Disciplinary action refers to the actions or penalties that are taken by an organisation in response to an employee's misconduct. For disciplinary action to be effective it must be undertaken by appropriate people and must adhere to NSW Government legislation and the policies of the agency involved.
Disciplinary action that is not done properly is more likely to be challenged and/or overturned if there is an appeal.Â
The range of disciplinary action that may be taken includes an official caution or reprimand, salary being reduced by pay increment(s), a fine, transfer to another position, demotion, suspension (with or without pay), and dismissal.Â Remedial action, including issuing a warning, implementing a performance improvement plan, training, coaching, mentoring, and restricted (instead of flexible) hours may be used as an alternative to formal disciplinary action.
The role of disciplinary action
An organisation's ability to punish corruption is an important tool in responding to corruption.Â Increasing the perceived cost of corrupt conduct or unethical behaviour through some form of discipline helps prevent corruption.Â By contrast, inaction in response to misconduct can create a workplace in which corruption can more easily occur.Â
Importantly, disciplinary action and outcomes need to be publicised after an investigation and once action has been taken, to make staff aware of the consequences of corrupt behaviour.Â For example, the staff newsletter could state that an (unnamed) employee was dismissed because of corruption, with a message from the CEO that corruption will never be tolerated and that the reporting of misconduct is encouraged.
Senior management and disciplinary action
It is the responsibility of managers to ensure that an appropriate level of discipline is applied consistently, without bias and in a timely manner.
The primary sources of guidance for disciplinary action are the NSW Government's Personnel Handbook and the Public Sector Employment and Management Act 2002 (NSW) ("the PSEM Act"). Your organisation's industrial award should also outline the options for disciplinary action.
- Your organisation should have a policy on discipline to guide managers and to better ensure consistency in disciplinary action.Â For organisations that come under the PSEM Act their policy must adhere to the Act.Â Other NSW public sector organisations must have a policy that complies with their own legislation, although in many cases their policy will also closely follow the PSEM Act.
- Your organisation's code of conduct should mention disciplinary consequences if the code is breached.
- Your organisation's corruption risk management strategy should mention the disciplinary consequences of corruption and refer to documents such as your organisation's human resources manual and code of conduct.
Disciplinary action should match the misconduct.Â To determine what action is appropriate, managers should look at precedents within the organisation and obtain advice from the NSW Government's Public Sector Workforce OfficeÂ (within the Department of Premier and Cabinet).
Good record-keeping is essential when disciplinary action is taken. Managers are responsible for creating and maintaining such records.Â Good records help prevent the possibility that any appeal will overturn the disciplinary action due to critical documents being unavailable or of unsatisfactory quality.Â Records should be held centrally (such as with Human Resources) so all managers are able to obtain the same information about employees.
Any kind of disciplinary action that is taken against whistleblowers who report corruption or maladministration may constitute a breach of the Protected Disclosures Act 1994 (NSW).Â See the NSW Ombudsman's Protected Disclosures Guidelines (fifth edition, January 2004) for information on the proper treatment of people who have made a protected disclosure.
|Â Responding to corrupt conduct: Consequences of inadequate disciplinary action|
An ICAC investigation into corruption at a government agency illuminated the relationship between corruption and inadequate disciplinary action.
Between 1989 and January 2004, a project manager breached the agency's Code of Conduct at least 43 times, including assaulting customers and colleagues, refusing to serve certain customers, abusing customers, drinking alcohol during work hours, and being absent without leave from a position where he was responsible for the safety of others.
The project manager was punished for some of these breaches, including being counselled, reprimanded, warned, and being suspended without pay.Â He was dismissed in response to his assault of a 14-year-old child customer whom he kicked in the head (for which he was convicted and received a $500 fine), but was reinstated on appeal. The primary response by managers to his behaviour was to get him transferred to another area to avoid dealing with him.
