Best practice in performance management in the public sector
Anna Perigo, Barrister, Frederick Jordan Chambers
Summary of seminar presented on 22 July 2015
This paper considers decisions at the federal and state level that provide insight into 'best practice', or how to afford procedural fairness in the context of performance management. As there are limited authorities considering performance management, regard has also been had to cases that consider misconduct.
"The term 'procedural fairness' encapsulates a duty to observe fair procedures when making decisions which affect a person' s rights or interests in a direct or immediate way" Kioa v West (1985) 159 CLR 550
Kioa v West, a decision of the High Court, considered a review of an administrative decision pursuant to the Administrative Decisions (Judicial Review) Act 1977. This principle from Kioa v West is also applicable in considering procedural fairness in the employment context. Procedural fairness is reflected in the certain provisions of the Fair Work Act 2009 (Cth) ("FW Act") and Industrial Relations Act 1996 (NSW) ("IR Act"). The FW Act (in the context of an unfair dismissal application) is concerned with whether there is a valid reason for the dismissal, whether the person was notified and had an opportunity to respond to the allegations made and, if there was a performance issue, had there been a previous warning or warnings. The IR Act is very similar; it is concerned with whether a reason was given for the termination of employment, whether the reason was found in substance and whether there was an opportunity to respond, to make out a defence or provide an explanation.
There are essentially two broad common law rules of procedural fairness
- The hearing rule: In summary the hearing rule entitles a person whose interests are likely to be affected to be given notice of relevant matters and a reasonable opportunity to present his or her case. Decision makers should not make a decision having had regard to undisclosed material being adverse information that was credible, relevant and significant to the decision to be made without first putting that material to the relevant person
- The rule against bias: In summary, a decision maker must not be personally biased (actual bias) or be seen by an informed observer to be biased (apprehended bias) in making a decision.
To set and clarify expectations for employees
This covers such issues as ensuring employees:
(a) Have a description of their role including their duties, obligations and responsibilities;
(b) Understand the deliverables for which they are accountable;
(c) Are aware of the relevant policies and code of conduct setting out the standards they are expected to achieve.
To set and clarify expectations for employees – cases
B, C and D v Australian Postal Corporation  FWCFB 6191
There were approximately 40 individuals who were initially investigated in relation to the use of the email system. Only three employees were dismissed and, of the other employees who were sending or storing the offending emails, some were supervisory or managerial employees. The employer only discovered the conduct because of the introduction of a new IT system. The employees relied on the argument that their actions had been condoned or tolerated because no action had ever been taken and managers and supervisors were supposedly engaged in a similar practice.
On appeal, a majority of the Full Bench of the Commission found that there had been an extremely high volume of email traffic containing inappropriate content circulating in the workplace. When Australia Post investigated the conduct they drew a distinction based on whether someone was receiving an email and opening it up, as opposed to someone who was actively sending, forwarding or distributing the material. The three employees who were dismissed fell into the latter category. The Full Bench said that the "formulation, implementation, dissemination and enforcement of policies are a matter within the prerogative of management" (at ). The Full Bench found that policies cannot just be put into place, they must be communicated and education must occur around those policies. The Full Bench also said that the (at ):"failure to monitor compliance or enforcement can be a relevant factor that weighs against a finding that a dismissal for breach was not harsh, unjust or unreasonable."
The majority found that management were condoning the emailing practice, that the employees were long serving employees and that there was a culture of such emails being sent at the workplace. There was an absence of any steps by the organisation to ensure employees understood the requirements of its policy, the obligation to comply with such requirements and that material breaches of its policies may result in dismissal. The majority found the dismissal of each employee was harsh. The Full Court of the Federal Court found that the Full Bench of the Commission made no errors in its decision to grant the employees leave to appeal a decision that upheld their dismissals.
