Roads and Traffic Authority of NSW, Division of NSW Government Service (Respondent) Representation: Ms P Lowson of Counsel (Applicant) Mr Menzies, QC with Ms K Eastman of Counsel (Respondent) W G McNally Jones Staff (Applicant) Minter Ellison (Respondent File Number(s): IRC 1141 of 2009

Background 1The Public Service Association of New South Wales (the "Applicant"), on 4 August 2009, filed an application, pursuant to section 84 of the Industrial Relations Act 1996, seeking relief for the alleged unfair dismissal of Ms Rosanna Ganino, a member of that Association, by the Roads and Traffic Authority of NSW (the "RTA"), a Division of the Government Service of New South Wales, and a corporation under section 46 of the Transport Administration Act 1988 (NSW). 2Ms Ganino completed the Solicitors Admission Board Diploma in Law and the College Law to qualify for admission as a legal practitioner. In December 1991, she was admitted as a solicitor of the Supreme Court of New South Wales. She accepted, during cross-examination, that admission as a solicitor conferred certain privileges and duties. On 8 February 2002, she commenced employment with the Respondent as a Support Solicitor USS Grade 9 in the Legal Branch. In April 2007, Ms Ganino applied for the externally advertised position of Senior Solicitor Liability Litigation USS Grade 11. On 1 June 2007, she commenced in the position of Senior Solicitor Liability Litigation. Up until 9 January 2009, Ms Ganino performed duties as a senior solicitor providing legal support to the various Directors of the RTA and advising on a range of legal matters, some of which were highly sensitive. It was not disputed that the solicitors employed by the RTA hold positions of trust and stand in a fiduciary relationship to their client (the RTA). That fiduciary relationship requires the RTA to have complete confidence and trust in its solicitors: See Hospital Products Limited v United States Surgical Corp (1984) 156 CLR 4 at 96-97 per Mason . 3The RTA contended that Ms Ganino, whose role was one which required the highest standards of trust and confidence, was dismissed because she engaged in serious misconduct in contravention of the RTA's Code of Conduct. The substance of the alleged serious misconduct is: (1)On 18 December 2008, she accessed documents that were confidential and related to personal information; and (2)She used that information for personal purposes and unrelated to the performance of her duties as Acting Legal Counsel Corporate Law; and (3)She failed to disclose to the Acting General Counsel, Ms Vickers, or any other senior RTA officers that she had accessed the information and that there was a security failure with the level of access available to documents in the Staffing subfolder within the Interwoven documents management system; (4)She displayed insolent and disrespectful conduct towards Ms Vickers at a meeting on 6 January 2009; and (5)She refused to comply with a reasonable and lawful directions given on 7 January and 14 January 2009 to return documents obtained on 9 October 2008. 4The Respondent contended that, in addition to the above, Ms Ganino refused to participate in the fact-finding interview or disciplinary interview in a meaningful way thereby contributing to the RTA's decision to terminate her employment. She had elected not to assist with the disciplinary proceeding. She failed to provide an exculpatory statement or explanation of matters that were peculiarly within her knowledge during the fact-finding inquiry and the disciplinary process. and failed to provide a plausible explanation for her failure to participate. 5The RTA submitted that there were two main issues for determination by the Commission: (i)whether the termination of Ms Ganino's employment was harsh; and (ii)if the termination is found to be harsh, should Ms Ganino be reinstated? 6Counsel for the Applicant raised the issue of delegated authority on 22 April 2010 during the hearing on the alleged unfair dismissal claim - firstly , the manner in which delegations are made within the RTA; secondly , the manner in which delegations are communicated in the RTA and, thirdly , whether or not instruments of delegations are issued on each and every occasion that a decision is sought to be made. The Respondent was directed to file and serve further evidence and an outline of submissions in that regard by 28 April 2010. What eventuated was that the Respondent filed, on 3 May 2010, a brief submission opposing what it perceived to be an attempt on behalf of the Applicant to amend her claim to include the issue of delegations. 7The Applicant reminded the Commission of its ruling that the Respondent, a seasoned litigant with experienced Solicitors and Counsel, adduce evidence in relation to the delegations issue. Instead, without providing a reason(s) for doing so, the Respondent produced submissions as to form rather than substance. The transcript in relation to that exchange relevantly reads: LOWSON: It's essentially a legal argument, Commissioner, and it's a matter which I'm happy, to avoid any argument down the track that we shouldn't be allowed to put the legal argument more broadly, I'm happy to provide the respondent next week with an outline of my submissions in relation to that specific argument, if that would assist. COMMISSIONER: That would assist. Are you happy with that? EASTMAN: It would assist and I'd ask that we have leave to have the opportunity to file some evidence relevant to what is a new issue and I'll treat the submissions as being an amendment to the application for unfair dismissal. But I'd seek the Commission's leave to file evidence solely on the issue of delegations and how delegations operate and the meaning of the manual and how that's done if this issue is now genuinely being raised. COMMISSIONER: Well, when do you think you would have the submissions ready? LOWSON: I've indicated an outline of submissions by the end of next week. COMMISSIONER: Yes. LOWSON: I know what my friend says and while of course if there is any evidence that needs to be put in this regard that is relevant to the case, I'll take instructions, but I would imagine our position would be not to oppose it but we note that we have issued summonses and all that has been produced is the two thick delegation documents. So if there are further documents that fall within our summons which are sought to be tendered or relied upon, on that point there might be significantly more argument as to whether or not you should accept documents if they should have been produced in response to our summons. EASTMAN: I have not said that we would file evidence by way of additional documents and we've met our obligations under the summons and if the documents come within the scope of the summons, we've produced them. So again, I reject the assertion that somehow the RTA hasn't complied with its obligations in relation to producing documents