Minister for Primary Industry and Energy v Davey

[1993] FCA 574

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C A T C H W O R D S

INDUSTRIAL LAW - Industrial award - Award providing agreed procedures for disciplinary action against employees - Interpretation of agreed procedures - Whether the agreed

procedures contain an implied postponement of proceedings for misconduct until the finalisation of any criminal proceedings arising out of the conduct complained of.

Industrial Relations Act 1988, s.51.

Telecom General Conditions of Em~lovment Award 1989, c1.10

MAX SCHOUTEN v. TELESTRA CORPORATION LIMITED

No. NI 13 OF 1993

CORAEI:	WILCOX J
PLACE :	SYDNEY
DATE :	27 JULY 1993

REGISTRY

FEDERAL COURT OF

AUSTRALIA PRINCIPAL

IN THE FEDERAL COURT OF AUSTRALIA )

) No. NI 13 of 1993

NEW SOUTH WALES DISTRICT REGISTRY )	\
INDUSTRIAL DIVISION

BETWEEN :	WAX SCHOUTEN
Applicant
AND :	TELESTRA  CORPORATION
LIMITED
Respondent

CORAM:	WILCOX J
PLACE :	SYDNEY
DATE :	27 JULY 1993

MINUTES OF ORDER

THE COURT ORDERS THAT:

1.         The Application be dismissed.

Note :  Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. [See also Order 37 rule 2(3)].

IN THE FEDERAL COURT OF AUSTRALIA )

I	No. NI 13 of 1993
1

INDUSTRIAL DIVISION 1

BETWEEN:	MAX SCHOUTEN
Applicant
AND :	TELESTRA CORPORATION LIMITED
Respondent

C O N :	WILCOX J
PLACE :	SYDNEY
DATE :	27 JULY 1993

EXTEMPORE REASONS FOR JUDGMENT

WIXOX J: This is an application brought under the Industrial Relations Act 1988 whereby the applicant, Max Schouten, seeks an interpretation of a document made pursuant to the Telecom General Conditions of Employment Award 1989. Section 51(1) of the Act empowers the court to give an interpretation of an award on application by any person bound by the Award. The respondent is Telestra Corporation Limited, a corporation that

was formerly known as the Australian Telecommunications	Corporation.
The Award contains a clause, number 10, headed "Employer Conduct and Discipline." The clause reads as follows :

"(1) Behaviour by an employee shall be regarded as constituting misconduct if the employee :

(a)	Wilfully disobeys or wilfully disregards a direction given them as an employee and given by a person having authority to give the direction;
(b)	is inefficient or incompetent by reason of causes within their own control;

(C) is negligent or careless in the discharge of their duties;

(d)	is guilty of improper conduct as an employee;
(e)	is guilty of improper conduct otherwise than as an employee, being conduct that adversely affects the performance of their duties, is prejudicial to the interests of the corporation or damaging to the business of the corporation;
(f)	contravenes or fails to comply with the terms and conditions upon which they are employed; or
(g)	has, whether before or after becoming an employee, wilfully supplied to the corporation, to an employee or to some other person acting on behalf of the corporation, incorrect or misleading information in connection with their employment with the corporation.

(2) Where the corporation initiates

disciplinary action against an

employee in connection with alleged misconduct, the matter shall be handled in accordance with procedures agreed between the parties which are set out in the exhibit 'Procedures agreed between the Australian Telecommunications Corporation and the staff organisations respondent: to the Telecom General Conditions of Employment Award 1989' and which was tendered in the proceedings which lead to the making of this award. An employee upon whom the corporation has imposed disciplinary action shall have the right to appeal to a

disciplinary appeal board against such disciplinary action in accordance with the above procedures agreed between the parties.

(3) A disciplinary appeal board shall be

constituted by:

(a)	A chairperson, being a person selected in accordance with procedures agreed between the corporation and the staff organisation whose membership includes the largest number of employees of the corporation;
(b)	an employee nominated by the corporation for the purpose of the appeal; and
(c)	a person nominated by the appropriate staff organisation prescribed under clause 36 of this award."

It will be noted that subcl. (2) refers to a document entitled "Procedures agreed between the Australian Telecommunications Corporation and the staff organisations respondent to the Telecom General Conditions of Employment Award 1989" ("Agreed Procedures"). The dispute between the

parties in relation to which the Court's ruling is sought	relates to the proper interpretation of this document. There
may be a question whether a request for interpretation of the Agreed Procedures falls within s.51(1) of the Act. However, the respondent did not raise any point about that matter. It argued the case upon the basis that it is within the competence of the Court to rule upon the proper interpretation of the document.

The Agreed Procedures commences with an opening

statement:

"These are the agreed procedures that are referred to in Clause 10 of the Telecom General Conditions of Employment Award 1989. However, the parties reserve their rights to seek variations to these procedures having regard to changing circumstances."

