APPEAL AGAINST THE DECISION TO TERMINATE EMPLOYMENT ON 24 NOVEMBER 2021

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00394

DELIVERED : MONday, 24 July 2023

FILE NO. : PSAB 35 OF 2021

Appellant

AND

Department of Mines, Industry Regulation and Safety

Respondent

CatchWords : Industrial Law (WA) – Appeal against decision to terminate employment – misconduct – secondary employment – degree of involvement in secondary employment activities - lawful and reasonable direction – reliance on legal advice.

Legislation : Industrial Relations Act 1979 (WA)

   Public Sector Management Act 1994 (WA)

Result : Appeal dismissed

Representation:

Appellant : Mr T Power (of counsel)

Respondent : Mr M McIlwaine (of counsel)

Case(s) referred to in reasons:

Adami v Maison de Luxe Limited [1924] HCA 45;(1924) 35 CLR 143

Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224

Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66

Clouston & Co v Corry (1906) AC 122

Director General, Department of Biodiversity, Conservation and Attractions v Cosentino & Ors [2022] WASC 306

Department of Education Western Australia v Spyker Legal Pty Ltd; Sarah Colomb [2020] WAIRC 00757; (2020) 100 WAIG 1284

Finlay v Commissioner of Police as the Chief Executive Officer of the Department known as the Police Service (Department of Police) [2022] WASC 272

Grant v BHP Coal Pty Ltd [2014] FWCFB 3027

Harvey v Commissioner for Corrections, Department of Corrective Services [2017] WAIRC 00728; (2017) 97 WAIG 1525

McManus v Scott-Charlton [1996] FCA 904; (1996) 70 FCR 16

R v Darling Island Stevedoring and Lighterage Company Limited [1938] HCA 44; (1938) 60 CLR 601

Raxworthy v The Authority for Intellectually Handicapped Persons (1989) 69 WAIG 2266

Sanja Spasojevic v Speaker of the Legislative Assembly [2021] WAIRC 00641; (2021) 102 WAIG 70

Schlafrig v Payne & Anor [1999] WASCA 174

State Government Insurance Commission v Johnson (1997) 77 WAIG 2169

Thavarasan v The Water Corporation [2006] WAIRC 04089; (2006) 86 WAIG 1434

Trevor McLean v Latrobe Regional Hospital [2012] FWA 3337

Reasons for Decision

1         On 15 December 2021, Mr Christopher Shane Maseyk (appellant) appealed the decision of the Director General of the Department of Mines, Industry Regulation and Safety (DMIRS) to terminate his employment to the Public Service Appeal Board (Board).

2         The appellant refers the decision to dismiss him on the grounds that the disciplinary process was inept, clumsy, and procedurally unfair. Further that DMIRS failed to sufficiently consider relevant factors and the dismissal was a disproportionate response to his conduct.

3         The appellant asserts that the decision to dismiss ought to be adjusted because:

• There were flaws in the disciplinary procedure that caused confusion to the appellant.
• The respondent failed to adequately consider the appellant’s personal circumstances and his health.
• The appellant’s level of involvement in secondary employment had diminished and an application to engage secondary employment would have been approved.
• The appellant was acting upon legal advice in his conduct during the disciplinary process.
• The respondent’s failure to adequately consider these factors resulted in the respondent’s decision to dismiss being disproportionate to the misconduct.

4         DMIRS opposes the appellant’s application and submits that dismissal was an appropriate and proportionate response to the appellant’s misconduct. DMIRS says the appellant misconducted himself because he was in breach of s 102(1) of the Public Sector Management Act 1994 (WA) (PSM Act) and failed to comply with a lawful and reasonable direction to cease secondary employment until and unless he had obtained approval from the respondent to do so. DMIRS contends that allowing the appeal and adjusting DMIRS’ decision by reinstating the appellant to his former position is impracticable because it would result in the appellant being placed in a position where he is in breach of s 102 of the PSM Act.

Background

5         The appellant and the respondent filed a Statement of Agreed Facts on 13 April 2022. Within the Statement of Agreed Facts are references to 28 documents which were subsequently filed as a Bundle of Agreed Documents on 22 April 2022. On 20 September 2022 the appellant sought to vacate the final hearing scheduled for 28 September 2022. The appellant asserted that he did not agree to the Bundle of Agreed Documents being tendered as evidence and that he wished to examine the author of the documents. The respondent declined to call the author of the documents as witnesses and confirmed it intended to tender all documents in the Bundle of Agreed Documents. After hearing from the parties on the adjournment and tendering of the documents the Board determined that the adjournment was declined because the respondent could not be compelled to call witnesses and decisions concerning the admission of documents would be made at the final hearing. The 28 documents were exhibited during the final hearing.

6         The Board makes the following findings of fact based on the Statement of Agreed Facts and the oral and material evidence given at the hearing.

7         The appellant worked for DMIRS from 2 April 2013 as a Level 8 Enforcement Manager and held this position until he was dismissed on 24 November 2021, effective from 25 November 2021.

8         During his employment with DMIRS the appellant was the sole director and 50 per cent shareholder of Beechroolz Pty Ltd (CAN 611 039 279) trading as ‘Lancelin Beach Breaks’ (LBB), a short stay accommodation business located in Lancelin.

9         In or around late November 2016, the appellant submitted a secondary employment application for the period from 12 December 2016 to 12 December 2017 specifying he would undertake up to 40 hours of work per week in his secondary employment. The application was approved in the context of the appellant’s six months long service leave being approved and discussions with the Complaints Manager regarding the appellant’s work and life balance.

