been prescribed under s 97(1)(a) of the Public Sector Management Act 1994 by the Public Sector Management (Examination and Review Procedures) Regulations in relation to the recruitment, selection and appointment standard which prescribes the minimum standard of 'merit, equity and probity' for selection and appointment in the public sector. As a result of this procedure being prescribed, the Arbitrator does not have jurisdiction to hear the matter."

87 The appellant submitted that provisions of the Industrial Relations Act and the Public Sector Management Act expressly allowed for the establishment of a special regime for dealing with the complaints of government officers or employees. In that event, the exclusive jurisdiction which might otherwise be conferred upon an Arbitrator pursuant to s 80E(1) was displaced in respect of "any matter" in respect of which a procedure was prescribed in the manner allowed for by s 97(1)(a) of the Public Sector Management Act. It followed from this, the appellant submitted, that Mr Jones was obliged to lay his claim against the Director General in the manner provided for by the Public Sector Management (Examination and Review Procedures) Regulations 2001 (WA).

88 Clause 5 of the Examination and Review Regulations provides for the lodging of a claim of breach of public sector standards relating to recruitment, selection and appointment. In the following clauses provision is made for the public sector body to take all appropriate steps to resolve the claim and for an examiner to be appointed if the claim cannot be resolved.

89 If the claim is found to have substance the Commissioner of Public Sector Standards will appoint a reviewer. By cl 22 the Commissioner will determine whether the public sector standard has been breached having regard to the reviewer's report and related materials. The public sector body must then respond to the determination.

90 It might be argued that in the absence of provisions in the examination and review procedure specifically providing for complaints to be dealt with and disposed of at a formal judicial hearing that the rights of an employee to obtain relief were diminished to some extent. It might be argued that such a view lends support to the notion that s 80E(1) and the related provisions should not be construed so as to exclude an opportunity for the employee to obtain relief from a public service arbitrator, being the course actually pursued in the present case.

91 However, on balance, I incline to the view that s 80E(7) is quite explicit that, in circumstances where a special regime has been created for dealing with complaints concerning public sector standards, the Arbitrator's usual jurisdiction to deal with industrial matters pursuant to s 80E(1) of the Industrial Relations Act is displaced. In other words, I am persuaded to the view reflected in par 26 of the appellant's outline of submissions that the result of the proclamation of the Public Sector Management (Examination and Review Procedures) Regulations 2001 is that the Arbitrator did not have jurisdiction to hear the matter in the circumstances of the present case. I consider that the appeal should be allowed upon the basis reflected in grounds 1 and 2 of the notice of appeal.

92 It follows that for essentially the same reasons as are provided in the joint judgment, I am of the view that the Full Bench erred in considering a matter which both the Arbitrator and the Full Bench lacked jurisdiction to inquire into.

93 I must now proceed to issues raised by the additional grounds of appeal. I do so for the sake of completeness, and pursuant to the precept mentioned earlier that the Industrial Appeal Court is required to keep in mind the justice of the situation before determining whether the decision the subject of the appeal is to be overturned.

94 Before proceeding to the further grounds of appeal it will be useful to stand back and make some general observations about the matters in controversy. With that thought in mind, I must briefly revisit certain features of the narrative.

95 It is apparent from the Arbitrator's Memorandum of Matters referred for hearing dated 26 May 2004 that, in essence, Mr Jones contended that the appellant's action in preparing his memo dated 23 October 2002 and certain related actions were "unlawful" and should be declared void. The complaint did not contain allegations of personal impropriety. It seemed to be concerned with an alleged failure to comply with the law. Indeed, at par 68 the Arbitrator defined the issue in this way:

"... The question to be determined is whether Mr Piper and Mr Harvey engaged in a valid exercise of power when Mr Piper became directly involved in the selection process for the Level 7 position."

96 The appellant did not give evidence concerning his motivation, and no evidence was sought from him at any stage. No part of the reference to arbitration foreshadowed an inquiry into motivation or personal propriety, or suggested that the abolition of the position for which Mr Jones applied was due to a malign or dishonest purpose. The subject memo is the only piece of evidence directly reflecting the appellant's views, and that memo, at a first glance, appears to address matters relevant to the selection criteria such as the absence of referee reports. It does so in a business like tone of voice. It does not reflect any overt or obvious sign of bias against Mr Jones.

97 In the end, however, after various adverse inferences had been drawn by the Arbitrator and the Full Bench from events surrounding the apparently innocuous memo, the Full Bench, as indicated by President Sharkey's many stringent conclusions at par 127 of his reasons for judgment, finished up condemning the appellant as "acting without integrity" (par 127(f)).

