Sharma, Sharon v State Rail Authority

[1998] FCA 552

SHARON SHARMA AND SHALLY PRASAD v STATE RAIL AUTHORITY OF NSW
Nos. NI 5047 of 1995 and NI 1273 of 1996
FED No. 552/98
Number of pages - 9
Industrial Law - Termination of Employment

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

MADGWICK J

Industrial Law - Termination of Employment - review of decision of judicial registrar - estoppel - abuse of process - applicants dismissed from employment on ground of misconduct - applicants appealed to NSW Transport Appeal Board - dismissal confirmed - applicants appealed to employer as provided for by relevant legislation - appeal unsuccessful - applicants lodged applications before Court on ground that termination of employment was unlawful - whether applicants estopped from bringing applications before Court - State tribunal does not constitute alternative remedy - employees entitled to bring application in the Court - cause of action estoppel and issue estoppel not made out - hearing of applications may constitute abuse of process

Transport Appeal Boards Act 1980 (NSW)

Workplace Relations Act 1996 (Cth), s 170ED(4), s 170DE(1)

AWU-FIME Union v Qld Alumina (1995) 62 IR 385, refd

Baker v Campbell (1983) 153 CLR 52, refd

Balog v Independent Commission against Corruption (1990) 169 CLR 625, refd

Fryarand Simpson v Systems Services Pty Ltd (1995) 130 ALR 168, refd

Houssein v Department of Industrial Relations & Technology (1982) 148 CLR 88, refd

Julius v Bishop of Oxford (1880) 5 AC 214, applied

Morgan v Konway Express Pty Ltd (IRCA, unrep, Wilcox CJ, Ryan and Moore JJ, 6/12/96), refd

Nicholson v Heaven and Earth Gallery Pty Ltd (1994) 57 IR 50, refd

Schaale v Hoechst Australia Ltd (1993) 47 IR 249, refd

The Administration of Papua and New Guinea v Daera Guba (1973) 170 CLR 353, applied

Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 335, refd

Victoria v Commonwealth (1996) 138 ALR 129, refd

Walton v Gardiner (1993) 177 CLR 378, applied

Ward v Williams (1956-1957) 92 CLR 426, refd

SYDNEY, 8 July 1997 (hearing), 25 May 1998 (decision)

#DATE 25:5:1998

Counsel for the Applicant: J Wallace

Solicitor for the Applicant: Lachlan Riches

Counsel for the Respondent: R Reitano

MADGWICK J

The applicants seek a review of a decision of a judicial registrar to dismiss their applications for relief at the threshold of the proceedings on the ground of estoppel.

Allegations of Misconduct

The applicants were employed by the respondent, the State Rail Authority of New South Wales ("the SRA"), as Revenue Protection Officers. Their main responsibility was to collect train fares and to account for those monies to the SRA.

On 29 May and 1 June 1995, Ms Prasad and Ms Sharma (along with some others) were each charged with breaches of the SRA's "code of conduct" in that they had collected cash fares from passengers but had failed to remit those fares to the SRA. This "code of conduct" seems to be based on delegated legislation gathered into a "Handbook". Internal disciplinary proceedings were commenced whereby statements were taken from witnesses and the applicants were both interviewed by an investigator from the SRA's Internal Investigation Unit. As a result of those proceedings a delegate of the SRA dismissed both applicants, Ms Prasad's termination of employment being effective from 21 November and Ms Sharma's termination from 21 December 1995.

Proceedings before the Transport Appeal Board

The applicants sought reinstatement by lodging appeals with the Transport Appeal Board ("the Board"). The Transport Administration (Staff) Regulation 1995 (NSW) made under the Transport Administration Act 1988 (NSW) provides, in Part 2 Division 3 (clauses 12-16), for disciplinary proceedings against SRA officers. Under clause (12) the SRA may impose one or more "punishments" in disciplinary proceedings ranging from a caution or reprimand through to dismissal. Clause (15) guarantees a charged officer a right to make representations to the investigating agent of the SRA. Clause (16) provides that an SRA officer may appeal to a Transport Appeal Board against a decision of the SRA to impose a punishment more serious than a mere reprimand or caution.

Transport Appeal Boards Act 1980 (NSW)

The Transport Appeal Boards are tripartite. The "Chairperson" is appointed by the Governor. In particular cases, one of the other members is an officer authorised by the relevant employing authority, and the remaining member is an officer nominated by the relevant industrial union or unions. A majority decision prevails.

