WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

PARTIES Stephen Mann

CLAIMANT

-v-

Employing Authority, Government Employees Superannuation Board

RESPONDENT

CORAM INDUSTRIAL MAGISTRATE G. CICCHINI

HEARD Thursday, 29 November 2007, Thursday, 20 December 2007

DELIVERED Thursday, 20 December 2007

CLAIM NO. M 66 OF 2007

CITATION NO. 2007 WAIRC 01324

CatchWords Failure to pay prescribed salary for a pay period; Right to suspend without pa; Improper exercise of discretion to suspend; When power to suspend can be exercised; Procedural fairness.

Legislation  Public Sector Management Act 1994

Industrial Relations Act 1979

Property Law Act 1969

Cases Cited  Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435

The Queen v The Australian Broadcasting Tribunal and Others, Ex parte 2HD Pty Ltd (1979) 144 CLR 45

Re Piper, Ex parte Nilong (1996) SC Library 960021

Re Railway Appeal Board; Ex parte Western Australian Government Railways Commission [1999] 21 WAR 1

Csomore and Another v Public Service Board of NSW [1986] 10 NSWLR 587

Cases referred to

in decision Director General, Department of Justice v The Civil Service Association of Western Australia [2003] 83

Result The claim fails.

Representation 

Claimant Mr G McCorry of Labourline – Industrial and Workplace Relations Consulting appeared for the Claimant.

Respondent Mr R Andretich (of Counsel) instructed by the State Solicitor for Western Australia appeared for the Respondent.

REASONS FOR DECISION

Agreed Facts

1          1.              The Claimant is a public service officer.

2          2.              The Respondent is an employing authority for the Crown in the right of the State of Western Australia and is the employer of the Claimant for the purposes of the Public Sector Management Act 1994 (the PSMA) and the Industrial Relations Act 1979 (the IR Act).

3          3.              The Claimant and the Respondent are both subject to the disciplinary provisions of Part 5 of the PSMA.

4          4.              The Claimant and the Respondent are both bound by the Public Service Award 1992 (the Award) and the Public Service General Agreement 2006 (the Agreement).

5          5.              The Claimant is substantively classified at Level 6.4 under the Award and the Agreement.

6          6.              The prescribed fortnightly salary for a public service officer classified at Level 6.4 under the Award and the Agreement at the material time was $2,995.70 gross.  Payment to the Claimant is made fortnightly, in accordance with clause 11(3) of the Award.

7            7. Pursuant to (section) 81(1) of the PSMA, on 8 February, 2007, the Respondent notified the Claimant that –

a) he was suspected of having committed a breach of discipline contrary to section 80 of the PSMA;

b) he was relieved of the requirement to attend work until the matter was concluded;

c) he would receive his normal remuneration during this period; and

d) he was required to provide an explanation in relation to the suspected breach of discipline.

8          8.              As the Claimant’s explanation was not accepted an investigation was undertaken into the suspected breach of discipline pursuant to section 81(2) of the PSMA.  On 3 April, 2007, following that investigation, the Respondent charged the Claimant with having committed the breach of discipline pursuant to section 83(1)(b) of the PSMA.

9          9.              On 1 June, 2007, the Respondent appointed Mr Keith Dodd, pursuant to section 86(4)(a) of the PSMA, to undertake a disciplinary inquiry into the Claimant’s alleged breach of discipline.

10       10. On 6 August, 2007, the Claimant lodged an appeal to the Public Service Appeal Board (PSAB) against the decision to charge him and against the decision of the Respondent to appoint Mr Keith Dodd to undertake the disciplinary inquiry.

11       11. On 5 September, 2007, the Respondent notified the Claimant by letter that it proposed suspending the Claimant without pay, pursuant to section 82 of the PSMA, effective for the paydate of 20 September, 2007.

12       12. On 18 September, 2007 the Respondent notified the Claimant by letter that he was being suspended without pay pursuant to section 82 of the PSMA, effective for the paydate of 20 September, 2007, as foreshadowed in the letter of 5 September, 2007.

13       13. On 20 September, 2007, the Respondent did not pay the Claimant the salary for the fortnight ending 20 September, 2007.

14       14. The Respondent has not paid the Claimant any salary from the beginning of the pay period ending on 20 September, 2007.

15       15. The Claimant has not been required to render service since 8 February, 2007 and will not be required to pending the outcome of the disciplinary proceedings commenced on that date.

Claim and Response

16       The Claimant alleges that contrary to clause 11(3)(a) of the Award and without lawful authority, the Respondent failed to pay the Claimant his prescribed salary for the pay period ending on 20 September 2007.

17       The Respondent contends that the Claimant’s suspension without pay effective from the pay date of 20 September 2007 was lawful and in accordance with the provisions of section 82(1) of the PSMA.

Issues

18       The two issues requiring determination are:

1. Whether the Respondent’s suspension of the Claimant’s employment without pay was lawful; and

2. If so, whether it was entitled to stop paying the Claimant commencing the pay period ending 20 September 2007.

Did the Respondent Lawfully Suspend the Claimant’s Employment Without Pay?

