AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal against decision
PR917063 issued by Commissioner Cribb on 23 April 2002
J.P. Dundovich
(C2002/2586)
s.170CE Application for relief re termination of employment
J. Dundovich
and
P&O Ports
(U2001/2311)
VICE PRESIDENT ROSS |
|
DEPUTY PRESIDENT HAMILTON |
|
COMMISSIONER EAMES |
MELBOURNE, 8 OCTOBER 2002 |
Termination of employment - appeal - appeal filed out of time - extension of time granted despite absence of satisfactory explanation - short period of time - no prejudice to respondent - meritorious appeal. Failure to take account of a material consideration - appellant had a compensable work related injury at the time of termination - leave granted - appeal upheld - termination harsh, unjust and unreasonable - remitted for determination of remedy.
DECISION
Introduction
[1] This decision deals with an appeal by Mr J.P. Dundovich (the appellant) under s.45 of the Workplace Relations Act 1996 (the WR Act) against the decision made by Commissioner Cribb on 23 April 20021 arising out of an application for relief filed by Mr Dundovich in respect of the termination of his employment with P&O Ports Limited (P&O).
[2] In the decision subject to appeal the Commissioner found that the termination of Mr Dundovich's employment was "not harsh, unjust or unreasonable" and dismissed his application.
[3] We propose to set out the relevant background facts before turning to the decision subject to appeal.
Background
[4] On 19 February 1990 Mr Dundovich commenced full-time, permanent, employment with P&O at the company's West Swanson Container Terminal (the Terminal) in Melbourne. He worked as a crane driver between 1990 and 1997, primarily driving a portainer. Between October 1997 and July 1999 Mr Dundovich was employed as a foreman. Between 29 July 1999 and 13 June 2000 he worked as a relief foreman.
[5] In 1999 P&O sought to introduce a new enterprise bargaining agreement at the Terminal to facilitate structural change. The Maritime Union of Australia (the MUA) and P&O were unable to reach an agreement. P&O successfully applied to terminate a bargaining period which had been initiated by the MUA. Following the termination of the bargaining period the Commission proceeded to make an award pursuant to s.170MX of the WR Act, known as the P&O Ports West Swanson Container and Ro Ro Terminal Enterprise Award 19992 (the s.170MX Award).
[6] The s.170MX Award came into operation on 2 August 1999. Appendix 3 to the award identifies the manning levels at the Terminal and the proposed number of employees to fill each classification within the restructured workforce. The number of foremen required following the restructure was 24, including four "charge" foremen. Previously there had been 45 foremen in total. The s.170MX Award also introduced new rostering arrangements, which did not suit Mr Dundovich's personal circumstances.
[7] On 29 July 1999, Mr Sammut, P&O's Human Resources Manager for the Terminal, posted a document on the foreman's mess room notice board. The document served to notify all employees of their likely function once the s.170MX Award came into operation on 2 August 19993. Under the proposed new arrangements Mr Dundovich was to work as a portainer driver rather than as a foreman. But he would still be paid as a foreman pursuant to an agreement between the MUA and P&O. On 2 August 1999 Mr Dundovich lodged a personal grievance on the grounds that during the restructuring of operations at the Terminal he "was overlooked for the position of permanent Foreman"4.
[8] To facilitate the restructuring process P&O had planned to introduce a new computer system (the NAVIS computer system) in September or October 1999 to enable the Terminal to operate effectively with only 24 foremen. But the NAVIS system was not fully operational until April or May 2000. In the absence of this system P&O operated with a number of "relief foremen" as an interim measure. Mr Dundovich worked as a relief foreman until 24 May 2000.
[9] Clause 8.4 of the s.170MX Award states:
"Subject to the provisions of this Award, all employees are employed by the employer on the basis that each employee will carry out all work within their recognised competence as reasonably directed by the employer."
[10] Mr Dundovich was competent to perform the duties of foreman, straddle driver and portainer driver.
[11] Mr Dundovich began to feel physically and mentally unwell after the introduction of the new work arrangements in October 1999. His condition deteriorated in early 2000 and he commenced taking prescribed medication for depression in May 2000.
[12] In March 2000 a position for a permanent crane foreperson was advertised. Mr Dundovich applied for the position, but was unsuccessful. He subsequently lodged a personal grievance in relation to his non-selection.
