Marroun v State Transit Authority

[2017] NSWCA 273

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Marroun v State Transit Authority [2017] NSWCA 273

Hearing dates:

2 August 2017

Decision date:

24 October 2017

Before:

Bathurst CJ; Beazley P; Basten JA

Decision:

(1)   Grant leave to appeal from the judgment in the Common Law Division given on 15 December 2016.

 

(2)   Allow the appeal and set aside orders 1 and 2 made on 15 December 2016.

 

(3)   In place thereof:

 

(a) Allow the appeal under s 197B(1) of the Industrial Relations Act 1996 (NSW) from the decision made by the Industrial Relations Commission of NSW on 4 February 2016;
(b) Set aside the order made under s 100C(2) of the Industrial Relations Act 1996 (NSW) by the Industrial Relations Commission of NSW on 4 February 2016 dismissing the appeal;
(c)   Order that the State Transit Authority pay Mr Marroun’s costs of the hearing of that appeal.

 

(4) Remit the matter to the Industrial Relations Commission for reconsideration of appropriate orders in the appellant’s appeal under s 98 of the Industrial Relations Act 1996 (NSW), according to law.

 (5)   Order that the respondent pay the appellant’s costs of the proceedings in this Court.

Catchwords:

APPEALS – leave to appeal – appeal under Supreme Court Act 1970 (NSW), s 101(3A) – whether subject to leave requirement under s 101(2)(r)

 

APPEALS – right of appeal limited to decision on question of law – whether open to appellant to allege procedural unfairness – circumstances giving rise to an implied decision that process adopted not unfair

  EMPLOYMENT AND INDUSTRIAL LAW – public sector employee dismissed as a result of disciplinary action – employee appealed to Industrial Relations Commission – whether decision of Commission upholding dismissal on basis of uncharged conduct within jurisdiction – whether decision involved procedural unfairness

Legislation Cited:

Administrative Appeals Tribunal Act 1975 (Cth), s 44
Government and Related Employees Appeal Tribunal Act 1980 (NSW), ss 24, 28, 48, 48A
Industrial Relations Act 1988 (Cth), s 170EE
Industrial Relations Act 1996 (NSW), ss 89, 91, 97, 98, 100C, 100D, 100G, 106, 197B, 355B; Ch 2, Pt 6, Pt 7, Pt 9, Ch 4, Pt 5, Ch 6A; Div 3; Sch 4, Pt 18, cl 66
Public Sector Employment and Management Act 2002 (NSW), ss 41, 46; Pt 2.7
Supreme Court Act 1970 (NSW), ss 69, 101
Transport Administration Act 1988 (NSW), ss 68C, 68P
Transport Administration (Staff) Regulation 2012 (NSW), regs 28, 30, 31; Pt 5

Cases Cited:

Calman v Commissioner of Police (1999) 73 ALJR 1609; [1999] HCA 60
Director-General, Department of Ageing, Disability and Homecare v Lambert (2009) 74 NSWLR 523; [2009] NSWCA 102
Elleray v Rail Corporation of New South Wales (2014) 86 NSWLR 326; [2014] NSWIRComm 45
Gilmore v Allied Express Transport Pty Ltd [2006] NSWIRComm 16
Grygiel v Baine [2005] NSWCA 218
Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92
Maritime Services Board v Murray (1993) 52 IR 455
Marroun v State Transit Authority [2016] NSWIRComm 1003
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18
Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82, [2000] HCA 57
R v Solicitors’ Disciplinary Tribunal; Ex parte L, a solicitor [1988] VR 757
Secretary, Department of Justice v Schoeman (2014) 86 NSWLR 749; [2014] NSWIRComm 40
Smith v Allan, Secretary, Treasury of New South Wales (1993) 31 NSWLR 52
Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36
Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105

Category:

Principal judgment

Parties:

Jamal Marroun (Appellant)
State Transit Authority (Respondent)

Representation:

Counsel:
Ms M Allars SC/Mr E W Young (Appellant/Applicant)
Ms K Nomchong SC/Ms K Edwards (Respondent)

  Solicitors:
Lazarus Legal Group (Appellant/Applicant)
State Transit Authority of NSW (Respondent)

File Number(s):

2017/8687; 2017/195864

 Decision under appeal 

Court or tribunal:

Supreme Court of NSW

Jurisdiction:

Common Law Division

Citation:

[2016] NSWSC 1830

Date of Decision:

15 December 2016

Before:

Walton J

File Number(s):

2016/59249

headnote

[This headnote is not to be read as part of the judgment]

On 11 April 2015, the appellant, then an employee of the State Transit Authority at Kingsgrove, removed an amount of unclaimed lost property from the depot. The standard procedure for disposal of such property was to leave it at local charity bins. The property in question was not in fact ready to be disposed of, and was not so disposed of by the appellant, but rather retained by him. As a result of this conduct, disciplinary proceedings were commenced against the appellant, who was dismissed from his position on 20 May 2015.

The appellant appealed against his dismissal to the Industrial Relations Commission. The Commission held that the penalty imposed was too severe, but nevertheless upheld the dismissal on the basis of its finding that the appellant had lied in his account of his conduct, and had consequently destroyed the necessary relationship of trust between employee and employer.

The appellant then appealed to the Industrial Court against the decision of the Commission on a question of law. The appellate jurisdiction of the Industrial Court having been transferred to the Supreme Court in 2016, the appeal was heard and determined by Walton J, who dismissed the proceeding.

The appellant appealed to this Court.

The questions on appeal were:

(1)   Is an appeal to this Court brought under the Supreme Court Act 1970 (NSW), s 101(3A), which does not involve a particular sum of money, subject to the requirement for leave to appeal under s 101(2)(r)?

(2)   In determining the appeal against dismissal on a basis not considered by the employer, did the Commissioner exercise his functions within his jurisdiction according to law?

(3)   Did the Commissioner’s determination of the appeal on the basis of uncharged conduct constitute procedural unfairness?

(4)   Was it open to the appellant to allege procedural unfairness on the part of the Commission in circumstances where his right of appeal was limited to a decision of the Commission on a question of law?

The Court (Bathurst CJ, Beazley P and Basten JA) allowed the appeal and held:

In relation to question (1):

1. There is no reason to suppose that the effect of s 101(3A) was not to apply the provisions of s 101(2). Accordingly, the appellant was right to seek leave to appeal on the basis that the monetary amount involved was uncertain: [12].

In relation to question (2):

2. An appeal to the Commission from an employer is an appeal by way of fresh hearing, which means that the appellate body “stands in the shoes of” the original decision-maker. Where there is a specific complaint before the employer, it will be necessary for the Commission to consider that complaint and, if it be upheld, determine what disciplinary action should be imposed. Generally, it is assumed that the appellate body has the same powers as the original decision-maker: [35].

Calman v Commissioner of Police (1999) 73 ALJR 1609; [1999] HCA 60, applied.

3.   The Industrial Relations Act 1996 (NSW), s 100C, confers powers on the Commission in relation to a disciplinary appeal, which must be exercised by the Commission in deciding the appeal. The subject matter of the appeal, and thus the matter to be determined by the Commission, is the decision of the public sector employer to take specific disciplinary action. There is no legitimate reading of s 100C(2) which expands the jurisdiction of the Commission: [47].

Secretary, Department of Justice v Schoeman (2014) 86 NSWLR 749; [2014] NSWIRComm 40, overruled; Smith v Allan, Secretary, Treasury of New South Wales (1993) 31 NSWLR 52, discussed; Maritime Services Board v Murray (1993) 52 IR 455, discussed; Director-General, Department of Ageing, Disability and Homecare v Lambert (2009) 74 NSWLR 523; [2009] NSWCA 102, discussed.

4. The finding of the Commissioner that the appellant’s dismissal was not warranted by the conduct of 11 April 2015, which formed the basis of the disciplinary charge, should have led to an order allowing the appeal. In not taking that course, the Commissioner exercised a jurisdiction he did not have and failed to complete his statutory function: [60]-[61]. The decision of the Commission must be set aside: [63].

