Allen v Chadwick [2015] HCA 47 – getting in a car with an intoxicated driver and failing to put on seat belt – contributory negligence

The law often does not reflect ethics, morals or societal expectations. If you did not learn this at law school, you will quickly learn this as a junior lawyer. One reason why the law often falls short is the need to attribute responsibility. Attributing responsibility can be a very black and white exercise whereas real life is often more complex. There is no better example than the various civil liability regimes in Australia. In December 2015, the High Court handed down the case of Allen v Chadwick [2015] HCA 47 (Allen v Chadwick) which concerned contributory negligence of an injured person under the Civil Liability Act 1936 (SA) (Civil Liability Act). The case involved chilling facts where a pregnant woman who had been drinking and was in a car with her heavily intoxicated partner became paraplegic after her partner drove the car into trees. The legal question before the High Court was the extent the woman could be held contributory negligent for knowingly travelling in a car with an intoxicated driver and failing to wear a seatbelt.

Facts

In March 2007 (yes, it took the case 8 years to get to the High Court, which is not unusual) Ms Chadwick (who was pregnant at the time) and Mr Allen went on a weekend getaway to the Yorke Peninsula with their 5 year old daughter. They met with Mr Allen’s school friend Mr Martlew and his two children aged 3 and 6 and booked two motel rooms attached to the Port Victoria Hotel. After the children had been put to bed, the adults moved to the Port Victoria Hotel. Mr Allen and Mr Martlew had been drinking most afternoon and continued to drink at the Port Victoria Hotel. There was some evidence that Ms Chadwick had also been drinking, though in lesser amounts. After the Port Victoria Hotel closed, they moved to the veranda area near the motel rooms. At about 1:30am, the adults decided to go for a drive to look for some cigarettes. Mr Allen and Mr Martlew were heavily intoxicated.

Ms Chadwick drove initially for about 15 minutes, with loud music playing and Mr Allen and Mr Martlew screaming directions at her. Ms Chadwick stopped the car at some point on the highway out of town as she needed to relieve herself. On returning to the car Mr Allen was in the driver’s seat. On asking Mr Allen to get out, Mr Allen screamed at Ms Chadwick to “get the fuck in the car”. Ms Chadwick got in the car, attempting and then abandoning her attempts to put on a seatbelt. Mr Allen took off, gaining speed into town, where he did a series of U-turns before driving out of the town, off the road and hitting trees. On impact, Ms Chadwick was thrown out the rear driver’s side of the car. She was air lifted to the Royal Adelaide Hospital. Her injuries caused Level 3 paraplegia, permanently confining Ms Chadwick to a wheelchair.

In his criminal case, Mr Allen pleaded guilty to a charge of aggravated harm caused by dangerous driving, and in January 2009 was sentenced to a suspended prison term of three years and four months and disqualified from holding a driver’s licence for five years.

Contributory negligence in the Civil Liability Act

In real life, several factors can cause an outcome. In the legal sphere, where attributing responsibility to an individual with legal capacity is everything, it can be difficult for the law to meet reality. One way in which the law attempts to meet reality in the Civil Liability Act is through the concept of contributory negligence. Where a person is found to be contributory negligent, the damages they receive will be reduced proportionately. Contributory negligence is defined in s.3 as “a failure by a person who suffers harm to exercise reasonable care and skill for his or her own protection or for the protection of his or her own interests”. The Civil Liability Act creates presumptions of contributory negligence in certain situations. The two relevant presumptions in Allen v Chadwick are travelling with an intoxicated driver and failing to wear a seatbelt:

1.       Travelling with intoxicated driver (s.47)

Section 47(1) creates a presumption of contributory negligence if:

(a)         the injured person— 

(i)         was of or above the age of 16 years at the time of the accident; and 

(ii)         relied on the care and skill of a person who was intoxicated at the time of the accident; and 

(iii)         was aware, or ought to have been aware, that the other person was intoxicated; and 

(b)         the accident was caused through the negligence of the other person; and 

(c)         the defendant alleges contributory negligence on the part of the injured person, 

contributory negligence will, subject to this section, be presumed. 

Where the person was a passenger in a motor vehicle the person is presumed to rely on the care and skill of the driver (s.47(4)). Ordinarily the fixed statutory reduction for contributory negligence under s.47 is 25%. However, in the case of a motor accident, where the blood alcohol concentration was .15g/100mL or more, or the driver was so much under the influence of intoxicating liquor or drug as to be incapable of exercising effective control of the vehicle, the statutory reduction in the assessment of damages is increased to 50% (s.47(5)). An exception to the presumption of contributory negligence exists where the person could not reasonably have been expected to have avoided the risk (s.47(2)(b)).

Essentially, unless an exception can be made out, in situations where a person is injured in a car crash where they were aware or ought to have been aware a person was intoxicated, they will be held 50% responsible for the situation under the Civil Liability Act. This is a law not many people who get in cars with intoxicated drivers are aware of. The law assumes an injured person was 50% responsible when they are injured in a car crash, simply because the person decided to get in the car and had knowledge or ought to have knowledge of the fact the driver was intoxicated.

2.       Failing to wear a seatbelt (s.49)

Section 49 creates a presumption of contributory negligence where a person is injured in a motor vehicle accident and is not wearing a seatbelt. The fixed statutory reduction in the assessment of damages is 25% (s.49(3)). An exception to the presumption exists where it can be established on the balance of probabilities that the injured person could not reasonably be expected to have avoided the risk.

Legal question before the High Court

The two questions before the High Court were:

1.       Was the s.47 defence made out in that “the injured person could not reasonably be expected to have avoided the risk”; and

2.       Was the s.49 defence made out in that “the injured person could not reasonably be expected to have avoided the risk.

