Note: An appeal pursuant to s.604 (C2011/4807) was lodged against this decision - refer to Full Bench decisions dated 1 August 2011 [[2011] FWAFB 4909] and 11 October 2011 [[2011] FWAFB 6612] result of appeal.

[2011] FWA 3532

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Ms A
v
The Commonwealth of Australia, represented by Centrelink
(U2010/14050)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

ADELAIDE, 6 JUNE 2011

Termination of employment - arbitration - valid reason - fair performance management process - obligation on employee to advise of illness.

[1] On 11 November 2010 Ms A lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) through which she sought relief with respect to the termination of her employment with The Commonwealth of Australia, represented by Centrelink (herein referred to as Centrelink).

[2] Having considered Ms A’s personal circumstances I have decided that it is appropriate that her name and hence the other persons involved in this matter not be identified by name. Because of its size and unique standing I see little point in not identifying Centrelink by name. The parties to this matter have been advised of the names of the persons described by pseudonym.

The Proceedings

[3] The application was unable to be settled through the conciliation process and was referred to me for arbitration in March 2011.

[4] It was the subject of a brief hearing following a request from Centrelink lawyers, Blake Dawson for a grant of permission to represent Centrelink. Ms A, who was, at that time, self represented, opposed this request. I refused the request on the basis that, given Centrelink’s size and its in-house legal resources, I was not satisfied that the circumstances set out in s.596 were met so as to warrant a grant of permission. Specifically, I was not satisfied that the matter was of such complexity that it required other than the Centrelink in house legal representative and I took account of Ms A’s self represented status. However, given the involvement of Blake Dawson personnel in the preparation of the material for the arbitration, I specifically confirmed the capacity for that Blake Dawson lawyer to continue to assist the Centrelink legal representative in these proceedings.

[5] The proceedings in this matter were somewhat complicated. The application was listed for hearing on 10 March 2011. The commencement of the hearing was deferred following advice from the parties that they were well advanced in settlement discussions. These discussions were ultimately assisted by Bartel DP at the request of the parties. The hearing was subsequently vacated after I was advised that an agreement in principle had been reached.

[6] On 18 March 2011 Ms A advised that this agreement had not been achieved and requested that the matter proceed. It was listed for hearing on 19 and 20 April 2011. However, the hearing on 19th April was ultimately cancelled because Ms A was unwell.

[7] On 20 April 2011 Ms A represented herself and Centrelink was represented by Ms Welfare. These proceedings were adjourned at the conclusion of Ms A’s evidence when she became unwell and was unable to continue.

[8] The matter proceeded again on 16 and 17 May 2011. On this occasion Mr Saunders, of counsel, requested, and was granted permission to represent Ms A.

The Background

[9] Ms A commenced employment with Centrelink on 9 September 1996. From at least 2008 she worked as a Customer Service Advisor within the Centrelink Adelaide Call Centre. At the time of the termination of her employment she was classified at the highest possible Customer Service Adviser classification.

[10] While the full details associated with Ms A’s work arrangements are not absolutely clear, Centrelink were aware, from 2000 that Ms A suffered from psychological disorders specified as Social Phobia and Dysthymic Disorder. She was taking antidepressant medication. These conditions were assessed as pre-existing conditions rather than being caused by her work and the advice provided in 2000 and confirmed in 2006 was that Ms A was psychologically fit for her duties at Centrelink although in 2000 her difficulty in coping with work monitoring, performance appraisals and feedback was noted.

[11] It appears that the allocation of call centre duties to Ms A some time after 2006 reflected an agreed approach to best accommodate Ms A’s psychological conditions.

[12] Ms A’s employment was terminated on 29 October 2010, as a result of a conclusion reached by the Call Centre Manager, Mr B, that Ms A had failed to attain, and sustain, the necessary standards of work performance for a Customer Service Advisor. This decision was reached after the implementation of a formal performance improvement programme.

