FEDERAL COURT OF AUSTRALIA

O’Sullivan v Commissioner of Police [2019] FCA 1367

ORDERS

THE COURT ORDERS THAT:

1.    The originating application be dismissed.

2.    The applicant pay the first respondent’s costs as agreed or assessed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BROMWICH J:

1    The applicant, Ms Bridget O’Sullivan, is a member of the Australian Federal Police (AFP), employed under s 24 of the Australian Federal Police Act 1979 (Cth) (AFP Act). She was subject to disciplinary action taken by the second respondent as a delegate of the first respondent, the Commissioner of the AFP. The delegate ultimately decided not to terminate Ms O’Sullivan’s employment, instead exercising a discretion to impose six actions. Those six actions were to preclude her working again in the professional standards area in which her contravening conduct had arisen, a reduction in her salary band classification and pay point, formal counselling, ethics and governance training, a formal warning and participation in the development of a case study into the conduct giving rise to the disciplinary action. The key sanction in dispute is the reduction in her salary band classification and pay point.

2    Part V of the AFP Act contains the AFP disciplinary provisions. Section 69B of the AFP Act excludes the Fair Work Act 2009 (Cth) from application in relation to a matter “covered by”, or action taken in relation to a matter covered by, Part V (other than express exceptions discussed further below). Ms O’Sullivan contends that the disciplinary action against her was taken under the Australian Federal Police Enterprise Agreement 2017-2020, approved by the Fair Work Commission under the Fair Work Act, and that this was contrary to s 69B insofar as it resulted in a reduction in her salary. By an originating application, Ms O’Sullivan brings judicial review proceedings under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act), and in the alternative under s 39B of the Judiciary Act 1903 (Cth), seeking vindication of that contention. At the commencement of the hearing, and without objection, I granted Ms O’Sullivan an extension of time for the filing of her originating application to the date upon which it was filed, 21 September 2018.

3    Ms O’Sullivan characterises the central issue in this proceeding as being whether the Enterprise Agreement could validly confer powers on the Commissioner to impose the sanction of a reduction in her salary band classification and pay point. The primary relief Ms O’Sullivan seeks is to set aside only the action of reducing her salary band classification and pay point upon the basis that there was no power reposed in the Commissioner (and thus any delegate) to take that action.

4    Ms O’Sullivan also seeks an injunction to prevent the Commissioner from taking any future action to reduce her salary based on her prior conduct and a declaration that there is no power to take such action.

5    The respondents’ case is that the ADJR Act aspect of the originating application is incompetent (leaving the more limited application under s 39B of the Judiciary Act), that there was a valid and effective power to reduce Ms O’Sullivan’s salary pay point and, in the alternative, that it would be an inappropriate, if not improper, exercise of discretion to set aside only the reduction in salary band classification and pay point component of the disciplinary action taken as an alternative to termination, given the composite nature of that decision. That is, the respondents contend, if the decision is vitiated, the entirety of the decision should be set aside and remitted for re-determination. Both sides sought costs.

Background

6    The facts are largely not in dispute. On 7 April 2017, Ms O’Sullivan was informed about an allegation that she had breached the AFP Code of Conduct in relation to the disclosure to a fellow AFP officer of certain professional standards confidential information. The allegations were investigated. She was directed to participate in interviews, given a copy of an initial report and given an opportunity to comment. On 12 April 2018, the delegate informed Ms O’Sullivan that the allegation against her was established as “category 3 conduct” and that consideration was being given to terminating her employment. She was invited to make a written submission in response. To that point, the whole of the investigation of the allegations, the findings and the proposed sanction was conducted under Part V of the AFP Act, including the delegate’s proposal to take termination action under s 28 of the AFP Act.

7    Ms O’Sullivan, through her union, the Australian Federal Police Association (AFPA), made a written submission to the delegate as to why she should not be dismissed. The delegate effectively acceded to that submission and subsequently decided not to proceed with termination action. Instead, by a notice dated 25 May 2018, the delegate decided to take six actions in relation to Ms O’Sullivan as follows (verbatim):

1.    You are never to work in Professional Standards (PRS) again.

2.    You are to be reduced from pay point 4.5 to 3.5.

3.    You are to receive formal counselling from the Chief Police Officer (CPO) ACT, and this counselling should be reflected in your Performance Development Agreement, with emphasis on;

    a.    The need to know principle;

   b.    The harm that careless sharing of information or gossiping can have on individuals who are the subject of that discussion; and

   c.    Reporting obligations and the importance of Commissioners Order on Professional Standards (CO2).

  4.    You are to undertake the Ethics and Governance course you have identified at your own cost and ensure that you complete all mandatory training, including privacy, secrecy and the disclosure of information.

  5.    You be issued a formal warning.

6.    You work with PRS to develop a case study with emphasis on what effect this behaviour can have on culture and individuals who have their privacy breached.

Comments were also made in the notice about aspects of the submissions made on her behalf that were not accepted.

8    The action that Ms O’Sullivan challenges is the reduction in her salary band classification from 4 to 3, with a pay point of .5, such that she went from being at the 4.5 level to being at the 3.5 level. On the basis of the current Enterprise Agreement, this reduced her annual salary by $12,853 in 2018, $13,110 in 2019, and $13,241 in 2020. She deposes to the fact that, in the ordinary course, it will take her at least five years to again reach her prior salary band and pay point (referred to in the notice in a composite way as simply her “pay point”).