Section 47 travelling with an intoxicated driver

The facts established that before Ms Chadwick got in the car with Mr Allen driving, the car was situated about 200m away from the town on the highway. The immediate surrounds were shrubbery and trees. It was dark and an uncertain distance from the township in the early hours of the morning. Ms Chadwick was a young woman who was pregnant and her children were by themselves at the motel. The High Court held in their single, unanimous judgment, that the defence in s.47(2)(b) is concerned with the “reasonable evaluation of the relative risks of riding with an intoxicated river or taking an alternative course of action”. It requires an objective evaluation of the relative risks and contemplates a person may decide to get in a vehicle with an intoxicated driver where it may reasonably be assessed to be less risky than other unattractive alternatives. The test is objective, so subjective characteristics of an individual such as their hysteria, mental illness or personality are irrelevant to the s.47(2)(b) test. In weighing up the risks in Ms Chadwick’s case, the High Court observed that given the facts, there was a real risk of harm from strangers or the risk of walking over unfamiliar terrain in the dark if Ms Chadwick had not got in the car, and that the substantial risk of riding with Mr Allen was reduced by the absence of other traffic. The High Court held Ms Chadwick could not have been expected to avoid the risk of travelling with Mr Allen and her damages will not be reduced by 50% under s.47.

Section 49 failing to wear a seatbelt

At the trial before the District Court, a 25% reduction in damages was applied, as Ms Chadwick was not wearing her seatbelt and the defence of not reasonably being expected to have avoided the risk was not made out, as there were straight sections of road in which Ms Chadwick could have put her seatbelt on, and her inability to do so was found to be related to her own anger at Mr Allen and her pulling the straps too hard. The majority of the Full Court of the Supreme Court overturned the District Court’s decision and held that Mr Allen’s erratic driving caused the seatbelt mechanism to lock, and that the defence in s.49(2) of not reasonably being expected to avoid the risk was made out.

In deciding whether Ms Chadwick was prevented by Mr Allen from fastening her seatbelt, the High Court favoured the trial judge’s approach, as the trial judge had heard Ms Chadwick’s evidence first hand. The High Court also considered whether the “act of a stranger” defence was available. The “act of a stranger” defence was developed in the South Australian case of Mayer v Merchant (1973) 5 SASR 567 where it was said it is normally a defence to a criminal charge where the “forbidden act occurred as the result of an act of a stranger...over which the defendant had no control and against which he could not reasonably have been expected to guard”. Citing Norcock v Bowey [1966] SASR 250, the High Court held that the defence was not made out as it was not enough to show reasonable care had been taken, the circumstances must have been completely beyond the person’s control.

Lessons to learn

From a legal perspective, Allen v Chadwick confirms that the test for the defence in s.47 is an objective test that requires the weighing of different risks. It also confirms that the “act of a stranger” defence requires circumstances to be beyond the person’s control, and is therefore a difficult defence to establish.

Practically speaking, Allen v Chadwick demonstrates why we should all think carefully before getting in the car with an intoxicated person. The South Australian civil liability regime will automatically apply the 50% reduction in s.47 unless the defence can be established. Similarly, the threshold for the defence in s.49 for not using a seatbelt appears to be high. It is not an excuse to be fearfully pulling at your seatbelt and eventually giving up, even if the vehicle is being driven dangerously at timess.

Gaynor v Chief of the Defence Force (No 3) [2015] FCA 1370 – Reservist saved by implied freedom of political communication

An Army Reservist of Roman Catholic faith who was terminated due to his highly critical comments made on social media concerning gay members of the ADF, women serving on the front line, and Islam has been saved by the Federal Court who found the ADF’s termination decision was contrary to the implied freedom of political communication in the Constitution. The case sheds light on the extent to which the ADF (or employers by analogy) can control a person’s political expression on social media out of hours. Note that this is not an unfair dismissal case, as members of the Australian Defence Force (ADF) are not employees. Members of the ADF are commissioned, with their commission being governed by the Crown prerogative and regulated by the Defence Act 1903 (Defence Act) and the Defence (Personnel) Regulations 2002 (Personnel Regulations).

Background and facts

Mr Bernard Gaynor served in Afghanistan (2006) and Iraq (2006-7, 2008-9 and 2009) and was awarded the United States of America Meritorious Service Medal in October 2009. In July 2011 he transferred to the Australian Army Reserve. At the time the incidents that led to his termination occurred, Mr Gaynor was a Major in the Army Reserve.

In January 2013, Mr Gaynor launched a webpage, Twitter page and Facebook page to promote his candidature as a Senate Candidate for Katter’s Australian Party for the Federal elections in 2013. On 23^rd January Mr Gaynor tweeted “I wouldn’t let a gay person teach my children and I am not afraid to say it”. Mr Gaynor’s webpage identified him as having served in the Iraq War. On the 24^th January, Mr Gaynor made a press release available along the same lines, that parents should be able to choose if their children are taught by a gay teacher.

On 6 February 2013 Major Gaynor was interviewed and counselled by Lieutenant Colonel Buxton who directed Major Gaynor, using the relevant DI(G), not to make any further intemperate or inflammatory remarks on social media, whether or not on duty or in uniform while he remained a member of the ADF.

Mr Gaynor ignored this direction, and made no attempt to prevent his audience from knowing he was a current ADF Reservist. On 22^nd March 2013 the Deputy Chief of Army sent Mr Gaynor a letter referring to his publications and asking him to stop. Mr Gaynor also ignored the direction contained in this letter.

In March and April 2013 Mr Gaynor published a number of controversial statements on social media including:

1.       A series of press releases, reflecting the material on his webpage, critical of the ADF’s participation in the Mardi Gras, stating that the ADF was accommodating to gay officers and transgender officers but discriminatory against Christian members who make public comment.

2.       Press releases critical of the ADF’s women on the front line policy.

3.       An article on his webpage headed “domestic betrayal a waste of soldiers’ sacrifices” which was openly critical of defence policy in Afghanistan and linked Islam to violence.

