Rice v University of Queensland

[1998] IRCA 9

INDUSTRIAL RELATIONS COURT OF AUSTRALIA

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - review of decision of judicial registrar - allegations of serious misconduct against a university lecturer - unlawful termination of employment provisions of Workplace Relations Act - Award provided that allegations were to be investigated by an independent Committee - Committee recommended that the employee be dismissed - employer bound by Award to act in accordance with that recommendation - employer had a “VALID REASON” based on operational requirements - overlap between “conduct” and “operational requirements” reasons for termination - meaning of “serious dereliction of duty” - Committee erred in law - whether “old” conduct may be relied on - strict requirements of Award - interpretation of Award.

Industrial Relations Act 1988 (Cth), s 170DE

Chambers vJames Cook University (1995) 61 IR 121, applied
Cosco v Van Do and Ors (FCA, Full Court, 4/12/1997), applied
Craig v South Australia (1995) 131 ALR 595, referred
Eshetu v Minister for Immigration and Multicultural Affairs (1997) 145 ALR 621, applied
H & H Security Pty Ltd v Toliopoulos (IRCA, Madgwick J, unreported, 25 July 1997), referred
Hozack v Church of Jesus Christ of Latter Day Saints (FCA, Madgwick J, 27/11/97), applied
John Lysaght (Aust.) Ltd. v F.I.A. (1972) 14 AILR 517, applied
Mainsbridge v Murdoch University (FCA, Madgwick J, 13/2/98), applied
Nikoloska v Stirling Ethnic Aged Community Hospital (1996) 68 IR 165), referred
Port of Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 589, referred
Scharmann v Apia Club Ltd (1983) 6 IR 157, applied
Sherman v Peabody Coal Ltd (FCA, Moore J, unreported, 27 February 1998), referred
T C N Channel 9 Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 829, referred
H & H Security Pty Ltd v Toliopoulos (IRCA, Madgwick J, unreported, 25 July 1997), applied

RICE v UNIVERSITY OF QUEENSLAND
QI 1042 of 1995

MADGWICK J
SYDNEY (HEARD IN BRISBANE)
13 MARCH 1998

IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QI 1042 of 1995

BETWEEN:	MARTIN JAMES RICE APPLICANT
AND:	UNIVERSITY OF QUEENSLAND RESPONDENT

JUDGE(S):	MADGWICK J
DATE:	13 MARCH 1998
PLACE:	SYDNEY (HEARD IN BRISBANE)

REASONS FOR JUDGMENT

HIS HONOUR:

Nature of the case

The applicant, Dr Rice, was employed by the respondent, the University of Queensland (“the University”) as a Senior Lecturer in the Department of Entomology. He had held academic posts there since 1974.  In June 1994 the University submitted a formal complaint against Dr Rice in which it alleged that Dr Rice was guilty of serious misconduct.  Pursuant to the terms of the relevant Award, the complaint was heard by an independent Committee, which ultimately determined that Dr Rice had engaged in serious misconduct in the sense of serious dereliction of his duties.  The Committee recommended that Dr Rice be dismissed from his employment, and that recommendation was subsequently ratified by the Senate of the University.  Dr Rice’s employment was terminated by letter effective 10 February 1995.

On 28 February, Dr Rice applied to the Court, seeking reinstatement and compensation.  The matter was heard before a judicial registrar who, for reasons given on 30 November 1995, dismissed the application on the ground that there was ample evidence before the Committee to support its findings, and as such the University had a valid reason to terminate Dr Rice’s employment.  This is a review of that decision.

General background - concerns about exploitation of an academic’s commercially valuable knowledge

In February 1988, Dr Rice co-authored an article praising the effectiveness of Azadirachtin, an insecticide derived from the oil of neem trees.  The article identified the University as a patent holder for technology that enabled the extraction of Azadirachtin concentrate, and indicated that the Department of Entomology (“the Department”) was conducting research into the effectiveness and safety of its commercial production, which would assist the development of an Australian neem industry.

Around this time, concerns emerged about Dr Rice’s alleged activities in the marketplace concerning neem oil.

In April 1988 the Vice Chancellor of the University agreed that Dr Rice might explore the commercial viability of a neem-based product, on the condition that negotiations should only be made with a body nominated by the University, Australian Agricultural Technology.  The Vice Chancellor sought written confirmation from Dr Rice that he would not pursue other private negotiations or take out further patents on behalf of the University without obtaining prior approval.  Dr Rice did not give such written confirmation, but did agree that he would not enter into any commercial contracts without the requisite approval.

However, in July 1988, Dr Rice entered into an agreement on behalf of the Department with another company, Azad Pty Ltd, which had not been nominated by the University, whereby the University would provide technical advice and support to the company in return for a fee of $25,000 plus ten per cent of the Azadirachtin concentrate to be produced by Azad.  During October 1988 Dr Rice also had discussions with Neemoil Pty Ltd (a company with which he had previously worked) and, at the suggestion of one of Neemoil’s directors, with another company, Arunta Pty Ltd, concerning a proposal to involve those companies in the
University’s neem project.  At Dr Rice’s request, a draft agreement was returned to Professor Sheehan, the Academic Director of Research, for approval.

In December 1988, Professor Sheehan objected to the agreement with Azad on the basis that the contract had been entered into against the direction of the Vice-Chancellor and contrary to Dr Rice’s undertaking.  The University subsequently returned the fee to Azad.  Professor Sheehan also rejected the proposal with Neemoil and Arunta on the basis that the University’s legal officer had considered the agreement to be unsuitable.  The Professor wrote to the Vice Chancellor proposing that the University no longer be involved in the neem project.

On 20 January 1989, the Vice Chancellor wrote to Dr Rice:

“I am writing to inform you that the University of Queensland will no longer be associated with the commercialisation of neem.  Given the history that lies behind your involvement with neem, I am not ready to have the University involved with the commercialisation of neem in any way.

I have no objection to non-commercial research being done by you in this area but must insist that you do not persist in the commercialisation of neem while a member of the staff in the University’s employ.”

On 23 January the Vice Chancellor again wrote to Dr Rice following a request for clarification.  In that letter, the Vice Chancellor directed:

“While you are an employee of the University I am prepared to allow you to submit research applications involving neem to Research Services Section which fall generally under the heading of Basic Research afforded by agencies such as the ARC and Rural Industry Research bodies.  Applications involving bodies such as the [Queensland Department of Primary Industries] will be considered on their merits.  The University of Queensland is not prepared to be associated with private or commercial interests involved in the development of the neem industry in Australia nor are any of the facilities or services of the University to be used for that purpose.

The University Senate has determined that a clearing house will be established to vet research activity of a commercial kind which is not directed through Uniquest.

A copy of the circular issued by the Academic Director of Research and guidelines endorsed by Senate of this subject are attached.  I require you to observe the contents of the circular and the guidelines as far as they apply to any commercial research that you wish to undertake and which may impact on the University directly or indirectly.  No contracts be they in writing or verbal, should be entered into without having been cleared by your Head of Department and the Clearing House...

I have by virtue of a letter of this date informed the Head of Department of Entomology, Professor Paterson, that as from 1 February 1989 he should permit you to engage in paid or unpaid consultative related outside work in relation to neem only according to the guidelines that have been laid down.  Citing from those guidelines (s.3.355 of the Handbook of Administrative Information),

‘The work must not interfere with the discharge of the staff member’s academic responsibilities... Approvals for work shall be dependent upon evidence of high quality performance in those teaching, research and administrative duties allocated by the Head of Department...and no responsibility for the work shall attach to the University for paid consultative and related outside work done by a staff member in a personal capacity.  It is the member’s responsibility to make clear to the person or body for which the work is to be carried out that the staff member and not the University is carrying responsibility or liability in the matter.’

Finally, I forbid the use of the University’s name in connection with the so-called commercialisation of neem either by yourself or by individuals and/or companies which you have to this point been associated with.  I have asked the Academic Director of Research to write to all named interest groups in this area to inform them that the University of Queensland has no interest in the commercialisation and development of a neem seed industry in Australia.

...Any failure on your part to observe the contents of this letter will be treated as a case of wilful disregard of my instructions.”

