Quality Lodges International Pty Ltd v Bibby and Kelm No. Scciv-01-933

QUALITY LODGES INTERNATIONAL PTY LTD v
STATE OF SOUTH AUSTRALIA and ORS
[2002] SASC 116
Judicial Review

PERRY J. The applicant (“Quality Lodges”) seeks judicial review, more particularly an order in the nature of certiorari, with respect to a decision of the Dispute Resolution Committee (“the DRC”) established under the Vocational Education, Employment and Training Act 1994 (“the Act”).
In its decision the DRC held that the purported termination by Quality Lodges of contracts of training which it had entered into with the second and third respondents (“Bibby and Kelm”) was unlawful. It ordered Quality Lodges to pay to Bibby and Kelm their “full salary and entitlements” for the period between 21 March 2000 and 21 November 2000.
The decision of the DRC to that effect was made on 14 December 2000. This was varied slightly in terms which I will come to in due course, by a further order made on 11 May 2001.
Quality Lodges seeks an order quashing the order of the DRC made on 11 May 2001, and to the extent necessary, the order made on 14 December 2000, and asks that the matter be remitted to the DRC for reconsideration. Quality Lodges’ application is based on the ground of alleged denial of procedural fairness.
RELEVANT PROVISIONS OF THE ACT
The Act repeals the Industrial and Commercial Training Act 1981 and the Tertiary Education Act 1986, and substitutes new provisions relating to vocational education, employment and training.
The Act establishes the Accreditation and Registration Council (the “ARC”) which accredits courses, registers education and training providers, provides codes of practice for education and training providers, grants certificates to persons completing education and training courses, and performs related functions as set out in s 14 of the Act.
Under the Act, employers may not undertake to train a person in a trade, being a trade gazetted as a trade for the purposes of the Act, except under a contract of training (s 30). The employer must provide a copy of the contract of training to the ARC, together with “the particulars required by ARC by notice in the Gazette”, within two weeks of employing a person (s 30(5)).
In carrying out the contract of employment, the employer must ensure that various requirements as laid down in the Act are complied with, such as approval of the place of employment by the ARC, which must also approve the equipment and methods used in the training (s 34).
The contract of training also constitutes the contract of employment of the trainee (s 37(1)).
Section 32 of the Act provides as follows:
“(1)Subject to this Act, a contract of training may not be terminated or suspended without the approval of ARC.
(2)A party to a contract of training may terminate the contract by notice in writing to the other party or parties to the contract within the period after the commencement of the term of the contract that is specified by ARC by notice in the Gazette for the trade or other declared vocation to which the contract relates.
(3)Where a contract of training is terminated under subsection (2), the employer must, within seven days of the termination, notify ARC, in writing, of the termination.
Penalty:Division 7 fine.”
The DRC is established “as a committee of ARC” (s 39(1)).
Section 40 of the Act relevantly provides:
“Disputes and discipline
40(1)Where-
(a)a dispute arises between parties to a contract of training; or
(b)a party to a contract of training is aggrieved by the conduct of another party,
a party to the contract may refer the matter to the Disputes Resolution Committee.
(2)Where ARC suspects on reasonable grounds that a party to a contract of training has breached, or failed to comply with, a provision of the contract or this Act, it may refer the matter to the Disputes Resolution Committee.
(3)The Disputes Resolution Committee must inquire into a matter referred to it under this section, and may, if it thinks fit, by order, exercise one or more of the following powers:
(a)it may reprimand a party in default;
(b)it may suspend a person from his or her employment under a contract of training for a period not exceeding four weeks commencing on a date specified in the order;
(c)it may confirm or revoke a suspension imposed under subsection (7) and, in the event of revocation, order the employer to pay any wages that would, but for the suspension, have been payable under the contract;
(d)it may extend the term of a contract of training;
(e)it may cancel a contract of training as at the date specified in the order;
(f)it may order a party to the contract to pay such wages or take such other action that, in the opinion of the Committee, he or she is required to take under the contract or under this Part;
(g)it may excuse a party to the contract from performing one or more of his or her obligations under the contract;
(h)it may order that, for the purpose of computing the period of training that has been served by a trainee, a specified period or periods be excluded;
(i)it may order an employer not to employ any trainees in addition to those named in the order without the approval of the Committee;
(k)it may make any consequential orders that the Committee thinks necessary or expedient.
(4)The term of a contract of training must be computed and the contract must be construed and must apply in accordance with an order made by the Disputes Resolution Committee under subsection (3).
(5)..........
(6)Where, under subsection (3), the Disputes Resolution Committee orders one party to a contract of training to pay a sum of money to another party to the contract, that sum may be recovered by the other party as a debt.
(7)If an employer has reasonable grounds to believe that a trainee employed by him or her under a contract of training is guilty of wilful and serious misconduct, the employer may (without first obtaining the approval of ARC) suspend the trainee from employment under the contract, and must, in that event, immediately refer the matter to the Disputes Resolution Committee and confirm the reference in writing within three days of the suspension.
Penalty:Division 7 fine.
(8)A suspension under subsection (7) must, unless confirmed by the Disputes Resolution Committee, not operate for more than seven working days.
(9)............
(10).........
(11)The Disputes Resolution Committee may, at any time, vary or revoke an order made by it under this section.
(12)A person must not contravene, or fail to comply with, an order of the Disputes Resolution Committee under this section.
Penalty:Division 7 fine.
(13)In this section-
“party to a contract of training” or “party” includes a person who was formerly a party to a contract of training.”
Section 39(6) provides that the DRC may determine its own procedures. Apart from that section, there is no express guidance in the Act as to how the DRC is to go about its task of inquiring into a matter under s 40(3).
BACKGROUND FACTS
Quality Lodges conducts two motel businesses, namely, that of Aviators Lodge Motel on Tapleys Hill Road at West Beach and Adelaide International Motel on Anzac Highway at Glenelg North. Mr Jim Finlayson was at all relevant times managing director of the company.
This case principally concerns its operations at Adelaide International Motel.
In July 1999, Bibby and Kelm, who both previously trained as school teachers, responded to an advertisement inserted in a newspaper by Quality Lodges for a “relief management course”. They attended in Adelaide from Victoria and undertook the course at the Adelaide International Motel, for about a week.
They then performed two weeks unpaid work experience spread between the Aviators Lodge Motel and the Adelaide International Motel. In the absence of any concrete offer of employment at that stage from Quality Lodges, they took up a position in a caravan park at Alice Springs. After that, they then travelled to Darwin, but before settling down there, received from Quality Lodges an offer of employment at Adelaide International Motel.
They both came down more or less immediately to take up the offer.
They commenced work as joint managers of the motel on 29 November 1999.
In a letter addressed to Bibby and Kelm dated 7 December 1999, Mr Finlayson confirmed the terms of their employment. The letter stated, inter alia, that the position “... will initially be on a probationary period until Friday 28 January 2000”. The joint commencing annual salary was $35,000 “on a live-in basis, including all duty meals”.
