[2016] FWCFB 7190

The attached document replaces the document previously issued with the above code on 13 December 2016.

An administrative error have been fixed at paragraph 1

Helen Hamberger

Associate to Vice President Hatcher

Dated 16 December 2016.

Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision of Commissioner Ryan at Melbourne on 14 September 2016 in matter number U2016/7692.

Introduction

[1] On 27 September 2016, Bendigo Health Care Group (Bendigo Health) lodged a notice of appeal in which it applied for permission to appeal and appealed under s.604 of the Fair Work Act 2009 (FW Act) against a decision of Commissioner Ryan delivered ex tempore on 14 September 2016 and published in edited form on 23 September 2016 1 (Decision). In the Decision, the Commissioner found that the dismissal of Mr Francis Logan by Bendigo Health was unfair and reinstated Mr Logan to the position of aged care nurse he occupied immediately prior to his dismissal by Bendigo Health, with such reinstatement to take effect from 28 September 2016. The Commissioner also ordered Bendigo Health to treat the period of employment of Mr Logan not to have been broken by the dismissal. A separate order was issued on 14 September 2016 giving effect to the Decision2 (reinstatement order).

[2] Bendigo Health applied in its notice of appeal for the Decision and the reinstatement order to be stayed pending the hearing and determination of the appeal. On 7 October 2016, Deputy President Clancy granted a stay order conditional upon Bendigo Health paying the amount that Mr Logan would have earned had he been reinstated in accordance with the reinstatement order into its solicitors’ trust account from 5 October 2016 until a decision in relation to the appeal was made or until further order of the Commission. 3

[3] This matter was previously the subject of a hearing before this Full Bench on 11 October 2016 concerning the issue of permission to appeal only. Having heard the submissions of the parties on that day, we delivered an ex tempore decision in relation to permission to appeal. We determined that we would grant permission to appeal in relation to the issue of whether the reinstatement of Mr Logan should have been granted as a remedy having regard to evidence which he gave before the Commissioner concerning a declaration he had made in support of his application to renew his registration as an enrolled nurse to the effect that he had satisfied the professional development requirements of registration. We refused permission to appeal in relation to all other matters raised in the notice of appeal and the submissions advanced by Bendigo Health in support thereof.

[4] Permission to appeal having been granted on the limited basis identified, directions were subsequently issued for the conduct of the appeal on 13 October 2016. Those directions accommodated an anticipated application to adduce further evidence on the appeal, so that the parties would be on notice of the nature of such evidence before it was heard. Bendigo Health filed written submissions dated 27 October 2016 accompanied by an affidavit affirmed by Ms Melissa Phillips, its industrial relations advisor, on 25 October 2016. Mr Logan filed written submissions dated 10 November 2016, together with a witness statement made by him on the same date and additional statements from Ms Kathryn Eyre, general manager of Bupa Aged Care in Echuca, and Ms Judith Pellas, associate clinical nurse/associate nurse unit manager with Bendigo Health. At the hearing of the appeal on 14 November 2016, we determined to admit that affidavit and the witness statements into evidence pursuant to s.607(2)(a) of the FW Act. Neither the deponent of the affidavit nor the makers of the witness statements were required for cross-examination.

[5] In this decision, we set out our full reasons for our earlier decision concerning permission to appeal and our determination in respect of that aspect of the appeal for which permission was granted.

Factual background

[6] Mr Logan worked for Bendigo Health as an enrolled nurse in aged care from 2004 until his dismissal on 26 May 2016 for serious misconduct. His employment was on a casual basis but was continuous except for one very short break in employment. As an enrolled nurse, Mr Logan is subject to professional regulation by the Australian Health Practitioner Regulation Agency (AHPRA). His dismissal arose from his admission that he had engaged in misconduct on 16 May 2016. The evidence which Mr Logan gave before the Commissioner was that a patient had confided in him about certain distressing details of her life history. Mr Logan then, on his own admission, responded by touching the patient on the hand, kissing her on the forehead and saying “Goodnight and God bless”.

[7] The incident was reported to AHPRA, and it was considered by the Nursing and Midwifery Board of Australia. Subsequent to Mr Logan’s dismissal, the Board issued a report on 9 September 2016 concerning the incident (AHPRA Report). The Board found that Mr Logan’s conduct “is or may be unsatisfactory” and cautioned him to “abide by the code of professional conduct for nurses by maintaining professional boundaries between himself and the person for which he is caring”. The report went on to state:

“While your conduct was not considered to be sexually motivated, the board considered that kissing the patient on the head represents a violation of the code of professional conduct for nurses, namely, conduct statement 8, and the maintenance of professional boundaries.  As such, the board considered that your conduct fell below the standard reasonably expected of a nurse.