[13] On 10 May 2000, Mr Hindle, the Operations Resource Manager at the Terminal, wrote to Mr Dundovich in the following terms:
"Re: Straddle Competency Assessment Program
This is to advise that as a result of the recent introduction of the NAVIS SPARCS SYSTEM more emphasis will be placed on utilising you in a STRADDLE function.
Due to concerns regarding the recency/frequency of your abilities in performing this function (if any) you will be required to undergo a Straddle Driving Competency Checking process. This will ascertain if any further training is required in order for you to fulfil the requirements of Straddle operation by the Company.
You have been scheduled to undergo this program on 29/5/00, DAY SHIFT.
If you have any enquiries regarding this program please don't hesitate to contact me."5
[14] Later in May 2000 Mr Sammut became aware that Mr Dundovich was taking prescribed medication for depression. He decided that it would be appropriate for Dr David Ho, P&O's doctor, to examine Mr Dundovich and assess his fitness for work. A copy of Dr Ho's report is set out at Annexure `SS-13' to Exhibit R2. Dr Ho's report concludes in these following terms:
"In my opinion, Mr Dundovich, a 36 year old foreman appears to be suffering from reactive anxiety depression which he has attributed to his work particularly the rostering and the EBA changes at work since August 1999.
I suggest you obtain an opinion from a psychiatrist regarding the work relatedness of his anxiety depression.
Regardless he has been prescribed anti depressant Lovan, which will affect his capability to operate machinery, in particular the straddle machine.
Indeed Mr Dundovich is currently not driving his car as he had reportedly done silly things like driving through a stop sign.
Despite his medication, Mr Dundovich currently looks and sounds depressed. In my opinion he should not be at work, while in his current state and on medication."
[15] On 13 June 2000 a meeting was scheduled to discuss Mr Dundovich's personal grievance. Mr Sammut had resolved to discuss Dr Ho's report with Mr Dundovich at that meeting. At some point during the meeting Mr Hindle told Mr Dundovich that he had a serious concern regarding his ability to operate machinery while on medication. Mr Dundovich was sent home on full pay. Mr Hindle told him that he could not resume work until P&O had ascertained exactly what his condition was and then he could participate in a return to work program. Later that day Mr Dundovich filed a workers' compensation claim.
[16] On 14 June 2000 Mr Sammut sent Mr Dundovich a letter advising him that his personal grievance had been unsuccessful6.
[17] In July 2000 P&O received a certificate from Mr Dundovich's doctor stating that he could return to work on alternate duties. A copy of the certificate is set out at Annexure 17 to Exhibit R2.
[18] On 26 July 2000 a meeting took place between Messrs Hindle, Cushion, Dundovich and Colasacco (Operations Superintendent, Systems for the Terminal). The meeting ended on the basis that Mr Dundovich would consult his general practitioner to provide a medical clearance for him to return to work7.
[19] At some point in July 2000 Mr Dundovich's workers' compensation claim was rejected by CGU, P&O's insurers, on the basis that the injury was not work related and that the steps taken by P&O in relation to Mr Dundovich's employment were reasonable. Mr Dundovich commenced proceedings for the payment of weekly payments and medical and other like expenses pursuant to the Accident Compensation Act 1985 (Vic).
[20] Since August 2000 Mr Dundovich has received treatment from Dr Samir Ibrahim, a psychiatrist.
[21] On 19 October 2000 Holding Redlich wrote to P&O alleging that P&O had discriminated against Mr Dundovich on the basis of his disability, in contravention of s.14 of the Equal Opportunity Act 1995 (Vic)8. P&O replied to Holding Redlich on 21 November 2000 and advised that Mr Dundovich could resume work when P&O "receives medical advice that he is capable of returning to work in his primary role of straddle driver"9.
[22] On 23 November 2001 a WorkCover conciliation conference took place in relation to Mr Dundovich's workers' compensation claim. The matter was not resolved at conciliation.