19       The determination of this issue necessarily involves a consideration of the following sub-issues;

1. Was the Respondent entitled to suspend the Claimant when it did? ; and

2. Did the Respondent properly exercise its discretionary right to suspend the Claimant without pay?

Was the Respondent Entitled to Suspend the Claimant When it Did?

20       Section 82 of the PSMA empowers the employing authority to suspend an employee without pay.  It provides:

82.        Suspension without pay

(1)    If an investigation is initiated under section 81, the employing authority may at any time before proceedings against the respondent are terminated within the meaning of subsection (2) suspend the respondent, if still its employee, without pay.

(2)    When proceedings against a respondent for a suspected breach of discipline are terminated by –

(a)    the taking of action under section 83 or 84 that is not cancelled under section 85, or the taking of action under section 86(3), 88(1) or 89; or

(b)     a finding that no breach of discipline was committed by the respondent, the employing authority shall terminate any suspension of the respondent without pay under subsection (1) and, if no breach of discipline has been found to have been committed by the respondent, restore to the respondent the pay of which the respondent has been deprived during the period of that suspension.

(3)     An employing authority may, in relation to an employee who has been suspended without pay under subsection (1), on its own initiative or on the application of that employee restore pay to that employee for such period as the employing authority thinks fit.

21       The Claimant submits that, given the penal nature of the relevant provisions, section 82 of the PSMA ought to be construed strictly.  He says that the necessary conditions for suspending an employee without pay are:

a) An investigation must first have been commenced under section 81 of the PSMA; and

b) The suspension must occur before the proceedings (i.e. the investigation commenced under section 81) have been terminated within the meaning of section 82(2) of the PSMA.

22       The Claimant submits that the investigation instigated by the Respondent on 8 February 2007 was terminated within the meaning of section 82(2) of the PSMA when the Respondent, on 3 April 2007, decided to charge him with a serious breach of discipline.  The Respondent’s opportunity to suspend him without pay ceased on 3 April 2007 when he was charged.  It follows that the Respondent’s suspension of him without pay on 20 September 2007 was unauthorised and unlawful.  He contends that the Respondent’s failure to pay him his salary for the pay period ending 20 September 2007 constitutes a breach of the Award.

23       The Claimant’s assertion that action to suspend under section 82(2) may only be taken prior to an officer being charged or the taking of action under section 83 or section 84 of the PSMA is, in my view, incorrect.  I accept the Respondent’s submission that disciplinary proceedings are only terminated by the taking of action under sections 83 or 84 where that action is not cancelled by an objection under section 85 of the PSMA, and where a finding of a minor breach of discipline is made and the prescribed outcomes result or, alternatively, where no breach of discipline is found to have been committed.  Where however, a serious breach of discipline appears to have been committed, section 83(1)(b) requires the employee to be charged.  The charging of the employee does not terminate the proceedings.  If the employee admits the charge, one of the penalties mentioned in section 86(3) may be imposed which will result in the disciplinary proceedings being terminated.  If the charge is not admitted a disciplinary inquiry is required to be held by section 86(4).  Where a directed person conducting an inquiry submits a finding that the charge has been made out, he or she is required by section 86(8) to recommend to the employing authority that it act as if the respondent had admitted the charge or, where no breach of discipline was committed, notify the employee that no further action will be taken.  In either case the disciplinary proceedings are terminated.

24       Disciplinary proceedings can only be terminated under section 86 following an investigation, where a charge is admitted, or an inquiry into the charge is held which either substantiates the charge or results in a finding that no breach of discipline was committed.

25       The Claimant’s contention that the meaning of “proceedings” in section 82(2) of the PSMA relates only to the investigation commenced under section 81 is, in my view, far too narrow.  Its proper construction dictates that it relates to the entire disciplinary process and not just its investigative stage as the Claimant suggests.  Section 82 is enacted to provide the employing authority with the power to suspend once there has been a decision made that there will be an investigation.  The power to suspend commences immediately the disciplinary process starts and continues throughout the process until the proceedings are concluded.  If it had been the intention of Parliament to restrict the power to suspend without pay to only the investigative stage it would have said so.  Indeed the use of the plural “proceedings” reflects that it relates to the various stages of the process and not just the initiating stage.

26       In this instance the disciplinary proceedings relating to the Claimant continue and the steps thus far taken under sections 83 and 86 have not had the effect of terminating proceedings.  Given that the proceedings had not terminated when the Respondent suspended the Claimant without pay, its act in so doing was lawful.

Did the Respondent Properly Exercise its Discretionary Right to Suspend the Claimant Without Pay?

27       The Claimant asserts that the discretion of the employer to suspend without pay must be exercised for a proper purpose.  It must not be exercised unreasonably or in bad faith.