[13] Centrelink assert that this formal performance improvement programme (the PIP) was instituted as a result of performance concerns which were subsequently addressed through regular coaching. An informal performance management process was put in place in early 2010 consistent with normal Centrelink performance management processes. The PIP was instituted in April 2010 and reflects an approach set out in the Centrelink Agreement 2009 -2011 (the Agreement) such that it follows informal performance improvement endeavours. There is no dispute that Ms A was given, and utilised an opportunity to have input into this formal PIP. Its initial eight-week duration was extended by Mr B for a further four weeks. Throughout the PIP process Ms A declined to meet with her Team Leader, Mr C about the PIP. However, over the latter part of the PIP she met on a regular basis with Mr B. The formal PIP concluded on 10 August 2010.

[14] Ms A was subsequently advised that termination of her employment was being considered and she was invited to respond to this advice. Ms A provided a detailed response on 2 September 2010. In this response she disputed the extent to which Centrelink asserted that she had not adequately met the performance standards. Secondly, she disputed the extent to which Centrelink should consider termination of her employment, as distinct from reassignment to different duties at the same, or at a lower classification or pay level. She asserted that the PIP was flawed in that Mr C had exhibited bias against her and that her performance was affected by earlier managerial deficiencies. In her response Ms A asserted that her performance was affected because of her health. She attached a medical certificate, which stated:

[15] Centrelink subsequently provided advice to Ms A’s doctor (with her approval) to the effect that termination of her employment was being considered. It sought urgent provision of the doctor’s opinion about the duration of Ms A’s psychiatric illness, its impact on her ability to perform her duties, the extent to which it could be caused by the PIP and what adjustments Centrelink could make to take account of Ms A’s position.

[16] The doctor’s response, received by Centrelink on 8 October 2010, confirmed Ms P’s psychiatric condition was long-standing but had been, and continued to be, treatable. It proposed possible changes to her working hours.

[17] On 20 September 2010 Centrelink referred Ms A for a Fitness for Duty assessment consistent with the provisions of the Agreement. Centrelink provided background advice and a series of questions to a consultant psychiatrist, Dr D. This background advice included earlier psychiatric assessments.

[18] Dr D’s report was provided to Centrelink on 11 October 2010. It noted Ms A’s psychiatric history and her concerns relative to the performance management initiatives which had been in effect since October 2009. It recommended that she take a month off work, noted that her condition was chronic and could be expected to vary over time, but concluded that she was not partially permanently incapacitated for work. Further, that Ms A’s performance would have likely been reduced because of the increased checking and lower confidence that she had endured over the past 12 months. Finally, Dr D’s report concluded that it was reasonable and appropriate for normal performance management to the undertaken given Ms A’s health conditions.

[19] On receipt of this report Centrelink arranged for Ms A to take leave from work. It also provided her with an opportunity to seek a review of this medical assessment. Ms A did not make any such request.

[20] Commencing in late August 2010, Mr B initiated a number of enquiries of other Centrelink functions to ascertain if alternative employment for Ms A could be identified.

[21] Ms A’s employment was terminated on 29 October 2010. She was paid four weeks pay in lieu of notice.

The Submissions

[22] Ms A asserts that the overall performance management process was founded on flawed performance data.

[23] She asserts that Centrelink failed to take proper account of her psychiatric condition in that it had available to it, medical information dating back to 2000 which should have informed Centrelink that she was unable to properly cope with a performance management regime.

[24] Ms A asserts that the formal PIP was conducted unfairly and that it was characterised by bias. She further asserts that the termination of employment decision should not have been made by Mr B given his involvement in the PIP.

[25] Notwithstanding this, Ms A asserts that she met, or substantially met, the required performance metrics. In the alternative, she asserts that reliance on these metrics as the basis for termination of employment was flawed and inherently unfair.

[26] Ms A asserts that the termination of her employment was also unfair in that it occurred, at least in part, as a consequence of her psychological health. Further, she asserts that Centrelink should have implemented alternatives to the termination of her employment in these circumstances.

