Promnitz v Gympie Regional Council [2015] ICQ 11

Ex parte Tasker; re Hannon; [1971] 1 NSWLR 804

Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355

Samuel Montagu & Co Ltd v Swiss Air Transport Co Ltd [1966] 2 QB 306

Scurr v Brisbane City Council [1973] HCA 39; (1973) 133 CLR 242

SZOFE v Minister for Immigration & Citizenship [2010] FCAFC 79; (2010) 185 FCR 129

J Farren on behalf of the appellant instructed by Dowd & Company

C Murdoch for the respondent instructed by Minter Ellison

**[1] Jill Promnitz was employed as an administrative coordinator by the Gympie Regional Council until mid-February 2014. At that time she was summarily dismissed from her employment. Ms Promnitz applied to the Commission for a declaration under s 274A of the Industrial Relations Act 1999 that her termination was invalid. She was unsuccessful and appeals from that decision.

[2] In January 2014 Ms Promnitz was notified by the Chief Executive Officer of the Council that a complaint about her conduct had been made to the Crime and Misconduct Commission and that it, in turn, had referred the complaint to the Council for investigation. The Council engaged a firm of solicitors, Gadens Lawyers, to conduct the investigation on its behalf. A series of allegations were made against Ms Promnitz and, in the course of the investigation by Gadens, she was interviewed and provided both written and oral responses to the allegations.

[3] The conclusions reached by the investigator were to the effect that, of the five allegations, one was unsubstantiated, three were substantiated and the fifth was partially substantiated. On the basis of those findings, the CEO wrote to Ms Promnitz and said, among other things:**

**_"It is Council's opinion that the above substantiated allegations constitute misconduct within the meaning of the [Crime and Misconduct Act 2001] in the form of:

(b) Misusing/abusing authority to deliberately disadvantage staff members.

Furthermore it contravenes Council Code of Conduct.

Given this, Council hereby terminates your employment by way of summary dismissal effective immediately."_**

**[4] The hearing before the Deputy President was quite brief. The parties relied on affidavit evidence and a statement of agreed facts and documents.

[5] One of the agreed facts was that the CEO was "authorised to take disciplinary action (including termination) against a local government employee in accordance with the power contained in section 197 of the [Local Government] Act and the provisions of Division 1 of the Part 3, Chapter 8 of the Local Government Regulation 2012".

[6] It is apparent from the statement of agreed facts and the manner in which the parties conducted this matter that they both proceeded on the basis that s 279 of the Local Government Regulation 2012 ('the Regulation') was engaged and, as a result, s 283 of the Regulation was in issue. I will refer to this later.

[7] Division 1 of Part 3 of Chapter 8 of the Regulation provides, so far as is relevant, as follows:**

This division prescribes, for section 197(2) of the Act, when the chief executive officer may take, and the types of, disciplinary action.

The chief executive officer may take disciplinary action against a local government employee if the chief executive officer is satisfied the employee has -

(a) failed to perform their responsibilities under the Act; or

(b) failed to perform a responsibility under the Act in accordance with the local government principles; or

(c) taken action under the Act in a way that is not consistent with the local government principles.

(1) The disciplinary action taken by the chief executive officer against a local government employee may be 1 or more of the following -

283 Employee to be given notice of grounds for disciplinary action

(1) Before the chief executive officer takes disciplinary action against a local government employee, the chief executive officer must give the employee -

(ii) the grounds on which the disciplinary action is taken;

(iii) the particulars of conduct claimed to support the grounds; and

(b) a reasonable opportunity to respond to the information contained in the written notice.

(2) The grounds and particulars are taken to be the only grounds and particulars for the disciplinary action taken, and no other ground or particular of conduct can be advanced in any proceeding about the disciplinary action taken against the local government employee."

**[8] As I have referred to above, both parties have proceeded on the basis that this case involves action by an employee which constitutes either a failure to perform responsibilities under the Local Government Act 2009 ('the Act'), a failure to perform those responsibilities in accordance with local government principles, or the taking of action under the Act in a way that is not consistent with the local government principles. The material before me does not establish that there was a determination that the conduct of the appellant was conduct "under the Act". Nevertheless, as I have set out above, the parties proceeded on the basis that these sections of the Regulation applied.

[9] In February 2014 Ms Promnitz filed an application for reinstatement under s 74 of the Industrial Relations Act 1999 alleging that she had been unfairly dismissed. In April 2014 she filed a further application for declarations and orders pursuant to s 274A of the Industrial Relations Act 1999. In particular, she sought a declaration that the termination of her employment was invalid. The basis for the application for a declaration was that the Council had failed to comply with the requirements of s 283 of the Regulation.

[10] After setting out the relevant parts of the Regulation the Deputy President said:**

"[16] For the applicant it is argued that there has been no, or no substantial, compliance with the requirements of r 283 and that consequently the termination of the applicant's employment was void and of no effect.

[17] It is clear that the requirements of the regulation have not been met.

