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Murphy v. Revenue Commissioners [1998] IESC 29 (22nd October, 1998)
AN
CHÚIRT UACHTARACH
THE
SUPREME COURT
Hamilton
C.J,
0‘Flaherty
J,
Lynch
J,
(54/98)
BETWEEN:
MICHAEL
MURPHY
Applicant/Respondent
.V.
THE
REVENUE COMMISSIONERS
Respondents/Appellants
Judgment
delivered on the 22nd day of October, 1998, by O’Flaherty J. [Nem. Diss.]
“(1)
The Minister [for Finance] shall be responsible for the following matters:-
(a)
the
regulation and control of the Civil Service,
(b)
the
classification, re-classification, numbers and remuneration of civil servants,
(c) the
fixing of-
(i)
the terms and conditions of service of civil servants, and
(ii)
the conditions governing the promotion of civil servants
-2-
(2)
The
Minister may, for the purpose of subsection (1) of this section, make such
arrangements as he thinks fit and may cancel or vary those arrangements.
(3)
...................”
1. On
3rd February, 1992, Mr. Joseph McGovern, Assistant Secretary at the Department
of Finance, notified all departments of the Minister’s decision to put in
place new procedures for dealing with grievance and disciplinary problems in
the civil service. This amended and extended the procedures that had been
hitherto in force and should be approbated as the right way forward to resolve
such unhappy differences as may arise in the workplace of the civil service
from time to time.
2. The
grievance procedure provided as follows:-
“Claims
affecting individual officers are, in general, excluded from the scope of the
Conciliation and Arbitration Scheme. In the event, therefore, of an individual
officer or group of officers having a complaint affecting their official
position which is not appropriate for discussion under the Conciliation and
Arbitration Scheme, and in order that such a complaint can be dealt with
promptly and satisfactorily, the procedure set out below shall be followed:
-3-
Stage
I
: Any
complaint which arises should (where appropriate) first be the subject of
discussion between the complainant and his/her appropriate superior.
Stage
II
:
If the matter cannot be resolved by informal discussion the complainant should
outline his/her complaint in writing to his/her
superior,
indicating (a) that he/she is invoking the grievance procedure and, if
possible, (b) the corrective action sought.
Stage
III
:
The
superior
should reply in writing to the complainant within two weeks.
Stage
IV
:
If the
complaint
is not resolved at Stage III, the complainant should (within two weeks) refer
the matter in writing to the appropriate level of management above his/her
superior.
Stage
V
:
The manager will endeavour to resolve the complaint by informal agreement. If
these efforts are unsuccessful, he/she will arrange a meeting
with
the parties concerned. The meeting should be held within two weeks of the
complaint being formally referred to the manager.
Stage
VI
:
If the matter is not
resolved
within a further week, it will be referred in writing by the complainant to the
personnel section. (This stage will still be appropriate where the complaint
arises within the personnel section itself). Within two weeks of referral to
personnel section, a meeting will be held between the
-4
personnel
section and those
directly
concerned including, if he/she so wishes, the complainant’s union
representative.
Stage
VII
:
The decision of
management
on the complaint and the reasons for the decision will be conveyed in writing
within 2 weeks of the meeting referred to in Stage VI.
Stage
VIII
:
A complainant who is dissatisfied with the decision of management on the
complaint may make a written request
to
the personnel officer that the dispute be referred to a mediation officer
appointed by the Minister for Finance with the agreement of the General Council
Staff Panel. Any such request shall be dealt with on the following basis:
(a) Complaints
concerning the following shall not be referred to the mediation officer:
-
disciplinary action taken in accordance with the provisions of the disciplinary
code;
-
selection for promotion, whether by way of competition or normal course
promotion, or selection for assignment to a post carrying an allowance,
-
exclusion from competitions or from consideration for promotion on grounds of
health or sick leave record;
-
the interpretation of general regulations, circulars or agreed reports of
general council or departmental councils.
(b) Subject
to (a) above, the personnel officer shall not refuse to refer a complaint to
the mediation officer where the complainant has suffered an immediate and
direct loss of earnings as a consequence of the action complained of.
(c) In
any other case the complaint shall be referred to the mediation officer if the
personnel officer considers the matter appropriate for such reference.