4.       A Facebook post which was critical of the ADF’s policies in relation to gay officers, sex-change operations, women serving on the front line, and Islam. The post contained a link to a press release by Mr Gaynor. Both the Facebook post and press release identified Mr Gaynor as a Reservist.

5.       A Facebook post where Mr Gaynor wrote “at what point does the ADF become complicit in child abuse? Should children be exposed to nudity and sexually explicit behaviour at the Mardi Gras?”

6.       A Facebook post critical of ADF personnel participation in Mardi Gras that directly mentioned the Deputy Chief of the Army. The identification of the officer was intended to mock and ridicule the officer. Mr Gaynor also mentioned the Deputy Chief of the Army in a tweet along the same lines.

In May 2013, Mr Gaynor became more aggressive in his strategy and turned specific attention to the transgender officer on the staff of the Chief of Army. His comments were personal and offensive such as “he thinks that because he has had a nip here, a tuck there and popped a bunch of pills that he is now a woman” and “the Army is now the employer of choice for those who want to take their cross- dressing career a little further”.

On 30 May 2013 My Gaynor was served with a Termination Notice issued by Chief of Army who was satisfied the criteria in reg.85(1)(d) and (1A) was established (Termination Notice). My Gaynor responded with a statement of reasons on 27 June 2013.

The decision to terminate Mr Gaynor’s commission was made on 10 December 2013 by the Chief of the Defence Force (Termination Decision). A variety of reasons were given in the termination decision including:

·         being openly critical on social media of ADF and government policy, support offered to gay and transgender members, and the decision to permit women to serve in combat roles;

·         clearly identifying as an active Army Reserve member on many occasions when making comments contrary to ADF policies;

·         behaviour generally acting contrary to policies and cultural change initiatives;

·         conduct repeatedly inconsistent with the DI(G) PERS 50-1;

·         failure to modify online behaviour; and

·         persistence of the conduct.

Mr Gaynor made a Redress of Grievance complaint, and progressed it through all internal avenues before the Chief of Defence Force finally rejected the Redress of Grievance on 30 June 2014.

Mr Gaynor challenged the Termination decision under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) as well as under constitutional grounds (s.116 freedom of religion, and the implied freedom of political communication). He was successful before Justice Buchanan on the implied freedom of political communication argument.

Defence Instructions (General) (DI(G))

The Secretary and Chief of the Defence Force have joint administrative responsibilities in the administration of the Defence Force (s.9A Defence Act). Instructions and policies issued with the authority of the Secretary and the Chief of the Defence Force pursuant to s.9A have statutory effect and are known as Defence Instructions (General) (DI(G)). DI(G)’s relevant to this case include:

·         DI(G) PERS 50-1 issued 18 October 2001 “Equity and Diversity in the Australian Defence Force”;

·         DI(G) ADMIN 08-1 issued 5 October 2007 “Public comment and dissemination of official information by Defence personnel”; and

·         DI(G) ADMIN 08-2 issued 16 January 2013 “Use of social media by Defence personnel”.

Mr Gaynor was required to follow these Defence Instructions.

Mr Gaynor was also required to abide by the Chief of Army Directive CA Directive 15/12 “Army Implementation Plan for Removal of Gender Restrictions” which attempts to improve the Army’s gender diversity and implement an ADF wide plan.

Personnel Regulations

Regulation 85 of the Personnel Regulations lists the reasons for which the service of an officer may be terminated. The list includes at 1(d):

“the Chief of the officer’s Service is satisfied that the retention of the officer is not in the interest of:

(i)                  The Defence Force; or

(ii)                The Chief’s service”

The reasons for which the Chief of the officer’s Service may be satisfied under 1(d) are not limited but include reasons relating to the officer’s behaviour.

Regulation 85(2) permits the Governor-General (or their delegate under reg.85(6)) to issue a termination notice stating the reasons, particulars and facts of termination, inviting the officer to give a statement of reasons and giving a period of at least 28 days for the officer to provide their statement of reasons.

Regulation 85(4) states that the Governor General (or their delegate under reg.85(6)) must issue a termination decision where a statement of reasons has been provided by the officer within the period, and having considered the statement, the Governor General is of the opinion the reason for termination has been established and has not been affected by a change of circumstance since the termination notice was given to the officer. 

In Mr Gaynor’s case, the Chief of the Defence Force and Chief of Army had been delegated the power to issue a termination notice and make a termination decision.

The ADJR Act claim

The ADJR Act claim was brought under s.5 of the ADJR Act. Mr Gaynor attempted to rely on every ground available in s.5(1), which made it difficult for Justice Buchanan to distil the essence of Mr Gaynor’s argument.

However, Justice Buchanan did conduct an analysis of possible grounds, reiterating that reg.85(1)(d) is a satisfaction power. The judiciary cannot rule on whether the satisfaction of a decision maker is appropriate, as this would amount to merits review, not judicial review. Similarly, the judiciary cannot analyse the appropriateness of ADF policies. The DI(G) applied to Mr Gaynor whether or not he was in uniform, as his service obligation was to obey the instructions and orders he was given and respect the disciplined nature of the ADF. The DI(G)’s themselves were not unlawful. There was no evidence showing bias, judgment or predetermination by the Chief of the Defence Force and no substance in any of the challenges to the Termination Decision under the ADJR Act.

The constitutional law claims

Section 116

Section 116 of the Commonwealth Constitution states:

“The Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion, and no religious test shall be required as a qualification for any office or public trust under the Commonwealth.”