[23] In December 2001 the MUA notified the Commission of a dispute in relation to Mr Dundovich's situation. A conciliation conference took place before Commissioner Raffaelli on 20 December 2001 at which the parties reached an agreement in relation to Mr Dundovich's possible return to work. Details of the agreement are as follows:
"1 Holding Redlich will draft a letter to Mr Dundovich's treating psychiatrist, Dr Samir Ibrahim, seeking his opinion, inter alia, as to whether Mr Dundovich's will be able to return to work as a straddle driver in the foreseeable future, whether there will be any effect from medication Mr Dundovich is currently taking on his ability to drive heavy machinery, and the expected period of time required for such a return.
2 Dr Ibrahim's report will be forwarded to P&O upon completion. Within 10 working days of receiving this report, P&O will advise whether, upon consideration of the contents of the report, they are satisfied that Mr Dundovich will be able to return to the straddle driver position in the foreseeable future.
3 In the event that P&O determine that Mr Dundovich will be able to return to straddle driving duties in the foreseeable future, they will arrange for Mr Dundovich to return to work, on a return to work program, within 5 working days.
4 Throughout the return to work program P&O will continue to monitor Mr Dundovich's situation, through their return to work co-ordinator, Jenny Simpson. Mr Dundovich's capacity to work as a straddle driver will be constantly assessed, and if possible he will be transferred to the straddle driving position.
5 If, throughout the return to work program, it appears that Mr Dundovich will not be able to return to straddle driving duties upon completion of the program, P&O will consult with the Maritime Union of Australia and Mr Dundovich, and if necessary will seek medical advice to determine whether or not the return to work program should be extended, or Mr Dundovich should return to sick leave without pay or access any accrued leave entitlements."10
[24] Pursuant to the agreement medical reports were received from Drs Ibrahim and Miller. Dr Ibrahim's report concluded in the following terms:
"Mr J Dundovich suffered an Adjustment disorder: anxiety and depression. This was precipitated by the above mentioned work related stress.
The current anti-depressant did not cause severe side effects and he could start drive his own car successfully in quite roads. He will need some time and graded exposure to return to his full confidence in driving a motor vehicle, let alone driving a heavy machinery. The time frame required will depend largely on the gradual return to work program, which should incorporate gradual return to responsibilities and working hours.
This program should also take into account the trauma that John has suffered at the work place and ensure the gradual acceptability of his working environment. The return to drive a straddle should be included in the graded exposure to the work responsibilities. This program should be continuously evaluated and John's condition monitored to ensure the maximum benefit and prevent any possibilities of relapse. The speed to implement the program would depend on John's reaction to the reintegration into the work force.
John has always maintained a good level of eagerness to return to work as soon as possible, and I believe that this level of motivation will be the driving force behind a successful "return to work" program."11
[25] P&O sought an opinion from Dr Miller whose report concluded that:
"My clinical examination today revealed that he continues to suffer with depression and anxiety and that he obviously requires ongoing long term treatment in the form of medication and counseling. Mr Dundovich is emotionally not capable of returning to his pre injury duties and hours. Because of the medication he is taking he is unable to operate a straddle or other heavy machinery in fact he has great difficulty driving a car. Whilst he remains on the psychotropic medication he will be unable to operate a straddle."12
[26] Messrs Sammut and Hindle gave evidence to the effect that having read the medical reports they were not convinced that Mr Dundovich was fit to return to work. Despite their reservations they agreed to try a return to work program.
[27] On 15 March 2001 a meeting took place involving Messrs Sammut and Hindle with Ms Mazic from P&O, and Mr Cushion, Mr Dundovich and Mr Walvisch, a solicitor from Holding Redlich. The purpose of the meeting was to discuss Mr Dundovich's future at P&O in light of the medical reports. The parties agreed to participate in a two week return to work plan, the purpose of which was to desensitise Mr Dundovich for straddle driving.
[28] A copy of the agreed return to work program is set out at Annexure 8 to Exhibit A1.
[29] On 30 March 2001 a meeting was held to review Mr Dundovich's progress. Messrs Sammut, Hindle, Cushion and Dundovich and Ms Mazic attended the meeting. When asked whether he could drive the straddle Mr Dundovich said that he thought he would eventually be able to, but would need more time13. The P&O representatives left the meeting to speak to Mr Doug Schultz, Manager Container Handling.
[30] Messrs Sammut and Hindle told Mr Schultz that Mr Dundovich could not drive a straddle and would not be able to for the foreseeable future, and in the circumstances it was appropriate to dismiss him.
[31] Mr Schultz agreed that termination was appropriate.