[27] In terms of the process followed, Ms A acknowledges that she was given an opportunity to respond to the Centrelink proposal to terminate her employment but argues that the process was inherently unfair in that it involved written communications.

[28] Ms A seeks reinstatement but, in the alternative, six months compensation.

[29] The Centrelink position is that the overall performance management process was fairly and legitimately applied and that the PIP disclosed that Ms A was unable to achieve and sustain the requisite performance standards.

[30] Centrelink asserts that Ms A was treated fairly and that the decision to terminate her employment reflected an objective and appropriate process. In terms of Ms A’s psychiatric condition, Centrelink asserted that Ms A did not raise this until her response to the termination of employment proposition and that its actions in terminating her employment on the basis of the PIP were consistent with the medical advice provided to it.

The witnesses

[31] Ms A gave evidence about the circumstances of her employment and dismissal.

[32] Mr B, the Centrelink Call Centre Manager gave evidence about his involvement in the overall performance management process and the actions he took to the time he terminated Ms A’s employment.

[33] Mr C, Ms A’s Team Leader during the formal PIP gave evidence about the development and implementation of that PIP and his dealings with Ms A.

[34] Dr D was the consultant psychiatrist who provided the Fitness for Duty assessment regarding Ms A’s psychological health. His evidence went to this assessment and his conclusions with regard to Ms A’s health and its effect on her work.

Findings

[35] While there is little dispute about the background facts to this matter, I have reached a number of conclusions about significant differences between the parties position.

[36] These conclusions are based on all of the witness evidence before me, together with the substantial written material provided to me. In terms of the witness evidence, where the evidence is contradictory, I have generally preferred that of Dr D, Mr B and Mr C. Ms A tended to attribute fault to everyone but herself and to rely on her psychological health as the reason for all of her inappropriate actions. Her position was inconsistent with the extent to which she had opportunities to obtain assistance and chose not to do so. I am not satisfied that Ms A’s psychological health stopped her from asking for assistance, or from alerting management to her concerns, or from working within normal performance expectations.

[37] I have considered Ms A’s position that the initial implementation of the performance management process in the form of the informal action plan was inherently flawed to the extent that performance deficiencies were not properly identified, any failings were caused by management actions or inactions, the actions of other staff, and/or Centrelink’s failure to recognise and take proper account of her ongoing psychiatric condition.

[38] I am unable to agree that these concerns are properly founded. Centrelink management identified performance concerns and alerted Ms A to these concerns. Ms A had the opportunity to engage with line management to address these issues and elected not to do so. Further, she had the capacity to escalate any concerns about the way she was being managed or the actions of other staff, and did not do so. There is no evidence that satisfies me that Centrelink’s management approach was unfair towards Ms A.

[39] There is no medical evidence that confirms that Ms A’s psychological health substantially affected her performance in the period before and during the informal, or, for that matter, the formal performance management process. Perhaps even more significantly, if Ms A considered this to be the case, she did not raise it as a factor which she sought that Centrelink take into account until after the formal PIP was completed. In this respect I do not consider that Ms A could reasonably expect that Centrelink modify the application of the normal performance management processes in 2009 and 2010 on the basis of the medical advice provided to it in 2000 or in 2006. Nothing in those advices indicates an ongoing requirement for Centrelink to modify normal management processes.

[40] To the extent that Ms A believed that the performance management process which commenced in 2009 required modifications to take account of her psychological health, I consider that she was obliged to identify these concerns to Centrelink. In this respect I note that Ms A has sought extensive medical advice over the last few years such that I can discern no impediment to her seeking medical advice to substantiate her position in this respect. It is simply not enough for Ms A to assert that as Centrelink was aware that she was, for example, taking anti-depressant medication, normal and fair employment practices could not apply. She had an obligation to provide Centrelink with clear and medically supported grounds upon which her objection to these practices was based. Dr D’s evidence was to the effect that there was nothing additional Centrelink could or should have done for her, and that she could reasonably have been subjected to normal management practices.