Mr Gayor argued that his posts on social media were protected by s.116 of the Constitution, as his comments amounted to the exercise of his Roman Catholic religion. Justice Buchanan immediately dismissed this argument, as the Termination Decision did not require Mr Gaynor to refrain from the exercise of his religion or satisfy a religious test of any kind. There is limited case law on the point, Justice Buchanan cited Mason ACJ and Brennan J’s test from Church of the New Faith v Commissioner of Pay-roll Tax (Vic) (1983) 154 CLR 120:

“The area of legal immunity marked out by the concept of religion cannot extend to all conduct in which a person may engage in giving effect to his faith in the supernatural. Conduct in which a person engages in giving effect to his faith in the supernatural is religious, but it is excluded from the area of legal immunity marked out by the concept of religion if it offends against the ordinary laws, i.e. if it offends against laws which do not discriminate against religion generally or against particular religions or against conduct of a kind which is characteristic only of a religion”.

Justice Buchanan applied this test to Mr Gaynor’s situation and found s.116 could not be breached, as none of the instructions or orders given to Mr Gaynor or the Termination Decision infringe the test.

Implied freedom of political communication

Justice Buchanan begins his analysis by identifying the two limb test in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 (Lange):

Limb 1: Does the law effectively burden the freedom?

Limb 2: Is the object of the law compatible with the constitutional system of representative and responsible government and is the law reasonably appropriate and adapted to achieving that legitimate end?

Justice Buchanan also describes the distillation of the second limb of Lange in McCloy v State of New South Wales [2015] HCA 34 where the majority required proportionality testing in the second limb, requiring an analysis of whether the law is suitable, necessary and adequate in its balance. For a more detailed analysis of the two limbed test, see my blog post on McCloy v State of New South Wales [2015] HCA 34.

Importantly, Justice Buchanan reiterated that the freedom is not a personal right, and in Mr Gaynor’s case, the implied freedom is a suggested limitation on the discretion available under reg.85 of the Personnel Regulations. The first limb required an examination of whether the statements and communications by the applicant were political in nature. Justice Buchanan found that Mr Gaynor’s statements were clearly political in nature, and the fact the statements were offensive did not take them outside the scope of political discourse, even when directed at an individual. The Termination Decision was essentially disciplinary action which was an adverse consequence aimed at preventing further communications.

In considering the second limb, the reasons given in the Termination Notice were analysed. As identified in the facts above, the Termination Notice contained a mix of reasons for termination. The reasons included Mr Gaynor identifying himself as an ADF member while making his comments, but were not confined to this, and included the contention that Mr Gaynor’s public comments and general behaviour and his membership of the ADF as such were incompatible. Justice Buchanan concluded that the main reason behind the decision to terminate Mr Gaynor’s commission was the fact that Mr Gaynor had expressed his views publicly while he was still a member of the ADF.

Mr Gaynor had made the comments in a personal capacity, unconnected to the ADF except by the ongoing formal circumstance of his ADF membership. Justice Buchanan found the second limb of the Lange test was not satisfied. The decision to terminate Mr Gaynor’s commission exceeded the statutory authority under reg.84(4) of the Personnel Regulations because it was not reasonably proportionate and adapted to a legitimate end served by reg.84.

In applying the “suitable, necessary and adequate in its balance” criteria from McCloy, Justice Buchanan considered the question of whether “a regulation which directly prohibited the applicant’s conduct, would be valid if it was based on the same matters as the findings of CDF in the Termination Decision”. Justice Buchanan found such a regulation would not be “adequate in its balance”:

1.       Suitable – there is a need for discipline, obedience to orders and adherence to standards by ADF members, and a restriction on public comment is “suitable”.

2.       Necessary – there is not another obvious and compelling means of achieving the objective in the face of conduct such as Mr Gaynor’s who was defiant and intractable.

3.       Adequate in its balance –Mr Gaynor’s conduct involved the expression of political opinion, effectively as a private citizen. The burden on Mr Gaynor was significant, given the consequences of termination. The right to the freedom cannot be lost merely because of the main reason for termination, being Mr Gaynor remained a member of the ADF. Members of the full time regular services may rarely be free to publicy express opinions against the ADF, but the situation is not the same for Reservists who are often not on duty, and are private citizens when not in duty or uniform. When not in duty or uniform, Reservists should not have their freedom of political communication burdened.

While Justice Buchanan applied the elements of the McCloy distillation of the test, he made it clear his decision would fall the same way if he had applied the second limb of Lange in its traditional sense.

Key lessons

This case is a win for freedom of political communication advocates. It clearly states that the ADF cannot terminate a Reservist for expressing their political views where the political views are expressed when not on duty or in uniform, even where the Reservist makes it clear they are a current ADF member. The ADF case fell down on the “adequate in its balance” component of the second limb of the Lange test. If a decision lesser than termination had been made, this may have been “adequate in its balance”.

Analogies can be drawn from this case to the employment context. While each case will turn on an employee’s type of employment and the applicable policies, an employee’s freedom of political communication will be protected while the employee is acting in a private capacity. The protection may extend to instances where the employee states their connection to their employer, but this would depend on whether the second limb of Lange is satisfied, and in particular, whether the action taken against an employee is “adequate in its balance”. There is no higher authority case law on the application of the implied freedom of political communication to an employment law unfair dismissal context.

Note there is a strong chance this case will be appealed to the Full Court of the Federal Court and eventually the High Court. While it remains to be seen whether leave for appeal will be granted, given the case turned on the application of the “adequate in its balance” component of the test as enunciated in McCloy, and this is a new component of the second limb of Lange, there is a high chance leave will be granted.

Personal use of work mobile phones – what are the limits? Applicant v NBN Co Limited [2015] FWC 7412

Do you have a work provided phone? Do you use this phone for personal phone calls? If your answers are yes and yes, this blog post is a must read. In Applicant v NBN Co Limited [2015] FWC 7412 (NBN Co Case) an NBN Co employee was dismissed after the employee accumulated $22,630 worth of personal international calls made to numbers in India and failed to co-operate effectively in paying this money back. The employee’s unfair dismissal application failed. Most work places permit “reasonable personal use” of work provided phones and mobile phones - however, policies differ, and you should check the relevant policies at your workplace which will usually indicate whether you can use your phone for personal use and the limits of that personal use.