on the summons. What I've said is that if this is genuinely an issue, we would like to reserve our rights to file some evidence to explain the process of delegations and how they work within the RTA, rather than just have floating documents around where you're asked to try to work out what they mean. COMMISSIONER: All right. Is the end of next week convenient for you? EASTMAN: Well, I'll need to see these submissions to understand what the scope of the claim is against us, as we're still a little in the dark on that. COMMISSIONER: Yes, that'll be end of next week. And do you require seven days? EASTMAN: Yes I think so, I just haven't got my diary with me, Commissioner, in terms of the next round of hearings. COMMISSIONER: So it'll be 30th. Next round is not next week, the week after. So what we're talking about is next week we have no hearings of this matter. On Friday you'll get the outline and then we're back here on the Tuesday. EASTMAN: We'll do our best. I'm in Ms Lowson's hands; the earlier she can provide me the submissions so I actually understand the case that's now been put against the RTA, I'll need time to get some instructions from the relevant people, I think Mr Tout's not back in the country until the Monday of that week, might be either the Friday afternoon or the Monday, I can't remember, fm sorry about that. It's the Friday afternoon or the Monday and fm not sure whether-- COMMISSIONER: That's the 3rd? EASTMAN: --he's the person who's best to give the evidence about how delegations work or whether we need somebody new, but if the submission - obviously my learned friend knows the case that she now wants to put against us. If it's a narrow point, then perhaps the submissions could be provided earlier than the week and by Wednesday and then we'll be in a position to file some evidence the day before the hearing. COMMISSIONER: Wednesday 28? LOWSON: Yes, I was going to suggest I could probably do a quicker turnover given that Monday is a holiday. COMMISSIONER: And your reply is by Monday the 3rd? (emphasis added) 8The Applicant submitted that, despite the course foreshadowed by their Counsel, and without providing any or any adequate explanations, the Respondent chose a different course. One may infer that the Respondent's failure to file any evidence in relation to the issue is the result of its inability to deal with the Applicant's arguments. If that inference is correct, then all the more reason why this issue should be dealt with in these proceedings. 9Although the Respondent asserted that Mr Tout and Ms Cvetkovic could have given evidence about delegations, it did not outline to the Commission what the evidence would be, why it was not prepared in a timely way and identify what other witnesses would be called. 10At the resumption of the hearing on 12 May 2010, the Commission heard argument from the parties in relation to whether the Applicant should be permitted to run an argument on the issue of delegations. The Commission issued a decision on 18 May 2010 advising the parties that it intended to allow evidence to be filed in relation to delegations and indicated that reasons for decision would be provided at a later date. 11The hearing of the unfair dismissal proceeded. All of the evidence was received as were submissions from the parties. The Commission, as presently constituted, issued an interim decision on 8 March 2011 ([2011] NSWIRComm 1008). The Commission had summarised the evidence and submissions and made a finding made in the following terms: [100] I accept that the Applicant has raised sufficient doubt in relation to the following: (a) the validity of the purported exercise of delegated functions and powers in the absence of any delegations in writing in relation to the various steps in the disciplinary process; and (b) the validity of the decision to dismiss even if the delegation, dated 8 July 2009, was a valid delegation in view of the allegation that the foundation upon which the decision to dismiss was made was invalid. The issue of delegation needs to be considered as a threshold issue and I determine accordingly. 12The Applicant had filed and served a submission on the issue of the validity of the delegations on 27 April 2010 designed to address the objections of the Respondent made on 12 May 2010 in relation to both the tender by the Applicant of the Delegation Manuals and submissions on the general issue of the validity of delegations. The interim decision went on to grant leave to the Respondent to make submissions in relation to the "Operation of the Delegations Manual". 13The issue of delegations was the subject of a hearing on 19 April 2011 and written submissions were provided by 28 April 2011. 14At the hearing on 19 April 2011, Mr Menzies, QC submitted that the Respondent was in complete agreement with that conclusion. Nevertheless, it was submitted that the Commission was being led into error. It was submitted that, prior to determining the issue of delegation, it was critical that the Commission determine whether or not the Applicant has been dismissed. If the response is in the affirmative, then the Commission is seized with the jurisdiction to determine whether the dismissal is tainted in any way by the delegation issue. If, however, the response is negative, then the Commission has no jurisdiction to deal any further with the matter and the issues arising from that are properly dealt with in another forum that is seized with jurisdiction to deal with the matter, for example, an application for a declaration pursuant to section 54 of the Act to be dealt with by the Commission in Court Session. 15Ms Lowson reminded the Commission that the Applicant was running an argument on two fronts: Firstly , the Applicant contended that the Commission needs to determine whether or not the dismissal was valid. The Applicant contended that Ms Ganino's dismissal was invalid because the delegations upon which the dismissal was based were invalid or, alternatively, there has been no dismissal because some invalidity in the process tainted the final decision which was based upon a valid delegation. Secondly , if the Commission finds against the Applicant on that point, then it needs to determine the fairness or otherwise of the dismissal. In that regard, the Applicant challenged the unfairness of Ms Ganino's dismissal. 16The Commission once again held that the validity of the dismissal must be determined as a threshold issue. 17The Respondent proceeded to call Mr David John Ebert, Group General Manager- Business Services Group at the RTA, its only witness on the threshold issue, to give evidence on its behalf. Mr Ebert gave evidence that he reported directly to the Director, Finance and Corporate Services. During cross-examination, he gave evidence that his view was that the position of General Counsel was a level 3 General Manager as it reports directly to the Chief Executive. He was not aware that::

