DISPUTE RE ALLEGED UNFAIR DISCIPLINARY PROCESS

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2015 WAIRC 00054

DELIVERED : Monday, 2 February 2015

FILE NO. : CR 34 OF 2014

Applicant

AND

The Governing Council of Kimberley Training Institute

Respondent

CatchWords : Matter Referred for Hearing and Determination pursuant to s 44 – Termination of employment – Breach of discipline – Delegation of power – Whether the dismissal was made without legal authority – Whether the decision maker had the necessary delegated authority or subdelegation

Legislation : Industrial Relations Act 1979  s 44

  Public Sector Management Act 1994  s 23, s 29, s 29(1)(g), s 33, s 33(3), s 33(5)

  Vocational Education and Training Act 1996  s 35, s 37, s 42(1), s 42(2), s 45(1), s 45(2), s 46(1), s 46(2)

Result : No effective delegation of power

Representation:

Applicant : Mr M Amati and later Mr D Scaife (of counsel)

Respondent : Mr D Anderson (of counsel)

Reasons for Decision

1          This matter relates to the dismissal of Mr James Alex Petticrew who was employed by the respondent as a Lecturer Maritime Security at Kimberley Training Institute. 

2          Mr Petticrew was dismissed with effect from 9 April 2014 following a disciplinary process which found that he had breached discipline.  The decision to dismiss was made by the respondent’s Managing Director, Ms Karen Dickinson. 

3          By letter dated 12 May 2014, Ms Dickinson advised Mr Petticrew that all findings made against him in relation to the disciplinary matter were withdrawn.  Mr Petticrew was informed that he was therefore reinstated and that his continuity of service was maintained.  However, Ms Dickinson informed Mr Petticrew that the suspected breach of discipline process would continue, and that she had delegated her responsibility under the Kimberley Training Institute’s Disciplinary Policy to her colleague, Ms Julie Kean and that she, Ms Dickinson, would no longer be involved.  She noted that Ms Kean had not been involved in the disciplinary matter to date. 

4          Following a disciplinary process undertaken by Ms Kean, Mr Petticrew was dismissed on 6 November 2014.  The decision to dismiss was contained in a letter signed by Ms Kean dated that day.  Although that letter is not before me, it seems to be common ground that Ms Kean made the decision to dismiss. 

5          The matter of Mr Petticrew’s dismissal was the subject of an application for a conference under s 44 of the Industrial Relations Act 1979 (the Act).  The matter was not resolved in conciliation and was referred for hearing and determination on 26 November 2014.  In the referral, the applicant claims that the process culminating in the dismissal was unfair, oppressive, biased and prejudiced.  A number of grounds are cited including grounds relating to the impact and seriousness of Mr Petticrew’s alleged conduct; a lack of rigour in the investigative process; disputes as to the facts, and other matters.  In particular, the referral includes a claim that ‘the respondent’s purported dismissal of Mr Petticrew was made without legal authority as the person who made the decision did not have the appropriate power.’

6          The parties agreed that this last issue ought to be dealt with prior to the remainder of the grounds, and that it ought to be done on the papers. 

The applicant’s case

7          The applicant says that Ms Kean does not have the necessary delegated authority, or alternatively, the necessary subdelegation, from Ms Dickinson in whom the power to dismiss rests.  Therefore, the applicant says, the dismissal is a nullity, or alternatively its unlawfulness ought to be construed as a limb contributing to the harsh, oppressive or unfair way Mr Petticrew was dismissed. 

8          The applicant refers to the provisions of the Public Sector Management Act 1994 (the PSM Act) and the Vocational Education and Training Act 1996 (the VET Act) as demonstrating the lack of proper delegation or subdelegation of power to Ms Kean to make the decision to dismiss Mr Petticrew. 

The respondent’s case

9          The respondent says that the Managing Director of the College is also the chief executive officer (CEO) of the Kimberley Training Institute and has the functions of managing director delegated by the Governing Council of the College as well as those functions conferred upon the CEO under s 29 of the PSM Act.  A CEO may also delegate any power or duty under the PSM Act. 

10       The respondent also says that the Managing Director has delegated her power and responsibilities, set out in the respondent’s Disciplinary Policy, to Ms Kean and that that is evidenced in writing in the letter to Mr Petticrew dated 12 May 2014.  It says that it is clear by the letter to Mr Petticrew that ‘there was an attempt at compliance with section 33(3) of the PSM Act to evidence that delegation in writing’. 

The letter of 12 May 2014

11       The letter to Mr Petticrew dated 12 May 2014 sets out that Ms Dickinson has withdrawn all previous findings made against Mr Petticrew in relation to the disciplinary matter.  She advises that he is reinstated to his substantive position effective immediately and confirms that his continuous service has been maintained.  However, the disciplinary process is to continue.  The letter goes on to say: 

However, in continuing to deal with the suspected breach of discipline as a disciplinary matter, I have made the decision to delegate my responsibilities under the Kimberley Training Institute’s Disciplinary Policy to my colleague, Ms Julie Kean.  I have sought Ms Kean’s assistance in conducting the disciplinary process from hereon in and I will no longer be involved. 