In relation to question (3):

5. Although the appellant’s credibility was in issue at all stages, he was not put on notice that if findings were to be made against him of the kind in fact made by the Commissioner, his dismissal might be justified on that basis: [68]. There was a denial of procedural fairness which, if properly raised, vitiated the order of the Commission: [72].

Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36, applied.

In relation to question (4):

6. Procedural unfairness, in the legal sense, will constitute an error of law because it will vitiate the basis of the decision under review: [74].

Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57; Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105, applied; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18; Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92, discussed.

7. In proceeding to dismiss the appeal on the basis of uncharged conduct, the Commissioner implicitly determined that there was no procedural unfairness in taking that step. The appellant was therefore entitled to challenge that decision and to rely on procedural unfairness: [77].

8. Procedural unfairness is not an undifferentiated category of error which cannot ever give rise to an implicit decision on a question of law: [78].

Elleray v Rail Corporation of New South Wales (2014) 86 NSWLR 326; [2014] NSWIRComm 45, overruled.

Judgment

1. THE COURT: The appellant was, as at 11 April 2015, an employee with the State Transit Authority (“the STA”), at its Kingsgrove depot. On the day in question, he took a load of unclaimed lost property from the depot, ostensibly to be disposed of in accordance with standard procedure by leaving it at local charity bins. The property was in fact not ready to be disposed of and was not disposed of in local charity bins. This conduct resulted in disciplinary proceedings against the appellant, who, on 20 May 2015, was dismissed from his employment.

2. The appellant appealed against the disciplinary action to the Industrial Relations Commission. That Commission accepted that the penalty was too severe, and that a reprimand would have been sufficient. Nevertheless, the Commission also found that the appellant had lied in his account of his conduct and that the relationship of trust necessary for continued employment had been destroyed. Accordingly, the Commissioner declined to interfere with the order made by the employer and dismissed the appeal. [1]

   1. Marroun v State Transit Authority [2016] 259 IR 122; [2016] NSWIRComm 1003 (“Marroun (IRC)”).

3. The appellant then sought to appeal to the Industrial Court from a decision of the Commissioner on a question of law. That appeal was ultimately heard and determined by Walton J, the appellate jurisdiction of the Industrial Court having been transferred to the Supreme Court in 2016. Walton J dismissed the appeal. [2]

   2. Marroun v State Transit Authority [2016] NSWSC 1830.

4. On the critical issue, Walton J concluded that (i) the appellant had failed to identify a relevant decision of the Commission on a question of law; (ii) in so far as the appellant sought to claim procedural unfairness on the part of the Commission, that did not constitute a decision on a question of law, and (iii) there was, in any event, no procedural unfairness.

5. The primary judge did not rely on his first conclusion, but disposed of the proceedings on the other bases. The primary judge was in error with respect to each of those three findings. There was, however, a separate and fundamental error which underlay the Commission’s approach. It will be addressed first.

Jurisdictional issues (Supreme Court)

(a)   procedural history

6. Prior to his dismissal, the appellant was employed in the Transport Service, to exercise functions of the STA, pursuant to s 68C(1) of the Transport Administration Act 1988 (NSW). The decision to dismiss the appellant was made by a delegate of the Transport Secretary exercising “employer functions of the Government”, pursuant to s 68C(3) and (4).

7. Provisions (somewhat skeletal) relating to disciplinary matters are to be found in the Transport Administration (Staff) Regulation 2012 (NSW), made pursuant to s 68P of the Transport Administration Act. It will be necessary to make further reference to those regulations below.

8. The appeal brought by the appellant from the dismissal decision was heard by a Commissioner of the Industrial Relations Commission, pursuant to s 98(1) of the Industrial Relations Act 1996 (NSW). The orders available to the Commission in determining such an appeal are to be found in s 100C(2) of the Industrial Relations Act, the scope of which is critical to one aspect of the present proceedings.

9. The Commissioner having dismissed the appeal, the appellant then exercised a right of further appeal to the Commission in Court Session, pursuant to s 197B of the Industrial Relations Act, as it stood in February 2016. The scope of that appeal was also of importance to the resolution of the present proceedings, being limited to an appeal “against any decision of the Commission in the proceedings on a question of law.” A hearing was conducted by the Industrial Court (as the Commission in Court Session was then known) in July 2016, with final submissions being filed in August 2016. On 8 December 2016, before judgment had been delivered, the jurisdiction of the Industrial Court was transferred to the Supreme Court. [3] Proceedings pending in the Industrial Court, which had not been determined as at that time, became proceedings in the Supreme Court and the judicial officer who had constituted the Industrial Court determined the matter in the Supreme Court. [4] Judgment was delivered in the Supreme Court on 15 December 2016.

   3. Industrial Relations Amendment (Industrial Court) Act 2016 (NSW).

   4.    Industrial Relations Act, Sch 4, Pt 18, cl 66.

10. The appeal from the judgment of Walton J was therefore an appeal from a judge in the Division. The appeal was brought pursuant to s 101(3A) of the Supreme Court Act 1970 (NSW) which allowed for an appeal to this Court “as provided by this section”.

(b)   leave requirement

11. The appellant foresaw the possibility that this language might, in appropriate circumstances, engage the requirements for leave, pursuant to s 101(2). As there was an issue as to whether the judgment under appeal involved an amount of $100,000 or more, the appellant filed an affidavit seeking to demonstrate that leave was not required, but also (informally) and contingent upon a finding that leave was required under s 101(2)(r), a summons seeking such leave.

12. Section 101(3A) applies to “industrial proceedings within the meaning of Chapter 6A of the Industrial Relations Act”; s 355B(d) in that Chapter identifies proceedings under s 197B of the Industrial Relations Act. Section 101(3A) therefore applies to these proceedings. However, there is a wide range of industrial proceedings referred to in s 355B, including proceedings dealing with registration of industrial organisations and election of officers, which may not involve any particular sum of money. Generally, all cases not having a readily ascertainable monetary value (including appeals involving the liberty of the individual) require leave under s 101(2)(r). There is no reason to suppose that the effect of s 101(3A), in conferring an entitlement to appeal “as provided by [s 101]”, was not to apply the provisions of s 101(2). Accordingly, the appellant was right to seek leave to appeal on the basis that the amount involved was uncertain.

13. Because, for reasons identified below, the appeal raises at least two issues of general public importance, and because the consequences for the appellant personally are not insignificant, it is appropriate to grant leave to appeal and to treat the notice of appeal as properly filed pursuant to that leave. (The respondent did not oppose a grant of leave, if required.)

(c)   proceedings in supervisory jurisdiction

14. As noted above, there was a live issue before the primary judge (Walton J) as to whether an appeal under s 197B of the Industrial Relations Act, limited to a decision of the Commission on a question of law, permitted an appeal based on a failure to accord procedural fairness. The primary judge concluded that it did not, a finding which was expressly challenged on the appeal. However, lest that aspect of the appeal fail, the appellant sought to protect himself by filing a summons in the supervisory jurisdiction of the Court seeking relief with respect to the decision of the Commission, pursuant to s 69 of the Supreme Court Act. In particular, he sought an order in the nature of certiorari quashing the decision of the Commission.

15. For reasons explained below, that course was unnecessary because, properly understood, s 197B allowed for the appeal alleging procedural unfairness, on the particular basis identified by the appellant. Further, the appellant was entitled to succeed on an entirely separate ground, namely that the Commission misconceived the scope and nature of its jurisdiction. The summons in the supervisory jurisdiction may therefore be dismissed as unnecessary.