• the Legal Services branch was referred to within the RTA as a directorate;
• the telephone directory, used a reference point for delegation levels, identified that General Counsel at level 1.
• Mr Ebert accepted that if the telephone directory identified General the position of Counsel as level 1, then that is their level for the purposes of the Delegations Manual. 18Mr Ebert stated in his statement: It may well be that in the absence of any other specific delegation the DCS [Director of Corporate Services] acted in this matter on behalf of the EC [Chief Executive]. 19That statement prompted the following exchange during cross-examination: LOWSON: What did you mean by the DCS acting on behalf of the EC? EBERT: The Director of Corporate Services ... can act as being empowered to take on board those matters that are fully within their function, and that includes Human Resources type functions, and it also, at the time, it could well have been, depending on what instruction that the Director of Corporate Services may have spoken to the Chief Executive about what powers he could - or what authority he was going to have in whatever matter - in this particular matter. Q: Are you suggesting that a conversation between the Chief Executive and the Director would be sufficient for the Director to be cloaked with authority to do tasks otherwise only within the purview of the Chief Executive? A: No, but because it is a clarification of what's actually been empowered to the Directors, and especially the Corporate Services and Finance Directors more broadly for those functions of which they are empowered across the whole of the organisation, not just specifically for their own directorates. Q. So you are suggesting that a conversation could clarify the extent of the power accorded under page 6 of 9 to the Director of Corporate Services? A: That's what I thought, yes. Q: Is that your evidence as to how a Delegations Manual would ordinarily operate? That is, that conversations between senior members of the RTA would - A: I just know how the Delegations Manual operates but it does talk about, in the Delegations Manual, those broad functions, and I'm saying that to operate, you know, in a matter that is across - when you are taking on board functions, those broad functions around Human Resources or Finance - it could well be possible that or likely that the Director would talk to the Chief Executive about it through any normal consultation process. 20In order for the threshold issue to be considered in detail, it is appropriate to consider the legislative framework as well as the evidence and submissions which have been made throughout the course of the proceedings. In that regard it has been necessary to traverse a large amount of the evidence already contained in the decision of 8 March 2011.

Legislative History 21The Public Sector Employment Legislation Amendment Act 2006 ("the PSELA Act") introduced amendments to NSW Statutes which had the effect of transferring the employment of staff from statutory corporations to the Government of New South Wales as those organisations, including the Roads and Traffic Authority, were vulnerable to coverage by the Work Choices legislation. 22Those Amendments included the insertion of Chapter IA into the Public Sector Employment and Management Act 2002 ("the PSEM Act") which included the following relevant provisions: s.4D(2) A Division Head may, subject to section 4B(2), exercise on behalf of the Government of New South Wales the employer functions of the Government in relation to the members of staff of the Division. s.4B(2) The employment of staff in the Government Service, including the exercise of employer functions in relation to that staff, is subject to the requirements of this or any other Act relating to that staff. 23The Applicant submitted that, not only were the provisions of ss 4B(2) obviously incorrect, but that the PSEM Act does not apply to staff employed by the Government of New South Wales under s.4B(1). 24The Applicant pointed out that section 57 of the Transport Administration Act (NSW) 1988 was inserted, in the same terms, in the PSELA Act 2006. That section provides as follows: 57(1) The regulations may make provision for or with respect to the staff to which this Division applies, including the conditions of employment and the discipline of any such staff. (2) Any such regulations relating to the conditions of employment or the discipline of the staff to which this Division applies: (a) have effect subject to any State industrial instrument relating to that staff, and (b) have effect despite any determination under section 4E (1) of the Public Sector Employment and Management Act 2002, and (c) are subject to Part 3.1 of the Public Sector Employment and Management Act 2002, and (d) in the case of staff employed in a Division of the Government Service to enable the State Transit Authority to exercise its functions may provide for appeals by members of staff in connection with their employment, including appeals to a Transport Appeal Board constituted under the Transport Appeal Boards Act,1980. 25Despite the fact that the section contemplates that Regulations would be made that apply to RTA staff, no such regulations have been promulgated. 26The Applicant concluded that the only provision relating to RTA staff is Clause 35 of the Transport Administration (Staff) Regulation 2005 which took effect from 1 September 2005 and which provides as follows: 35(1) An RTA officer may be temporarily suspended from duty by the RTA pending: (a) the institution or determination by the RTA of disciplinary action against the officer, or (b) the determination by a court of any charge against the officer for a serious criminal offence . 35(2) The RTA may remove a suspension at any time. 35(3) If: (a) disciplinary action is instituted by the RTA against an RTA officer, or (b) an RTA officer is charged with having committed a serious criminal offence , any salary payable to the officer while the officer is suspended from duty is (if the Chief Executive of the RTA so directs) to be withheld. 35(4) Salary so withheld may (if the Chief Executive so directs) be subsequently paid to the RTA officer whatever the result of the disciplinary action or charge. 35(5) In this clause : "disciplinary action" includes: (a) disciplinary interviews or inquiries in connection with the conduct of an officer of the RTA, and (b) disciplinary charges against an officer of the RTA, whether made orally or in writing. "serious criminal offence" means an offence committed in New South Wales that is punishable by imprisonment for 6 months or more or an offence committed elsewhere that, if it had been committed in New South Wales, would be an offence so punishable 27The Applicant submitted that, in the absence of any other legislation that applies to limit the extent or generality of s 4D of the PSEM Act in relation to employer functions, only the Chief Executive Officer of the RTA is authorised to exercise employer functions in relation to RTA staff, including the right to manage the discipline of staff employed to undertake RTA work, except to the extent the CEO delegates that function pursuant to s 4F of the PSEM Act which provides as follows: 4F(1) The Division Head of a Division may delegate to any member of staff of that or any other Division of the Government Service : (a) any of the Division Head 's functions under this Act (other than this power of delegation), and (b) any employment-related functions under any other Act that the Division Head exercises on behalf of the Government of New South Wales in relation to the staff in that Division . 4F(2) If: (a) a function of a Division Head is delegated to a member of staff in accordance with subsection (1), and (b) the instrument of delegation authorises the sub-delegation of the function , then, subject to any conditions to which the delegation is subject, the person may sub-delegate the function to another member of staff of that or any other Division of the Government Service . 4F (3) In this section: (a) a reference to the functions of a Division Head includes a reference to any functions delegated to the Division Head under this Act, and (b) a reference to a member of staff of a Division includes a reference to a person holding an appointment to or in a body or organisation in respect of which a Division of the Government Service is established to enable the body or organisation to exercise its functions . 28The Applicant also submitted that, in the absence of a definition of " employer functions " in the PSEM Act, then the words are to be given their ordinary meaning which would include, inter alia, the management of discipline. The Applicant further submitted that only the CEO can discipline staff unless that function or power has been validly delegated. The Applicant conceded that some of the documentation produced by the Respondent indicated that the CEO may have delegated some specific functions or powers in relation to disciplining of RTA staff, however, no documentary evidence has been produced to the Commission evidencing delegation of that function in relation to Ms Ganino. 29On that basis, the Applicant concluded that the following functions were invalid and had no effect as they were purportedly exercised by persons other than the CEO: (a)Engaging external providers; (b)Issuing allegations; (c)Authorising fact finding and disciplinary interviews; (d)Finding the allegations proven; and (e)Suspending Ms Ganino with pay.

