C2002/4272, Transcript of Proceedings [2003] AIRCTrans 4190 (22 September 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

VICE PRESIDENT LAWLER

C2002/4272

APPEAL UNDER SECTION 45 OF THE ACT
BY D. PHILLIS AGAINST A DECISION OF
SENIOR DEPUTY PRESIDENT O'CALLAGHAN
AT ADELAIDE ON 15 NOVEMBER 2002 IN
U NO 1853 OF 2002 [PR924543] RE
DAVID PHILLIS AND AUSTRALIAN DEPARTMENT
OF DEFENCE - TERMINATION OF EMPLOYMENT

SYDNEY

3.00 PM, FRIDAY, 5 SEPTEMBER 2003

PN1

THE VICE PRESIDENT: Gentlemen, Vice President Lawler here. For the record I note the appearance of MR JACOBS AND MR VAN TEMPEST for the Department, and MR HUMPHREYS for Mr Phillis. The purpose of convening this hearing is to notify the parties of the decision that the Appeal Bench has reached to publish the reasons which we will email to you immediately, but also to make a few observations which are relevant to the outcome of the appeal.

PN2

The Bench has decided that leave to appeal ought be granted, and that the appeal ought be allowed on the re-hearing that the Bench has conducted has concluded that it is appropriate that an order for reinstatement pursuant to Section 170CH(3)(b); that is to a position no less favourable. I would like to read briefly a couple of passages from the decision which will be emailed to you immediately.

PN3

In relation to Section 170CH(2)(e) we accept that the conviction for contempt against Mr Phillis, the findings in the contempt decisions and the likelihood of further disciplinary proceedings are relevant matters and ought be considered. For the reasons we have given, there is no evidence that allows a prediction that those disciplinary proceedings are likely to result in the termination of Mr Phillis. The mere fact that further disciplinary proceedings are likely is not a matter that has any significant bearing on whether an order for reinstatement is not appropriate, unless there is a substantial prospect that Mr Phillis would be terminated as a result of such proceedings.

PN4

The appropriate weight to be attached to the conviction for a contempt against Mr Phillis in the context of any future disciplinary proceedings against him is a matter that will depend upon the circumstances and in particular the evidence placed before any disciplinary hearing. Of course the starting point is that a contempt of Court is a serious matter, and that Mr Phillis has been found guilty of contempt, which finding has been upheld on appeal. However, the surrounding circumstances which may mitigate against the seriousness of the contempt were not a matter of evidence before the Senior Deputy President, and are unknown to this Bench on appeal. Nevertheless, one matter deserves special comment; Neuke J rejected Mr Phillis' evidence as to his genuine belief that his actions in relation to the property, the subject of the dispute between he and his former defacto partner, were consistent with the earlier orders in relation to that property.

PN5

Mr Phillis claimed to advice from his accountant and an unnamed solicitor supporting his interpretation of the orders; neither the accountant nor the solicitor were called during the contempt hearing before Neuke J. Neuke J drew an adverse inference from the absence of such evidence from the accountant. It is entirely possible that the failure finally to call the accountant was a product of an ill-judged forensic decision, and that this evidence was not essential to a successful defence of the charge, in circumstances where the accountant had not been subpoenaed and was apparently unavailable without subpoena because of work pressures arising from an impending deadline for the filing of business activity statements when weighed against the cost implications of obtaining the necessary adjournment and the further hearing time that would be involved.