16. Had it been necessary to rely upon the Court’s supervisory jurisdiction, the summons could not have been heard in this Court. That is because the need for the summons would only have arisen in the event that the appeal against the judgment of the primary judge fails. For this Court to set aside the decision of the Commission would be to make a decision inconsistent with the judgment of the primary judge, which would still stand, the appeal having been dismissed. (It was not suggested that this Court had jurisdiction under s 69 to set aside a judgment of a judge of the Supreme Court in a Division.) The Court would not exercise its jurisdiction to create inconsistent judgments of a superior court. In any event, for the reasons noted above, the summons was unnecessary and should be dismissed.

17. It follows that, however informally sought, it is appropriate to grant the appellant leave to appeal and to deal with the appeal as argued by reference to the grounds in the notice of appeal filed on 13 March 2017, albeit without leave.

Decision of Commissioner

18. It will be necessary to refer below to various aspects of the Commissioner’s reasons. Shortly stated the Commissioner determined that the responsible officer of the STA had concluded that the appellant’s conduct involved “carelessness, not conscious bad intent.”[5] He noted that the written report recommending dismissal did not include a finding that the appellant’s conduct “could be characterised as misconduct.”[6] The Commissioner then stated:[7]

“The STA’s conduct in this matter invites the conclusion that the officers tasked with making a decision on Mr Marroun’s employment believed that Mr Marroun had in reality taken the property deliberately for his own purposes in the knowledge that it was not property to be disposed of, but that the STA lacked the courage of its convictions to put that as an allegation to Mr Marroun.”

5. Marroun (IRC) at [65].

6. Ibid at [66].

7. Ibid at [67].

19. At least implicitly, the Commissioner accepted that if the matter were to be disposed of on that basis alone, the appeal would have been allowed and the dismissal set aside. In fact the Commissioner concluded, having regard to the statutory scheme, that his function on appeal was “not confined to the review of the allegation and the decision made by the employer.”[8]

    8. Ibid at [69].

19. The Commissioner then found that, although the appellant had an obligation to be candid with his employer in answering questions as to what he had done with the property he had taken (his conduct having been recorded on CCTV), the appellant was “not candid.”[9] The Commissioner found that he had “provided to the STA a partially fabricated account of what occurred.” He had invited the STA to speak to his wife, which it did, knowing that his wife would also give a partially fabricated account. [10] The Commissioner concluded:[11]

“The elements of the account that were fabricated are all patently designed to avoid it emerging that Mr Marroun knew very well, before he received the call from the STA advising him that he had taken the wrong items, that his wife was dealing with the lost property items he had brought home as if they were hers to deal with as she wished, and that he condoned her doing so.”

9. Ibid at [76].

10. Ibid.

11. Ibid at [78].

21. He stated that the appellant’s conduct in lying about the fate of the property was “a fundamental breach of his obligations under his contract of employment” and “destructive of the necessary confidence between employer and employee.”[12] The Commissioner concluded:[13]

“Mr Marroun’s conduct both in relation to his lack of candour with his employer and his lack of candour with the Commission has precluded the appeal being determined in his favour. The appeal must be dismissed.”

12. Ibid at [100].

13. Ibid at [105].

22. The Commissioner gave a further reason for refusing to uphold the appeal. That reason relied on two abusive statements posted by the appellant on Facebook two months after his termination and referring by name to the General Manager, Fleet Operations for the STA and the investigating officer in the appellant’s case.

23. Although it was but lightly touched on in the appellant’s written submissions in this Court, [14] the basis on which the Commissioner dismissed the appeal before him raised an issue as to whether he had exercised his functions according to law.

Ground 4 – statutory function of Commission

14.    Appellant’s written submissions filed 21 April 2017, par 6.3; notice of appeal, ground 4.

(a)   actions of employer

24. In order to understand the scope and nature of the appellate function of the Commission in dealing with a disciplinary appeal (also referred to as the Commission’s jurisdiction) it is necessary first to identify the powers of the employer with respect to disciplinary action. The relevant powers in relation to the appellant are to be found in Pt 5 of the Transport Administration (Staff) Regulation 2012 (“the TAS Regulation”). Relevantly Pt 5 provides:

Part 5 Members of the Transport Service—disciplinary matters

28   Definitions

In this Part:

disciplinary action, in relation to a member of the Transport Service, means any one or more of the following:

(a)   dismissal,

(b)   deferral of the payment of an increment,

(c)   reduction of the member’s salary or demotion to a lower position or grade,

(d)   suspension from duty without payment of salary,

(e)   a caution or reprimand,

(f)   a fine of an amount not exceeding $100.

remedial action, in relation to a member of the Transport Service, means any one or more of the following:

(a)   counselling,

…

(e)   the issuing of a warning to the member that certain conduct is unacceptable or that the member’s performance is not satisfactory,

…

(g)   any other action of a similar nature.

…

30   Disciplinary proceedings

(1)   A member of the Transport Service who is subject to any disciplinary proceedings is entitled to be notified in writing by the Transport Secretary of the particulars of the alleged behaviour giving rise to the proceedings.

(2)   A formal hearing is not required to be held before the person or body investigating or dealing with the alleged behaviour, but the member of the Transport Service who is the subject of the proceedings may make representations to that person or body.

(3)   The Transport Secretary may determine any disciplinary proceedings that have been instituted against a member of the Transport Service by:

(a)   taking disciplinary action with respect to the member, or

(b)   taking remedial action with respect to the member, or

(c)   taking no further action.

31   Members of the Transport Service convicted of serious offences

If a member of the Transport Service is convicted of a serious criminal offence, the Transport Secretary may:

(a)   take disciplinary action with respect to the member, or

(b)   take remedial action with respect to the member.

25. The appellant was given written notice of the particulars of his alleged behaviour, in accordance with cl 30(1). On 15 April 2015, an officer of State Transit wrote to him setting out what amounted to a charge in the following terms:

“I am writing to you with regard to a number of alleged incidents that may be in breach of State Transit polic[i]es and regulations, specifically:

(a) Section No 3 of the State Transit Code of Conduct, and

(b) State Transit bus operations lost property procedure 49.07

DETAILS AS FOLLOWS

Allegation 1

On Saturday 11th April 2015 you breached Section 3 of the State Transit Code of Conduct and the State Transit bus operations lost property procedure 49.07 when you removed lost property from the revenue room of Kingsgrove bus depot.

Particulars of Allegation 1

1.   On the 11th April 2015 you failed to behave in a lawful, professional and reasonable manner by removing lost property from the Kingsgrove Bus Depot revenue room.

2.   On the 11th April 2015 you failed to comply with the State Transit lost property procedure 49.07 by removing lost property from the Kingsgrove Bus Depot revenue room that you were not authorised to remove.

3.   On the 11th April 2015 you failed to carry out the duties, responsibilities and accountabilities of your position in an honest and fair manner when you removed lost property from the Kingsgrove Bus Depot revenue room, such property not being your personal property or with the due authority of your position.”

26. On 16 April 2015 the appellant responded in writing to the allegations and, on 23 April, was interviewed by the officer. On 19 May 2015 another officer, with delegated responsibility for disciplinary decisions, signed and provided to the appellant a document headed “Notice of punishment”. The rest of the document was in two parts. The first part followed the precise form of the notice of allegation except that it identified the appellant by name and classification and continued “has been found to have breached”, setting out the two requirements (a) and (b) in the allegations. It identified “details of the breach” in the precise terms of allegation (1) and the particulars of allegation (1). The notice then stated:

“This behaviour is misconduct for which punishment may be imposed under the terms of Clause 30 of the Transport Administration (Staff) Regulation 2012.”

There followed the following heading and item:

“Punishment: Dismissal”.

27. The appellant sought to appeal to the Commission. The notice of appeal was a printed form, covering one page, which, in item 5, sought an indication of “the type of discipline decision being appealed against”; the appellant ticked the box against the word “Dismissal”. Item 6 was headed “Orders Sought”, against which the appellant wrote “reinstatement to previous position.”

