Xirakis and Comcare [2007] AATA 1817 | Case summary

The actions taken against Mr Xirakis are set out in the Statement of Agreed Facts.[6]
It appears that both parties accept that certain actions taken by Mr Bruce, concerning the allegations made against Mr Xirakis, constitute disciplinary action, and that those disciplinary actions materially contributed to cause the psychological condition he then suffered. However, the specific disciplinary action that materially contributed to Mr Xirakis' psychological condition is not clearly identified. In the parties' submissions, the delineation between action of a disciplinary nature and other action that was taken against Mr Xirakis is not clearly made out.
While we accept that disciplinary actions were taken against Mr Xirakis, it is necessary to clearly identify these actions in the circumstances in order to properly address the question of reasonableness that follows.
In the circumstances, the framework in which the question concerning disciplinary action must be considered is formed by the Certified Agreement, then in force, and the PSM Act. Considering the relevant provisions of these instruments, as will appear, it is not clear that the actions taken by Mr Bruce were disciplinary actions under either the PSM Act or the Certified Agreement. However, it is clear that if his actions were taken under either instrument, they were not compliant with the applicable provisions.
Under the Certified Agreement, all teachers are appointed on probation in accordance with the PSM Act unless otherwise determined.[7] Section F of the Certified Agreement establishes procedures for managing issues of discipline that "apply to the exclusion of provisions contained in Part IX of the PSM Act" (sub cl. 41.4). However, the Certified Agreement disciplinary procedures are explicitly disapplied to employees during a probationary period (cl 41.3). Thus the disciplinary procedures established by the Certified Agreement did not apply to Mr Xirakis. Comcare asserts that it does not follow that the PSM Act disciplinary procedures apply in Mr Xirakis' case.
We do not agree. The Certified Agreement does not purport to operate generally to the exclusion of the PSM Act even though it purports to "prevail" over that Act (sub cl 7.3). The exclusionary operation to which we have referred is specific and relates only to disciplinary procedures (sub cl 41.4). Nevertheless, the Certified Agreement must be read in conjunction with the PSM Act (sub cl 7.2). The disapplication of those procedures in the case of temporary and casual employees, and employees during a probationary period must be considered in this context.
Provision is made under the Certified Agreement for the employment of temporary and casual employees on a contractual basis. One would expect that any such contracts may include provisions concerning alleged misconduct and related disputation. The same cannot be said in relation to an officer appointed for a probationary period. The terms of such employment, specifically in relation to conduct, are not subject to contractual provisions, but are within the terms of employment set out in the Certified Agreement and the PSM Act (and other applicable legislation) during the period of the probation. The employment, albeit during a probationary period, is under the PSM Act (sub cl 8.1). The PSM Act provides that appointment to the ACT public service, at first instance, is to be for a probationary period unless certain circumstances apply (s. 70), during which the particular appointment is as an officer of that service. The PSM Act attaches certain conditions to a probationary appointment: the appointment may be terminated at any time (subs 70(4)) on 14 days notice (subs 70(7)) in certain circumstances (subs 70 (9)), notably "after receiving a report from the officer's supervisor or another appropriate officer, that the performance of the officer's duties has not been satisfactory" (subs 70(9)(b)). For a teacher, such as Mr Xirakis, the probationary period is 12 months and not the 6 months otherwise specified for non-teaching appointments (s. 71). The disciplinary procedures set out in Part IX of the PSM Act apply to officers appointed under Division 3, including officers appointed for a period of probation (subs 3(1) and 186(1)). As the specific disciplinary procedures established under the Certified Agreement explicitly do not apply to officers during periods of probation, the provisions of the PSM Act concerning discipline apply during those probationary periods.
We do not accept or agree with Comcare's submission that this is inconceivable insofar as a probationary officer would accrue greater rights than his or her non-probationary counterparts or that a more strenuous test would apply in relation to matters of alleged misconduct under the PSM Act. The reason officers are excluded from the disciplinary procedures established by the Certified Agreement during probationary periods is not apparent on the materials before us. Nevertheless, we are satisfied that the disciplinary procedures set out at Part IX of the PSM Act applied to Mr Xirakis during the period of his probation in 2005 as the disciplinary procedures established by the Certified Agreement did not apply to him. However, even if we are wrong on this point, and no formal disciplinary actions or procedures apply to teachers during the period of their probation, Comcare's case is not made out.
