Western Australian Industrial Relations Commission

Full Bench finds dismissal valid despite non-compliance with the law

The Full Bench upheld an appeal by the Shire of Denmark against a decision of the Commission to find that its former Director of Infrastructure Services, Mr Whooley, was invalidly dismissed and award him almost $44,000. 

The Commission at first instance found that the purported dismissal of Mr Whooley by the CEO was invalid because the decision to dismiss him ultimately rested with the Shire’s Council.  The Commission found that the Shire owed Mr Whooley his salary and allowances until he resigned months after the dismissal, because the dismissal was invalid.  Mr Whooley had previously disputed his dismissal in the Fair Work Commission and the parties reached in‑principle agreement to settle that matter.  The Commission found that, because the dismissal was invalid, there was nothing for an agreement to settle a claim of unfair dismissal to fasten upon; there was no dismissal.  The agreement was therefore of no effect and could not prevent Mr Whooley from bringing his claim for denied contractual entitlements. 

The Hon. A/President Smith and Commissioner Emmanuel held that the dismissal was valid.  They also held that the agreement to compromise the unfair dismissal proceedings in the Fair Work Commission between the Shire and Mr Whooley was not void, and therefore was a bar to proceedings.  A/Senior Commissioner Kenner disagreed with the majority in a number of aspects of the decision.

A/President Smith found that the terms of the Local Government Act 1995 were simply a direction to submit a recommendation to the Shire Council to dismiss.  It is a principle of law that if Parliament intends to make a contract void in certain circumstances, the Act must say so.  Her Honour observed that this is in contrast to other provisions in the Local Government Act which deem other decisions of the CEO to have no effect.  Therefore, the decision to dismiss was not invalid simply because a directive provision of the governing Act was not complied with. 

The majority also found that the agreement reached to settle a claim of unfair dismissal was valid, and could be an effective bar to proceedings.  The Hon. A/President observed that the law in this area is not settled.  She went on to conclude that Mr Whooley would have to satisfy the Commission that there was a misrepresentation or fraud about the validity of the dismissal at the time the agreement was struck, or that because of the invalidity of the dismissal, the agreement would be impossible to perform.  The majority were not convinced that either of these tests were satisfied.  Therefore, even if the dismissal was invalid, the agreement is a bar to proceedings in any event. 

A/Senior Commissioner Kenner held that the dismissal was invalid because the Local Government Act requires Council to be the ultimate decision maker in relation to senior employees.  He arrived at that conclusion having considered the principles of democratic and responsible local government included in that Act.  The A/Senior Commissioner also held that the agreement to settle the matter was not a bar to proceedings because the Shire of Denmark has not paid the settlement sum in accordance with the agreement.  It is a rule of law that for an agreement to be a contract and have binding effect, both parties must give something in consideration for the agreement.  The Shire cannot get the benefit of a bar to proceedings without giving anything to Mr Whooley.

The decision can be read here.

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