28       The Claimant says that the terms of a letter from the Respondent to the Claimant dated 5 September 2007 demonstrate bad faith and an improper purpose.  In its letter to the Claimant the Respondent said inter alia:

In my letter of 8 February 2007 I relieved you of the obligation to attend work until this matter is concluded.

While I appreciate your need to get advice, this matter has taken a significant period of time to resolve.  I note your recent appeal to the Public Service Appeal Board (PSAB) and the substance of your claim.  On 16 August 2007 GESB nominated its representative on the PSAB.  Subsequent contact with the Western Australian Industrial Relations Commission has informed me that your nominated representative is not able to attend to this matter until the week commencing 10 September 2007.

This delay is not acceptable and GESB has sought further advice from the State Solicitor’s Office regarding the specific grounds of your appeal and what GESB perceives as continuing attempts to frustrate and extend the disciplinary process.

Following that advice, and in accordance with section 82 of the Public Sector Management Act 1994, I wish to inform you that I propose suspending you without pay effective for the paydate of 20 September 2007.  Should you wish to make a written representation on this proposed course of action this should be made by 14 September 2007.

29       The Claimant submits that the stated reasons for suspension without pay are:

a) A delay of five days in the representative being available to attend the PSAB was unacceptable; and

b) The Respondent’s perception that the union representative on the PSAB was a nominee of the Claimant rather than a nominee of the Civil Service Association and the Claimant was in some way responsible for the delay; and

c) The Respondent’s perception that the Claimant’s appeal to the PSAB was a continuing attempt to frustrate and extend the disciplinary process.

30       The Claimant contends that the decision to suspend him arose because of errors of fact made concerning the nomination of a representative on the PSAB and also because he had exercised his right to appeal.  He says he was punished for exercising his legal right to appeal.  In the circumstances the Respondent’s decision to suspend him without pay was not made for a proper purpose, was in bad faith and was unreasonable.

31       Damien Stewart, who prepared the letter dated 5 September 2007 on behalf of the Respondent, testified that the decision to suspend without pay was made as a consequence of a conclusion reached that there had been a substantial delay in the entirety of the proceedings against the backdrop that the appeal to the PSAB was without merit.  I accept Mr Stewart’s evidence.  Indeed his evidence in that regard was not inconsistent with what was said in the letter dated 5 September 2007.

32       The evidence supports the Respondent’s contention that its reason for suspending the Claimant without pay was entirely legitimate and the decision to suspend him without pay was not made in bad faith.  There was no improper purpose behind the decision.  The Respondent afforded procedural fairness to the Claimant in the form of an opportunity to make representations as to why the discretion should not be exercised. 

33       I reject the Claimant’s contention that the Respondent’s exercise of its discretion miscarried and that therefore its decision was void and of no effect.  I find that the Respondent did what it was entitled to do.  It had an unfettered discretion to suspend the Claimant without pay.  Such unfettered discretion was qualified by the protection afforded to the Claimant by section 82(2) which entitles him to have his pay restored in the event that a finding is made that he did not commit a breach of discipline.

Was the Respondent Entitled to Stop Paying the Claimant Commencing the Pay Period Ending 20 September 2007

34       The Claimant contends that his salary is an annual amount payable periodically and pursuant to section 131 of the Property Law Act 1969 accrues from day to day.  When the Respondent purported to suspend him on 18 September 2007 his salary for the period up to the date of notification had already accrued and was vested in him.  He was therefore entitled to be paid on 20 September 2007.  He submits that his suspension without pay could lawfully only have occurred after 20 September 2007.  Consequently the Respondent has breached the Award and Agreement by failing to pay him on 20 September 2007.

35       Is the Claimant correct in his assertion that his salary entitlement had been accruing leading up to his suspension without pay?  I think not.  The legal entitlement to wages or salary is dependent upon rendering service in the absence of agreement, award or statutory provision to the contrary.  In Director General, Department of Justice v The Civil Service Association of Western Australia [2003] 83 WAIG 908 the Full Bench of the Western Australian Industrial Relations Commission confirmed that the “no work no pay” principle was the law in Western Australia even where the failure to render service by an employee was caused by the unlawful act of an employer (see paragraphs 48 to 53).  Given that the Claimant was not rendering services at the material time, he was not entitled to wages.  He was not accruing wages.  Indeed there is nothing in the PSMA which implies an obligation on the part of an employing authority to pay a person when service is not rendered, nor is such a provision contained in the Award or the Agreement.

36       The payments made by the Respondent to the Claimant after he was relieved of his obligation to attend work were not made in consequence of the Respondent’s legal obligation to pay wages but rather gratuitously as a result of a unilateral decision made by the Respondent to continue paying him.  That decision was revocable at any time.  Therefore the decision to stop paying the Claimant and to suspend him without pay could occur at any time and with immediate effect.

37       Given that the Claimant did not have a legal entitlement to be paid for the pay period ending 20 September 2007, there could not have been, nor was there, a breach of the Award and/or the Agreement.

Result

38       The claim fails.

G Cicchini

Industrial Magistrate