Queensland Rail v Wake (2006) 156 IR 393
The decision in B, C and D v Australian Postal Corporation can be contrasted with Queensland Rail v Wake which similarly involved a breach of internet and email use. However in Queensland Rail v Wake, the employer, over a period of two to three years, introduced and developed a policy about the use of emails and took numerous steps to educate employees about the policy, including:
- Putting articles in their weekly newsletters to explain the policy;
- The CEO released an update about the policy to all employees explaining what it was and the strong stance on the appropriate use of the communication systems;
- Information was included on payslips about the inappropriate use of electronic communications being unacceptable and having serious consequences;
- An amnesty period essentially put on the basis 'if you have anything on your computer that is inappropriate, now is the time to delete it'; and,
- An acknowledgement on computer screens and above the acknowledgement the words 'DON'T JUST TICK THE BOX' and 'PLEASE READ'.
This process took a few years. An employee still breached it and admitted to doing so. He was subsequently dismissed. He was reinstated at first instance. Queensland Rail appealed; the appeal was upheld and the dismissal was overturned. The only criticism of Queensland Rail was that they said in their policy "if you do these things, if you transmit these images you will be dismissed". The Commission said it ought not be assumed that the Commission will uphold the employer's right to apply the sanction of termination in all cases of deliberate breach regardless of the circumstances. Whatever sanction the employer's policy prescribes, the Commission must decide whether the termination is harsh, unjust or unreasonable [at 23].
Neville v Secretary of the Treasury on behalf of Corrective Services NSW  NSWIRComm 1004
This case concerned the use of a private vehicle by an employee of Corrective Services NSW and the failure by the employee to make certain entries in relation to that vehicle, including failing to make notes about visiting an offender and having contact with an offender. At issue was whether an offender was conveyed to a place via the employee's home without authority.
The Commission found that the employee's failure to keep case notes was the most serious issue. The employee admitted that he failed to keep such notes and that he had a responsibility to keep those records. In making the determination to disallow the appeal, the Commissioner referred to the requirement to keep case notes and that it was set out fully and with clarity in the Corrective Services Community Corrections Policy and Procedures manual. In this case, there was a very clear manual, a very clear policy and very clear set of expectations for employees. The employee was found to have breached a fundamental obligation of his employment (read decision on NSW Caselaw).
Soares v KDR Victoria Pty Ltd t/a Yarra Trams  FWC 4472
This case involves a similar issue as that in Neville. An employee who spent three years as a tram driver was dismissed following an investigation because he was allegedly texting while driving. Someone saw him and sent out a tweet saying "so much for the safety of the tram systems in Victoria". The employee was advised he had breached a cardinal rule: "never operate a tram, plan or machinery while using a handheld mobile device". In addition, the employee had breached a number of other rules: he was behaving in a way that put public safety in danger and he was allowing himself to be distracted. The employee claimed that he was not using his mobile phone while driving the tram. The employer conducted an extensive investigation. The employee was given three month's pay while the incident was investigated and provided with an opportunity to respond to the allegations on several occasions.
The Commission found that the employee was using a mobile phone while driving. His application was dismissed by the Commission. The human resources team of the employer provided some initial advice and then took a "hands off" approach. As a result, the company's disciplinary process was not correctly following. The Commission said that, in different circumstances, that would have given rise to a decision that termination was harsh, unjust or unreasonable. However, the Commission took the view that given the seriousness of the conduct there was no other avenue for the employer to take.
Raveena Singh Rai and State Transit Authority of New South Wales  NSWIRComm 1000
A bus driver, who had been employed since 1987, was dismissed after it was alleged that she failed to sign in at her scheduled commencement times. Six allegations were made and five were proven. In considering the relevant questions and looking at whether the conduct had occurred or not the Commission first looked at the applicable policy and considered whether the employee knew the policy, whether the policy was clear and unambiguous and, if so, whether the employee had behaved in a way that contravened the policy. In dismissing the application, the Commission found that the investigation process was procedurally fair, the employee had the opportunity to respond to the allegations, the employee had the opportunity to make representations on the question of penalty and the employee had previously received a final warning (read decision on NSW Caselaw).
