Business Law

Why play by the rules? fair is fair, isn’t it?

Why play by the rules? fair is fair, isn’t it?

Despite the fact that people care more about the result of the final Saturday in September than the goings-on in Parliament, the AFL does not wield governmental power (though the AFL might wish otherwise). How then did James Hird allege that he was denied procedural fairness when the question of whether he breached the rules was determined? While those proceedings were ultimately discontinued, it raises the question of whether procedural fairness applies to private organisations.

Historically, procedural fairness has been a common law right that applied only to governmental powers that, when exercised, negatively affected the rights or interests of an individual. Where certain decisions are made, procedural fairness operates so that the decision must be reached in a fair manner.

More recently, the courts have begun to expand the role of procedural fairness and have applied it to companies and private organisations. The classic example of decisions affecting individuals is where members or employees are suspended or terminated (e.g. for supplying performance enhancing supplements).

The key procedural fairness principles to keep in mind are:

  • the hearing rule -the organisation must inform the individual of the case against them. It encompasses a right to be heard, giving the person an opportunity to reply to the allegations against them and present their case;
  • the bias rule -the decision-maker must not have a personal interest in the matter or even the appearance of bias. This can sometimes be difficult in the case of smaller = organisations where all the members or employees know each other; and
  • the no evidence rule – all decisions must be based on logically probative evidence.

The hearing rule has an added benefit, in that it can give the decision maker advance warning of the defence to be made and highlight any weaknesses in their own case.

So why does procedural fairness apply to private organisations? For government decisions, the duty was implied into legislation, rather than expressly provided for. In much the same way, the duty arises from the rules of the particular organisation being construed on the basis that fair procedures are intended. Express words in the rules can operate to exclude the duty, but if the rules are silent it is likely that procedural fairness will apply.

It is important to remember that the critical question for procedural fairness is not whether the ultimate decision is fair; it is whether it was reached fairly. The best practice is to assume that procedural fairness will apply to decisions that negatively affect the rights or interests of an individual. You should have proper procedures in place so that decisions of this nature are made in a procedurally fair manner; if you don’t play by the rules, you may end up with a decision that does not stand.

Mark Love, Legal Director, Business Law
9th Floor, Canberra House,
40 Marcus Clarke Street, Canberra ACT 2601
E: [email protected]
T: 02 6274 0810 |>

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