Shortly afterwards, Bibby and Kelm signed contracts of training under the Act. These are dated 10 December 1999. The contracts both describe the “vocation” to which the training would be directed as “management”.
Apparently in purported compliance with s 30(5) of the Act, copies of the contracts of training were received in the Traineeship and Apprenticeship Management Section of ARC on 16 December 1999. But they could not be accepted at that stage as Quality Lodges had not been approved as an employer to employ trainees in “management”.
Quality Lodges resubmitted the contracts, together with an “employer training proposal” on 25 February 2000. By letter dated 26 April 2000, ARC notified Quality Lodges and Bibby and Kelm of its formal receipt of the training contracts, which it stated would be for a nominal term” of 24 months, expiring on 9 December 2001.
In the meantime, by letter dated 1 February 2000 addressed to Bibby, he was given a warning as to Quality Lodges’ concern as to his performance in the job. The letter reads:
“Dear Ron
It is with much regret that I find it necessary to give you this first and final formal written warning. Your attitude and behaviour as a manager has proven to be quite unacceptable.
I personally have heard and observed inappropriate statements and behaviour and have had complaints from a number of different sources. Too often your comments have been crass, crude, vulgar and in no way professional. Things you regard as funny are not seen as humorous by others and often offend.
You have only until the end of your probationary period to correct this fault and to act in a totally professional managerial style or I will have no alternative but to terminate your employment. If I can offer any help or guidance I will be pleased to do so, but the real question is are you prepared to make a major change in your professional working attitude?
Yours sincerely
Jim Finlayson (signed)
Managing Director”
By letter dated 11 February 2000, Mr Finlayson wrote again to Bibby and Kelm stating, inter alia:
“... I find it necessary to extend your probationary period until Monday 1 March 2000.
This extension will give you ample opportunity to demonstrate the improved performance I seek and a more professional management style. .....”
On 20 March 2000, Mr Finlayson purported to summarily dismiss Bibby and Kelm on the ground of “serious misconduct”. The dismissal was conveyed to Mr Bibby in a face to face interview with Mr Finlayson. In due course I will deal with the circumstances which led him to take that action.
The very next day, on 21 March 2000, a training consultant from the ARC conducted a site visit at what is described as Quality Lodges “head office”, in order to advance the process of approval of Quality Lodges to train in “management”. Bibby and Kelm were not present, but the training consultant met with Mr Finlayson and discussed the obligations and responsibilities of the employer under the training regime administered by ARC. Inexplicably, no mention was made by Mr Finlayson of the fact that on the previous day he had summarily dismissed both employees.
Surprisingly, Mr Finlayson later signed a reference dated 30 March 2000 for both Bibby and Kelm. The reference is in the following terms:
“To whom it may concern
This is to confirm that Ron Bibby and Christine Kelm worked for Quality Lodges International from 29 November 1999 to 20 March 2000. During this time they acted as joint managers of the Adelaide International Motel on Anzac Highway, Glenelg.
They were good enough to take up the appointment at very short notice and travel from Darwin to help us out in an emergency situation.
They are hard working people whom I would be pleased to discuss in more detail with any prospective employer in the hospitality business. Please give me a call at my office on (08) 8376 1140 at any time.”
Following their “dismissal”, Bibby and Kelm consulted Mr Derek St John Palmer, an industrial relations consultant. He faxed a letter to Mr Finlayson on 6 April 2000 requesting at statement in writing setting out the reasons for the dismissal. The evidence does not disclose whether or not Quality Lodges replied to the letter.
At all events, with Mr Palmer’s assistance, Bibby and Kelm lodged applications on 7 April 2000 in the Industrial Relations Commission alleging harsh, unjust or unreasonable dismissal. The two applications were heard together. They came on for hearing before Commissioner Dangerfield on 28 August 2000.
In a judgment delivered on 12 September 2000, the Commissioner held that the commission had no jurisdiction to entertain the applications. He delivered written reasons in which he held that the provisions of the Vocational Education, Employment and Training Act operated so as to exclude the jurisdiction of the commission under the Industrial and Employee Relations Act 1994. In effect, he held that whatever remedy Bibby and Kelm were entitled to, they should pursue under the Vocational Education, Employment and Training Act.
In the meantime, on 17 April 2000, Ms Kelm rang the ARC to report the fact that her and Mr Bibby’s employment had been terminated. At the same time, she advised that the application alleging harsh and unjust dismissal had been made to the Industrial Relations Commission.
Thereupon an officer of ARC contacted Mr Finlayson. He appeared to be unaware of the provisions of the Act, more particularly of s 32(1), which limited Quality Lodges’ ability to terminate the training contracts without the approval of the ARC. He undertook to forward an application to cancel both contracts effective from 20 March 2000.
By letter dated 3 May 2000, Mr Finlayson wrote to ARC making a formal application to “terminate” the training contracts. The letter reads:
“Dear Sir/Madam
Quality Lodges International Pty Ltd regrets to advise that it seeks termination of training contracts with Ron Bibby (99H296) and Christine Kelm (99H295) as of the 20^th March 2000 due to several serious acts of wilful misconduct.
Unfortunately, we did not comply with the VEET Act 1994 in notifying your organisation within 7 days of the issues coming out, however, once Mr Bibby and Ms Kelm lodge (sic) simultaneous claims for unfair dismissal with the Industrial Relations Commission, the advice of our industrial relations advisor was that two remedies for the same matter could not be pursued, therefore, we have waited until the IRC determines its position on jurisdiction in this matter.
In anticipation of the IRC determining jurisdiction lies with ARC, we now ask you to terminate the above contracts based upon the following allegations:
1.That Mr Bibby and Ms Kelm were involved in sexual impropriety which borders on sexual harassment;
2.That Mr Bibby and Ms Kelm consumed company products without paying for them;
3.That Mr Bibby and Ms Kelm entertained guest with company products without paying for them;
4.That Mr Bibby on February 4^th let a room out on day rates and did not record the transaction;
5.That Mr Bibby and Ms Kelm acted in an unprofessional manner on numerous occasions in front of guests and subordinates;
6.That Mr Bibby on several occasions breached company policy in serving alcohol to students of the Quality Training Company while in attendance of a residential course.
These allegations have been made by staff of the International Motel and are now in the form of Statutory Declarations. In addition, we have perused records to confirm the accuracy of allegation 4, and are considering police involvement.
We await your advice on how this matter will proceed.”
ARC responded by engaging one of the officers employed in the Traineeship and Apprenticeship Management Section of ARC, Daryl Thalbourne, to prepare a report.
That report sets out the known history of the matter, and attaches a lengthy chronology in summary, together with copies of a number of the relevant documents.
Before dealing with the course of the further proceedings before the board, I will deal with the immediate circumstances leading up to the “dismissal” of Bibby and Kelm.
CIRCUMSTANCES OF THE DISMISSAL
In purporting to dismiss Bibby and Kelm, Mr Finlayson asserts that he acted upon verbal reports which he had received from other employees. They were asked to reduce their complaints to writing, in some instances in the form of statutory declarations. I summarise the statements.
