Challenges when natural justice collides with APS secrecy requirements

We have written on the topic in these pages before, drawing analogy to a famous judicial description of hardcore pornography: "I know it when I see it." The content of natural justice is notoriously amorphous. But a recent Fair Work Commission decision underscores some interesting challenges that arise when the principle collides with secrecy obligations. Although arising in the private sector, Devine v Westpac Banking Corporation contains useful lessons for the APS.

Devine had been employed by Westpac since 2011 in a relationship management role. In August 2020, she was asked to attend a formal meeting with a senior manager the following day. Concerned about what the meeting might entail, Devine sought assistance from a union representative, who requested more detail. Westpac cancelled the meeting and immediately terminated Devine's employment, without providing any reason for the dismissal.

For a sophisticated employer like Westpac, this is an extremely unusual approach. Natural justice dictates that employers must put employees on notice about potential misconduct that might give rise to disciplinary action, and give them an opportunity to respond. In the APS context, procedural fairness in Code of Conduct processes is mandated by the Public Service Act 1999. There are very few circumstances which might justify an employer summarily dismissing an employee; even then, they would be obliged to provide reasons for termination at the time.

Devine lodged an unfair dismissal application in the commission. To defeat such an application, Westpac needs to show, among other things, that it had a valid reason for firing Devine. Instead, in its response, Westpac said that it was legally prevented from disclosing why it terminated its employee, but insisted it did have a valid reason "related to her integrity which caused the employer to lose trust and confidence in her".

Westpac then sought a confidentiality order from the commission. These are not entirely uncommon; while the commission ordinarily operates on the basis of open justice, sometimes it will close its doors to the public. But the orders Westpac sought were not just to prevent the public from knowing about the conduct of the proceedings. Westpac also wanted to be able to provide the commission with evidence that Devine could not see. All of this, allegedly, because of its legal obligations to a regulator (presumably AUSTRAC or APRA, deputy president Bull speculated, although Westpac said it could not even identify the regulator). All rather Kafkaesque.

In a decision published in late February, the deputy president refused Westpac's application. "To say the least, this application is unusual, if not unprecedented," he said. Noting the commission's obligation to provide natural justice to all parties, Bull held that Devine "could not possibly be provided with every opportunity to [prosecute her case] where the commission is appraised of the reasons for her dismissal, but not Devine herself."

While indicating he was "sympathetic" to the "predicament" Westpac found itself in, Bull ultimately concluded that he could not "countenance an unfair dismissal hearing proceeding on the basis" sought by Westpac. Regrettably for curious employment lawyers, we may never know anything further about this unusual case. Bull noted that he would happily entertain a more limited confidentiality order, which would likely prevent the public learning how the dispute unfolds and what allegedly justified the unannounced dismissal of Devine.

But the Devine case offers several useful lessons for public sector employers and employees, given the prevalence of secrecy laws and classified information in this sphere. The first is a helpful reminder about the overarching importance of procedural fairness and natural justice in employment disputes - both during the disciplinary stage and in any subsequent tribunal proceedings.

Bull noted that "the right to a fair hearing requires that individuals are not penalised by decisions affecting their rights or legitimate expectations unless they have been given prior notice of the cases against them, a fair opportunity to answer them, and the opportunity to present their own cases." Fail to meet those standards for whatever reason, and a decision to sanction a public servant for misconduct will likely fall down.

Secondly, pleas to the requirements of secrecy are likely to be given only partial credence by the Fair Work Commission. While the need to use secret or classified information in an employment dispute may be sufficient to overcome the presumption of open justice, it will not - on the basis of Devine - be enough to trample over natural justice concerns. Particularly given the statutory requirements for procedural fairness in the APS context, it is hard to envisage a government agency getting away with Westpac's conduct in Devine.

Finally, it may be that in such circumstances a balance between the secrecy requirements and procedural obligations cannot be adequately accommodated. The consequence might be that the employer has to accept liability for unfair dismissal, even if it thinks it has a valid reason (which in cannot disclose). The commission, in such a case, might order compensation for the employee but refuse reinstatement, as a way to balance the scales in a suboptimal situation.

Parallels can be drawn to prosecutions for secrecy offences, where courts are required to balance an accused's fair trial rights with the need to limit awareness of the material alleged to have been wrongly disclosed. It would be counterproductive if secrecy prosecutions resulted in broader dissemination of the secret material. Faced with this dilemma, some courts have stayed prosecutions, unable to find a suitable compromise. In Devine, Westpac submitted that it had been placed in an "invidious position". This may be so - but in such circumstances, justice probably dictates that the unfairness falls more squarely on a large corporation than an individual employee.

As another High Court justice has reminded us, "that no man is to be judged unheard was a precept known to the Greeks." Despite two millennia of legal progress and, more recently, the rise of secrecy-shrouded regulatory regimes, that principle remains robust. Unfortunately for Westpac, the words of Roman playwright Seneca continue to inform Australia's unfair dismissal laws:

Who ought decrees, without hearing both sides discuss,

Does so unjustly, though his judgment may be just.