9    On 20 June 2018, the AFPA, on behalf of Ms O’Sullivan, wrote to the delegate, requesting a statement of reasons under s 13(1) of the ADJR Act for the decision to reduce her pay point. The delegate replied on 19 July 2018 to the effect that there was no right under the ADJR Act to a written statement of reasons. That was said to be because the delegate’s decision to reduce her salary band classification and pay point from 4.5 to 3.5 was made under cl 67 of the Enterprise Agreement, noting that “the application of the sanction is a decision made under the Fair Work Act 2009 (Cth) (the FW Act), in that it is made under an instrument made pursuant to the Fair Work Act”. Decisions made under the Fair Work Act are in a class of decisions to which the ADJR Act does not apply by reason of being listed at item (a) of Schedule 1.

Relevant parts of the AFP Act, Fair Work Act and enterprise agreement

10    The Fair Work Act establishes substantive employment rights, such as through the National Employment Standards and Parts 3-1 and 3-2, as well as establishing procedures through the Fair Work Commission for making awards and approving agreements, enforceable through the courts. The permitted terms of agreements are generally limited only by the requirement that they pertain to the relationship between the employer and employees, and employee organisations, per s 172(1), and that they do not contain any unlawful terms per ss 186(4) and 194.

11    The relevant parts of the AFP Act are:

(1)    Section 3A(6A) states: “Part V provides for the setting of AFP professional standards and the way in which AFP conduct or practices issues are raised and dealt with.”

(2)    Section 27 provides:

Remuneration and other conditions

(1)    The Commissioner may from time to time determine in writing the remuneration and other terms and conditions of employment applying to an AFP employee, other than:

(a)    terms and conditions of employment that the Commissioner may determine under subsection 40H(2); or

(b)    accommodation arrangements that are to apply to an AFP employee, and allowances an AFP employee is to be paid, while the employee is performing duties of the kind covered by paragraph 40H(3)(b).

Note:    The Commissioner may, under section 35A, authorise special payments to AFP employees.

      Application etc. of industrial instrument

(2)    A determination under subsection (1) may apply, adopt or incorporate, with or without modification, any of the provisions of an industrial instrument, as in force at a particular time or as in force from time to time.

Industrial instrument prevails over a determination under subsection (1)

(3)    An industrial instrument overrides any determination under subsection (1), to the extent of any inconsistency.

Interpretation

(4)    In this section:

Industrial instrument means an award, determination or industrial agreement made under the Fair Work Act 2009 or continued in existence by the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (see item 2 of Schedule 3 to that Act).

Note:    A determination under section (1) must not provide less than the minimum entitlements of employment under the Australian Fair Pay and Conditions Standard (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009: see item 4 of Schedule 2 to that Act) or under the National Employment Standards (within the meaning of the Fair Work Act 2009).

(3)    Section 40RB gives a simplified outline of Part V, with s 40RB(5) stating:

AFP conduct issues that belong to the 2 more serious categories (category 3 and corruption issues) are dealt with through more formal investigations and may be addressed not only by training and development action and remedial action but also by termination action (see section 40TE) and other action. The investigation may also give rise to a prosecution for an offence.

(4)    Section 40TR of the AFP Act provides:

Recommendations that may be made in relation to category 3 conduct or corrupt conduct

(1)    If the investigator is satisfied, on reasonable grounds, that the AFP appointee has engaged in category 3 conduct or corrupt conduct, the investigator may recommend that any one or more of the following be taken in relation to the AFP appointee:

(a)    termination action;

(b)    remedial action;

(c)    training and development action;

(d)    any other action that the Commissioner can take in relation to the AFP appointee.

Note 1:    For termination action, see section 40TE.

Note 2:    For remedial action, see section 40TD.

Note 3:    For training and development action, see section 40TC.

Note 4:    If evidence emerges, at any stage of the investigation, that the AFP appointee may have committed an offence, the investigator could also arrange for the AFP appointee to be charged with the offence. This might be done even before the investigation of the issue is completed. The AFP appointee might be charged with the offence even if the investigator does not recommend that termination, remedial or training and development action to be taken in relation to the AFP appointee.

(2)    To avoid doubt, the Commissioner may take termination action in relation to an AFP employee whether or not a recommendation has been made by an investigator that termination action be taken in relation to the employee.

(5)    Section 40TV of the AFP Act provides:

Taking action on report

The Commissioner must ensure that:

(a)     any recommendations made in the report under section 40TU are fully considered; and

(b)    appropriate action is taken in relation to the issue to which the report relates.

(6)    Section 69B of the AFP Act provides (emphasis added below the heading):

Limited operation of Fair Work Act

(1)    The Fair Work Act 2009 (other than Part 3-1 or Division 9 of Part 3-3) does not apply in relation to any of the following matters:

(a)     a matter covered by any of Divisions 2 to 8 of Part IV or any action taken under any of those Divisions;

(b)    a matter covered by Part V or any action (other than action to terminate employment under section 28 of this Act to which the Fair Work Act 2009 would otherwise apply) taken in relation to a matter covered by that Part;

(c)    any entitlement of AFP employees to adjustment payments;

(d)    any other matter prescribed by the regulations.