Carol Dodunski, who described herself as relief manager on the weekend of 18 and 19 March 2000, stated that:
·She was “told” of an incident involving Mr Bibby who was said to have sent “teenagers” up to the spa room which was occupied by a customer being visited by a “hooker to check her out, as Ron put it”.
·Bibby had sold alcohol to “residential students”.
·Bibby and Kelm “would walk around the motel drinking from beer bottles in the early afternoon and continue until close-up”.
·She had been “told” of one night when Kelm was in the kitchen “boasting she had no underpants on and deliberately bending over for all to see”.
·Bibby and Kelm had been observed “arguing and swearing”.
·Money had been received for rooms and not accounted for “through the computer”.
Further statements were given by Derek Edmonds, who had visited Mr Bibby in February 2000 and observed him “purchase” three bottles of wine, refusing payment from the guests, but that only one of the bottles appeared to have been accounted for by money put in the till.
In a separate statutory declaration, Carol Dodunski and Gregory Dodunski jointly narrated an account of incidents confirming Carol Dodunski’s statement, with some elaboration as to confrontations between Ms Kelm and another staff member who was told to work, although she complained that she was ill. They also asserted that friends of Bibby and Kelm had stayed at the motel “not paying for accommodation, drinks or meals”.
Without going into detail, similar allegations were made in statutory declarations furnished by Ms Vella, Mr Wilkie and Ms Wade.
It will be seen that these statements broadly support the six separate allegations detailed in Mr Finlayson’s letter to the ARC dated 3 May 2000, in which he summarises the grounds upon which he had purported summarily to dismiss Bibby and Kelm.
PRELIMINARY DISCUSSION AS TO THE PROCEDURES FOR THE HEARING BEFORE THE DRC
Ahead of the DRC hearing, it was obvious that the parties, or at least Mr Palmer on behalf of Bibby and Kelm, were concerned at the manner in which the proceedings would be conducted.
Mr Palmer first formally expressed his concerns in a letter to Mr Springs, Chief Executive Officer of the Department of Education, Training and Employment, dated 18 May 2000, inter alia, seeking Mr Spring’s assistance, “.... in clarifying the role, remedies and practice of your tribunal” (which may be taken as a reference to the DRC). He then went on to pose a series of questions which included a question as to whether his clients would be given the right to test the evidence by way of cross-examination.
In his reply, Mr Spring explained that under the Act, the DRC considered matters “... on the basis of the facts presented without representation of legal counsel, industrial advocates or other professional services”. He went on to explain that where it was not possible to resolve the matter on the information provided to DRC, “the committee may convene a formal hearing, calling the parties to the contract to attend”. However, in that eventuality, the parties would appear individually, allowing the committee members an opportunity to pose relevant questions.

Interpreting that reply as an indication that, in the event of a hearing, the DRC would deny any opportunity to cross-examination witnesses, Mr Palmer then wrote a draft letter to Mr Spring emphasising what he suggested was the importance of the parties being afforded an opportunity of “testing the evidence”, and that where there was a dispute as to factual matters, he submitted that there should be an “oral hearing”. Although he conceded that commonly this would not necessitate a right to cross-examine, he submitted that in the circumstances of this case there should be an oral hearing with cross-examination allowed.
Having prepared the draft letter, Mr Palmer then invited Mr Wallace, the industrial consultant engaged by Quality Lodges, to make a joint application in terms of the draft letter. He received a letter dated 9 October 2000 from Mr Wallace in which the latter stated that he was unable to agree to the content of the draft joint letter. Mr Wallace goes on to state:
“The employer is keen to finalise this issue quickly and after discussions with Daryl Thalbourne [the officer of ARC who had investigated the matter on behalf of the DRC], it would appear that a determination could be made before the IR court [the Industrial Relations Commission] hearing date on October 24 if we both simply submit our submissions, so that is the way we will go.” (emphasis added)
In the face of that response, Mr Palmer then wrote a letter dated 6 October 2000 to Mr Spring in which he made a unilateral request for an “oral hearing with cross-examination permitted”.
In a reply dated 18 October 2000, Mr Mennie of the Department of Education, Training and Employment, wrote on Mr Spring’s behalf, explaining that:
“Where it is not possible to resolve the matter on the information provided, the committee may convene a formal hearing calling the parties to the contract to attend. At this hearing:
ù the parties appear individually to present matters related to the dispute;
ù the committee members then have the opportunity to pose relevant questions, compare responses by the parties and assess the situation first hand.
Some parties may seek professional assistance to support their side of their submission. Third parties or professional assistance may be permitted at the hearing at the discretion of the DRC.”
Although in the letter Mr Mennie did not refer specifically to the question of cross-examination during the course of an oral hearing, it was obvious from his description of the procedure that should the DRC consider it necessary to call a hearing, cross-examination would not be permitted.
In the events which happened, the DRC did call on a formal hearing, which took place on 14 December 2000.
I draw attention later to the fact that although the position is not entirely clear, the hearing should properly be regarded as part of an inquiry initiated by the parties to the training contract pursuant to s 40(1).
THE PROCEEDINGS BEFORE THE DRC
The formal hearing conducted by the DRC took place on 14 December 2000. For the purposes of the inquiry, the committee was constituted by Ms Sue Frazer (Chair), John Marshall (an employer representative on the ARC) and Ian Curry (an employee representative on the ARC).
Appearing before the committee was Don Mackie, described by the Chair as an “adviser to the DRC”.
In an “agenda” which had been prepared before the meeting by the DRC, Mr Mackie is described as the “manager, legislation and legal services”, presumably a position within the ARC. He is detailed in the agenda as being present in order to give “clarification of legal advice and procedures”.
Mr Finlayson attended on behalf of Quality Lodges, and Bibby and Kelm appeared in person.
At the outset of the hearing, Ms Frazer identified the matter in dispute as relating to the “submission” from Quality Lodges “for cancellation of [the] contracts of training”. Submissions in writing from both parties, that is, Quality Lodges on the one hand and Bibby and Kelm on the other, had been lodged with the DRC before the hearing.
Ms Frazer identified the “basis” of the submission by Quality Lodges as focussing on “allegations of serious and wilful misconduct”.
She confirmed that the committee had read the submissions which had been advanced by Quality Lodges. She commented that the submission from Bibby and Kelm “disputes those allegations”.
The submission of Quality Lodges had been prepared on its behalf by Robert Wallace, an industrial relations consultant. It set out the history of the engagement of Bibby and Kelm, and referred to the counselling which had been given to them, including the written warning to Mr Bibby following complaints, and the circumstances and reasons for the “dismissal”.
A separate submission was prepared for Bibby and Kelm by Mr Palmer. In that submission, Bibby and Kelm flatly denied the allegations of impropriety. Through Mr Palmer they asserted that they had “consumed and used without payment” only permitted “products” which were part of the “live-in basis including all duty meals” specified in the letter of engagement. They admitted to serving drinks to “residential students”, but only students over the age of 18 years, and asserted that they were unaware of any policy against that.
