The removal of Michelle Guthrie as the Director of the ABC has been met with polarising reactions. Although some employees of the ABC were vocally supportive of the move made by the Board, others (including Guthrie herself) have questioned the legality of the decision. Further, the decision has been met with controversy over the involvement of Justin Milne, the Chairperson of the ABC.
To determine the legality of Michelle Guthrie’s termination, we must first look at the charter of the ABC, and the role of the Board.
How is the ABC structured?
The ABC is governed by the Australian Broadcasting Corporation Act 1983 (Cth) (The Act). The ABC is structured very differently to other companies as it is funded by the Government and not-for-profit. This means that the ABC is funded by taxpayers, meaning that the concerns of everyday Australians are a key consideration in decision-making. In this sense, it has to be more accountable as it is intended to serve the public at large, and this is where the Board steps in.
What does the Board do?
According to the Act, the Board can be made up of seven people (Directors) appointed by the Governor General. This is quite different to the boards which form part of private companies. Their role is to make sure that the ABC functions efficiently, and to “maintain the independence and integrity of the Corporation”. The Board is also tasked with overseeing how content is published or broadcast, with accuracy and impartiality being the two hallmarks.
Notably, the Board is responsible for the appointment of the Managing Director. Subsequently, they also have the power to remove the Managing Director but with what justification? The simple answer is none.
Voting Powers
The Board has voting powers as regards all decisions to be made about the operations of the ABC. As with most boards, the Directors have to have a quorum at meetings, meaning that a decision can only be made where a majority of the Directors agree. The Managing Director is technically a member of the Board but is not allowed to be present at any of the meetings.
There are currently seven Directors (not including the Managing Director), plus the chairperson of the Board. If five of the Directors (including the Chairperson) sign a request for a meeting, then it must be held. Similarly, this is number required for a vote to pass and would be applicable to a vote on whether to terminate staff.
Can the Board remove the Managing Director without ‘just cause’?
Although we have established that the Board has the power to appoint and remove Managing Directors, questions are raised regarding what reasoning there needs to be for removal (if any). According to the Act, the Board may terminate the employment of a Managing Director “at any time.” As there are no provisions which outline the specific circumstances in which they may exercise this power, it can be taken to mean that the Board has the discretion to do this, notably if they are of the consensus that the ABC is not functioning efficiently, and if they feel the principles and purposes of the ABC are not being effectively upheld by the Managing Director.
What happens next?
The Board will likely not be in any rush to appoint a new Managing Director and the current acting Managing Director, David Anderson, is himself a strong contender for the role. More interesting will be to see if Michelle Guthrie takes action against the ABC, which would most likely be in the form of an application for unfair dismissal in the FWC.
Either way, terminating employment is an action which requires careful consideration of existing contracts, employee rights and reasons for dismissal. Often, employment contracts are not clear-cut when it comes to termination. If you are unsure of your rights in relation to terminating an employee or being terminated, visit our website to speak to someone who can help you.
Update: Justin Milne, the Chairman of the ABC who is largely suspected to have been the driving force behind Michelle Guthrie’s termination has resigned in the wake of claims that his political affiliations influenced his conduct on the Board.