In response to a further letter sent by Dr Rice, the Vice Chancellor wrote on 6 February 1989:

“The University has no interest in whether you hold another workshop on neem except to say that it should not be held on Campus and you must take great care to avoid creating any misunderstanding that the University is involved in some way... What you do in your own time off Campus is your own affair provided of course that you stay within the guidelines of the University policy for consultative and related outside work.  However what you do as a full-time employee of the University does concern me and it is in this context that I am not willing to countenance the use of the University’s services and facilities for the purpose of developing a neem industry in Australia.  Nothing I have said should deter you from being involved in this endeavour (to develop a neem industry) as a private citizen, but not as an employee of the University of Queensland.”

A prior formal censure

On 6 May 1993, the Vice Chancellor wrote to Dr Rice regarding an allegation that he had not complied with a specific directive of the Head of the Department.  It was alleged that Dr Rice had failed to provide a copy of the examination paper in subject ET327 in time, despite the Head’s direction that the paper be submitted by 30 October 1992.  The Vice Chancellor stated that he was satisfied that Dr Rice understood that the paper had to be shown to the Head and/or the Chief Departmental Examiner, Dr Exley, at least two weeks before the examination, and that he had received several written requests from Dr Exley for a copy of the paper.  The Vice Chancellor agreed with the Head that Dr Rice’s intention to deliver the paper to the examination room on the day was an unacceptable response to the directive.  The Vice Chancellor then referred to the various events (as outlined above) relating to the University’s decision to discontinue its involvement in the neem project.  He continued:

“Because of the intercession by your then Head, Professor Paterson, I refrained from acting against you over your misconduct in refusing and failing to comply with my directives [in relation to neem], but the recent episode of the examination paper reveals that you have not learned the evident lesson: you are to obey directives from officers of the University in authority over you.  They certainly include (but are not limited to) your Head of Department and myself as Vice Chancellor.  To obey directives is no less mandatory because they are couched in polite terms: it is unsatisfactory conduct to fail to do so.

I now formally censure you for your unsatisfactory conduct in failing to provide a draft examination paper in ET327 by the deadline 30 October 1992 as you had been instructed.  It caused your Acting Head to adopt alternative steps that took him from his other duties.  Your continued failure to provide the paper might have lead to students being disadvantaged in their progression towards their degrees had the Acting Head not intervened.  It was reprehensible of you and is a blemish on the record of your performance at this University.”

The Vice Chancellor then issued a warning that “any repetition of the conduct may be regarded as serious misconduct”.

The Award

Dr Rice’s conditions of employment were governed by the provisions of the Australian Universities Academic Staff (Conditions of Employment) Award 1988 (“the Award”).  The relevant clause of that Award is clause 9:

“9 - PROCEDURES IN RESPECT OF SERIOUS MISCONDUCT

(a)In the context of these procedures serious misconduct shall mean:

(i)serious misbehaviour of a kind which constitutes a serious impediment to the carrying out of the member’s duties or to other members carrying out their duties; or

(ii)serious dereliction of the duties required of the member’s office; or

(iii)conviction by a court of competent jurisdiction of an offence of a kind which constitutes a serious impediment to the carrying out of the member’s duties or to other members carrying out their duties.”

(b)Where there is any question that a staff member may have been guilty of serious misconduct, the matter shall be investigated and reported on solely in accordance with these procedures, notwithstanding anything to the contrary in the staff member’s terms of employment or any of the procedure(s) that may currently be in operation at any University.

(c)All allegations of serious misconduct shall be investigated in the first instance by the Chief Executive Officer.

(d)(i)        Where the Chief Executive officer believes that an allegation of serious misconduct by a staff member warrants further investigation, he or she shall:

(1)notify the staff member in writing of the nature of the act or acts or omission or omissions which constitute the alleged serious misconduct in sufficient detail to enable the staff member to know the precise nature of the allegations and to properly consider and to properly respond to the allegations; and

(2)require the staff member within 30 days to submit a written response.

(ii)       Provided that:

(1)The Chief Executive Officer may, at the time the allegations are conveyed to the staff member, if he or she considers it necessary and in the best interests of the University, suspend the staff member from duty, with pay, and exclude him or her from the University; and

(2)a staff member who is suspended and excluded from the University shall be permitted reasonable access to the University for the preparation of his or her response to the allegation and to collect books, papers and other personal property.

.......

(h)If the allegation is denied in part or in full by the staff member, or if the staff member fails to submit a written reply pursuant to paragraph (d)(i) hereof and the Chief Executive Officer decides that a prima facie case for serious misconduct exists... the Chief Executive Officer shall proceed to refer the matter to a Committee of Investigation (hereinafter referred to as “the Committee”).

(i)       The Committee shall exist of:

(i)a senior member of the legal profession or a person with appropriate experience in industrial relations appointed by agreement between the Chief Executive Officer and the President of the local branch of the Union, and who shall chair the Committee;

(ii)a nominee of the Chief Executive Officer; and

(iii)a nominee of the President of the local branch of the Union

provided that the parties shall no longer than fourteen days to agree in terms of (i) above, starting from the date upon which either of the parties notifies in writing to the other a name or names in connection with an agreed appointment to the position.

(j)The function of the Committee shall be to investigate any case referred to it by the Chief Executive Officer pursuant to subclause (h) hereof.

......

(l)The Committee shall, after hearing and considering the evidence adduced and submissions made before it, promptly report in writing to the Chief Executive Officer on:

(i)whether it is satisfied that each of the facts or matters alleged has been proven;

(ii)whether the facts as proven constitute serious misconduct on the part of the staff member; and

(iii)its recommendation as to whether the Chief Executive Officer should exercise any of the powers referred to in sub-clause (e) hereof, together with the reasons for its findings, provided that where the Committee has investigated a matter in which the facts are not disputed but the penalty imposed is disputed, the Committee shall report only in accordance with paragraphs (ii) and (iii) hereof.

(m)The Committee shall, when it furnishes its report to the Chief Executive Officer forward to the staff member a copy of the same report.

(n)The Chief Executive Officer shall, after receiving the report of the Committee, act on its finding by proceeding forthwith to exercise one or more of the following powers, namely to:

(i)dismiss the case and remove any suspension previously places upon the staff member; or

(ii)censure the staff member, withhold an increment of salary for a period not exceeding twelve months, demote the staff member, or dismiss the staff member from the employment of the University.

(o)The decision of the Chief Executive Officer shall be final, except where current rules, practices, legislation or orders of any Governor in Council of State require that a recommendation or decision to demote or dismiss a staff member be ratified by the governing body of the University, and subject to the jurisdiction of any competent external authority.  Any recommendation or decision of the Chief Executive Officer required to be ratified by the governing body of the University shall take effect only from the date of such ratification, provided that that the governing body shall make its decision on the basis of the reasons for decision provided by the Chief Executive Officer or Committee of Investigation as the case may be and not otherwise.

(p)In the case of:

(i)a decision to dismiss, the dismissal shall take place with immediate effect on the day of the decision of the Chief Executive Officer or the governing body as the case may be;

.....”

The allegations of misconduct

By letter dated 22 June 1994 the Vice-Chancellor made a formal complaint of serious misconduct against Dr Rice.  He was suspended from duties with pay, and was excluded from the University except with the express permission of the Head of the Department.  The allegations were expressed as follows:

“1.      You are alleged to have committed serious misbehaviour in that:

(1)You deliberately disobeyed a series of formal written directions from me as Chief Executive of the University that you not be involved in the commercialisation of a neem seed industry in Australia in such a way that these activities would adversely affect your primary duties at this University.

(2)You misrepresented your involvement in these activities, from which you derived personal gain, by denying both in letters and in your ‘Paid Consultative and Related Outside Work’ returns that you were significantly involved in any such activities.

(3)You used the property and facilities of the University, without recompense, in the conduct of these activities.

(4)While engaging in unauthorised conduct with parties external to the University, you represented yourself as an agent of the University or as acting with the University’s endorsement, or you so acted as to lead them to the reasonable belief that the University endorsed your behaviour and claims.

2.Your serious misbehaviour as outlined above has seriously impeded the carrying out of your own duties in that:

(5)Your teaching and lecturing has been performed at such an inadequate standard that students have justifiably complained of your incompetence.

(6)(a)       You have inadequately prepared lecture notes.

(b)You have failed to provide lecture notes when explicitly instructed by your Head of Department to do so.

(7)You have consistently prepared examination questions late, and delivered them late to the appropriate authority in charge of the examination programming, despite repeated and explicit instructions from relevant authorities to do so in time.  You will recall that I formally found an example of your conduct in this regard unsatisfactory last year and wrote to censure, warn and counsel you on 6th May 1993.