A.      The NBN Co Case - Facts

An NBN Co employee used his work provided phone to make personal calls to his family in India, incurring international call costs of $22,630 in the period May to September 2004. Over a period of nine months, NBN Co attempted to come to an agreement with the employee about the repayment of the money, holding a number of meetings with the employee and his representative over this time. On 25 June 2015 after the employee continued to refuse to come to an agreement, NBN Co terminated his employment.

B.      Was the employee’s termination an unfair dismissal?

Section 385 of the Fair Work Act 2009 lists the criteria that must be established for an unfair dismissal:

(a)  the person has been dismissed; and

(b)  the dismissal was harsh, unjust or unreasonable; and

(c)  the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d)  the dismissal was not a case of genuine redundancy.

In considering whether the dismissal was “harsh, unjust or unreasonable”, the FWC must take into account the criteria in s.387:

(a)  whether there was a valid reason for the dismissal related to the person's capacity or conduct (including its effect on the safety and welfare of other employees); and

(b)  whether the person was notified of that reason; and

                (c)  whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

                (d)  any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

                (e)  if the dismissal related to unsatisfactory performance by the person--whether the person had been warned about that unsatisfactory performance before the dismissal; and

                (f)  the degree to which the size of the employer's enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

                (g)  the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

                (h)  any other matters that the FWC considers relevant.

 

NBN put forward two reasons which combined constituted a valid reason for dismissal:

1.       The employee’s excessive use of the phone in breach of policies; and

2.       The employee’s refusal to agree to a repayment plan.

Breach of policies

There were two relevant NBN Co policies:

1.       IT Equipment Policy

The IT Equipment Policy gave the employer the right to audit and review phone and data usage and if inappropriate use is identified the policy allows NBN to recover costs from the employee and commence disciplinary action including termination of employment. Accounts where the monthly call charge is greater than $75 are to be investigated under the policy. The employee was aware of this policy.

2.       Acceptable Use Guideline

The Guidelines permit reasonable personal use of mobile calling within Australia only.

The employee claimed he was not aware of the Acceptable Use Guideline at the relevant time, being the time he was making the personal international phone calls. While the employee was not provided with a copy of the Guideline at his induction:

·         there was nothing in the induction suggesting unlimited personal international calls was permitted; and

·         the IT Equipment Policy of which the employee was aware stated that use of work provided mobile phones will be monitored and if monthly call costs exceed $75, they will be investigated.

In these circumstances the employee should have taken steps to find out whether he could make personal international calls on the work provided phone and locate the relevant policy. The employee did not ask his manager about call costs or seek out the Guideline.

Deputy President Gooley also noted that NBN Co did not follow their own policies in monitoring phone usage. NBN Co did not review usage for all accounts where usage exceeded $75 as required by the IT Equipment Policy. The employee’s call usage was on average $8,000 - $12,000 per month, far beyond the $75 investigation threshold, yet it took months for the employer to review the account. Even when the issue was identified, the employee was not initially told the full extent of the money he owed. The employee was notified of about $7,500 worth of personal calls in September 2014, but it was not until later that a full investigation found $22,630 was owed and the employee was notified of this revised amount. Had the employee been aware of the matter sooner, he would have stopped making the personal international calls.

Refusal to agree to a repayment plan

Where a debt is owed to an employer and there is a legitimate basis for the debt to be disputed, the mere existence of the debt alone will not be a valid reason for dismissal. However, in this case, Deputy President Gooley held that there was no reasonable basis for the employee to dispute the debt, as the policies were incorporated into his employment contract and he had clearly breached the policies. It was unreasonable for him to refuse to enter into an agreement plan to repay the money, and this was a valid reason for dismissal.

The key to Deputy President Gooley’s decision was that NBN Co had managed the investigative procedure in accordance with procedural fairness, giving the employee several opportunities to come to an agreement for repayment.

NBN Co organised a number of meetings over a period of nine months to try and come to an agreement on a repayment plan. Over this time, the employee changed his stance several times, initially offering to repay the amount, repaying $7,500 and asking not to be required to repay the remainder, and finally retracting his offer to repay the amount. NBN Co sent a warning letter in February 2015 stating that the employee had breached NBN Co policies and that if the outstanding amount of $15,130 was not repaid, NBN Co would consider further disciplinary action including the likely termination of employment. On 11 June 2015, after a number of unsuccessful meetings between the employer and employee, NBN Co issued a show cause letter asking the employee to accept a proposed repayment plan of $200 per fortnight or for the employee to propose an alternative regular repayment, or NBN Co would consider further disciplinary action including termination of employment. A number of further meetings were held. On 25 June 2015 the employee and the employee’s representative attended a meeting where various proposals were discussed, by the employee would not move on his non-negotiable position that the final warning be revoked, and NBN Co terminated the employee’s employment. Section 387 directs attention to whether the applicant was given an opportunity to respond and was notified of reasons for dismissal. All of the steps NBN Co took in providing sufficient opportunities to come to an agreement were important in the refusal to come to a repayment plan being a valid reason for dismissal.

C.      Key points from the NBN Co Case

Employees

1.       You may have to take your own steps to access IT policies relevant to phone usage. Do not assume that you can use a work provided phone for personal use.

2.       One policy may direct your attention to another policy – make sure you seek out the second policy. In the NBN Co Case the employee was aware of the first policy which indicated there were restrictions on personal use of work provided mobile phones. The employee was aware of this first policy and should have sought out the second policy which described in more detail the boundaries of the personal use.

3.       If you are unsure about whether you can use your work phone for personal use or the extent to which you are permitted to use your phone for personal use, make sure you clarify your concerns with your manager prior to using your phone for personal use. In the NBN Co Case Deputy President Gooley stated “the Applicant should have made inquiries of his managers. Without express advice that a work provided phone can be used for both personal and local use and internal calls an employee cannot simply assume that such use is approved”.