Arguments as to Delegation 30The Applicant argued that if its argument is correct in relation to the Delegations issue, then Ms Ganino's -

• suspension with pay by letter from Mr Boggon (acting in Mr Tout's position as Director Corporate Services and Reform), on 9 January 2009 was invalid;
• there was not a valid delegation to Ms Cvetkovic to start off the Hopkins disciplinary process by letter on 12 May 2009; and
• Mr Tout was not properly delegated to make the decision determining her employment in July 2009. 31The Respondent rejected what it considered to be an application by the Applicant to amend her application to include the issue of Delegations as another ground. The Respondent raised concerns that the Applicant was relying on a range of assumptions to challenge, in addition to the three decisions made with respect to her, the whole manner in which delegations are made within the RTA and how they would apply in a range of situations. 32The Respondent argued that if the Applicant is correct that the three decisions were invalid, then the Applicant has failed to provide a valid or plausible explanation as to what action she has taken to address each of those issue at the earliest opportunity - an explanation which is highly relevant to an application to amend. The legal actions that were available to the Applicant were
• a dispute notification to the Commission;
• or prerogative relief in the Supreme Court in relation to an administrative decision. The Respondent pointed out that the Applicant failed to pursue either avenue and there was no suggestion that she intended to pursue prerogative relief in the Supreme Court. 33In the Delegation Submissions, the Applicant submitted that: Where the Delegations Manual refers to a power having been delegated, in the absence of the Instrument in Writing the Respondent has not established that the delegation is valid. 34The Respondent pointed out that the above submission "succinctly highlights" why the Commission is being led into error. It was pointed out that the Applicant failed to identify any relevant source of power for the Commission to embark upon such an inquiry while dealing with proceedings under Part 6 of the Act. 35For its part, the Respondent considers that there are two issues for determination:
• whether the Commission needs to consider whether there was a delegation of the Chief Executive's powers to take various steps during the disciplinary process; and

Delegation Manuals 56In response to the summons for delegation documents, the Respondent had merely produced the 2007 and 2009 Delegations Manuals and a single page document purporting to delegate powers in relation to the employment of the Applicant to Mr Tout. 57The Applicant argued, firstly , that a delegation is not valid in the absence of an instrument in writing referring to each power referred to in the relevant Manual that has been delegated; secondly , that the specific steps in the disciplinary process may only be exercised by the CEO if the Manual is silent about the delegation of powers in respect of those steps; and, thirdly , the steps are invalid unless the CEO authorised those steps to be taken. 58Bearing in mind that the Applicant's termination had occurred on 23 July 2009 and the 2009 Delegations Manual took effect from 6 July, it was submitted that the relevant Manual for the majority of the disciplinary process was the 2007 Manual which relevantly provides: Section 1 - Introduction