[32] The P&O representatives returned to the meeting room and Mr Hindle informed Mr Dundovich that his employment had been terminated because he was unable to fulfil his duties as a straddle driver. Mr Dundovich subsequently received a letter from Mr Schultz, dated 30 March 2001, in the following terms:
"Termination of employment
I refer you to our discussion at West Swanson Container Terminal (Present: Roger Hindle, Serge Sammut, Marianna Mazic, David Cushion (MUA), John Dundovich) today, 30 March 2001, where we confirmed your termination of employment with P&O Ports as a result of your inability to perform your contract of employment.
Accordingly I confirm that your employment with P&O Ports is terminated effective Friday, 30 March 2001.
As you are no longer an employee of P&O Ports access to the terminal or P&O Ports property, other than in the presence of P&O Port Management, is not permitted. Please ensure that any Company property in your possession is returned to us, this includes company keys."14
[33] On 20 July 2001 Magistrate Jones handed down his decision in respect of Mr Dundovich's application claiming weekly payments of compensation from 13 June 2000, together with medical and like expenses pursuant to the provisions of the Accident Compensation Act 1985. Magistrate Jones upheld Mr Dundovich's claim. A copy of his reasons for decision is set out at Annexure 6 to Exhibit A1.
[34] In August 2001 Dr Ibrahim certified that Mr Dundovich was expected to be fit to return to his normal duties from 18 August 200115.
[35] We now turn to the decision subject to appeal.
Decision at First Instance
[36] Mr Dundovich filed his application for relief in respect of the termination of his employment, pursuant to s.170CE of the WR Act. The application was heard by Commissioner Cribb on 18 September, 11 October and 12 December 2001. On 23 April 2002 the Commissioner handed down her reasons for decision.16
[37] The principal findings in the decision at first instance in relation to whether the termination of Mr Dundovich's employment was harsh, unjust or unreasonable are dealt with below by reference to the provisions of s.170CG(3).
Section 170CG(3)
[38] The Commissioner determined that there was a valid reason for the termination of the applicant's employment.17 In this context the Commissioner made the following findings:
¬ at the time his employment was terminated the applicant was not classified as a permanent foreman;18
¬ the duties P&O required the applicant to perform were those of straddle driving and he was unable to perform those duties at the end of his return to work program. P&O did not require the applicant to perform foreman or portainer driving duties;19
¬ at the time of his termination the applicant was unable to perform the duties P&O required of him, nor would he be able to perform those duties in the foreseeable future. On this basis the applicant could not fulfil his contract of employment and therefore there was a valid reason for his termination;20 and
¬ the Magistrate's Court's decision was not part of the circumstances in existence at the time the applicant's employment was terminated. Accordingly the applicant's submissions regarding the requirements of s.122 of the Accident Compensation Act 1985 (Vic) are not material to the determination of the matter.21
Section 170CG(3)(b)
[39] During the meeting on 30 March 2001 the applicant was notified of the reason for his termination, that is because he was unable to drive the straddle at the end of the return to work program and that it was unlikely that he would be able to do so in the foreseeable future.22
Section 170CG(3)(c)
[40] The Commissioner accepted that at the meeting on 15 March 2001 Mr Hindle told the applicant, "in clear terms" that if he was unable to drive the straddle at the end of the return to work program his employment would be terminated. On this basis the Commissioner concluded that the applicant had been "put on notice" regarding the possibility of being terminated.23
[41] In relation to the meeting on 30 March 2001 the Commissioner said:
". . . it was common ground that the purpose of the meeting was to review the applicant's progress on the return to work plan. That meeting, however, in my view, was held within the context of Mr Hindle's statement two weeks earlier. It is accepted that, until after the break in the meeting, there had been no mention of possible termination of the applicant. Minutes of the meeting recorded that, during the first part of the meeting, the applicant was questioned regarding how the return to work plan had gone, whether he could drive the straddle, whether he could, in the foreseeable future and if so, when?"24
[42] The Commissioner concluded that the applicant had been given an opportunity to respond to the reason for his termination.25
[43] In relation to s.170CG(3)(d) the Commissioner concluded that having regard to the circumstances of the matter the provision did not apply.26
Section 170CG(3)(e)