The allegations of a sexual nature, such as “sending teenagers up to a spa room to check out a hooker”, were denied and alleged to be unsubstantiated hearsay. Ms Kelm joined issue with the suggestion that she had acted in a sexually provocative manner as alleged, and Mr Bibby denied that he had made crude sexist suggestions to or in the presence of female members of staff.
The lengthy denials set out point by point in Bibby and Kelm’s submission were accompanied with a good deal of circumstantial detail and argument.
Whether triggered off by receipt of Quality Lodges’ submission or for some other reason not clearly identified in the papers, Bibby and Kelm, through Mr Palmer, saw fit to submit a second lengthy written submission. This dealt in part with a reference made in Quality Lodges’ submission to a decision of the Industrial Relations Commission (Twohig v Ashford Community Hospital Inc) and further elaborated upon the factual responses made to the allegations against them.
So that, with the detailed written submissions of the parties, together with the lengthy report of Mr Thalbourne, the DRC had before it a considerable volume of material detailing the factual allegations and the responses to them.
Against that background, in the “agenda” drawn up before the hearing commenced, the DRC allowed half an hour in sequence for each of Mr Finlayson, Ms Kelm and Mr Bibby to present their respective cases, with a stipulation that if, after deliberating on the matter over the lunch adjournment, they felt the need to recall the parties, they could do so.
In the events which happened, the committee sat for about three hours, during which each of the three parties addressed them in turn.
A feature of the hearing was that they heard Mr Finlayson separately in the absence of Bibby and Kelm, then Kelm and Bibby separately in the absence of the other parties.
The presentations by the three parties were largely led by questions from the members of the committee, particularly the Chair. Much of the questioning of Mr Finlayson was associated with the formalities of the entry into the training contract, the degree of supervision pursuant to it, and the nature of the training program which Quality Lodges had in place for the managers.
Mr Finlayson was unable to give any convincing explanation as to how it happened that he did not refer to the dismissal of the two employees at the time when he was interviewed on 21 March 2000 by the representative from the ARC. He was also questioned about other matters associated with alleged non-compliance with the Act, including his extension of the probationary period without the approval of the ARC.
As for the various allegations which had been made concerning the conduct of Bibby and Kelm, obviously Mr Finlayson was not in a position to do other than rely upon what he had been told. No doubt that explains why he was asked very little about the allegations, although one significant question and answer during the course of his appearance before the committee was as follows:
“Chair:...... the question remains: what opportunity were they [Bibby and Kelm] afforded to refute those allegations prior to the termination.
Mr Finlayson: None.”
Mr Finlayson acknowledged, during the course of his appearance before the committee, that he was “at fault” “by not following the administrative procedures that are clearly laid out”. He stated:
“Whatever penalty I’m due for that, I’ll cop it without question. In terms of my decision of what should happen, there’s no way that we want them back in any shape or form”.
He went on to say:
“In terms of my decision to terminate them [Bibby and Kelm] abruptly and summarily, I feel still totally justified when I see young women in tears and genuinely scared about what has happened and about what might happen. Yes, I’m guilty of saying, ‘To hell with administration and bureaucracy’ I show now decisiveness to put these girls’ minds at ease. They won’t be back, the people that are causing the concern. I still feel totally justified in that. ...... I wish I’d suspended them and spoken to ARC. ............ If I’d suspended them and ARC had not agreed to the suspension I would have still [have] fired them, with or without ARC’s consent.”
During the course of her separate appearance before the committee, Ms Kelm was questioned at length as to the formalities of entering into the contract, the nature of the training which she was given and her understanding of her position vis a vis the training contract. She confirmed that on the day upon which she was dismissed, Mr Finlayson declined to tell her why he was dismissing her, although he offered to write a reference. Ms Kelm was not questioned in detail as to the allegations of impropriety, but in general terms, described them as “rubbish”, and that “some of those are half truths and have been exaggerated absolutely unbelievably”.
A somewhat similar passage of questioning followed when Mr Bibby appeared before the committee. He admitted having received the warning letter dated 11 February 2000, but he stated that he did not know what it was specifically directed to. He stated that Mr Finlayson would not explain to him what his alleged shortcomings were, and he was not given any reason as to why the employment was being terminated. He described the conversation at the time of his dismissal in the following terms:
“He [Mr Finlayson] rang at half past 9 approximately. He wanted to see me in the office at half past 10. He was there with the manager of the Aviators and he said, ‘I’m sorry but I’ve got to terminate you’. I sort of said, just off the cuff, ‘Well, that’s a relief’. Basically, I said ‘What more can I say, what can we say?’ so I said, ‘Thank you’ and left.”
He confirmed that no allegations were put to him at that time, and he was given no reason for the “termination”.
Again, without going into detail, Mr Bibby denied having been guilty of the behaviour alleged against him.
THE DECISION OF THE DRC
The DRC notified the parties of its decision by letters dated 19 December 2000.
As to each of them, the DRC found that the termination of the Contract of Training was unlawful; that the allegations made in respect of the behaviour of each employee were not made out; that procedural fairness was denied to each of the employees “in the action by ... the employer to unlawfully terminate the Contract of Training”; and that the requirement to seek approval from the ARC for the termination of the Contract of Training in each case was not met.
Pursuant to s 40 of the Act, the DRC went on to make orders in each case providing that the respective contracts of training be “cancelled effective from 21 March 2000” and that the two employees be paid an amount to be calculated “on the basis of the employment contract ... such payment to represent the full salary and entitlements of [each claimant] for the period 21 March 2000 to 21 November 2000”.
By letter of 8 January 2001, Bonnins solicitors on behalf of Quality Lodges requested of the ARC that the DRC provide reasons for each of the “determinations” which it had made.
By letter dated 23 January 2001 to Bonnins, Ms Frazer answered the request for reasons as follows:
“Determination 1:
That the termination of the contract of training entered into between Quality Lodges International Pty Ltd and Ms Christine Margaret Kelm and Quality Lodges International Pty Ltd and Mr Ronald Earlston Bibby was unlawful.
The Vocational Education Employment and Training (VEET) Act requires that a contract of training may not be terminated or suspended without the approval of the Accreditation Registration Council. Therefore such termination by the employer is in breach of the Act and therefore unlawful.
Determination 2:
The allegations made in respect of Ms Kelm’s and Mr Bibby’s behaviour were not made out
After taking both written and verbal evidence from all the parties, the committee was not provided with adequate information that would allow the allegations concerning Ms Kelm and Mr Bibby to be considered credible.
Determination 3:
That procedural fairness was denied to Ms Kelm in the action by you the employer to unlawfully terminate the contract of training
Evidence was presented to the DRC that indicated quite clearly that Ms Kelm and Mr Bibby were not provided with any opportunity to answer unsubstantiated allegations nor were they provided with an opportunity to discuss issues surrounding their contract termination (prior to such termination).
Determination 4:
That the requirement to seek approval from the Accreditation and Registration Council for the termination of the contract of training was not met
It was admitted by the employer that no approval was sought from the Accreditation and Registration Council for termination for the contract.”