98 Indeed, President Sharkey asserted at par 127(d) that it would be correct to find that the appellant resolved to abolish the position because Mr Jones complained about his treatment. To abolish it to prevent him obtaining the position was based on no proper assessment of merit or equity and amounted to treating Mr Jones unfairly and subjecting him to an arbitrary or capricious act. President Sharkey concluded at par 127(i)(xii) that the appellant did not treat Mr Jones as he would like to have been treated.

99 This tone of denunciation is echoed in other passages of the President's judgment. The learned President speaks of the failure of the Director General and his colleagues (Mr Harvey and Ms Withers) to behave honestly (par 127(i)(v)) or in a consistently ethical manner (par 127(i)(x)) or to impartially carry out their duties (par 127(i)(ix)). The judgment contains many other equally adverse revelations. What began as an inquiry into whether there had been a valid exercise of power finished up sounding like the pronouncements of an inquisition. One wonders how all of this came about.

100 This brings me to the Public Sector Management Act. Section 64(1) provides, in effect, that the employing authority of a department (in this case the appellant in his role as Director General of the Department of Justice) may in accordance with approved procedures appoint a person as a public service officer. President Sharkey of the Full Bench observed at par 126 of his judgment that it was quite clear that the appellant, as Chief Executive Officer, had the power and the duty to reject the recommendation of a person for promotion or to otherwise fill a position in the Department. That view of the matter was apparently not disputed before the Arbitrator or the Full Bench, and did not appear to be in issue on the hearing of this appeal.

101 On the face of it, then, it would not appear to be surprising, of itself, that the appellant, with whom the final responsibility for appointments lay, should take an interest in recommendations for appointment to senior positions, especially in the case of policy making positions. He had the final responsibility for the efficient running of a governmental agency and was the person likely to be criticised if persons appointed to influential positions were not suitable or if the positions themselves were no longer necessary or in need of reshaping.

102 I pause here to observe that a refrain underlying the complaint made by Mr Jones, being a refrain that seems to have struck a responsive cord with the Arbitrator and Full Bench in due course, was that the appellant had acted in an unusual manner (to use a neutral term at this stage) in taking a close personal interest in a forthcoming appointment. However, let me say at the outset, that, having regard to the appellant's burden of responsibility, I am not easily persuaded that his interest in the matter, of itself, should be held against him, or be used to shore up inferences that he acted unfairly or improperly.

104 Apart from the issue concerning jurisdiction, a crucial issue before the Full Bench was whether the Arbitrator erred in law in finding that the actions of the appellant and his subordinate Mr R Harvey (the Executive Director) were unlawful and, if so, whether such a finding permitted the Arbitrator to set aside the decision not to appoint and to afford relief to Mr Jones by ordering that he be appointed to a level 7 position.

105 I remind myself that, without considering referee reports, the selection panel recommended Mr Jones for appointment on 10 September 2002. Shortly afterwards, on 7 October 2002, the Acting Executive Director, Mr Carter, approved the panel's recommendation and certified that the panel had followed the proper processes. By letter dated 11 October 2002 Ms Withers advised Mr Jones that he was the successful applicant and that subject to any appeal by disappointed applicants he would be appointed to the position. On 23 October 2002 the appellant forwarded a memo to the Chairperson of the selection panel expressing concerns about Mr Jones' work performance and requesting that referee reports be obtained from four persons specified by the appellant of which two had been specified by Mr Jones himself.

106 The selection panel declined to reconsider the matter and was thus in the position that it had not considered referee reports at any stage. Two of the referee reports, being those obtained from persons not nominated by Mr Jones, raised issues about Mr Jones' appointment concerning his capacity to display a contemporary view of policy development. It was against this background that Mr Harvey, who had now resumed active duty as Executive Director (the position briefly occupied by Mr Carter) sent a memo to Ms Withers on 3 December 2002 referring to these issues and referring to a preponderance of level 7 positions. He said that he had decided not to proceed with filling the subject level 7 vacancy.

107 Ms Withers conveyed this information to Mr Jones on 5 December 2002. It is common ground between the parties that, for whatever reason, Mr Jones was not afforded an opportunity to respond to the two adverse referee reports. In the end, Mr Jones was not appointed to the position for which he was recommended and the position in question was abolished. It was open to Mr Jones to lay a complaint pursuant to the examination and review procedure but he declined to do so. Instead, assisted by the respondent Association, he, initiated proceedings under the Industrial Relations Act.