(2)    The Fair Work Act 2009 (other than Parts 3-1, 3-2, 6-1 and 6-4, and Division 2 of Part 3-6) does not apply in relation to the termination of employment of AFP employees.

(3)    To avoid doubt, this section does not imply that the Fair Work Act 2009 applies to any matter covered by this Act:

(a)    that is not mentioned in this section; and

(b)    to which the Fair Work Act 2009 would not otherwise apply.

12    Clause 67(1)(a) and (2) of the Enterprise Agreement relevantly provides:

67    Reduction in Classification

(1)    The Commissioner may reduce an Employee in classification to any Increment Point in any Salary Band within the AFP as a result of:

(a)    an adverse Professional Standards finding under Part V of the AFP Act, in relation to a category three conduct issue or a corruption issue being made where the Commissioner has made a determination that the appropriate action in relation to the finding is to reduce, or includes a reduction in, the Employee’s salary band, or

(b)    …

(2)    Where an Employee is reduced in classification under this section, all the terms and conditions, including salary rates, or broadband provisions, applicable to the classification to which the Employee is reduced, will apply until such time as the Employee is otherwise advanced in accordance with an open selection process based on Merit Principles.

…

Power to reduce the salary band classification and pay point

13    The burden of Ms O’Sullivan’s argument is that cl 67(1)(a) of the Enterprise Agreement could not validly confer any power to reduce her salary band classification and pay point, and thereby demote her, because of the operation of s 69B of the AFP Act. She contends that s 69B extends to the operation of enterprise agreements made and approved under the Fair Work Act, except for the limited express exceptions of general protections in Part 3-1 or payments relating to periods of industrial action in Part 3-3 of Div 9.

14    The burden of the respondents’ contrary argument is that s 69B does not apply to exclude the Enterprise Agreement (or any AFP enterprise agreement), nor to the decision of the Fair Work Commission to approve the Enterprise Agreement (or any AFP enterprise agreement). Rather, the respondents contend that s 69B(1)(b) applies after the action of imposing a sanction has been taken and is directed to limiting the circumstances in which an employee may pursue a remedy under the Fair Work Act following any such decision. On the respondents’ argument, s 69B(1)(b) operates to preclude certain claims or actions being initiated under the Fair Work Act, other than in accordance with the express exceptions identified in the preceding paragraph. Alternatively, the respondents contend that if cl 67(1) of the Enterprise Agreement was not the source of the Commissioner’s power to reduce Ms O’Sullivan’s salary band classification and pay point, that s 27 of the AFP Act provided an alternative source of power for the decision.

15    Because the competing and irreconcilable arguments are of some complexity, it is necessary to consider them in some detail before deciding which should prevail.

Ms O’Sullivan’s argument in detail

16    Ms O’Sullivan contends that the Commissioner and thus his delegate did not have the power to take the action of reducing her salary band classification and pay point under the Enterprise Agreement or otherwise. She argues that is so because the Enterprise Agreement is approved and made operative by the Fair Work Act, and s 69B of the AFP Act provides that the Fair Work Act does not apply to a “matter covered by” Part V of the AFP Act. She contends that the phrase “matter covered by” refers to the subject matter being addressed. Ms O’Sullivan develops her argument as follows:

  (1)    Both the Fair Work Act and Part V of the AFP Act deal with employment issues.

  (2)    The Fair Work Act is a law of general application which deals with employment comprehensively, and across all areas of employment with limited exceptions, and which can apply to dealing with disciplinary issues.

(3)    The Enterprise Agreement is approved and made operative by the Fair Work Act.

(4)    Part V of the AFP Act deals specifically with employment in the AFP and deals with only one aspect of that employment – professional discipline and related provisions.

(5)    The rationale behind s 69B of the AFP Act is that the AFP is a disciplined force, which makes the maintenance of discipline and professional standards critical to protect the public and to protect individual police officers from the consequences of split-second and sometimes lethal decisions. The exclusion of the operation of the Fair Work Act in respect of those parts that deal with command and discipline ensures that responsibility is left with the Commissioner and not some outside body or person.

(6)    By contrast, enterprise agreements are the product of agreement, by majority in the case of employees, which makes such agreements an inappropriate basis for, and repository of, disciplinary powers. Given the nature of enterprise agreements, if the Fair Work Act does not apply to a particular area, then neither can the Fair Work Commission approve an enterprise agreement applying to that area, nor can the provisions of the Fair Work Act which give the binding effect to such an agreement have operation in an area from which it has been excluded.

(7)    The AFP Act gives the Commissioner a wide range of powers, consistently with that Act being the repository of all powers to do with employment, especially in Part IV, Division 6, dealing with declarations of serious misconduct, and Part V, dealing with professional standards, conduct and practice issues. This was the place where a power to demote should reside, but for some reason it was not included.

(8)    In construing s 69B, it is important to observe the breadth of what is excluded, being, apart from Part 3-1 or Division 9 of Part 3-3, a matter, in the sense of subject matter, covered by any of Divisions 2 to 8 of Part IV or any action taken under those divisions, or a matter covered by Part V or any action taken in relation to a matter covered by that Part (apart from termination of employment under s 28).

