Education and Training Reform Amendment (Miscellaneous) Bill 2016

Ms PENNICUIK (Southern Metropolitan) — I am very pleased to make some remarks today on the Education and Training Reform Amendment (Miscellaneous) Bill 2016, which indeed makes a range of miscellaneous amendments to the Education and Training Reform Act 2006. They are quite different sets of amendments that this bill includes.

Firstly, under clause 4 the bill expands the definition of 'sexual offence' in section 1.1.3(1) of the act to include references to additional offences that have been recently inserted into the Criminal Code of the commonwealth of Australia to ensure that those offences are taken into account when assessing the registration and performance of Victorian schools and Victorian teachers. These definitions would include: forced marriage involving a person under 18 years of age; using a carriage service for sexual activity with a person under 16 years of age; and using a carriage service to transmit indecent communication to a person under 16 years of age. The Greens are very supportive of this amendment under clause 4 of the bill to add those definitions under that section of the act.

Clauses 6 to 13 make a number of other miscellaneous amendments to the act, such as inserting fees for temporary approvals of early childhood teachers. This amendment would simplify the fee-setting process for temporary approvals of early childhood teachers by removing the requirement for the minister to call for and consider a recommendation of the Victorian Institute of Teaching (VIT) when fixing that application fee.

But this would not affect the requirement for the minister to continue to call for and consider VIT recommendations in relation to other fees relating to teacher and early childhood teacher registration.

The bill also amends the act to clarify the process for the appointment of acting members to the VIT. Currently the minister has the power to make those appointments to the governing boards of statutory authorities under the act, but historically this has not applied to the VIT council because of the process of electing members to the council prior to 2014 when the previous government changed it. But that has now been changed back. Instead, the chairperson of the VIT is empowered to appoint acting members on the recommendation of the council.

We are supportive of that amendment and also the amendment that goes to the debt recovery arrangements, which is to ensure that Victoria complies with its obligations under the Australian Education Act 2013 at a commonwealth level to have adequate debt recovery arrangements in place in respect of school funding by the commonwealth. These are all sensible amendments.

The other amendment that is made by the bill, particularly by clause 5, which is the major clause dealing with this amendment, will enable the secretary to dismiss an employee without a formal inquiry if the secretary reasonably believes that serious misconduct has occurred. The minister in his second-reading speech states that this dismissal power:

… seeks to close a gap in existing legislation to effectively manage serious staff misconduct without unnecessary procedural delays and to increase the integrity and accountability of the government teaching service.

The Greens have serious concerns with the amendments in the bill which go to sections 2.4.61, 2.4.62, 2.4.63, 2.4.64, 2.4.65, 2.4.66 and 2.4.67 of the act. These lay out very detailed procedures for the dismissal of or disciplinary action taken against teachers or education staff under the act. Sections 2.4.62 and 2.4.63 also outline the procedures, and section 2.4.60 sets out the grounds for action taken against employees in terms of disciplinary actions. The Greens are of the view that this particular section of the act is very comprehensive in terms of the sorts of procedures and natural justice processes involved in disciplinary action, whether or not they eventually lead to the dismissal of an employee, and that there is no need for the summary dismissal power that is being inserted by this bill.

I should say that the Greens have prepared an amendment to remove clause 5 from the bill, and I am happy to have that amendment circulated.

Greens amendments circulated by Ms Pennicuik (Southern Metropolitan) pursuant to standing orders.

Ms PENNICUIK — Members will have the amendments in their hands, and as I was just outlining, there are very comprehensive processes and procedures under section 2.4.61 and other following sections of the act. Just recently there were changes made to the Victorian Institute of Teaching such that if there were any allegations of sexual misconduct by teaching staff they could be immediately suspended. In my view, because an allegation is an allegation and not necessarily a fact, a suspension allows the teacher to be removed from the classroom. An immediate suspension allows the teacher to be removed from the classroom while an investigation is carried out, and we supported that amendment with some comments that I made at the time.

But what we have here now is the power for the secretary of the department to summarily dismiss an employee. If you read the second-reading speech and the statement of compatibility, both of those go to the issue of allegations of sexual misconduct by a member of staff, but if you go back in time the real reason appears to be the findings of the IBAC inquiry and its report known as Operation Ord.

