Workplace Relations Insights

05 October 2005

Dismissal at pleasure? Procedural fairness for public sector employees

By Bob Cook.

Key Points:
Where the statute provides for removal from office or termination of employment and is silent as to the manner or way in which the power is to be exercised, a duty to comply with procedural fairness will be implied.

Can government and public sector employers dismiss employees "at pleasure" – that is, without reason or giving an opportunity to the employee to be heard?

This issue was considered on 8 September 2005 by the High Court. In Jarratt v Commissioner of Police for New South Wales [2005] HCA 50, the High Court decided that the Deputy Commissioner of Police in NSW should have been given an opportunity to be heard before a decision was made to remove him from office on account of his performance, and so terminate his employment as a member of the senior executive service.

Facts

The Governor of New South Wales acted on the recommendation of the Commissioner of Police (which was approved by the Minister for Police) to remove Mr Jarratt from his position as Deputy Commissioner of Police. The Governor acted under section 51 of the Police Act 1990 (NSW).

Sections (1) and (1A) of section 51 of the Police Act stated:

"(1) An executive officer may be removed from office at any time:

(a) by the Governor on the recommendation of the Commissioner, in the case of a Deputy Commissioner or Assistant Commissioner, or

(b) by the Commissioner, in any other case

(c) A recommendation referred to in subsection (1)(a) may not be submitted to the Governor except with the approval of the Minister."

The basis for his removal from office, as indicated in the media release, was "performance". Mr Jarratt claimed he was not given an opportunity to put his case about any problems or criticism with his performance.

The applicant sought redress first in the Supreme Court of NSW, claiming damages of nearly $650,000 for breach of contract. He claimed that as he had not been given natural justice (procedural fairness), his removal from the office of Deputy Commissioner of Police was invalid, so that his discharge from the Police Service repudiated his contract entitling him to damages. Justice Simpson at first instance allowed his claim. On appeal, the NSW Court of Appeal allowed the Commissioner of Police's appeal, reversing the Supreme Court's decision, and holding that he was not entitled to natural justice before being removed from office. Mr Jarratt then appealed to the High Court.

High Court decision

The High Court unanimously decided to allow the appeal and to set aside the order of the Court of Appeal. The Court decided that the applicant was entitled to natural justice before removal from office.

In the course of its decision, the Court made observations on the concept of dismissal at pleasure, and the nature of broad statutory powers enabling removal from office.

"Dismissal at pleasure"

Chief Justice Gleeson described the concept of an office held at pleasure as meaning that

"whoever has the power to remove the office holders may exercise the power at anytime, and without having to provide, either to the office-holder, or to a court examining the decision to remove, any justification of the decision."

Further, where an office is held at pleasure

"[n]o period of notice, and no justification or cause for removal, is required by law".

The Chief Justice observed that holding office at pleasure is no longer appropriate and that such a rule would be "difficult to reconcile with modern conceptions of government employment and accountability".

The joint judgment of Justices McHugh, Gummow and Hayne also was critical of the concept. They observed that the underlying reason for dismissal at pleasure – that the monarch who engaged crown servants can do no wrong – does not apply to contemporary public administration. They did not find it necessary to conclude on whether there was any room for the concept to operate today because most public service positions were governed by legislation – the Police Act being the applicable Act in this case. This legislation abrogated or displaced the concept of dismissal at pleasure.

The governing Act and natural justice

The powers in section 51, relating to removal from office, were broad. There was silence as to the need for natural justice. The Court implied into the empowering section an obligation to follow fair procedures: the applicant should have been accorded natural justice.

In the words of Chief Justice Gleeson:

"The very breadth of the statutory power seems to me to be an argument for, rather than against, a conclusion that it was intended to be exercised fairly. So also is the consideration that, in practice, the power would normally be exercised for cause, even though such cause is not legally necessary."

Parliament is taken to have intended that a statutory power, which can prejudice the rights or interests or legitimate expectations of a person, must be exercised fairly and in accordance with natural justice.

Justice Callinan observed that procedural process was not incompatible with the duties imposed on the Commissioner to manage the service "effectively, efficiently and economically". Efficiency, he considered, would be enhanced by "the beneficial effect on morale" and public confidence would be maintained.

Justice Heydon noted that the "way in which the duty to give procedural fairness is to be compiled with in particular cases may well vary with the circumstances".

Implications

This case has implications for employers and employees where employment is governed by statute, or a mixture of statue and contract. Where the statute provides for removal from office or termination of employment and is silent as to the manner or way in which the power is to be exercised, a duty to comply with procedural fairness will be implied. An employer cannot dismiss such an employee without giving that employee an opportunity to be heard. This right of employees is not through the operation of unfair dismissal legislation. Rather it is through the courts implying such a duty, where a strict and literal reading of the express powers of dismissal under the statute does not impose such a duty.

Failure to give procedural fairness in this case resulted in breach of contract for which significant damages were payable.

Employers should be aware that the right of dismissal at pleasure for public sector employees does not find favour with the High Court in the context of modern public sector administration and employment.

 

Thanks to Marilyn Pittard for her help in writing this article.

For further information, please contact Bob Cook.

Disclaimer
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states or territories.