10      On or about 20 July 2017 the appellant sought to renew his secondary employment approval for the period from 17 July 2017 to 31 December 2017 specifying he would undertake up to 20 hours per week in his secondary employment. The Acting Executive Director for the Building Commission approved his request and forwarded it to the next level for approval. The appellant does not recall subsequently receiving any further communications concerning this application. However, there is no disagreement between the parties that the appellant engaged in secondary employment and had not made a further application for approval after 31 December 2017.

11      In 2017, DMIRS introduced an automated human resource management system ‘ESKI’. The appellant understood that this system would prompt him and other relevant staff, such as his Directors, to apply for approval to continue to engage in secondary employment on the expiry of a current approval period. The appellant did not receive a prompt for the approved secondary employment period expiring on 31 December 2017.

12      About mid-2017, the appellant’s wife was diagnosed with chronic heart failure and had a poor prognosis. Consequently, the appellant’s involvement in LBB reduced to almost nothing. A friend of the appellants increased his involvement at that time.

13      During his employment the appellant met with his direct supervisor regularly and at no time did his supervisor raise the issue of the expiry of his secondary employment approval and that it was required to be renewed.

14      On 10 August 2020, the Director General of DMIRS wrote to the appellant particularising 9 allegations of a potential disciplinary matter under s 80 of the PSM Act. The allegations related to concerns of the appellant’s conduct at the workplace and inappropriate and unprofessional interactions with colleagues.

15      On 7 October 2020, the appellant wrote to DMIRS, setting out his detailed response to the allegations raised against him.

16      On 18 November 2020, the Director General wrote to the appellant, informing him of DMIRS’ decision to treat the matter as a disciplinary matter, and to appoint an external investigator to conduct an independent investigation into the allegations made by DMIRS against the appellant.

17      The appellant made enquiries about the status of the investigation with his Director and his Executive Director in the following months, however they were not able to provide any further information.

18      On or about 10 February 2021 the appellant received an email from the Deputy Director General (DDG) of DMIRS requesting he attend a meeting on 12 February 2021.

19      On 12 February 2021 at the meeting with the DDG and the Acting Manager of HR Services, the appellant was notified that he was suspended from the workplace on full pay effective immediately. The appellant was provided with a letter from the Director General stating that potential witnesses to the 9 allegations felt intimidated by him discussing the disciplinary process with them and that this may compromise the integrity of the investigation. The appellant was notified that his access to DMIRS’ buildings and information technology systems would be temporarily deactivated. The appellant was provided with an opportunity to respond to the decision in writing within 5 working days.

20      On 17 March 2021, the investigator emailed the appellant to arrange an interview on a date in late March 2021.

21      On 25 March 2021 the DDG emailed the appellant to advise him that she had become aware from the investigators that he was unavailable to participate in the investigation process because he was on a period of personal leave from 18 March 2021. The DDG advised the appellant that whilst on suspension from the workplace he is expected to make himself available to participate in the investigation process and remain contactable during work hours. The appellant was advised that he would need to submit a leave application along with supporting evidence if he wished to access personal leave of more than two days. The appellant and the respondent disagree about the information provided by the appellant to an investigator concerning the reasons for his inability to attend an interview with the investigator, however the Board considers it is not necessary to make a finding on this matter.

22      On 10 May 2021 the DDG emailed the appellant notifying him that she had yet to receive leave applications from him. The email reminded the appellant that while on suspension for duty all other conditions of employment continued to apply. The email specified that in the event the appellant was not available for work related requirements such as disciplinary investigation and considered himself on leave that it was important to submit leave applications. The appellant was notified that he was required to submit leave applications concerning previous periods when he regarded himself to be on leave by 14 May 2021.

23      On 25 May 2021, the appellant’s legal representatives emailed the investigator confirming that they had been retained to represent the appellant in relation to the conduct of the investigation and requesting all communications to the appellant be directed through them.

24      On 28 July 2021, the Director General for DMIRS, wrote to the appellant directly via email, particularising a further allegation of a potential disciplinary matter regarding DMIRS’ secondary employment policy (allegation 10) and provided the appellant with an opportunity to respond to allegation 10 within 10 working days, with any response to be directed to the investigator.

25      On 2 September 2021 the Director General wrote to the appellant advising that DMIRS had not received a response to allegation 10 and therefore was minded to conclude an adverse inference and was of the view that allegation 10 had been substantiated. The Director General noted that the appellant had emailed his acknowledgement of receipt of the letter dated 28 July 2021 and that the appellant had stated he would refer the letter to his legal team. The Director General noted that the appellant had provided medical certificates stating he was unfit for work from 27 May 2021 for 10 days and that he had stated that he was being admitted to hospital on 6 August 2021 however he had not provided any further details including medical certificates. The Director General advised that DMIRS did not have any information to suggest that the appellant was unable to provide a response between the receipt of the letter and the date of his surgery or after the surgery. The Director General noted that the appellant had not applied for leave for this period. The Director General advised that he considered the conduct the subject of allegation 10 to be particularly serious including because of the appellant’s refusal to meet with the investigator and the appellant’s claims that he was unfit for work. The Director General notified the appellant that they would terminate his employment because of allegation 10 being substantiated without explanation. The appellant was notified that any response to the proposal to substantiate allegation 10 and consequently terminate his employment, be provided on or before 8 September 2021.

26      On 8 September 2021, the appellant’s legal representative wrote to DMIRS setting out the reasons for delay in providing a response and seeking an extension of time until 29 September 2021 to respond to the Director General’s letter dated 1 September 2021. On 15 September 2021, the Director General wrote to the appellant confirming he would grant an extension until 22 September 2021.