108 It was the uncontested evidence of Ms Withers that a recommendation for appointment could be rejected by the appellant as the person with the power and duty to deal with a recommendation. It is clear that as far as Mr Jones was concerned the process of appointment was never completed. I pause here to note that, in my view, the letter to him of 11 October 2002 foreshadowing his appointment cannot be regarded as having any binding effect because that letter did not profess to be an appointment and indicated that the process of appointment was still in motion.

109 The Arbitrator found at par 70 of her reasons that as a consequence of the appellant and Mr Harvey becoming involved in the selection process this resulted in the selection panel's recommendation being overturned. She went on to find at par 72 that Mr Piper acted "inappropriately" in writing his memo dated 23 October 2002 and, in doing so, his actions were contrary to various provisions of the Public Service Management Act and the Code of conduct applicable to a public sector body.

110 The Arbitrator reduced this general finding to more specific findings by determining that the appellant did not ensure that the Department's administrative responsibilities were clearly defined as required by s 7(d) of the Public Service Management Act because he became involved in the selection process after Mr Carter, exercising a delegated power, had endorsed the selection panel's recommendation. The Arbitrator arrived at this conclusion, notwithstanding her acceptance that, having regard to s 59(1)(a) of the Interpretation Act, a delegator such as the appellant was not precluded from exercising or performing at any time a power or duty which has been delegated.

111 The Arbitrator found also (at par 75) that when the appellant "re-opened the selection process" his actions were contrary to s 9(a)(iii) and s 9(c) of the Public Service Management Act. I note in passing that s 9(a)(iii) requires compliance with any code of conduct applicable to the public sector body. Section 9(c) requires the public sector body to exercise proper courtesy, consideration and sensitivity in their dealings with members of the public and employees.

112 The Arbitrator noted at par 74 that the Code provides that all public sector employees are to act in an open and accountable manner, they must protect people's rights to due process and they must treat employees courteously and with due consideration. Further, employees are to be informed about decisions and actions affecting them.

113 The Arbitrator went on to find at par 76 that by nominating two of the four referees who were required to write reports about Mr Jones, Mr Piper did not act in an open and transparent manner towards Mr Jones as an inference could be drawn that the two referees selected by Mr Piper were deliberately chosen to achieve a predetermined outcome as they had a limited knowledge of Mr Jones' skills and abilities. Further, Mr Jones was denied procedural fairness when he was not given the opportunity to review the structure and content of the adverse referee reports.

114 I pause here to observe that an inference of the kind just mentioned appears to be somewhat questionable. If one proceeds from an assumption that the Director General of a department will often be too busy to monitor the progress of all appointments and will generally be content to act on the recommendation of selection panels and those exercising delegated powers, then this state of affairs might lend colour to the notion that the appellant's intervention was not only unusual but possibly prompted by some capricious or improper purpose.

115 On the other hand, if one proceeds from the premise that the head of a department, as the person bearing ultimate responsibility for the quality of appointments made and decisions taken within the Department, is entitled to concern himself with various matters of detail including selection processes, with a view to ensuring the best possible outcome, then it might not be thought surprising that the appellant should take a close personal interest in the selection process, especially in circumstances where referee reports were not submitted to or considered by the relevant selection panel. Thus, to my mind, care must be exercised in determining what, if any, inferences are to be drawn in the circumstances of the present case. The conventional rule in employment cases is that in the absence of direct evidence inferences can be drawn from primary facts clearly established by other evidence, although bias or discrimination should not be inferred when more probable and innocent explanations are available on the evidence: Fenwick v Beveridge Building Product Pty Ltd (1985) 62 ALR 275; Erbs v Overseas Corporation Pty Ltd (1986) EOC 92-181; Department of Health v Arumugam [1988] VicRp 42; (1988) VR 319.

116 I am conscious that the HRM Standards provide for the process to be open and free of bias or discrimination. However, it is questionable whether these or any other provisions imply that adverse referee reports are to be provided to the applicant or dealt with at a hearing. Neither the Public Sector Management Act nor the HRM Standards concerning recruitment expressly require an applicant for appointment to be provided with referee reports or material adverse to that applicant or to be accorded a hearing before a decision is taken to make or refuse an appointment having regard to any such material. If it were a requirement, it would be a disincentive for referees to be frank, especially where they are not supportive of the applicant, and this would interfere with the objective of the recruitment process which on a competitive basis is to employ the most suitable candidate.