(b)   functions of the Commission

28. The appeal to the Industrial Relations Commission from the decision of the employer was brought under Ch 2, Pt 7 of the Industrial Relations Act, dealing with “Public Sector Disciplinary Appeals”. Disciplinary appeals are dealt with in Div 3. In particular, s 98(1) gives a public sector employee a right to appeal to the Commission “against an appealable decision of his or her employer.” The term “appealable decision” is defined in s 91(1) to mean a decision of a kind referred to in s 97(1). Amongst the decisions identified in s 97(1) is “(f) a decision to dismiss the employee”.

29. It was common ground that the proceeding before the Commission was a fresh hearing of the allegation of misconduct. Whether any further allegation could have been laid by the employer was not raised, because no further allegation was laid.

30. This conclusion was supported by reference to the decision of the High Court in Calman v Commissioner of Police,[15] a case dealing with the nature of an appeal under s 24 and s 48 of the Government and Related Employees Appeal Tribunal Act 1980 (NSW) (“the GREAT Act”), which were the predecessors of s 98(1) and s 100C respectively of the Industrial Relations Act. [16] Nothing turns on minor differences in form between s 24(1) of the GREAT Act and s 98(1) of the Industrial Relations Act.

    15. (1999) 73 ALJR 1609; [1999] HCA 60 (Gaudron ACJ, McHugh, Gummow, Kirby and Callinan JJ).

    16. The GREAT Act was repealed by the Industrial Relations Amendment (Public Sector Appeals) Act 2010 (NSW), with effect from 1 July 2010.

31. In relation to the current operation of s 100C, there was a live issue as to the scope of the third option provided by that section, namely making “such other decision with respect to the appeal as it thinks fit.” The operation of s 48(2) was to be viewed by reference to the following section, s 48A. Read together they provided:

48   Decisions with respect to appeals

…

(2) The Tribunal, in relation to an appeal under section 24, may decide to allow or disallow the appeal or may make such other decision with respect to the appeal as it thinks fit.

48A   Orders by Tribunal with respect to payment of salary and continuity of employment

(1) Without limiting section 48, if the Tribunal decides to allow an appeal under section 24, the Tribunal may:

(a)   if the employee has paid a fine imposed by the employer or his or her pay has been forfeited—order the employer to repay the amount of any such fine or forfeited pay, and

(b)   order the employer to pay the employee an amount stated in the order that does not exceed the remuneration the employee would, but for the decision of the employer, have received from the employer, and

(c)   order that any period of employment of the employee with the employer is taken not to have been broken by the decision of the employer.

(2)   Any such order by the Tribunal must be given effect to by the employer.

(3)   Nothing in subsection (1) enables the Tribunal to make an order for compensation in the case where a person is not reinstated or does not continue in employment.

32. In Calman, the Court stated:

“[28]   Various provisions of the statute disclose that the Tribunal is empowered to inquire into the merits of the matter before it, at a formal hearing and in a manner which is distinct from the process adopted by the administrative decision-maker at first instance. The effect of these provisions is as follows.

[29] The sitting of the Tribunal was ‘formal’ (s 36), as opposed to an ‘informal’ hearing for promotion appeals under s 20 of the GREAT Act (s 35(1)). Evidence at such a sitting of the Tribunal is given on oath and is subject to cross-examination (s 38(1)). The scope of the evidence available to the Tribunal is not bound by the rules or practice as to evidence (s 43(1)). Further, the Tribunal, subject to an exception in s 43(2), may inform itself on ‘any matter in such manner as it thinks fit’ (s 43(1)). Section 43(2) prohibits the Tribunal informing itself on, or taking into consideration, ‘any matter which has not been disclosed in evidence at a sitting of the Tribunal if the matter is one which ought, in the interests of justice, to be available for challenge or testing by the persons entitled to be present at the sitting’. Moreover, s 44 confers power on the Senior Chairperson or Chairperson of the Tribunal to compel discovery of documents and the attendance of witnesses.

[30] Thus the proceeding which the appellant initiated in the Tribunal, pursuant to s 186(1) of the Police Service Act, was, by the operation of s 48(2) of the GREAT Act, in substance, a fresh exercise of administrative power, this now being pursuant to the criteria laid down in s 186(1) of the Police Service Act. In that sense, the ‘appeal’ may be described as an administrative hearing de novo.”

33. Section 100C and s 100D of the Industrial Relations Act state:

100C   Decisions with respect to appeals

…

(2)   The Commission, in relation to a disciplinary appeal, may decide to allow or disallow the appeal or make such other decision with respect to the appeal as it thinks fit.

(3)   Without limiting the generality of subsection (2), if in relation to a disciplinary appeal it appears to the Commission that the employer failed to comply with the rules of procedural fairness in making the decision appealed against, the Commission:

(a)   is not required to allow the appeal solely on that basis and may proceed to decide the appeal on its merits, or

(b)   may quash the decision and remit the matter back to the employer with such directions (if any) as to which stage of the disciplinary process in relation to the matter may be recommenced by the employer.

(4) The decision of the Commission in respect of an appeal is, except as provided by section 197B, final and is to be given effect to by the employer against whose decision the appeal was brought.

100D   Orders by Commission with respect to payment of salary and continuity of employment

(1)   Without limiting section 100C, if the Commission decides to allow a disciplinary appeal, the Commission may:

(a)   if the employee has paid a fine imposed by the employer or his or her pay has been forfeited—order the employer to repay the amount of any such fine or forfeited pay, and

(b)   order the employer to pay the employee an amount stated in the order that does not exceed the remuneration the employee would, but for the decision of the employer, have received from the employer, and

(c)   order that any period of employment of the employee with the employer is taken not to have been broken by the decision of the employer.

(2)   Any such order by the Commission must be given effect to by the employer.

(3)   Nothing in subsection (1) enables the Commission to make an order for compensation in the case where a person is not reinstated or does not continue in employment.

34. The procedural powers, equivalent to those relied upon in Calman, are now to be found in Ch 4, Pt 5 “Procedure and powers of Commission”. Arguably persuasive support for the conclusion that an appeal under s 98(1) provides for a fresh hearing of the disciplinary matter is to be found in s 100G, which provides that the employer must present its case first at a hearing, and s 100C(3), which states (as set out above) that even where there is a finding of procedural unfairness, the Commission is not required to allow the appeal solely on that basis and may “proceed to decide the appeal on its merits”.

35. Before turning to the manner in which the Commission purported to exercise its powers, it is convenient to consider further what follows from the characterisation of the process identified in Calman. In colloquial terms, an appeal by way of fresh hearing means that the appellate body “stands in the shoes of” the original decision-maker. Where there is, as here, a specific charge or complaint before the employer, which has resulted in particular disciplinary action, it will be necessary for the Commission to consider that charge or complaint and, if it be upheld, determine what disciplinary action should be imposed. Generally, it is assumed that the appellate body has the same powers as the original decision-maker, no more and no fewer. One basis for that inference is the use of the term “appeal” to describe what is in substance a fresh hearing.

(c)   the Commission’s determination

36. After noting some preliminary matters, including the substance of the employer’s decision, the Commissioner accepted that his function was “to hear and determine the matter afresh on the materials before [him], not simply review the decision of the initial decisionmaker”, referring to s 100C of the Industrial Relations Act and the judgment of the High Court in Calman. The Commissioner also referred to a decision of the President of the Commission, Secretary, Department of Justice v Schoeman,[17] to which it will be necessary to turn shortly.

    17. (2014) 86 NSWLR 749; [2014] NSWIRComm 40 (Walton P).

37. Having reviewed the facts as revealed in the evidence before him, the Commissioner concluded:

“[55]   First, Mr Marroun did not himself effect a breach of his obligations under the STA’s lost property procedures, as alleged against him, by his action of actually removing the lost property from the revenue room of the Kingsgrove bus depot. He removed what he thought were items that were to be disposed of according to the established local procedure. He took the wrong items; the overall result was that the procedure was breached.