The
mediation officer shall investigate any matter referred to him/her and mediate
between the parties with a view to resolving the dispute amicably. Where such
resolution in not possible, the mediation officer may make such recommendation
as he/she considers appropriate. Where the action complained of is defended on
the grounds that it was required by the needs of the work, the mediation
officer shall accept that the definition of the needs of the work is a matter
for management but may uphold the complaint on the grounds that the action
complained of was arbitrary, improperly discriminatory or otherwise
inconsistent with good management practice.”
3. The
matter of the payment of increments to officers is dealt with in a Departmental
circular 9/87 of 17th September, 1987. It defines an increment
-6-
as:
“an increase in pay for which provision is made in a pay scale.” As
a general rule, increments are granted annually provided an officer’s
services are satisfactory.
4. The
circular provides at paragraph 3:-
“The
onus is on individual officers to show that their performance during the year
merits an increment. It follows that officers are not entitled to any prior
formal warning of possible deferral of an increment. However, every effort
should be made to ensure that officers are advised in good time of any
perceived deficiencies in their performance and are given an opportunity to
remedy them.”
5. Paragraph
4 provides:-
“The
payment of an increment should normally be deferred as a matter of course where
doubts arise, during a probationary period or a period of acting appointment,
as to an officer’s suitability for final appointment. Where such doubts
are due solely to
health
considerations that increment may, however, be allowed provided that the
officer’s services including the,
sick
leave record
are in all other respects accepted as satisfactory.”
6. Paragraph
13 of the circular provides - under the heading “Deferral of
Increments”:-
“If
a certificate of satisfactory service cannot be given, payment of the increment
will be deferred for a specified period e.g. three, six, nine or twelve months.
On the expiration of the period, the
-7-
officer’s
performance should be reviewed and the increment may be allowed with effect
from the end of the review period provided the officer’s service is
satisfactory. The
increments
should not be
restored with effect from an earlier date save in the most exceptional
circumstances.”
7. The
respondent, Michael Murphy, joined the staff of the Revenue Commissioners as an
executive officer in June, 1973. He has been a higher executive officer in the
capital taxes branch of the Commissioners since September, 1982.
8. He
made a claim for the payment of two long service increments, being increments
which were introduced under a restructuring agreement in relation to grades
represented by the Public Service Executive Union, of which union he is a
member. The increments were calculated on the basis of 7.4% of gross salary as
of 1st October, 1994, and were to be paid in the following manner:-
7/12
with effect from the 1st October, 1994; 3/12 with effect from the 1st June,
1996, and the final 2/12 with effect from the 1st June, 1997.
9. Otherwise
these increments were payable in accordance with the terms of the circular
9/87, to which reference has already been made.
-8-
10. However,
Mr. Murphy’s principal officer, Mr. H.B. Early, on 22nd November, 1995,
told him that, in relation to his situation, the appellants intended to defer
payment of the two long service increments until October, 1996.
11. Mr.
Murphy thereupon invoked the grievance procedure and, accordingly, Mr. Early
set out the reasons for his decision in a memorandum of the 13th December,
1995. The reasons relied upon were:-
(i) That
Mr. Murphy lacked the ability to bring cases to a satisfactory and speedy
conclusion and showed indecision;
(ii) That
there were delays in getting cases returned, and that the responses contained
queries and gave rise to additional correspondence and
(iii) That
Mr. Murphy had poor interpersonal skills which hindered his ability to work
successfully with others.
12. A
meeting was held in conformity with Stage V of the grievance procedure on 9th
January, 1996, the other stages having been exhausted. It was attended by Mr.
Murphy, accompanied by Mr. Richard Hughes, Mr. Michael
-9-
13. O’Grady,
Assistant Secretary capital taxes division, and Mr. H.B. Early. The matter was
not resolved at this meeting and it was then referred to the personnel section.
14. So
a Stage VI meeting was convened. Mr. Murphy did not succeed at that meeting
either.
15. By
letter of 20th March, 1996, in compliance with Stage VII the personnel officer,
Mr. Kevin O’Connor, wrote to Mr. Murphy with reference to Stage VI of the
grievance procedure as follows:-
“I
have given careful consideration to your complaint. Given your length of
service as a higher executive officer (appointed in 1982) and in particular
your experience in CAT Division (since 1987), I am satisfied that, apart from
any other considerations, the delay factor involved in clearing CAT 500 type
cases raises doubt as to whether your services are satisfactory.