Mr Bruce considered that "it was appropriate to use those [Certified Agreement] procedures as a guide in dealing with Mr Xirakis' alleged misconduct, having regard to procedural fairness issues".[8] On 10 October 2005, Mr Bruce made reference to the Certified Agreement and to the PSM Act in his letter to Mr Xirakis concerning the allegations and findings made against him.[9] Mr Bruce stated that the letter "constitutes a final warning in relation to your misconduct and any substantiated recurrence will result in further disciplinary action and may lead to your dismissal from the ACT Public Service".
We find that, at least, that the actions Mr Bruce took against Mr Xirakis on 29 September 2005, in the form of a formal meeting with Mr Xirakis, and 11 October 2005, in the form of a formal warning letter, are disciplinary actions for the purposes of the Act. That is so whether those actions were taken, correctly or otherwise, under the Certified Agreement, the PSM Act, or under some other head of power or delegation that was not agitated before us. We accept that actions relating to the investigation of alleged misconduct, preceding and possibly preconditioning any subsequent disciplinary action against an employee, may fall outside the meaning of disciplinary action. It is a matter of carefully considering the particular circumstances in each case. In Mr Xirakis' case, it appears to us likely that Mr Bruce's action on 16 September 2005 to suspend him from all duties on full pay may be within the meaning of disciplinary action under the PSM Act and the Certified Agreement. We note that Ms Howard met with Mr Xirakis prior to the process Mr Bruce initiated on 15 September 2005. Ms Howard was Mr Xirakis' immediate supervisor, and was a member of Mr Xirakis' probation assessment panel, the purpose of which was to assess his performance during the probationary period on the basis of agreed procedures (sub cl 93.3). It appears from Ms Howard's statement[10] that on 13 September 2005, she and another teacher (Mr Cox) met with Mr Xirakis and "questioned him" about his classroom conduct. The character and content of that meeting is not clear, especially in relation to Ms Howard's role on Mr Xirakis' probation assessment panel. However, it is not necessary to make findings on this point as the matter is resolved on other grounds in Mr Xirakis' favour.
We are reasonably satisfied that the disciplinary actions Mr Bruce took against Mr Xirakis materially contributed to cause or aggravate the psychological injury claimed. We so find.

Comcare says that the disciplinary action taken by Mr Bruce was reasonable in the circumstances.
We do not agree.
For disciplinary action to be reasonable for the purposes of the Act, it must at least, be lawful. To be lawful, formal disciplinary action taken against an employee must be properly authorised and preconditioned. The exercise of disciplinary action requires the proper conferral or delegation of power. Furthermore, in our view, disciplinary action taken against an employee is unlikely to be reasonable if it is contrary to the rules of natural justice and procedural fairness has been denied.
The disciplinary procedures under Part IX of the PSM Act apply if the officer has failed to fulfil his or her duty as an officer in compliance with s. 9 of that Act (s.179). The first step is for an authorised officer to decide whether the officer should be charged (subs 186(1)). If the officer is not charged, the authorised officer or the officer's supervisor may counsel the officer. If the officer is charged, an inquiry into the alleged misconduct is to be conducted (s. 187). Notably, such an inquiry is not to be conducted by an officer who has given a report into any of the matters alleged or by the officer who laid the charge (subs 187(2)). An officer who has been charged may be suspended from duty pending completion of an inquiry into the alleged misconduct in certain circumstances (s.189). An officer so charged has a right to appeal against a decision made against him or her (s.191).
The disciplinary procedures under the Certified Agreement apply in certain circumstances (cl. 42), and certain actions may be taken having regard to the degree of misconduct found (cl.43). Those actions include counselling the employee, a written admonishment, suspension with or without pay, and termination of employment (sub cl 43(3)). These actions are expanded upon at clauses 44 and 45, which set out procedures for suspension, informal counselling, formal counselling, formal written warning and "discipline action". In the latter case, the procedure includes the investigation of the alleged misconduct by the Delegate and subsequent written notice of the decision and reasons, as well as any further discipline action and information about the employee's appeal rights (sub cl 45.4). Under the Certified Agreement, an employee has right to appeal against a decision made in disciplinary proceedings (cl. 46; Section H).
