Procedural fairness, or natural justice, is essential in decision-making, ensuring confidence in the integrity of decision-makers. It focuses on procedures used rather than the outcome of the decision, based on the belief that a fair process leads to a fair and correct outcome. By adhering to the principles of procedural fairness, decision-makers promote transparency, accountability and trust in the decision-making process.
What is procedural fairness and what does it require?
Procedural fairness requires a decision-maker to follow a fair and proper procedure when making a decision. It is has two key rules:
1. The fair hearing rule: a person who may be affected by the decision must be given the opportunity to present their case before the decision is made. This involves:
- giving the person the opportunity to respond to relevant information;
- providing sufficient information or evidence for a proper response; and
- adequate notice if an adverse decision is possible.
2. The bias rule: to ensure objectivity, decision-makers must be and must also appear to be impartial. Bias may include:
- actual bias, where the decision-maker has a prejudice against one party’s case for reasons unconnected with the merits of the case; or
- perceived (or apprehended) bias, where a decision-maker’s conduct, associations, knowledge of extraneous information, or interest in the outcome of the decision leads an observer to believe that the decision-maker may not be impartial.
When does procedural fairness apply?
The application of procedural fairness varies based on the nature and context of the decision being made. While it has its roots in legal contexts, procedural fairness applies broadly:
1. Disciplinary actions – employers must allow employees the opportunity to respond before any decision to take disciplinary action is made.
2. Redundancy processes – where an employer proposes to make a job redundant, they are often required to consult with the impacted employee and consider alternatives to redundancy.
3. Admissions processes – universities and schools should use transparent selection criteria and processes about when they will and when they will not admit students.
4. Policy implementation – government agencies should ensure transparency and seek public input when implementing policies.
5. Consumer complaints – businesses can demonstrate a procedurally fair approach to handling consumer complaints through clear policies and procedures in allowing customers to present their complaint and receive an unbiased resolution.
What happens if a decision is not procedurally fair?
If a decision is not procedurally fair, it can have significant consequences. Depending on the type of decision being made, it may lead to:
1. Legal challenges – affected individuals may have the right to appeal or seek a review potentially resulting in significant legal costs.
2. Reputational harm – organisations may suffer damage to their reputation and erode trust among employees, stakeholders, or members of the public.
3. Disqualification of decision-maker – if a decision-maker is found to be biased, they may be disqualified from making the decision. This often necessitates the appointment of a new, impartial decision-maker, and in some cases, the investigation or consideration must be redone. When an organisation needs to rectify a procedurally unfair decision, it will likely incur costs, such as legal and administrative fees, to organise for the decision to be remade.
4. Additional costs and resourcing – when a decision-maker fails to ensure procedural fairness, the broader organisation may need to incur additional costs and allocate more resources to prevent future occurrences. This can include implementing new policies or providing further training for staff.
Conclusion
By applying the principles of procedural fairness, organisations and individuals can make more ethical, equitable, and defensible decisions. Fairness and transparency in decision-making helps build trust and credibility with employees and other stakeholders, who know that their voices are being heard and decisions are not being made arbitrarily.
If you have any questions, please contact Charli or Emily.
| Charli Barclay Senior Associate T: (03) 6235 5125 E: cbarclay@pageseager.com.au |
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| Emily Creak Principal M: 0400 955 183 E: ecreak@pageseager.com.au |
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Published: 20 August 2024