[18] Regulation 283 requires that certain things be done before a CEO takes disciplinary action against a local government employee.

[19] It is not sufficient that the applicant might have known, and was told by the investigators, that termination of employment was a possibility. In particular, no written, or indeed any, notice of the disciplinary action that was intended to be taken, or a reasonable opportunity to respond in respect of the intended disciplinary action, was provided to the applicant. Although she was not provided with them post the investigation process conducted by Gadens, the applicant had been informed, in the letter of 22 January 2014 from Gadens, of the likely grounds on which the disciplinary action might be taken, as well as with limited particulars of the conduct claimed to support the grounds

[20] Prior to the termination of her employment she had not been furnished with a written notice of the disciplinary action to be taken, the grounds on which it was to be taken or full particulars of the conduct claimed to support the grounds. Nor had she been provided with any, let alone a reasonable, opportunity to respond to the case against her.

[21] It follows that there had been no, or no substantial compliance with the requirements of r 283. Mr Murdoch accepted that there had not been compliance with, at least, those parts of the regulation that require that there be notice of the disciplinary action to be taken and that there be an opportunity to reply, but submitted that that does not render the decision to terminate the Applicant's employment invalid."

[11] The Deputy President dismissed the application for a declaration. He referred to the principles in Project Blue Sky Inc & Ors v Australian Broadcasting Authority[1] and noted the following:

**(a) That employees of local government entities had other statutory remedies available to them, in particular, an application under s 74 of the Industrial Relations Act 1999;

(b) That s 283 does no more than require that in exercising disciplinary powers against a local government employee the Council afford that employee natural justice;

(c) Whether or not an employee has been afforded natural justice prior to termination is a matter that goes to the fairness of the dismissal; and

(d) As the Commission had jurisdiction to determine the dismissal was unfair and, if so to provide a remedy, that militates against a conclusion that parliament intended that a failure to act in accordance with s 283 would render that conduct invalid.**

"[36] On fine balance, it seems to me that it is not a purpose of the legislation that an act done in breach of its provisions should be invalid."

[13] The appellant submits that the Deputy President erred:**

**(a) in his construction of the Act and that he should have held that the termination was invalid,

(b) in holding that there was not a common law requirement, in addition to the requirements of s 283, to afford the appellant natural justice, and

(c) in not finding that there was no evidence that the CEO was satisfied in the manner required by s 279.**

[14] In order to determine the effect which flows from failing to comply (either at all or partially) with a procedure laid down in an Act it is necessary to consider whether the legislature intended that invalidity should flow from such a failure.

[15] In the joint judgment of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky[2] the following observation was made:**

"An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition." (emphasis added)

[16] Section 278 of the Regulation provides that Division 1 "prescribes" when a chief executive officer may take disciplinary action, and the types of action which may be taken. In these circumstances, "prescribes" means "to lay down ... as a rule or a course to be followed", "to lay down rules, direct, or dictate"[3] or to "lay down or impose authoritatively"[4]. In other words, Division 1 sets out what is to be done if a chief executive officer decides to take disciplinary action.

[17] The words of s 283 are written in an imperative manner: "the chief executive officer must give the employee". Further, s 283(2) emphasises the importance of the notice to be given under s 283(1) by providing that no other ground or particular of conduct "can be advanced in any proceeding about the disciplinary action taken against the local government employee". That particular set of words is wide enough to include a proceeding such as this where discretionary relief was sought.

[18] The use of imperative language was considered in Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd[5]. The words of s 17 of the Building and Construction Industry Security of Payment Act 1999 (NSW) were in issue. Section 17(2) commenced with these words: "An adjudication application to which subsection (1)(b) applies cannot be made unless: ..." (emphasis added).

[19] In considering the meaning of those words, Spigelman CJ referred to the High Court's decision in Project Blue Sky and said:**

"[40] The first textual indicator that is always of significance is the mode of expression of the element directly in issue. Substantial, indeed often, but not always, determinative, weight must be given to language which is in mandatory form. See, for example:

David Grant v Westpac supra esp at 276-277, where the formulation was 'may only'.

City of Enfield supra at [6], [28] and [32]-[33], where the formulation was 'must not be granted'.

SAAP v Minister for Immigration and Multicultural and Indigenous Affairs at [68], [136], [173] and [206], where the language "must give" was described as "imperative".

[41] The element under consideration in the present case - "cannot be made unless" - has a similar mandatory import. To adapt the words of Gummow J in David Grant v Westpac at 277:

' ... it is impossible to identify the function or utility of the words - "cannot be made" - if (they do) not mean what (they) say.'" (citations omitted)

**[20] The provisions of s 283 are of a similar nature - "the chief executive officer must give the employee ...". They are designed to provide an employee with notice of the allegations made against him or her and the action which is proposed to be taken on the basis of those allegations and then to give that employee "a reasonable opportunity to respond to the information contained in the written notice". In other words, it is a requirement which is intended to allow a person to make representations relevant to a decision. As is noted in Statutory Interpretation in Australia[6] "a failure to comply with those requirements will usually be interpreted as producing an invalid result".