Section 23 confers power on the Board, in its discretion, to "confirm or modify any decision appealed against or made any such order thereon as it thinks fit", and, subject to s 24, the Board's decision is "final and conclusive". Section 24 provides that an employee may appeal against the Board's decision to the SRA if the punishment involves, among other things, dismissal. An appellant before a Board is entitled to be legally represented, to examine witnesses and to address the Board: s 20. Adversarial procedure is clearly contemplated by the Act. In no sense is a Transport Appeal Board part of the "internal" processes of an employing authority, despite s 24.

The hearing before the Board

A hearing was conducted and the Board subsequently confirmed the SRA's decision. In giving reasons for its decision, the Chairperson, Mr Lynn, a magistrate, stated:

"The evidence establishes, that following information they received, the SRA employed a number of private investigators to take part in an operation to check whether seven suspected employees including [the applicants], were properly carrying out their duties. The evidence from the private investigators, contained in the documents conducted in the SRA's case and provided by the oral testimony of the investigators called, satisfies the tribunal [sic] that at times and places specified in the particulars of the charges, the investigators paid sums of money to [the applicants] and did not receive a receipt for such money.... [The Board then addressed each of the explanations provided by the appellants, including the applicants, and did not accept those explanations] Having regard to these matters and bearing in mind the standard of proof which the SRA bears in serious disciplinary cases such as this, the Board is satisfied that the particulars of each of the charges preferred against [the applicants] have been established..... [The Board then gave the applicant's representative an opportunity to address the Board on the question of the appropriate sanction to be imposed, and continued:] ....As a public transport authority, the SRA has an important responsibility to collect and properly account for public monies. Each of [the applicants] was specifically employed to perform that task on behalf of the SRA. Each of them was entrusted to work independently in the field. The SRA is entitled to have full confidence in the integrity of persons employed as Revenue Protection Officers. The fundamental purpose of that employment is to ensure collection of monies from passengers to which the SRA is entitled. It is, of course, absolutely in conflict with the purpose of such employment for Revenue Protection Officers to themselves act dishonestly and fail to properly account for monies received in the course of employment. In considering this matter, the Board has in mind too, that misconduct of the kind found established here, is most difficult to detect. In the instant case, had it not been for a special and no doubt quite expensive operation, these offences would almost certainly have not been detected. The Board regards it as fundamentally important also, that Revenue Protection Officers employed within the SRA clearly understand that if they breach their positions of trust by failing to properly account for monies, they can no longer continue in such employment. Having regard to these considerations, the Board considers the decisions of dismissal were the only appropriate sanctions reasonably available to the SRA in the circumstances here."

Appeal to SRA

Oddly, as noted, the Transport Appeal Boards Act provides that there may be an appeal from the Board made to the SRA in a case where the Board has confirmed an initial decision to dismiss an employee. Such an appeal was made and was unsuccessful. It was determined by a delegate, a senior legal officer, who saw no reason to interfere with the Board's conclusion.

Proceedings before the Industrial Relations Court

The applicants then brought applications in the Industrial Relations Court, seeking reinstatement and compensation on the ground that the termination of their employment was unlawful.

The matter came before a judicial registrar. It was argued by Mr Reitano, counsel for the SRA, that the applicants were estopped from bringing these proceedings in the Court, because (a) the proceedings before the Court were based on the same cause of action as that before the Board, that is, that the basis for dismissal was in fact a valid reason for termination and to that end the same evidence would be relied upon in the proceedings before the Court; and (b) the same issues which were sought to be agitated had been heard and determined finally by the Board, a competent tribunal. The judicial registrar was satisfied that there was no relevant difference between the two sets of proceedings that would deny estoppel and concluded that a cause of action estoppel had been made out. This is a review of that decision.

Section 170ED(4) of the Act

The Industrial Relations Act 1988 (Cth), as it was, expressly dealt with the question of the Court declining to consider or determine an application, where there is the opportunity for a hearing in relation to an employee's termination of employment by a State court or tribunal. Section 170ED(4) provided:

"The Court must decline to consider or determine an application referred to it by the Commission if it is satisfied that the employee by whom, or on whose behalf, the application was lodged is entitled to apply for an alternative remedy in respect of the termination under a law of the Commonwealth, a State or Territory that satisfies the requirements of Articles 4 to 11 of the Termination of Employment Convention."