While your conduct was considered sufficient to warrant regulatory action, the board noted that it was a relatively minor violation of the code of professional conduct.  Accordingly, a caution is considered to be adequate to ensure that you are aware of the board's expectations and that you do not repeat the behaviour. The caution is intended to remind you of the importance of abiding by the code of professional conduct with regard to the maintenance of professional boundaries.”

[8] Mr Logan was required as an enrolled nurse to make an application to AHPRA to annually renew his registration as a health professional. One of the requirements of registration was to complete 20 hours of Continuing Professional Development (CPD) in each year of registration. A person completing the relevant application form was required to make a declaration to effect that, among other things, the details in the application were true and complete and the person understood that giving false or misleading information was grounds for refusal of renewal of registration and knew that a false declaration amounted to a contravention of the National Law and might lead to disciplinary action for unprofessional conduct. In May 2016 Mr Logan completed this application form in order to seek renewal of his registration, and in doing so ticked the “yes” box to the question concerning whether he had met his CPD requirements, and had signed the declaration (CPD declaration). However, whilst being cross-examined before the Commissioner, Mr Logan gave evidence that he had never actually added up whether he had completed 20 CPD hours in the relevant year. On the basis of this evidence Bendigo Health submitted that Mr Logan had made a false declaration and may not validly be registered, and that this constituted an independent basis for his dismissal and, alternatively, was a reason why he should not be reinstated should his dismissal be found to be unfair.

The Decision

[9] In the Decision, the Commissioner considered each of the matters he was required to take into account under s.387 of the FW Act. In relation to s.387(a), the Commissioner found that there was a valid reason for dismissal based on Mr Logan’s admitted conduct. The Commissioner characterised that as conduct which “the patient found unwanted and unwarranted”, which “crossed a boundary”, and which was “unsatisfactory behaviour that justifies the imposition of a sanction”. 4 However, the Commissioner rejected Bendigo Health’s submission that there were two other issues which also constituted valid reason for dismissal, one of these being Mr Logan’s “false” CPD declaration. In relation to the CPD declaration, the Commissioner concluded that “The evidence of Mr Logan is insufficient to establish that he did not meet the CPD requirements or the recency requirements for registration”.5

[10] The Commissioner’s finding concerning s.387(b)-(g) were not controversial. In relation to s.387(h), the Commissioner took into account the AHPRA Report, that Mr Logan understood that his conduct “crossed the line”, Mr Logan’s personal circumstances at the time of the conduct, his length of service and the financial impact of the dismissal. He also took into account the patient’s allegation that, when Mr Logan first entered her room, “she immediately felt uncomfortable” and “was going to yell for help if [he] closed the door, as she felt he had intent of some sort”. The Commissioner found that it did not appear that there was any rational basis for this or that the investigators of the incident had established any. 6

[11] The Commissioner concluded that the dismissal was harsh, unjust and unreasonable. In considering what remedy should be ordered, the Commissioner referred to the Full Bench decision in Nguyen v The Vietnamese Community in Australia. 7 In that respect the Commissioner said:

“[77] It is also very important, in considering the appropriateness or inappropriateness of reinstatement, to have regard to the Full Bench decision in Nguyen v The Vietnamese Community in Australia. At paragraph 27 of that decision the Full Bench identifies in a number of dot points, a number of propositions where they say they're propositions concerning the impact of a loss of trust and confidence on the question of whether reinstatement is appropriate and they make it clear as to what those propositions are. But at paragraph 23 of the decision the Full Bench says:

‘[23] In speaking of ‘trust and confidence’ in this context, we are concerned with that which is essential to make an employment relationship workable.’

[78] This is an important aspect of the concept of trust and confidence. Much was put by the Respondent that the relationship of trust and confidence had broken down. The evidence is not before the Commission to show that there is clearly a complete breakdown of the relationship of trust and confidence necessary to make an employment relationship work. What is required is that there be sufficient trust and confidence to make an employment relationship workable. I have no doubt, having heard all of the evidence, including the evidence of Ms Hyett, Ms Atkins, Ms Muns, that a workable relationship can be re-established between Mr Logan and the Respondent.”

[12] The Commissioner took into account a submission made by Bendigo Health that Mr Logan’s CPD declaration meant that reinstatement would be inappropriate as follows:

“[72] It is very clear that those factors which support a finding that reinstatement is inappropriate are as follows. Firstly, Mr Logan's own evidence as to his approach to completing his registration renewal process. The language used by Ms Nelson was to describe Mr Logan as having a complete disregard for the registration requirements, in terms of the way in which he has to answer and declare the correctness, as to the answers given in his registration renewal process. This is clearly a factor which would tend to support reinstatement being an inappropriate remedy.”