1. ...... This document outlines the various levels of authorisation required for a range of functions from procurement,.... to managing staff conditions of employment. All staff exercising any delegations MUST comply with the provisions of this manual. Section 2 - Principles of Delegation
2. Delegations apply to the works, activities, organisations and administrative sections, for which delegates are responsible, and are to be exercised within approved budgets and/or programs.
3. Delegated Officers are expected to know and to comply with relevant legislation, regulations, Government and Authority policy as well as directions, requirements or limitations which may be issued from time to time....
4. Delegated functions are implicitly limited also by an obligation on delegates to consult. where not specifically required in RTA procedures, consultation will depend on the judgement of the delegate. It is expected delegates will consult with more senior or specialist officers before exercising delegations, where implications for the RTA and its activities are significant (e.g. legal).
5. Contractor (including Skill Hire Personnel) and consultants cannot exercise delegated authorities or commit funds on behalf of the Roads and Traffic Authority or approve expenditure, nor sign contracts or commit the Authority in any way. Section 4 - Position Authority Schedule 4.1 The Legend - Delegation Level specifies that the Chief Executive is level 0 and a Director is level 1. Section 5 - Delegation Clauses 5.4 Human Resources 5.4.7 Conduct Approval to: Authorise a disciplinary interview: CEO or Director Take disciplinary action: CEO or Director Suspend a staff member from duty with pay: CEO or Director Suspend a staff member from duty without pay: Chief Executive 59It was submitted by the Applican t that, in the absence of a definition of "disciplinary action" in the RTA Manual, then the definition contained in the RTA Discipline Policy should apply. The said definition includes:

Disciplinary Procedures, Policies and Guidelines 62The parties were in dispute as to what disciplinary policies/procedures/ Guidelines were applicable to the Applicant at the relevant time.. 63The Respondent contended that the following were the appropriate policies: Discipline Policy; version 5.0; last updated 29.03.2004 Discipline Guidelines; version 5.0; last updated 29.03.2004 Discipline Procedure; version 5.0; last updated 29.03.2004 64The Applicant pointed out that, included in correspondence to her dated 19 February 2009 in which she was advised of ten allegations made against her and in which she was directed to attend a fact finding interview, were three attachments: Discipline Policy; version 6.0; last updated 3.11.2008 Discipline Guidelines; version 6.0; last updated 3.11.2008 Discipline Procedure; version 5.0; last updated 29.03.2004 65Whilst the Applicant did not waive her rights to rely on the Policy and Guidelines she had been provided with, including the delegation aspect, she focused her submission on the Policies and Guidelines relied on by the Respondent. 66Ms Cvetkovic, Manager Workplace Practice Unit, attached the Discipline Guidelines, version 5.0 dated 29.03.2004 to her statement. Those Guidelines stipulate that a Manager must take prompt action, including conducting a fact-finding investigation, if and as required, where strategies directed at achieving the required standard of work or conduct have not produced the required result or where a disciplinary matter is alleged, suspected or known to have occurred. Ms Cvetkovic conceded, in correspondence to the Applicant dated 23 February 2009, that there were no policies or procedures governing fact-finding interviews, " however the process followed is generally as per disciplinary guidelines and procedures... ". Despite the absence of policies or procedures, Ms Ganino was threatened, in that correspondence, with suspension without pay if she did not attend the fact finding interview. It is noted that the correspondence concluded with the warning that failure to attend the fact-finding interview would be considered a failure to comply with a lawful direction and " consideration will be given to suspending you from duty without pay " - a role that is ascribed only to the Chief Executive by virtue of the 2007 Delegations Manual. 67The Discipline Guidelines refer to disciplinary interviews. The Discipline Procedure also refers to disciplinary interviews but not fact-finding investigations. The Applicant pointed out that any delegations in respect of disciplinary interviews do not ipso facto apply to fact finding interviews.

Deficiencies in 2007 Delegations 68The Applicant pointed to the significant differences between the 2007 and 2009 Delegations Manuals regarding disciplinary matters. For example, the 2007 Manual lacked a number of delegations which were relevant to the current proceedings:

• Fact-finding interviews;
• Approval to authorise a disciplinary investigation;
• Determination of penalty arising from unsatisfactory performance and/or conduct;
• Approval to determine disciplinary outcome in serious misconduct matters;
• Approval to recommend disciplinary proceedings. 69The Applicant submitted that the absence of these delegations from the 2007 Manual meant that the only person authorised to undertake those steps in relation to Ms Ganino was the CEO. The Applicant concluded the following from the failure of the CEO to undertake those steps: firstly , the disciplinary investigation was not properly authorised and was invalid; secondly , the disciplinary proceedings were not appropriately approved and were invalid; thirdly , the findings of the Disciplinary Panel and Mr Tout were not properly authorised and were invalid; and fourthly , the determination by Mr Tout of the expected penalty was not properly authorised and was invalid. 70The Applicant made the point that, even if the 2009 Delegations Manual were to be found to be the relevant Manual applicable to Ms Ganino's set of circumstances, there were certain delegations relating to her that were not dealt with in that Manual:
  • Authority to engage an external investigator, Mr Dave Madden, to conduct a fact finding investigation, including requiring the attendance of employees and contractors at fact finding interviews;
  • Authority to engage an external investigator, Mr Geoffrey Hopkins, to conduct a disciplinary investigation including requiring the attendance of employees and contractors at disciplinary interviews; and
  • Authority to issue allegations on 19 February and 12 May 2009 are all invalid, as none of them were authorised by the CEO.