27      On 22 September 2021, the appellant’s legal representative provided DMIRS with the appellant’s response to allegation 10. In his response the appellant noted that the information provided in relation to the particulars is very broad and expressed his concerns that DMIRS would not genuinely consider his response because of the adversarial tone taken by DMIRS in its correspondence and that the individuals conducting the investigation had formed a negative view of him and had concluded that his employment would be terminated. The appellant questioned the justification of termination in the event allegation 10 was substantiated. The appellant raised concerns with the respondent’s view that the medical certificates he had provided stated he was unfit for work and did not specify that he was unfit to participate in the investigation process. The appellant refuted the respondent’s claim that he had refused to participate in the investigation.

28      In the appellant’s response dated 22 September 2021 he admitted that he had failed to obtain approval for the relevant period and acknowledged that he was required to obtain approval for the further periods. The appellant set out his circumstances during the relevant period including his wife’s serious health deterioration and relocation to Tasmania to receive intensive treatment, his openness about his engagement in LBB, his reduction in involvement in LBB with the engagement of staff to undertake many of the activities associated with LBB. The appellant refuted the respondent’s claim that he continued to manage LBB including taking reservations. The appellant stated that his involvement had steadily declined and did not reflect the extent of the secondary work he undertook in 2016 and 2017.

29      On 1 October 2021 the Director General wrote to the appellant noting that he had carefully reviewed the appellant’s legal representative’s letter of 22 September 2021 and stated that the appellant’s response admits he has engaged in secondary employment since 2017 without the necessary approval and therefore admits to a breach of discipline. The respondent acknowledged the appellant does not accept the allegation that he has continued to manage the LBB including taking reservations and that the appellant asserts that the business has hired staff, including a business manager, resulting in the appellant’s involvement in the business steadily declining. The Director General advised that the level of involvement the appellant had in the business remained unclear and directed the appellant to attend an interview with the investigator on 6 October 2021 to answer questions to assist the respondent to further interrogate the appellant’s response to allegation 10. The Director General instructed the appellant to attend the meeting with documents that establish the appellant’s claims in his response including staff wage records. The Director General advised the appellant he was required to immediately cease engaging in secondary employment unless and until he has received the necessary authorisation to do so.

30      The appellant attended the interview with an external investigator on 6 October 2021. A transcript of the interview was provided to the Board.

31      On 12 October 2021, the investigators emailed the appellant’s legal representative, requesting the appellant’s documents that supported the appellant’s claim that he had employed an office manager during the relevant period and the appellant’s contemporaneous notes of the telephone conversation with one of the investigators.

32      On 15 October 2021, the appellant provided a copy of his notes from his telephone conversation with one of the investigators on 21 March 2021.

33      On 20 October 2021, an investigator emailed the appellant’s legal representatives, requesting provision of documents by Friday, 22 October 2021.

34      Later in the same day, DMIRS emailed the appellant’s legal representative, advising that DMIRS had a copy of the transcript of the interview conducted by the investigators on 6 October 2021 and that it would be provided to the Director General the following morning of 21 October 2021 for his consideration. DMIRS advised that any information the appellant possessed relating to payroll evidence that the Director General should consider would need to be submitted by the close of business of 20 October 2021 so that it could be forwarded to the Director General along with the transcript.

35      Subsequently, on 20 October 2021, the appellant’s legal representative emailed DMIRS explaining the delay, expressing an objection to the requirement to provide the documents that day and providing some further documents and indicating that additional information would be provided when it has been received.

36      On 21 October 2021, the appellant’s legal representative emailed a further document to DMIRS.

37      On 28 October 2021, the appellant’s legal representative received an email from DMIRS attaching a letter from the Director General dated 26 October 2021. The letter confirmed that the Director General’s preliminary findings were that allegation 10 had been substantiated. The Director General also put forward further particulars of allegation 10 and provided the appellant an opportunity to respond to these further particulars by 4 November 2021.

38      On 4 November 2021, the appellant’s legal representative, provided a written response to DMIRS on behalf of the appellant, stating that the appellant would be medically unfit to provide instruction for the duration of 8 to 14 October 2021.

39      On 8 November 2021, the appellant’s legal representative clarified by way of email to DMIRS that the reference to 8 to 14 October 2021 was a typographical error and should have read 8 to 14 November 2021.

40      On 12 November 2021, the Director General wrote to the appellant advising he had confirmed he had substantiated allegation 10 as particularised and confirmed he was proposing to terminate the appellant’s employment.

41      On 24 November 2021, the Director General wrote to the appellant to confirm he was dismissing the appellant from employment.

42      On 25 November 2021, the appellant emailed DMIRS and his legal representatives separately wrote to DMIRS seeking an extension of time to respond to DMIRS’ proposal to terminate his employment.

43      On 30 November 2021, DMIRS emailed the appellant a letter from the Director General dated 29 November 2021, confirming that the decision had been made on 24 November 2021 and that the appellant’s employment had ceased.

Principles to be Applied in the Appeal

44      The appeal is brought under s 78 of the PSM Act against a decision of DMIRS to take disciplinary action against the appellant.

45      Under s 80 of the PSM Act, a public sector employee who commits an act of misconduct commits a breach of ‘discipline’ and is liable to face disciplinary action. Section 80A provides that ‘disciplinary action’ includes a reprimand, fine, transfer, reduction in remuneration or classification and dismissal. Section 82A sets out how an employing authority deals with a disciplinary matter.

46      Under s 78 of the PSM Act, a public sector employee may appeal a decision to take disciplinary action to a Public Service Appeal Board. The Board is a constituent authority of the Commission and exercises jurisdiction under the Industrial Relations Act 1979 (WA) (IR Act) when hearing and determining such appeals.

