Afford procedural fairness before engaging public sector employees? Not today, the Court affirms in Patole v Child & Adolescent Health Service [2024] WASCA 126.
Are public sector bodies, unlike the private sector, subject to some higher and further obligation to afford procedural fairness to applicants before deciding who to employ to fill vacant positions?
In Patole v Child & Adolescent Health Service [2024] WASCA 126, the Court firmly indicated the answer is generally ‘no’. The principles contained in sections 7 to 9 of the Public Sector Management Act (PSM Act) and the Employment Standard made under it, despite each dealing with avoiding bias in making employment decisions, do not impose that requirement. Something more in a particular legislative context would be required.
Public sector bodies, then, need not worry too much about members of selection panels or those deciding to employ an applicant having given written references supporting particular candidates. Even if a statutory regime somehow did require there to be no reasonable apprehension of bias, still no issue may arise. So long as a written reference does not mean a selector is advocating for an applicant in strident terms that might lead a fair-minded lay observer to apprehend they would not consider another candidate, there may well be no jurisdictional error invalidating the employment contract.
And, in any event, the possible availability of relief under the Employment Standard and the Public Sector Management (Breaches of Public Sector Standards) Regulations may well mean a court would decline to quash an employment decision anyway.
Public sector bodies, then, seem able to continue to confidently make employment decisions without needing to adopt any new obligations.
Why did Dr Patole seek a review of the Health Service’s decision to employ Dr Sharp?
Two candidates — Dr Patole and Dr Sharp — went for the position of Medical Co-Director of the Child & Adolescent Health Service’s neonatology department.
Dr Sharp had been acting in that position for a bit under a year. She had been working directly with the Health Service’s Executive Director. The Executive Director was the chair of the selection panel tasked with recommending either Dr Sharp or Dr Patole be employed. He was also the delegate who would decide whether to accept that recommendation.
Before the selection panel made its recommendation, the Executive Director gave a referee report for Dr Sharp. He wrote that she was an ‘eminent consultant neonatologist’ and that he would support Dr Sharp as a highly suitable applicant for the role. He said Dr Sharp was above average when it came to the selection criteria.
The panel recommended that Dr Sharp be employed, and the Executive Director decided to employ her.
Dr Patole sought judicial review of the decision to employ Dr Sharp, on the basis that the circumstances gave rise to a reasonable apprehension of bias. He failed at first instance and appealed, primarily on the ground that the trial Judge was wrong about the Health Service not being required to afford Dr Patole procedural fairness in deciding who to employ.
Why did the Court also reject the existence of an obligation to afford procedural fairness?
The Court was unanimous in confirming that the Health Service did not need to afford procedural fairness to Dr Patole before deciding to employ Dr Sharp, although Quinlan CJ & Mitchell JA wrote separately to Vaughan JA.
Quinlan CJ & Mitchell JA began by objecting to framing the question as whether the relevant executive powers of the State and its public authorities were ‘judicially reviewable’. Their Honours were clear that the proper question is what the legal limits on a relevant power are and whether those limits have been transgressed. It was not helpful to approach the issue as one of whether a decision was ‘not amenable to judicial review because it was not made in the exercise of a public power’.
Instead, their Honours considered that the decision by the Executive Director to enter an employment contract with Dr Sharp was ‘amenable to judicial review’ in the sense that the Court had jurisdiction to determine whether the legal limits on the exercise of that power had been exceeded. That required the Court to determine whether the valid exercise of the State’s power to enter an employment contract with Dr Sharp was conditioned on complying with the rules of procedural fairness.
Vaughan JA did not criticise the framing of the issue as whether the decision was of a character amenable to judicial review. His Honour did, though, restate and deal with the issue as similarly being a question of whether the relevant power was, on a proper analysis, conditioned by a requirement to afford procedural fairness.
In deciding that issue, Quinlan CJ & Mitchell JA said it did not matter whether the power to employ Dr Sharp was a non-statutory power of the executive regulated by the PSM Actand the Health Services Act, or a statutory power contained in those Acts. The question was whether those Acts expressly or impliedly conditioned the valid exercise of the power to engage an employee on compliance with the rules of procedural fairness.
The starting point was that the exercise of a power by the State to enter a contract is not ordinarily conditioned by that requirement. That extended to employment contracts which, generally, directly affect the rights and interests of the person employed, not those of disappointed applicants.
That result was not changed by the terms of the PSM Act nor the Employment Standard made under it, which each apply more broadly to employment in the public sector. The PSM Act relevantly included in s 8(1) principles requiring selection processes to be directed towards and based on a proper assessment of merit and equity, and no power with regard to human resource management to be exercised on the basis of nepotism or patronage. The Employment Standard similarly provided that employment decisions were to be based on merit, and were to be impartial and free from bias, nepotism and patronage.