117 All of this suggests that it has never been a requirement of procedural fairness that adverse reports be made available to an applicant for an employment position for comment. It calls into question findings based on an assumption that contentious reports ought to be provided to an applicant for an employment position. In Attorney-General for the State of New South Wales v Quin (1990) 170 CLR 1 the High Court accepted that in ordinary circumstances the making of an appointment would not attract the rules of natural justice. In the present case the appellant himself did not take any step or make any representation sufficient to displace the ordinary rule or confer upon Mr Jones an entitlement to procedural fairness based upon a legitimate expectation that he would be heard.

118 President Sharkey of the Full Bench summarised the findings of the Arbitrator at par 44 of his judgment. He referred explicitly to a finding that the appellant did not act in an open and transparent manner towards Mr Jones by nominating two of the four referees who were required to write reports about him. He referred also to the Arbitrator's "inference" that the two referees selected by the appellant were deliberately chosen to achieve a predetermined outcome as the authors of the adverse referee reports had a limited knowledge of Mr Jones' skills and abilities. He referred to the findings that Mr Jones was denied procedural fairness in not being given the opportunity to review the pro forma referee report prior to it being sent to the referees in question; the appellant did not ensure Mr Jones' right to due process and his entitlement to due consideration and courtesy; the appellant did not act in an open and accountable manner; Mr Jones was not afforded procedural fairness since he was unable to respond to the appellant's personal views about his abilities and no opportunity was given to Mr Jones to be heard before he was adversely affected by the decision.

119 His Honour accepted (at par 126) that the appellant had the power and the duty to reject the recommendation of a person for promotion but was of the view that the appellant's failure to comply with the requirements of s 7, s 8 and s 9 of the Public Service Management Act and the Public Sector Code of Ethics in the manner determined by the Arbitrator rendered the decision not to appoint void because these were mandatory requirements.

120 His Honour observed at par 127 that "it was open to find, and would be correct to find" that both the refusal to appoint Mr Jones and the abolition of the level 7 position applied for were unlawful acts and void because there was a breach or a failure to comply with mandatory requirements in that there was a lack of compliance in various respects. Many of the matters mentioned by his Honour mirror the findings made by the Arbitrator. However, he went on to observe at par 133 that "the order abolishing the position was made solely to prevent Mr Jones getting the position, and, for that reason, should have been rendered void as a misuse of power". He observed at par 135 that "it is quite clear, too, and it would have been open and correct to find, that since the position to which he should have been appointed was abolished, that it was done only to prevent Mr Jones' appointment to level 7, and not because the position was surplus to the employer's requirements".

121 In support of this conclusion his Honour referred to the following facts and matters. The abolition happened simultaneously with Mr Jones objecting to the recommendation not being implemented. Mr Harvey's evidence was that the committee's recommendation was to be implemented until the Chief Executive Officer intervened, Mr Harvey only took action because of and after the intervention of the appellant, Mr Harvey committed a complete volte face allegedly on what he knew of Mr Jones and on the reference reports that Mr Jones was not suitable for the position, the position was abolished on the unlikely reason that it was a redundant position. His Honour was of the view that it was therefore appropriate for an order to be made by the Arbitrator striking down the abolition of the position for the same reason as the order to employ Mr Jones as a level 7 position was made.

122 Senior Commissioner J F Gregor agreed with the reasons of President Sharkey. Commissioner Wood was generally in agreement with those reasons but was of the view that a question arose as to whether the appellant properly exercised his powers by intervening in the selection process in circumstances in which an officer of the Department (Mr Carter) exercising delegated powers had endorsed the recommendation for appointment. He concluded that the Director General had not acted fairly towards Mr Jones and the Arbitrator was right to so find. For those reasons he supported the President in affirming the orders previously made by the Arbitrator whereby the decision not to appoint was quashed and an order made for the appointment of Mr Jones to a level 7 position. Commissioner Wood was of the view that to simply return the matter to a new selection process would not have been adequate.

123 It emerges from this overview that severe adverse findings were made against the appellant, being findings reflecting upon his integrity and suggestive of personal impropriety and misconduct, although no evidence was received from the appellant and the subject memo complained of appears to be consistent with and relevant to the discharge of duties imposed upon the appellant as Director General by s 64 of the Public Sector Management Act. Moreover, the Full Bench accepted that the appellant was not obliged to act on recommendations put to him, because the final power rested with him, and he remained at liberty to exercise the power to appoint notwithstanding a delegation of power to the Executive Director.