In this case, Ms Howard made allegations against Mr Xirakis at a time when she was his immediate supervisor and a member of his probation assessment panel. She questioned Mr Xirakis about her concerns in the presence of another teacher and then informed Mr Bruce.
Subsequently, on Mr Bruce's instruction, Ms Howard conducted an investigation into the allegations she had raised against Mr Xirakis. She reported her findings and the evidence on which they were based to Mr Bruce, and attended a formal meeting with Mr Xirakis to discuss the allegations at which Mr Xirakis made oral and written responses to the allegations.
We accept that Ms Howard did not take part in Mr Bruce's decision, concerning the alleged misconduct. We accept that Mr Xirakis was given a proper opportunity to respond to the allegations and be heard by the decision maker - Mr Bruce. There is no compelling evidence before us that Mr Bruce prejudged the outcome of the investigation he set in train, and we accept that he did not. However, those findings do not end the matter.
There is no evidence before us concerning delegations held and purportedly exercised by Mr Bruce. The parties were in agreement that appropriate delegations were in place. Thus, in the absence of disputation or evidence, we will proceed on that basis. However, we note that in the construction contended for by Comcare, whereby no formal disciplinary procedures applied in respect of probationary teachers, the terms of the particular delegation would need to be carefully considered to determine whether Mr Bruce had any lawful power to take disciplinary action against an employee in Mr Xirakis' circumstances.
Mr Xirakis was entitled to natural justice when the allegations of misconduct were dealt with by Mr Bruce, and Mr Bruce was required to act fairly in the circumstances (Rose & Bloxham v Bridges (1997)[11]). That is so, explicitly in the terms of the Certified Agreement concerning disciplinary procedures (that did not apply to Mr Xirakis); and by implication, as a matter of law, under the PSM Act, in which no contrary intention appears (Kioa v Minister for Immigration and Ethnic Affairs (1985)[12] and Annetts v McCann (1990)[13]). Issues of procedural fairness and reasonable apprehension of bias must be considered.
We accept that failure to follow a specified procedure when making a decision may not always invalidate the resulting decision. One must look to the applicable legislation and instruments in the particular circumstances (Bromet v Oddie [2003][14]). If the particular procedure is not a mandatory requirement, failure to strictly adhere to the procedure may not invalidate the resulting decision. In order to determine whether Mr Bruce's decision is invalid, it is necessary to consider the particular provisions and instruments that apply. We are reasonably satisfied that Mr Bruce did not strictly adhere to the disciplinary procedures under either the Certified Agreement or the PSM Act.
The significant matter ventilated before us concerns the role of Ms Howard in the procedure adopted by Mr Bruce. Under the PSM Act, the investigative role Ms Howard performed is precluded by operation of subsection 187(2). This is a mandatory requirement that was not within Mr Bruce's discretion to ignore. Thus, if the disciplinary procedures of the PSM Act apply in Mr Xirakis' case, and we are satisfied that they do, the procedure adopted by Mr Bruce is contrary to the mandatory requirements of that enactment and is therefore unlawful. Even if we are wrong on that point, the matter does not resolve in the manner contended for by Comcare.
We accept that procedural unfairness can occur without any personal fault on the part of the decision-maker and that one must be careful to consider the role of other persons involved in the process (Hot Holdings Pty Ltd v Creasy (2002)[15]). The part Ms Howard played was central to the raising and investigation of the allegations─ she was purported witness, complainant and investigator. Furthermore, she was Mr Xirakis' immediate supervisor and a member of his probation assessment panel. Thus, without finding personal fault, we are reasonably satisfied that the part Ms Howard played in the actions ultimately taken by Mr Bruce against Mr Xirakis infected those actions with procedural unfairness.
The test to be applied concerning perceptions of bias is not limited to actual or real bias, although such a finding would be determinative, but is one of reasonable apprehension of bias by a fair-minded layperson (Johnson v Johnson (2000)[16]; Laws v Australian Broadcasting Tribunal (1990)[17]). As has been oft repeated: "justice should not only be done, but it should manifestly and undoubtedly be seen to be done" (R v Sussex Justices; Ex parte McCarthy [1924][18]).