(9)    The investigation was conducted pursuant to Part V of the AFP Act, and the finding was made of category 3 serious misconduct as defined in that Part. Thus, at all material stages it was a category 3 issue that was being considered. The show cause letter sent to Ms O’Sullivan raised the possibility of termination under Part V (s 28), being one of the actions able to be recommended upon a finding of category 3 conduct (s 40TR); and the letter advising of the sanctions made similar references to Part V, without identifying any source of the power to reduce Ms O’Sullivan’s salary being from anywhere other than the AFP Act.

(10)    When reasons were sought, the following was said as part of the reason why that request would not be acceded to:

The decision to reduce an employee’s classification is made under section 57 of the Australian Federal Police Enterprise Agreement 2017-2020 (the EA).

Under the ADJR Act, the AFP is not required to give reasons for the decision to apply the sanction of reducing the classification/salary of an AFP employee pursuant to the EA. This is because the application of the sanction is a decision made under the Fair Work Act 2009 (Cth) (the FW Act), in that it is made under an instrument made pursuant to the Fair Work Act. Consequently, the decision is specifically excluded at item (a) of Schedule 1 of the ADJR Act from being within the ambit of the ADJR Act and the requirement to provide a statement of reasons.

(11)    There would be potential for “conflict or dissonance” between the terms of an enterprise agreement and the provisions of Part V, but for Parliament enacting s 69B of the AFP Act, which specifically provides that the Fair Work Act does not apply to a matter covered by Part V of the AFP Act.

(12)    Section 69B:

(a)    expresses an intention that discipline in the AFP will be the responsibility of the Commissioner, subject only to the ancillary role of the Ombudsman, citing in support the second reading speech on the Law Enforcement (AFP Professional Standards and Related Measures) Bill 2006, 29 March 2006; and

(b)    resolves the potential conflict between the Enterprise Agreement and Part V by ensuring that the detailed provisions concerning facilities, procedures, rights, obligations and powers set out at Part V for dealing with the professional conduct of AFP appointees is not disturbed by operation of the Fair Work Act, other than in relation to the express exceptions.

(13)    Three of the four exclusions of the application of the Fair Work Act in s 69B operate by reference to the expression “matter covered by” Part V, or a component thereof. This is a reference to the subject matter of Part V and thereby to all of the terms, facilities, powers, procedures, rights, obligations, and so on, in relation to which Part V makes provision.

(14)    The word “matter” in the context in which it appears in s 69B is capable of encompassing all of the things involving or related to the provisions of Part V, citing R v Thomas; Ex parte Brodsky (1963) 109 CLR 434 at 436, and relying upon the terms of s 40RB(5) as summarising the subject matter of Part V as relevant to this proceeding. While the term “matter”, depending on the context, may mean justiciable controversy or dispute in relation to which a court or tribunal may have jurisdiction, it need not only have that meaning and does not only have that meaning in relation to a “matter covered by” Part V, because, in that context, the word “matter”:

(a)    is frequently used throughout the AFP Act to mean “subject matter”; and

(b)    more readily accords with the ordinary meaning of the transitive verb “to cover”, in its Dictionary meaning “to include; comprise; provide for; take in: this book covers all common English words”, quoting from the Macquarie Dictionary (Susan Butler (ed), Pan Macmillan, 7th Edition, 2017, p 354).

(15)    Section 27 of the AFP Act, relied upon by the respondents in the alternative as a source of power to demote, was not something that was raised at any material time, and indeed that Act was disavowed as being the source of the power to demote so as to resist providing reasons under the ADJR Act, such that Ms O’Sullivan was not given any opportunity to be heard on that. But in any event, s 27 cannot be a source of power because it only applies to remuneration determinations from time to time, which is inapt to apply to a disciplinary context.

17    The impact of Ms O’Sullivan’s argument, if accepted, is that the expression “matter covered by” Part V refers to the subject matter of Part V, and thus to the way in which conduct issues involving AFP employees are raised and dealt with. In particular, this would mean that the actions which the Commissioner can take under s 40TV of the AFP Act, by way of sanction if category 3 conduct is established following an investigation, is a matter in relation to which the Fair Work Act does not apply, subject to the express exceptions provided for in s 69B. Further, on Ms O’Sullivan’s expansive argument as to the scope of s 69B, that provision is not confined to proscribing any application of the Fair Work Act in relation to matters covered by Part V: it also proscribes any application of the Fair Work Act to “any action … taken in relation to a matter covered by that Part”. On this approach, an additional scope of the proscription in s 69B is that it covers action taken by the Commissioner (or his delegate) under s 40TV of the AFP Act on the report of an investigation of category 3 conduct issues. That is, s 69B proscribes the operation of the Fair Work Act, or instruments made operative and applicable by it, in relation to any powers exercised in imposing a sanction for misconduct.

18    On Ms O’Sullivan’s argument, the limitation of the application of the Fair Work Act, and any enterprise agreements made and approved under that Act, has the result that the powers conferred by Parliament on the Commissioner under s 40TV cannot be widened or narrowed, nor have the effect of diminishing, amending, governing, reviewing or enlarging any actions that may be taken in a particular case. On this argument, the particular provisions of the Fair Work Act that are made inapplicable by s 69B are those which give enterprise agreements legal force and effect in respect of terms covered by Part V of the AFP Act. Those provisions are primarily at ss 51 to 54 inclusive.