We know, of course, that certain employees of the Department of Education and Training were involved in fraud of the taxpayer, basically. At least one of those was an executive employee and was, in fact, dismissed under the Public Administration Act. But in terms of many of the other staff members who may have been named in this report, the grounds that need to be satisfied at the present time for dismissal of staff are clear. Currently, as expressed in the second-reading speech:

… the procedure for managing serious misconduct is subject to complex and time-consuming procedures.

Well, it should be subject to procedures, whether they be complex and time consuming or not, and bearing in mind that a person can always be suspended. The second-reading speech continues:

There is no explicit legal power for the secretary to terminate the employment of a member of the government teaching service for serious misconduct without first conducting an inquiry.

I would have thought that if you were going to dismiss someone you would need to conduct an inquiry and know you are on solid ground to justify such drastic action. At the moment:

To justify summary dismissal, the secretary needs to be satisfied that an employee's conduct is grave, serious or a significant departure from the standard of care which should have been exercised.

I do have some issues with the minister saying that one of the reasons for not conducting an inquiry is that the process is complex and time consuming and the other is the introduction of the concept of 'reasonable belief' rather than some evidence that something has occurred. Also, if we go to the statement of compatibility, the secretary will be able to summarily terminate an employee if he or she reasonably believes the employee has engaged in serious misconduct.

Under the heading 'Fair Hearing' in the statement of compatibility, the minister says that, yes, this limits the rights under section 24 of the charter, but this power will:

Expedite the dismissal process when it is clear that the employee has engaged in serious misconduct and inquiry is not required.

The proposal that something must be clear and that the only test is that the secretary has a reasonable belief is antithetical, because a reasonable belief is not clarity. So we have a problem there. The statement of compatibility continues:

Circumstances in which the secretary may decide to terminate an employee without first holding an investigation include where the employee has admitted the serious misconduct in a court or another forum.

I would say that that still requires investigation because the person may be a witness and could come under significant duress during questioning by a barrister or someone assisting the IBAC commissioner, and may admit to something that has not in fact been proven, so I think this is a behaviour that, under the existing processes under section 2.4.61 and following sections of the act, would require an investigation by the secretary to investigate that admission and the circumstances by which it has come about and undertake disciplinary action. As section 2.4.61 says, this could be a reprimand, a fine not exceeding 50 penalty units, a reduction in classification or a termination of employment, but it does require some investigation.

As I have said, senior public servants in the executive service are not covered by this provision. It refers to departmental employees and/or teachers. As I also said, if there is any allegation of sexual misconduct, they can already be immediately suspended, so that is — —

Mrs Peulich — On full pay.

Ms PENNICUIK — Mrs Peulich says 'On full pay', but I am talking about allegations, which are not proven facts — and people can make allegations that are not true.

The statement of compatibility also goes on to say:

An expedited process for the termination of employment as opposed to the power to suspend a person, in circumstances where there is strong, reliable evidence that serious misconduct has occurred, especially in cases where this may involve a child, is appropriate in that it removes ongoing uncertainty for those involved.

I do not understand how that strong, reliable evidence correlates with a reasonable belief, and further, it would mean:

…that the secretary may choose not to comply with the processes in the act mandating investigations …

But the statement of compatibility says that while this amendment would not mean that the secretary would need to carry out an investigation, 'it is envisaged that these processes will be adhered to in the majority of cases'.

I am glad to read that, but that is not what the actual bill says and it is not a compelling case, given that it is just mentioned in the statement of compatibility. As I said, there is already the ability to suspend an employee. I would say, too, that the existing processes and procedures in the act, in addition to the ones that were recently added to the Victorian Institute of Teaching legislation, have worked well over many years. They have been worked out through successive governments and the staff of the education department, including departmental staff and teachers. There has been no evidence put to me — except the behaviour outlined in Operation Ord, which I will talk about in a moment — to show that there is any need for this, and I would still say that apart from the executive service personnel, the processes already outlined in the act would suffice.

The next page of the statement of compatibility states that:

DET's managing complaints, misconduct and unsatisfactory performance guidelines will also be amended to include a section on summary dismissal to set out the general requirements for the decision-maker to ensure that a fair and reasonable process is followed.