47      The jurisdiction of the Board is found at Part IIA – Division 2 of the IR Act, s 80I:

80I. Board's jurisdiction

(1) Subject to the Public Sector Management Act 1994 section 52, the Health Services Act 2016 section 118 and subsection (3) of this section, a Board has jurisdiction to hear and determine —

(a) an appeal by any public service officer against any decision of an employing authority in relation to an interpretation of any provision of the Public Sector Management Act 1994, and any provision of the regulations made under that Act, concerning the conditions of service (other than salaries and allowances) of public service officers;

(b) an appeal by a government officer under the Public Sector Management Act 1994 section 78 against a decision or finding referred to in subsection (1)(b) of that section;

(c) an appeal by a government officer under the Health Services Act 2016 section 172 against a decision or finding referred to in subsection (1) of that section;

(d) an appeal, other than an appeal under the Public Sector Management Act 1994 section 78(1) or the Health Services Act 2016 section 172(2), by a government officer that the government officer be dismissed,

and to adjust all such matters as are referred to in paragraphs (a), (b), (c) and (d).

[(2) deleted]

(3) A Board does not have jurisdiction to hear and determine an appeal by a government officer from a decision made under regulations referred to in the Public Sector Management Act 1994 section 94 or 95A.

48      The Board is empowered to review DMIRS’ decision de novo: Deborah Harvey v Commissioner for Corrections, Department of Corrective Services [2017] WAIRC 00728; (2017) 97 WAIG 1525 (Harvey).

49      This means the Board decides the matter afresh, on the evidence before it, not merely based on whether DMIRS made the right decision available to it at the time. It also means the Board has much greater scope to substitute its own view for that of DMIRS. In the case of disciplinary action for misconduct, it is for the employer to establish on the evidence that the misconduct occurred: See Harvey at [24]-[25] citing Gary Mark Raxworthy v The Authority for Intellectually Handicapped Persons (1989) 69 WAIG 2266; Krishna Thavarasan v The Water Corporation [2006] WAIRC 04089; (2006) 86 WAIG 1434. Also see Sanja Spasojevic v Speaker of the Legislative Assembly [2021] WAIRC 00641; (2021) 102 WAIG 70 (Spasojevic No 1) at [36] – [37].

50      When determining matters de novo, the Board makes its own decision as to whether the appellant engaged in the misconduct alleged: Harvey at [31] and [65].

51      DMIRS’ decision is not to be totally disregarded by the Board. However, a hearing de novo does not necessarily mean the Board must re‑hear every aspect of the allegations afresh. The matters to be considered in the appeal will largely depend on the circumstances of the particular case: see Harvey at [29]-[30] and Spasojevic No 1 at [40]-[44].

52      Section 26(1)(a) of the IR Act applies to the exercise of the Board’s jurisdiction. It requires the Board to act according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms.

53      In Bi-Lo Pty Ltd v Hooper (1992) 53 IR 224, 229 the Full Bench of the South Australian Commission stated that the following factors were relevant when dealing with a dismissal based upon alleged misconduct. The employer will satisfy the evidentiary onus on it to demonstrate that before dismissing the employee it conducted a full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances. The employer must also give the employee every reasonable opportunity and sufficient time to answer all allegations. If the employer then believes and has reasonable grounds for deciding that the employee was guilty of the misconduct alleged and after taking into account any mitigating circumstances either associated with the misconduct or the employee’s work record, it may decide whether such misconduct justifies dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable.

Questions to be Answered

54      The first question the Board must answer on the evidence before it, is whether the appellant’s conduct was misconduct.

55      If the answer to the first question is yes, the second question is whether the decision to terminate the appellant’s employment was a proportionate response to the appellant’s misconduct.

56      If the answer to the second question is no, then the Board must decide the appropriate adjustment to be made, if any.

Did the Appellant Misconduct Himself?

57      The respondent contends that the decision to dismiss the appellant was made on the basis that the appellant had misconducted himself by failing to apply for approval to engage in secondary employment, conveying to the respondent that he had no intention to make an application to engage in secondary employment and continuing to engage in secondary employment after the respondent had directed him to cease doing so until and unless he had obtained the necessary approval.

58      The appellant says that he simply forgot to apply for approval to continue secondary employment following the expiry of the approved period at the end of 2017. The appellant submits that the automated system did not prompt him nor his supervisor that the approved period was nearing conclusion, and he would need to make a further application. The appellant submits that the lack of action by DMIRS since his approval for secondary employment expired at the end of 2017 indicates his conduct was acceptable to his employer.

59      The appellant contends that DMIRS did not direct him to make an application for approval to engage in secondary employment until 1 October 2021. The appellant says that DMIRS adopted inconsistent positions in its communications with him. On 1 September 2021 the appellant contends that DMIRS indicated that on the information before it, DMIRS would terminate the appellant’s employment. In the same letter the appellant submits that DMIRS suggests that he ought to have made an application in circumstances where a termination of his employment had been threatened.

60      The appellant asserts his involvement in LBB had diminished and therefore, an application for secondary employment involving less hours would have been approved by DMIRS.

61      The appellant submits that he was not able to fully participate and respond to allegations during the disciplinary investigation because of ill health.

62      The respondent contends that the direction to apply for approval to engage in secondary employment and to cease involvement in secondary employment until approval had been obtained were lawful and reasonable directions. The appellant’s failure to comply is sufficiently serious to warrant dismissal.

Consideration

63      An employee has a duty to obey an employer’s lawful and reasonable orders (see R v Darling Island Stevedoring and Lighterage Company Limited [1938] HCA 44; (1938) 60 CLR 601 at 621; Adami v Maison de Luxe Limited [1924] HCA 45; (1924) 35 CLR 1433 at 151; McManus v Scott-Charlton [1996] FCA 904; (1996) 70 FCR 16 at 21AD (McManus)). Disobeying or disregarding a reasonable lawful order is a serious matter. Reasonableness is a question of fact and balance/degree: McManus at 30C.

