NSW public service senior executives gain (some) rights to challenge termination

There's been a belief in some NSW public service agencies that senior executives cannot challenge terminations of their employment or other employment actions. The Industrial Relations Commission of New South Wales (IRC) has rejected that view of senior executives' employment rights in the recent decision of Davie v Industrial Relations Secretary (Department of Justice, Corrective Services NSW) (No. 2) [2019] NSWIRComm 1056, meaning that agencies must now review their management of senior executives to ensure they are not inadvertently opening themselves to future litigation.

Mr Davie's employment as a senior executive is terminated

Stuart Davie was a senior executive employed under the Government Sector Employment Act 2013 (NSW) (GSE Act) who claimed his termination was unlawful because it amounted to victimisation in breach of section 210 of the Industrial Relations Act 1996 (NSW) (IR Act). His employer, the NSW Department of Justice, argued Mr Davie was precluded from making this claim by sections 41(1) and 58(7) of the GSE Act.

The GSE Act limits the ability of senior executives to make claims with respect to their employment:

• section 41(1) states "The employer of a Public Service senior executive may terminate the employment of the executive at any time, for any or no stated reason and without notice"; and
• section 58(7) prevents "proceedings for an order in the nature of prohibition, certiorari or mandamus or for a declaration or injunction or for any other relief" for any matter relating to a senior executive's employment.

Mr Davie loses at first instance, but wins on appeal

Commissioner Murphy found Mr Davie was precluded from seeking relief under section 213 because section 41(1) impliedly repealed the victimisation provisions as they relate to termination of the employment of senior executives, and section 58(7) precluded any relief for "removal, retirement, termination of employment or other cessation of employment of an executive employee".

The implication of the reasoning was that senior executives were also prevented from claiming relief by other means, including under the GSE Act, contract law, administrative law, the Anti-Discrimination Act 1977 (NSW) or the Work Health and Safety Act 2011 (NSW) (in our view, there remained a possibility of claims under some Commonwealth laws). 

The three Member Bench disagreed.

First, it found section 41 prevents review of the merits of any decision to dismiss a senior executive (eg disciplinary reviews), but does not prevent claims that the dismissal was unlawful, such as claims under discrimination laws, victimisations laws or the WHS Act.

Second, it found the phrase "any other relief" in section 58(7) only refers to relief of the same kind as the other orders listed in this section, which it characterised as relief available in judicial proceedings. senior executives may still allege a decision to terminate their employment was unlawful by claiming other forms of relief, including by applying to the IRC under section 213 of the GSE Act or to the Anti-Discrimination Board of NSW (and subsequently the NSW Civil and Administrative Tribunal) under the Anti-Discrimination Act.

What NSW Public Service Agencies should be doing now post-Davie

As a result of Davie, senior executives will have more options to challenge employment actions such as terminations, but are still prevented from:

• any form of merits review of a decision to terminate their employment (eg. disciplinary appeals), and
• commencing proceedings for an order in the nature of prohibition, certiorari or mandamus or for a declaration or injunction, or other similar relief, with respect to a decision made in relation to their employment.

Broadly, when evaluating legal risks associated with terminating the employment of a senior executive or taking other actions with respect to their employment, you should consider the risks of claims that the action was unlawful, including whether it breached the Anti-Discrimination Act, Part 6 of the Work Health and Safety Act or victimisation provisions in the GSE Act.

That means reviewing your internal guidance for handling senior executive disciplinary issues, complaints, or other workplace issues. Were they created on the assumption that there could be no possible challenge from the employee? If so, they must be updated to reflect the new requirements and risks arising from Davie.