PN6

It may be that in any disciplinary proceedings in relation to the contempt finding that Mr Phillis would call his accountant and the unnamed solicitor to corroborate his assertion as to the advice he had been given. If such evidence were called and accepted this may substantially undermine the seriousness of the conviction for contempt and the adverse findings by Neuke J. Bearing in mind that the Commission is required by Section 170CA(2) to accord both the Department and Mr Phillis "a fair go all around" it is important to note that the Department made a deliberate decision not to rely upon the conviction for contempt, notwithstanding that it was well aware of it in pursuing the disciplinary proceedings that resulted in Mr Phillis' termination, or as providing a "valid reason" for his termination. The Department's reliance on the conviction for contempt at the heel of the hunt in the proceedings before the Senior Deputy President as a basis for opposing reinstatement has had the effect of depriving Mr Phillis of a proper opportunity to put his case in relation to that matter. If it was clear that Mr Phillis ought be terminated on account of the conviction for contempt, irrespective of the evidence or arguments that he might advance in respect of that matter, then clearly it would not be appropriate to reinstate Mr Phillis; however, that is not this case.

PN7

Later on, we say:

PN8

Nothing we have said should inhibit the Department from bringing, as has been foreshadowed, further disciplinary proceedings against Mr Phillis based on his conviction for contempt in the findings of Neuke J, any disciplinary proceedings. Similarly, nothing we have said ought be taken as any indications to the proper outcome in relation to such proceedings. We think it appropriate that orders be made pursuant to Section 170CH(4); however, particular difficulties are presented by the likelihood of any disciplinary proceedings. The Department had the benefit of a decision by the Senior Deputy President in which he found that reinstatement was not appropriate; unless and until that decision was overturned on appeal, there was no occasion for the Department to launch the new disciplinary proceedings. If the Senior Deputy President had reinstated Mr Phillis, then the new disciplinary proceedings would almost certainly have been commenced and determined well before the date of this decision, possibly adversely to Mr Phillis.

PN9

In our view it would be unfair to the Department, and therefore not appropriate within the meaning of Section 170CH(4)(b) for Mr Phillis to have, subject to questions of mitigation, the benefit of orders under Section 170CH(4) relating to the whole period between the date of his termination and the date of final orders arising from this decision, in the event that the new disciplinary proceedings result in his termination, provided any such proceedings are prosecuted diligently. On the other hand, it would be unfair to Mr Phillis for him not to receive, subject to questions of mitigation, the benefit of substantial orders under Section 170CH(4) if the new disciplinary proceedings do not result in his termination. Accordingly, we think that the making of any order under Section 170CH(4) should be postponed until the outcome of any such proceedings is known.

PN10

The amount of any order under Section 170CH(4)(b) must be subject to an allowance for moneys earned by Mr Phillis in the relevant period, and take proper account of the issue of mitigation. In the unusual circumstances of this case, we propose, pursuant to Section 45(7)(c) to give a direction to Vice President Lawler to determine, in accordance with these reasons, the appropriate order for maintaining continuity under Section 170CH(4)(a) and the amount to be ordered under Section 170CH(4)(b) in the event that in due course the parties are unable to reach agreement on the proper amount for that order. The parties should prepare short minutes of order to give effect to these reasons which short minutes are to be settled by Vice President Lawler.

PN11

That concludes my reading of extracts from the reasons for decision, and I have been asked by the other Members of the Bench, and I concur, to draw the parties' attention in particular to those passages, and to the fact that the Commission - the Bench has determined that it is appropriate to postpone the final determination in respect of any order to be made under Section 170CH(4)(a) or (b), pending the outcome of the foreshadowed disciplinary proceedings.

PN12

We think it appropriate to note, though, that the Department must prosecute any such proceedings with reasonable expedition, and that in the event that there is an unreasonable delay in the prosecution of such proceedings, it ought be open to Mr Phillis to seek to have the matter relisted and to press for the orders under Section 170CH(4), which the Bench has indicated ought be made, to be made. And I don't know whether there is anything that arises from that, so far as the parties are concerned, but those are the remarks which the other Members of the Bench wished me to convey.

PN13

MR P. HUMPHREYS: Deputy President, this is Peter Humphreys. I am just wondering whether, consistent with what you have just mentioned about the final determination of that question being postponed, we mightn't at least get an order that the income be made up to the date of the original decision, because - and I put it on this basis - that - - -

PN14

THE VICE PRESIDENT: The answer to that is no, Mr Humphreys, and that is because there is not sufficiently - there was no adequate evidence as to your client's attempts to mitigate to enable such an order to be properly made.