[44] The applicant raised a number of other matters which were said to be relevant to the determination of whether the termination of his employment was harsh, unjust or unreasonable. In relation to the matters raised the Commissioner made the following findings:
¬ the termination of the applicant's employment hindered his rate of recovery from depression, but this did not render the termination harsh;27
¬ the agreement of 3 January 2001 did not provide termination as an option in the event that the return to work program was unsuccessful, rather it specified consultation with the union with the options of either extending the program or a return to sick leave without pay or access to any accrued leave entitlements. But the applicant's union and legal representatives were present at the meeting on 15 March 2001 when Mr Hindle told the applicant that he would be terminated if the return to work program was not successful;28
¬ Messrs Hindle and Sammut perceived a "lack of enthusiasm" by the applicant about the return to work program but this perception did not form part of the decision making process which resulted in the applicant's termination.29
[45] The Commissioner concluded her decision in the following terms:
"I have considered all of the factors set out in Section 170CG(3)(a) to (e) and, balancing all of these factors in the context of a `fair go all round' (section 170CH), I am satisfied that, on balance, the termination of the applicant was not harsh, unjust or unreasonable."30
Out of Time
[46] The notice of appeal was lodged on 21 May 2002. Rule 11(2)(a) of the Commission's rules provides that an appeal must be instituted "before the end of 21 days after the date of the . . . decision appealed against." The decision subject to appeal was made on 23 April 2002. Hence the appeal was lodged some seven days outside of the prescribed time period.
[47] Rule 11(2)(c) confers power on a Full Bench of the Commission to extend the time within which an appeal is to be lodged. In Stevenson-Helmer v Epworth Hospital31 the Commission made the following observations about the exercise of the power in Rule 11(2)(c):
"In Re: Metro Meat Ltd Orange Interim Award 1987 the Commission made the following general observations about the exercise of such power:
`The Commission has a discretion to extend the time prescribed for instituting an appeal when it considers that such an extension would be desirable. We do not seek to codify, and it may be undesirable to constrain, the grounds upon which the Commission will exercise its discretion. However, we take as the starting point that it is for the appellant applicants to satisfy the Commission that an extension of time would be desirable. . . .
We are reluctant to accept that a time limit of this kind should be open to extension as a matter of course. There are sound administrative and industrial reasons for setting a limit to the time for bringing an appeal. The parties appearing before the Commission have an obligation to acquaint themselves with such limits." (Unreported Print J1669, 1 March 1990 per Munro J, MacBean SDP and Grimshaw C at p.2.)'
We agree with the above observation. In our view the time limits in relation to the institution of appeals must be treated seriously and should only be extended where there are good reasons for doing so. (Bremmer v Lababidi, unreported Print S7292, 21 June 2000 per Polites SDP, Williams SDP and Lewin C.) The appellant bears the onus of persuading the Commission to extend the 21 day period prescribed in Rule 11(2). In Fox v Kangan TAFE the Commission summarised the factors which may be relevant to the exercise of the discretion in the following terms:
`The cases show that, in exercising the discretion in rule 11(2)(c), the Commission should take into account whether there is a satisfactory reason for the delay, the length of the delay, the nature of the grounds of appeal and the likelihood of one or more of those grounds being upheld if time was to be extended: Meat and Allied Trades Federation v AMIEU (1990) 35 IR 25 at p.26; The National Rail Enterprise Agreement 1993, 1 December 1993 [Print L0238 at pp. 11-12]; Shop Distributive and Allied Employees Association v OPSM Pty Ltd, 2 July 1998 [Print Q2858]; Section 109 Reviews Decision, 12 March 1999 [Print R2700 paragraphs 17-24]. Any prejudice the respondent might suffer if time were extended because of developments after the time for lodgment had expired would also be relevant.' (Unreported Print S0253, 25 October 1999 per Giudice J, McIntyre VP and Redmond C at paragraph 36)"
[48] The authorities cited in the above extract provide that the following matters are relevant to the exercise of the Commission's discretion under Rule 11(2)(a):
¬ whether there is a satisfactory reason for the delay;
¬ the length of the delay;
¬ the nature of the grounds of appeal and the likelihood of one or more of those grounds being upheld if time was extended; and
¬ any prejudice to the respondent if time were extended because of developments after the time for lodgment had expired.
[49] We propose to deal with each of these matters in turn.