It was not argued that the provisions of the Transport Appeal Boards Act, in conjunction with the procedures adopted by the Board, provide for the same rights and obligations conferred upon employees and employers by the Convention, so that the applicants would not be entitled to have the applications heard and determined by this Court. The issue on such a question is not whether estoppel arises because of a sameness of the cause of action or issues sought to be raised; what is required is a comparison to be made between the powers and duties of the Board and the requirements of the Convention: Morgan v Konway Express Pty Ltd (Industrial Relations Court of Australia, unreported, Wilcox CJ, Ryan and Moore JJ, 6 December 1996).

The question here is whether, having been satisfied that an alternative remedy (in the context of s 170ED(4)) is not available to the applicants, the Court may still be obliged or have some discretion not to hear and determine the applications, or whether the applicants are entitled to have the applications heard and determined by the Court. Questions also arise as to the Court's discretion to grant a remedy under s 170EE.

Regard must first be had to the Act itself, and its relevant objects. Section 170CA provides that the object of the provisions of Pt VIA Div 3 ("the Termination of Employment Division") is to give effect to the Convention, which, in turn, is designed to provide significant substantive and procedural rights to employees at the point of possible termination of their employment. In the present context, the expressio unius rule of construction of the Act would not be sufficiently safe of application to s 170ED(4). It is always a rule to be applied with care and "only when the intention it expresses is discoverable upon the face of the instrument" in question: Houssein v Department of Industrial Relations & Technology (1982) 148 CLR 88.

In the usual case, an employee whose employment has been terminated in breach of the Convention has been said to be "entitled to have a discretionary determination as to whether it is appropriate to grant relief": Morgan. More precisely, in my opinion, the case falls within the considerations comprehended in the "rule" in Julius v Bishop of Oxford (1880) 5 AC 214 at 225 posited in connection with the perennial "may/shall" debate:

"... where a power is deposited with a public officer for the purpose of being used for the benefit of persons who are specifically pointed out, and with regard to whom a definition is supplied by the Legislature of the conditions upon which they are entitled to call for its exercise, that power ought to be exercised and the Court will require it to be exercised."

A fortiori where "the power is conferred upon a judicial tribunal and to be invoked by a judicial proceeding": Ward v Williams (1956-1957) 92 CLR 426 at 507.

In no case, however, is such a "right" or "entitlement" absolute: to take an obvious example, the Court could not normally be required, for example, simply to re-hear a case it had already heard. There may be other legal reasons for the Court not to hear the matter. In any event, an entitlement to have one's case considered and determined says nothing as to evidentiary rules that should or may be applied in the process of such hearing and determination. Thus cause of action or "preclusion" estoppel and issue estoppel remain live issues.

Cause of action estoppel

The issues for the Court on an application under the Termination of Employment Division are, one might say, precise as to contravention of the Act and broad as to the question of a remedy. As to contravention of the Act, the questions are:

* was there a reason for the termination of employment connected with the employee's capacity or conduct or based on the operational requirements of the undertaking?

* was such reason a valid one? (s 170DE(1))

* if the employment was terminated for reasons related to the employee's conduct or performance, was the employee given the opportunity to defend himself/herself? (s 170DC(a))

* if not, could the employer reasonably be expected to have given the employee that opportunity? (s 170DC(b))

The issues do not include whether, assuming an otherwise valid reason, the termination was harsh, unjust or unreasonable: Victoria v Commonwealth (1996) 138 ALR 129.

A discretion to withhold a remedy is given to the Court under s 170EE(1). While very broad, that discretion is not untrammelled. It arises only once a contravention of the Act has been determined by the Court to have occurred, or is assumed so to have been determined. It cannot therefore be used in aid of a proposal that the Court refrain from determining whether the Act has been contravened. Logically then, when the Court comes to decide whether it "considers it appropriate in all the circumstances of the case" to grant a remedy, those circumstances do not include matters that are antecedent to the actual or assumed process of determination that there has been a contravention, and such that they played no part in the matrix of facts out of which the contravention arises. It follows that, if a competent tribunal took a different view of such matters than the Court might, that circumstance cannot enable the Court, at the outset, to conclude that (assuming that the Court would find a contravention) it ought not to give any remedy. Such a factor is irrelevant at that point, because of the two-phase statutory scheme, namely: (i) determination of contravention; (ii) consideration of whether a remedy is appropriate.

Under the SRA's operative legislation and delegated legislation, as far as appears, the questions for the Board would seem to have been:

* did the appellants breach the "code of conduct"?