…

[58]   So far as Mr Marroun’s conduct is assessed against STA procedures he was, it might be said, careless in not checking the materials more thoroughly, or asking someone if they really were the materials he had been asked to dispose of. Indeed, that accords with the finding of fact made against him.

[59]   For this he may have deserved some form of disciplinary sanction; something perhaps in the order of a reprimand for not taking better care to check on the property of which he disposed, but a sanction well short of dismissal.

[60]   For him to be dismissed for his conduct in removing the wrong items – which is all that he was accused of and all he was found to have done – was disproportionate and inappropriate.”

38. The Commissioner then identified an additional consideration, namely that another officer with the STA had failed to undertake her function properly and was therefore also in direct breach of the STA procedures, noting that no disciplinary action had been taken against her.

39. As counsel for the respondent conceded, the Commissioner did not expressly find that the allegation made by the Authority had been proven, nor that any of the three particulars, to the extent that they were made out, constituted a breach of the relevant code or procedure. Nevertheless, he disallowed the appeal because of the uncharged misconduct noted above at [20]-[22].

40. The question is how the Commissioner came to adopt an approach which appeared, in its terms, to be inconsistent with the nature of the Commission’s function as identified in Calman and as accepted by the Commission.

41. In the Commission, the employer’s advocate noted, both in the course of oral submissions and in written submissions in reply, that the appellant was “seeking to be reinstated to his position.” It was in resisting such an order that the employer contended that “reinstatement or reemployment is not practical or appropriate given the loss of trust and confidence, which is ‘a necessary ingredient in any employment relationship’.” The employer referred to two authorities, including a decision of the Full Court of the Industrial Relations Court of Australia, Perkins v Grace Worldwide (Aust) Pty Ltd. [18] This submission was accepted by the Commission and formed the basis of its decision. The submission, and the authority relied on in support of it, were concerned with the practicability of an order to reinstate a worker claiming unfair dismissal, under s 89 of the Industrial Relations Act. [19] That provision appears in Pt 6 of the Act dealing with unfair dismissals.

    18. (1997) 72 IR 186.

    19. Or, in the case of Perkins, the federal equivalent, namely s 170EE of the Industrial Relations Act 1988 (Cth), as then in force.

42. The Commissioner expressed his conclusions in the following passages:

“[103]   There is another, and related, effect of Mr Marroun’s conduct. The Commission in exercising its powers under s 100C is exercising a discretionary power, albeit a statutorily-guided discretion. Mr Marroun has come before the tribunal exercising that discretion and given a fabricated account to cause the tribunal to exercise a discretion in his favour. That is conduct which disentitles the appellant to the discretionary remedy he seeks, even if on a general view of the facts it might have been available to him: Gilmore v Allied Express Transport Pty Ltd [2006] NSWIRComm 16.

[104]   I do not overlook the decision of the Court in Schoeman so far as it says that the determination of whether misconduct did or did not occur will be a significant matter in an appeal such as this. But it is apparent from that decision that that is not by any means the determinative question. I have given due weight – that is, significant weight – to the fact that while Mr Marroun did as a matter of fact what he was accused of doing, what he was accused of doing could not properly have been seen as misconduct. However, that is outweighed by his disentitling conduct toward his employer and the Commission, and his post-employment conduct, a matter to which the Court in Schoeman expressly held the Commission was able to have regard in matters of this kind, and to which I will return.

[105]   Mr Marroun’s conduct both in relation to his lack of candour with his employer and his lack of candour with the Commission has precluded the appeal being determined in his favour. The appeal must be dismissed.”

43. The reliance on Gilmore v Allied Express was also misplaced; that case dealt with the appropriate relief with respect to an unfair contract challenged under s 106, to be found in Ch 2, Pt 9 of the Industrial Relations Act.

(d)   reliance on Schoeman

44. The Commissioner stated (correctly) that he was bound by the approach adopted in Schoeman, a decision of the Industrial Court. In that case, the primary judge (then the President of the Commission) held that the Commissioner hearing Ms Schoeman’s appeal had erred in confining “the question he was required to consider solely to ‘whether the misconduct said to be the basis for punishment [was] made out’ (other than the related question, also concerning punishment, that, if misconduct was made out was the punishment imposed appropriate?).” The error, the President held, resulted from treating the jurisdiction as “punitive” rather than “protective”, in accordance with s 100C of the Industrial Relations Act. [20] In the reasons which followed this statement of conclusions, the President noted but rejected two steps in the submissions put forward by Ms Schoeman. The first step was that s 46(2) of the Public Sector Employment and Management Act 2002 (NSW) (“the Public Sector Act”), which provided that the department head “may, if the Department Head is of the opinion that the officer has engaged in any misconduct, decide to take disciplinary action with respect to the officer”, made a finding of misconduct a precondition to the taking of disciplinary action. [21] The second step in Ms Schoeman’s argument was that, once the Commission determined that no misconduct had occurred, “the disciplinary action imposed being dismissal could not stand, and nor could any other disciplinary action”. [22]

    20.    Schoeman at [151]-[152].

    21.    Schoeman at [182 (1)], [184].

    22.    Schoeman at [182 (4)].

45. In rejecting those submissions, the President stated:[23]

“(2) Section 100C(2) of the [Industrial Relations Act] provides the commission a wide power to determine appeals. So much is illustrated by the capacity to ‘make such other decision with respect to the appeal as it thinks fit’ (see Smith at 61; Murray at 464) ….

…

(6)   There is no requirement for the commission to reach a conclusion as to the misconduct (as charged) in a disciplinary appeal as a prerequisite to the exercise of its powers under s 100C (and the exercise of its discretion). …

(7)   Further, I am unable to discern a legislative intention to confine an appeal to, as the commissioner found, a review only of the specific allegations of misconduct upon which punishment was based, and by implication only materials which formed the basis for that decision.”

23. Schoeman at [184].

46. This approach should not be accepted. It was inconsistent with the understanding of the appellate process outlined above; in a significant respect it misread the legislation and it was unsupported by authority.

47. It is correct to say that s 100C(2) confers powers on the Commission in relation to a disciplinary appeal. Those powers are not at large; they must be exercised in deciding the disciplinary appeal before the Commission. The subject matter of the appeal, and thus the matter to be determined by the Commission, is the decision of the public sector employer to take specific disciplinary action. In Schoeman, the Public Sector Act, s 46(2), was unambiguous and unequivocal. It conferred power on the department head to take disciplinary action if the officer had engaged in misconduct. The employer had no power to take disciplinary action unless the officer had engaged in misconduct. It was the exercise of that power which was the subject of a disciplinary appeal and thus the subject matter with respect to which “jurisdiction” was conferred on the Commission. The powers conferred on the Commission were therefore limited to the exercise of that jurisdiction and to the disposal of the appeal. There is no legitimate reading of s 100C(2) which expands the jurisdiction of the Commission.

48. To hold otherwise is inconsistent with the reasoning in Calman, where the High Court succinctly identified the function of the Tribunal hearing an appeal as “a fresh exercise of administrative power”. [24] It is not the exercise of a different power for the first time; so much is inherent in the description of the function as an “appeal”.

    24. Calman at [30].

49. In seeking to sustain wider powers than were conferred on the employer, the reasoning in Schoeman relied upon three authorities. The first, chronologically, was Smith v Allan, Secretary, Treasury of New South Wales. [25] That case concerned the scope of an appeal to the Tribunal under the GREAT Act, ss 24 and 48(2). At that time, s 48 of the GREAT Act did not contain subs (2A), now found in s 100C(3) of the Industrial Relations Act, expressly conferring powers in respect of an appeal where the Tribunal was satisfied that the employer had failed to accord the appellant procedural fairness. In Smith v Allan the primary question was whether on a fresh hearing, the Tribunal should simply start afresh, or could address a ground alleging procedural unfairness on the part of the employer in reaching the initial decision. A consequential question was what the Tribunal should properly do in circumstances where such a ground was upheld; should it remit the matter to the employer or deal with the merits of the appeal?