[41] I have considered Ms A’s position that the performance metrics applied by Centrelink were inherently flawed. These metrics go to the measurement of call time, of processing time, the recording of times when an employee is actually available to work, quality, and the need for technical support. Call Centres operate to precise standards and I am satisfied, on the evidence before me, that the performance metrics are both appropriate and capable of general achievement. Further, I am satisfied that Centrelink is entitled to expect employees to consistently meet these minimum performance obligations. A failure to meet these obligations clearly has the potential to adversely impact on customer service standards and the prompt provision of advice.

Harsh, Unjust or Unreasonable

[42] Section 387 states:

[43] I have considered these factors individually and collectively.

Valid Reason

[44] In Selvechandron v Petersen Plastics Ltd 1, Northrop J stated:

[45] Notwithstanding that His Honour was, in that matter, operating under legislation which incorporated into the consideration of a valid reason, a number of factors now separately identified in s.387, I have adopted this general approach to the consideration of whether there was a valid reason for the termination of Ms A’s employment.

[46] Mr B’s detailed termination of employment advice to Ms A of 29 October 2010 concluded that he was satisfied that Ms A did not attain and sustain the necessary standards of work performance 2. I am satisfied that this was the only reason for the termination of Ms A’s employment.

[47] By the time Centrelink was provided with Dr D’s Fitness for Work assessment, the PIP had been completed. Ms A had not identified any medical condition or need for an absence from work as a result of illness or injury prior to the completion of the PIP in a fashion which would question the integrity of that performance management process.

[48] I am satisfied that Mr B’s decision to place Ms A on leave, following the receipt of Dr D’s report, simply reflected the recommendation to that effect in that report and was not related in any way to the decision to terminate Ms A’s employment. It is clear that Mr B was considering options with respect to Ms A’s continued employment in late August when he corresponded with various Centrelink managers relative to alternative employment options for Ms A.

[49] I am satisfied that the formal PIP was established consistent with the Centrelink Agreement and its internal Human Resource Management policies. This plan invited Ms A’s active involvement at the outset and gave her numerous opportunities to engage with Centrelink management. In fact, Ms A elected not to avail herself of most of these opportunities.

[50] I can discern no inherent bias in either the application of the PIP, the approach adopted by Mr C or the final termination of employment decision taken by Mr B.

[51] The PIP disclosed a number of deficiencies against the required standards. I am satisfied that it disclosed that Ms A did not achieve and sustain the required standards with respect to the average time she took to handle a call from a customer. The PIP disclosed that Ms A had not sustained the performance requirements with respect to adherence relative to Call Centre attendance and readiness to take calls within a specified times. Additionally, Ms A did not sustain the requisite standard relating to the time she took after a call to complete the work associated with that call.

[52] I am satisfied that each of these required standards was made known to Ms A as factors against which her performance would be measured over the duration of the PIP.

[53] Ms A limited the use of the opportunity for face-to-face discussions to the final few weeks of the PIP during which she engaged in discussions with Mr B. The PIP also identified Ms A’s failure to properly maintain an individual learning plan and a further late arrival for work. Both of these factors were not taken into account by Mr B in the termination of employment decision. I can discern no impropriety on Mr B’s part and in fact his decision to extend the duration of the PIP and to exclude a period when Ms A was unwell, only operated to benefit Ms A.

[54] I have concluded that Ms A failed to properly utilise the first four weeks of the PIP with its focus on support and learning.

[55] I can discern no malice or prejudice in the Centrelink decision-making process or the application of the PIP itself. Whilst Centrelink identified four specific performance failings at the time of the implementation of the PIP, I am satisfied that, to the extent that the PIP requirement extended these failings into a consideration of other factors, these related to reasonable expectations of Ms A as a senior Customer Service Advisor. Ms A was aware of the significance of the PIP and the extent to which achievement and maintenance of the specified standards was fundamental to her continued employment. While Ms A was a long term Centrelink employee, the evidence indicates that performance issues had previously been raised with her.