(8)You have persistently returned late, or have not returned at all, written assignments or written examination questions, despite clear directives to the contrary from your Head.

(9)You have conducted both written and oral exams in an unacceptable manner.

(10)You have attended practical classes for an unacceptably brief time or not attended them at all.

3.Further the alleged serious misbehaviour has been an impediment to other persons carrying out their duties in that:

(11)You have re-scheduled practical classes to a time when you knew you would be absent on leave thus requiring other staff to undertake your obligations at short notice.

(12)You have created a range of administrative difficulties for each of the Heads or Acting Heads of your Department who have had to deal with you since you became involved with the commercialisation of neem seed.

(13)You have inadequately supervised the Doctor of Philosophy student, Mr. Zhen, at the same time as providing misleading reports of his progress.

4.(14)     Instance (13) alleged in the above amounts, in the alternative, to serious dereliction of the duties required of you as a staff member.

(15)The cumulative effect of the instances (1) to (13) alleged above amounts to serious dereliction of duties required of you as a staff member.”

The Vice-Chancellor concluded:

“... Your time-consuming efforts in relation to the commercialisation of a neem seed industry have distorted the focus of your research, distracted you from your primary responsibilities, alienated you from your colleagues at the University and most importantly of all, impacted adversely on your students.  The significant efforts of your Head of Department to provide advice and counselling with the objective of modifying your behaviour have clearly been unsuccessful.  It is for these reasons that I have decided to initiate the procedures set out in Clause 9 of the Award.

You should understand that, once the due process set out in Clause 9 of the Award has been properly completed, if the allegations are sustained, a number of options are available to me including dismissal.  Accordingly, I draw your attention to Clause 9 (q) of the Award which provides you with the opportunity to either resign or to accept an offer of early retirement ‘with immediate effect’.”

Pursuant to clause 9(d)(2) of the Award, Dr Rice denied the allegations in a written response dated 22 July 1994.  The Vice Chancellor decided that there was a prima facie case for serious misconduct, and referred the matter to a Committee of Investigation (“the Committee”).

The Committee’s investigation

The Committee consisted of Dr Ryan, a retired Justice of the Supreme Court of Queensland (and, if I may say so, a distinguished one), Professor Dobson and Dr Kaye.  The investigation took place from 31 October to 30 November 1994.

At the outset of the investigation, the Committee found that there were, in substance, five allegations of serious misconduct made against Dr Rice.  The first four were the matters set out in paragraph 1 of the Vice Chancellor’s letter, alleging that Dr Rice had committed “serious misbehaviour”.  These did not, in the Committee’s opinion, contain allegations of serious misconduct as defined in clause 9 of the Award.

Further, the Committee said that, in paragraph 2, allegations (5) to (8) did not themselves contain allegations of serious misbehaviour.  However, the Committee said that those allegations, “read with paragraph 1 ... state how the four allegations of serious misbehaviour [in paragraph 1] constitute serious misconduct”.

The allegations set out in paragraph 3 were found not to be in accordance with clause 9(i) of the Award, in that the alleged serious misbehaviour must constitute a “serious impediment” (rather than a bare impediment) to other “members” (rather than to “other persons”) carrying out their duties.

The fifth allegation of serious misconduct was actually constituted by paragraph 4 allegation (15), and was that the cumulative effect of allegations (1) to (13) amounted to “serious dereliction of duties”.

While it is only necessary to consider at any length the allegations that the Committee found established, or established in part, against Dr Rice, it is necessary, as will be seen, to bear in mind what was found not to be established against him.  The allegations found not established were:

• that he had deliberately disobeyed directions of the Vice Chancellor that he not be involved in the commercialisation of the neem seed industry (paragraph 1 allegation (1));

• that he had misrepresented himself as acting with the University’s endorsement (paragraph 1 allegation (4));

• that his teaching and lecturing had been performed at such an inadequate standard that students had justifiably complained (paragraph 2 allegation (5));

• that he had attended practical classes for an unacceptably brief time or not at all (paragraph 2 allegation (10));

• that he had re-scheduled practical classes to a time when he knew he would be absent on leave, thus requiring other staff to undertake his obligations (paragraph 3 allegation (11)); and

• that he had inadequately supervised a Doctor of Philosophy student (paragraph 3 allegation (13) and paragraph 4 allegation (14)).

The matters that, in the opinion of the Committee, were established against Dr Rice were:

(a)       Dr Rice’s denial of involvement in the commercialisation of a neem industry

The charge contained in paragraph 1 allegation 2 was that:

“1.      You are alleged to have committed serious misbehaviour in that:

(2)You misrepresented your involvement in these activities, from which you derived personal gain, by denying both in letters and in your ‘Paid Consultative and Related Outside Work’ returns that you were significantly involved in any such activities.”

As indicated above, the Committee was not satisfied that the University had established allegation (1) (that Dr Rice disobeyed the Vice-Chancellor’s directive about his involvement in the commercialisation of neem).  Among other things, as from 24 February 1989 Dr Rice and his family had formed a partnership, and subsequently a company by the name of “Entomology Workshop Pty Ltd”, for the purpose of growing and selling neem seed.  The Committee considered that the company had been set up to enable work to be done on the commercialisation of neem without breaching the Vice-Chancellor’s directions, but that that was not sufficient to conclude that acts done or money received by the company could be attributed personally to Dr Rice.

The Committee did find, however, that Dr Rice had misrepresented his involvement in the commercial activities of the family company from which he had derived personal gain.  The allegation was based upon a number of returns received by the University in which Dr Rice had claimed that he had not received any payment for his external work in relation to neem, but that all such work (including consultancy work done for his family company) had been honorary.  The Committee took into account Dr Rice’s income tax returns which showed that in 1990 and 1991 he had received income from a distribution of the profits of the family enterprise, and that in 1992 and 1993 he had claimed a deduction for a share of the net losses.  The Committee concluded that Dr Rice had received “personal gain” through his external work, and that he should have disclosed this to the University.  The Committee was satisfied that Dr Rice’s failure to make such disclosures was contrary to the Vice Chancellor’s direction and constituted “serious misbehaviour”.

(b) unauthorised use of  the University’s property and facilities without recompense

The charge contained in paragraph 1 allegation (3) was that:

“1.      You are alleged to have committed serious misbehaviour in that:

(3)You used the property and facilities of the University, without recompense, in the conduct of these [neem-related] activities.”

One matter relied upon by the University to prove allegation (3) was Dr Rice’s use of the University’s equipment to run Azadirachtin assays for the benefit of Neemoil during 1989 and 1990.  Dr Rice argued that these assays were done in return for neem materials, which were essential to research projects undertaken by the Department and by postgraduate students of the University.  The Committee found that Dr Rice was not justified in providing the service, even though it benefited the University, because the arrangement had not been approved prior to the assays being performed.  The Committee was not satisfied (contrary to Dr Rice’s assertion) that Professor Paterson had condoned the arrangement, but found that, even if Dr Rice thought Professor Paterson knew about and approved of the arrangement after the event, he did not seek the Head’s explicit approval before the arrangement was made.  The Committee concluded that Dr Rice’s use of the University equipment for the assays amounted to “serious misbehaviour”.

(c)       Failure to provide lecture notes

The charges in paragraph 2 allegations 6(a) and 6(b) were that:

“2.Your serious misbehaviour as outlined [in paragraph 1] has seriously impeded the carrying out of your own duties in that:

(6)(a)       You have inadequately prepared lecture notes.

(b)You have failed to provide lecture notes when explicitly instructed by your Head of Department to do so.”

In August 1993, Dr Rice had a dispute with Professor Gordh (the Head of the Department at the time) about the scheduling of lectures during Dr Rice’s long service leave in October.  On 27 August Dr Rice complained that Professor Gordh had changed scheduling arrangements, which Dr Rice had previously made with the subjects co-ordinator to avoid a clash with his leave, and as a result he had wasted a considerable amount of time preparing for lectures which were now scheduled during his absence.  On 29 August Professor Gordh asked Dr Rice to provide him with the notes for those lectures which he said he had prepared by 31 August.  Those lecture notes were never provided.  The Committee noted that, although it may have been difficult for Dr Rice to comply with Professor Gordh’s request within two days, Dr Rice had made no attempt to seek an extension or to explain why those notes could not be provided.

In response to the Vice Chancellor’s allegation, Dr Rice had explained that, in his opinion, the notes which he had prepared for the purpose of lecturing were his intellectual property, and also were in such a form as to be incomprehensible to anyone else.  The Committee did not find this convincing and was satisfied that Dr Rice’s failure amounted to a “deliberate and culpable refusal”.

