Download Code of conduct—financial record keeping for a social club

Disclaimer: The following summary illustrates how the Merit Protection Commissioner has
reviewed a particular case and should not be relied on as legal advice.
Case Summary: Code of conduct—financial
record keeping for a social club
Key words: employment relationship-procedural fairness-upheld
Application
The agency found the applicant had breached the APS Code of Conduct as it determined
that there was a failure to keep proper financial records with respect to the workplace
social club. This action was found to breach subsection 13(11) of the Public Service Act
1999 and the applicant was informed that a sanction of a reprimand had been imposed.
The applicant sought a review by the Merit Protection Commissioner under Public
Service regulation 5.24 (2) of both the finding of a breach and the sanction imposed.
The social club was informal in nature and aimed to raise money to offset the cost of the
annual Christmas function. The applicant said that this was not a formal role and only
involved depositing money and writing cheques when required. The applicant had taken
on the role as the incumbent treasurer was having difficulty balancing the finances.
A number of social club members approached management with their concerns in
relation to the social club finances. As a result of these approaches, the applicant was
informed by the agency of a potential breach of the Code of Conduct and was suspended
from duty with pay, while an investigation was conducted.
After the investigation, the applicant was notified by the decision maker that the
allegation had been proven as the applicant had not behaved ‘honestly’ in the course of
APS employment. The other allegation was not proven.
The applicant questioned the agency’s ability to undertake a formal inquiry into this
matter, and made claims as to procedural flaws in the investigative process, in particular a
lack of procedural fairness including an apprehension of bias. The issue of apprehension
of bias, while addressed in the report, is not covered in this summary.
Review
The applicant raised a concern about procedural fairness (see accompanying general
information). These were around the issues of whether or not there was an employment
relationship with regard to social club activities and the application of the ‘hearing rule’.
Social club activities and an employment relationship
In the applicant’s view, as the social club had no formal procedures or guidelines, it was
Disclaimer: The following summary illustrates how the Merit Protection Commissioner has
reviewed a particular case and should not be relied on as legal advice.
not activity undertaken in the course of APS employment and therefore the APS Code of
Conduct did not apply. It was argued that whilst some activities investigated took place
on work premises and within working hours, they did not occur ‘in the course of APS
employment’.
Generally, the Code requires a relationship between the conduct complained of and
employment. Different sections of the code require different levels of connectedness
between the standard of conduct and APS employment. The facts and circumstances of
each matter will determine whether the required relationship exists.
The conduct that was the subject of this review arose out of the applicant’s involvement
with a workplace social club and the role of depositing money and writing cheques. As
such, a sufficient relationship existed to warrant an investigation under the agency’s
procedures for dealing with suspected breaches of the Code of Conduct.
Application of the ‘Hearing rule’
The applicant also argued that the finding of a breach was based on one finding of fact—
evidence that there were electronic financial records—and the claim of not being given
an opportunity to comment on this evidence before a decision was made that a breach had
occurred. The investigators stated the basis for the proven allegation was the applicant’s
response to a question about financial records. To quote the report:
I base this [the finding of breach] on the fact that, in [one person’s] statement,
[the applicant] was asked … if there were any electronic financial records for the
Social Club, [the applicant] said there were not any electronic financial records
for the Social Club…[and] there are.
The agency’s procedures stated that:
The principles of procedural fairness (natural justice) will be observed at all
stages of the disciplinary process… this includes..the hearing rule which requires
a decision maker to give an opportunity to be heard to a person whose interests
may be adversely affected by a decision.
The Merit Protection Commissioner considered that if a decision is made without the
decision maker giving the affected employee an opportunity to respond to evidence used
to make a relevant finding, the hearing rule has not been properly applied.
The agency’s procedures also stated:
The delegate will first provide the employee with a copy of the discipline report
and give the employee 7 days, or a longer period as may be agreed, to provide
comments in relation to the findings and the action/sanction imposed.
After considering the employee’s comments the delegate will advise the employee
Disclaimer: The following summary illustrates how the Merit Protection Commissioner has
reviewed a particular case and should not be relied on as legal advice.
in writing of his her decision, what action/sanction (if any) is to be imposed, and
the employee’s review rights.
Inherent in this statement is that all relevant material should be provided with, or set out
in, the report, suggesting that there may well be, at that stage, material unfamiliar to the
employee concerned. The letter sent to the applicant attaching the report stated, however,
that the delegate had found the relevant allegation proven, and asked for comment ‘before
I make a final decision in relation to sanctions’.
The agency’s comments on the process were as follows:
I accept that the ambiguity of this letter would seem to suggest that only comment
regarding sanctions would be considered (and in this regard a revised template
has been developed and promulgated for use.)
In any event, [the applicant] provided a response to both the breach and the
sanction…Clearly, had [the applicant] presented information that changed the
delegate’s opinion regarding whether there had been a breach of the Code of
Conduct, it was open to the delegate to amend that decision. Evidently, the
delegate was still of the view that the determined breach of the Code of Conduct
was correct. In relation to the sanction, on consideration of [the applicant’s]
comments, a lesser sanction than originally proposed was imposed.