Absence of Delegation of Functions and Powers 71Item 5.4.7, Conduct of the 2007 Delegations Manual provides that the Section Manager Control Management Services can approve the interviewing of staff to establish facts of " suspected or alleged misappropriation, fraud or corrupt conduct ". 72Whilst the Applicant conceded that fact finding interviews may be conducted as part of the RTA's management of discipline, pursuant to s 4D of the PSEM Act, only the CEO has the authority to exercise that power in the absence of a specific delegation of that power by the CEO. 73The Applicant submitted that, in Ms Ganino's case, there was no evidence before the Commission that: 73.1. The CEO authorised fact finding interviews to be conducted; 73.2. The CEO delegated the power to authorise fact finding interviews to be conducted; and 73.3. A Director authorised the conduct of the fact finding interviews. 74The Applicant submitted that, in the absence of such delegation, it fell on the CEO to exercise the following employment functions which, the facts demonstrate, the CEO did not do: 74.1 Appointment of the external investigator, Mr Dave Madden; 74.2 Appointment of the external investigator, Mr Geoffrey Hopkins; 74.3 Issuing of allegations on 19 February 2009; 74.4 Issuing of allegations on 12 May 2009; and 74.5 Finding the allegations were proven in June 2009. 75The Commission was reminded that Ms Ganino had been threatened with suspension without pay if she did not attend the fact finding interview. It followed, therefore, that the fact finding interviews were required to be properly authorised. As the CEO did not authorise the fact finding interviews and did not delegate that authority to anyone else, it followed that the interviews were invalid. If that material was excluded from consideration, then the factual basis for the disciplinary process is invalid and the whole process is impugned bearing in mind that the material from the fact finding interviews formed a significant part of the findings by Mr Madden that the allegations against her were proven.

Rod Tout not the appropriate Director 76Ms Ganino had, in correspondence to the Respondent dated 6 July 2009, pointed out that Mr Tout, as Director Corporate Services, was not the specified Director responsible for the Legal Branch which was part of the CEO's office. She also pointed out that Ms Vickers, who was Acting General Counsel at the relevant time, could not be delegated with functions because she was a contractor. Ms Ganino based that information on version 6.0 of the Guidelines although it was equally applicable under version 5.0 as the latter refers to the "relevant director". It followed, therefore, that only the CEO had the power to authorise the following actions in relation to her:

fact finding interview;

the appointment of external people to conduct the said interviews;

a disciplinary interview;

the appointment of external people to conduct a disciplinary interview;

allegations made against the applicant;

suspension with pay.

77The Applicant submitted that even if she were to concede that Mr Tout was the correct Director to authorise a disciplinary interview, a point which she does not concede in the absence of the actual Instrument of Delegation, the Respondent has not produced: 77.1 any document signed by Mr Tout authorising the disciplinary interview of Ms Ganino on 24 May 2009; 77.2 any sub-delegation by Mr Tout to Ms Cvetkovic giving the latter the power to authorise the disciplinary interview.

Validity of Actions 78The Applicant referred to the provisions of s 49 (2)(b) of the Interpretation Act (NSW) 1987 in relation to what constitutes a valid delegation of power to exercise discipline functions by the CEO: delegations " shall be in, or be evidenced by, writing signed by the delegator or, if the delegator is a body, by a person authorised by the body for that purpose". The Applicant cited the judgment of the High Court in Project Blue Sky v The Australian Broadcasting Authority (1998) 194 CLR 355 at pars [91] to [93] (per McHugh, Gummow, Kirby and Hayne JJ) as establishing the relevant test dealing with invalidity of an act done in breach of a condition regulating the exercise of a statutory power. 79The Applicant submitted that, in applying the Project Blue Sky test, regard must be had to the statutory scheme (per Marks J): Public Service Association and Professional Officers Association Amalgamated Union of New South Wales and Director of Public Employment by his agent the Director General of the Department of Justice and Attorney General [2010] NSWIRComm 36. The circumstances pertaining to that case were distinguished from the present circumstances in that Part 2.7 of the PSEM Act, which details the disciplinary processes applying to public sector employees does not apply to RTA employees nor is there any equivalent provision applying to RTA employees in the PSEM Act or any other Act. 80It was submitted by the Applicant that sections 4B and 4D of the PSEM Act stipulate that the CEO of the RTA must either delegate all " employer functions in relation to management of staff " or must delegate specific authority in relation to particular aspects of the management of staff as evidenced by the detailed employment-related matters set out in the 2007 Delegations Manual which, co-incidentally, also illustrates the significant gaps in delegations dealing with steps in the disciplinary process. 81The Applicant also submitted that the law requires punctilious compliance, irrespective of whether it is an application of criminal or civil law, where one faces allegations of the most serious nature and where the consequences of the exercise of the power are grave, such as in the present circumstances: R v Janceski [2005] NSWCCA 281 at [98]; R v Halmi [2005] NSWCCA 2. It is noted that both Benches applied the Project Blue Sky test. The Applicant pointed out that, as was held in Janceski , in which the English judgments in R v Morais (1988) 87 Cr App R9 and R v Jackson (1997) 2 Crim App R 497 were cited with approval, the defects in the purported delegations can hardly be described as meaningless clerical steps or mere formality. 82The Applicant also relied on the Victorian Court of Appeal decision in B (A Solicitor) v Victorian Lawyers RPA Ltd (2002) 6 VR 642 where it was held that written minutes of a meeting of the RPA recording the approval to delegate powers to an officer was not a delegation "in writing" as required by the Legal Practice Act and therefore the proceedings initiated by that Officer against the two affected Solicitors were invalidated. 83The Applicant further relied on the judgment of his honour Justice Goldberg, which was upheld on appeal to the full Federal Court, wherein he held, in Parks Holdings Pty Ltd v Chief Executive Officer of Customs [2004] FCA 820: 99 A provision which requires an act to be in writing must be considered by reference to the context in which it appears. The notion that something be done in writing is designed to provide a measure of formality and official identification. In the present context the reason for the delegation to be in writing is no doubt to ensure that any official act carried out pursuant to the instrument of delegation which affects the rights of persons, or impinges upon commercial or personal activities, is seen to be within power and authorised. One can readily appreciate the issues of proof of authority which would arise in the context where the power to delegate acts which impinged upon the rights of individuals was given with no permanent recorded proof of such delegation. As Miles CJ noted in Perpetual Trustee Company (Canberra) Ltd v Lewis (1994) 119 FLR 38 at 45: The power to issue notices like those issued pursuant to section 18(2) of the Taxation (Administration) Act is a power `whose exercise will be likely adversely to affect rights of the individuals : O'Reilly v Commissioners of State Bank of Victoria (1982) 153 CLR 1 at 12 per Gibbs CJ. Therefore an instrument which delegates such a power or part of it should not be construed loosely. 84It was concluded on behalf of the Applicant that, on the basis of the above authorities, the purported exercise of delegated functions and powers was invalid because: 84.1 There was no punctilious compliance with the lawful requirements of delegation as the Respondent did not produce any delegations in writing in relation to the various steps in the disciplinary process; and 84.2. Even if the CEO did validly delegate employment functions to the Director Corporate Services on 8 July 2009 pursuant to s 4D of the PSEM Act, the foundation on which the decision to terminate was based was invalid as it was based on the exercise of functions by persons not authorised to exercise those functions. 85In relation to the public interest, the Applicant distinguished the circumstances pertaining in Project Blue Sky from the circumstances surrounding Ms Ganino pointing out that any public inconvenience that may occur as a result of the invalidity of the act would be slight, if any at all, particularly when compared to her interests. 86In conclusion, the Applicant submitted that the breaches of the statutory scheme for delegation of functions and powers, when considered in the context of the importance of Ms Ganino's rights, indicate that the various steps taken in the disciplinary process and ultimate termination of the employment were invalid.