    25. (1993) 31 NSWLR 52.

50. Kirby P (with the agreement of Clarke JA and Samuels AJA) accepted that the Tribunal had power to determine an appeal by reference to that ground. [26] With respect to the second issue, the Court appears to have assumed that the matter would be remitted to the employer which would then exercise the power again. [27] Reference was made in that context to the power in s 48(2) to “make such other decision with respect to the appeal as it thinks fit”. Although the Court considered it likely that it would be sufficient to allow the appeal, [28] the reasoning of the President continued: [29]

“The head of department, as a manifestation of the Crown, can be expected to act in accordance with law as authoritatively stated. Therefore, if the ground for allowing the appeal was the opinion of the Tribunal that the decision, the subject of an appeal, was not validly made because it did not conform to law, it can readily be expected that the head of department would ensure that this determination was faithfully carried into effect. And if there is any doubt, parliament has provided, in the case of disciplinary appeals, the additional power in the Tribunal as referred to in the closing words of s 48(2). Those words are more than sufficient to allow the Tribunal to make other decisions which provide for, for example, the deployment of the employee in question pending the making of a lawful ‘decision’ by the primary decision-maker and any appeal which might then be brought against that decision by the head of department if still disaffected”.

26.    Smith at 63E-F.

27.    Smith at 61D-F.

28.    Smith at 61C-D.

29.    Smith at 61D-F.

51. This understanding of the scope of the powers conferred on the Tribunal by s 48(2) was entirely conventional; it allowed for consequential orders giving effect to a determination that the decision under appeal had not been validly made. It offered no support for the broad conclusions reached in Schoeman.

52. The second decision, a judgment of this Court handed down only six months after Smith v Allan, was Maritime Services Board v Murray. [30] This case involved an appeal by the employer after the Tribunal had set aside the penalty of dismissal it had imposed, which the Tribunal had described as “excessive for the misconduct alleged against the appellant.” [31] The Tribunal had ordered that the appellant be reinstated “as from the date of this decision”, but denied him any reimbursement of salary for the period from the date of his dismissal to the date of the decision, which it treated as “sufficient punishment for any misconduct on his part.” [32]

    30. (1993) 52 IR 455 (Kirby P, Handley and Sheller JJA).

    31.    Murray at 458.

    32.    Murray at 458.

53. The employer’s appeal was based, first, on the lack of an opportunity to address the Tribunal on penalty. That was identified as procedural unfairness. (The Court noted a doubt as to whether the ground was permissible on an appeal against a decision on a question of law, but, the point not having been taken, assumed that the appeal was valid.) The ground was dismissed on the merits.

54. The second ground, which gave rise to the reasoning relied on in Schoeman, complained that the Tribunal had taken into account “extraneous matters”, which had arisen since the date of the dismissal decision. (They included the loss of salary and the rectification by the respondent of the error which had led to his dismissal, namely the failure to pay sales tax on a mobile phone.)

55. Kirby P noted that the post-decision material was “taken into account in determining the order which the Tribunal should make and not in deciding whether or not the appeal should be allowed.” [33] In that regard, the President referred to the powers conferred on the Tribunal, set out the passage from the reasons in Smith v Allan considered above, and continued: [34]

“For like reasons the words are wide enough, in the appropriate case, to sustain an order that the dismissed employee be reinstated. That this is so is confirmed by provisions of [the predecessor to s 97(1)(f) of the Industrial Relations Act]. That paragraph makes it clear that disciplinary appeals were to include appeal against a decision to dismiss an employee. A simple order allowing the appeal would leave the employee dismissed. It is doubtless for that reason that, in disciplinary appeals, the Tribunal was given a wider mandate and provided with larger powers. Those powers could not easily be exercised without regard to events which had occurred since the dismissal. Therefore, to the extent that the Tribunal referred to those events, in determining how it would make its ‘other decision’, it committed no error.”

33.    Murray at 463.

34.    Murray at 464.

56. This reasoning, entirely consistent with that in Smith v Allan, identified the power to make “any other decision it thought fit” as providing for consequential orders to give effect to the basis on which the appeal had been allowed. Murray is also authority for the proposition that post-decision events or conduct may be relevant to the consideration of penalty, but not to the consideration of the essential precondition to the imposition of a penalty, namely whether the disciplinary charge has been proven. That point of distinction assumed that the first task of the Tribunal was to be satisfied that the charge had been made out.

57. The third case was the more recent decision of this Court in Director-General, Department of Ageing, Disability and Homecare v Lambert. [35] Lambert appears to have been relevant to the reasoning in Schoeman in two ways. One was a statement by Hodgson JA to the effect that an exercise of the powers conferred by s 100C should not derogate from the objects of the relevant part of the Public Sector Act in issue in that case (but not in this case). Secondly, and more generally, the reasoning in Lambert was relied upon for the proposition that the purpose for the exercise of disciplinary powers was not punitive action directed at the individual employee, but was protective of the public, in whose interests the employer exercised its functions. So much was derived from the statement of the objects of the part in the Public Sector Act, as explained by Hodgson JA. [36]

    35. (2009) 74 NSWLR 523; [2009] NSWCA 102 (Hodgson, Tobias and Basten JJA).

    36.    Lambert at [30]; see also at [84]-[85] (Basten JA).

58. Two points should be noted in this regard. First, the statement of objects in the Public Sector Act, Pt 2.7 (“Management of conduct and performance”) was as follows:

41   Objects of Part

The objects of this Part are as follows:

(a)   to maintain appropriate standards of conduct and work-related performance in the Public Service,

(b)   to protect and enhance the integrity and reputation of the Public Service,

(c)   to ensure that the public interest is protected.

The reasoning in Lambert accepted that the powers (particularly to take “disciplinary action”) were to be exercised having regard to those objects. There was no suggestion that the functions were otherwise limited or extended. Relevantly to the circumstances in Lambert, the Tribunal had erred in allowing the proper purposes of disciplinary action to be subverted by taking into account the personal interests of the officer, which might properly have been taken into account were punishment of the officer the primary purpose of the order.

59. Secondly, there was another aspect of the reasoning in Lambert which was not identified in Schoeman, but was directly relevant to its conclusion. The order made by the Tribunal had been to reinstate the officer, but subject to his employment being “on probation” for 12 months. With respect to that order, Basten JA stated (with the agreement of Tobias JA):

“[92] Secondly, the [GREAT Act] requires that the decision of the Tribunal ‘shall be given effect to by the employer’: s 48(3). It is possible that such a provision impliedly gives power to the employer which he or she might not have under any other provision of the Act. The alternative construction is that the Tribunal is not empowered to make an order to which the employer could not give effect. The latter is the preferable approach.

[93] Thirdly, the role of the Tribunal is to provide a second tier of administrative (or quasi-judicial) decision-making in relation to public sector employment. In this case, the appeal involved a review of a decision by a department head to take disciplinary action with respect to an officer: see s 46(2) [of the Public Sector Act]. So far as the employer is concerned, his or her powers are constrained by the concept of ‘disciplinary action’ defined in s 42(1) of the Public Sector Act. There is nothing in either Act which suggests that the Tribunal is intended to have some broader powers with respect to misconduct in the public sector.

[94]   In this context, the powers of the Tribunal in respect of a finding of misconduct are as broad [as], but no broader than, those of the employer. Accordingly, as explained by Hodgson JA, they did not extend to placing the respondent on ‘probation’.”

(e)   conclusions as to excess of power

60. There is no doubt that, in the present case, the Commissioner did not consider that the disciplinary action, namely dismissal, was warranted by the only conduct which formed the basis of the disciplinary charge, namely the conduct of the appellant on 11 April 2015. That finding should have led to an order allowing the appeal. The Commissioner did not take that course, but rather, on the basis that the appellant had given untruthful evidence (as to which more will be said below) and had abused his superiors in the STA by posts on Facebook, found the appellant had destroyed the trust on which the employment relationship was based and therefore the dismissal should stand.