Reason for the Delay
[50] The appellant's explanation for the delay in instituting the appeal is set out in the Appellant's submissions. The relevant part of the submissions states:
"Mr. Dundovich has filed an affidavit dated 21 May 2002 in support of the application for an extension of time. The affidavit details a dilatory attitude of his union in response to requests as to whether it was prepared to support his appeal. The Union had supported Mr. Dundovich at first instance. The Union had also supported Mr. Dundovich in the notification of a dispute to the Commission during the currency of his employment. Accordingly, it was to be expected that Mr. Dundovich would turn first to the Union when considering an appeal. Mr. Dundovich, or his legal representatives, contacted the Union no less than 9 times: on 23, 26 29, 30 April and 3, 9, 13, 14, 15 May. It is clear that the equivocation of the Union as to whether to support its member in relation to the appeal was the reason for the delay. No inference ought to be drawn that Mr. Dundovich was responsible for the delay." 32
[51] It is apparent from Mr Dundovich's affidavit of 21 May 2002 that his explanation for the delay in lodging the appeal is:
¬ his reluctance to proceed with an appeal without MUA financial support; and
¬ the failure of the MUA to confirm whether it would financially support the appeal.
[52] Further, Mr Dundovich's affidavit shows that at least from 9 May 2002 (some five days before the expiry of the time period for the lodgement of the appeal) he knew about the time limit that applied.33
[53] Counsel for the respondent dealt with this issue at paragraphs 18 and 21 of Exhibit R1:
"18 The Appellant simply took no action to lodge the appeal in time despite knowing of the time limit. Needless to say, the appeal could have been lodged (at no cost) within time with or without confirmation that the MUA would fund the appeal process. That confirmation could still have been sought afterwards. The appeal could have been withdrawn after it was lodged with no adverse cost consequences. Indeed, when the notice of appeal was filed, it was unaccompanied by any of the appeal documents that are required to be filed and served under Rule 11. The respondent was not served with any appeal notice or other documentation until after it recently received by facsimile the initial notice of listing of the appeal from the Commission. . . .
22 The Appellant was responsible for the delay. The only reason given is that he decided to defer action based on a reluctance to proceed without MUA financial support. This is not a good enough reason."
[54] We agree with the respondent on this point. We are not persuaded that the appellant has advanced a satisfactory reason for the delay in instituting the appeal.
Length of the delay
[55] The length of the delay is short, being only seven days.
Prospects of success on appeal
[56] We are satisfied that the appellant has a strongly arguable case on both the question of leave to appeal and on the substantive appeal.
Prejudice to the respondent
[57] There are no developments after the time for lodgement has expired that would give rise to additional prejudice to the respondent.
Conclusion
[58] We have had regard to each of the matters set out at paragraph 48 of this decision. Despite the absence of a satisfactory explanation for the delay we have decided to grant the extension of time sought. The absence of a satisfactory explanation must be weighed against the short period of the delay, the absence of prejudice to the respondent occasioned by the delay and the injustice which would accrue to the appellant in being denied an extension on a meritorious appeal.
[59] Pursuant to Rule 11(2)(c) we will extend the time period for the lodgement of the appeal until 21 May 2002.
The Appeal
[60] The appellate jurisdiction conferred on us by s.45(1)(b) in relation to an appeal concerning an order arising from the arbitration of an application under s.170CE is conditioned by s.170JF(1) which limits the grounds of an appeal. The only ground is that the member of the Commission who conducted the arbitration was in error in deciding to make an order. That can be an error of fact or an error of law.34
[61] The nature of an appeal under s.45 of the WR Act was the subject of consideration by the High Court of Australia most recently in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission35 (Coal & Allied). Gleeson CJ, Gaudron and Hayne JJ, in a joint judgment, said:
"Because a Full Bench of the Commission has power under s 45(6) of the Act to receive further evidence on appeal, an appeal under that section is properly described as an appeal by way of rehearing. And because there is nothing to suggest otherwise, its powers under sub-s (7) are exercisable only if there is error on the part of the primary decision-maker. And that is so regardless of the different decisions that may be the subject of an appeal under s 45." 36
[62] The types of error that may constitute grounds for review of a discretionary decision of the kind here under consideration were re-stated in Coal & Allied in the following way:
"Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process [See Norbis v Norbis (1986) 161 CLR 513 at 518-519 per Mason and Deane JJ]. And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms:
`If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. [(1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ].' "37
[63] We now turn to deal with the particular points advanced by the appellant. The grounds set out in the notice of appeal are as follows:
"Background
1. The Applicant was off work from 13 June 2000 and lodged a workcover claim on that day: paragraphs [22] - [26] of the Commission's reasons for judgment. The respondent rejected the workcover claim in late July 2000: paragraph [28]. As at 30 March, 2001, the date of the termination of the applicant's employment, the rejection of the Applicant's claim was pending in the Magistrates Court: paragraph [54]. On 20 July 2001, subsequent to the applicant's termination, the Magistrate's Court found that the applicant was eligible for weekly payments: paragraph [51].