64      In his recent decision of Finlay v Commissioner of Police as the Chief Executive Officer of the Department known as the Police Service (Department of Police) [2022] WASC 272 (Finlay), Allanson J set out the law in relation to lawful orders at [21]:

It is a fundamental term implied by law into all employment contracts that employees are contractually obliged to follow the lawful and reasonable directions of their employer. At common law, an employee's obligation of obedience is to lawful commands - commands which involve no illegality, which fall within the scope of the contract of service, and are reasonable: R v Darling Island Stevedoring and Lighterage Co; Ex parte Halliday v Sullivan (1938) 60 CLR 601, 621 - 622. Reasonableness is not a separate requirement, but is the standard or test by which the common law determines whether an order is lawful: One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU) [2018] FCAFC 77; (2018) 262 FCR 527, 564; McManus v Scott-Charlton (1996) 70 FCR 16, 21. Reasonableness is not determined in a vacuum, but rather by reference to ‘the nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument, in this case an award, governing the relationship…’: R v Darling Island Stevedoring and Lighterage, 622.

65      His Honour held at [23]:

The authority of the employing authority under the Public Sector Management Act to issue lawful orders should be understood as having the same content of the common law rule, and to authorise orders which involve no illegality, which fall within the scope of the contract of service, and are reasonable.

66      The Board respectfully adopts his Honour’s reasoning and applies it in this matter.

67      It is not contested that the appellant did not obtain approval to engage in secondary employment after 1 January 2018 until his employment was terminated on 24 November 2021.

68      It is not disputed that s 102 of the PSM Act required that the appellant must have approval to engage in secondary employment. It is also uncontested that the requirements of s 102 apply to persons who are owner/s and/or are directors of a business.

69      The Board finds that the requirements set out in s 102 are not discretionary and apply to the appellant who is both an owner and director of the business, LBB.

70      It is not contested that on 1 October 2021 the respondent directed the appellant to apply for approval to engage in secondary employment and notified him that he was to cease engagement in secondary employment until he had approval to do so. The appellant’s submissions suggest the direction was not reasonable in the circumstances where the respondent had not taken any action concerning the appellant’s engagement in secondary employment from 2018 until 2021.

71      The Board is of the view that the lack of action by DMIRS prior to the notification to the appellant from DMIRS by letter on 28 July 2021 that he was engaging in secondary employment without the necessary approval required by the PSM Act does not mean the action subsequently taken by DMIRS was unreasonable, unlawful or unfair. DMIRS’ instruction to the appellant on 1 October 2021 was lawful and reasonable in the circumstances where it had become aware that the appellant was in breach of the PSM Act. Given the mandatory language of s 102 it may be considered that the respondent ought to have been aware of the appellant’s breach earlier, however this does not then make it unreasonable that the respondent gave the direction when it did.

72      When the respondent issued its direction on 1 October 2021 the appellant could not have been in any doubt that despite the period of time in which he did not have the necessary approval to engage in secondary employment he now needed to apply for approval to continue to engage in secondary employment. The appellant failed to comply with the instruction.

73      DMIRS’ Secondary Employment Policy states that secondary employment will only be approved for a maximum of 12 consecutive months and that an email notification from ESKI (DMIRS’ automated HR system) will be sent to the employee advising the approved period is ceasing in four weeks and a new application must be submitted for approval should an employee wish to continue the arrangement.

74      The appellant’s uncontested evidence is that the ESKI system failed to send an email notification four weeks prior to the conclusion of the approved secondary employment period.

75      The Board is of the view that the failure of the ESKI system is not a material issue given the respondent’s written notification on 28 July 2021 to the appellant of an allegation (allegation 10) that he did not have the necessary authorisation to engage in secondary employment and that the respondent considered this conduct was in breach of s 102 and that allegation 10 would be treated as a disciplinary matter pursuant to s 81(1)(a) of the PSM Act and as part of the current disciplinary proceedings and investigation. Subsequently the respondent wrote to the appellant to notify him that he needed to cease secondary employment until he had approval. These were clear notifications that cured the failure of the ESKI system. The appellant could not have been in any doubt that he did not have the necessary approval to engage in secondary employment, that he was in breach of the PSM Act and that he now needed to apply for approval to continue to engage in secondary employment. The appellant failed to comply with the instruction.

76      The appellant’s evidence is that he was medically unfit between 22 March 2021 and 29 March 2021, 29 March 2021 to 1 April 2021, 6 April 2021 to 9 April 2021, 12 April 2021 to 19 April 2021, 20 April 2021 to 30 April 2021, and 3 May 2021 to 22 May 2021. The appellant’s evidence is that between 6 October 2021 and 25 November 2021 he was struggling with depression and self-medicating with alcohol and medications, he had met with a general practitioner and had lived with a friend for about two weeks because of concern for his mental health. The appellant submits that the respondent did not consider these mitigating circumstances.

77      The appellant has not provided any evidence that he communicated these circumstances to the respondent at the relevant time nor provided evidence in support of his physical or mental incapacity. The Board considers the appellant’s physical and mental health did not prevent the appellant from making an application for secondary employment at least from 1 October 2021.

78      The appellant contends that his involvement in LBB had diminished and was almost negligible at the relevant time. The appellant submits that the earlier approvals granted in circumstances where his involvement was much greater indicates that approval, if sought, would have been granted.

79      The appellant’s contentions that an application for secondary employment made during the relevant period would have been approved, because earlier applications of greater hours of engagement by the appellant had been approved, are not accepted by the Board.

80      It is not possible to conclude that an application for secondary employment in the circumstances at the relevant time would have been approved. The evidence is an assessment would be made of an application for approval for secondary employment including consideration of the appellant’s performance and capacity to meet expectations. These factors change over time, and it cannot be said that an application made some years after an earlier approved application would have been approved.