* was such breach so serious as to legally warrant dismissal for misconduct?

* in all of the circumstances of the matter, was dismissal too harsh a disciplinary response?

The kinds of remedy available before the Board and in this Court are quite different. The Board could not order compensation while allowing the dismissal to stand. This Court cannot substitute a lesser disciplinary response than dismissal.

While, in a broad way, some of the ultimate legal issues before the Board were similar to those before the Court, it is clear that they are neither identical nor so closely similar that, in substance, it can be said that what may be understood as the "causes of action" are the same: Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 108 ALR 335 at 347. Hence there is, on the facts of the matter, no cause of action, or preclusion estoppel. It is unnecessary to consider any possible constitutional barrier to the determination of a State court or quasi-court operating to found such an estoppel in proceedings in a federal court: c.f. Trawl.

Issue estoppel

That the doctrine of res judicata has not been fulfilled says nothing as to possible estoppels of a more limited kind. If the Board was a competent judicial tribunal for the purposes of this branch of the law, its final decision would bind the parties in respect of factual issues which were legally indispensable to that decision.

Despite the seemingly anomalous provision for the appeal to the SRA against a conclusion upon an appeal to the Board from an SRA decision, the Board's decision was "final and conclusive" (as was the decision of the SRA on appeal: s 24(2) Transport Appeal Boards Act). Unless appealed, its decisions are final; and it has jurisdiction to decide questions arising between parties. The Board was, therefore:

"a tribunal which ha[d] jurisdiction to decide finally a question arising between parties even if it is not called a court and [although] its jurisdiction is derived from statute."

such as the High Court held in The Administration of Papua and New Guinea v Daera Guba (1973) 170 CLR 353, 405, 453, 460 would suffice to make the Board a "judicial tribunal" for the purposes of the law of issue estoppel. It is unnecessary to consider nice questions of the nature of judicial power: ibid.

However, the decision in consequence of which the applicants were dismissed was not that of the Board having effect under s 16. It was that of the SRA having effect under s 24. When, as here, a s 24 appeal is made to a relevant authority, it is the decision of that authority which is "final and conclusive". It is stretching the bounds of the nature of a "judicial tribunal" for the purposes of the law of issue estoppel to an alarming degree to say that an appeal heard by Caesar about a matter in which Caesar was the initiator would be included. There is nothing remotely court-like about such a procedure; indeed it is the antithesis of judicial behaviour. That decision of the SRA could hardly meaningfully be called a decision "between parties".

Thus, assuming (what is clearly enough the case) that the conclusions adopted by the SRA (in its role as an appellate body from the Board) were that the applicants dishonestly failed to account for moneys they had collected and that such dishonesty would, any consideration of harshness or hardship aside, justify their dismissal, it seems to me that a condition of the existence of an issue estoppel has not been shown to have been satisfied. That is, clearly, a technical decision. But, in some cases, issue estoppel can operate very harshly against a litigant who seeks to escape the clutches of an earlier decision: lack of representation, poor representation, temporary unavailability of witnesses and so on may have led to the decision. The doctrine is not a discretionary one, to be set aside in hard cases. The law may, in short, operate technically to a contrary effect.

Abuse of Process

But is that the end of the matter? The applicants had choices as to where they would go and what redress they would seek for what they say were their wrongful dismissals. They could have gone straight to the Industrial Relations Court of Australia. They chose instead to chance their arm before a New South Wales Transport Appeal Board. Had they not chosen to appeal against the Board's decision to the SRA, they would have been estopped from asserting that they had not dishonestly failed to account and that, at law, such a failure would warrant dismissal from employment. Is it right or even sensible that they should be able to avoid that result through having, of their own choice, interposed yet another stage in the litigation?

In a proper case, the Court is not powerless to avoid manifest unfairness or bringing the administration of justice into disrepute. In Walton v Gardiner (1993) 177 CLR 378 at 392-3 the majority of the High Court held:

"The inherent jurisdiction of a superior court to stay its proceedings on grounds of abuse of process extends to all those categories of cases in which the processes and procedures of the court, which exist to administer justice with fairness and impartiality, may be converted into instruments of injustice or unfairness. ... proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536 as 'the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people'." (per Mason CJ, Deane and Dawson JJ)

These remarks, in my view, not only delineate a jurisdiction in a superior court, they also give guidance as to the manner of its exercise.