Professor Gordh also stated that he had agreed to take Dr Rice’s lectures in Insect Physiology while he was on long service leave, and asked Dr Rice to provide him with lecture notes for that part of the course which he was to teach.  However, Dr Rice went on leave without providing Professor Gordh with any lecture notes.  On 5 October, the day after Dr Rice went on leave, Professor Gordh wrote to him:

“When I agreed to take your physiology lectures I told you that I wanted your lecture notes for this subject.  You have not provided them to me.  Neither have you told me what topics to cover for the remaining three lectures.  You have just walked away from the subject without concern for the students or notifying them of the changes in lecturer.  I cannot teach this subject without directions and the lecture notes.”

The Committee was satisfied that this instance also amounted to a “deliberate and culpable failure to comply with a direction of [the] Head of the Department”.

(d)      Late preparation of examination questions

The charge in paragraph 2 allegation (7) was that:

“2.Your serious misbehaviour as outlined above has seriously impeded the carrying out of your own duties in that:

(7)You have consistently prepared examination questions late, and delivered them late to the appropriate authority in charge of the examination programming, despite repeated and explicit instructions from relevant authorities to do so in time.  You will recall that I formally found an example of your conduct in this regard unsatisfactory last year and wrote to censure, warn and counsel you on 6th May 1993.”(emphasis added)

The University cited three instances to prove allegation (7) against Dr Rice, although the Committee found Dr Rice culpable in only one instance, that relating to examinations at the end of the first semester in 1992.  Dr Rice received a letter on 11 May 1992, containing the following request:

“For all departmental exams, the exam paper is to be shown to the Head and/or the Chief Departmental Examiner... at least two weeks before the exam.  This is to ensure the maintenance of standards and quality of the examination process.  I don’t think anyone of us can claim infallibility....”

Dr Rice replied on 12 May, pointing out that as the exams were to be held on 21 May it was impossible for him to meet this deadline, but that he thought the examination paper would be ready in a few days. 

The Committee noted that although there was no doubt that it was impossible for Dr Rice to comply with the direction, it was made reasonably clear that there was a sense of immediacy about the preparation of the examination paper.  The Committee was satisfied that Dr Rice’s late preparation amounted to a “culpable” failure, but was not satisfied that it related specifically to any of the first four allegations (ie. those made in paragraph 1 of the Vice Chancellor’s letter).

(e)      Failure to return / late return of  written assignments

The charge in paragraph 2 allegation (8) was that:

“2.Your serious misbehaviour as outlined above has seriously impeded the carrying out of your own duties in that:

(8)You have persistently returned late, or have not returned at all, written assignments or written examination questions, despite clear directives to the contrary from your Head.”

Professor Gordh gave evidence that during 1993 he had received complaints from students concerning Dr Rice’s failure to return assignments.  In one instance, the Professor wrote to Dr Rice on 29 August 1993:

“All students with whom I have spoken claim you do not return work promptly.  Undergraduates complain that you do not return projects that have been submitted to assessment.”

Dr Rice replied the next day:

“One of the few undeniably just comments you have made about me is that I am not always quick at returning written work.  I accept that as a weak area and am conscious that I do need to improve on it and I am definitely trying to do that... If anyone reports to you that I have not returned a project assessment, please ask them to see me immediately to obtain their work.”

On 1 September Professor Gordh wrote a letter demanding that Dr Rice provide him with all outstanding assessments from a subject taught the previous semester by 3 September.  Dr Rice replied:

“To reiterate[,] any student who would like a project report returned to them should be directed to me.  I will happily return the work to them after commenting on their good points and on ways in which they can improve.”

The Committee was satisfied that, on the basis of Dr Rice’s admission, Dr Rice was persistently late in returning written assignments.  It was also satisfied that Dr Rice’s refusal to comply with Professor Gordh’s request amounted to a deliberate and culpable refusal, although the Committee was not satisfied that it related to the first four allegations.

(f)       Unacceptable conduct of examination

The charge in paragraph 2 allegation (9) was that:

“2.Your serious misbehaviour as outlined above has seriously impeded the carrying out of your own duties in that:

(9)You have conducted both written and oral exams in an unacceptable manner.”

In May 1991 the Faculty approved new guidelines for the conduct of oral examinations.  Professor Paterson’s evidence was that in June 1991 he and Dr Exley asked Dr Rice to provide information regarding an oral examination in one of his subjects, in order to ensure that the guidelines were being followed.  On 18 June Professor Paterson again wrote to Dr Rice indicating that, since he had not received the information as requested, a meeting had been called with the Dean of the Faculty of Science the next day.  Dr Rice replied that he was certain that the information had been supplied, and did not attend the meeting.  As a result, the Dean cancelled the oral examination and instructed Dr Rice to prepare a written examination, which was prepared late.  The Committee was satisfied that Dr Rice’s conduct in relation to the examination was unsatisfactory, and that his failure was culpable, but again, not in relation to the first four allegations.

(g)       Creation of administrative difficulties

The charge in paragraph 3 allegation 12 was that:

“3.Further the alleged serious misbehaviour has been an impediment to other persons carrying out their duties in that:

(12)You have created a range of administrative difficulties for each of the Heads or Acting Heads of your Department who have had to deal with you since you became involved with the commercialisation of neem seed.”

In the attachment to the allegation, the University claimed:

“An examination of that part of the history of your activities which is documented in your files leads me to the conclusion that few, if any, academic staff members of this University have taken up so much time of their Heads of Department and other administration officers as you have, in activities which were-

·   unnecessary if you had been carrying out your normal duties

·   excessively time-wasting and unproductive

·   distracting them from more productive activities with co-operative staff members and students.

The record shows a sustained pattern of unco-operative behaviour requiring constant follow-up and admonition.  You have managed to alienate each of the Heads or Acting Heads of Department since you became preoccupied with neem.”

The Committee considered Dr Rice’s relationship with Professor Paterson, Dr Exley, Dr Zalucki, and Professor Gordh, all of whom had been or had acted as the Head of Department during Dr Rice’s employment. 

Professor Paterson referred to a number of incidents where he had dealt with Dr Rice, including the following incidents which the Committee found amounted to “culpable negligence” on Dr Rice’s behalf:

• Dr Rice’s use in August 1988 of University letterhead in correspondence relating to a private research project;

• Dr Rice’s failure in April 1991 to urgently provide grade results for a student who would otherwise miss graduation; and

• Dr Rice’s failure in December 1991 to provide a report to the Queensland Department of Primary Industry, resulting in the publication of the Department’s research findings without Dr Rice’s report.

Correspondence between Dr Exley and Dr Rice was relied upon to demonstrate that Dr Exley too had faced “administrative difficulties” in 1990 as a result of Dr Rice’s failure to:

• account for overdrawn funds relating to his various research projects;

• complete a report on overseas travel taken in January 1990; and

• prepare a list of current research projects. 

The Committee was satisfied that Dr Rice’s failure to respond with due diligence to Dr Exley’s requests regarding the overdrawn funds did create administrative difficulties, and, in relation to the other two matters, was also satisfied that these amounted to “culpable negligence”.

Another incident was referred to which occurred in October 1992 whilst Dr Zalucki was acting as the Head of the Department.  On three occasions Dr Zalucki wrote to Dr Rice asking him to provide a paper for the approaching examinations.  On 4 November Dr Zalucki felt that it was necessary to relieve Dr Rice of his responsibility for the course.  The Committee was satisfied that it was culpable neglect by Dr Rice not to provide the paper as directed.

A large amount of written correspondence between Dr Rice and Professor Gordh in 1993 and 1994 demonstrated that they had, to say the least, a strained relationship.  The Committee referred to a number of specific incidents and concluded that Professor Gordh had faced “administrative difficulties” as a result of Dr Rice’s actions or inaction.  The Committee also concluded that Dr Rice was guilty of culpable failure to perform his duties as a result of an incident in June 1994, when Dr Rice had sought repair work to be performed on a machine at a cost of $1,100 before seeking Professor Gordh’s approval for the expenditure. 

The Committee’s evaluation of the proven allegations

The Committee, it may be recalled, regarded two instances of serious misbehaviour as proven.  These consisted of Dr Rice’s misrepresentation of his involvement in the commercialisation of a neem seed industry in Australia from which he derived a personal gain, and of his use of the University’s property and facilities without recompense.  However, the Committee was unable to conclude that these matters amounted to behaviour of a kind which constituted “a serious impediment” to Dr Rice or to other members of the staff carrying out their duties.