[13] The Commissioner also took into account as weighing against reinstatement Mr Logan’s failure to proactively inform himself about the professional requirements concerning boundaries. Additionally, he took into account as favouring reinstatement Mr Logan’s desire to continue working in his career, his satisfaction that Mr Logan would never repeat the conduct which caused him to be dismissed, the finding in the AHPRA Report that his conduct constituted a minor violation warranting a caution, and the capacity of Bendigo Health to require Mr Logan to undertake retraining. The Commissioner’s ultimate conclusion as to the remedy of reinstatement was as follows:

“[79] When I weigh up the factors favouring reinstatement against the factors which do not favour reinstatement, I conclude that, in all of the circumstances of this matter, reinstatement is appropriate.  Or, to put it more clearly in the language of the Act, I cannot be satisfied that reinstatement is not appropriate.”

[14] The Commissioner declined to make any order compensating Mr Logan for the remuneration he lost as a result of his dismissal, stating:

“[82] ... I do not consider it appropriate, in the circumstances of the present matter, to put the Applicant into a position where he has suffered nothing out of this exercise.  By not making an order for the restoration of lost pay a very clear message is given to the Applicant as to the consequences that flow from his own conduct.”

Appeal grounds and submissions

[15] Bendigo Health’s notice of appeal identified 10 grounds for appeal as follows:

1. The Commissioner erred by finding that the conduct of Mr Logan in kissing a patient was not serious misconduct rather than merely misconduct.

2. The Commissioner erred by failing to accept the evidence of the Respondent's witnesses that kissing a patient was conduct that was never acceptable conduct.

3. The Commissioner erred by finding that the evidence of Ms Muns and Ms Hyett that kissing a patient was never acceptable conduct was extreme.

4. The Commissioner erred by failing to accept the evidence of the Respondent's witnesses that Mr Logan's conduct in kissing a patient had a significant impact on the health and safety of the patient in question.

5. The Commissioner did not provide adequate reasons as to why the conduct of Mr Logan in kissing a patient was not serious misconduct rather than merely misconduct.

6. In considering whether reinstatement was not inappropriate, the Commissioner failed to correctly apply the proper test.

7. The Commissioner erred by finding that there was no evidence that the relationship between the employer and employee was unworkable.

8. The Commissioner erred by failing to accept the evidence of the Respondent's witnesses that it had lost all trust and confidence in Mr Logan.

9. The Commissioner erred by finding that the reinstatement of Mr Logan was not inappropriate.

10. The Commissioner did not provide adequate reasons as to why reinstatement was not inappropriate.

[16] In relation to those grounds concerning the grant of the remedy of reinstatement (grounds 6-10), Bendigo Health submitted that the Commissioner failed to correctly apply the proper test set out in in Nguyen, erred by finding that there was no evidence that the relationship between the employer and employee was unworkable and erred by failing to accept the evidence of Bendigo Health’s witnesses that it had lost all trust and confidence in Mr Logan. Bendigo Health further submitted the Commissioner’s reasons failed to indicate the basis on which he found that Mr Logan’s failure to comply with his professional obligations did not destroy the relationship of trust and confidence, and that he failed to consider the nature of Mr Logan’s employment in assessing whether reinstatement was viable.

[17] Concerning the issue in relation to which permission to appeal was granted, namely whether reinstatement was appropriate having regard to the CPD declaration, Bendigo Health submitted that the Commissioner erred in that he:

● failed to consider that Mr Logan’s “complete disregard for his professional obligations registration as a nurse” provided a sound and rational basis for the loss of trust and confidence;

● failed to consider the evidence that Mr Logan had declared he had completed the necessary CPD training despite being unsure what he had completed;

● failed to consider evidence from Ms Hyett and Ms Atkins of Bendigo Health regarding the seriousness of making a false declaration and the likely view that would have been formed had it been known;

● failed to consider that the making of a further report to AHPRA by Bendigo Health about Mr Logan concerning the “false” CPD declaration demonstrated and provided a sound and rational basis for the loss of trust and confidence;

● failed to consider the possibility that the making of this report to AHPRA could lead to the reinstatement order being futile, if Mr Logan’s registration was restricted or cancelled on this basis; and

● failed to consider how seriously Mr Logan’s failure to comply with his professional obligations was viewed by his colleagues and the impact his “professional breach” had on the relationship of trust and confidence.