124 Many of the adverse findings made by the Arbitrator and the Full Bench appear to be based upon inferences which make insufficient allowance for innocent explanations and are drawn from facts and matters of marginal relevance to the Jones application. Moreover, as to the crucial adverse inference concerning abolition of the level 7 position, the inference was drawn by the Full Bench in the absence of any decisive finding against or rebuttal of Mr Harvey's evidence that the decision to abolish was a bona fide means of reducing a preponderance of level 7 positions and replacing them with operational positions.

125 The Arbitrator characterised Mr Harvey as an honest witness but went on to qualify this by saying that he was "tentative and unconvincing" when giving evidence about the basis on which he determined that Mr Jones was unsuitable to be appointed to the level 7 position. Nonetheless, neither the Arbitrator nor the Full Bench purported to hold that no weight could be given to Mr Harvey's evidence concerning the abolition issue.

126 The appellant was not afforded an opportunity to be heard prior to findings of personal impropriety being made against him. This obliges me to keep in mind what was said in Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596 by Brennan J at 608:

"Personal reputation has now been established as an interest which should not be damaged by an official finding after a statutory inquiry unless the person whose reputation is likely to be affected has a full and fair opportunity to show why the finding should not be made."

127 It emerges, then, as I commence to draw together these general observations in the light of my earlier conclusion concerning the jurisdiction issue, that any complaint made by Mr Jones about the refusal to appoint him to the position applied for ought to have been pursued in the manner allowed for the examination and review process. A complaint of this kind may well have led to the appellant being required to say why exactly he felt obliged to intervene in the selection process by issuing the subject memo dated 23 October 2002. The availability of the examination and review process is another factor in the situation which weighs against the drawing of adverse inferences of unfairness from the fact that the subject memo was issued after the selection panel's recommendation had been approved.

128 I am of the view (being a view apparently shared by the Full Bench), having regard to s 59(1)(a) of the Interpretation Act that the appellant was not precluded from exercising or performing the power to fill the position after having delegated the power to the Executive Director. In circumstances in which the appellant was the person ultimately responsible for making suitable appointments in accordance with the approved procedures, this consideration is a factor that weighs against the drawing of adverse inferences against the appellant of personal impropriety or unlawfulness in taking steps to ensure that the position was filled by a suitable applicant, and that the position was one which would be of use to the Department.

129 The adverse inferences of personal impropriety drawn by President Sharkey (within which I include his findings of a lack of honesty and integrity) seem to have been taken into account and to have influenced the conclusions arrived at by the Full Bench concerning unlawfulness and the appellant's supposed failure to comply with the provisions of the statute, Code and regulations. To my mind, for the reasons I have given, it is questionable whether the inferences were properly drawn by the Full Bench, and this calls into question the validity of the conclusions arrived at by the Arbitrator and the Full Bench as to whether the appellant and Mr Harvey engaged in a valid exercise of power when the appellant became directly involved in the selection process.

130 Let me now turn to the further grounds of appeal. As I indicated in earlier discussion, I will group the grounds by reference to the issues. I am of the view that the Industrial Appeal Court has jurisdiction to deal with these grounds in that in each case an issue is raised as to the proper construction of certain provisions of the Public Sector Management Act and related regulations, and, additionally, as to certain of the grounds, there are issues concerning the appellant's right to be heard.

131 It will be convenient to turn now to those grounds of appeal concerning alleged errors in construction of the statutory provisions, the Public Sector Code of Ethics and the HRM Standards, namely, grounds 3, 4 and 5 of the notice of appeal.

132 It is said in ground 5 that the Full Bench erred in law in finding that the appellant by s 8 and s 9 of the Public Sector Management Act, the Public Sector Code of Ethics and the law acted unlawfully in making his views known to his delegate and the selection panel concerning Mr Jones' suitability for appointment and requesting references be obtained concerning this issue.

133 The Arbitrator found at par 71 of her reasons for decision that even though the Director General had divested himself of the power of appointment he was not precluded from exercising or performing at any time the power which had been delegated. This view was apparently approved by President Sharkey at pars 60 and 61 of his reasons for decision, although there is a degree of ambiguity in his position in that he referred to a cross-appeal by the respondent directed to this point being made out.

134 I am of the view, as appears from my general observations, that pursuant to s 59(1)(a) of the Interpretation Act the appellant remained at liberty to take an interest in the selection procedure, notwithstanding the delegation of power to the Executive Director, Mr Harvey.