PN15

MR HUMPHREYS: All right.

PN16

THE VICE PRESIDENT: And there are particular issues that arise from that, but the Bench took the view that it was desirable, as it were, to leave those issues to me on the subsequent hearing, if that becomes necessary in relation to the appropriate orders to be made under Section 170CH(4)(a) and (b).

PN17

MR HUMPHREYS: Very well, I just thought that we might be able to - consistent with what you were saying - I thought we might at least get something out of it for that period of time, but I accept what you say about the mitigation issue.

PN18

THE VICE PRESIDENT: I mean, provisionally, and very provisionally - indeed I withdraw that, I won't even express a provisional view. I will simply express a concern about legal issues that arise; there are some authorities in the Commission that suggest that notions of onus of proof are not appropriate in the context of applications which are arbitrated by the Commission. On the other hand, mitigation is one of the matters which Section 170CH(2) requires the Commission to have regard to.

PN19

Mitigation is a matter peculiarly within the knowledge of the applicant and respondent of the appeal. It is a matter peculiarly without the knowledge of the Department. There is a real issue as to what course the Commission ought properly take in the absence of evidence as to attempts to mitigate. Provisionally, I take the view that it is inappropriate for the Commission to speculate that the applicant has made attempts to mitigate, and therefore it ought order substantial amount, pursuant to Section 170CH(4).

PN20

On the other hand, for reasons which have to do with practicality no doubt, there is also a problem of the absence of evidence in relation to earnings in mitigation in the period between the Senior Deputy President's decision and the date on which the appeal was heard, and now the period between the date of the hearing of the appeal and this decision. It seems to me that those matters can be properly addressed at the time of any hearing in respect of the appropriate orders to be made under Section 170CH(4) in the event that the parties can't come to some sensible agreement amongst themselves in relation to orders for continuity and in respect of compensation for income that would have been received in the period. I don't think it is necessarily appropriate for me to say more than that.

PN21

MR HUMPHREYS: I accept that, thank you.

PN22

THE VICE PRESIDENT: Is there anything that you, Mr Jacobs, or Mr Van Tempest would wish to contribute to that particular exchange?

PN23

MR JACOBS: It is Mr Jacobs here, your Honour, I don't think there is anything that arises from that. I think all I can say is the respondent will obviously need some time to digest both what you have said today, and also of course the content of the decision, with a view to perhaps reporting back to you at some stage, or something along those lines.

PN24

THE VICE PRESIDENT: And of course, the Department may well take the view that it wishes to exercise its rights to have issues that are raised here considered elsewhere; that of course also can be accommodated. But I think the important point that the Members of the Bench wished to convey to the Department in particular was the need to make a decision about whether or not the foreshadowed disciplinary proceedings will occur with reasonable expedition and to prosecute those proceedings with reasonable diligence in the event it is decided to pursue them.

PN25

MR JACOBS: Yes, your Honour, yes, and that is certainly - that obviously hasn't fallen on deaf ears, it is a matter that we are most conscious of.

PN26

THE VICE PRESIDENT: Yes.

PN27

MR JACOBS: So no doubt steps will be put in place to make any decision in respect of that as quickly as possible. Perhaps the only matter that might immediately arise from what your Honour has said today - and I haven't taken any instructions in respect of this - but just whether there should be some sort of report-back to your Honour at some stage.

PN28

THE VICE PRESIDENT: At the moment, what I would propose to do is not to set a date for that.

PN29

MR JACOBS: Yes.

PN30

THE VICE PRESIDENT: But to give the parties leave to relist the matter on, say, 48 hours notice in the event that either of the parties thinks that there is something that ought be raised. Obviously, the respondent's camp will be eager to obtain the benefit of orders under Section 170CH(4) in the event that the parties are unable to agree upon appropriate orders.