Consideration

Permission to appeal

[18] This appeal is one to which s.400 of the FW Act applies 8. Section 400 provides:

(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.

[19] In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 as “a stringent one”. 9 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment10. In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:

“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.” 11

[20] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 12 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.13

[21] The grant of permission to appeal in this matter was on a narrow basis. We considered that the issue of whether an order for reinstatement was appropriate having regard to Mr Logan’s evidence concerning his CPD declaration (which arose under appeal ground 9) attracted the public interest, because it raised a question as to whether it was lawful or practicable for Bendigo Health to employ Mr Logan as a nurse pursuant to the reinstatement order in circumstances where there might be doubt as to the validity of Mr Logan’s registration as a nurse.

[22] We did not consider that Bendigo Health’s grounds of appeal, and the submissions advanced in support of those grounds, were otherwise such as to permit the grant of permission to appeal in the public interest. Grounds 1-5, which challenged the Commissioner’s conclusion that the dismissal was unfair, did not disclose any arguable contention of error. In his consideration under s.387(a), the Commissioner found, in favour of Bendigo Health, that Mr Logan’s conduct in kissing the patient constituted a valid reason for his dismissal. As has been repeatedly stated in Full Bench decisions (most recently in Titan Plant Hire Pty Ltd v Van Malsen 14), s.387(a) does not involve the application of postulated standard of “serious misconduct”, nor does the characterisation of a dismissed employee’s conduct as constituting “serious misconduct” disbar a dismissal from being found to be unfair. The import of Bendigo Health’s contentions in appeal grounds 1 and 5 that the Commissioner erred in not characterising Mr Logan’s conduct as “serious misconduct” is therefore unclear. Grounds 2 and 3 are misconceived, in that the Commissioner did not actually reject the proposition that kissing a patient was never appropriate. The relevant passage in the Decision was as follows:

“[20] I'm supported in finding that there was a valid reason for dismissal, based upon the kissing of a patient on the forehead, by the evidence of Ms Muns and Ms Hyett, that kissing a patient is never appropriate. Whilst their views are at the extreme, in that they have said it's never appropriate, it's sufficient, even if I reduce that down to "normally not appropriate", that consistent with their evidence and the admission by Mr Logan that he had crossed a boundary, that whether it is never appropriate or whether there may be exceptions, in this particular circumstance it was not appropriate because Mr Logan admitted that he had crossed the boundary in kissing a patient on the forehead.”

[23] It is clear that the Commissioner regarded it as unnecessary to determine whether kissing a patient was never appropriate because it was sufficient for the purpose of s.387(a) to find that in this instance Mr Logan’s conduct was not appropriate.

[24] In relation to ground 4, it may be accepted that the Commissioner did not refer in the Decision to evidence to the effect that Mr Logan’s conduct left the patient feeling apprehensive and uncomfortable (although there is no indication that this was because the Commissioner did not accept this evidence). However, given that the Commissioner accepted that Mr Logan’s conduct constituted a valid reason for his dismissal, it is not apparent how this could be demonstrative of any appealable error. In its submissions Bendigo Health advanced this appeal ground as an integer of its submission that the Commissioner erred by failing to conclude that Mr Logan committed “serious misconduct”. That submission is misconceived for the reasons already explained.

[25] Grounds 6-10 were relevant to the grant of the remedy of reinstatement. Leaving aside the issue of the CPD declaration in relation to which leave was granted, we consider that those grounds also do not disclose any arguable case of error. In relation to ground 6, we do not consider that the Commissioner failed to apply the “proper test”. The Commissioner expressly referred to the Full Bench decision in Nguyen which dealt with the principles applicable to the consideration of whether the remedy of reinstatement should be granted, and properly emphasised that part of the Full Bench’s judgment which clarified that in its discussion concerning whether a loss of “trust and confidence” rendered reinstatement inappropriate, it meant “that which is essential to make an employment relationship workable”. Ground 7 is misconceived in that the Commissioner did not find that there was “no evidence” that the employer/employee relationship was unworkable, but that the evidence before him was not sufficient to demonstrate clearly that there had been a complete breakdown in the relationship of trust and confidence. 15 Ground 8 is equally misconceived because, as was held in Nguyen and the earlier decision of the Industrial Relations Court of Australia in Perkins v Grace Worldwide (Aust) Pty Ltd16, the question of whether there has been a loss of trust and confidence on the part of the employer such as to render reinstatement unviable does not simply involve an assessment of the subjective views of the employer’s management personnel. Ground 9 involves no specific contention of error, and in relation to ground 10 we consider that the Commissioner’s reasons are sufficient to enable the proper identification of the basis upon which he determined to grant reinstatement and to allow the appeal function to be exercised properly.