Employers

1.       When providing mobile phones to employees, the employer should point out the relevant policies that apply and provide employees with access to these policies.

2.       It is important to ensure investigation and usage management practices in policies are complied with. In the NBN Co Case the IT Equipment Policy stated that phone usage will be investigated where call costs exceeded $75 per month. These investigations were not always conducted when the $75 trigger point was met.

3.       Successfully managing an employee who has potentially breached a policy by using their work provided phone for prohibited personal use may take months. An employee must be given an opportunity to respond to allegations and have a support person present at discussions relating to the dismissal. If there are reasonable alternatives to termination, these should be considered. 

4.       Ordinarily the fact an employee has a debt to the employer alone will not be sufficient to justify dismissal, especially where the employee has reasonable grounds to challenge the employee’s finding. Alternatives to dismissal may be available in these situations.

5.       Where an employee makes a formal grievance complaint about the investigative process, ensure the grievance complaint is considered and responded to prior to further action (such as termination of employment) is taken.

McCloy v New South Wales [2015] HCA 34 – implied freedom of political communication – a case summary for law students

There are a number of case summaries that have been written on the High Court’s most recent implied freedom of political communication case, McCloy v New South Wales [2015] HCA 34 (“McCloy”). This case summary is different in that it is designed for law students and junior lawyers and the content is intended to assist in assignments and exams.

Background

Jeff McCloy, the former Lord Mayor of Newcastle and current property developer challenged the validity of several parts of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) (EFED Act) on the basis that the laws impermissibly burden the implied freedom of communication of political and government matters. As you are probably aware, McCloy was before ICAC earlier in 2015 regarding political donations made far in excess of the cap. The following parts of the EFED Act were challenged:

1.       Division 2A of Part 6 which creates a general cap of $5,000 (increased annually in line with the equation in Schedule 1)) for political donations to a registered party or candidate for State elections;

2.       Division 4A of Part 6 which prohibits political donations being made by property developers, tobacco industry businesses and liquor and gambling industry businesses ; and

3.       Section 96E which prohibits certain indirect campaign contributions including provision of office accommodation, vehicles, computers and other equipment for no or inadequate consideration for use substantially for election campaign purposes.

New South Wales was joined as defendant by the Commonwealth, Western Australia, Queensland, South Australia and Victoria.

The Lange test – a reminder

A two-step test for determining whether a law is invalid due to the constitutional freedom of political communication was developed in Lange v ABC (1997) 189 CLR 520 (“Lange”)):

Step 1 – Does the law effectively burden political communication in its legal or practical operation?

Step 2 – Is the law reasonably appropriate and adapted to serve a legitimate end in a manner which is compatible with the system of representative and responsible government established by the Constitution?

How did McCloy build on the Lange test?

At issue in McCloy was the nature of Step 2 of the Lange test. The majority adopted a proportionality approach which neither Gageler J, Gordon J or Nettle J agreed with.

Lange remains the authority for the test for the constitutional implied freedom. McCloy adds to Lange by clarifying the steps to take when deciding whether the measure is “reasonably appropriate and adapted” to achieve a legitimate end ([70]). In McCloy, the majority refers to this as the “proportionality test” and specifies three elements that must be established before the proportionality test is satisfied – suitable, necessary and adequate in its balance.

What was the outcome in McCloy?

The outcome (6:1 - French CJ, Kiefel, Bell and Keane JJ, Gageler J, and Gordon J : Nettle J) was that none of the EFED Act laws challenged exceeded the implied freedom of political communication derived from ss.7, 24, 64 and 128 of the Constitution. However, while the majority in their joint judgment (French CJ, Kiefel J, Bell J and Keane J) came to this conclusion through the proportionality approach, Gageler J applied Lange in its classic sense and rejected the majority’s proportionality approach, while Gordon J rejected the “balancing” aspect of the majority’s proportionality approach. Nettle J found the laws prohibiting donations from building developers were invalid, as they discriminated particularly against this group, and the justification was not sufficient to warrant this discrimination. Nettle J found it was unnecessary to decide on the proportionality point. The outcome on the proportionality point was 4:3 (French CJ, Kiefel, Bell and Keane JJ : Gageler J, Gordon J and Nettle J).

What you need to know – the three question test from the joint judgment

The joint judgment commences at paragraph 2 by reiterating that the Constitutional implied freedom of political communication is not an absolute freedom, but a qualified freedom that is implied in order to ensure the people of the Commonwealth may “exercise a free and informed choice as electors” (Lange). Relying on Lange as modified in Coleman v Power (2004) 220 CLR 1, and adding a proportionality analysis to the second limb of Lange, the High Court succinctly set out the three questions to answer when determining if a law exceeds the implied freedom of political communication on governmental and political matters. I have converted this information into a flow chart:

*"Compatability test"

The compatability test requires firstly that the following be identified:

1.       The purpose of the law; and

2.       The means adopted to carry out the purpose of the law.

Both (1) and (2) must be “compatible with the constitutionally prescribed system in the sense that they do not adversely upon the functioning of the system of representative government”. The compatability test is a rule derived from the Constitution itself ([68]).

^#“Proportionality test”

The High Court majority added a proportionality test to the second limb of Lange. All three elements must be satisfied before proportionality can be said to exist:

1.       Suitable – “having a rational connection to the purpose of the provision”.

If the measure cannot contribute to the realisation of the statute’s legitimate purpose, it cannot be said to be reasonable ([80]). The majority indicate this is consistent with both Lange and Unions NSW v New South Wales (2013) 252 CLR 530 (“Unions NSW”).

2.       Necessary – “there is no obvious and compelling alternative, reasonably practicable means of achieving the same purpose which has a less restrictive effect on this freedom”.

