The Art of Merits Review – Significant Changes to Membership Provisions

Paper presented  at the 2024 COAT Annual Conference, Brisbane

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The Administrative Review Tribunal Act 2024 ('ART Act') and two consequential and transitional provisions Acts have received the royal assent and await proclamation.

The ART Act establishes the Administrative Review Tribunal ('ART') and makes significant reforms to the current system of merits review. As I will demonstrate, the ART will be very different from the Administrative Appeals Tribunal ('AAT'). It will not simply be a rebadged AAT.

One of the key policies that has inspired the reform is the establishment of minimum qualifications and conduct and performance standards for members.

In the next 30 minutes I will discuss the provisions of the ART Act which make reforms to the qualifications, appointment, functions, conduct, performance, training and termination of appointment of members of the ART. I will also discuss whether some of these reforms have the potential to undermine the independence of members.

I will discuss the reforms under the following headings:

• Qualifications, appointment and functions of members;
• Training, education and professional development of members;
• Conduct and performance of members;
• Termination of appointment of members; and
• Independence of members.

Qualifications, appointment and functions of members

The ART Act retains the existing hierarchy of members of the AAT, namely a President, judicial deputy presidents, non-judicial deputy presidents, senior members and general members.[1] The Act provides that the Attorney-General may appoint the President or a non-judicial deputy president as a jurisdictional area leader and that the President may appoint a deputy president or a senior member as a list leader.[2]

Significantly, the qualifications for appointment of members have changed. Section 207(3) of the ART Act sets out a new minimum qualification for non-judicial deputy presidents. A person must have been enrolled as a legal practitioner for at least 10 years prior to their appointment as a non-judicial deputy president. Currently, there is no requirement that non-judicial deputy presidents of the AAT must be legally qualified. It is also noteworthy that the new 10 year post-admission period is double the minimum for appointment as a judge of many Australian courts.[3]

The Explanatory Memorandum for the ART Bill indicates that the qualifications for each member level reflect the seniority of the position, the responsibilities assigned to it and the complexity of the matters members at each level will be hearing.[4]

Section 194(2) of the ART Act provides that the functions of non-judicial deputy presidents include:

(a) to hear proceedings involving complex, significant or sensitive matters;

(b) to provide intellectual leadership to the Tribunal, including by promoting best practice in decision-making by the Tribunal; and

(c) to assist the President in the performance of the President's functions.

For senior members, the ART Act provides that a person must have been enrolled as a legal practitioner for at least seven years prior to their appointment as a senior member. Alternatively, the Attorney-General must be satisfied that the person has at least seven years' specialised training or experience in a subject matter relevant to the jurisdiction of the Tribunal.[5] There is a similar minimum qualification for general members, save that the person must have been enrolled for five years or have five years' specialised training or experience.[6]

Section 195 of the ART Act sets out the functions of senior and general members. The section sets out three functions that apply to senior members but not general members. They are:

(a) to hear proceedings which involve more complex matters;

(b) to assist jurisdictional area leaders in the performance of their functions; and

(c) to promote best practice indecision-making by the Tribunal.

A major change introduced by the ART Act is that members, including the President, will only be eligible for appointment if they undergo a publicly advertised merit-based assessment process.[7]There is an exception for non-judicial deputy presidents.

The ART Act provides that an assessment process is 'merits-based' only if:

(a) an assessment is made of the comparative suitability of the candidates for the duties of the office, using a competitive selection process;

(b) the assessment is based on the relationship between the candidates' skills, expertise, experience and knowledge and the skills, expertise, experience and knowledge required for the duties of the office; and

(c) the assessment takes into account the need for a diversity of skills, expertise, lived experience and knowledge within the Tribunal.[8]

The ART Act provides that, before the Attorney-General makes a recommendation to the Governor-General that a person be appointed as a non-judicial deputy president, a senior member or a general member, the Attorney-General must seek, and take into account, the advice of the President in relation to certain matters.[9] Those matters are as follows:

(a) whether the appointment would meet the operational needs of the Tribunal;

(b) the financial capacity of the Tribunal for the appointment; and

(c) the effect of the appointment on the number of members at the relevant level relative to the number of members at the other two levels.[10]

The phrase 'operational needs of the Tribunal' is not defined by the ART Act. However, it can be inferred that it covers matters such as whether a potential member has the skills, qualifications and experience that the Tribunal needs, and whether the potential member is geographically located where the need exists.