19    Ms O’Sullivan further argues that there is no other source of power to reduce her salary band classification and pay point, because the range of actions set out at s 40TR of the AFP Act do not include any express power to reduce an employee’s salary band classification and pay point. Nor, she contends, is the additional category in s 40TR(1) of “any other action that the Commissioner can take in relation to the AFP appointee” to be construed as adding a further substantial power to impose a reduction in salary band classification and pay point. Such a power must be one that the Commissioner already has, but there is no express power to take such action in the AFP Act.

20    Ms O’Sullivan draws on common law authority to support her interpretation. In particular, while the Crown in right of the Commonwealth has a common law right to dismiss an employee, this does not, without more, include a right to demote that employee, citing Director-General of Education v Suttling (1987) 162 CLR 427. Brennan J, writing for the majority in Suttling, said (at 442):

… even if the Crown’s right to dispense with the services of a member of the Service is unrestricted that right does not confer on the Crown (and, a fortiori, does not confer on the Director-General as a statutory officer) a power to reduce the position or salary of a Crown employee who has been appointed pursuant to statute to a position which entitles the holder to a particular salary. … An unrestricted power to dismiss at will from the Crown’s service does not import a power to reduce the position and salary of a Crown employee whose services are retained.

21    Dependent upon her preceding arguments succeeding, Ms O’Sullivan submits that a power such as demotion, which inflicts a significant and continuing financial penalty, must be conferred in clear terms and cannot be taken to form part of a general power of administration and control. Nor, she submits, does the common law of employment serve as a source of a power to reduce an employee’s salary band classification level and salary, there being no general right or power at common law for an employer to demote an employee, citing Western v Union des Assurances de Paris (1996) 88 IR 259 at 261; Beck v Darling Downs Institute of Advanced Education (1990) 140 IR 364 at 369–370; Quinn v Jack Chia (Australia) Ltd (1992) 1 VR 567; 43 IR 91 at 97–100; and Brackenridge v Toyota Motor Corporation (1996) 142 ALR 99 at 105-106.

22    Ms O’Sullivan submits that unless there is a contractual right to demote, an action which involves a reduction in classification, status, duties or remuneration or all of them is a wrongful breach of contract for which an employee is entitled to damages. It is convenient to record the respondents’ answer to this final point, namely that there is no allegation before the Court that the Commissioner has breached a common law contract of employment. Section 23(1) of the AFP Act provides that the Commissioner, on behalf of the Commonwealth, “has all the rights, duties and powers of an employer in respect of AFP employees”, conferring all the rights, duties and powers that an employer has under the common law.

The respondents’ argument in detail

23    The respondents accurately characterise the core and substance of Ms O’Sullivan’s argument detailed above as being that cl 67(1)(a) of the Enterprise Agreement was inoperative because:

(1)    the reference to the Fair Work Act in s 69B(1) should be construed to include “any instruments made operative or applicable by” the Fair Work Act;

(2)    the phrase “a matter covered” by Part V should be construed to mean “the subject matter of Part V”; that is, “all of the terms, facilities, powers, procedures, rights, obligations, etc in relation to which Part V makes provision”; and

(3)    the phrase “any action ... taken in relation to a matter covered by that Part” in s 69B(1)(b) should be construed to mean all actions taken under s 40TV of the AFP Act or cl 67(1)(a) of the Enterprise Agreement.

24    The respondents contend that this cannot be the correct interpretation for a number of independent but inter-related reasons.

25    First and foremost, the respondents contend that reference to the Fair Work Act in s 69B(1) does not include a reference to any enterprise agreements made under and given legal effect by that Act. That is said to be because s 69B(1) does not include or refer to any fair work instrument as defined in the Dictionary in s 12 of the Fair Work Act. The respondents contend that in the absence of such an express reference to something more than the Fair Work Act itself, it cannot be assumed, inferred or concluded that the reference to it extends to all “fair work instruments”, being orders made or anything done by the Fair Work Commission under that Act. In aid of that submission, the respondents rely upon a number of points of construction.

26    The respondents contrast s 69B(1) with s 27 of the AFP Act, with the latter specifically referring to an “industrial instrument” made under the Fair Work Act, which suggests that the drafters appreciated the distinction between that Act and instruments made under that Act. The respondents therefore submit that the sounder assumption and thereby construction is that the drafting of ss 69B and 27 of the AFP Act would have been uniform and therefore explicit if s 69B was intended to have the effect that an industrial instrument made under the Fair Work Act did not apply.

27    The respondents submit that this construction is also consistent with the nature and character of an enterprise agreement, which is not a regulation or legislative instrument, citing Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84; 222 FCR 152 at [89], [97]. Rather, the respondents submit:

(1)    an enterprise agreement is the result of a negotiation between the employer and employees;

(2)    once approved by the Fair Work Commission, an enterprise agreement is binding on the parties covered by the agreement; and

(3)    once an enterprise agreement is in place, the role of the Fair Work Act is relevantly to provide a remedy for an alleged breach of the agreement: see s 50.