CONSIDERATION 87I intend to firstly deal with the reasons for my decision to allow evidence to be filed in relation to delegations. 88Section 146, General Functions of Commission, and s. 3 (objects) provide as follows (emphasis added): 146 (1) [Functions] The Commission has the following functions: (a) setting remuneration and other conditions of employment, (b) resolving industrial disputes, (c) hearing and determining other industrial matters, (d) inquiring into, and reporting on, any industrial or other matter referred to it by the Minister, (e) functions conferred on it by this or any other Act or law. (2) [Regard to public interest] The Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to: (a) the objects of this Act, and ... (b) .... This subsection does not apply to proceedings before the Commission in Court Session that are criminal proceedings or that it determines are not appropriate. 3. Objects The objects of this Act are as follows: (a) to provide a framework for the conduct of industrial relations that is fair and just, (b) to promote efficiency and productivity in the economy of the State, (c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level, (d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies, (e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments, (f) to prevent and eliminate discrimination in the workplace and in particular to ensure equal remuneration for men and women doing work of equal or comparable value, (g) to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality, (h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations. 89I accept that it is a primary function of the court to ensure that all matters in controversy between the parties are attended to in the one set of proceedings. 90I do not accept that the grant of leave was contrary to the public interest. None of the previous witnesses were required to be recalled to give evidence. In addition to that, the Respondent is a very large employer and it is in its best interests and in the public interest to ensure that its policies and procedures are complied with during investigative, disciplinary and/or dismissal processes. 91I do not propose to go over the evidence which I have detailed above and summarised in the decision of 8 March 2011. In relation to key issues, it is clear that Ms Ganino is not an employment lawyer. Nevertheless her legal background and her experience in the workplace led her to believe that there was an issue to be pursued in relation to delegations. I am satisfied, from the evidence I have outlined above, that Ms Ganino and the Applicant, through its Solicitors and Counsel, doggedly pursued the issue of delegation with the Respondent, on at least 13 occasions, since at least 6 July 2009. 92Ms Ganino was stood down with pay on 9 January 2009 pending an investigation into the allegations set out above. She was advised that she was dismissed effective 23 July 2009 for allegedly acting contrary to the Code of Conduct of Ethics. The Applicant lodged a section 84 application on her behalf on 4 August 2009. Neither Ms Ganino nor the Applicant or its Solicitors had access to the Delegations Manuals prior to the lodging of the claim. Yet the issue is alluded to in the reasons for the section 84 application. In my view, the Applicant is entitled to make out a case in relation to that ground without any necessity for the Commission to grant leave to amend. 93Finally, Section 163, Rules of Evidence and Legal Formality, of the Act provides that the Commission (a) is not bound to act in a formal manner, and (b) is not bound by the rules of evidence and may inform itself on any matter in any way that it considers to be just, and (c) is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. There is substantial evidence before the Commission as to the frustrated attempts by Ms Ganino and the Applicant, through its Solicitors, to ventilate this issue prior to the matter being brought before the Commission. The delegations matter was a major plank in the Applicant's case. The Commission, as currently constituted, formed the view that it was incumbent on the Commission to inform itself in relation to the validity or otherwise of that ground in the Applicant's case. 94In relation to the issue as to the validity or otherwise of the dismissal, it is not unusual for Members of the Commission to deal with threshold issues either prior to hearing the merits of an unfair dismissal claim or to hear both arguments as to threshold issue and merits and then determine the former first. 95The threshold issues include, but are not limited to, whether there has been a dismissal or resignation; dismissal or abandonment of employment; a threatened dismissal. 96In determining unfair dismissal claims, the Commission is required to take into account relevant factors such as the provisions of relevant awards, enterprise agreements and the like to ensure that there has been compliance with the relevant provisions relating to the dismissal. 97I do not accept the Respondent's submission that there is no relevant source of power for the Commission to embark upon an inquiry into whether Ms Ganino has been validly dismissed. Section 88 of the Industrial Relations Act 1996 sets out matters to be considered in determining a claim as including " such other matters as the Commission considers relevant ". 98In the case of Ms Ganino the procedures laid down by the Delegation Manuals are a fundamental part of the employment relationship. It was submitted on behalf of the Applicant that one of the effects of the WorkChoices changes was the necessity, from March 2006, to create new Instruments of Delegation from the Chief Executive. 99The Applicant insists that there is no instrument in writing from the Chief Executive delegating his functions to Mr Tout in relation to the disciplinary processes leading up to the dismissal of Ms Ganino. 100There was a dispute between the parties as to which Delegation Manual applied to Ms Ganino's termination and there was no shortage of these Manuals in the proceedings. In the 8 March 2011 decision, I indicated that the 2009 Delegations Manual was not approved until 9 July 2009. It applied to her alleged dismissal on 23 July 2009 but did not apply to the fact-finding investigation commissioned by the Respondent. I set out the relevant section of the 2007 Manual in relation to delegation: Section 2 - Principles of Delegation The basic legal questions that should be asked by public servants when action is to be taken or a decision is to be made on behalf of the agency are: A. Is there a legal authority for taking the action or making the decision? B. Who has the legal authority to take the action or make the decision? C. Why is the action being taken or the decision made? 101I accept the submissions on behalf of the Applicant in relation to the requirements of the Interpretation Act as far as delegations are concerned. I accept that delegations are required to articulate just what function is/are being delegated. Mr Tout, who held a more senior role to Mr Ebert and who held himself out as responsible for the production of the 2009 Delegations Manual, cast doubt on Mr Ebert's authority on the matter of delegations in his evidence on 31 May 2010, an opinion which was confirmed by Mr Ebert in his evidence. . 102As Senior Solicitor Liability Litigation, Ms Ganino was attached to the Chief Executive Officer's Directorate. In other words, her line Manager was the Chief Executive Officer. 103It is not disputed that Ms Vickers, as a Consultant to the RTA, was unable to exercise delegated authority from the Chief Executive. 104Mr Boggon, Acting Director, Corporate Services and Reform, wrote to the Applicant on 9 January 2009 advising that she was being stood down with pay pending an investigation into allegations that had been made against her. No documentation was provided to the Commission evidencing the fact that he had been delegation by the CEO to approve the investigation or to stand Ms Ganino down with pay. 105The relevant Discipline Guidelines state that "Disciplinary action is a matter for determination by the relevant Director on advice of the Ethical Standards Committee". There was no evidence before the Commission that the Committee met, or was even established, to consider Ms Ganino's disciplinary matter. 106In the decision of 8 March 2011, I accepted the submissions made on behalf of the Applicant that, in the absence of documentary proof evidencing a valid delegation of the processes up to, and including, the dismissal of Ms Ganino, then the only person authorised to approve those steps in relation to her was the Chief Executive Officer. 107I accept that, in the absence of a valid delegation from the Chief Executive Officer, that the issue remains an appropriate preliminary issue for the Commission to determine.