[56] I have concluded that Ms A’s failure to achieve and particularly, to sustain the PIP performance criteria, represented a valid reason for the termination of employment.

Notification of the Reason

[57] Ms A was notified of the reasons for the termination of employment in the termination of employment advice of 29 October 2010.

Opportunity to Respond

[58] Ms A was given opportunities to respond to the position being adopted by Centrelink throughout the entire performance management process. These included the informal performance action plan, the formal PIP, when Mr B foreshadowed the termination of employment and, following Centrelink’s receipt of Dr D’s Fitness for Work Report.

[59] While Ms A utilised a number of these opportunities she failed, at her own discretion, to utilise others.

Unreasonable refusal to allow Ms A a support person

[60] I am satisfied that Centrelink did not refuse to allow Ms A access to a support person. On one occasion she met with Centrelink management in the company of a union official. However, the majority of communications relative to the termination of employment were in writing and Ms A had both the time and the capacity to seek support in the preparation of a response.

Warnings about unsatisfactory performance

[61] Ms A had been warned about unsatisfactory performance over a long period of time.

[62] The 2009 informal performance action plan involved such warnings. More particularly, the formal PIP made it patently clear that a failure to achieve and sustain the requisite performance metrics could result in termination of her employment.

Size of Centrelink relative to procedures

[63] Centrelink is a very large organisation. With respect to Ms A, Centrelink has carefully followed its documented and clear procedures. I am satisfied that these procedures have ensured a fair and equitable approach to performance management issues.

Absence of Human Resource Management expertise

[64] Centrelink clearly has a comprehensive human resource management function which provided extensive advice and assistance to Mr B in the development of a management position with respect to Ms A’s performance.

Other matters considered relevant

[65] I have noted that the Centrelink human resource management function is essentially based in Canberra and apparently retains medical information about employees rather than dispersing this information to the relevant line managers. Given privacy issues and the size of the Centrelink organisation this approach is understandable. However, it has the potential to allow a situation where an employee is asked or expected to undertake a function outside of their medical limitations. There is no information that establishes that this was the case with respect to Ms A as the medical advice consistently confirmed that she was able to work normally other than when she had specific medical advice to the contrary.

[66] I have considered Ms A’s psychiatric condition in the context of whether this condition made the imposition of the performance management approach unfair or whether it meant that, once Mr B became aware of Ms A’s psychiatric condition, the PIP should have been aborted or deferred.

[67] The Fitness for Work Report conducted in 2000 3 identified that Ms A had a predisposition to difficulty in coping with work monitoring, performance appraisals and reasonable feedback. It suggested ongoing treatment and proposed call centre work which was later agreed with Ms A.

[68] The Fitness for Work assessment conducted in 2006 by Dr E 4 addressed Ms A’s substantial absences from work in the context of her physical and psychological difficulties. It suggested that Ms A work reduced hours (which subsequently occurred) but did not identify other impediments to normal work.

[69] In reaching various reduced working hours agreements with Centrelink management, Ms A referred to her desire to achieve an improved work/life balance.

[70] Having considered each of these factors in the context of all the evidence before me I am unable to conclude that Centrelink were remiss or inherently unfair in applying normal performance expectations to Ms A. In the event that Ms A felt unable to cope with these normal expectations because of her psychiatric condition, I consider that she had an obligation to make Centrelink aware of this so that it could then be considered. I am not satisfied that Ms A did this until Mr B advised that he intended to terminate her employment.

[71] Additionally, I am not satisfied, on the evidence before me that Ms P’s behaviour was such that it should have alerted Centrelink to her incapacity to continue the PIP.

[72] I consider Mr B’s actions in seeking advice from Ms A’s doctor and then Dr D represented perfectly reasonable actions.

[73] The belated advice from Ms A’s doctor disclosed no basis upon which the integrity of the PIP should be questioned.