Such a common law doctrine might, of course, be excluded by the terms of the Act, either expressly or by necessary implication, although there would be a presumption against an interpretation which would have the result of "interfer[ing] with basic common law doctrines": Balog v Independent Commission against Corruption (1990) 169 CLR 625 at 635-6; Baker v Campbell (1983) 153 CLR 52 at 123.

In my view, the scheme of the Act was to provide alternative but not serial remedies. Section 170HB provided that the Termination of Employment Division of the Act was not intended to limit any right that a person or trade union might have, apart from under the Act, to challenge a termination of employment. Section 170ED(4) has been referred to above. It requires the Court to decline to consider an application if the ex-employee concerned "is entitled to apply" (emphasis added) for an alternative remedy that meets the standards of the Convention. As indicated above, it furnishes no implication that, where an alternative remedy has been sought and litigated to an unsuccessful conclusion, disappointed ex-employees have an absolute right to re-litigate their grievances before the Court.

Section 170DE(1) gives employees legal rights. It enacted into domestic law the central promise and aspiration of the Convention expressed in Article 4 thereof:

"The employment of a worker shall not be terminated unless there is a valid reason [of kinds set out] for such termination."

The Act provides for the vindication of those rights in the Court: Fryarand Simpson v Systems Services Pty Ltd (1995) 130 ALR 168 and Morgan.

It might be said that it cannot be an abuse of the Court's processes to seek such vindication when all that has occurred is a proceeding elsewhere that had no concern with the recognition or vindication of such rights. The force of such a contention must be acknowledged. However, the jurisdiction as to abuse of process is concerned with the substance of the rights of the parties and not with the forms in which those rights may be cast. Inquiry should be made therefore of the substance of what occurred before the Board.

It is perfectly clear that the Board was an independent body which (a) regarded the onus of proof as resting on the employer; (b) regarded that onus as not easily satisfied "in serious disciplinary cases such as [these]"; (c) considered whether there really had been serious misconduct by the applicants; (d) considered whether that misconduct was so serious as to warrant dismissal; and (e) considered whether there were circumstances "subjective" to the applicants which would make a lesser response than dismissal appropriate. It is also clear that, before the Board considered the matter, the employees had a legal right to and were given an opportunity to defend themselves. In substance, the Act and the Convention guarantee employees no more (c.f. s 170DC, see also Schaale v Hoechst Australia Ltd (1993) 47 IR 249 at 253; Nicholson v Heaven and Earth Gallery Pty Ltd (1994) 57 IR 50 at 59; AWU-FIME Union v Qld Alumina (1995) 62 IR 385 at 391).

Subject to a matter mentioned below, it would, in my view, in the language used or approved by Mason CJ, Deane and Dawson JJ, in Walton, convert the Court's processes into "instruments of unfairness" to require the SRA, all over again, to justify these terminations of employment under the Act. So to require would "bring the administration of justice into disrepute among [rational and fair-minded] people". While the relevant provisions of the Act and the Convention were both promulgated as a measure beneficial to employees, their provisions are to be applied, as every judge of the Industrial Relations Court of Australia held, in a commonsense and practical way recognising the realities of commercial and industrial life. Parliament should not be thought to have intended to authorise plain unfairness and the bringing into disrepute of the administration of justice.

Thus, there is nothing in the Act which would lead to a conclusion that ordinary considerations of abuse of process by repetitive litigation should not apply.

Conclusion

As noted, the applicants had the choice of two remedies when they were dismissed. They or their union could have come to this Court. Or they could go to the Transport Appeals Board. They chose the latter course. When they lost there they chose to pursue the further appeal avenue available under s 24 of the State Act. On the face of it, there is no reason why employees in their position should, unlike other litigants, have an immunity from their litigious choices being attended with consequences. Neither, on the face of it, is it conscionable that they should be able to avoid those consequences through their own resort to the peculiar appellate medium provided by s 24 of the State Act.

I refer to the face of the matters because these considerations should at an early stage of the proceedings have been raised with the Court by the SRA. Further, exclusion of litigants, on the ground that not to exclude them would be to suffer an abuse of the Court's process, has always been regarded as an extreme step. It may be that there has been some witting or unwitting acquiescence by the SRA in the seeming efforts by each applicant to litigate their grievances twice. Any such acquiescence may have legal consequences.

The matter will be further listed for directions by my Associate in one week's time to determine whether a procedure needs to be devised to establish the facts about any such possible acquiescence and to permit legal debate on possible legal consequences of it.