28    The respondents submit that the effect of Ms O’Sullivan’s argument that s 69B(1)(b) of the AFP Act applies to render ss 51 to 54 of the Fair Work Act “inapplicable” in respect of any matter under Part V of the AFP Act, is that the Commissioner and employees can never negotiate and agree on any terms of an agreement that touch on the subject matter of Part V of the AFP Act, such as cl 67(1)(a). That is, there cannot be agreement on how disciplinary action can take place, including its metes and bounds, in greater detail than is provided for in the AFP Act. The respondents point out that there is no evidence that such a contention was ever raised when the Fair Work Commission was asked to approve the Enterprise Agreement on 17 May 2018, or when the Fair Work Commission was asked to approve the prior 2012-2016 enterprise agreement in March 2012, which contained an almost identical provision.

29    The respondents’ second argument is that, when the delegate exercised the Commissioner’s power under cl 67(1)(a) of the Enterprise Agreement to reduce Ms O’Sullivan’s pay point, the Fair Work Act was not the source of that power. On this argument, the Fair Work Act had already applied to determine AFP employees’ terms and conditions of employment through the approval of the Enterprise Agreement, and once approved became a “statutory artefact”, citing Marmara at [90]. The respondents contend that the Commissioner’s exercise of power was under cl 67 of the Enterprise Agreement, not under the Fair Work Act. On this argument, s 69B(1)(b) does not have the effect of rendering inapplicable cl 67 of the Enterprise Agreement as a source of power to make the relevant decision. That is said to be so because the relevant “action” referred to in s 69B(1)(b) is taken under cl 67 of the Enterprise Agreement, not under any provision of the Fair Work Act. The respondents contend that there is no proper basis to read into s 69B(1) the additional words “and any instrument made under the Fair Work Act 2009”.

30    The respondents’ third argument is that, properly construed, the phrase “a matter covered” by Part V in s 69B(1)(b) refers to a particular conduct complaint that is the subject-matter of an investigation under Part V. The respondents submit that the article “a” confines the meaning of “matter”, which is necessarily a particular matter, noting that the drafters did not use the expression “all matters” or “any matter” to suggest a broad and expansive coverage. That is, this is not a question of references to the singular including the plural, but rather understanding what is being referred to. The respondents submit that this construction is also consistent with relevant authorities that have considered the meaning of the broader phrase “any matter” in other statutory contexts, citing in particular Brodsky (relied upon by Ms O’Sullivan) and also Attorney-General (Vic) v Glass [2016] VSCA 306; 51 VR 381. The respondents rely on those two cases to indicate the significance of the presence, and absence, of “any” to accompany “matter”:

(1)    Brodsky concerned a challenge to the jurisdiction of a Medical Services Committee of Inquiry established under the National Health Act 1953-1962 (Cth). The Committee had authority to inquire into and report on “any matter” referred to it in connection with the provision of particular medical services under a part of that Act. The High Court rejected a submission by Dr Brodsky that the term “matter” meant a subject matter for determination in a legal proceeding, noting that “it seems chosen for the sake of that vagueness which reserves all definition to be the function of super-added descriptive words. It is often used in this manner as merely equivalent to ‘things’ or ‘something’ ” and holding (at 438) that it was a “comprehensive term to refer to any subject of inquiry ... that is to say, any subject-matter that may be chosen for inquiry”.

(2)    Glass was a challenge to the jurisdiction of the Victorian Ombudsman to carry out an investigation of a matter referred by the Legislative Council, pursuant to a statutory power to “refer to the Ombudsman for investigation and report any matter, other than a matter concerning a judicial proceeding”, which it considered should be investigated. The Victorian Court of Appeal upheld the primary judge’s reasoning that the term “any matter” was used in the same sense as the legislation considered in Brodsky, that is, in the sense of “any subject matter that may be chosen for inquiry”.

31    By contrast, the respondents point out, s 69B(1)(b) refers to “a matter” in the context of Part V of the AFP Act, which deals with investigating and sanctioning misconduct within the AFP. They contend it should therefore be interpreted as referring to particular conduct that is the subject of investigation under Part V and possible sanction – “a matter” – rather than referring generally to the subject matter covered by Part V of the AFP Act.

32    The respondents’ fourth argument, closely related to their third argument, is that the reference to “any action” in the phrase in s 69B(1)(b) “or any action ... taken in relation to a matter covered by that Part”, means all or any actions taken with respect to a particular matter, being the subject matter of the particular complaint. The respondents submit that this phrase cannot properly be construed to mean any action which could be taken in relation to any matter under Part V of the AFP Act, because that would require the Court to alter the text substituting “a matter” with “any matter”. Rather, the respondents submit, when s 69B is construed in context, limiting the operation of the Fair Work Act does not also limit the rights of the Commissioner and the AFP employees to negotiate terms and conclude an enterprise agreement, or limit the Fair Work Commission in approving an agreement; nor does it limit the operation of an otherwise valid enterprise agreement. The respondents submit that the purpose of s 69B is not to limit the Commissioner’s powers under the AFP Act or the Fair Work Act, noting that the source of those powers with respect to employment is the AFP Act, not the Fair Work Act.