135 To my mind, the Arbitrator's acknowledgement that the appellant remained at liberty to exercise the power of appointment cannot be easily reconciled with her opinion that there was a breach of s 7(d) of the Public Sector Management Act which requires that administrative responsibilities be clearly defined. It was a matter for the appellant's delegate and the selection panel as to whether they took into account or acted on the appellant's views and the reference material. Their power to act was not necessarily diminished by the appellant's residual power to make an appointment. Accordingly, I am persuaded that the appeal should be allowed on this ground.

136 This brings me to grounds 3 and 4 of the appeal and the question of whether the principles of administration referred to in ss 7, 8 and 9 of the Public Sector Management Act are to be characterised as being mandatory in nature.

137 The appellant contended in ground 3 of the appeal that the Full Bench erred in law in finding that the actions of the appellant in not ensuring that Mr Jones was accorded procedural fairness and the actions of his delegate Mr Harvey in not providing this in connection with the appellant's views of Mr Jones and the reference materials obtained in connection with his suitability for appointment were unlawful.

138 Ground 4 contained an assertion that the Full Bench erred in law in finding that s 8 and s 9 of the Public Sector Management Act and the Public Sector Code of Ethics were mandatory in nature. It was said that the provisions in question were merely directory, being guides as to the standard of conduct desired of public sector bodies and employees. Breaches do not give rise to void or voidable acts or decisions and are not then unlawful in nature.

139 I noted in my general observations that the various provisions concerning the process of selection and appointment do not expressly require that an applicant be afforded an opportunity to be heard or to deal with materials that might be regarded as adverse to his or her prospects. It cannot be readily assumed that adverse materials should be made available to the applicant and dealt with at a hearing for such a course would be a disincentive for referees to speak frankly. It appears from the reasoning of the High Court in Quin's case (supra) that the requirements that the process of selection be fair, open and transparent must be considered in the context of employment practices.

140 If the appellant's subject memo had shown signs of bias against the applicant for the position or contained patently prejudicial material, and this had been kept from the applicant, then, in these circumstances, a question of fairness and transparency might arise. However, in circumstances where the subject memo simply invited the Chairperson of the selection panel to give further consideration to the application after referee reports had been obtained, I am not persuaded that there was an absence of fairness.

141 The decided cases in recent years suggest that the distinction formerly drawn between mandatory and directory provisions may, in the end, be of little assistance as an analytical tool. The consequences of non-compliance with a provision are to be determined by a consideration of the provision in context and close attention to the language of the provision.

142 It follows from earlier discussion that in the circumstances of the present case, where an examination and review process has been constituted as a special regime to resolve complaints made by disappointed applicants, it is difficult to accept that the consequence of non-compliance with a step in the recruitment process should result in an invalidity of the kind previously attached to provisions of the kind characterised as mandatory.

143 If the jurisdiction of the Public Service Arbitrator is excluded by the presence of a special regime of examination and review, as in the circumstances of the present case, irregularities concerning the decision complained of may ultimately lead to a reversal or modification of the decision pursuant to the process of examination and review. But that is not the same as the decision being treated as void or voidable.

144 On the other hand, in circumstances where the jurisdiction of the Public Service Arbitrator to enquire into industrial matters has not been excluded, then the power to set aside a decision or an outcome is to be found in the Industrial Relations Act. Section 80E(5) of the Industrial Relations Act specifically provides that in certain circumstances an act done by an employer is liable to be nullified or varied by an Arbitrator.

145 It follows that, in my view, even if it be assumed that the Arbitrator, and thus the Full Bench, had jurisdiction to deal with the dispute as an industrial matter, the Full Bench erred in law in finding that s 8 and s 9 of the Public Sector Management Act and related requirements were mandatory in nature and that the conduct attributed to the appellant in grounds 3 and 4 was unlawful. The context and the language of the provisions suggests that the principles being referred to are in the nature of guidelines. I would be prepared to allow the appeal on these grounds.

146 Grounds 8, 9, 10, 11 and 13 raise issues concerning the right to be heard and related issues concerning the effect of certain findings made by the Full Court.

147 The appellant contended in ground 8 that the Full Bench erred in law in finding that the position for which Mr Jones applied was abolished to either prevent or obstruct his appointment. It was said in ground 9 that the Full Bench erred in finding that the appellant acted in breach of the statutory requirements and the requirements of procedural fairness in not according to Mr Jones a hearing in connection with his views and the reference material obtained as this was not a finding made at first instance nor the subject of the appeal.

148 It was said further in ground 10 that the Full Bench erred in finding that the refusal to appoint Mr Jones and the abolition of the position for which he applied were unlawful acts committed by the appellant.