The merit-based process for appointing members to the ART in 2024, prior to the enactment of the ART Act, was in accordance with guidelines published by the Attorney-General's Department. That process resembled the process in the ART Act. There were eight selection panels for general members, four selection panels for senior members and a single selection panel for non-judicial deputy presidents.

As many more candidates applied for the three levels of membership than the available positions at those levels, the first task for the selection panels was to determine who should be shortlisted for interview. Candidates who were not shortlisted were advised that their applications were unsuccessful. The second task of the selection panels was to interview the shortlisted candidates and assess whether they were suitable for appointment as a member at the relevant level. Those assessed as not suitable were advised that their applications were unsuccessful.

As more candidates were assessed as suitable for appointment than the available positions at each level, some of them will be appointed, while others will be placed on a merit list to fill future vacancies. As part of the Attorney-General's deliberations, he consulted me on the operational needs of the Tribunal.

Members, including the President, can be appointed for a term not exceeding five years. A member, including the President, can only be reappointed within six months of their term expiring. There is an exception for judicial deputy presidents. There is no limit to how many times a member can be reappointed. However, after the first reappointment a member, other than the President, will have to apply through a merit-based assessment process.[11]

Under the current AAT Act, members can be appointed without applying through a merit-based selection process. They can be appointed for a maximum term of seven years, and there is no prohibition on them being reappointed for a further term at any time.

Sections 193 to 195 of the ART Act expressly set out the functions of the President, deputy presidents, senior and general members. I have already referred to the functions of non-judicial deputy presidents and compared the functions of senior members and general members. Section 193 sets out a long list of functions to be performed by the President. They include the following:

• to manage the business of the Tribunal;
• to ensure that the Tribunal operates efficiently and effectively and continually pursues its objective in section 9 of the Act;
• to provide leadership and guidance to, and engender cohesiveness and collaboration among, members and staff members;
• to participate in proceedings involving complex, significant or sensitive matters;
• to provide intellectual leadership to the Tribunal, including by promoting best practice in decision-making by the Tribunal;
• to promote the training, education, and professional development of members;
• to manage the performance and conduct of members;
• to inform relevant Ministers, Commonwealth entities and the Administrative Review Council of any systemic issues related to the making of reviewable decisions that have been identified in the caseload of the Tribunal; and
• to engage with civil society in relation to the performance of any of the President's functions.

These functions broadly reflect the functions that Presidents of the AAT have always performed.

I have already referred to the power of the Attorney-General to appoint the President or a non-judicial deputy president as a jurisdictional area leader. A jurisdictional area leader, like the name implies, leads one or more of the eight jurisdictional areas established by section 196(1) of the ART Act. The areas are: (1) General; (2) Intelligence and Security; (3) Migration; (4) National Disability Insurance Scheme; (5) Protection; (6) Social Security; (7) Taxation and Business; and (8) Veterans' and Workers' Compensation.

The functions of jurisdictional area leaders are set out in section 197(5) of the ART Act. Relevantly, they include:

• to provide intellectual leadership to members assigned to the jurisdictional area, including by promoting best practice in decision-making by those members;
• to assist the President to ensure that the Tribunal operates efficiently and effectively and, in respect of members in the relevant jurisdictional area, to assist the President in managing the performance and conduct of those members;
• to provide training, education and professional development opportunities to members in the relevant jurisdictional area; and
• to identify systemic issues related to the making of reviewable decisions arising in the caseload of the relevant jurisdictional area and to inform the President of those issues.

Section 236 of the ART Act also establishes a Tribunal Advisory Committee (TAC), which will consist of the President, the Principal Registrar, the jurisdictional area leaders and such other members or staff members as the President nominates. One of the functions of the TAC will be to promote the training, education and professional development of members.

A key change in the ART Act is the conferral upon the President the power under section 196(2) to establish one or more lists as subareas within a jurisdictional area. As I have already stated, the President may appoint a deputy president or a senior member as a list leader, to lead one or more lists. It is anticipated that the list leaders will be responsible for much of the day-to-day administrative arrangements in relation to the work of members and have oversight of members' workload and performance.

Under section 199 of the ART Act, the President has power to assign senior and general members to one or more of the jurisdictional areas and to alter such assignments from time to time. This power is currently vested in the Attorney-General. The transfer of the power to the President will enable the President to respond dynamically and flexibly to changes in volumes of caseloads. It will also enable the President to assign members across different jurisdictional areas based upon their changing skills, expertise and interest, and thus provide greater diversity of work for them.

Training, education and professional development of members

The ART Act places significant emphasis on the training, education and professional development of members. As we have seen, the functions of the President, jurisdictional area leaders and the TAC include responsibilities for these matters. Section 242(2)(j)(iii) of the ART Act provides that the President's annual report must include an overview of any actions taken in relation to the training, education and professional development of members.

