What's involved in making a 'fair' decision? - natural justice or procedural fairness

Decision-making is complex and dynamic. Information needs to be gathered, assessed, evaluated and considered. Many people may want a say in a decision. Decisions involve balancing competing interests. The matters considered in any decision may also change and evolve. As a result making a final decision is not necessarily easy or straightforward, and in making a decision, the decision-maker may also have to navigate the concept of natural justice.

Natural justice or procedural fairness comprises three main components: the opportunity to be heard; there must be no bias; and the decision must have some basis in fact or reasoning. But exactly what procedural fairness comprises in practice is often elusive. In this article, we examine the general principles and some recent cases.

The hearing rule – an opportunity to be heard

The concept of procedural fairness, and giving the employee an opportunity to be heard before disciplinary action is taken, ought not to be unfamiliar to HR practitioners. Industrial legislation prescribes what a fair process is to entail. Under s88 of the NSW Industrial Relations Act 1996, in determining an unfair dismissal claim, the Commission must consider:

(b) ... whether the applicant was given an opportunity to make out a defence or give an explanation for his or her behaviour or to justify his or her reinstatement or re-employment,

But not every decision is regulated by legislation. Some decisions made by administrators (that affect a right, interest or legitimate expectation of an individual) are governed by the common law.

It is said that the rules of natural justice are a “duty to act fairly”: Kioa v West (1985) 159 CLR 550. But what is fair may be in the eye of the beholder; and the courts refuse to set fixed rules. Some guidance however as to the hearing rule includes:

• The content of the opportunity to be heard is flexible, determined by what is fair in the circumstances of the particular case. The hearing could take the form of an exchange of letters, or involve a meeting of the parties with the making of oral submissions. In more extreme cases, a more formal hearing could be conducted;

• Courts however will not expect a decision-maker to adopt the procedures of adversarial litigation;

• The essential focus is that the person affected by the decision has a reasonable opportunity to present their case;

• A “reasonable opportunity” means the person affected “must be given an opportunity to deal with relevant matters adverse to” their interests;

• Any adverse information that is “credible, relevant and significant to the decision” should (absent issues of confidentiality) be identified for the person affected to reply;

• The person affected should be presented with inconsistencies, critical facts and issues on which a decision is likely to turn to have an opportunity to respond;

• A hearing is unlikely to be fair if a decision-maker receives material or representations in the absence of one party, or does not disclose that material obtained from the other source;

• A decision-maker may not need to disclose copies of materials considered or provide precise details of all matters; it is sufficient to inform the person concerned of the “gravamen or substance of the issue”;

• A decision-maker is not required to disclose their thinking process or proposed conclusions before making the decision. However, the disclosure of an adverse conclusion may be necessary where the conclusion is not obvious or anticipated; and

• Only in cases of exceptional or great urgency, will fairness permit a limited or no hearing.

Recently, Wingecarribee Shire Council had findings it made about alleged misconduct by a councillor reviewed by the NSW Supreme Court: Mauger v Wingecarribee Shire Council [2015] NSWSC 1022. Other than in one respect, the court did not interfere with the Council’s decision.

The one procedural failing was a simple but common failing. The investigator properly interviewed the councillor and obtained the councillor’s response to the alleged conduct. Further enquiries were then made and additional information obtained. However, this additional information was not provided to the councillor to have a chance to respond. Despite the councillor having been originally heard, that chance to be heard must be given in respect of all information that is “credible, relevant and significant to the decision”. The new information obtained required giving the councillor a chance to be heard in respect of that new information.

Some may argue that a further chance to comment is too much natural justice as a chance was given to respond to the core issues (see Professor John McMillan “Natural justice: too much, too little or just right?”). It is persuasively argued that too much natural justice delays decision-making.

For HR and administrators, the lesson however is simple: give the affected person a chance to respond to any adverse information that is “credible, relevant and significant to the decision” being made, even if it means a slight delay before making your decision.

Bias – actual and apprehended bias

Recently, the High Court of Australia overturned the decision of a Council committee that ordered a dog be destroyed: Isbester v Knox City Council [2015] HCA 20. The Council’s committee included the person (Ms Hughes) who prepared and conducted a prosecution in the Magistrate’s court against the dog’s owner. That prosecutor then convened and sat on the committee to determine the dog’s fate.

The High Court said the question was “whether a fair-minded lay observer might reasonably apprehend a lack of impartiality with respect to the decision to be made”. The fact it is said a person has an “interest” in a decision (such that they might decide a case other than on its merits) requires a logical connection between that fear and any “interest”.

Ms Hughes was not a witness to the conduct nor affected by the conduct of the dog owner. It was argued that Ms Hughes had no relevant personal interest. Council argued she was “only doing her job” and did so diligently and in good faith.

A personal interest, the High Court said, is not just an interest whereby a person may receive some material or other benefit. A prosecutor, like Ms Hughes, has a personal interest in a matter – she promoted the charge in the Magistrate’s court. As such it “might be reasonably be thought that the person’s involvement in the capacity of prosecutor will not enable them to bring the requisite impartiality to decision-making”.

The argument that Ms Hughes was just doing her job is only an answer to a complaint of actual bias. The issue is one of apprehension of bias. In this case, there was an incompatibility of roles as prosecutor and then sitting on the committee.

The lesson learnt is that it may be prudent to separate different functions and responsibilities to different persons to avoid bias or the appearance of bias. So, for example, in managing an employment complaint about inappropriate behaviour, the investigator should not be the decision-maker as to the worker’s ongoing employment.

Any evidence or reasoning for your decision?

Procedural fairness is focussed on procedures rather than the merit or outcome of decisions. Therefore, a court will not declare a decision invalid simply because it disagrees with the decision. Intervention into the merit of a decision is very limited. However, if a decision is so unreasonable that no reasonable or right thinking tribunal would make the decision, a court may then intervene.

In Christie v Agricultural Societies Council of NSW Ltd [2015] NSWSC 1118 the Supreme Court held that a decision to suspend horse trainer, Mr Christie, was not so unreasonable. The horse trained by Mr Christie tested positive for prohibitive substances. However, Mr Christie did not administer the drugs. Without his knowledge the horse’s owner administered the drugs. Regardless, the disciplinary committee imposed a 12-month suspension on Mr Christie. The Supreme Court said it was permissible for the committee to look at the matter not just by Mr Christie’s lack of involvement but rather by his responsibility and omissions as the trainer.

In contrast, in the area of employment, the Industrial Commission will look at the fairness or harshness of the dismissal decision. The Industrial Relations Act provides scope for a review of the merits of a dismissal.

Regardless of the breadth of any review, in both cases a decision-maker needs to focus on the real reason or reasons for the decision, and be able to clearly articulate a rationale and probative reason for the decision. Sometimes that reason may be distinct from the obvious conduct and focussed on what the conduct shows about the person’s character, fitness, suitability and ability to be trusted.

Conclusion

Making some decisions is not easy. Avoidance is not a solution. But making the decision:

• in a manner that gives others a chance to be heard (and therefore you are properly informed);

• free from bias (and therefore you are objective); and

• with some rationale foundation (as you have thought about the decision), will place you in good stead to defend the decision you ultimately make.

Author: James Mattson