The Committee then considered whether the University had established serious misconduct in the sense of “serious dereliction” of the duties required of Dr Rice’s position.  “Dereliction of duty” was understood by the Committee to mean “a reprehensible abandonment or neglect” of duties, sufficiently serious to indicate a rejection or repudiation of the contract of employment, so as to be considered “culpable”.  It was the University’s contention that the cumulative effect of all the proven allegations amounted to a serious dereliction of duties.  Having regard to the incidents outlined above, the Committee was satisfied that, overall, there had been a serious dereliction of duty which constituted “serious misconduct”.

The Committee then had regard to the disciplinary options available to the University under clause 9(l)(iii) of the Award.  It recommended that, having regard to -

• the matters proved having taken place over a period of five years;

• Dr Rice having maintained throughout the proceedings that he had done nothing wrong; and

• the seriousness of the matters proved,

the Vice Chancellor should dismiss Dr Rice from his employment in accordance with clause 9(l)(iv) of the Award.

On 10 February 1995, the Senate of the University ratified the Vice Chancellor’s decision to terminate Dr Rice’s employment.  He was dismissed by the University by letter dated 13 February, to be effective from 10 February.

The applicant’s submissions

The applicant’s case is three-fold.  Firstly, it was submitted that the Committee had misdirected itself.  It was submitted that a “serious dereliction of duty” connotes abandonment of duty of a high degree of culpability, sufficient possibly to justify dismissal: Hagener v Pulitzer Publishing Company 158 S.W.2d 54:  the concept is akin to the common law requirement of “repudiation of the fundamental terms of the contract”:  Scharmann v Apia Club Ltd (1983) 6 IR 157. On the Committee’s own reasons and findings, it was contended that-

• none of the acts found was capable of constituting serious dereliction of duty;

• none of the acts found was capable of constituting such dereliction so as to amount to serious misconduct;

• the acts found were not capable of being considered cumulatively so as to enhance their seriousness;

• the acts found, considered together, were not capable of constituting dereliction of duty serious enough to amount to serious misconduct;

• cumulatively, the acts relied on, even if constituting serious dereliction of duty and serious misconduct, were not the type of conduct capable of justifying dismissal.  The Award provides for a range of disciplinary responses from censure through loss of pay increments and demotion to dismissal, and dismissal is necessarily reserved for the worst class of cases.

It was argued that, considering the allegations as separate incidents, it was necessary to read each of them in the context of the whole letter.  The Committee had misdirected itself in that, once the allegations in paragraph 1 were found not proven, it wrongly interpreted allegation (15) as enabling it to consider those matters in the absence of any causal relationship between those allegations and the allegations concerning Dr Rice’s involvement in the neem industry.

Secondly, it was argued that, in any event, the question of whether the University had a valid reason under s 170DE(1) must be answered separately from the question of whether the procedures and conditions of the Award had been met by the University. In particular, it was submitted that alleged misconduct was relied upon by the University which, although such conduct may have once been legitimately relied upon to institute disciplinary measures against Dr Rice, was not acted upon at the time it was said to have occurred; for example, it came to the University’s attention that Dr Rice was performing Azadirachtin assays for Neemoil in July 1991, prior to the censure in 1993, but that was not raised until these proceedings in 1994. Those alleged incidents could not now constitute, either by themselves or cumulatively, a valid reason for the termination of Dr Rice’s employment.

Thirdly, it was argued that Dr Rice had not been given an opportunity properly to defend himself against the allegations, contrary to s 170DC of the Act: because the Committee made findings on matters which were not charged, its conclusions were so different from the thrust of the allegations that Dr Rice should have been given an opportunity to address those findings separately, particularly in relation to the appropriate penalty.

Conclusions

1. The meaning of  “valid reason” and “conduct”

S 170DE(1) provided:

“An employer must not terminate an employee’s employment unless there is a valid reason, connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.”

The power of the Court to make any order is thus contingent upon an employer’s failure (see s 170EDA(1) as to the onus) to show that there was a valid reason, either connected with the employee’s conduct or based on the operational requirements of the enterprise.  A valid reason is one which is not otherwise unlawful, no matter how unjust it may be: Cosco v Van Do and Ors (Federal Court of Australia, Full Court, unreported, 4 December 1997).  In a case founded on operational requirements, the operational requirements must truly exist: Cosco.  “Operational requirements” connotes, in my opinion, matters requisite for the continued, proper functioning of the enterprise, considered as an employer.  I considered this matter in Hozack v Church of Jesus Christ of Latter Day Saints (Federal Court of Australia, unreported, 27 November 1997).  I have also held that, in a case founded solely on conduct, the conduct complained of must objectively exist: Mainsbridge v Murdoch University (Federal Court of Australia, unreported, 13 February 1998).  That view was also taken by Moore J in Sherman v Peabody Coal Ltd (Federal Court of Australia, unreported, 27 February 1998).

1. Conduct and operational requirements can overlap

However, cases concerning an employee’s conduct and cases concerning an employer’s operational requirements are not mutually exclusive and, although they are likely to be unusual, there are instances in which such concerns will overlap: Mainsbridge.  In such cases, there must be an honest and reasonably held belief, after proper inquiry in the circumstances, that the conduct existed: ibid.  In my opinion, there would also be every reason to regard as applicable in such a case the employee’s right under s 170DC not to have his or her services terminated “for reasons relating to” such supposed conduct unless the employee had been given an opportunity to defend himself or herself against the allegations of misconduct.

Mr Murdoch, counsel for the University, argued that the reason which actuated the University to terminate Dr Rice’s services was the fact of the report of the Committee and the University’s obligation under the Award to act on it, so that it is the validity of that reason which is in issue.  I agree with that submission, subject to some reservations which will become apparent.  In order to explain why, it is necessary to consider the Award and its context.

1. The Award: a unique system and a code

When framing the Award, the parties to it evidently had in mind such matters as the intrinsic social importance of the work of academic staff of universities, and the historical phenomenon that some with much to contribute to such work may not necessarily behave in particularly orthodox ways.  It is evident that the parties were intent on doing a number of things aimed, on the one hand, at respect for academic freedom while, on the other, at distinguishing between the legitimate scope of such freedom and behaviour which would make it practically intolerable for the continuation of an academic’s employment.  A unique system has been established to deal with supposed cases of serious misconduct.  The Award’s features include:

• It expressly overrides otherwise relevant (express or implied) contractual terms between a member of the relevant industrial organisation and a university (clause 9(b)).  Thus the role of common law concepts is much diminished.

• It takes the independent powers and functions of fact-finding and discretionary judgment of the comparative seriousness of such infractions out of the hands of the administrative officers of the employing university and vests them in an independent and senior Committee, which represents the interests of the university and its staff.

• The requirement in subclauses (n) and (o) that the relevant administrative organs of the university must apply the findings of the Committee denudes them of the power even of charitably-intended indulgence; the powers of the administrators are thereby greatly reduced.  Among other things, the Award stringently removes any capacity for a purely subjective approach by a Vice Chancellor.  The countervailing benefit to the university would appear to be that it escapes the burden of appeals to their administrators’ benevolence, and of complaints about harshness by them.

• The parties to the Award jointly choose the presiding member of the Committee.

• It attempts, restrictively and exhaustively, to define serious misconduct.

• Precision and detail in the formulation of allegations (subclause (d)(i)(1)) are made mandatory and the Committee’s attention is confined to such allegations (subclause (l)(i) and (2)).

• A graduated range of disciplinary responses is made available to the Committee, with the necessary implication that the most serious response, dismissal, is reserved for the most serious class of cases.

I agree with Spender J in Chambers vJames Cook University (1995) 61 IR 121 at 137, that the Award is, as to presently relevant matters, a code.