Ipso facto, summary dismissal is not a fair and reasonable process. What is a fair and reasonable process is what already exists in the act, and there is no need to change the act. For example, this provision sets what we could call a condition precedent, and a condition precedent to the exercise of the power to summarily dismiss — that is, the secretary holding a reasonable belief — is too low a bar for dismissal. The condition precedent should be the conduct itself — that is, the grounds of the serious misconduct. Simply referring to 'serious misconduct' is vague. It should be referring to an actual action such as theft, fraud, assault and so on.

I agree, also, that if, for argument's sake, we accept the need for a summary dismissal, this needs to be limited to a power being exercised only by the secretary and not by delegation. I know the government has an amendment to that effect, which we would support. I notice that Mrs Peulich is not going to support the amendment on the delegation; is that right?

Mrs Peulich — We won't oppose.

Ms PENNICUIK — You will not oppose? Well, you spoke against it.

Mrs Peulich — I expressed some concerns about how it will operate.

Ms PENNICUIK — In summary on the problems with this amendment, it does abrogate the right to procedural fairness. There is no appeal on the substantive ground of whether in fact the conduct occurred. The explanatory memorandum says that an employee has a right to appeal and that under appeal it would be considered and it would be assessed on whether there is a reasonable belief but not the substantive ground on whether in fact the conduct had occurred. This leads to a wide variety of circumstances where an employee has not in fact engaged in conduct, even though the secretary has a reasonable belief that the conduct has been engaged in. If the employee has been found guilty and then that is set aside, the employee would not be able to challenge the substantive ground of the alleged misconduct.

It has also been brought to my attention that the practical exercise of the powers proposed would lead to a conflict with unfair dismissal laws in respect of non-executive employees. This is because unfair dismissal laws require an employer to have a valid reason for dismissal, not simply a reasonable belief. So that is the problem with this provision that is being inserted into the act by this bill, which the Greens are saying is not required because the procedures under the act suffice already.

In terms of the report of IBAC — called Operation Ord, which I have already made a statement about in statements on reports — it is worth saying that the secretary of the department saying, 'Well, I'm going to fix this problem by getting the act changed so that I can summarily dismiss employees' is not going to get to the nub of the problem. If people were to read the report they would deduce and infer from it that the problems have to do with the culture, the structures and the behaviours that have gone on in the department of education over a long time. For example, on page 8 the report says:

This report outlines the conduct of Operation Ord, which has been complex and protracted due to the considerable subterfuge involved, as well as constraints on the availability of financial data. The report also outlines departmental practices, organisational culture and the failure of systems and controls which contributed to the corrupt conduct going undetected for so long.

As I have said before, this state of affairs was allowed to develop and to continue and to fester under multiple governments — the previous government, the one before that and this one. It is no surprise if you read the report that some people behaved badly, because there was not anything to prevent them from doing that. For example, the report also says:

Operation Ord identified that there was a general failure of controls around procurement that contributed to the corrupt conduct. Deficiencies included business managers failing to check that goods and services were delivered or performed before processing payment, purchase orders either not being raised or being raised after a purchase had been made, invoices with insufficient information being approved for payment, and lack of documentation to support payments.

Similarly, the investigation uncovered a widespread lack of accountability for public money within the department. Banker schools were used to pay for goods that were contrary to department policy, such as generous hospitality, alcohol and gifts. Invoices were paid without question at the direction of senior officers, although the payments were totally unrelated to the business of the school or established clusters of schools.

There was a significant lack of transparency in relation to funds transferred into and out of schools for these purposes. The lack of accountability and transparency clearly suited the purposes of certain senior officers, who were using banker schools either corruptly or inappropriately.

There is even more that needs to be put on the record as well, with regard to what was going on in these schools. Paragraph 3.5 of the report goes to the department's 2010 audit into the program coordinator schools. In 2010 two senior internal departmental auditors completed an audit program of the coordinator schools. This audit was placed on the plan as a result of pressure brought to bear by a number of people who expressed concerns over a number of years about the use of program coordinator schools to circumvent systems and controls and who were also concerned about the apparent use of program coordinator schools to pay invoices et cetera. The audit identified that at October 2010 approximately $30 million was held by the schools, and the audit looked at whether the coordinator schools were properly administering the funds on behalf of regions, if departmental policies and procedures were being followed and whether controls were in place to ensure appropriate authorisation, recording and reporting of expenditure.