Ms Kean has not been involved in the disciplinary matter to date and therefore I reasonably expect that Ms Kean will write to you in due course to seek any further response that you may wish to give in respect of the breach of discipline allegation.  Following any response by you an independent investigator may be appointed in the event that the allegation or particulars of the allegation remain disputed or not admitted. 

Applicant’s submissions, 22 December 2014, Appendix 3

Consideration

Delegation of power

12       In addressing the issue of the validity of the exercise of power and regarding delegation, Gibbs CJ in Dainford Limited v Smith and Another (1984 – 1985) 155 CLR 342, 349, said that the question to be answered is ‘whether the power has been exercised by the person upon whom it has been conferred and whether it has been exercised in the manner and within the limits laid down by the statute conferring the power’.  

13       The term ‘delegate’ as a noun, has been defined by Creyke and McMillan as: 

Delegate:  The term ‘delegate’ nowadays describes a person or officer to whom a power or function has been delegated, by written instrument signed by the principal, pursuant to an authority to delegate conferred by legislation.  The scope of authority of the delegate will be set out in the instrument of delegation:  it may replicate that of the principal, or be hedged with limitations or conditions (for example, that the delegate can only make decisions under a particular provision of the legislation, of a certain kind, or below a prescribed monetary limit).  Within those limits, the delegate acts independently.  For instance, as a general rule a decision‑maker – whether principal or delegate – cannot act at the direction or behest of another person.  Similarly, as illustrated in Re Reference [under Section 11 of Ombudsman Act 1976 for an Advisory Opinion; Ex parte Director‑General of Social Services], it is expected that a delegate will sign a decision in his or her own name and not in the name of the principal. 

Creyke R and McMillan J, Control of Government Action (2005) 418

14       In Re Reference (1979) 2 ALD 86, 93, Brennan J noted that: 

An act done in purported exercise of a statutory power is valid if the act falls within the statutory provision which confers the power.  Prima facie an act will not fall within the statute unless it be done by the person in whom the statute reposes the power (whom I shall call ‘the authority’).  Validity is thus dependent upon the identity of the authority and the doer of the act. 

15       Therefore, where a statute vests in a person a particular power, the exercise of that power by a delegate will only be valid if the power has been validly delegated in the first instance (Glenn Ross v Peter Conran, Director General, Department of Premier and Cabinet [2013] WAIRC 00152). 

16       The question in this matter is whether Ms Kean had the authority to exercise the power to dismiss, which was conferred on Ms Dickinson.  This delegation or subdelegation is not merely an internal administrative arrangement, but includes the power to dismiss an employee or officer.  It is a significant matter. 

Subdelegation

17       I conclude that there has been no subdelegation of the managing director’s power to dismiss in accordance with the VET Act.  I do so for the following reasons. 

18       The respondent is a governing council of a college established under s 35 of the VET Act.  The functions of the college are set out in s 37 of the VET Act.  Each college established under the VET Act has a governing council with authority to perform the functions of the college and govern its operations and affairs (s 42(1)).  The functions of the governing council include that ‘it may do all things necessary or convenient to be done for or in connection with the performance of its functions’ (s 42(2) VET Act).  The governing council is the employing authority of employees by virtue of s 5(1)(c)(ii) and (iii) of the PSM Act. 

19       A chief executive officer is to be appointed under Part 3 of the PSM Act for each college (s 46(1) VET Act), and the chief executive officer is called the managing director of the college (s 46(2) VET Act). 

20       The governing council may delegate the performance of all or any of its functions under the VET Act, with an exception which is not relevant here, to the managing director of the college (s 45(1) VET Act). 

21       In this case, the governing council signed a formal document headed Instrument of Delegation 2, 1999, in which it has delegated ‘[t]he powers and duties of the College as an employing authority’ under the PSM Act ‘to the person holding or acting in the office of the Managing Director of the College’ (applicant’s submissions 22 December 2014, appendix 2). 

22       The managing director of the college, to whom a function under s 45(1) of the VET Act has been delegated, ‘may subdelegate that function to a person employed by the college with the approval of the governing council but not otherwise’ (s 45(2)). 

23       I note in passing that the Kimberley Training Institute’s Staff Disciplinary Policy and Process (the policy) provides that if ‘the Managing Director becomes aware that a conflict of interest may exist if he or she were to decide the matter, it is to be referred to the Institute Governing Council for determination’ (Section B – The Investigation Process [3.5]). 

24       Section 29(1)(g) of the PSM Act provides that, subject to that Act ‘and any other written law relating to his or her department or organisation’ (emphasis added), as a chief executive officer under Part 3 of the PSM Act, the managing director of the college has functions including ‘to manage and direct employees’ of the college including the responsibility for termination of the employment of those employees. 

25       Section 33 of the PSM Act provides that, subject to any other written law, a CEO may delegate any power of the CEO to another employee (emphasis added). 