1. Compliance with the Award would furnish a valid reason

It is of importance that the University is legally required to give effect to the findings of the Committee. That is an unusual kind of provision. It both underlines the idea that the Award is a code as to disciplinary matters and is an integral part of that code. For any employer, it is essential that there be available a legal means of dealing with perceived disciplinary problems. Often this is left to what the common law will imply into the contract of employment. It may also be dealt with by express contractual terms. Or, award obligations voluntarily or involuntarily imposed may modify the express or implied contractual terms. Here, the Award ousts those terms entirely and substitutes its own regime. If that regime results in an obligation on the University as an employer to terminate an academic’s employment, it seems to me to be fundamental to the proper functioning of the University that it comply with that Award requirement. Not to do so would displace the only legally available system of discipline. There are other likely important practical consequences of non-compliance. Those consequences may include justifiable staff or student unrest and/or political obloquy for the University or those governing it, to say nothing of the difficulty of attracting suitable senior people to the membership of the disciplinary committees contemplated by the Award. In the unusual circumstances of the provisions of this award, it seems to me that this requirement placed on the University can fairly be labelled an “operational requirement of the ... establishment” within the meaning of s 170DE. I should perhaps stress that the provisions of the Award are a reasonable and proportionate response to the conditions of universities and their academic staff: there is no scent of the Award having been framed so as to bring what would otherwise simply be an ordinary conduct case within the purview of “operational requirements” as a justification for termination of employment under the Act.

There is even an argument that, despite manifest legal error on the part of a Committee, compliance with its findings would be a valid reason for the termination of an academic’s services, based on the operational requirements of a university.  The mode of composition of the Committee might be said to imply that the parties bound by the Award should be taken to have entrusted the Committee with not only the power to decide, but to err without invalidating the decision.  In other words, such an error would be “non-jurisdictional”.  However, in my opinion, if it can be said that the Committee has not done what the Award intended, the Committee’s findings can and should, in my view, be said to be “otherwise unlawful” (within the apparent contemplation of Lindgren and Lehane JJ in Cosco) so as to render reliance on them invalid under s 170DE as a reason for the termination of an academic’s services. The only source of the Committee’s authority is the Award. The Committee was not a court, and while the Award ensures that the fruits of either industrial relations or legal experience will be available in the deliberations of committees, there is no guarantee that a lawyer will be present. Nor does the Award seek to immunise a committee’s deliberations against judicial review; indeed, subordination of the committee’s findings to the jurisdiction of a “competent external authority” is assumed (subclause (o)). It is difficult, for these reasons, to regard legal errors of any importance as being non-jurisdictional: Craig v South Australia (1995) 131 ALR 595, especially at 602. If the committee has seriously erred in law, the relevant university, union, or academic might seek a declaration that it is not required to act on the committee’s recommendation.

In my view, if the Committee acted lawfully, though mistakenly (in the opinion of the Court) as to questions of fact, such would nevertheless furnish the University with a valid reason based on its operational requirements.

The question then becomes: did the Committee act lawfully?

1. Misconceived charges and their attempted salvation

A reading of the whole of the letter containing the allegations indicates that in some respects, its framers set the University a needlessly Herculean task of proof, and that Dr Rice’s neem-related activities were the core of the complaints against him. 

Firstly, it was evidently conceived that it was necessary to particularise the supposed impediment constituted by the alleged serious misbehaviour.  In cases where the nature of the impediment is not obvious (as was the case here), that was no doubt correct.  However, the nature of the impediment which would suffice was plainly misconceived: it was assumed that actual further defaults on the part of the allegedly aberrant staff member were necessary to constitute such an impediment.  Conceptually, that is not so.  To take an extreme example, a lecturer’s misbehaviour consisting of a sexual assault upon one of his or her students on campus would constitute, without more, an impediment to the carrying out of that lecturer’s duties.  Nevertheless, further defaults were alleged as “serious impediments” in paragraph 2 of the Vice Chancellor’s letter.  As the Committee recognised, those defaults, even if proven, therefore had to be causally linked with what was alleged in paragraph 1, before anything in that paragraph (despite its proof) could be regarded as constituting serious misconduct by serious misbehaviour. 

The Committee, unable to forge such a link (and having held, correctly in my view, that paragraph 3 was defective in the nature of the allegations made), therefore needed to consider allegation (15) in paragraph 4:

“(15)The cumulative effect of the instances (1) to (13) alleged above amounts to serious dereliction of duties required of you as a staff member.”

The Committee evidently interpreted allegation (15) as if, after the words “[t]he cumulative effect of”, the words “all or some of” (or some such expression) had been inserted.  It is here, with respect, that I regretfully part company from the Committee’s approach.  There are two reasons for this.  One is the interpretation on its own terms of the letter containing the charges, and the other is the kind of interpretation that must be given to the letter because of the Award.

The interpretation favoured by the Committee requires the notional inclusion in allegation (15) of words that are not there.  Not only is there no justification, except expedience (which would, however, operate against Dr Rice’s otherwise legitimate interests) for including them; there are, in my opinion, positive indicators in the letter that that should not be done.  In paragraph 4, allegation (15) does not stand alone:  allegation (14) was intended to require consideration of allegation (13), which had been a single alleged serious impediment (supposedly inadequate supervision of a PhD student), as itself constituting serious dereliction of duty.  Rightly or wrongly, that instance was evidently seen as the most serious single matter mentioned, otherwise it would not have been singled out for consideration as possibly amounting, in itself, to serious dereliction of duty.  Allegation (15) then included allegation (13) among those collected for their “cumulative effect”, and whether or not it might be found to constitute serious dereliction of duty in itself:  there is no reference in allegation (15) to a phrase such as “in the alternative”, although that expression appears in allegation (14).  Such inclusion would make sense when the question of which might be the appropriate disciplinary response is considered: standing alone, the supervision matter might not warrant dismissal, but with other matters, it might.  In any case, the singling out in allegation (14) of “instance (13)” speaks against reading “the cumulative effect of ” in allegation (15) as if it meant “each of” or “one or more of”.  Hence it was truly the cumulative effect of the matters alleged at which allegation (15) was aimed. 

The broad, explanatory penultimate paragraph of the letter confirms the impression that not only were all of Dr Rice’s shortcomings alleged to be related to his commercial involvement in the neem industry, but that it was the sum of all these shortcomings which had finally moved the Vice Chancellor to act.  That is another reason for thinking that the words of allegation (15) were intended to mean what they said.

The terms and context of the Award put beyond doubt, in my opinion, that if there is any imprecision in the written notification of the allegations required by subclause (d)(i)(1), the staff member should have the benefit of it.  The staff member is entitled to know the “precise” nature of the allegations, so that he or she can “properly” consider and respond to them.  The allegations are central to the whole scheme contemplated by the Award.  The context is that the Award is dealing with very important matters.  More than ordinarily serious economic and occupational consequences may attend the dismissal of an academic:  universities offer virtually the only avenues of employment in some disciplines, and world-wide communication between university academics in particular fields is often the norm.

Here, it would be a very different thing from having to consider and respond to the cumulative effect of thirteen allegations, to having to consider and respond to the cumulative effect of any conceivable combination of them: among other things, assuming that each allegation could be answered simply as “established” or “not established” (an oversimplification), in theory the effect of over 8,000 (2¹³) permutations would require consideration!  More practically, a wide range of results could be regarded as reasonably possible.  Any adequate response would need to deal with both the characterisation (as to seriousness) of particular matters proven, alone or together, as well as with what disciplinary action in relation thereto, if any, would be appropriate.

It is no answer to any of this to say that the Committee may have indicated its intention to proceed in the way it did, so that Dr Rice had notice of how the matter was to proceed.  That would show only that he had notice of how the Committee interpreted the allegations, rather than that such interpretation had supplanted or could supplant the allegations.  Under subclause (d)(ii), the staff member is entitled to know the precise allegations against him/her before a committee is even established.  The Committee could not add to or alter the allegations.

In the present case, as a practical matter, the course taken by the Committee meant that an ordinary difficulty foreseen by the Award in subclause (l), namely that the decision as to whether serious misconduct had been established could not be made until it was known which allegations had been proved, was likely to be greatly magnified.  In a case of any complexity, this would require, as a matter of procedural fairness, that submissions on whether the facts as proven constituted serious misconduct, and as to what the Committee’s recommendation to the Chief Executive Officer should be as to the disciplinary powers vested in him or her by clause 9, should not be received until it was known what the precise factual findings were.  That was not done in this case.

In my view, upon the Committee having been told that the University wished to rely on the cumulative effect of various partial combinations of the 13 allegations, the Committee should have informed the University’s representative that that would not be possible on the allegations as laid.  The University might then have opted to notify Dr Rice of an appropriate further allegation or allegations, and the relevant parties might also have been content to constitute the same Committee to hear the allegation/s.  But, if that were not so, the inconvenience would simply emphasise the care with which allegations should be drafted so as to indicate plainly, fairly and immediately to the staff member just what it is that he or she faces.