PN31

MR JACOBS: Yes, your Honour.

PN32

THE VICE PRESIDENT: Which orders I would make, rather than the Full Bench, given that the Full Bench has now given me a direction pursuant to Section 45(7)(c) to determine those issues. So I would imagine that Mr Phillis' representatives would be seeking to have the matter relisted if there is any significant delay in a decision to commence further disciplinary proceedings or not, and the reasonably expeditious dispatch of those proceedings.

PN33

MR JACOBS: Yes, your Honour. I accept that liberty to have the matter relisted at short notice is the most appropriate course for the Commission to take. The only minor issue is just, given that the Commission is in Sydney and the parties are interstate, is just whether perhaps you might allow 72 hours?

PN34

THE VICE PRESIDENT: Certainly.

PN35

MR JACOBS: Rather than 48 hours.

PN36

THE VICE PRESIDENT: Yes, certainly.

PN37

MR JACOBS: That is the only matter that I would raise.

PN38

THE VICE PRESIDENT: Certainly; so that either party has liberty to apply to relist the matter before me on 72 hours notice to the other party.

PN39

MR JACOBS: Yes, if your Honour pleases.

PN40

THE VICE PRESIDENT: And unless there is anything else that the parties wish to raise, I propose now to conclude this telephone hearing.

PN41

MR HUMPHREYS: Deputy President, this is Peter Humphreys again, I am just wondering whether, rather than have some room for differences of opinion perhaps, if I put it that way, on the matter of the due expedition of any disciplinary proceedings, is it realistic to nominate a time rather than us be saying, well, you haven't done it diligently, and the Department saying, well, we are doing it - giving it our urgent attention, and I mean, it just seems to me that if it is open-ended it just creates an opportunity for further uncertainty and possibly argument as to what is or isn't reasonably efficient.

PN42

THE VICE PRESIDENT: We turned our minds to that; however, we think it is inappropriate to do so on the basis that we simply don't know what the precise nature of the processes are that have to be followed within the Department.

PN43

MR HUMPHREYS: Yes.

PN44

THE VICE PRESIDENT: Or the practical matters that will bear upon how long it will take to organise and conclude such a hearing, in the event the Department decides to proceed with the foreshadowed disciplinary proceedings.

PN45

MR HUMPHREYS: I wasn't - - -

PN46

THE VICE PRESIDENT: Therefore, we have left that on the basis that we have.

PN47

MR HUMPHREYS: Yes, I guess my query was directed not so much as the conclusion or the completion of it, but really, whether or not there is going to be some action taken, so that we are not left wondering whether the Department are still contemplating taking disciplinary proceedings or not. I mean, I accept that it could be - there could be all sorts of variables that might impact upon the length of time that would be involved in making the investigation and - sorry - once a decision is taken to proceed down that path, there could be any number of variables between the commencement of it and the conclusion of it, but I am just wondering whether if we mightn't look at a timeframe which the Department might commit to one thing or the other.

PN48

THE VICE PRESIDENT: I don't have the authority of the other members of the Bench to speak on their behalf and to impose some deadline on the Department in that regard. I think the Department is a responsible employer, and it is reasonable to expect that they will behave responsibly in this particular context; that therefore there won't be any inordinate delay in the making of a decision as to whether or not to pursue the proceedings, or indeed, any delay in the prosecution of those proceedings.

PN49

Of course, the parties will need to communicate with me, in the near future in any event, with orders; hopefully agreed, and if not agreed, then orders that I will determine, to give effect to the reasons of the Full Bench. Those orders will obviously be an order for the reinstatement of Mr Phillis pursuant to Section 170CH(3)(b), and an order pursuant to Section 45(7)(c) giving a direction to me in accordance with para 35 of the decision.

PN50

MR HUMPHREYS: Yes, your Honour.

PN51

THE VICE PRESIDENT: Fine. Okay, well, that concludes this decision hearing. Thank you.

ADJOURNED INDEFINITELY [3.22pm]