Pizarro v State Transit Authority  NSWIRComm 1019
A bus driver showed up late, conducted personal business and did not advise anyone that he was late for work. He provided false and misleading information to a supervisor regarding the late running service.
The Commission did not accept that the bus driver had provided false and misleading information. However, the Commission looked at the actions the employer took in terms of procedural fairness and what the employee knew about his obligations in employment. The Commission found that the employee was given every opportunity to make out his case, he was an experienced driver, trained in his duties and responsibilities, demonstrated through a competency assessment that he had reached the required level of competency as a bus driver and had knowledge of the rules. The Commission set aside the dismissal, considered the impact of a dismissal on the employee and ordered in place of dismissal the employee be allowed to resign (read decision on NSW Caselaw).
Resolve unsatisfactory performance
Unsatisfactory performance includes:
(a) Unsatisfactory work such as timeliness or quality of work;
(b) Not following reasonable directions;
(c) Breaches of policies and codes of conduct that do not warrant a misconduct investigation;
(d) Inappropriate behaviour such as poor team work and poor communication with colleagues.
Resolve unsatisfactory performance – cases
Gerard Meta and Wollongong City Council  NSWIRComm 1023
A long serving employee was alleged to have made threats to another employee which were investigated and proven. The employee was transferred to a temporary position for three months. After the three month period the position no longer existed, no other opportunities were available and the employer proposed to dismiss the employee. The Employee had a history of warnings in relation to performance such as customer complaints and his working relationship with other employees. He had also been transferred to another position as part of a disciplinary process. Prior to dismissing the employee, the employer had provided the employee with a detailed show cause letter.
The Commission considered that the employer did everything they could possibly do to manage the employee's performance and provided him with the appropriate training to try and assist with whatever the issues were causing the poor performance. That was reflected in the extensive "show cause" letter, written by the employer prior to dismissal, which traced the employer's movements from one location to the other, the reasons for the five warnings and the reasons for the transfer. The Commission found that the applicant was advised of the cause for concern on each occasion and, on each occasion, he was given an opportunity to respond, an opportunity to have a support person present and necessary training to possibly resolve the issue. Further, that the employee had been moved numerous times in an attempt to find a solution. The employee's application was dismissed (read decision on NSW Caselaw).
Byrnes v Tuftmaster Carpets Pty Ltd  FWC 1039
An employee was dismissed from his position as an Area Sales Manager after nearly four years of employment. He was dismissed without notice. The purported reasons were poor sales figures, his negative and apathetic attitude and his failure to provide reports. He was not given a prior warning and was told to hand back his equipment, including his mobile phone. After his dismissal the employer found inappropriate images on the mobile phone.
The Commission found that the employer could take the inappropriate images into account and rely on that conduct. The Commission found that the conduct, when looked at in the context of his performance, was a valid reason for his dismissal. However, the policy in relation to the internet and phone and email usage was less than rigorous and was not consistently applied. Further, the Commission found that there was substantial denial of procedural fairness as the employee had not been provided with a warning and had not been given an opportunity to respond to any allegations in relation to his performance or conduct. Further, during the meeting when the employee was told that his employment was terminated, was asked whether he had anything to say in response. The employee said "would it make a difference" and the General Manager said "no, not really". Accordingly, the dismissal was unfair, harsh and unjust. Reinstatement was not ordered because the employee did not seek it; he was awarded compensation.
Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 549
The High Court considered the general protections provisions of the Fair Work Act 2009 and in particular s. 361 which states:
"Reason for action to be presumed unless proved otherwise
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
For example, in the case of a dismissal, the applicant has the onus of establishing the objective facts they rely on before consideration is given to whether the employer contravened the provisions of the Fair Work Act 2009 and the onus placed on the employer under s. 361 has been discharged. The employer is required to prove that the employee was not dismissed for a prohibited reason. This makes the process taken by the employer in dismissing the employee critical.
"This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s. 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence."
The webinar can be accessed here.