[2011] FWAFB 8032

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Fair Work Act 2009
s.604—Appeal of decisions

Balfours Bakery
B. Cooper



[1] This is an appeal, for which permission is required, against a decision given by Senior Deputy President O’Callaghan on 18 July 2011. 1 The appellant is Balfours Bakery Pty Ltd. The respondent is Mr B Cooper. The appellant employed the respondent between May 1991 and February 2011. On 24 February 2011 the appellant terminated the respondent’s employment. On 7 March 2011 the respondent made an application under s.394 of the Fair Work Act 2009 (the Act) for an unfair dismissal remedy. In the decision under appeal, the Senior Deputy President found that the respondent had been unfairly dismissed and should be reinstated. An appropriate order was made on the same day.2

[2] At the time his employment was terminated, the respondent was engaged as a delivery driver. His employment was governed by the terms of an enterprise agreement entitled Balfours Pty Ltd Enterprise Agreement 2005 (the agreement). 3  The agreement provides for income protection insurance through International Underwriting Services Pty Ltd (IUS). The policy provides income protection for up to 24 months in the case of non-work-related injury or illness. The respondent had made some 25 workers’ compensation claims and had lodged 40 incident reports while employed by the appellant. On 8 April 2010 he advised the appellant of a shoulder injury which had arisen while on annual leave. He made a claim for weekly payments under the IUS income protection policy. The claim was granted. On or about 23 November 2010 the respondent also made a Workcover claim in relation to his shoulder injury. On 7 February 2011 the respondent was advised that this claim had been rejected. In its letter of 24 February 2011 terminating the respondent’s employment, the appellant indicated that in light of his ongoing medical condition, it was unable to continue to hold his position open. The respondent had been absent from work and in receipt of income protection payments since 8 April the previous year, more than 10 months in all.

[3] It is necessary to elaborate on some matters. First, there was evidence that the respondent had made potentially contradictory statements to medical practitioners about the cause of his injury, in particular, whether the injury was work-related on not. The claim he made under the IUS income protection policy was based on a clear acknowledgement that the injury was not work-related. The available medical records indicate the respondent’s description of the cause of the injury was consistent with it not being work-related until November 2010 when he lodged a Workcover claim. From that point on, generally speaking, he indicated that the cause was work-related. The Senior Deputy President found that the respondent had decided to lodge the Workcover claim after discussions with his union and he did so in order to slow or prevent the termination of his employment. It seems to be accepted that at the time of the termination the respondent could have returned to work on restricted duties, but that the appellant as a matter of policy did not provide restricted duties. If the respondent’s Workcover claim had been accepted, the appellant would in all likelihood have been obliged to provide him with employment on a restricted duties basis.

[4] In the circumstances the Senior Deputy President concluded that there was no valid reason for the termination and, in particular, that the contract of employment had not come to an end by frustration as a result of the respondent’s inability to perform the full range of duties.

[5] The Senior Deputy President’s conclusion for the purpose of s.385 of the Act were as follows:

[6] The appellant advanced two main grounds of appeal. The first main ground is that the Senior Deputy President was in error to find there was no valid reason for the termination. A number of submissions were made in support of this ground. It was submitted that the respondent’s injury was of long standing, there was no clear indication of when he could return to work and that he had failed to call relevant medical evidence. It was also submitted that the respondent had been dishonest in first making a claim under the IUS income protection policy on the basis that the injury was not work-related and then subsequently making a Workcover claim on the basis that the injury was work-related. The appellant also relied upon the fact that the respondent had lodged the Workcover claim because, as only became clear when he gave his evidence, he was concerned about the termination of his employment.

[7] In relation to the submissions concerning the medical evidence, the Senior Deputy President found that while the respondent had refused to participate in a work site assessment commenced by IUS in June 2010 and that he did not authorise IUS to disclose medical information to the appellant, nevertheless the appellant was provided with some reports by IUS and with all of the medical information provided to Workcover. Consistent with these findings, His Honour concluded that at the time of the termination the appellant was aware that the respondent was recovering, that he could have performed restricted duties if they were offered and that there was the potential for his surgeon to give him a full clearance the following April. We think all of these findings were open.