Considering the agreed facts, we are persuaded, as a matter of probability rather than mere possibility, that a fair-minded layperson could be expected, reasonably, to perceive that Ms Howard, as witness and complainant, may not have brought an impartial mind to bear when investigating and reporting (orally and in writing) directly to Mr Bruce on the particular allegations against Mr Xirakis. The fact that Mr Bruce relied upon and preferred her evidence to the refutations and explanations offered by Mr Xirakis gives rise to a reasonable apprehension of bias in the disciplinary action that was taken against Mr Xirakis. We so find.
Counsel for Comcare, Mr Dube, sought to distinguish authorities relied upon by Mr Xirakis (Stollery v Greyhound Racing Control Board (1972)[19]; Re Macquarie University: Ex parte Ong (1989)[20]; Re JRL: Ex parte CJL (1986)[21]). Truly enough, each of those cases may be distinguished on their facts. However, the principles of law plainly articulated in those (and other) such cases cannot so easily be dispensed with. Not only should justice be done, but it should also be seen to be done. It is a fact we have accepted that Ms Howard did not participate in Mr Bruce's decision concerning the allegations of misconduct. Nor was she part of a board of management or inquiry dealing with those matters. However, she was Mr Xirakis' immediate supervisor within the management framework of the school in which he was employed. She was a member of his probation assessment panel. She was in a position of influence in the school in relation to Mr Xirakis and the allegations made against him. The precise details of the decision making process adopted by Mr Bruce are not clear on the available evidence. Nevertheless, we are reasonably satisfied, in the particular circumstances, that a reasonable inference may be drawn by a reasonable bystander, that Ms Howard was in a position to influence the outcome of the investigation into the allegations of misconduct against Mr Xirakis. Such an inference is neither extravagant nor far-fetched (Stollery v Greyhound Racing Control Board (1972)[22]).
As it appears to us, the role played by Ms Howard in the disciplinary action that was taken against Mr Xirakis renders that action other than reasonable. The disciplinary action taken against Mr Xirakis by Mr Bruce was infected by a reasonable apprehension of bias. Furthermore, in all likelihood, the part Ms Howard played in relation to the investigation of the allegations was unlawful under the PSM Act. Finally, we note that there is no evidence that Mr Xirakis was properly informed of his rights of appeal against the decision made concerning the allegations. Even though this last matter was not raised in submissions and alone may not be determinative, it is nevertheless a relevant matter to have regard to, and it is one that further indicates deficiencies in the procedures applied. As it appears to us, the more serious the allegation and the more serious the consequence of an adverse finding against an employee, the greater the importance of ensuring that proper and fair procedures are applied within the framework of law when dealing with the matters raised. Failure to adhere to proper and fair procedures may, as in this case, raise a reasonable apprehension of bias in the mind of a fair-minded layperson.
Thus, we are reasonably satisfied that the disciplinary action taken against Mr Xirakis was not reasonable and so find.
It follows and we find that the psychological injury Mr Xirakis claimed as a result of that unreasonable disciplinary action is not excluded as an injury under the Act.
That being so, the decision under review is set aside and in place thereof we decide that Mr Xirakis' claimed psychological injury is not excluded under the Act as a result of reasonable disciplinary action. The matter is remitted to Comcare to determine Mr Xirakis' entitlements to compensation under the Act.
The parties have 14 days in which to make submissions in relation to orders for costs. If no submissions are received, Comcare will be ordered to pay Mr Xirakis' reasonable costs in these proceedings as agreed or taxed.
We note in closing that we do not accept Mr Anforth's submission that Mr Xirakis' compensation entitlements in relation to incapacity and medical treatment expenses are properly before the Tribunal for determination. In our view, they are not. Mr Xirakis' entitlements, if any, under either head of compensation have not been determined or reconsidered. Thus these aspects of Mr Xirakis' case will be remitted to Comcare.

Xirakis and Comcare [2007] AATA 1817 (2 October 2007)

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Xirakis and Comcare [2007] AATA 1817 (2 October 2007)

Legislation Cited (2)

Cases Cited (10)