REVIEW BY DRC
Section 39(4) of the Act is as follows:
“(4)If ARC, acting at the direction of the Minister, requests the Committee to review its decision or order on any matter, the Committee must review the decision or order and may, on the review-
(a) confirm, vary or revoke the decision or order subject to the review; or
(b) make any other decision or order in substitution for that decision or order”
By letter of 8 March 2001, Bonnins solicitors on behalf of Quality Lodges asked the Minister to exercise his power to direct the ARC to request the DRC to review its decision.
Apparently, Bibby and Kelm learnt of the request by Bonnins. By letter of 29 March 2001, Armour & Allen solicitors on behalf of Bibby and Kelm wrote to the ARC asking that in the event that a review was to be undertaken by the DRC of its decision, the DRC at the same time quantify the amount payable to Bibby and Kelm. As will have been seen from the order of the DRC which I have quoted above, it directed Quality Lodges to pay to the respondents an amount representing their “full salary and entitlements” for the period 21 March 2000 to 21 November 2000, but did not specify the amount.
By letter of 8 April 2001, the Minister directed the ARC to request the DRC to review its decision.
In a letter to Armour & Allen dated 1 May 2001, Ms Frazer, in her capacity as Chair of the DRC, indicated that the DRC would proceed with the review. At the same time, however, she advised that:
“... the DRC did not consider it appropriate to determine the amount [to be paid to Bibby and Kelm] as the specific circumstances of the entitlements [wages, leave, etc] were not known to the DRC. It is suggested that in consultation with your client you establish what you believe to be the appropriate amount.”
The review was duly undertaken by DRC at its meeting on 11 May 2001. The same quorum met to consider the matter, as had made the determination of 14 December 2000. Neither the parties nor their representatives were invited to attend.
An unconfirmed record of the meeting of 11 May 2001 tendered on the hearing in this Court, which I will call the “minutes” of the meeting, indicates that in the process of review the DRC considered the submissions which had previously been put forward by Mr Palmer and Mr Wallace for the purposes of the December 2000 hearing, and the response from the ARC, to which I have earlier referred.
In the minutes of the meeting DRC sets out its views as to the various complaints which had been made by Bonnins on behalf of Quality Lodges in their request that a review be directed.
The complaints which had been made by Bonnins, and which led to the review, replicate almost word for word the complaints which now find expression in the inter partes summons by which these proceedings were commenced, more particularly in the grounds upon which the review by this Court is sought. There are altogether some sixteen grounds. They include, for example, complaints that Quality Lodges was not given an opportunity to be heard or present submissions at the meeting on 11 May 2001; that it was not given an opportunity to call witnesses as to the conduct of the trainees, either at the hearing on 14 December 2000 or 11 May 2001; and that it was not permitted to test the stories of the trainees by cross-examination, either at the hearing conducted on 14 December 200 or at the meeting on 11 May 2001.
Effectively, at its meeting on 11 May 2001, DRC was not prepared to accede to the complaints, except to vary the notional date of cancellation of Mr Bibby’s contract which originally had been 21 November 2000 so as to substitute Friday 15 September 2000, and to vary his entitlement to a payment from Quality Lodges so that the calculation extended from 21 March 2000 to 15 September 2000.
Rather than deal with DRC’s responses to the various complaints which it considered on its review of its earlier decision, it would be more convenient for me to deal with all of the criticisms when I deal with the arguments which were presented on the hearing of the application to this Court.
THE OBLIGATION OF THE DRC TO ACCORD PROCEDURAL FAIRNESS
As I have explained, a question arises as to how DRC’s inquiry was initiated.
By its letter of 3 May 2000 to ARC, Quality Lodges sought “termination” of the two training contracts “as of 20 March 2000”. If the matter had rested there, it would have been open for the ARC to consider whether or not it would give its approval pursuant to s 32(1) of the Act. In dealing with the matter under s 32(1), there would have been no occasion for the DRC to become involved.
However, earlier, on 17 April 2000, Ms Kelm had telephoned the ARC to report the fact that her appointment and that of Mr Bibby had been terminated and that proceedings alleging harsh and unjust dismissal has been commenced in the Industrial Relations Commission. So that from that time onwards ARC was aware that there was a dispute between the parties as to the propriety of the purported dismissal. Furthermore, between 17 April 2000 and 3 May 2000, as a result of contact with Mr Finlayson by an officer of the ARC, it must have been apparent to the ARC that there was evidence that Quality Lodges had failed in various respects to comply with its obligations under the Act.
Against that background, it is not entirely clear whether the subsequent involvement of the DRC was as a result of a reference by the parties to contracts of training to the DRC of a dispute arising between them pursuant to s 40(1)(a) of the Act, or whether it resulted from a reference by ARC pursuant to s 40(2) following the entertainment by ARC of a suspicion on reasonable grounds that Quality Lodges had breached or failed to comply with a provision of the Act.
In any event, no point was taken by the parties to the proceedings before this Court as to the propriety of the action of the DRC in inquiring into the matter. Clearly, the case was dealt with by the DRC on the footing that there was a dispute between the parties as to whether or not Quality Lodges was entitled to terminate the contracts of training when it did, and if not, assuming that the contracts should be regarded as still on foot, whether they should be cancelled, and if so, as from what date.

It is perhaps unfortunate that the distinction between termination of a contract of training with the approval of the ARC under s 32(1) as opposed to cancellation by the DRC in the exercise of its powers upon inquiry into a “matter” under s 40(3) does not seem to have clearly been articulated.
Be that as it may, as I have said, it seems clear that the “matter” into which the DRC inquired should be characterised as a reference by the parties of a dispute pursuant to s 40(1)(a) of the Act.
There is no doubt that in conducting an inquiry pursuant to s 40 of the Act the DRC was obliged to observe the requirements of procedural fairness as between the parties. In that respect, the dictum of Mason J in Kioa and Ors v West and Anor[1] is apposite:
“The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention.”
[1] (1985) 159 CLR 550 at 584.
Equally clearly, the content of the obligation to accord procedural fairness is to be determined by a process of construction of the relevant statute. As it was put by Mason J in the same case:
“Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute. In Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation,[2] Kitto J pointed out that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on ‘the particular statutory framework’. What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject-matter, and the rules under which the decision-maker is actin: Reg v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group.[3]
In this respect the expression ‘procedural fairness’ more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly ie in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations: cf Salemi [No 2][4]”
[2] (1963) 113 CLR 475 at 503-504.
[3] (1969) 122 CLR 546 AT 552-553.
[4] (1977) 137 CLR at 451.
I have already drawn attention to s 39(6) of the Act pursuant to which the committee may determine its own procedures.
However, it does not follow that it is open to the DRC to adopt procedures which conflict with its obligation to accord procedural fairness.
The question then is whether the conduct of the inquiry by the DRC in this case was in accordance with the dictates of procedural fairness, having regard to the scope and purpose of the Act considered as a whole.
In my opinion, despite the criticisms raised by Quality Lodges, the procedures adopted prior to and at the hearing of 14 December 2000, and the conduct of the committee in reviewing the matter leading up to its ruling made on the review following its meeting on 11 May 2001, were in accordance with the requirements of procedural fairness, having regard to the Act.