81      The appellant’s failure to make an application frustrated the respondent’s assessment and determination of whether the appellant should be granted approval under s 102(1) of the PSM Act to engage in secondary employment. There is no evidence related to an assessment of the impact of any secondary employment upon the appellant’s performance before the Board.

82      DMIRS contends that the level of involvement in running LBB is not relevant. DMIRS submits that as a sole director of LBB, the appellant has non-delegable duties in relation to the company. The appellant is a major shareholder in LBB which is a commercial enterprise that the appellant obtained for the purpose of financial reward and his activities in LBB, whether attracting a wage or not, are intended to increase the value of his shareholding. DMIRS refers the Board to the case of Schlafrig v Payne & Anor [1999] WASCA 174, a similar situation where a government employee was a shareholder and director of a company but was not drawing a wage, Ipp J (with Anderson and White JJ agreeing) stated:

[22] [I]t would be incongruous, in my view, if an employee in the public sector were to be able to avoid the prohibitions contained in s 102(1), and the clear purpose and intent of that section, by taking a significant share in a proprietary company and using that company as a vehicle for commercial gain by seeking to increase the value of his or her shareholding. … In my view the section is not capable of being so construed.

83      The Board is of the view that the degree or extent of a public service officer’s involvement in secondary employment is not a relevant factor to a finding of whether a person is in breach of s 102(1) of the PSM Act.

84      The evidence is that the appellant was engaged in LBB as a director and was also involved in the day to day running of the LBB. The appellant admits that he did not obtain approval to do so. The appellant admits he did not comply with DMIRS direction to cease secondary employment until and unless he had approval.

85      In Grant v BHP Coal Pty Ltd [2014] FWCFB 3027, the Full Bench of the Fair Work Commission noted at [110], that ‘a direction given to an employee is lawful to the extent that it falls reasonably within the scope of service of the employee’. The direction was lawful – plainly on the reading of PSM Act, s 102(1) of the PSM Act prohibits officers from engaging in secondary employment without written approval from DMIRS.

86      ‘Misconduct’ is a general term used for a wide spectrum of unacceptable behaviour, including behaviour that is unlawful, inappropriate, improper or unreasonable. Whether there is misconduct, and the degree that will justify disciplinary action, are questions of fact: Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66 citing Clouston & Co v Corry (1906) AC 122.

87      The obligations imposed by s 102 is directed at ensuring public service officers are able to perform their roles and responsibilities without being influenced by their personal interests, and are able to perform their work adequately and devote the necessary time and attention. The requirement to obtain approval to engage in secondary employment is mandatory.

88      The appellant says there is no evidence that his involvement in LBB negatively detracted from his capacity to perform his duties. The Board considers that this is not the central issue. The refusal or omission to make an application avoided the assessment of the impact of the appellant’s secondary employment on his duties.

89      The Board finds that the respondent’s direction was lawful and reasonable. It follows then, that the appellant was obliged to follow the respondent’s direction. The Board finds that the failure to follow the respondent’s direction was misconduct.

90      The appellant claims that the direction to cease involvement until approval is granted was an artifice designed to provide a reason for which the appellant’s dismissal could be engineered and justified. The appellant has not provided any evidence to support this contention and submits that in the absence of cross examination of the authors of the relevant correspondence and the decision makers, it was not possible to bring the necessary evidence. In the Board’s view the difficulty with this claim is that the requirement for approval to engage in secondary employment is unambiguous and the direction to obtain approval or cease secondary employment is an independent discrete direction and unconnected to any other concerns the respondent may have held. It is the failure to comply with that direction that is the misconduct by the appellant.

Flaws in Disciplinary Procedure

91      The appellant claims the disciplinary process and investigation of his conduct was flawed and he was unsure of how to properly engage in the investigation process or respond to the allegations put to him. The appellant says that he was not provided with an opportunity to respond to claims concerning his alleged interference with witnesses before being suspended from work. The appellant contends that the reasons for his termination were not sufficiently clear because the respondent conflated the issues concerning his involvement in the business with the non-compliance with the direction to seek approval to engage in secondary employment. The procedural flaws resulted in the conduct and outcome of the disciplinary process being unfair.

92      DMIRS submits that any defects related to procedural fairness in the disciplinary process are not relevant because the nature of the hearing before the Board is a de novo hearing. The Board is referred to Harvey [65].

93      The Board must consider whether an employee has been notified of the reason for dismissal and whether the person was afforded an opportunity to respond to any reason related to their conduct or performance. Notification of reasons for termination should occur before the decision to dismiss is made and be made in explicit, plain and clear terms. The question of whether an employee had an opportunity to respond to reasons related to conduct or performance should be understood in a commonsense way; the focus of the consideration is whether the employee was treated fairly, rather than on any formality.

94      The respondent’s letter dated 24 November 2021 notified the appellant that his employment had been terminated effective of 25 November 2021 and refers to their reasons as previously outlined in their correspondence to the appellant dated 12 November 2021:

Findings in relation to further particulars

Particular (a)

I have reviewed your response in relation to this particular. I take from your response that you have not applied for approval to engage in secondary employment (and I am informed that no application has been made). I also take from your response that you have no intention to make such an application as it may prejudice your position in this disciplinary matter.

I find this response, and your failure to apply for the necessary secondary employment approval, totally unsatisfactory.

It is not entirely clear what you mean by being prejudiced in an ongoing investigation. In any case, while you are the subject of a disciplinary procedure you are still an employee and are required to comply with the Department’s policies and my lawful and reasonable directions.

I take from your responses to Allegation 10 that you acknowledge that you should have applied for approval to engage in secondary employment. On 1 October 2021, I directed you to cease secondary employment until you had obtained the necessary approval. Over one month has passed since I gave this direction and you have not ceased secondary employment or sought the approval.