The audit concluded that program coordinator school arrangements were in breach of the act as well as departmental policies, procedures and guidelines. Three audit findings were defined as critical, indicating potential severe adverse effect on the department and requiring immediate attention of the deputy secretary. It recommended that arrangements involving expenditure on behalf of regions and central office cease immediately, and a lot of detail follows.

Further on the report says:

Despite the gravity of the findings and recommendations, the audit report languished. In fact, it was not signed off by management until August 2011, approximately eight months after its completion.

If you go to paragraph 3.5.4, it reads:

Following a period of obstruction, management acknowledged the concerns raised in the 2010 audit and accepted most of the recommendations.

What I am trying to get to there is that there is a lot more in this report that could illuminate what has been going on in the department of education. There are serious structural problems within the department. During the Public Accounts and Estimates Committee hearings and in fact in financial outcomes hearings earlier this year, I pursued this issue with the new secretary, Ms Gill Callister. I am confident that she wants to fix these problems, but I think she has a very difficult task in terms of the longstanding, entrenched practices and the ignoring of warnings, not only those given by their own internal auditors but several given by the Victorian Auditor-General's Office regarding the lack of proper procedures and processes within the department with regard to its oversight of public money.

As I say, structures were not in place, and when that happens, some people, sadly, will take advantage of that, and some of those people have already gone.

But going back to the nub of the issue, my concern really is with natural justice and procedural fairness and that a reasonable belief being held by the secretary of the department without having undertaken any sort of investigation or inquiry and without proper procedures in place for response by an employee before they are summarily dismissed is not good industrial relations practice. It is not fair, it does not follow natural justice and it may lead to very unjust outcomes, whereas the procedures that already exist under the act are there to prevent unfair outcomes. They are also sufficient to protect children, particularly with the changes that were made earlier this year with regard to the Victorian Institute of Teaching.

We already have the processes and procedures in place that can deal with any of the issues that the government cares to raise in defence of its summary dismissal powers. That is why the Greens will not be supporting that particular provision of the bill even though we are supportive of the other aspects of the bill.

AND

Ms PENNICUIK (Southern Metropolitan) — Thank you, Deputy President, and welcome to your post as chair of committees. I move:

1.     Clause 1, lines 5 to 8, omit all words and expressions on these lines.

2.     Clause 1, line 9, omit “(b)” and insert “(a)”.

3.     Clause 1, page 2, line 3, omit “(c)” and insert “(b)”.

4.     Clause 1, page 2, line 6, omit “(d)” and insert “(c)”.

Amendment 1 is in fact an amendment to clause 1 of the bill, which would remove paragraph (a) of the purposes clause, which is the clause that enables the secretary to terminate the employment of an employee if the secretary reasonably believes that the employee has engaged in serious misconduct. As the Deputy President pointed out, this amendment is a test for the following amendments, in particular the major amendment, which is the omission of clause 5 and the subsequent clauses 6, 7 and 11, which are basically technical amendments following the omission of clause 5.

Clause 5 is the clause that introduces the new power of the secretary to terminate a new employee for serious misconduct and sees a new section 2.4.61A inserted into the act. That would be inserted under the existing section 2.4.61, which is entitled 'Action against employee', and it is worth just reading out what that says. It reads:

(1)   If the Secretary is satisfied on an inquiry under this Part that there are one or more grounds under this Division for taking action against an employee, the Secretary may take one or more of the following actions against the employee—

(a)    a reprimand;

(b)   a fine not exceeding 50 penalty units;

(c)    a reduction in classification;

(d)   termination of employment.

So the argument we have here is not that the secretary cannot terminate the employee; the argument is as to how that is done — whether that is done in a summary way or whether it is done after an inquiry or an investigation. So under section 2.4.62, 'Procedures for investigation and determination of allegations', it states:

The Secretary must establish procedures for the investigation and determination of an inquiry under this Division.

Now, there are many more provisions, but the other thing to say about the new provision is that it precludes the other subsections under section 2.4, so 2.4.60 will not apply, neither will 2.4.61, which I just read out and is the major 'Action against employee' section. Section 2.4.60 is a rather long section of the act, which I will not read out in full, but basically it goes to the 'Grounds for action'.

It begins with:

(1)   The Secretary, after investigation, may take action under this Part against an employee who …

Then there is a list: conducts himself or herself in a disgraceful or improper manner, commits an act of misconduct, is convicted or found guilty, is negligent or incompetent, contravenes a provision of the act or a requirement, without reasonable excuse fails to comply, without permission is absent, or is unfit on account of character et cetera — but that also requires investigation.