It should be made clear that it was not incumbent on the DRC to proceed in a manner appropriate to a court of law.[5] The DRC was composed of lay persons; the obligation to inquire into the matter referred to it did not carry with it an implication that the processes followed by their inquiry were to be regarded as adversarial in nature.
[5] Rola Co (Aust) Pty Ltd v The Commonwealth (1944) 69 CLR 185 per Rich J (in dissent) at 203 and R v Commonwealth Rent Controller (1947) 75 CLR 361 at 367.
Neither was there an obligation upon the DRC to hear evidence in the manner in which a court might hear evidence. The DRC had no power to administer an oath. It was under no duty to permit “cross-examination” of parties whose statements were before it.[6]
[6] O’Rourke v Miller (1984-5) 156 CLR 342.
In any event, with respect to the complaint by Quality Lodges that the DRC denied procedural fairness in declining to allow an opportunity for cross-examination of Bibby and Kelm, Quality Lodges had earlier refused to join in with a request by Mr Palmer acting for Bibby and Kelm that an opportunity be afforded for cross-examination of the “witnesses”. In those circumstances, it is hardly open to Quality Lodges in the pursuit of its application now before the Court to raise that argument.
I accept that it is a “fundamental rule” of the common law doctrine of natural justice that, generally speaking, a party whose interests are put at risk by an administrative process is entitled to be informed of the case against him or her, and to be given a fair opportunity of replying to it.[7]
[7] Kioa v West (1985) 159 CLR 550 per Mason J at 582 citing Twist v Randwick Municipal Council (1976) 136 CLR 106 at 1009, Salemi v MacKellar (No 2) (1977) 137 CLR at 419, R v MacKellar; Ex parte Ratu (1977) 137 CLR at 476, Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 at 498-499, FAI Insurances Ltd v Winneke (1982) 151 CLR 342 at 360, 376-377 and Annamunthodo v Oilfields Workers’ Trade Union [1961] AC 945.
In the context of this case, Quality Lodges stood to suffer a substantial detriment if the training contracts were not terminated or cancelled as of 20 March 2000. Conversely, Bibby and Kelm stood to be disadvantaged if cancellation was effected in the terms sought by Quality Lodges.
Insofar as Bibby and Kelm are concerned, it was well aware of the terms of the case against them. Although they were not adequately informed of this at the time of the purported “dismissal”, they or their representative were subsequently given a copy of the statutory declarations and later of the submission put forward by Mr Wallace on behalf of Quality Lodges, with its enclosures. Bibby and Kelm then exercised a right of reply by lodging a responding submission with the DRC.
So far as Quality Lodges was concerned, it was well aware of the breaches of the Act which Mr Finlayson admitted to, and they were well aware of the fact that the various allegations advanced against Bibby and Kelm were denied by them.
They had every opportunity to put forward whatever material they wished to the DRC. With the assistance of an industrial relations consultant, they prepared a very lengthy submission and included presumably all of the material which they wished the DRC to consider.
As for the review, a question arises as to the appropriate procedure to be followed by the DRC when ARC, on the direction of the Minister, requests DRC to review its decision or order pursuant to s 39(4).
I have no doubt that in conducting the review the DRC is equally bound to accord procedural fairness to the parties, as it is with respect to its conduct of an inquiry under s 40(3).
But in the case of a review, the content of the requirement to accord procedural fairness must necessarily be different. This must be so as ordinarily a process of “review” does not connote an obligation to start over again and conduct an inquiry de novo.
What is required of the DRC in order to fulfil its obligations properly to conduct a review in accordance with the Act will depend to a large extent upon the grounds put forward to justify the review.
In this case, the request that the Minister exercise his power to direct the ARC in turn to request the DRC to review its decision, was conveyed by the letter of 8 March 2001 from Bonnins solicitors on behalf of Quality Lodges. In the letter, the reasons put forward by Bonnins as justifying a review substantially correspond with the grounds now offered to this Court by Quality Lodges in support of its application for judicial review. The reasons as set out in the letter are as follows:
“4.Reasons for Request
4.1    The DRC denied QLI procedural fairness.
4.1.1QLI was not permitted to call its witnesses as to the conduct of the trainee.
4.1.2QLI was not permitted to test the stories of the trainee by cross examination.
4.1.3QLI’s representative did not have the version of the trainee put to him to enable him to respond at the meeting of DRC.
4.1.4QLI’s representative was not asked about certain circumstances surrounding the termination.
4.1.5QLI’s representative was not asked to make comment on the relief to be granted.
4.2    The DRC did not take into account relevant facts in determining to terminate the contract effective as 21 November 2000 and order QLI to pay wages to that date.
4.2.1The DRC had proposed to have a hearing on that date which was postponed due to the unavailability of the trainee.
4.2.2The DRC did not take into account a request by the trainee to put the contract of training into limbo.
4.2.3The DRC did not take into account the fact that the delay in the hearing was not caused by QLI but was caused by the trainee taking proceedings in the IRC which were unsuccessful on a jurisdictional basis. Further, the employer relied upon the statements of D. Thalbourne that DRC would take this into account.
4.2.4The DRC did not enquiry into and take into account the fact of whether the trainee had obtained or attempted to obtain any earnings since 20 March 2000 which should be offset against salary or go to mitigation.
4.2.5The DRC failed to take into account the conduct of the trainee since 20 March 2000 in determining as to what date wages had to be paid.
4.3    The DRC decision was to unreasonable that no reasonable person could make that decision.
4.3.1There is no reasons given for selecting 21 November 2001 as the effective date for termination of the contract and the date to which wages had to be paid and there is no rationale for that date.
4.3.2The selection of 21 November failed to take into account what is a reasonable period of notice of termination or reasonable damages caused by any breach of contract.
4.3.3The order that QLI pay ‘full salary and entitlement’ is vague and uncertain and was made without enquiry as to the appropriate recompense.”
It will be seen that the complaints embodied in those reasons relate to questions of procedure, together with allegations that the DRC did not take various matters into account and that it arbitrarily fixed the effective date for termination of the contract.
In those circumstances, in my opinion, it was not incumbent upon the DRC to recall the parties to hear further oral argument or permit any sort of re-opening of the case. Instead the committee met, and from the record of the meeting it is clear that the committee addressed each of the concerns raised by Quality Lodges.
It appears from what I have described as the minutes of the meeting of 11 May 2000 that the committee discussed what it believed to be answers to the various points raised. The relevant part of the “minutes” is as follows:
“4.2.3The DRC did not take into account the fact that the delay in the hearing was not caused by QLI but was caused by the trainee taking proceedings in the IRC which were unsuccessful on a jurisdictional basis. Further, the employer relied upon the statements of D. Thalbourne that DRC would take this into account.
............
·The fact that a TAM officer has been to the employer’s premises the day after the termination and there was no mention of the termination.
·The employer had not taken the necessary action as required to advise ARC.
·The employer had received advice not to pursue matter whilst matter was before the IR commission and therefore had not applied to ARC for a termination until 3 May 2000.