In any case, in my opinion, such was the range of possible results of the Committee’s deliberations on the factual issues raised by the allegations, that this was a case where procedural fairness (or natural justice as it was, until recently, more commonly called) required that the Committee keep an open mind on the question of serious misconduct and the appropriate response, until the primary factual findings had been made and the parties had had the chance to make submissions.  The Award cannot operate so as to exclude such a basic requirement or to excuse non-compliance with it; the Award cannot rise higher than its source, the Act which enabled it, the (then) Industrial Relations Act1988 (Cth). Nothing in that Act expressly warranted any denial of procedural fairness, and such a denial is not readily sanctioned by implication. In Eshetu v Minister for Immigration and Multicultural Affairs (1997) 145 ALR 621 at 637, (although I have elsewhere expressed my respectful disagreement with his Honour’s ultimate conclusion in that case) Burchett J put the matter succinctly:

“...in Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 252, the joint judgment of Deane, Dawson, Toohey and Gaudron JJ states:

‘There are certain matters in relation to which legislative provisions will be construed as effecting no more than is strictly required by clear words or as a matter of necessary implication. They include important common law rights, procedural and other safeguards of individual rights and freedoms and the jurisdiction of superior courts.’

These pronouncements apply with particular strength to rules as fundamental as those of natural justice ...”

1. Other matters

In the approach I take, it is not necessary for me to embark on a review of the Committee’s purely factual findings, where there is some evidence to support them.  As to matters where academic standards are involved, it would be right, in any case, for the Court to accord respect to the expertise possessed by the Committee:  see T C N Channel 9 Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 829. There were, however, in my opinion, some other errors of law made by the Committee, and I now deal with these.

Allegation of misrepresentation of paid outside work

Paragraph 1 allegation (2) stated:

“1.      You are alleged to have committed serious misbehaviour in that:

(2)You misrepresented your involvement in these activities, from which you derived personal gain, by denying both in letters and in your ‘Paid Consultative and Related Outside Work’ returns that you were significantly involved in any such activities.”

The essential contested ingredients of this allegation were that (1) Dr Rice had derived personal gain from his involvement in commercialisation of neem, and (2) he had misrepresented his involvement in those activities.

There was, in my opinion, evidence to support the first element and I say no more about it.  As to the second, it will be recalled that the Committee’s conclusion was based upon a number of annual returns received by the University from Dr Rice from 1989-1993.  In each case, the information sought from Dr Rice was the following:

“Paid Consultative and Related Outside work
If any such work has been undertaken, please provide a report, in accordance with the policy approved by the Senate on 26.9.88 giving information on the nature of the work and the number of hours involved for each activity.”

In each case, Dr Rice indicated that there was nothing to report.  This was capable of being interpreted by the Committee as a representation that he had undertaken no paid consultative or the like work.  However, unless it was a misrepresentation, it could provide no evidence of the misrepresentation alleged.  The question is whether there is evidence from which it could be concluded that Dr Rice had been paid for such work.

The problem is that the Committee’s conclusion is inconsistent with its finding that payments for neem products and services were made to the company or the partnership.  Such payments (or tax deductions for trading losses) as Dr Rice personally received were received not as a consultant, but as a member of the partnership or as a shareholder in the company.  The payment was simply a dividend or profit share; if the arrangement with the company or partnership was such that the work was unpaid (and there was no positive evidence that it was otherwise), it did not become “paid ... work” because the partnership made a profit.  It was not shown that Dr Rice had made no financial or other material contribution which would have commercially warranted a profit share being made to him, nor was it shown that the return was disproportionate to any such contribution.  The returns only asked about paid work.  The guidelines only addressed themselves to that subject.  It is no doubt true that Dr Rice “deliberately sought to remove his activities in the commercialisation of neem from the scrutiny by his Head of Department” (in the phrase of the Committee) by the commercial arrangements he had made and did not disclose in his returns.  It is equally true that the terms of the guidelines and returns were inadequate to cope with commercial practices made commonplace by the taxation avoidance industry.  But neither of those considerations is to the point of the allegation against Dr Rice. 

In my view, there was no material from which it might be concluded that his returns were misrepresentations, and hence no material from which it might have been concluded that he made the misrepresentation alleged against him.  However unmeritoriously, he was, as a matter of law, entitled to a finding that this allegation was not proved. 

Use of University property without recompense

Allegation 1 paragraph (3) was:

“1.“You are alleged to have committed serious misbehaviour in that:

(3)You used the property and facilities of the University, without recompense, in the conduct of these activities.”

Particulars given of this allegation were:

“In your efforts to develop methods to commercialise the extraction of azadiracthin from neem ... there is evidence that you have used, or sought to use, the University’s facilities improperly.  I cite instances :

[five instances of allegedly improper use of University facilities were set out - of these, four were found not proven] ...

There is no evidence that you declared or paid for the use of University facilities as is clearly required by the University’s policy on Paid Consultative & Related Outside Work.”

The matter accepted by the Committee to found this allegation was, it will be recalled, Dr Rice’s use of the University’s equipment to run Azadirachtin assays for the benefit of Neemoil during 1989 and 1990.  The Committee found that Dr Rice was not justified in providing the service, even though it benefited the University, because the arrangement had not been approved prior to the assays being performed.  The Committee concluded that Dr Rice’s use of the University equipment for the assays amounted to “serious misbehaviour”.  The essence of the Committee’s approach was this:

“It cannot be claimed that Dr Rice’s action in providing this service to Neemoil Pty Ltd was justified because it resulted in some discernible benefit to the University.  It was only if the arrangement had received prior approval from an appropriate officer of the university that it could be said that the use was not improper and that the University received recompense for the use of its property and facilities.”

However, upon a fair reading of the entirety of the allegation and particulars of it furnished to Dr Rice, their gist, it seems to me, is not merely that Dr Rice used University facilities without permission; it is that he also used them without paying for such use.  The allegation itself and the last paragraph of the particulars (as set out above) make that clear.  Such an allegation is not answered by the Committee’s point that “recompense” implies that there must have been a permissible use of property to be recompensed.  Dr Rice claimed that he had caused a reasonable, countervailing, material benefit to flow to the University for his admitted use of the facilities.  In the absence of a finding that there was no such “payment”, there was no material, in my opinion, from which a finding could have been made that this allegation was established.

Complaints about events preceding the earlier censure

As set out above, Dr Rice received a censure, pursuant to clause 9(g) of the Award, in May 1993 for a failure in October 1992 to comply with a specific directive of his Departmental Head to furnish a copy of an examination paper about 10 days before the examination was held.  He was censured, counselled and warned (although the Award contemplates that only one of these responses may be used) that a repetition might constitute serious misconduct.  Much of the conduct now complained of occurred before either of those two dates.  There was debate about whether, and to what extent, it was legitimate to have regard to such conduct.  The matter was acute in relation to allegation (7):

“You have consistently prepared examination questions late, and delivered them late to the appropriate authority in charge of the examination programming, despite repeated and explicit instructions from relevant authorities to do so in time.  You will recall that I formally found an example of your conduct in this regard unsatisfactory last year and wrote to censure, warn and counsel you on 6th May 1993.”

In the result, the Committee relied on two instances in 1992 to sustain the allegation.  One was the very subject of the conduct condemned by way of the 1993 censure.  The other preceded that conduct by a few months. 

In general, in my opinion, the institution by a university of proceedings under clause 9 of the Award does not necessarily protect a staff member from later disciplinary action relying on that or earlier conduct.  Later events may take colour and significance from an earlier one, or be joined with it, to show a course of conduct that might not otherwise appear.  It would fly in the face of common sense and fairness to the employer if regard could not be had to such earlier events, and that is so even if the earlier conduct has, considered on its own, been dealt with by disciplinary measures under the Award.  A matter made the subject of a disciplinary warning would lend obviously greater significance to a repetition of such conduct, for example.