33    Thus, the respondents submit, the evident purpose of s 69B(1) and (2) is to carve out from the operation of the Fair Work Act the availability of particular statutory causes of actions that might otherwise be available to an AFP employee in circumstances of a particular disciplinary matter, reflecting the unique character of a police force. On this argument, s 69B(1)(b) operates to confine an AFP employee’s access to certain limited statutory causes of action provided by the Fair Work Act with respect to an investigation of alleged misconduct under Part V of the AFP Act and the Commissioner’s action of imposing a sanction, noting that an AFP employee’s access to remedies for alleged contraventions of the general protections regime in Part 3-1 of the Fair Work Act remains. Likewise, the respondents submit, s 69B(2) confines the available remedies under the Fair Work Act when an AFP employee is terminated. The respondents argue that this is all in keeping with the unique nature of a disciplined police force.

34    The respondents submit that this is not a case of inconsistency, which, if any inconsistency existed, would be resolved not by s 69B of the AFP Act, but rather s 40(1) of the Fair Work Act. Section 40(1) expressly provides that a “public sector employment law prevails over a fair work instrument that deals with public sector employment, to the extent of any inconsistency”.

35    The respondents therefore submit that Ms O’Sullivan’s claim that cl 67 of the Enterprise Agreement did not confer power on the Commissioner or his delegate to reduce her remuneration, by reason of s 69B(1) of the AFP Act, should be rejected.

36    The respondents further submit that, in any event, the delegate’s determination satisfied the requirements of s 27 of the AFP Act because it was made in writing, concerned the terms and conditions of Ms O’Sullivan’s employment, and was not inconsistent with the Enterprise Agreement, because cl 67 of that agreement expressly provided for such a determination to be made. The respondents contend that while the terms and conditions which may be imposed on an AFP employee’s employment under s 27(1) are not unlimited, for the impugned action of reducing Ms O’Sullivan’s salary band classification and pay point, s 27(1) expressly states that the Commissioner may determine an AFP employee’s “remuneration” in writing pursuant to s 27. Thus, the respondents submit, determination of an AFP employee’s remuneration plainly falls within s 27.

37    The respondents further submit that the delegate’s determination applies, adopts or incorporates the relevant provision of the Enterprise Agreement, being the industrial agreement in force at the particular time, and thus satisfies s 27(2) of the AFP Act. There is no inconsistency between the delegate’s determination and the Enterprise Agreement, because the determination is consistent with cl 67 of that agreement. For these reasons, s 27 of the AFP Act conferred power on the Commissioner or his delegate to make a determination reducing Ms O’Sullivan’s salary as a result of an adverse Professional Standards finding under Part V of the AFP Act in relation to a category 3 conduct issue.

Consideration

38    Despite the complexity of the competing arguments, the resolution of this dispute comes down to a relatively confined issue as to whether the exclusion of the operation of the Fair Work Act in s 69B of the AFP Act:

(1)    applies only to the remedial provisions of the Fair Work Act itself (apart from the express exceptions that continue to operate and are not in issue in this proceeding); or

(2)    additionally extends to remedies to be derived outside of the provisions of the Fair Work Act itself, but which are dependent upon that Act for their existence, relevantly being sanctions within cl 67 of the Enterprise Agreement.

39    The Enterprise Agreement is the sole place that deals with salary band classification and pay points, both as to advancement, which is not in dispute, but also as to regression, which is the central issue in dispute. There is an inherent logic and coherence in having both dealt with in the same place, if otherwise permissible.

40    A gateway issue for Ms O’Sullivan is whether the reference in s 69B(1) of the AFP Act to “a matter covered by” specified parts of the Fair Work Act, dealing with command powers, professional standards, and AFP conduct and practice issues, is a reference only to those portions of that Act. Her case cannot succeed without this reference extending the s 69B(1)(b) exclusion to the instruments under the Fair Work Act, and thus to cl 67(1)(a) of the Enterprise Agreement. There is nothing in Ms O’Sullivan’s argument that convinces me that this additional step, going beyond the express words of s 69B(1)(b), would have been in contemplation by the Parliament. That is especially so given that s 27 of the AFP Act makes express reference to industrial instruments, including industrial agreements such as the Enterprise Agreement. It would be a curious exercise of legislative drafting to make express reference to industrial instruments at one point, but only a reference to be inferred at another point. Such an inference would be reluctantly drawn, ordinarily due to there being no viable alternative. It amounts to finding a legislative mistake, which is ordinarily only inferred when the literal words produce a clearly unintended consequence that is contrary to the overall purpose of the statute, or that part of the statute.

41    It is not to the point that the investigation of Ms O’Sullivan was conducted under Part V of the AFP Act. This proceeding is concerned with steps taken after the completion of such an investigation. Division 3 of Part V of the AFP Act deals with AFP conduct or practice issues. Subdivision D deals with the most serious of those issues, being category 3 conduct and corruption. In particular, s 40TR(1) provides that if an investigator is satisfied on reasonable grounds that an AFP appointee has engaged in category 3 conduct or corrupt conduct, he or she may recommend a range of actions be taken, including termination, remedial action, training and development action or, per paragraph (d), “any other action that the Commissioner can take in relation to the AFP appointee”. I accept Ms O’Sullivan’s submission that s 40TR(1)(d) is referring to the exercise of an existing power for action that the Commissioner “can take”, rather than being itself a source of power. I do not accept, however, that it precludes a source of power for such action being derived from outside of the AFP Act. Nor do I accept that the terms of s 40TR(1)(d) preclude a source of power other than as bestowed by Parliament. The power to take some kind of recommended action following an investigation may come from a range of sources, including the AFP Act itself, contract, common law, or an enterprise agreement. Given that there is an express source of power in cl 67(1)(a) of the Enterprise Agreement, the principles in Suttling, the other authority Ms O’Sullivan relies upon as to the absence of a common law power to demote, and the need for a power of demotion to be conferred in clear terms, are not of any assistance to Ms O’Sullivan. Once the terms of cl 67(1)(a) apply, each of those barriers to the existence of such a power do not apply. The Commissioner had no need to rely upon any different source of power.