The applicant strongly refuted whether any comment could have in any way changed the
delegate’s decision, as the letters had been drawn up and on the desk ready to hand over.
The fact that the delegate did not change the decision that a breach had occurred did not
mean the applicant’s comments had been disregarded. Evidence that the applicant’s
comments were considered is in the modification to the sanction. A reassignment of
duties and a reprimand had originally been proposed, and the agency delegate decided to
impose a reprimand only.
Having regard to the totality of the matters, the Merit Protection Commissioner was
satisfied that the applicant was provided with the details of the case and with
opportunities to respond to that information before decisions were made.
‘Honesty’ with regard to the financial records
With regard to the actual allegation, the Merit Protection Commissioner considered that
the primary issue was, as indicated by the inquiry officer, the records or lack thereof. To
the extent that the applicant did not provide records when asked, this may support a
conclusion that the records did not exist, or were not up to date.
The record of interview between the inquiry officer and another employee stated that the
Disclaimer: The following summary illustrates how the Merit Protection Commissioner has
reviewed a particular case and should not be relied on as legal advice.
other employee had asked the applicant:
…for copies of any financial records and was told by [the applicant] no records
existed for this year, or last year, since [the applicant] had taken control of
finances. … the applicant [stated] there never were any electronic records, yet
this was not true, as the deleted files were later recovered by IT.
The conversation referred to above formed the basis for the conclusion that there had
been a breach of the Code of Conduct. Both the inquiry officer and the delegate
confirmed in separate conversations that the primary piece of evidence taken into
consideration was the applicant’s response to the question by the other employee.
The applicant’s response with respect to this conversation was:
I was never asked specifically if there were any electronic records, nor did I say
‘no records existed for this year or last year…’…The person] didn’t ask me for
any ‘electronic records’ but I do recall [being asked] for ‘any other records’ to
which I responded ‘no’ because I had already handed [over] everything I had….
An earlier meeting had occurred at which the issue of the missing money was raised. The
applicant stated in response to the inquiry report that ‘10 minutes after the meeting I
handed over everything I had’.
With respect to the records themselves, the applicant said that there were problems on
occasion accessing the financial programme, but that the programme had been used.
Upon returning from leave, an access error message came up when trying to use the
programme, and the agency IT support area said the data was lost. The applicant
‘honestly believed’ the data had gone.
The inquiry officer stated that social club material, including the financial programme
data, had ‘been deleted’ but that IT staff had been able to recover certain information.
The inquiry officer said with respect to the financial records that these ‘reconciled very
closely with what was in the bank account…’, the difference being minor and that it
looked like the applicant had attempted to keep accurate records. In addition, the
programme folder was generally accessible to a number of employees.
The Merit Protection Commissioner considered that it was more probable than not that
the applicant would not have stated there were never any records when so many people
knew that there were. The explanation for the comment that there were not any records is
plausible given the belief that they had been lost, and is consistent with the fact that they
were missing.
A finding that an APS employee has not been honest is a serious one, and requires, even
on the balance of probabilities, a sufficient weight of evidence. On the basis of the above
the Merit Protection Commissioner was satisfied that the applicant was honest in the
response, and as such, the primary basis for the finding, as articulated by the inquiry
Disclaimer: The following summary illustrates how the Merit Protection Commissioner has
reviewed a particular case and should not be relied on as legal advice.
officer, could not be sustained.
The evidence paints a picture of a fairly informal arrangement with respect to the
management of the social club. There did not appear to be a charter or any guidelines as
to roles and responsibilities, and various members took responsibility for certain
fundraising activities. There is evidence of ‘IOUs’ being used to put money in a box to
pay for chocolates, and an honour system with respect to raffles and other events.
Envelopes of money appear to have been held in drawers, and there was a tin which
appears to have been used to essentially provide petty cash. Some individuals appear to
have kept the records for their particular events.
The inquiry officer was not able to determine why the money was missing, be it ‘theft or
inappropriate practices’. The inquiry officer noted that ‘due to poor practices of the
social club’, it had been difficult to trace expenditure and profit. Those practices appear
to encompass more than the activities of the applicant.
Outcome
On the basis of the above, the Merit Protection Commissioner recommended that the
agency set aside the decision that the applicant breached subsection 13(11) of the Act. As
the recommendation was that no breach has been found, the issue of a sanction did not
arise.
The Merit Protection Commissioner considered that some issues raised in the course of
this review highlighted the need for the agency’s procedures for determining whether a
breach of the Code of Conduct had occurred to be amended. As noted earlier, upon being
made aware of the ambiguity of its approach, the agency revised its template to clarify
the delegate’s responsibility to seek comment from the employee on both the proposed
finding of a breach of the Code and the sanction prior to either decision being made.
Lessons learnt: Conduct that is apparently unrelated to the performance of duties may be
subject to the Code if it can be demonstrated that there is a real connection between the
behaviour and its effect on the workplace. It is also important that, consistent with agency
procedures and policies, the decision maker provides an opportunity to be heard to a
person whose interests may be adversely affected by a decision.
Office of the Merit Protection Commissioner
December 2009