·Commissioner Dangerfield’s judgement was delivered on 12 September 2000.
·If DRC had met by end of May a determination would have been made and at that point it may not have agreed to cancel the contracts.
·In June 2000 Bibby & Kelm were still strenuously opposing the cancellations.
·By 10 November 2000 when the DRC met, both trainees indicated to the DRC they did not want to continue contracts.
The DRC then proceeded to discuss points 4.2.4 & 4.2.5 together.
4.2.4The DRC did not inquire into and take into account whether the trainee had obtained or attempted to obtain any earnings since 20 March 2000 which should be offset against salary or go to mitigation.
4.2.5The DRC failed to take into account the conduct of the trainee since 20 March 2000 in determining as to what date wages had to be paid.
4.3THE DRC DECISION WAS SO UNREASONABLE THAT NO REASONABLE PERSON COULD MAKE THAT DECISION
4.3.1There is no reasons given for selecting 21 November 2000 as the effective date for termination of the contract and the date to which wages had to be paid and there is no rationale for that date.
4.3.2The Selection of 21 November failed to take into account what is a reasonable period of notice of termination or reasonable damages caused by any breach of contract.
The DRC discussed the following points:
·The penalty on employer should not equate for the fault of the Department in providing incorrect advice to delay the matter until the SAIR had met.
·On balance, the DRC did not call for the maximum penalty to the end of the contract period, being 9 December 2001.
·The DRC is entitled to consider what is appropriate.
·Question of delay is not the key issue.
·The penalty imposed was at a level commensurate for the blatant disregard for procedural fairness.
·There appeared to be a total disregard of Contract of Training System, including rights and obligations of both parties. The DRC did not fail to consider any evidence and confirmed that the penalty is commensurate for the extreme nature of the offence and misdemeanour. The DRC considered what was relevant at the time and the penalty was appropriate within the powers of the DRC.
The DRC reviewed section 30(4) of the VEET Act, which states:
If ARC, acting at the direction of the Minister, requests the Committee to review its decision or order on any matter, the Committee must review the decision or order and may, on the review-
(a)confirm, vary or revoke the decision or order subject to the review, or
(b)make any other decision or order in substitution for that decision or order.
The DRC then considered the appropriateness of the same penalty for both Bibby & Kelm given that Bibby was given notice whilst Kelm was not.
·The DRC referred to the letter sent to the parties after the DRC determination and page 107 of the transcript which states:
CHAIR: Ms Moir, can you advise that determinations agreed in our deliberations, please.
MS MOIR: The three points that were made: the ARC determines that the termination of the contract of training was unlawful. One, procedural fairness was denied to either Bibby or Kelm in the action by the employer to unlawfully terminate the contracts of training. Two, the requirement to seek and gain approval from ARC for the termination of the contracts of training was not met. Three, the allegations made in respect of behaviour - whoever’s behaviour, Bibby or Kelm - were not substantiated by credible evidence.
There is agreement to cancel the contract. The date of cancellation will be 21 November and the committee orders the payment of wages to an amount equal to the salary package for the period 21 March up to and including 21 November this year, 2000.
CHAIR: 21 November being the date at which the hearing would have been heard if it had not been delayed by the unavailability of Bibby and Kelm.
·The DRC confirmed that the allegations by the employer where (sic) not made out and noted that they were different circumstances for Kelm.
·DRC agreed that there needed to be a heavier penalty for Kelm’s termination as there were no formal warnings; however, in Bibby’s case, there was evidence of formal warnings.
·Even if the matter was heard in September the penalty may well have been of the same magnitude.
·Although a warning in respect of the performance of Bibby was issued by the employer during the probationary period, the contract of training was not terminated before the end of the probationary period.
·The continued employment of the trainees beyond the probationary period suggested the performance issues complained of in the warning were not decisive issues in the subsequent termination.
·The employer extended the probationary period unlawfully.
·It was apparent that the employer’s view was, what you do for one you do for both.
·If the employer had issued a 3^rd formal warning situation it may have been handled differently.
On balance and on reviewing the situation there was a delay between the handing down of the Dangerfield decision on 12 September 2000 and the DRC meeting on 10 November 2000.
The DRC reached a consensus that the determination for Kelm was to remain the same and the original penalty to stand.
ØThe employer agreed that his actions were unlawful.
ØAllegations were not made out.
ØOffence has been committed - the DRC took a lesser penalty than the maximum.
ØThere was no procedural fairness for Kelm.
ØIn retrospect there should have been a recommendation through the Crown Law for a prosecution but the Department had compromised the DRC and the final determination. The DRC could have determined a much higher penalty.
The DRC then considered Bibby.
ØThe difference is that there was evidence of warnings for Bibby.
ØThe employer did not notify ARC until May 2000 of the intent to cancel.
ØIn the correspondence submitted, there was a letter dated 21/07/00 from the employer giving a glowing reference.
ØAllegations were not made out.
ØDate for cancellation was considered in the context of the date of the request for cancellation, the handing down of the Dangerfield decision and the date the DRC first determined that the cancellation should be effective from being 21 November 2000.
ØThe DRC determined that the cancellation date for Bibby be effective from 15 September 2000 being a date immediately after Dangerfield determination.
...................”
I have set out that lengthy quotation from the minutes, as it sets out clearly the reasoning behind the decision made on the review.
THE ARGUMENTS ON THE APPLICATION FOR JUDICIAL REVIEW
As I have already noted, the arguments proffered to this Court by Quality Lodges substantially replicate the reasons proffered by them in support of the request for a review by the DRC of its initial decision.
As for the contention that Quality Lodges was denied procedural fairness, I have substantially addressed those matters when I dealt earlier in these reasons with the extent of the obligations imposed upon the DRC in that respect.
If the matter turned on the grounds alleging procedural unfairness, I would dismiss the application.
Furthermore, it is not open to this Court to disturb the finding that the committee could not be satisfied that the allegations as to Bibby and Kelm’s behaviour were made out. There is no apparent error on the part of the committee in reaching that view, and even if there was, there is no right of appeal, and any such error would be an error within jurisdiction. Absent jurisdictional error, this Court has no warrant to review the merits of the decision.

Quality Lodges submitted that the DRC’s decision was so unreasonable that it attracted the application of the “Wednesbury” principle. I reject that argument as to the finding on the question of the proof of the allegations as to Bibby and Kelm’s conduct. As will be seen, I consider that there are grounds for this Court to intervene on the order as to payment of a monetary sum.
The manner in which the DRC went about fixing the operative date for cancellation of the contract and the process followed by it in awarding a sum of money and calculated the salary and other entitlements due under the employment contract between 21 March 2000 to 15 September 2000 (in the case of Mr Bibby) and to 21 November 2000 (in the case of Ms Kelm) is a matter of concern.
The reasons why the DRC went about the matter in that way appear in the minutes of the meeting of 11 May 2001, which I have quoted above.
In my opinion, the reasoning was flawed. It was not appropriate to approach the matter on the basis that the DRC was imposing a “penalty on employer”, as is noted under heading 4.3.2 at several points.