The project manager remained at the agency â€“ his noncompliant behaviour continuing in various ways â€“ for 18 years until he was finally dismissed for corrupt conduct following the Commission's investigation.Â Five findings of corrupt conduct were made against the project manager, including an undeclared conflict of interest involving his part-ownership of a firm to which he allocated contracts worth millions of dollars.Â ICAC's investigation report recommended that the agency establish a task force to review its system of discipline.
|Â Responding to corrupt conduct: Consequences of failure to take disciplinary action|
An ICAC investigation into a government agency illuminated the negative consequences of managers not taking disciplinary action against employees.Â
Following allegations of corruption against a company that removed trees on public lands, the agency undertook an internal investigation.Â The investigation found that an agency employee had modified aspects of the orders to that company without approval and in a manner that improperly financially benefited the tree removal company.
The internal investigation report recommended disciplinary action against the employee.Â However, despite the report being given to the CEO and other senior executives, no disciplinary action was ever taken.Â In fact, two years later, the employee received a promotion.Â She subsequently went on to dishonestly obtain at least $600,000 from the agency, before resigning.Â Her conduct was detected after her resignation, but the funds were never recovered.Â
Following the ICAC's public inquiry regarding the investigation, five findings of corrupt conduct were made against the employee.
|Â Responding to corrupt conduct: Consequences of failure to pass on information|
An ICAC investigation into corruption in procurement procedures at local councils showed how the lack of a system for passing on information about employees who had engaged in misconduct allowed a corrupt employee to hop from one council to another.
The investigation involved a council officer who created false quotes and arranged for a favoured contractor to submit dummy quotes.Â He had worked at five local councils and engaged in corrupt conduct at two of these, and another two councils had investigated his procurement activities.Â
When the council officer applied for a job at each of these councils he never used as a referee a supervisor to whom he had directly reported.Â If he had, his prospective employer would probably have quickly discovered from the former supervisor his history of misconduct.
To better ensure that councils are able to find out about discipline-related information regarding prospective employees, the ICAC investigation report recommended that councils apply the following two aspects of the Australian Standard on Employment Screening (AS 4811-2006):
Frequently asked questions
If someone admits to corrupt conduct during an ICAC investigation or public inquiry, when should the agency take disciplinary action?
If imposing disciplinary action is taking longer than anticipated, what should I do?Â
|Send the employee a letter stating that there is a delay and the reasons why.|
- Tips from the top: Senior NSW public sector managers discuss the challenges of preventing corruption, ICAC, Sydney, April 1999.Â Section on "Challenge #3: Taking effective action against corrupt conduct", pp. 19â€“20
- Use and misuse of public sector resources - Tip sheet for managers, ICAC, Sydney, February 2008. (For examples of various disciplinary action that could be applied in regard to misuse of public resources).
Â Other publications
- Australian Standard AS 4811-2006, Employment Screening, Standards Australia, July 2006
- Australian Standard AS 8001-2008, Fraud and Corruption Control, Standards Australia,Â March 2008. See Section 5.5 on "Disciplinary Procedures", p. 49
- The Personnel Handbook, Department of Premier and Cabinet, July 2009, Chapter 9 deals with management of conduct and performace.
- Memorandum No.19 94-35, Suspension of Public Employees from Duty, NSW Department of Premier and Cabinet, 7 October 1994
- Protected Disclosures Guidelines, fifth edition, NSW Ombudsman, January 2004.
- Handling Misconduct: A Good Practice Guide, Australian Public Service Commission, Canberra, 2008.
- Â Protected Disclosures Act 1994 (NSW)
- Public Sector Employment and Management Act 2002 (NSW)
Relevant ICAC investigations
Below are some examples ofÂ ICAC investigations that found inadequate disciplinary action was a factor in the corruption that occurred:
- RailCorp â€“ allegations of fraud and bribery in relation to procurement - eighth report, corruption prevention (Operation Monto) (December 2008)
- Department of Premier & Cabinet, www.dpc.nsw.gov.au
- Standards Australia, www.standards.com.au
- NSW legislation, www.legislation.nsw.gov.au