I
note that the question of satisfactory services for incremental purposes has
not arisen since 1988 when you reached the maximum of your pay scale. However,
your personnel file clearly shows that since that time (1988) the question of
unsatisfactory services has been raised directly with you by the respective
Principals in CAT Division. I am satisfied, in all the circumstances, that the
decision is warranted to defer the grant of long service increments until 1st
October, 1996, when this position will be reviewed.
-
10 -
In
the meantime your services will be reviewed periodically during the deferral
period. In this regard I am putting into place arrangements whereby I will
receive a report of your services by 14th June, 1996, and again by 13th
September, 1996.”
16. The
rest of the letter dealt with certain non-attendances of Mr. Murphy at his
duties due to absence on sick leave which are not relevant to anything we have
to deal with on this appeal.
17. On
2nd April, 1996, Mr. Tom McKevitt, General Secretary of the Public Service
Executive Union, wrote to Mr. O’Connor, noting that he was not prepared
to reverse the decision to defer the grant of two long service increments to
Mr. Murphy and asking him to proceed to Stage VIII of the grievance procedure.
18. On
9th May, 1996, Mr. O’Connor replied to him as follows:-
“Dear
Mr. McKevitt,
I
refer to your letter of 2nd April, 1996, regarding Mr. Michael Murphy, higher
executive officer and your request to proceed to Stage VIII of the Grievance
Procedure.
The
issue that arises in this case is the question of Mr. Murphy’s service
being satisfactory to meet the requirements which merit the payment of long
service increments under the restructuring agreement. These requirements are
covered by Department of
-
11 -
Finance
Circular 9/87 and the same requirements apply also to the payment of long
service increments under the Restructuring Agreement.
You
are aware, of course, that complaints in relation to certain matters set out
under Stage VIII(A) of the Grievance Procedure and in particular complaints
relating to interpretation of general regulations, circulars or agreed reports
of general council or departmental councils shall not be referred to the
mediation officer. Accordingly, I consider that this case comes within the
ambit of those excluded for referral, and is one which shall not be referred to
the Mediation Officer.
In
the meantime, I can assure you that Mr. Murphy will be given every opportunity
to demonstrate that he can give satisfactory service in every respect.”
19. Mr.
McKevitt replied by letter dated 29th May, 1996:-
“Dear
Mr. O’Connor,
I
refer to yours of 9th May about the case of Michael Murphy.
The
Union is disappointed that you are not prepared to go to the mediation officer.
The case in question is not an ‘interpretation’ of the general
council agreement on restructuring or the relevant circular. There is no
dispute, as far as I am aware, between the Union and the Revenue Commissioners
on what the
-12
-
agreement/circular
means in relation to the long-service increments.
The
disagreement is about whether or not Revenue are justified in not paying Mr.
Murphy the long-service increments. It is not about an interpretation of the
restructuring agreement. If the Revenue’s interpretation of the grievance
procedure is correct, then it would be impossible for almost any complaint to
go to mediation. I would ask, therefore, that you reconsider the decision
conveyed in your letter of 9th May. In addition, Mr. Murphy has asked me again
to request you to forward him a copy of the report of Stage V of the Grievance
procedure in his case.”
20. By
letter of 17th July, 1996, sent by the respondent’s solicitors to Mr.
O’Connor, he was asked, once again, to refer the matter to a mediation
officer but, aside from an acknowledgement of the letter, no reply was received
to that and, so, judicial review proceedings were brought by the respondent.
21. They
were duly heard by McCracken J., and in his judgment delivered on 17th
February, 1998, he held with the respondent that there should be a referral of
the dispute to a mediation officer.
22. This
litigation has thrown up three issues for determination:-
-
13 -
(1) Does
Mr. Murphy’s complaint involve “the
interpretation
of
general regulations, circulars or agreed reports of general council or
departmental council” so as to disentitle him to have the dispute
referred to a mediation officer?
(2) If
not, has the complainant suffered “an immediate and direct loss of
earnings as a consequence of the action complained of” requiring the
personnel officer to refer the matter to a mediation officer under Stage VIII?