This inquiry is to whether there is other, equally as effective means of achieving the legislative object which have a less restrictive effect on the freedom. These alternative means must be obvious and compelling. The majority indicate this is consistent with the approach taken in Lange and Unions NSW ([81]).

3.       Adequate in its balance – requires the judge to make a value judgment “describing the balance between the importance of the purpose served by the restrictive measure and the extent of the restriction it imposes on the freedom”.

The High Court said analysing the balance between the purpose and the extent of the restriction logically inheres in the Lange test, although this is the first time the High Court has “fleshed out” that this requirement is a necessary part of the second limb of the Lange test ([86]). In the balancing aspect of the proportionality test the positive effect of realising the law’s proper purpose must be balanced with the negative effect of limiting the constitutional freedom. The greater the restriction on the freedom, the more important the public interest purpose of the legislation must be for the law to be proportionate or balanced ([87]).

Applying the test to the provisions of the EFED Act – the joint judgment

Question 1 – does the law effectively burden the freedom?

In Unions NSW a case concerning the operation of Part 6 of the EFED Act, the High Court identified the burden as a restriction on the source of the funds available to political parties to meet the costs of political communication, as even with the public funding provided for in Part 5, a party or candidate will have to fund any shortfall. In McCloy, the majority identified this as the relevant burden. McCloy’s lawyers made an additional submission that the EFED Act prevents donors from making substantial political donations in order to build and assert political power. The High Court rejected this submission, as the ability to make substantial donations is not part of the implied freedom. Guaranteeing the ability of a few to make large political donations goes against the underlying principle of ensuring individuals have an equal share in political power ([28]).

Once the Plaintiff has established the law burdens the freedom, the burden then shifts to the Defendant to justify that burden by answering “Question 2” and “Question 3”.

Question 2 – is the compatibility test satisfied? Is the purpose and means compatible with the system of representative government provided for in the Constitution?

Div 2A Part 6

The purpose of Div 2A was identified as preventing and reducing the amount of corruption and undue influence in the government of the State, as well as to overcome perceptions of corruption and undue influence. The means to achieving this purpose in Div2A is to set a general cap on political donations. Capping political donations is consistent with representative government, as it helps to ensure equality of opportunity to participate in the political process and that one voice does not drown out others ([43] to [47]).

Section 96E

As s.96E is effectively an anti-avoidance provision which attempts to prevent donors getting around the general cap in on political donations in Div 2A, the validity of s.96E depends on that of Div 2A. As Div 2A passes the compatability test, so does s.96E.

Div 4A Part 6

Div4A prohibits property developers from making political donations. McCloy submitted that there is nothing special about property developers that make them more likely to make corrupt payments than other entities ([48]). The High Court accepted New South Wales submission that property developers can be distinguished from other participants due to their dependence on decisions of government in matters such as land zoning and development approvals. The purpose of Div 4A in reducing the risk of undue or corrupt influence in planning decisions where the risk is greater than in other areas of official decision making is legitimate, as are the means adopted to achieve the purpose ([53]).

Question 3 – is the proportionality test satisfied? Is the law suitable, necessary and adapted?

The majority found the proportionality test was satisfied for all the provisions of the EFED Act in dispute. The effect of the laws on the freedom is indirect. The negative effect of reducing funds available to election campaigns and restricting communication by political parties and candidates to the public needs to be balanced with the public interest in removing the risk and perception of corruption. The majority concluded the restriction on the freedom is more than balanced by the benefits sought to be achieved in removing the risk and perception of corruption ([93]).

Gageler J’s judgment

Gageler J dissented from the majority in his characterisation of the second part of the Lange test, rejecting the need for a proportionality test and highlighting two main problems with the majority’s proportionality approach:

1.       One size does not fit all, and the standardised criteria in the proportionality approach will not fit all cases ([142]); and

2.       Requiring a law to be “adequate in its balance” is not sufficiently focused on the reasons for the Constitutional freedom. Equating “strict proportionality with “specific balancing” has always been a controversial approach ([146]).

Gageler J’s formulation of the second stage of the Lange test is that there must be an explanation and a justification. First, the imposition of the restriction on political communication must be explained by the law’s object. Second, the restriction on political communication that is imposed by the law must be justified by the law’s reasonable pursuit of the identified legitimate end.

Nettle J’s judgment

Nettle J neither agreed nor disagreed with the majority’s strict proportionality analysis, as “for present purposes...it is unnecessary to delve into strict proportionality” ([222]). While Nettle J held the donation caps and restrictions on indirect contributions passed the two step Lange test were valid, Nettle J departed from the majority and held the laws prohibiting donations from property developers to be invalid. This was because Div 4A of Part 6 discriminates against a particular segment of the community, requiring strong justification, which was not present ([257]).

Gordon J’s judgment

Gordon J agreed with the majority on the outcome, however decided it was not necessary to limit the way in which a court can be satisfied of the second limb of Lange. Gordon J held that a court may consider whether there are more compelling, reasonably practicable ways of achieving the same end, but this will not always be necessary and there are many ways in which a court could approach the second limb of Lange, and the second limb should not require a set sequence of steps. Gordon Jdirectly rejected that “balancing” is a part of the second limb of Lange “as there are no criteria or rules by which a “balance” can be struck between means and ends” ([336]).

  

Vata-Meyer v Commonwealth of Australia [2015] FCAFC 139 – Federal Court slams lower court for not finding racial discrimination in “black babies” case.

The latest racial discrimination case involves several remarks made by a Department of Education employee towards an indigenous graduate Vata-Meyer. The employee who made the remarks was incredibly unsophisticated and insensitive, but this was only one factor and an overreliance on this finding and a failure to consider the elements of the s.9 test misguided the lower court.