I do not accept that you were unable to practically make an application for this approval. You could have made this application via ESKI. I am informed that you were previously provided a link to ESKI by HR. Further you could have contacted the Department seeking assistance with making this application. In any case, based on your response, outlined above, it is clear that you had no intention to make the application.

I find that this particular is substantiated.

…

Proposed action

As communicated to you in my previous letters, where I find that you have committed a breach of discipline, as I have found in this case, I can take the following action(s) pursuant to s 80A of the Public Sector Management Act 1994:

(a)  Improvement action;

(b) Disciplinary action, which may include any one or more of the following:

i.  a reprimand;

ii.  a fine – not exceeding five days’ remuneration;

iii.  a transfer to another public sector body;

iv.  a transfer to another position within the Department;

v.  a reduction in monetary remuneration;

vi.  a reduction in classification level; or

vii.  dismissal from employment;

(c) Both improvement action and disciplinary action; or

(d) No further action.

I am particularly concerned regarding your conduct in further particular (a) and your response to that particular. It is clear to me that you have disobeyed a reasonable and lawful direction and, further, that you have demonstrated no urgency in demonstrating any intention you might have to comply with the direction going forward.

In my mind, your ongoing lack of action to rectify the conduct that is the subject of the allegation has struck at the heart of our employment relationship and I am of the view that the employment relationship cannot continue in such circumstances. Therefore, I am proposing to dismiss you from your employment solely as a result of your conduct in further particular (a). I propose that your last day of employment will be 25 November 2021. The Department will pay out your notice period of up to four weeks.

Before I make my final decision with respect to this action. I am providing you with 5 working days to respond to this proposed action. Any response you make should be directed to me.

95      The respondent’s letter dated 24 November 2021 sets out that the appellant did not provide a response in relation to the proposed penalty and therefore the respondent had no cause to alter its preliminary view that dismissal is an appropriate and proportionate action in relation to the appellant’s conduct.

96      The Board is of the view that the appellant was clearly put on notice that the engagement in secondary employment without the necessary approval was a breach of s 102 of the PSM Act and that this was being treated as a disciplinary matter. The appellant was notified that in the event the investigation of this matter substantiated the breach that he would be terminated. The appellant was given an opportunity to respond.

97      At least from July 2021 the appellant continued secondary employment without approval in full knowledge that he did not have approval to do so, was required to have such approval and had been provided with the necessary documents to enable him to make an application for approval. Accordingly, the Board consider his conduct to be deliberate conduct, in the sense that it was not accidental or inadvertent. The appellant’s conduct was sustained, on-going and undertaken in full knowledge of his obligations and the need to comply with them.

98      The appellant was notified that failure to comply with the direction to submit a secondary employment application may lead to disciplinary proceedings resulting in dismissal. The appellant was notified that the respondent had formed the view that his employment ought to be terminated on 12 November 2021. The appellant was provided with an opportunity to respond to the allegation and the proposal to terminate his employment. The respondent wrote to the appellant on 24 November 2021 to notify the appellant of the decision to terminate his employment.

99      On 25 November 2021 the appellant sought an extension to provide a response. On 25 November 2021 the appellant advised the respondent that he was mentally unwell and was in the process of being referred to a psychiatrist and that he had cataract eye surgery on 16 November 2021. The respondent declined the extension on the basis that the decision had been taken and the appellant’s employment had been terminated.

100   At the hearing the appellant tendered a medical certificate stating he was unfit for work for the period 1 November 2021 to 5 November 2021 inclusive. The appellant also tendered a referral to a medical specialist dated 25 November 2021 and confirmation dated 16 August 2022 of cataract surgery on 16 November 2021. There is no evidence that the appellant had advised the respondent of any of these events prior to the events. The Board notes that the respondent had requested the appellant notify them when he was unfit or had surgery scheduled on several occasions previously.

101   The Board considers, consistent with Harvey, that any flaws, if they exist, in the conduct of the respondent’s investigation and decision to dismiss the appellant are cured by the review conducted by this appeal.

Reliance on Legal Advice

102   The appellant submits that he did not make an application to continue to engage in secondary employment and did not cease involvement in secondary employment when directed to do so because he received legal advice on these matters and followed that advice. In this circumstance the appellant asserts that dismissal is not proportionate to his conduct.

103   The appellant’s evidence is that when he received the respondent’s letters of 28 July 2021 and 1 October 2021, he sought advice from his legal representatives and relied on and acted upon that advice. That is, he relies on legal advice to explain why he failed to comply with the direction to apply for approval for secondary employment and failed to comply with the further direction to cease engagement in secondary employment without approval.

104   The appellant did not set out the content of the legal advice and submits that it is not necessary in this matter to do so. The appellant says the respondent does not challenge his evidence that he followed the advice of his legal counsel.

105   The respondent submits that the appellant’s conduct was wilful disobedience and the stated intention of the appellant to continue to refuse to comply with the respondent’s lawful and reasonable instructions left the respondent with no alternative but to terminate the appellant's employment. The respondent submits that the appellant’s conduct was disobedient, deliberate and calculated which had the effect of frustrating the respondent’s ability to perform its statutory duty under s 102(1) of the PSM Act.

106   The respondent submits that it inferred from the appellant’s response that he did not intend to apply for approval and that the appellant’s refusal was considered and deliberate.

107   The respondent contends that the appellant’s response seeks to justify his refusal to make an application for approval to engage in secondary employment because obeying the direction to make an application had the potential to prejudice his position in the investigation. The respondent submits that the investigation was pursuant to the PSM Act and not a criminal investigation where the appellant could refuse to self-incriminate himself.

108   The respondent submits that any advice given to the appellant to not apply for approval to engage in secondary employment is at odds with s 102(1) and should not operate as a shield to disciplinary action.