61. In adopting that approach, the Commissioner was applying the principles identified in Schoeman. Because those principles (as set out above) were based on a misconstruction of the statute and a misreading of relevant authorities, they led the Commissioner to exercise a jurisdiction he did not have and to fail to complete the function in fact conferred on him by statute. In respect of these matters Schoeman is wrong and should not be followed.

62. To state the matter affirmatively, the Commissioner was required to determine whether the allegation made in writing, in accordance with cl 30 of the Regulation, had been proven to his satisfaction. If it had not, he was obliged to allow the appeal. If he considered that any of the particulars were established, he would have had to address whether some lesser form of disciplinary action was appropriate. Neither of those tasks was undertaken.

63. As the decision of the Commission must be set aside, it is appropriate to note two other aspects of the manner in which the Commission dealt with the subsequent conduct of the appellant, which might have been relevant to a determination of the appropriate penalty.

64. First, following the submissions of the advocate appearing for the employer, the Commissioner appeared to treat the order which was sought, namely reinstatement, as if such an order had been sought under Ch 2, Pt 6 of the Industrial Relations Act dealing with “unfair dismissals”. He also referred to authority dealing with the power of the court to declare void or to vary “unfair contracts”. While, broadly speaking, there may be an analogy between an unfair dismissal and a dismissal resulting from the wrongful exercise of disciplinary powers, the latter must be seen as a specific case of the more general classification and, being subject to its own statutory regime, the appellate process will not necessarily be governed by the same principles. In short, it is legally erroneous to rely upon such reasoning with respect to a disciplinary appeal. The question for the Commission was whether, pursuant to s 100C, to confirm the order of dismissal or substitute another order. It was not a question of ordering reinstatement for an unfair dismissal. The order made followed from a misconception as to the nature of the proceedings.

65. Furthermore, there is an irony in insisting that a disciplinary appeal is governed by the specific objects in the former Public Sector Act and yet to import principles relating to the nature of the employment contract as considered in cases dealing with applications for relief under Ch 2, Pt 6.

66. Secondly, in considering the ground relating to procedural unfairness, it will be necessary to address the manner in which the subsequent conduct of the appellant could be dealt with on appeal. It is sufficient for present purposes to note that the Commissioner placed substantial and apparently determinative weight on his assessment of the appellant’s responses when the employer made inquiries about the incident (“Mr Marroun actively sought to deceive his employer”) and identified that act of deception on his part as "a fundamental breach of his obligations under his contract of employment” and “destructive of the necessary confidence between employer and employee.”[37]

    37. Marroun (IRC) at [100].

67. There was no doubt that the appellant’s creditworthiness was in issue at all stages. Nevertheless, and understandably, the adverse finding was only made in the reasons for decision given by the Commission in disposing of the appeal. Orders were made without giving the appellant an opportunity to address the Commission as to how such findings should affect the final order. Further, the phrase “actively sought to deceive” clearly implies a deliberate attempt to deceive. Although the appellant gave evidence and was cross-examined at some length, that proposition was never put to him. While a hearing before the Commission is not to be conducted as if it were a court proceeding, principles of basic fairness require that a party be offered the opportunity to deny or explain any suggestion that he has lied, whether in response to an inquiry from his employer, or on oath in giving evidence. That was not done.

Procedural fairness

(a)   ground 3 – procedural unfairness

68. In substance, the dismissal was allowed to stand not because of the findings made by the Commissioner as to the allegation upheld by the employer, which had resulted in his dismissal, but because the Commissioner was satisfied that the appellant had in other respects acted in such a way as to destroy a fundamental aspect of the employment relationship. However, although his credibility was in issue at all stages, he was not put on notice that if findings were to be made against him of the kind in fact made by the Commissioner, his dismissal might be justified on that basis.

69. That situation bore a striking resemblance to one aspect of Smith v New South Wales Bar Association. [38] The appellant was a barrister against whom a disciplinary charge had been laid, namely that he held a retainer to appear before a magistrate in a particular matter, when that was not so. This Court ordered the disbarment of the appellant, in part because it held that he had deliberately lied to the Court in relation to conduct which was the subject of the separate charge. The High Court accepted that the finding that the appellant had lied was not properly made on the evidence. Nevertheless, the joint reasons of Brennan, Dawson, Toohey and Gaudron JJ continued: [39]

“But even if the evidence was sufficient to support the findings so made and even if that finding could properly be taken into account in determining the result, considerations of procedural fairness required that the appellant be given an opportunity to be heard as to whether the finding should be made. In the first hearing before the Court of Appeal, no allegation of deliberately lying was made against the appellant before the adverse finding was made. That being so, the finding then made that the appellant had lied and the consequence of that finding then determined by Mahoney and Meagher JJA that the appellant be disbarred were flawed.”

38. (1992) 176 CLR 256; [1992] HCA 36.

39.    Smith at 269.

70. As further explained by Deane J: [40]

“In supporting a disbarment order, both Mahoney and Meagher JJA relied upon the finding that the appellant had deliberately given false evidence before the Court of Appeal. The judgment of Mahoney JA indicates that his Honour relied on it at least for the purpose of negativing the effect of mitigating considerations which might otherwise have justified a more lenient order. The brief comments of Meagher JA make plain that his Honour's conclusion that an order of disbarment was appropriate was at least partly based on the specific finding that, to quote his Honour's words, the appellant had ‘lied to this Court, and on oath’. It follows from what has been said above that the Court of Appeal's original order that the appellant be disbarred was affected by a denial of procedural fairness for the reason that the appellant had never been given an appropriate opportunity of being heard in relation to the question whether his evidence of the car park conversation was deliberately false.”

40.    Smith at 273.

71. Deane J also explained in more detail what should have happened in order to regularise the proceeding: [41]

“If, in the course of the hearing before the Court of Appeal, it had been sought to expand the particulars of the allegations against the appellant to include an allegation that he had deliberately given false evidence to that Court, a question would have arisen whether it would be reasonable to require the appellant to deal at the one time with the original particularized complaints against him and a complaint that the evidence which he gave in answer to those complaints was deliberately false. … In fact, there was no attempt to amend the particulars of complaint. In the absence of any such amendment, the issue before the Court of Appeal remained whether the effect of all the evidence, including the appellant's evidence about the car park conversation, was that the particularized complaints had been made out to the requisite standard of proof. The appellant could not realistically be expected, while maintaining the reliability of his evidence in relation to that issue, to have set out to establish how and why that evidence was honestly mistaken. If the Court of Appeal, after reaching the conclusion that the appellant's evidence about the car park conversation should be rejected, had thought it desirable or necessary to consider whether the appellant had been guilty of professional misconduct in that he had deliberately given false evidence before it, ‘at the very least a new charge would have [had] to be laid (before it could be relied upon) so that [the appellant could] then know of it, appreciate what he [had] to meet and be allowed ample opportunity to meet it’.”[42]

41.    Smith at 272.

42. The internal quote set out by Deane J with square brackets was from R v Solicitors’ Disciplinary Tribunal; Ex parte L, a solicitor [1988] VR 757 at 770 (Murphy, Fullagar and Southwell JJ).

72. The same reasoning operates in the present case; it follows that there was a denial of procedural fairness which, if properly raised, vitiated the order made in the Commission. The primary judge should have so held, although his attention was not drawn to Smith.

(b)   ground 2 – decision on a question of law

73. It was accepted by the primary judge, correctly, that an appeal against a decision on a question of law could be made in circumstances where the tribunal below had not expressly identified and determined a question of law. As explained in Grygiel v Baine,[43] in a passage adopted in Lambert:[44]

“It is not necessary that the matter of law be separately identified by the Tribunal and expressly addressed as such: it is sufficient that the Tribunal reaches a conclusion with respect to some matter which requires for its determination the identification of a relevant matter of law and that error is alleged with respect to that matter of law.”