[21] In Scurr v Brisbane City Council[7] the matter in issue was whether an advertisement had complied with the requirements of the City of Brisbane Town Planning Act 1964-1969 in giving notice of the application. The advertisement did not precisely identify the site of the proposed building and it contained a minor misprint. Stephen J, with whose decision the other members of the court agreed, said:**

"I doubt, however, whether, in the present case, a distinction of any substance exists between a mandatory and a directory interpretation of the requirement that the public notice contain particulars of the application. It is well established that a directory interpretation of a statutory requirement still necessitates, as a condition of validity, that there should be substantial compliance with the requirement; Cullimore v. Lyme Regis Corporation ... provides a modern instance of this. When the requirement is that "particulars of the application" should be given by public advertisement and when once it is accepted that there must be an advertisement which gives some such particulars, it is difficult to discern any distinction between a strict observance of this requirement, such as a mandatory interpretation would call for, and the substantial observance of it, as called for by a directory interpretation. The situation is quite different from that encountered when some formality of time or procedure has been neglected, or when some question of waiver arises, as it did in Edward Ramia Ltd. v. African Woods Ltd. ... . That which the statute calls for is not compliance with precise and detailed formalities, some of which might be omitted without affecting substantial compliance; substantial compliance can in this case only be achieved by giving adequate particulars and strict compliance calls for no more than the giving of those same adequate particulars. The particulars of the advertisement will either be sufficient to effect the legislative purpose of giving notice to the public of the application or, if not, will not amount even to a substantial compliance with the statute. I have found the particulars in the present instance to be inadequate and, whether as a result of a mandatory interpretation or of a directory one, the outcome will be the same; the council, or its delegate, here proceeded to a determination of the application without either strict or substantial compliance with relevant statutory requirements and the formation of its proposal to grant the application has thereby been vitiated."[8] (emphasis added, citations omitted)

[22] I have already dealt, in part, with this issue. It is apparent from the words of s 278 that Division 1 of Part 3 is intended to set out the actions which may be taken by a chief executive officer so far as discipline is concerned. The parts of that Division allow for different types of disciplinary action such as deductions from salary and suspension of employees in certain circumstances. The consequences for an employee can, obviously, be dire. The words of Division 1 of Part 3 do not purport to cover all circumstances in which an employee might be subject to discipline or to termination. The ambit is confined by the reference in s 279 to responsibilities or actions "under the Act". Thus, for example, it would not cover circumstances where an employee might be found guilty of an offence unconnected with the Local Government Act 2009. If the offence was sufficiently serious, then the chief executive officer might be justified in terminating employment and the ordinary law would apply.

[23] This Division is not concerned with actions of an employee which fall outside the categories in s 279 and so does not add another layer of control to all the matters which might justify an employer taking some form of action against an employee. The fact that it is restricted in that way contributes to a conclusion that invalidity would follow non-compliance with the terms of Division 1.

[24] In part of the Deputy President's reasoning he examined the consequences of the exercise of these disciplinary powers and said:**

"[27] ... It could cause significant public inconvenience if the validity of the exercise of these powers could be challenged each time it were to be alleged that there had been some non-compliance with the requirements of r 283."

**[25] So much can be accepted. In this case, though, there was no compliance to any extent with the requirements of s 283. An issue may arise, for example, as to whether or not a "written notice" required by s 283(1)(a) sufficiently set out the grounds on which the action is taken and the particulars of conduct claimed to support the grounds. That will be a question to be determined with respect to each notice. But, one must also examine the other side of the coin. What has occurred in this case is that the employee was not afforded the right given to her by the Regulation to respond to the written notice.

[26] It may be that the underlying hardship perceived by the Council is that, as it had already conducted an inquiry through an agent, the appellant had already been provided with an opportunity to say what she wished to say. Nevertheless, s 283 of the Regulation inserts a mandatory step before the taking of disciplinary action and it does so without reference to any earlier investigation that might have taken place.

[27] In the light of the construction which I have held to be correct, it is unnecessary for me to consider the other grounds.

(b) is confined to actions under the Local Government Act 2009, and

(c) affords a right to an employee to be told of the allegations and to be given an opportunity to respond._**

**[29] The proper construction of s 283 of the Regulation is that a failure to give a notice in the terms set out in that section results in the invalidity of any action taken by the Council with respect to discipline under this part of the Regulation.

[30] The appeal is allowed. The decision given on 10 July 2014 is set aside. Declare that the purported termination of the appellant's employment by the respondent was invalid.**

[3] Macquarie Dictionary, Revised Edition, 1985.

[4] Australian Concise Oxford Dictionary, 5th Edition, 2009.

[6] Pearce and Geddes, 8th Edition, 2014 at 11.24.

[7] [1973] HCA 39; (1973) 133 CLR 242.