[8] Mr Manuel, who appeared for the appellant, suggested that the onus was on the respondent to produce contemporary medical evidence indicating some likelihood that he would be able to return to work on an unrestricted basis. He further submitted that the respondent’s failure to do so gives rise to an inference that no such evidence was available. We do not think that any adverse inference should be drawn. The Senior Deputy President was entitled to accept the evidence that the respondent’s surgeon was of the view that there was a potential for him to recover fully by the following April and that the appellant was aware of that view. The fact that the view was expressed some months before the termination does not diminish its significance.

[9] In relation to the allegations of dishonesty, the Senior Deputy President declined to make a finding that the respondent had deliberately lied to any of the doctors, to IUS or to Workcover. As Mr Ats submitted on the respondent’s behalf, it is not unusual for employees to claim on alternative bases where there may be questions about the cause of an injury. And, as the Senior Deputy President pointed out, the appellant does not appear to have raised the issue of dishonesty at or prior to the termination. In our view the circumstances were not such as to require the conclusion that the respondent was deliberately dishonest. It was open to the Senior Deputy President to leave the question unresolved.

[10] The second main ground of appeal is that the Senior Deputy President erred in finding that the dismissal was harsh, unjust and unreasonable. Leaving aside the question of whether there was a valid reason for the dismissal, which we have just dealt with, the appellant alleged that the decision involves a number of other errors. These were said to include legal errors, in relation to the question of frustration of contract, and a failure to properly take into account the appellant’s loss of trust and confidence in the respondent arising from his dishonesty.

[11] In relation to the question of frustration of contract, we are unable to find any error in the manner in which the Senior Deputy President approached that question. The appellant submitted that it was justified in terminating the employment because the contract of employment had been frustrated as a result of the respondent’s continuing inability to properly discharge his duties and the likelihood that the situation would continue indefinitely. In rejecting the appellant’s submission His Honour relied mainly on two things. The first was the fact that both parties knew that payments could be made under the IUS income protection policy for up to two years. This suggested that absences for up to two years were contemplated without termination of employment. The second was the possibility that the respondent might be given a full medical clearance to return to work the following April. These were both cogent considerations. Even if, as seems to be the case, the respondent did not in fact receive a full medical clearance in April, the continued availability of payments under the IUS policy militated against a finding that the employment contract had been frustrated, either at the time of the termination or at the time of the hearing.

[12] The second matter, the submission that the Senior Deputy President failed to take into account the appellant’s loss of trust and confidence in the respondent arising from his dishonesty, can be dealt with quite briefly. The decision did not include a finding of deliberate dishonesty and we have found no error in that regard. Accordingly it was open to the Senior Deputy President to proceed on the basis that trust and confidence had not broken down in the relevant sense.

[13] The appellant also submitted that the remedy of reinstatement is inappropriate because of factors associated with the respondent’s dishonesty. Other reasons were advanced. They included the fact that the respondent is unable to resume full time duties and there is no indication of when that position might change, he is still receiving payments under the IUS income protection policy and is not suffering loss, and the appellant may well be able to terminate for frustration of contract in the near future. We have considered these arguments. The argument based on dishonesty carries little weight in light of our earlier findings. While there may be some force in the other arguments, the Senior Deputy President’s decision on remedy was open to him.

[14] We have considered all of the appellant’s submissions. The decision is not affected by any significant error of fact or any other appealable error and there is no reason in the public interest to grant permission to appeal. 4 The appeal is dismissed.



R Manuel of counsel with F Tillman for Balfours Bakery Pty Ltd.

M Ats of counsel for B. Cooper.

Hearing details:

October, 21.

 1   [2011] FWA 4595.

 2   PR511635.

 3   AG844636.

 4   Fair Work Act 2009, s.400.

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