There is no need to consider in detail the analogy of contractual doctrines of waiver in the present process of interpreting an award which has supplanted the relevant contractual rights of a university and those of its academic staff who are bound by the award.  It is enough to regard as generally applicable what was said by Sheppard J in John Lysaght (Aust.) Ltd. v F.I.A. (1972) 14 AILR 517.  In that case, an employer was relying on a “shocking record of absenteeism” by an employee.  The union argued that that should be overlooked “because the company had, except for a warning here and there, allowed it to run on”.  Sheppard J said:

“It is no doubt possible for the company to waive particular acts of misconduct that would otherwise justify dismissal without notice.  These particular acts could not subsequently be used for this purpose once a decision was made not to rely on them.  The act of misconduct however does not then disappear and become irrelevant when further misconduct occurs.  It remains and makes up the continuing history and record of a man’s service.  That record may always be referred to for the purpose for which the company now points to it and the presence of incidents such as I have described will always be a relevant factor to be weighed in the balance by an employer when he comes to consider whether or not a further breach or other act of misconduct should not bring about dismissal.”

However, where formal proceedings have been taken under the Award and no good reason is shown as to why conduct earlier than that alleged in such proceedings could not have also then been raised, the Award, which deals (and can only deal) primarily with employer-employee relations, rather than with matters of broader public interest, ought not be construed so as to encourage untimely attendance by the employer to disciplinary aspects of personnel administration.  Raking over old coals is apt to seem unfair and is likely to be so in various ways; memories fade, witnesses become unavailable, etc.  Reasonable promptitude is implicit in the provision of an adversarial-style procedure such as that established under the Award.  The analogy is with “Anshun estoppel”: see Port of Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 589.

Accordingly, here, it seems unfair to me, to the point of legal impermissibility, not that the October 1992 incident was again relied upon to suggest that it was just one incident in a chain, as it were, of consistency, but that the earlier 1992 incident should have surfaced for the first time as an item of serious complaint, even as a link in a chain.  Events in relation to it were relied on by the Vice Chancellor as part of the proof of the allegation relating to October 1992.  If it were seriously complained of, the 1993 proceedings were the time to raise the matter.  The Committee erred, in my opinion, in condoning unreasonable delay by the University in raising the matter.  Regard should not have been had to it.  Without that instance, one of only two relied on by the Committee, a charge of “consistently” having been late could not be sustained.

On being an administrative nuisance

Allegation 12 was:

“3.Further the alleged serious misbehaviour has been an impediment to other persons carrying out their duties in that:

(12)You have created a range of administrative difficulties for each of the Heads or Acting Heads of your Department who have had to deal with you since you became involved with the commercialisation of neem seed.”

It will be recalled that, in the attachment to the allegation, the matter was amplified in this way:

“An examination of that part of the history of your activities which is documented in your files leads me  to the conclusion that few, if any, academic staff members of this University have taken up so much time of their Heads of Department and other administration officers as you have, in activities which were-

·   unnecessary if you had been carrying out your normal duties

·   excessively time-wasting and unproductive

·   distracting them from more productive activities with co-operative staff members and students.

The record shows a sustained pattern of unco-operative behaviour requiring constant follow-up and admonition.  You have managed to alienate each of the Heads or Acting Heads of Department since you became preoccupied with neem.”

Various alleged difficulties were particularised.  It is fair to say that they point either to rudeness, or at least poor relations between Dr Rice and his Departmental Heads, or to complaints that Dr Rice was needlessly taking up their time with investigation of his activities, often neem-related, and his alleged administrative defaults.

Meaning of “serious dereliction of duty”

Stated in the abstract, I agree with the Committee’s exegesis of this expression.  The phrase obviously takes colour from its context.  It would be anomalous if less blameworthy and consequential conduct than in the case of “serious misbehaviour” would suffice.  The Shorter Oxford Dictionary gives “reprehensible abandonment or neglect” as a meaning for “dereliction”.  The notion of seriously reprehensible abandonment or neglect of duty is about as close as one can come to a paraphrase of “serious dereliction of duty”.  The phrase is used to denote a very high degree of culpability apt, in the context (which includes the extended definition of “serious misconduct”), to attract dismissal as a possible proportionate response: Hagener at 62.  It would at least need to satisfy the common law test of wilful misconduct (although the Award supersedes this), namely that it amount to repudiation of the fundamental terms of the contract of employment; see Scharmann.

The allegation fell to be considered as a matter contributing, in its effect,  to an overarching allegation of serious dereliction of duty.  No matter how much trouble Dr Rice put his supervisors to, unless he did it deliberately, that is not, in my opinion, the stuff of serious dereliction of duty.  The matter may be tested in this way.  Suppose Dr Rice had been “carrying out his normal duties” and had nevertheless caused the same level of  administrative headaches, paper wars and general difficulties as it seems he did.  Absent serious personal fault, one would surely say that some people are, by nature, unmanageable academics, and poor co-operators, just as some are turbulent priests.  The creation of an administrative burden for others does not in itself tend to show dereliction of duty.  By contrast, suppose then, lack of attention to duty as particularised under this rubric.  Either such dereliction would amount to serious dereliction of duty or it would not.  The extent of the creation of mere administrative difficulties by such dereliction would simply be irrelevant as an element in the correct characterisation of the seriousness of the behaviour complained of.  Serious derelictions of duty may or may not be accompanied by the creation of administrative difficulties.  At best, the creation of administrative difficulties might illuminate the importance, if  it were not obvious, of non-neglect of duty; if it were necessary to rely on such creation for that latter purpose, it would merely be part of the evidence and one would not expect to find it set forth, as it is here, as the centrepiece of the expression of the allegation.

Allegation (12), as it was expressed, might possibly have served as a particular of an impediment to other staff members’ performance of their duty, had Dr Rice been charged directly, for example, with an allegation of serious misbehaviour by devoting undue time and energy to the off-campus commercialisation of neem; but he was not so charged.  As things stood, the terms of the allegation are confusing and distracting: even the specific acts of neglect found by the Committee could not properly result in a finding that the allegation was proven, without a finding that there had also been proven what could reasonably be called a “range” of administrative difficulties for each Departmental Head.  This implies both some considerable number of such difficulties, and some variation in their type, for each Head.  In the case of Dr Exley, for example, only two matters were found proven by the Committee.

For these reasons, in my opinion, the allegation was legally misconceived, and should have been rejected by the Committee.

The University’s legal case fails

I conclude that the Committee’s report was not lawfully made, in the respects indicated, some of which are fundamental. The University has not, therefore, been able to show a valid reason based on the operational requirements or connected with conduct within the meaning of s 170DE, as interpreted in Cosco, for the termination of Dr Rice’s employment.  By the failure of the Committee to give him the opportunity to address, as it were, on penalty after the findings on liability, there may also have been a contravention of s 170DC.  It may be that the University had a positive obligation to submit to the Committee that Dr Rice should be heard on “penalty”, but it is not necessary to consider that matter to finality.

What, if any, remedy is appropriate?

Questions then arise which are best (and in some cases can only be) answered once the parties know the results of my consideration of the matter. 

I think the Committee sustained, in a legally unexceptionable way, the following allegations:

“. . .

(6)      (a)       You have inadequately prepared lecture notes.

(b)You have failed to provide lecture notes when explicitly instructed by your Head of Department to do so.

. . .

(8)You have persistently returned late, or have not returned at all, written assignments or written examination questions, despite clear directives to the contrary from your Head.

(9)You have conducted both written and oral exams in an unacceptable manner.”

In other respects, a distinguished committee, established pursuant to the admirably fair method prescribed in the Award, has found that Dr Rice’s conduct had been clearly discreditable over a long period and in different ways, notwithstanding that I have concluded that, for legal reasons, those findings should not be given the effect the Committee thought they should have. 

The questions that arise include:

• having regard to the chronology of this matter, and to the history of amendments to the Act, as to what aspects of the remedies contemplated by the Act is there any discretion in the Court?  (See my decisions in Nikoloska v Stirling Ethnic Aged Community Hospital (1996) 68 IR 165 and H & H Security Pty Ltd v Toliopoulos (Industrial Relations Court of Australia, unreported, 25 July 1997)).

• how should any such discretion be exercised?

• is there a means available to the Court whereby a just end might be brought to this matter?

• if so, what would such result be?

• have there been any supervening factors since the commencement of this litigation that might affect such matters?

The matter will be listed by my Associate for telephone directions to arrange a short hearing to enable the parties an opportunity to address these and any other questions outstanding as a result of these reasons.

I certify that this and the preceding thirty-eight (38) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick

Associate:

Dated:             13 March 1998

Counsel for the Applicant:	S. Keim
Solicitor for the Applicant:	Feez Ruthning
Counsel for the Respondent:	J. Murdoch
Solicitor for the Respondent:	Corrs Chambers Westgarth
Date of Hearing:	30 September, 1-2 October 1996
Date of Judgment:	13 March 1998