(3) Would
the fact that a mediation officer would resolve such a dispute as this mean
that departmental functions (ultimately the responsibility of the Minister) in
determining that increments are only granted to officers whose attendance,
performance and commitment has been completely satisfactory, had been
transferred from management to a mediation officer - and thus, be contrary to
s. 17 of the 1956 Act (quoted at the outset of this judgment).
-
14 -
23. As
regards the first question, while at one time the respondent asserted that the
onus of proving lack of satisfactory performance on his part rested with the
Revenue Commissioners, this contention was abandoned at the High Court hearing
and was not pursued here and, in any event, would fly in the face of the
express wording of the circular in question: circular 9/87 of 17th September,
1987. Further, assertions as to where the burden of proof rests in any
particular situation is purely an evidentiary matter; as I ventured to suggest
in the course of the debate at Bar, it is merely “a tool of the
trade” to bring about a just solution in any particular case. I cannot
see that there is any question for interpretation here. The question is rather
the
application
of
the grievance procedure to the facts of this case. The respective situation of
the parties is clear: Mr. Murphy asserts that he is entitled to these deferred
increments; the Revenue Commissioners assert that he is not because of his
unsatisfactory performance at work. So there is a conflict of fact which is
clearly proper to be determined by the mediation officer.
24. The
second question is whether the refusal to refer the complaint in question to
the mediation officer has the consequence that the complainant has suffered
“an immediate and direct loss of earnings as a result of the action
complained of” so as to make it mandatory for the personnel officer to
refer the dispute to a mediation officer. One need only look at the definition of
-
15 -
increment
in the document in question, ie. “an increase in pay for which provision
is made in a pay scale” for the answer to this. If a person is entitled
to an increment and it is not paid then such a person suffers an immediate and
direct loss. Of course, once there is a dispute, it may not be
apparent
that
he has suffered an immediate and direct loss of earnings and the right or wrong
of that cannot be crystallised until the decision is given as to whether he was
entitled to succeed in his claim or not. If it is ultimately found that Mr.
Murphy is not entitled to the increments in question the appellants will not be
damnified in any way as a result of the matter having been referred to a
mediation officer.
25. As
regards the point about transferring responsibility from management from the
Department of Finance to the mediation officer, this submission, as the learned
High Court judge held, is without any substance. The whole thrust of the
grievance procedure is that the Minister has provided that grievances such as
this should be resolved in the way that he has laid down, obviously with the
agreement of the workers, or the union acting on their behalf.
26. One
further point. Counsel for the Revenue Commissioners placed reliance on the
decision of this Court in
The
State (Keegan) .v. Stardust Victims Compensation Tribunal
[1986]
IR 642. That case lays down that the decision of an administrative tribunal,
or where a person has to take a decision in an
-16-
administrative
context, is not to be disturbed unless, to quote the well known passage from
the judgment of Henchy J. in that case (at p. 658):-
“......
the impugned decision plainly and unambiguously flies in the face of
fundamental reason and common sense. If it does, then the decision-maker should
be held to have acted
ultra
vires,
for
the necessarily implied constitutional limitation of jurisdiction in all
decision-making which affects rights or duties requires,
inter
alia,
that
the decision-maker must not flagrantly reject or disregard fundamental reason
or common sense in reaching his decision.”
27. That
case was concerned with where the decision-maker comes to deal with the
substantive matters in dispute. Here, we are concerned rather with the question
of law whether the personnel officer was entitled to refuse to refer the matter
on to a mediation officer. I am satisfied that he was not entitled so to find.
Cf
judgment
of Kinlen J. in
P.L
.v. An tÁrd Chláraitheoir
[1995]
2 IR 241.
28. In
light of these findings, it is not necessary to address the matter of the
residual discretion that the personnel officer has under paragraph (c) of Stage
VIII.
29. I
should emphasise that the
bona
fides
of
the personnel officer was not called in question in the course of the debate in
the High Court or here. Further, the merits of the respective parties have not
been approached at all in
-17-
this
present litigation. That is another day’s work: a day’s work to be
undertaken by the mediation officer.
30. Accordingly,
I would affirm the judgment and order of the learned High Court judge and would
dismiss the appeal.
© 1998 Irish Supreme Court
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