Together with the provisions requiring a mandatory merit-based selection process for the appointment of members, the provisions dealing with education, training and professional development of members seek to ensure that members maintain their skills and expertise so that they are able to make high quality decisions. Training, education and professional development will also assist members to comply with the performance standard that I will discuss next.

Conduct and performance of members

Sections 201 and 202 of the ART Act require the President to publish a code of conduct and performance standard for non-judicial members. The sections do not distinguish between the type of conduct that should be included in the code as distinct from the standard. However, it may be inferred that the code should deal with the behaviour of members whilst the standard should deal with the quality and timeliness of their work.

Sections 201 and 202 of the ART Act represent a significant departure from the AAT Act, which does not provide for either a code of conduct or a performance standard. These documents will be of fundamental importance to the ART because they will set out the normative standards of behaviour and performance expected of members.

The Explanatory Memorandum for the ART Bill links the code of conduct and the performance standard to public confidence in the Tribunal. It states that ensuring that members are performing well and behaving appropriately is essential to maintaining public confidence in the Tribunal and maintaining a safe workplace culture. It also states that the performance standard supports the merit-based selection process for the appointment of members.[12]

Both sections 201 and 202 require that the code and the standard make provision for 'the taking of action' by the President or a jurisdictional area leader in relation to non-judicial members upholding the code or meeting the standard, respectively.

The sections do not identify the type of action for which the code and the standard must provide. It may be inferred that the action is not confined to action resulting from a breach of the code or the standard, but also action to assist members to comply with the code and the standard.

Action to assist members to comply with the code and the standard may include education, training and mentoring. Under section 200(1) of the ART Act, the President may give a written direction to a non-judicial member relating to the performance of the member's duties, provided that such a direction does not relate to a particular proceeding. A direction under section 200(1) may assist in ensuring compliance with the code and the standard by, for example, requiring a member to refrain from certain conduct or to undertake a particular course or program.

Although sections 201 and 202 of the ART Act do not identify the type of action that may be taken in relation to a breach of the code or the standard, other provisions of the Act make clear that a breach of the code or the standard may have serious consequences for a member.

Under section 203 of the ART Act, if the President forms the opinion that a non-judicial member may have breached the code of conduct or the performance standard, the President will be able to conduct an investigation and temporarily restrict a member's duties while the investigation takes place. The President may also take any measures in relation to the member that the President believes are reasonably necessary to maintain public trust and confidence in the Tribunal.

As we will see shortly, a serious breach of the code or the standard may result in the Governor-General, on the recommendation of the Attorney-General, terminating the appointment of a member.

Some other Australian tribunals have adopted codes of conduct and performance standards. However, some of these documents use aspirational language. On the basis of my non-exhaustive research, it appears that no members of any other Australian tribunal are subject to legislation which expressly provides for the termination of their appointment as a result of a failure to meet a performance standard.

Given the potentially serious consequences of a breach of the ART's code of conduct and performance standard, it is obviously essential that their provisions are drafted in precise rather than aspirational language. Precise language will ensure that members know exactly what is expected of them and what conduct will constitute a breach.

Because of the great care that is required in the preparation of the ART's code and standard, the AAT has sought assistance from external consultants. As part of their work, the consultants have reviewed the codes of conduct and performance standards that other Australian tribunals have adopted, with a view to ensuring that the ART's code and the standard reflect best practice for the ART.

Following receipt of the consultants' advice, a draft code and a draft standard are being prepared. Consultation with members on the drafts will take place next month.

The code of conduct is likely to include obligations regarding matters such as complying with the law, acting with integrity, independence, impartiality and conflicts of interest. It may also include prohibitions against behaviour such as plagiarism, improper use of generative AI, sexual harassment, bullying, discrimination, violence and victimisation.

The performance standard may include matters such as benchmark periods within which members are expected to provide written reasons for their decisions and a maximum number of overdue decisions a member may have at any one time. It may also include an obligation that members must undertake training and education programs which are designated as mandatory and must not unreasonably refuse an offer of assistance that is made to them to help them to meet the standard.

The contents of the code of conduct and the performance standard will be carefully tied to the Tribunal's objective in section 9 of the ART Act. That section provides as follows: 

The Tribunal must pursue the objective of providing an independent mechanism of review that:   

(a) is fair and just; and   

(b) ensures that applications to the Tribunal are resolved as quickly, and with as little formality and expense, as a proper consideration of the matters before the Tribunal permits; and   

(c) is accessible and responsive to the diverse needs of parties to proceedings; and   

(d) improves the transparency and quality of government decision-making; and   

(e) promotes public trust and confidence in the Tribunal. 