While their Honours accepted the appointment of an employee by a person who was subject to a reasonable apprehension of bias may breach the Employment Standard, they did not consider that such a contravention rendered an employment contract invalid. That was not consistent with the relief available under the Regulations for such a breach. And, it would have had consequences for the public sector which Parliament could not objectively have intended. That is, that even without a complaint being made a public sector employee’s contract might lack legal effect because of some latent invalidity arising from a failure to afford procedural fairness to unsuccessful candidates. The operations of the public sector would be disrupted by the legal effect of purported appointments to public sector bodies being invalid or uncertain. And individual employees — unlikely to be at fault or able to discover any issues with their appointment — would be prejudiced.
Vaughan JA said further that sections 7 to 9 of the PSM Act prescribe norms of conduct to be observed in and in relation to public sector employment, and are principles that inform how the Public Sector Commissioner carries out their functions. They do not, though, give rise to an implication that the State’s capacity to employ a person is conditioned by a requirement to afford procedural fairness. Similarly, his Honour considered the Employment Standard provided a positive statement as to norms of conduct to be fulfilled in conducting a selection process. It did not impliedly impose a condition on the State’s capacity to contract.
Quinlan CJ & Mitchell JA did not consider that their conclusion meant that public servants could act with bias, nepotism or patronage without consequence. Their Honours noted contraventions of the Employment Standard could still constitute breaches of discipline, or could amount to corruption with criminal consequences.
However, a failure to afford procedural fairness to applicants for a public sector position, including by acting in breach of the bias rule, will not generally result in the invalidity of an employee’s contract.
Why wouldn’t the Executive Director giving Dr Sharp a reference have mattered anyway?
The Health Service’s notice of contention on the appeal challenged the trial Judge’s alternative finding that, if there were an obligation to afford procedural fairness to Dr Patole, then there was a reasonable apprehension of bias which would have justified the decision to employ Dr Sharp being quashed.
While Vaughan JA declined to decide the point, Quinlan CJ & Mitchell JA differed from the trial Judge, considering there was no reasonable apprehension of bias in the Executive Director having given his referee report.
Their Honours acknowledged that an apprehension that the Executive Director might not be open to being persuaded, in the sense that he might not be willing to give genuine and appropriate consideration to the merits of other candidates, would constitute a reasonable apprehension of bias. That might be the case where a referee acts as an advocate for an applicant’s appointment in strident terms that might lead a fair-minded lay observer to apprehend that they would not consider any other candidate
However, the Executive Director simply giving a written reference for a candidate was not enough to reach that standard.
The reference given by the Executive Director only expressed his views of Dr Sharp’s professional abilities based on her acting in the position she had applied for. That he held those views and would be expected to inform the selection panel of them did not give rise to any reasonable apprehension of bias. His professional association with Dr Sharp did not place the Executive Director in an uncommon situation as a person on a selection panel for a senior position in the public sector.
It was also common for there to be internal candidates for senior positions, so that members of a selection panel may know one or more candidates and have views about their professional abilities. To avoid associations of that kind would require the delegation of the selection of candidates to people unlikely to have a good understanding of the needs of a public sector body.
Accordingly, any application of the requirements of procedural fairness and the Employment Standard to public sector recruitment would have to accommodate those features.
In that context, that the Executive Director thought Dr Sharp to be a highly suitable candidate, and had expressed that in writing, could not lead a fair-minded lay observer to apprehend that he might not consider the merits of an application by another highly suitable candidate. Selecting someone other than Dr Sharp would not have required the Executive Director to depart from anything he had said, only to recognise that there was an even more suitable candidate.
Where the successful candidate would report directly to the Executive Director, it was obviously in his interests to select the best candidate, and there was nothing in his relationship with Dr Sharp which would tend to stop him from doing so.
How could the Employment Standard and the Regulations affect relief in future judicial review applications?
Having found two reasons why Dr Patole’s judicial review application failed, Quinlan CJ & Mitchell JA went on to raise a third possible roadblock to its success.
Their Honours considered that the existence of the Employment Standard, and the provision in the Regulations for disciplinary processes to deal with breach, could well undermine similar future applications for judicial review.
That is, the availability of that alternative avenue if an employment decision were not made impartially might be a powerful factor militating against a court granting relief. Their Honours effectively urged future applicants to carefully consider that matter, and to identify cogent reasons why relief by way of judicial review should still be granted.
It is apparent, then, that substantial hurdles stand in the way of unsuccessful applicants for public sector roles seeking judicial review in an attempt to overcome their disappointment.