[26] We did not consider that the grounds of appeal otherwise raised any issue of general application or importance which would attract the public interest. Nor do we consider that the outcome determined by the Commission - namely that a long serving employee who had engaged in a single act of inappropriate behaviour should be reinstated without any compensation for lost pay - was plainly unjust or counterintuitive such as to make it in the public interest to grant permission to appeal.

The reinstatement order and the CPD declaration

[27] Having considered the additional evidence and submissions of the parties concerning the CPD declaration issue in relation to which we determined to grant permission to appeal, we do not consider that there is any proper basis for appellate intervention in this matter.

[28] Firstly, we do not consider that there was any appealable error in the Commissioner’s consideration of the CPD declaration issue. The Commissioner took the matter into account, apparently accepted Bendigo Health’s characterisation of it as involving “a complete disregard for the registration requirements” 17, and treating it as clearly being a factor tending to support the conclusion that reinstatement would be an inappropriate remedy. However the Commissioner ultimately chose to give greater weight to other matters which militated in favour of reinstatement. This he was entitled to do in the exercise of his discretion.

[29] Secondly, our concern that the re-employment of Mr Logan by Bendigo Health pursuant to the reinstatement order might be unlawful or impracticable because of questions concerning the validity of his registration as an enrolled nurse effectively evaporated upon a consideration of the additional evidence adduced in the appeal. Mr Logan gave evidence to the effect that, having (eventually) given careful consideration to the question, his CPD declaration was in fact correct in that he did complete 20 CPD hours in the relevant period once all his activities which could properly be counted as CPD activities were taken into account. Mr Logan’s evidence was not the subject of any cross-examination by Bendigo Health, nor was it contradicted by any other evidence. We are therefore left in the position that there is no basis for us to conclude that Mr Logan did not satisfy the CPD requirements for registration or that he was invalidly registered.

[30] There may remain a separate question as to whether the CPD declaration was false and misleading at the time it was made, since Mr Logan affirmed that he had completed the CPD requirements without actually knowing whether this was the case or not. Mr Logan drew our attention to the High Court decision in Murphy v Farmer 18, in which the majority (Deane, Dawson and Gaudron JJ, Brennan and Toohey JJ dissenting) held that (for the purposes of s.229(1)(i) of the Customs Act 1901 (Cth)), a statement was “false” only if it was deliberately or intentionally untrue. We accept that the CPD declaration did not meet that description, although it may fairly be characterised as having been carelessly or even recklessly made. In any event, the evidence adduced in the appeal demonstrated that the issue of the CPD declaration had been reported by both Mr Logan and Bendigo Health to AHPRA, which is now seized of the matter. That being the case, we consider that any remaining public interest concerns are answered by allowing the AHPRA process to run its course. Both parties accept that if the outcome is that AHPRA revokes or suspends Mr Logan’s registration, then prima facie his employment with Bendigo Health cannot continue. However, that is not an impediment to the reinstatement order being given effect. A reinstatement order does not entitle the reinstated employee to continue to be employed indefinitely regardless of the circumstances, and the employee’s employment may be terminated if there arises a proper basis to do so.

[31] Accordingly the appeal must be dismissed. As a consequence of this, the stay order will lapse and Mr Logan will be entitled to be paid the moneys that have been deposited into Bendigo Health’s solicitors’ trust account in accordance with the condition of the stay order.

Order

[32] In addition to our earlier order granting permission to appeal on the limited basis described above, we order that the appeal is dismissed.

VICE PRESIDENT

Appearances:

R. Nelson of counsel for Bendigo Health Care Group.

R. Preston of counsel for Mr Logan.

Hearing details:

2016.

Melbourne:

14 November.

 1   [2016] FWC 6780

 2   PR585427

 3   PR586194

 4   Decision at [18], [19] and [21]

 5   Decision at [24]

 6   Decision at [56]

 7   [2014] FWCFB 7198

 8   See Australia Postal Corporation v Gorman [2011] FCA 975 at [37]

 9   (2011) 192 FCR 78 at [43]

 10   O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46]

 11   [2010] FWAFB 5343, 197 IR 266 at [24] – [27]

 12   Wan v AIRC (2001) 116 FCR 481 at [30]

 13   GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]

 14   [2016] FWCFB 5520 at [27]-[28]

 15   Decision at [78]

 16   (1997) 72 IR 186 at 191

 17   Decision at [72]

 18   [1988] HCA 31; (1988) 165 CLR 19

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