The document is divided into five sections. Section 1 is headed "Disciplinary Process"; Section 2 is headed "Conviction by Courtsu; Section 3 is headed "Suspension";

Section 4, "Disciplinary Appeals"; and Section 5, "Review of
Disciplinary Findings and Actions".

Section 1 provides for action to be taken in case of suspected misconduct. The word "misconduct" is not defined. The case has been argued upon the basis that it bears the meaning contained in c1.10(1) of the Award. It seems to me that this assumption is correct. The section sets out a number of stages in the disciplinary process. At the first

behaviour of an employee may constitute misconduct is

stage, a supervisor who has reason to suspect that the

empowered to require the employee to provide a written explanation as to relevant matters. The second stage involves the supervisor reporting the matter to the "delegated employee", presumably the person delegated for the purpose by the employer. The delegated employee may take one of certain courses, one of which is to charge the employee in writing with misconduct. Stage 3 requires an inquiry by an Inquiry

Officer into the alleged misconduct. Clause 7 of section 1 provides: "An employee charged with misconduct shall not be taken, by reason only of having failed to deny the truth of a matter, to have admitted the truth of that matter." Stage 4 sets out the course that may be taken by an Inquiry Officer who is satisfied that the charge of misconduct is justified. One alternative available to the Inquiry Officer is to recommend the employee's dismissal. Clause 9 provides that the Corporation, after considering any recommendation made by the Inquiry Officer, may take a number of courses, including dismissal of the employee. Clause 12 provides that disciplinary action other than counselling shall not take effect, if there is an appeal, until the appeal is determined. The appeal is dealt with by the Disciplinary Appeal Board, a multi-member board consisting of a chairperson and two other officers, one nominated by the Corporation and one by the relevant staff organisation, pursuant to clause lO(3) of the Award.

Section 4 deals with proceedings before a Board exercise its powers having regard to the rules of	Disciplinary Appeal Board. It specifically requires that the	-
natural justice and procedural fairness.

Section 2 of the Agreed Procedures deals with the situation where an employee is convicted of a criminal offence by a court. It provides for investigation and sanctions, including dismissal.

Section 3 deals with the situation pending a final decision. By clause 1, the section provides that:

"An employee may be suspended from duty or

transferred temporarily to other duties having the same classification as their existing duties if:

(a)	the employee is charged with having committed a criminal offence; or
(b)	the Corporation is of the opinion that the behaviour of the employee constitutes misconduct,

and the continued performance by the employee of his/her existing duties would be prejudicial to the effective operations of the Corporation, the interests of the public or the interests of the employee and his/her fellow employees."

In the case of an employee suspended from duty on the basis of being charged with having committed a criminal offence, the suspension is without pay. Where an employee is suspended from duty on the basis of alleged misconduct, suspension is with pay until a decision is made as to whether the employee is to be charged with misconduct. Presumably, the suspension is thereafter without pay, although this is not

specifically stated.

The argument put on behalf of the applicant-is that sections 1 and 2 are mutually exclusive; in the sense that, once an employee is charged with a criminal offence, he or she may not be subjected to disciplinary proceedings for misconduct pursuant to section 1. The argument is that the Agreed Procedures intend that the criminal proceedings shall

run their course before any disciplinary action is taken. If the employee is ultimately convicted, he/she may be dealt with under section 2; including, where this is warranted, by dismissal. If the employee is acquitted, counsel for the applicant say, it would be open to the employer to take proceedings under section 1 for misconduct; they concede that there may be situations where given behaviour constitutes misconduct, even though the employee has been acquitted of a criminal charge arising from that behaviour.

Counsel argue that, if the Agreed Procedures are interpreted in this way, they do not expose the employee to the task of having simultaneously to prepare a defence in criminal proceedings and deal with a complaint of misconduct.

Counsel also say that dual proceedings may occasion actual prejudice. An employee may be put into the dilemma that he/she wishes to give evidence in refutation of an allegation of misconduct, but is fearful that this evidence will be used at the criminal trial. The practical effect of

criminal trial is to derogate from the employee's right of	permitting disciplinary proceedings to proceed before the	-
silence.

Counsel for the employer says that there may be advantages to an employee in being dealt with by the employer for misconduct, in respect of particular behaviour, before the conclusion of any relevant criminal proceedings. He says that

the penalty may be less severe if imposed in respect of misconduct rather than criminal conviction. Moreover, he suggests, it may assist an employee to be able to say to a sentencing judicial officer that he/she has already been dealt with by the Corporation. The employee may be able to say that he/she has not been dismissed from his/her employment, thereby procuring a more lenient sentence - particularly, I suppose, a non-custodial sentence - than would otherwise have been awarded. Alternatively, the argument could be put that a severe penalty has already been sustained, and that the sentencing officer should take this into account in considering what sentence to impose in the criminal court.

It seems to me that there are arguments each way on the question of whether or not it would be a good idea to delay proceedings for misconduct until after termination of any relevant criminal proceedings. For me, the question is not whether or not a particular course would be desirable but whether or not the scheme suggested by the applicant's counsel is implied by the form of the Agreed Procedures themselves.