149 Moreover, the Full Bench erred in finding that the appellant, Mr Harvey and Ms Withers had acted in a manner amounting to personal impropriety.

150 The appellant contended in ground 13 that the Full Bench erred in finding Ms Withers had acted in breach of the relevant statutory provisions when there was no finding that she had done so at first instance and this was not an issue on appeal. The Full Bench did not indicate such a finding against her was being considered and did not provide the appellant with a hearing before making these findings.

151 In addressing these grounds of appeal, I must return to some of the matters I have already touched upon in my general observations.

152 The refusal to appoint Mr Jones was characterised as unlawful by the Full Bench having regard to certain inferences that could be drawn from the surrounding circumstances. The Full Bench inferred that the appellant and his colleagues acted dishonestly and without integrity. The decision to abolish the position was taken to prevent Mr Jones from obtaining the position. This showed (supposedly) that there had been no proper assessment of merit and equity. It amounted to treating Mr Jones unfairly and subjecting him to an arbitrary or capricious administrative act contrary to s 8 of the Public Section Management Act.

153 It was contended by the appellant on the hearing of the appeal to this Court that there was a lack of cogent evidence to support findings of impropriety of such a serious nature, bearing in mind that the appellant (Mr Piper) did not testify before the Arbitrator and the only specific evidence bearing upon his intervention in the selection process was a single letter concerning the need to obtain references.

154 Counsel for the appellant submitted that there was no finding by the Arbitrator as to the appellant's involvement in the refusal to appoint Mr Jones save that the appellant prepared a memo to the selection panel and his delegate reflecting the appellant's views about Mr Jones' suitability for appointment. The memo contained a request for references to be obtained concerning Mr Jones. There was no finding that the appellant was involved in or caused the subject level 7 position to be abolished. Moreover, this was not an issue on appeal or a finding which the Full Bench indicated was being considered.

155 Counsel for the appellant referred to s 26(3) of the Industrial Relations Act which requires the Commission to notify the parties of any matter that might have a bearing upon the outcome and to afford the parties an opportunity of being heard in relation to that matter. Counsel submitted that the Full Bench did not provide the appellant and his senior colleagues with a hearing before making the adverse findings in question. The appellant submitted that the Full Bench failed to act according to equity and good conscience and acted in breach of s 26(3) of the Industrial Relations Act. Accordingly, their findings of fact should be characterised as beyond power and should be set aside.

156 More particularly, counsel for the appellant submitted that the notion that the abolition of the level 7 position was a sham or a ruse was simply a matter touched on by counsel for the respondent in the course of the hearing before the Full Bench (as reflected in the transcript at AB100) and was not supported by any evidence. The Full Bench's purported findings of personal impropriety, which went beyond the findings of the Arbitrator and affected the outcome of the appeal against the Arbitrator's decision, were findings which ought not to have been made without affording those affected by them an opportunity to be heard.

157 On the other hand, counsel for the respondent submitted that any conclusions reached by the Full Bench were based on the evidence from the hearing before the Arbitrator. No new evidence was called before the Full Bench. The Full Bench was in as good a position as the Arbitrator to decide on the proper inferences to be drawn from the facts established at first instance: Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551.

158 Counsel for the respondent submitted that each of the findings complained of were based on matters of information that were squarely before the Full Bench at the hearing. Section 26(3) of the Industrial Relations Act (which requires that a party be afforded an opportunity of being heard if a decision is to be made taking into account any matter not raised previously) would apply only where the Full Bench had taken into account new material that was not in evidence at the hearing at first instance. There was therefore no obligation to notify anyone or provide anyone with an opportunity to be heard in respect of the findings. In any event, there would have been no obligation to notify Mr Harvey or Ms Withers as they were not parties concerned in the matter. They were merely witnesses called at the hearing at first instance.

159 Counsel for the respondent was obliged to concede that the inference drawn by President Sharkey concerning the abolition of the subject position (that is, it was done to obstruct Mr Jones) was not a matter being considered at first instance, and was not a finding made by the Arbitrator.

160 It will be apparent from my general observations that a number of the findings articulated by President Sharkey (which must be taken as having been approved by the Full Bench as a whole) go beyond findings made by the Arbitrator. For example, President Sharkey's finding that the position in question was abolished because Mr Jones complained about his treatment, and in order to prevent him obtaining the position is not reflected in the findings of the Arbitrator. As appears from my general observations, I do not accept that such an inference can be drawn from the evidence brought before the Arbitrator. The same can be said of his purported findings that the appellant acted dishonestly and without integrity.