I have in mind that, under the performance standard, list leaders will be responsible for monitoring the performance of members and assisting them to meet the standard.

Termination of appointment of members

A major change from the AAT Act is the expanded powers to terminate the appointment of non-judicial members.

Under section 221of the ART Act, the Governor-General will be able terminate a member's appointment, on the recommendation of the Attorney-General, in certain circumstances. Those circumstances include:

• where the member's conduct or behaviour amounts to serious misconduct;
• where the member's conduct constitutes a serious breach of the code of conduct or the performance standard;
• where the member is unable to perform their duties because of physical or mental incapacity;
• where a salaried member engages in paid outside work without the President's approval;
• where a sessional member engages in paid work that conflicts or could conflict with the proper performance of their duties as a member; and
• where a member fails, without reasonable excuse, to disclose a conflict of interest.

Section 4 of the ART Act defines 'serious misconduct' as including unlawful discrimination within the meaning of the Australian Human Rights Commission Act 1986, and serious or repeated bullying or harassment of a person. Section 221(2) provides that a serious breach of the code of conduct or the performance standard includes repeatedly breaching the code or the standard, and breaching the code or the standard in a way that is having, or is likely to have, a damaging effect on public trust and confidence in the Tribunal.

Section 222 of the ART Act provides that, if the President reasonably believes that there are grounds for terminating a non-judicial member's appointment under section 221, the President must notify the Attorney-General as soon as possible.

Compliance by a non-judicial member with the ART's performance standard is relevant not only to whether that member's appointment is terminated, but also whether the member is reappointed. Sections 207(8) and 208(9) of the ART Act provide that, before a person is reappointed as a non-judicial deputy president, senior member or general member, the Attorney-General must seek, and take into account, the advice of the President in relation to the person's performance against the performance standard.

Currently, the termination provisions for a member of the AAT largely mirror those that relate to judges. This means that the main method of removing a member is by an address being presented to the Governor-General by both houses of parliament for proved misbehaviour or physical or mental incapacity.

Independence of members

Finally, I will consider whether the provisions in the ART Act dealing with the code of conduct and the performance standard have the potential to undermine the independence of members.

It is first necessary to clarify the meaning of independence in the context of tribunal members. In my opinion, independence in that context means that a tribunal member must be free of any loyalties, duties or interests that might inappropriately influence or interfere with the performance of their functions. As the main function of members is to hear and determine cases allocated to them, no one should have the ability to direct them on how to conduct a particular case or the decision they should make in relation to any case.

Of course, members do not have an unfettered discretion to conduct each case as they please. That is because they are bound by the principles of natural justice. Likewise, members are bound to make decisions in accordance with the applicable law rather than their subjective preferences. Independent merits review is not equivalent to 'palm tree justice'.

The provisions of the ART Act dealing with the code of conduct and the performance standard represent a significant departure from the present position where there are no legally enforceable minimum standards of behaviour or performance for AAT members. To that extent, those provisions have the potential to place limits upon the conduct of members.

As is apparent from the outline I have given of the proposed contents of the code of conduct and the performance standard, these documents will not affect how members conduct their hearings or what decisions they make. Rather, they will be directed at forms of behaviour and levels of performance that are inconsistent with the Tribunal's statutory objective and undermine the public's trust and confidence in the Tribunal. They will establish minimum standards of how members should behave and the quality and timeliness of their work, and seek to reflect best practice behaviour and performance.

In my opinion, provisions in the code of conduct which require a member to refrain from having conflicts of interest, misusing confidential information and creating an unsafe work environment would not interfere with a member's independence. Likewise, a provision prohibiting members from using generative AI to produce parts of their reasons for decision would not be inconsistent with members' independence.

Similarly, provisions in the performance standard which require members to deliver their decisions within particular timeframes, subject to reasonable adjustments when warranted, would not interfere with members' independence. Independence does not extend to conferring upon members an entitlement to finalise their decisions whenever they feel like it. Nor does it extend to conferring upon members a discretion to pick and choose the cases they like hearing and to reject others that are not considered sufficiently interesting.

I am keenly aware of the importance of independence for members of the ART. The drafting of the ART's code of conduct and performance standard will endeavour to strike an appropriate balance between preserving the independence of members and the need to ensure that members meet minimum standards of behaviour and performance.

Thank you.