42    Nor do I accept that allowing an enterprise agreement to be the source of a power able to be recommended by a delegate under s 40TR(1)(d) produces any necessary conflict or dissonance between Part V and an enterprise agreement, so as to compel an interpretation going beyond the express words used by the legislature. The response to the request for reasons suggesting that the Fair Work Act was the enactment under which the demotion decision was made was infelicitous, but has no influence on the issue of construction. The proper application of Brodsky and of Glass make it tolerably clear that s 69B(1)(b), in referring to “a matter”, was deliberately not referring to “any matter” in the sense of the subject matter of, relevantly, Part V, but rather a particular matter under consideration. The same interpretation flows through to the obligation imposed on the Commissioner under s 40TV of ensuring that recommendations in a report of an investigation under s 40TU are fully considered and appropriate action taken.

43    It follows that I accept the respondents’ argument that the purpose of ss 69B(1) and 69B(2) is to carve out from the operation of the Fair Work Act the availability of particular statutory causes of actions otherwise available to an AFP appointee. The reference in s 69B is to the particular parts of the Fair Work Act expressly stated and nothing more; and the reference to “a matter” is a reference to a particular matter being considered in relation to those specified parts of the Fair Work Act, and does not refer to the subject matter of those provisions more generally. It is designed, in part, to ensure that an AFP appointee does not have recourse to the Fair Work Commission for a matter that is the subject of a Part V disciplinary process of some kind concerning that employee, except for the limited express exceptions. The clear intent of s 69B(1) of the AFP Act is to remove from adjudication by the Fair Work Commission:

(1)    the Commissioner’s command powers in Divisions 2 to 8 of Part IV, and any action taken in the exercise of those powers; and

(2)    the Commissioner’s disciplinary powers and processes for continuing AFP employees (that is to say, professional standards, conduct and practice issues) and any actions taken in that regard (except termination addressed in s 69B(2), general protections claims, and payments relating to periods of industrial action).

44    Thus, the exclusion in s 69B(1) does not extend to cl 67(1)(a) of the Enterprise Agreement. This interpretation has the practical effect of ensuring that, for a disciplined and effective police force, the Commissioner’s day-to-day decision-making concerning AFP employees is a matter for him and his command structure, including delegates, in accordance with Parts IV and V of the AFP Act. When the exclusion in s 69B(1) is interpreted in such a way that does not extend beyond the portions of the Fair Work Act referred to, the regime that is in place is logical and coherent. It enables all aspects of salary arrangements to be the subject to an enterprise agreement, both as to advancement and as to regression for disciplinary reasons.

45    It follows that “action” as referred to in s 69B(1)(a) and (b) is referrable to command decisions under Part IV and discipline decisions under Part V, respectively. In relation to Part V, the action is the final stage of the process required to be undertaken, in this case under Division 3, Subdivision D.

46    For the foregoing reasons, the narrower exclusion advanced by the respondents is what was intended by the scope, subject matter and purpose of s 69B. It follows that the reference in s 40TR(1)(d) of the AFP Act to any other action that the Commissioner could take in relation to an AFP appointee extends to the action that could be taken under cl 67(1)(a) of the Enterprise Agreement of demotion by way of reduction of salary classification band and pay point.

Alternative argument under s 27 of the AFP Act

47    In light of the conclusions reached above, it is not necessary to determine the respondents’ alternative argument that s 27 of the AFP Act is an alternative source of a power to demote. There were in any event two distinct problems with reliance upon that provision. The first is that the Commissioner’s refusal to give reasons for the purposes of the ADJR Act expressly disavowed the decision to demote being made under a provision of the AFP Act, which produces a procedural fairness issue and problem; and secondly, that at first blush at least, the working of s 27 is at least problematic in being regarded as a source of such a power. It is better that this question be answered in a context in which it is squarely raised as being the source of the power to make an impugned decision, at the time that decision is made or soon afterwards.

Competency of the ADJR Act part of the proceedings

48    In light of the conclusions reached, which apply equally to the case brought under the ADJR Act and in the alternative case brought under s 39B of the Judiciary Act, it is not necessary to determine the respondents’ challenge to the competency of the ADJR Act part of the proceedings. However, had it been necessary to decide, it is not easy to see how a decision overtly made under cl 67 of the Enterprise Agreement could be characterised as a decision under an enactment, unless somehow characterised as being a decision under the AFP Act or under the Fair Work Act.

Conclusion

49    The originating application must be dismissed with costs.

Associate:

Dated:    26 August 2019