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Procedural Fairness and the Right to Dismiss a Senior Public Servant
Max Spry
Consultant Law & Bills Digest Group
24 August 1999
The common practice is for senior Commonwealth, State and Territory public
servants to be appointed under a form of statutory contract, usually for
a term not exceeding five years. Legislation providing for such contracts
usually states that the contracts may be terminated before the expiry
of their term. Generally, no mention is made of the need to give reasons
when such dismissals occur, and it was widely believed, until the Federal
Court decision in Barratt v Howard (FCA 19 August 1999), that there
was no obligation to give reasons for dismissal.
Public Service Act 1922 (Cwth)
The Public Service Act 1922 governs the appointment to and removal
from office of departmental heads, i.e. Secretaries of Departments.
Section 36 relevantly provides that the Governor-General may appoint
a person to 'an office of Secretary' on the recommendation of the Prime
Minister.
The Prime Minister must not make such a recommendation until he has received
advice from the Secretary of the Department of Prime Minister and Cabinet.
(If a person is to be appointed to the office of Secretary to the Department
of Prime Minister and Cabinet, the relevant recommendation must come from
the Public Service Commissioner.)
Section 37 provides that an appointment shall not exceed five years.
Subsection 37(5) provides, in part, that the Governor-General may terminate
the appointment on a specified day and if, after that day the person does
not hold another office of Secretary, he or she is retired from the Public
Service.
Subsection 37(11) makes it clear that the Governor-General must act in
accordance with a recommendation made by the Prime Minister. The Prime
Minister must not make any recommendation to the Governor-General without
first receiving a written report from the Public Service Commissioner
or the Secretary to the Department of Prime Minister and Cabinet, as the
case may be.
The Facts in Barratt v Howard
Mr Barratt was appointed to the office of Secretary to the Department
of Defence in late 1997. His appointment, which commenced in February
1998, was for a fixed-term of five (5) years.
On Thursday 22 July 1999, some 18 months after his appointment, Mr Barratt
was advised by Mr Moore-Wilton, Secretary to the Department of Prime Minister
and Cabinet, 'that his appointment would be terminated by the Governor-General
on the advice of the Prime Minister in early August' (Australian Financial
Review, 30 July 1999, p. 4).
On Tuesday 27 July 1999, Mr Barratt obtained an interim injunction from
the Federal Court restraining the Prime Minister, Mr Howard, 'from advising
the Governor-General to terminate Mr Barratt's employment' (The Australian,
28 July 1999, p. 1).
A single judge of the Federal Court heard the matter over four days in
August, handing down his decision on Thursday, 19 August 1999.
The Issues
Justice Hely had to decide two key issues:
- was Mr Moore-Wilton and/or the Prime Minister 'obliged to afford the
applicant (Mr Barratt) procedural fairness, including a reasonable opportunity
to be heard' (para 4 of the judgment), and
- could the applicant only be dismissed for cause, that is because of
'some fault or incapacity of a fundamental nature that goes to the fitness
of the applicant to continue to occupy the office for the remainder
of the fixed term' (para 6)?
The Decision
Justice Hely dismissed the applicant's claim that he could only be dismissed
for cause. Section 37(5) does not set out any factors that must exist
before the Prime Minister may recommend the dismissal of a Secretary (para
49).
However, his Honour agreed with the applicant's claim that he was entitled
to procedural fairness, as the applicant's appointment could only be terminated
as an exercise of statutory power. Although the Prime Minister may decide
to recommend the dismissal of a Secretary for a wide range of reasons,
the recommendation has 'a direct and immediate effect on the applicant's
interests' and for this reason the obligation to provide procedural fairness
arises (para 53).
Here Justice Hely said that procedural fairness requires the applicant:
be told the grounds upon which a recommendation is proposed to be made
to the Governor-General that his appointment be terminated, and he is
entitled to be heard in relation to those grounds or reasons (para 68).
However, the applicant need not be given an oral hearing. Further, the
applicant is only entitled to put their case to the Secretary of Prime
Minister and Cabinet. Accordingly, where the Prime Minister acts on the
reasons given by his departmental Secretary, the Prime Minister need not
also hear the applicant before making the recommendation to the Governor-General.
However, should the Prime Minister make the recommendation to the Governor-General
on grounds other than those contained in the Secretary's report, the applicant
may be entitled to a further hearing.
Not a Mere Employee
Justice Hely held that Mr Barratt, the applicant, was entitled to procedural
fairness because he is the holder of a 'public office', that is, the 'office
of Secretary', and his appointment is regulated by the Public Service
Act (para 12). His Honour stated that:
At common law, and apart from statute, Crown servants hold office at
the pleasure of the Crown, and may be dismissed at any time without
notice, and for any reason, or for no reason. There is no right to be
heard before dismissal (para 7).
However, as the Public Service Act now governs the appointment of the
applicant, the common law position no longer holds, and the applicant
cannot be dismissed at pleasure. He may only be dismissed in accordance
with the terms of the Act, and any exercise of a power under the Act is
'subject to general public law principles which govern the exercise of
administrative discretions' (para 12).
The position of the applicant would be otherwise if his relationship
with the Government were one of mere employee/employer. In that case,
he would only be entitled to be heard before dismissal if the statutory
contract of employment conferred such a right (para 11).
Implications
Barratt v Howard is an important decision for the Commonwealth,
State and the Territory governments, although different considerations
may well apply in the States and Territories.
Focusing on the Commonwealth, the decision extends beyond the dismissal
of departmental secretaries. For example, the growing minority of the
Commonwealth Senior Executive Service members appointed for a fixed term
are appointed 'to hold office as a Senior Executive Service officer' (section
44, Public Service Act).
The decision may generate renewed debate on the significance of the public
office/employee distinction. If, however, the approach in Barratt v
Howard is followed, the fact that the applicant is the holder of a
public office may be of less significance than the fact that his appointment
is governed by the terms of the Public Service Act. This then raises the
question whether there is an obligation to provide procedural fairness
in the context of other employment decisions affecting senior public servants,
short of dismissal, but which have 'a direct and immediate effect' on
the public servant's interests.
Justice Hely also accepted that 'policy or political considerations may
have a bearing upon the selection of a departmental head' (para 50). But
what of anti-discrimination legislation prohibiting employment decisions
being made on the grounds of political belief or activity? If the recent
decision of the Queensland Anti-Discrimination Tribunal in Byrne v
Queensland is correct, then incoming governments may not find it an
easy matter to rid themselves of senior public servants appointed by an
outgoing regime of a different political complexion.
The requirement to afford procedural fairness to Departmental Secretaries
would largely be unaffected by the Public Service Bill 1999 and associated
proposals (the Bill) currently before federal Parliament. The Bill, does
however, remove the Governor-General from the equation, with Part 7 relevantly
transferring formal powers of appointment and termination to the Prime
Minister.
Lastly, at time of writing Mr Barratt remains in office but, if media
reports prove accurate, the Government will soon act to remove him from
his current position by lawful means.
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