Counsel for the applicant put at the forefront of

their submission the underlying proposition that the law will .
not place people charged with a criminal offence in the
dilemma of having to defend other proceedings arising out of
the same circumstances as the criminal charge until after the
criminal proceedings have been finalised.

I think it is fair to say that, at one time, judges had a strong predisposition to that view. But it is clear from the more recent cases that there is not now such a rule. I had occasion to look at this question, in the context of pending civil proceedings, in Cameron's Unit Services Pty Limited v Kevin R. Whel~ton and Associates Australia Ptv Limited (1984) 4 FCR 428. I do not propose to repeat what I there set out. However, the authorities to which I then referred make clear that there is no general rule that civil proceedings should be stayed pending resolution of criminal charges arising out of the same facts. The current rule is that, in considering whether or not a civil action should proceed to a hearing, the court should take into account the chance that this course will occasion injustice in the criminal proceedings. This requires the court to consider such matters as possible prejudicial publicity, the imminence of the criminal trial and the burden upon the accused person of defending two sets of proceedings concurrently.

In the present case there is no need for concern Disciplinary Appeal Board Act in private. It is difficult to	about publicity. Both the Inquiry Officer and the
see any real chance of publicity regarding their decisions. The only prejudice that I can conceive is the possibility that evidence given by the employee at the inquiry might be tendered at the criminal trial as being an admission of a matter relevant to the criminal charge.
However, as the authorities referred to in Cameron's gnit Services make plain, there is no absolute right of silence. People charged with a criminal offence frequently choose to comment, publicly or privately, regarding the substance of the matter. A person has the right to disclose the substance of his/her defence to pending criminal proceedings. This entitlement is something for the person to take into account in considering what defence, if any, to make to a civil proceeding. The same situation applies in a disciplinary case.
Where the person is actively engaged in defending the criminal proceeding, the disciplinary tribunal can adjourn the hearing, in the same way as a court may adjourn a civil trial. It is true, as counsel for the applicant point out, that clause 5 of section 1 requires an Inquiry Officer to conduct the inquiry without undue delay. I need not determine whether the granting of an adjournment pending the termination of criminal proceedings would constitute "undue delay". I would have thought not. Whatever the position of the Inquiry
Officer, the decision of the Corporation made pursuant to the inquiry does not take effect until after a determination of
any appeal by the Disciplinary Appeal Board; and the Disciplinary Appeal Board is specifically required to accord the appellant procedural fairness and to act in accordance with the rules of natural justice. This must include granting an adjournment where this is appropriate because of pending criminal proceedings.
The matters to which I have referred were raised in relation to the proper construction of the Agreed Procedures, the argument being that the policy urged by counsel for the applicant is so manifestly desirable that it is implied in the Agreed Procedures. I do not agree. Whatever the desirability of the course supported by counsel for the applicant - and it will be obvious that I do not think it is self-evidently desirable - that course finds no expression in the tens of the Agreed Procedures. There is an overlap between sections 1 and 2. The word "misconduct" in section 1, has the meaning ascribed to it in cl.lO(1) of the Award. Clause lO(2) of the Award, which provides for the Agreed Procedures, does no more than set out the way in which allegations of alleged misconduct - that is, cl.lO(1) misconduct - are to be investigated. Section 1 of the Agreed Procedures deals with misconduct generally. This section must be construed as covering all types of alleged misconduct. Section 2 deals with the special case of a criminal conviction. Of course, it only operates where the offence also amounts to misconduct within the meaning of c1.10(1) of the Award.

The implication suggested by counsel for the

I applicant would be inconsistent with the width of the language used in section 1. Section 2 is simply a streamlined procedure applying where there is already a criminal conviction, the purpose being to avoid the necessity of repeating the investigation.

12.   .,

I think that the appropriate order for me to make is

that the Application be dismissed. I so order.

[There was discussion regarding costs.]

Mr Joseph, on behalf of the respondent, seeks an order for costs. However, in my opinion this case is covered by s.347(1) of the Industrial Relations Act. I do not think it can be said that the proceedings were instituted vexatiously or without reasonable cause. It is true that the Application that was originally filed did not squarely raise the point that has been argued. But there was an underlying point. It was exposed and today argued. M r Joseph does not suggest that the point actually argued was one that could not reasonably be supported by argument, or that the action was otherwise vexatious or brought without reasonable cause. There will be no order for costs.

I certify that this and the preceding eleven (11) pages
are a true copy of the Reasons for Judgment

of the Honourable Justice Wilcox.

Associate:
Dated:	27 July 1993
Counsel for the Applicant:	R A Greenwood QC and
A Martin
Solicitor for the Applicant:	C Murphy
Counsel for the Respondent:	M Joseph
Solicitors for the Respondent:	Sparke Helmore Withycombe
Date of hearing:	27 July 1993