Also section 2.4.66 will not apply. That provides that the employee may make submissions. It says:

(1) The Secretary must give to an employee against whom it is alleged there are grounds for action notice in writing that the employee may make a submission in writing —

on the alleged grounds or any action that may be taken. It gives a 14-day time period and requires the secretary to consider any submissions made in accordance with the section.

As I mentioned in the second-reading debate and I will not go into detail, there have also been changes to the Victorian Institute of Teaching (VIT) regarding the registration of a teacher such that if an allegation is made that involves serious misconduct involving children, that teacher can immediately be suspended and removed from the school. That covers off any safety aspect with regard to a teacher who comes under such a cloud, and hopefully that is a very rare occurrence. So the safety of children is not at stake in terms of not allowing for a summary dismissal. I am saying that under the conditions of the safety of children but also the misconduct that I think is really behind this — which has got to do with the misconduct of certain teaching staff and other education department staff, mainly education department staff, with regard to the findings of Operation Ord — even in those examples the current procedures under part 2.4 of the act are sufficient and do allow for the termination of the employment of a staff member if, after investigation, that is found to be warranted.

So the nub of the issue is whether there should be a summary dismissal with no process and no procedure. As I have pointed out, those processes and procedures have worked well for many years under many governments, and whether the idea of the secretary himself or herself having a reasonable belief that something has occurred — that misconduct has occurred, misconduct — —

Mr Herbert — Serious misconduct.

Ms PENNICUIK — Yes, I take the minister's qualification there, serious misconduct. That is not necessary, given the comprehensive procedures that are already existing under the act and that maintain procedural fairness and natural justice. I do not accept the minister's assertion that summarily dismissing a person and then allowing an appeal is natural justice. I think natural justice is already incorporated in the section of the act as it already exists.

Successive governments have seen fit to leave it all there in place. I have not heard any evidence as to why it needs to be altered. There is nothing in being able to summarily dismiss someone that is required by anything that the government has mentioned in its second-reading speech. Its statement of compatibility makes assertions about procedural fairness and natural justice, which I do not think exist in the provision. That is why the Greens have moved the amendment.

AND

Ms PENNICUIK (Southern Metropolitan) — Just in response to a couple of issues raised by Mrs Peulich and by the minister, Mrs Peulich said that the summary dismissal power should be allowed where there is strong evidence. I probably could agree with that, but that is not what the bill says. It says 'reasonable belief', and that is a different thing; that is a much different test than 'strong evidence'. I would say with regard to miscarriage of justice that it is always better to prevent a miscarriage of justice than to act afterwards. What I am saying is that the comprehensive procedures are already in the act to deal with these issues, including immediately, under section 2.4.61, on the termination of employment. They already exist in the act.

The minister also said 'where there is strong and compelling evidence'. That is not what the provision says. This actual amendment knocks out the provisions that talk about evidence and inquiry et cetera and just talks about a reasonable belief.

That is what we are going to be left with in the act, so all of the issues about strong evidence which both Mrs Peulich and the minister are relying on actually will not exist in the bill because sections 2.4.60, 2.4.61 and 2.4.66 will not apply under new section 2.4.61A. In fact I do not take that as an assurance, and I go back to my original argument that we have the procedures already in place to deal with these issues and that a 'reasonable belief' is not strong and compelling evidence.

AND

Ms PENNICUIK (Southern Metropolitan) — The Greens will not support the Liberal-Nationals' voting against clause 8. The act is clear on the organisations from which persons elected to the VIT would originate, and I think in terms of appointing others that those organisations should be duly consulted. Again, that is just procedural fairness and proper process. Therefore the Greens will support the clause as it stands.

AND

Ms PENNICUIK (Southern Metropolitan) — The Greens will be supporting the amendment put forward by the government. Whilst we have strong concerns about the whole issue of summary dismissal of staff rather than following procedures as already set out in the act, if such a drastic step as to summarily dismiss someone is to occur — and the provision actually refers to the secretary having a reasonable belief and not anybody else having a reasonable belief — then that particular power, which I think is a serious power, should reside in the secretary, where it is fully accountable and transparent.

New clause agreed to; clauses 11 to 14 agreed to.

Reported to house with amendment.

Report adopted.