Background

Vata-Meyer is an indigenous woman who was employed by the Department of Education under the Indigenous Graduate Recruitment Program. On the 28 September 2011 whilst at work she was the target of a series of comments from an “obtuse” and “remarkably unsophisticated” employee, Mr Lee, who held a role in human resources management. The matter was originally lodged with the Australian Human Rights Commission, who issued a “no reasonable prospect of resolution” certificate on 5 September 2012, enabling Vata-Meyer to commence proceedings in the Federal Circuit Court (FCC). On 10 September 2014, the FCC dismissed the application, and Vata-Meyer appealed to the Federal Court. 

The alleged discriminatory conduct

Three separate incidents allegedly occurred on 28 September 2011:

1.       “Black babies” incident

Mr Lee had a packet of Chiko jelly babies and offered some to Vata-Myer and said “have some black babies”. A colleague said “you can’t talk like that” to Mr Lee. Vata-Myer made it clear that the comment was unwelcome.  Mr Lee conceded he said “here are some black babies”, as he had referred to Chikos as “black babies” since he was a child.

2.       “Michael Jackson” incident

At a team afternoon tea Mr Lee interjected in a conversation and said “like Michael Jackson”. Mr Lee denied this comment occurred.

3.       “Coon” incident

Cheese was served at the team afternoon tea. A colleague asked about the difference between camembert and brie. Mr Lee interjected with “I like Coon”. There was a discrepancy between Vata-Myer’s version that Mr Lee interjected and Mr Lee’s version that he was asked what kind of cheese he liked and he responded with “I just like plain old Coon cheese”. One meaning of coon as defined in the Macquarie dictionary is “(derog.)(racist) a member of dark-skinned people, as an Indigenous Australian or an African American” and is capable of racial connotations.  

Section 9 Racial Discrimination Act 1975 (Cth)

There are three components to the racial discrimination test under s.9 of the RDA (see also [57]-[60] of the judgement):

1.       An act involving a distinction, exclusion, restriction or preference;

2.       The distinction, restriction or preference must be based on race, colour, descent or national or ethnic origin;

3.       The act must have the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, in this case, of a right to work or to just and favourable conditions of work.

Problems with the lower court decision

The Full Court of the Federal Court was scathing on the FCC’s decision which contained inadequate analysis, applied the wrong standard of proof, and placed emphasis on certain evidence without explanations as to why that evidence was preferable over other evidence. The Full Court identified these main errors:

1.       Failure to consider the “Michael Jackson” incident

The FCC did not decide whether the “Michael Jackson” comments were made, let alone whether the elements in s.9 RDA were established ([68)]. 

2.       Failure to properly consider the “Coon” incident

The FCC stated that the word “coon” can have several meanings including a racially pejorative meaning, but did not decide on the meaning the word took on in the context ([70)]. The primary judge did not reconcile competing accounts of whether the phrase was said without prompting (Ms Vata-Meyer’s version) or whether the phrase was said in response to a direct question about the type of cheese Mr Lee likes (Mr Lee’s version). The primary judge accepted Mr Lee’s version without engaging with the alternative account ([70)].

3.       Application of the wrong standard of proof

The standard of proof for civil proceedings is “on the balance of probabilities” (s.140 Evidence Act 1995 (Cth))). However, the primary judge imposed a higher standard by finding Mr Lee did not understand his comments might cause offence and giving him the benefit of the doubt on the basis of his examination and cross-examination in the witness box ([73]). The mere availability of innocent explanations does not mean the purpose was a lawful one. The question is meant to be determined on the balance of probabilities, while the standard applied by the FCC was closer to “beyond reasonable doubt” the criminal standard of proof.

4.       Failure to properly consider Mr Lee’s purpose in making the comments

The FCC fixated on their finding that Mr Lee did not understand that his comments might cause offence. This finding does not address any element in s.9 of the RDA.  The primary judge was entitled to have regard to Mr Lee’s behaviour in the witness box, but was required to evaluate the answers given against ostensibly reliable evidence of other witnesses ([82]).

5.       Failure to consider Mr Lee’s training and position

Mr Lee held a relatively senior position in human resources management and had undertaken comprehensive cultural awareness training including several modules on indigenous culture and awareness. Someone of this position who had received this training would not be oblivious to the hurt they might cause to an indigenous person through the comments made ([84]). The Full Court found that the primary judge did not “weigh up the strength of the cumulative evidence to determine whether on the balance of probabilities” Mr Lee was actuated by an unlawful purpose ([88]). Identifying purpose is one component of the offence under s.9 and the primary judge failed to engage with this component.

6.       Failure to consider the alleged discriminatory conduct separately from the subsequent investigation

The primary judge muddled the consideration of elements of s.9 with the way the Department subsequently handled the complaint. The steps taken to investigate a complaint cannot deprive the offending conduct of its discriminatory nature ([92]). The primary judge failed to consider whether the conduct of Mr Lee on its own infringed s.9 of the RDA.

7.       Failure to consider steps taken after the alleged conduct

The FCC also failed to properly consider subsequent action taken by the Department. This consideration is relevant to s.18A(2) which states an employer will not be vicariously liable for the conduct of an employee where they “took all reasonable steps to prevent the employee or agent from doing the act”.

Outcome

There was a clear miscarriage of justice in the trial ([100]). While the Federal Court has the power to correct a judgment and the orders made, the Full Court could not do so in this instance due to the lack of evidence and lack of transcript before them and the inability to hear or see witnesses. This is very unfortunate for Vata-Meyer, as she cannot be sure of the outcome which will flow from the retrial in the Federal Circuit Court. She is seeking a variety of remedies including:

·         Order for redeployment within the Australian Public Service;

·         Compensation for economic loss, medical expenses and hurt, distress and humiliation;

·         An apology;

·         An order that the Department require Vata-Meyer’s supervisors to undergo anti-discrimination, anti-bullying and harassment training; and

·         Costs.

It is open to the Department to argue the s.18A “all reasonable steps” defence, though it is not clear from the facts on Appeal whether the Department will try and avoid vicarious liability.