109   The respondent says that even if the appellant’s reliance on legal advice is a mitigating factor his continued refusal to apply for approval for secondary employment left the respondent with no choice but to dismiss the appellant. The respondent says it is intolerable for the appellant to be permitted to continue to breach s 102(1) of the PSM Act while under investigation for breach of discipline.

Reliance on Legal Advice - Principles

110    The appellant refers the Board to the case of Trevor McLean v Latrobe Regional Hospital [2012] FWA 3337 (McLean) to support his contention that his refusal or failure to comply with the respondent’s direction was not wilful disobedience and ought to not be considered serious misconduct.

111   The Board considers that the circumstances in McLean differ from those in this matter. In McLean the Tribunal found that the employee had not acted contrary to and was not in breach of relevant legislation. Therefore, the direction to the employee was not lawful nor reasonable and the employee followed legal advice that the direction issued was not lawful nor reasonable. However, in this matter the Board finds the appellant has acted contrary to s 102(1) of the PSM Act and, unlike in McLean, is in breach of the legislation. In this matter the Board finds the respondent’s direction to make an application for approval to engage in secondary employment is lawful and reasonable.

112   A further difficulty for the Board in circumstances where the appellant’s reason for not complying with a lawful and reasonable direction is on the basis he has relied on legal advice is that the Board does not have any knowledge of that advice. The appellant submits that the legal advice is privileged and contends in circumstances where the respondent does not challenge the content of the legal advice or the appellant’s genuine reliance on that advice privilege is maintained. However, the appellant asserts the Board ought to find his dismissal was unfair and not proportionate to his conduct because he relied on legal advice in the absence of any knowledge of the content of the legal advice.

113   The Full Bench considered the issue of legal privilege and whether it had been waived in Department of Education Western Australia v Spyker Legal Pty Ltd; Sarah Colomb [2020] WAIRC 00757; (2020) 100 WAIG 1284. In their reasons both Scott CC and Kenner SC (majority) considered the circumstances in which a person relies on legal advice and the implications for legal privilege:

[67] A client of a lawyer impliedly waives the legal professional privilege that protects their communication with the lawyers where they “assert a state of mind as to the very matters upon which legal advice was being taken” (Australian Reliance Group Pty Ltd v Coverforce Insurance Brokers Pty Ltd [No 3] [2017] WASC 60 at [28] per Chaney J).

114   The Board’s considerations would include whether counsel is aware of all relevant facts, that is, has there been complete disclosure by the client; counsel is consulted as to legality of conduct before the action taken; whether counsel’s advice is clear, that the conduct was legal and whether counsel’s advice is relied upon in good faith and followed.

115   The Board is not able to assess whether the appellant relied in good faith on the advice of his legal representatives in this matter because there is no evidence of the relevant facts about the legal advice. The appellant may have several reasons for not wanting to waive privilege however the Board cannot assess the appellant’s claims concerning his reliance on legal advice without knowledge of that advice.

116   The Board considers that it is not relevant whether the respondent disputes the appellant’s reliance on this advice or the content of the advice. It is for the Board to consider whether the appellant’s claim that he relied on legal advice is correct and if so, what effect that has on whether the decision to dismiss is proportionate.

117   On the evidence before us, the Board is of the view that the appellant’s stated rationale for refusing to comply with the direction cannot succeed.

Is Dismissal a Proportionate Response to the Conduct?

118   It is well established that the Board’s power, under s 80I(1) of the IR Act is to ‘adjust’ a decision to dismiss a government officer, which means to ‘reverse’ the decision resulting in the person being in the same position that they were in prior to the decision being made: State Government Insurance Commission v Johnson (1997) 77 WAIG 2169 at 2170 cited in Re v Inspector of Custodial Services [2013] WAIRC 00830; (2013) 93 WAIG 1776 at [21] Also considered recently in Director General, Department of Biodiversity, Conservation and Attractions v Cosentino & Ors [2022] WASC 306.

119   The Board’s jurisdiction does not extend to, for example, adjusting the decision of the respondent and then ordering the respondent to re-employee the appellant in a different position, or to the same position as it was designed years prior to the dismissal: Re v Inspector of Custodial Services.

120   Harvey v Commissioner for Corrections, Department of Corrective Services at [30]

In cases such as this where the primary finding of fact, leading to breaches of discipline are in dispute, the circumstances enable the Appeal Board to decide for itself, based on all the evidence, whether the relevant misconduct took place. There may be other cases for example, where there is no challenge to the factual findings, but there is a challenge to the severity of the penalty imposed. In this situation, a hearing before the Appeal Board will be much more confined. There may be other situations where discrete issues are raised, such as an allegation of a denial of natural justice in the procedure followed leading to disciplinary decision, rather than a challenge to the primary facts. Both situations will obviously not require the matter to be reheard over again in its entirely (See too: CSA v Director General, Department of Family and Children’s Services [2003] WAIRC 07213; (2003) 83 WAIG 390). (emphasis added).

121   The availability of a less restrictive, proportionate means for achieving the same objective may indicate that the decision is an unreasonable exercise of power. The Board does not consider that the revocation of the dismissal and the imposition of alternate penalties set out in s 80A of the PSM Act would achieve the objective of compliance with s 102(1) of the PSM Act. The appellant was required to have approval to engage in secondary employment and he demonstrated by his conduct and communications that he did not intend to make an application for secondary employment. The imposition of reprimand or fine will not achieve the required compliance with s 102(1) of the PSM Act. In the Board’s view it is not appropriate to reinstate the appellant in circumstances where he would be in breach of his obligations set out in s 102(1) of the PSM Act.

Conclusion

122   For the reasons set out above, the Board will dismiss the appeal.