[74] Dr D’s Fitness for Duty Report 5 advised that Ms A was overwhelmed and should be given a month off work. Whilst this report quite appropriately confirmed that Dr D did not consider he was able to determine whether or not Ms A was meeting workplace performance targets or adhering to a performance improvement plan, it advised that Ms A’s performance “...would likely have reduced because of the increased checking and lower confidence that she has endured over the past 12 months6.

[75] However, Dr D continued, to state, “I do consider it reasonable and appropriate for normal performance and workplace management to be undertaken given any health conditions Ms A may have.” 7 (amended for confidentiality)

[76] In his evidence, Dr D clarified his position by advising that it was unlikely that anything could have been done to prevent Ms A from spending additional time checking her work but that the result and performance reduction would not have been considerable, and that Ms A’s “condition was not so serious that it impeded her ability to conform to normal standards of behaviour, including accepting feedback.” 8

[77] Ms A was given the opportunity to challenge Dr D’s assessment and she did not do so.

[78] Consequently, absent any clear articulation from her of why Centrelink should not apply the normal performance improvement process, I am unable to conclude that her psychiatric condition meant that the PIP was unfairly applied.

[79] I have also considered whether the sanction of termination of employment represented an inherent unfairness given that Centrelink had available to it alternative sanctions in the form of reallocated duties at the same, or at lower classification and pay levels. In this respect I have noted the evidence of Mr B 9 who stated:

[80] I have concluded that Mr B reasonably decided that Ms A could not be reallocated to other call centre work because the same performance standards applied. She could not be demoted to other call centre work on the same basis. It is clear from the responses to Mr B’s enquiries that appropriate other duties within Centrelink were not available.

[81] Consequently, I do not regard the conclusion that termination of employment was the only appropriate option, as unreasonable.

Conclusion - Harsh, Unjust or Unreasonable

[82] My consideration of all of the factors set out in s.387 supports a conclusion that the termination of Ms A’s employment was neither harsh, unjust or unreasonable.

[83] The process followed by Centrelink was clearly not unjust. It was a transparent performance management process which was directed at assisting Ms A to retain her employment. Ms A did not identify reasonable impediments to the application of the PIP and the Centrelink actions were consistent with the medical advice available to it.

[84] It was not unreasonable in that it was founded on legitimate performance concerns critical to the effective operation of the Centrelink Call Centre. Ms A had been properly alerted to these performance concerns and had the opportunity to actively participate in the performance management process.

[85] The issue of harshness represents some greater difficulty in this matter. Undoubtedly, there must be a measure of harshness from Ms A’s perspective. She has psychiatric conditions which I have concluded could make obtaining alternative employment more difficult.

[86] However, I consider that the concept of harshness must involve an overall assessment. A finding that prohibited Centrelink from applying responsible and fair performance management practices when Ms A did not identify to Centrelink medical considerations which she now argues to be relevant, would be harsh.

[87] Centrelink’s performance management approach to Ms A was exhaustively fair and Centrelink clearly took the medical advice available to it into account in reaching a final conclusion.

[88] On all the material before me I have concluded that the termination of Ms A’s employment cannot be regarded as harsh, unjust or unreasonable. The application must therefore be dismissed. An Order [PR510242] to this effect will be issued.

SENIOR DEPUTY PRESIDENT

Appearances:

Ms A (20 April) and R Saunders, counsel (16 and 17 May) for the Applicant.

M Welfare for the Respondent.

Hearing details:

2011.

Adelaide:

April 20

May 16 and 17.

 1   (1995) 62 IR 371 at 373

 2   Exhibit C3 (Attachment SM14)

 3   Exhibit P4

 4   Exhibit P5

 5   Exhibit C1 (Attachment DGB1)

 6   Exhibit C1 (Attachment DGB1 para 16)

 7   Exhibit C1 (Attachment DGB1 para 18)

 8   Exhibit C1 (para 15)

 9   Exhibit C3 (paras 58 and 59)



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