26       Therefore, the power to dismiss, held by the managing director, as a CEO, under the PSM Act is subject to any other written law relating to the college, that is the VET Act, and the power to delegate under the PSM Act is subject to the provisions of the VET Act insofar as it deals with delegation of power.  In this case, that means that the power to terminate employment, which the governing council, as employing authority, has delegated to the managing director, can be subdelegated, but only with the approval of the governing council (s 45(2) VET Act). 

27       There is no evidence of such a subdelegation of the managing director’s power to terminate employment having been the subject of approval by the governing council.  The terms of s 45(2) of the VET Act, that there may be a subdelegation ‘with the approval of the governing council but not otherwise’, make that approval mandatory (emphasis added). 

28       Therefore, where the managing director has purported to subdelegate to Ms Kean the power to deal with Mr Petticrew’s disciplinary process and to terminate his employment in accordance with the policy of the respondent, this subdelegation is without proper authority, and the decision to dismiss is not valid. 

Delegation under the PSM Act

29       If I am wrong and the power to delegate arises from s 33 of the PSM Act, and that this overrides the VET Act, then I note the following. 

30       Section 33 of the PSM Act provides for a chief executive officer or chief employee to delegate any power or duty to another person.  Relevantly, it provides: 

(1) Subject to any other written law, a chief executive officer or chief employee may delegate any power or duty of the chief executive officer or chief employee under another provision of this Act to —

(a) a public service officer; or

(b) any other employee; or

…

(3) The delegation must be in writing and signed by the chief executive officer or chief employee.

(4) A person to whom a power or duty is delegated under this section cannot delegate that power or duty.

(5) A person exercising or performing a power or duty that has been delegated to the person under this section is to be taken to do so in accordance with the terms of the delegation unless the contrary is shown.

(6) If a power or duty is delegated under subsection (1), the power or duty is, when exercised or performed by the delegate, to be taken to be exercised or performed by the person who delegated it.

(7) Nothing in this section limits the ability of the chief executive officer or chief employee to perform a function through an officer or agent.

31       The PSM Act does not prescribe a particular form of words or formal document for the purposes of effecting a delegation.  From my knowledge of public sector matters, the usual practice is for there to be a document or register within the documentation of a department or organisation which records the formal delegations and the period to which each applies.  As noted earlier, appendix 2 to the applicant’s submission of 22 December 2014 is a formal Instrument of Delegation under the PSM Act.  It sets out the particular delegation of the Governing Council of the College of the powers and duties of the College as an employing authority under the PSM Act; to whom the delegation is made, in this case the Managing Director of the College; its duration; the date and the signature for the Governing Council.  Therefore, one could assume that the respondent has some proper processes and documentation for formal delegations. 

32       The applicant also included within its supplementary submissions of 15 January 2015 the terms of the Instrument of Delegation made under the PSM Act, s 23, by the Public Sector Commissioner to each Chief Executive Officer and each employee directed by him to act in the office of Chief Executive Officer, delegating particular powers, and that instrument of delegation contains further details of the terms of that delegation and is dated.  This provides another example of the form a delegation may take. 

33       The requirements under legislation are for a formal delegation of power to be recorded and signed (s 33(3) of the PSM Act).  The terms of the delegation need to be specified (s 33(5)).  (See also Creyke and McMillan, that the delegation ‘may replicate that of the principal, or be hedged with limitations or conditions’.) 

34       The only evidence of there being a delegation of any of Ms Dickinson’s powers or duties to Ms Kean is that set out in the letter of 12 May 2014 to Mr Petticrew in which she says, ‘I have made the decision to delegate my responsibilities under the Kimberley Training Institute’s Disciplinary Policy to my colleague, Ms Julie Kean.’  This constitutes evidence that a decision to delegate has been made.  The respondent says that this is evidence of an attempt to delegate and does not argue that this is a matter of substance over form. 

35       As noted earlier, the delegation of a power to dismiss is a serious matter.  I find that the advice in the letter to Mr Petticrew that a decision had been made to delegate does not meet the requirements of s 33 of the PSM Act in that it is advice that a decision to delegate has been made, it is not the delegation itself.  It does not set out the scope or limits of the delegation, although the letter suggests that the scope of the delegation is all of the Managing Director’s responsibilities under the policy.  There is no evidence of the delegation being the subject of any formal instrument of delegation as with the delegation by the governing council to the managing director, nor is there other evidence that the delegation is recorded in the organisation’s records or of any communication between Ms Dickenson and Ms Kean of the delegation. 

36       I conclude that whilst, as the respondent says, the letter of 12 May 2014 is an attempt by the managing director to delegate the power to dismiss to Ms Kean, it is not actually a delegation nor is it evidence of the delegation, rather it is evidence of a decision to make that delegation.  It does not meet the formal requirements for a delegation to be made. 

Conclusions

37       Therefore, in respect of the first issue raised in this matter referred for hearing and determination, I conclude that there is no effective delegation of power and accordingly the decision to dismiss has not been validly made, or alternatively, it constitutes a ground for the decision to dismiss being harsh, oppressive or unfair.