43. [2005] NSWCA 218 at [29].

44. Lambert at [70].

74. Procedural unfairness, in the legal sense, will constitute an error of law because it will vitiate the basis of the decision under review. [45] Thus, in Re Refugee Review Tribunal; Ex parte Aala [46] procedural unfairness arose because the Tribunal had, through an innocent mistake, falsely assured the applicant that it had certain documents and had read them. As a result, the applicant desisted from tendering the documents and making submissions as to their content. The High Court accepted that there was procedural unfairness, and granted certiorari to quash the decision of the Tribunal.

    45. Warkworth Mining Limited v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105 at [5] (Bathurst CJ, Beazley P and Tobias AJA).

    46. (2000) 204 CLR 82, [2000] HCA 57.

75. This form of appeal may be distinguished from an appeal under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth), which provides for an “appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal”. As the Full Court of the Federal Court has explained, in that scheme the subject matter of the appeal is the question of law; the appeal is not restricted to a decision of the Tribunal on a question of law. Thus in Haritos v Federal Commissioner of Taxation [47] a five-judge bench said:

“We restate that the subject matter of an appeal under s 44 is a question or questions of law. We also restate that the appeal is not by way of rehearing; it is the exercise of original jurisdiction. Neither is it sufficient that the appeal merely involves a question of law. The correct approach, in our opinion, is to ask directly the question whether the appeal is on a question of law, without being diverted by whether or not the appeal raises a mixed question of fact and law. As the High Court said in Owens,[48] the purpose of limiting an appeal to a question of law is to ensure that the merits of the case are dealt with not by the Federal Court but by the Tribunal. This distribution of function is critical to the correct operation of the administrative review process. See also O'Brien[49] where Gibbs CJ, Wilson and Dawson JJ said that on an appeal under s 44 the appellate body should not usurp the fact-finding function of the Tribunal. But such fact finding is an entirely different exercise from the evaluation of the fact-finding process of the Tribunal (as fact-finder) to decide upon its legality.”

47. (2015) 233 FCR 315; [2015] FCAFC 92 at [194] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ).

48. Repatriation Commission v Owens (1996) 70 ALJR 904.

49. Repatriation Commission v O'Brien (1985) 155 CLR 422 at 430; [1985] HCA 10.

76. The circumstances in this case may be compared with those which arose in Minister for Immigration and Citizenship v Li. [50] Ms Li required a “skills assessment” in order to obtain a particular residence visa. She had sought an assessment on the basis of false information, which assessment had been rejected. She then sought an adjournment of the Tribunal hearing with respect to her visa application to allow her a further opportunity to obtain a skills assessment based on genuine information. The Tribunal denied the adjournment and rejected her visa application in the absence of the necessary skills assessment. The question before the Tribunal had been whether she had in fact had a reasonable opportunity to obtain a skills assessment. The High Court held that a reasonable opportunity had been denied, resulting in procedural unfairness. The Tribunal’s decision to reject the visa application was therefore set aside. In these circumstances, it is clear that, whether expressly or implicitly, the decision of the Tribunal to refuse the adjournment necessarily involved a decision that to do so would not be procedurally unfair. The decision could therefore have been challenged under a statutory appeal from a decision on a question of law, had such a course been available.

    50. (2013) 249 CLR 332; [2013] HCA 18.

77. In the present case, in proceeding to dismiss the appeal on the basis of uncharged conduct, the Commissioner had implicitly determined that there was no procedural unfairness in taking that step. It follows that the appellant was entitled to challenge that decision and to allege procedural unfairness.

78. The contrary conclusion reached by the primary judge was based on a proposition derived from his earlier judgment in Elleray v Rail Corporation of New South Wales. [51] Elleray held, in categorical terms that “the challenge by the appellant to an alleged denial of procedural fairness … does not constitute a decision on a question of law.”[52] The judge further noted that there had been “no challenge to the correctness of Elleray”. For the reasons already given, the principle stated in Elleray is too broad; procedural unfairness is not an undifferentiated category of error which cannot ever give rise to an implicit decision on a question of law. The case should not be followed on that point; the specific complaint must be addressed in each case.

    51. (2014) 86 NSWLR 326; [2014] NSWIRComm 45 at [67].

    52. Marroun at [142].

79. The primary judge was, therefore, in error in failing to allow for the possibility of an appeal on that ground. The error arose because of a failure to consider the precise nature of the decision under challenge. That explanation leads to the third question, as to whether the error was properly pleaded.

(c)   ground 1 – identification of error

80. Appellate courts have complained on many occasions about the inadequacies of notices of appeal. There are many reasons which warrant such concerns, which have particular force where the available grounds of appeal are limited. It is essential that the appellant establish an arguable ground that falls within the limits of the statutory regime. It is also important that the respondent have sufficient notice of the ground to be relied upon. Nevertheless, it is a large step to characterise the deficiencies in a particular case as sufficient to warrant the dismissal of the appeal as incompetent, particularly in circumstances where the respondent has not sought to strike out the notice. Although the primary judge was critical of the notice in the present case, he in fact proceeded to address each of the grounds in turn. [53] Accordingly, it is desirable to address the challenge raised by this ground.

    53. Marroun at [131].

81. The primary judge identified, under the heading “Procedural fairness”, grounds 4-10 in the notice of appeal. Those grounds reflected what had been identified, with the same paragraph numbering, as “Questions raised by the appeal”. It is sufficient for present purposes to refer to questions 4 and 5:

“4.   Did the Commissioner err in finding that the appellant was guilty of dishonesty in his version of events about occurrences after the subject of the allegation and employer’s investigation, despite no allegation of such dishonesty ever being made against Mr Marroun?

5.   Did the Commissioner err in failing to afford natural justice or procedural fairness to the appellant by making findings about an issue (ie whether or not the appellant was honest after the alleged misconduct, which was found not to have occurred) that was not the subject of challenge or argument in the case?”

82. There were, no doubt, infelicities in the drafting of these questions. For example, each referred to “findings” made by the Commissioner, whereas each might more properly have identified the decision based on the findings. Further, the reference to the absence of “challenge or argument” (in question 5) appears to have a complaint about the cross-examination and the submissions, rather than the absence of an allegation basing a disciplinary charge. On the other hand, question 4 expressly referred to “no allegation” of such dishonesty having been made.

83. In any event, the inadequacy of the pleading did not lead to the rejection of the appeal by the primary judge; rather, the ground was rejected on the basis that there had been no procedural unfairness. The correct response was that the complaint about the pleading was unwarranted.

Conclusion

84. For these reasons, the appeal should be allowed and the following orders should be made:

1. Grant leave to appeal from the judgment in the Common Law Division given on 15 December 2016.

2. Allow the appeal and set aside orders 1 and 2 made on 15 December 2016.

3. In place thereof:

1. Allow the appeal under s 197B(1) of the Industrial Relations Act 1996 (NSW) from the decision made by the Industrial Relations Commission of NSW on 4 February 2016;

2. Set aside the order made under s 100C(2) of the Industrial Relations Act 1996 (NSW) by the Industrial Relations Commission of NSW on 4 February 2016 dismissing the appeal;

3. Order that the State Transit Authority pay Mr Marroun’s costs of the hearing of that appeal.

4. Remit the matter to the Industrial Relations Commission for reconsideration of appropriate orders in the appellant’s appeal under s 98 of the Industrial Relations Act 1996 (NSW), according to law.

5. Order that the respondent pay the appellant’s costs of the proceedings in this Court.

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Endnotes

Amendments

30 August 2018 - Coversheet and [84] - Deleting "the" before "Mr Marroun" in order 3(c).

[25] - Amending "properly" to "property" in (b) of quote.

[58] - Amending "were" to "was".

[66] - Deleting quotation mark before "act" and inserting before "a fundamental...".

Decision last updated: 30 August 2018