In circumstances where the employer has made a request that a training contract be cancelled effective from a stated date, and the trainee disputes the employer’s right to cancellation, at least as of the day suggested, the dispute is not to be resolved by reference to any concept of a “penalty”.
Insofar as Quality Lodges was guilty of failures to comply with provisions of the Act, the relevant sections imposed their own penalties for non-compliance. For example, a failure to provide the ARC with a copy of a contract of training within two weeks after employing a person as set out in s 33(5) of the Act, involved a penalty amounting to a Division 7 fine.
The correct procedure for the DRC to adopt when there is a dispute as to whether and as from when a training contract should be cancelled is first to have regard to whether or not the relationship of employer and employee has irretrievably broken down. If that should be the case, the DRC should recognise that in exercising its power to cancel a training contract under s 40(3)(e).
Of course, in most situations, a breakdown in the relationship between the employer and the trainee will have resulted from what is perceived on one side or the other to be a breach of the contract, such as, for example, a failure by the trainee to undertake the required training, or a failure on the part of the employer to offer the appropriate training program, or, as is the case here, where there is an allegation of serious misconduct on the part of the employee.
Whatever the reason for the breakdown, the appropriate course for the DRC to take in considering the question of cancellation and the date upon which it is effective will depend upon the circumstances.
In this case, effectively, the trainees had left the employ or the employer on 20 March 2000, although the commencement of the proceedings in the Industrial Relations Commission manifested an intention to seek redress for what they asserted to be a wrongful dismissal.
However, the situation which had arisen was not one which was amenable to resolution by reference to common law principles of wrongful dismissal. On the contrary, the only redress was pursuant to the Act.
That is not to say that questions of “fault” might not properly be addressed. A justifiable de facto termination of the employment by an employer may not be visited by the same sort of order by DRC as to date of cancellation and as to payment of wages, as might be the case where the trainee’s conduct is blameless.
But clearly, Quality Lodges was in breach of the Act in various respects, the most relevant for present purposes being its failure to obtain approval for the termination of the training contract pursuant to s 32(1). If it considered that the circumstances warranted a suspension for “wilful and serious misconduct”, Quality Lodges might have suspended Bibby and Kelm pursuant to s 40(7) and immediately referred the matter to the DRC in accordance with the procedures set out in that subsection. It did none of those things. Instead it sought cancellation, a process available only by order of the DRC in the exercise of its powers of inquiring into and determining a dispute.
In the particular circumstances of this case, and without in any way attempting to lay down what course might be appropriate in other cases, in my view, the appropriate course for the DRC to have followed would have been:
·to accept that the relationship of employer and trainee had broken down and that there was no prospect of restoring the relationship;
·to accept that the contract of training was still on foot in the sense that it had not been terminated or suspended by the only means pursuant to the Act that either of those processes could be applied;
·to inquire into the question whether Bibby and Kelm had obtained other employment, and if not, over what period it would be reasonable to ensure payment of wages;
·if, as seems to have been the case, both trainees had taken up other employment before the hearing conducted in December 2000, it should have sought and obtained reliable evidence as to the dates upon which they had commenced such other employment;
·to consider whether in all the circumstances it was appropriate to cancel the contract of training as at the date upon which the other employment was taken up; such an approach would ordinarily follow where the training contract must still be regarded as on foot, and the de facto cessation of employment has not occurred as a result of some voluntary act of the trainee, such as would be the case if he or she voluntarily abandoned the employment, or where the trainee has been guilty of some other serious or fundamental breach of the training contract;
·given that it was unable to be satisfied on the evidence that the allegations against Bibby and Kelm were made out, to make an order that Quality Lodges pay wages down to whatever date was fixed as the operative date of the cancellation;
·given that any “sum of money” ordered to be paid may be recovered by the party entitled to it “as a debt” (s 40(6)), it is important that the order specify the amount, and not simply a process by which the amount may be calculated. Otherwise, the parties would be entitled to refer any dispute as to calculation of the amount back to the DRC as a fresh dispute pursuant so s 40(1).
As will have been seen from the “minutes” of 11 May 2001, the selection of 21 November 2000, varied in the case of Mr Bibby to 15 September 2000, was largely influenced by a view that it was appropriate to impose some sort of penalty. Apart from that, 21 November 2000 was chosen arbitrarily by reference to the date upon which the hearing might have been conducted had it not been delayed by the unavailability of Bibby and Kelm. The 15 September 2000 was chosen, equally arbitrarily, in the case of the varied order applying to Mr Bibby, as a date immediately after “the Dangerfield determination”, being the determination of the Industrial Relations Commission.
For the reasons given, such an approach was erroneous.
It must be steadfastly borne in mind that there is no appeal from an order or determination of the DRC. The only manner of varying or overturning its order is by proceedings in the nature of the prerogative proceedings which Quality Lodges has brought.
On an application for an order in the nature of certiorari, an error of law is reviewable if it amounts to an error on the face of the record which may properly be characterised as a jurisdictional error.
In my view, the erroneous approach adopted by the DRC to the question of the monetary payment went beyond an error made within jurisdiction and it constituted jurisdictional error on the face of the record.
I would not, however, interfere with the findings of the DRC that the allegations made in respect of Bibby and Kelm’s behaviour were not made out, or that procedural fairness was denied by Quality Lodges in terminating the orders in the manner in which they did, or that the requirement to seek approval from the ARC for the termination of the contracts of training was not met. There is no call for those matters to be revisited. Whatever criticism may be made of the DRC’s finding in those respects, they were findings made within jurisdiction and are not reviewable in proceedings of the kind now before the Court.
In the circumstances, it is appropriate simply that in the case of both Bibby and Kelm, the orders for cancellation and payment of wages be quashed, and that the matter be referred back to the DRC further to consider the date of cancellation and the calculation of the monetary payment to be made by way of wages in accordance with these reasons.
It will be incumbent upon the DRC to seek and obtain such evidence as is available to satisfy it as to when it was that Bibby and Kelm resumed employment, if that was the case, and in any event, to fix the date of cancellation in accordance with the approach which I have indicated above, and to calculate the wages which they would have been expected to earn between 20 March 2000 and the effective date of cancellation of the contracts.
I have referred to “wages”. Under s 40(3)(f), the DRC has power to “order a party to the contract to pay such wages or take such other action that, in the opinion of the committee, he or she is required to take under the contract or under this Part”.
There is another reference to wages which would be payable but for a suspension, in s 40(3)(c).
It is at least arguable that the word “wages” could not extend to an order for payment of an amount by way of compensation for a failure to provide accommodation or meals.
Neither counsel addressed an argument to the Court on this aspect of the matter. It was assumed that if the necessary preconditions had been established for the making of the order for a money sum to be paid, it could include an amount to reflect the loss of the value of accommodation and meals.
Before parting with the matter, and before I make a formal order on the application, I will hear counsel as to that issue, so that the DRC will have the benefit of whatever view I may be led to express as to this aspect of its powers.

[2002] SASC 116

12 April 2002