161 It will be apparent from my general observations and these further observations that, in my view, various findings of personal impropriety were made which were not strictly referable to the question before the Arbitrator of whether there had been a valid exercise of power. Issues of that kind were essentially new matters. Accordingly, if it be assumed that the Arbitrator, and thus the Full Bench, had jurisdiction to deal with the controversy between the parties as an industrial matter, the appellant should have been afforded an opportunity to be heard in respect of the imputations concerning him and his colleagues.

162 I will not pursue this aspect of the matter at greater length having regard to my earlier determination that the Arbitrator did not have jurisdiction. However, I do consider that the appellant is entitled to succeed upon these grounds.

163 These grounds of appeal concerned the powers of the Arbitrator and the Full Bench. Having allowed the claim the Arbitrator provided relief by ruling that Mr Jones be appointed to the status of a Level 7 employee. The Full Bench varied the order previously made by ordering that the abolition of the Level 7 position applied for be declared void and that Mr Jones be appointed to the Level 7 Policy Officer position or to another Level 7 position with commensurate salary.

164 By ground 6 the appellant asserted that the Full Bench erred in law in requiring Mr Jones to be appointed to the position for which he applied. It was said that neither s 80E(5) of the Industrial Relations Act nor any other statutory provision confers upon the Public Service Arbitrator the power to require an employing authority to restore a position which has been abolished. Further, there is no obligation upon an employing authority to make an appointment notwithstanding that an applicant has been advised he has been recommended for appointment.

165 The appellant contended in ground 12 that the Full Bench erred in declaring void the decision to abolish the position in respect of which Mr Jones applied and to require his appointment to it. This was not relief sought on appeal from the Full Bench nor relief that the Full Bench indicated it might grant to the appellant. The Full Bench did not provide the appellant with a hearing before making this order.

166 The appellant contended in ground 7 that if there was jurisdiction to judicially review the decision not to appoint Mr Jones the only order that could be made by the Full Bench was to declare the decision void. In judicially reviewing a discretionary decision a tribunal is unable to substitute its decision for that of the primary decision-maker and the tribunal can only require the decision under review to be made according to law. An order requiring the appointment of Mr Jones was in excess of jurisdiction.

167 As to these grounds of appeal, I share the view expressed in the joint judgment that there is no power conferred by the Industrial Relations Act upon an arbitrator to engage in anything in the nature of judicial review, or to make a bare declaration. That is jurisdiction of a kind quite different from the merit-based inquiry contemplated by s 80E of the Act. However, the powers of the Arbitrator are very wide. There may be occasions when it is necessary in order to deal appropriately with an industrial matter, to nullify, modify or vary an action or decision of an employer in the manner allowed for by s 80E(5) of the Act.

168 In the circumstances of the present case, it is questionable whether the Full Bench had power to make an order of the kind it purported to make in circumstances where the position had in fact been abolished. Moreover, the abolition of the position and issues bearing upon the need for such a position were not issues encompassed by the appeal to the Full Bench.

169 However, I am not inclined to explore this aspect of the matter at greater length. The short response to this ground of appeal is that the disputed order was not sought by either party and appears to have been made by the Full Bench of its own volition. It was a new matter in respect of which the appellant should have been afforded an opportunity to be heard.

170 Accordingly, I consider, to echo the language of ground 6, that the Full Bench erred in law in requiring Mr Jones to be appointed to the position for which he applied. However, my conclusion in regard to the jurisdiction issue, removes the need to examine the point in any greater detail.

171 It follows from earlier discussion concerning the first and second grounds of appeal that I am of the view that both the Arbitrator and the Full Bench lacked jurisdiction. I consider that the appeal should be allowed and the orders made by the Arbitrator and by the Full Bench should be quashed. To my mind, these orders are justified by the need of courts and tribunals to act within jurisdiction. Further, having regard to s 90(3a) of the Industrial Relations Act, it follows from the reasons I have given concerning the other grounds of appeal that, in my view, it is not open to the Industrial Appeal Court to confirm the decision the subject of the appeal upon the basis that no injustice has been suffered by the appellant. I consider that an injustice has been suffered by the appellant.

• Background
• The appeal
• The appeal to this Court
• Jurisdiction of Arbitrator to "judicially review"
• The effect of s 80E(7)

• Background
• The first and second grounds of appeal
• The jurisdiction issue
• General observations
• Grounds of appeal - 3, 4 and 5
• Right to be heard
• Grounds 6, 7 and 12
• Summary