DECISION 108Having considered all of the written and oral evidence and the submissions of the parties throughout the proceedings, I find that although the final decision was based upon a valid delegation, the disciplinary processes leading up to that dismissal were tainted by some invalidity. The disciplinary processes were not validly delegated to any of the people who purported to exercise those functions. On that basis, there has been no dismissal of Ms Ganino by the Respondent. I decide accordingly.

ORDERS 109The Commission orders that the Roads and Traffic Authority of NSW reinstate Ms Rosanna Ganino to her former position of Senior Solicitor Liability Litigation on terms not less favourable to her than those that would have been applicable if she had not been dismissed. Ms Ganino is to be reinstated as soon as practicable but no later than 9 November 2011 with full continuity of service; 110The Commission orders that the Roads and Traffic Authority of NSW pay to Ms Rosanna Ganino an amount which equates with the remuneration that she would, but for being dismissed, have received in the intervening period between dismissal and reinstatement, less any amounts received as payments derived from alternative employment. This amount is to be paid as soon as practicable but no later than 23 November 2011 but may be subject to Settlement of Minutes of Order proceedings initiated by written request of either party by no later than 23 November 2011. 111In relation to the issue of costs, the Applicant is to file and serve submissions by 9 November 2011 and the Respondent is to file and serve submissions by 23 November 2011. Unless either party requests that the Commission hear them, the issue of costs will be determined on the papers.

Commissioner DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 October 2011