Valid reason
2. In determining there was a valid reason for the termination of the applicant's employment, the Commissioner erred in failing to take into account, or failing to have sufficient regard to the Magistrate's Court decision and the applicant's submissions regarding the requirements of section 122 of the Accident Compensations Act 1985: paragraphs [55] and [56].
Process
3. The Applicant contended that the decision to terminate the applicant's employment was made during the break in a meeting on 30 March 2001: paragraph [61].
4. The Commissioner erred in failing to make a finding on whether the applicant's employment was terminated in the break of the meeting on 30 March 2001.
5. The Commissioner made a finding that until after the break in the meeting on 30 March 2001 there had been no mention of the possible termination of the employment of the applicant: paragraph [64].
6. The Commissioner erred in determining that the applicant was given an opportunity to respond to the reason for his termination: paragraph [65] in the light of the evidence that there had been no mention of the possible termination of the Applicant's employment before the break in the meeting on 30 March 2001 and the decision to terminate the employment was taken during the break in the meeting.
Other Matters
(a) Lack of Enthusiasm
7. The Commissioner made a finding that the perception of Mr. Hindle and Mr Sammut [who both gave evidence for the respondent] of a lack of enthusiasm by the applicant about his return to work did not form part of the decision making process which resulted in the termination of the applicant's employment: paragraph [70].
8. The Commissioner's finding was against the weight of the evidence and not reasonably open to her on the evidence.
(b) Unfair for the respondent to stipulate that the success or otherwise of the return to work plan should determine the status of the applicant's employment
9. The Commissioner erred in failing to make a finding on and/or failing to take account of the unfairness of the respondent's stipulation that the success or otherwise of the return to work plan should determine the status of the applicant's employment.
Public Interest
10. The Commissioner failed to consider relevant evidence, drew conclusions that were not reasonably open on the evidence and incorrectly applied the law in determining the application.
11. If the Commissioner's decision is wrong, substantial injustice would be done to the Applicant.
12. Further, the consideration of section 122 of the Accident Compensation Act (Vic.) is of importance beyond the parties to this litigation.
13. It is in the public interest that confidence be maintained in the operation of the unfair dismissal procedure of the Workplace Relations Act 1996."
[64] The thrust of the appellant's submissions were directed the Commissioner's conclusion that there was a valid reason for the termination. At paragraphs 54 to 56 of the decision subject to appeal the Commissioner said:
"[54] Accordingly, in this matter, the facts that were in existence at the time of the applicant's termination were that:
· the applicant had lodged a WorkCover claim.
· the company's insurer had rejected the claim.
· there had been an unsuccessful WorkCover conciliation.
· the rejection of the applicant's claim by the insurer was to be determined in the Magistrate's Court.
[55] I have also not been persuaded that the Magistrate Court's decision could be considered to be part of the "circumstance" that was in existence at the time of the termination.
[56] On this basis, the applicant's submissions regarding the requirements of Section 122 of the Accident Compensation Act 1985 are not material to determining the matter before me."
[65] The appellant contends that this part of the Commissioner's reasoning was erroneous as the Commissioner failed to take into account a material consideration - namely that at the time of the decision to terminate Mr Dundovich's employment he had a work related stress condition and was eligible for compensation pursuant to the Accident Compensation Act 1985 (Vic) (the AC Act). By reason of the existence of a workplace injury Mr Dundovich had rights, and his employer had obligations, under the AC Act, particularly under s.122 of that act.
[66] Section 122 of the AC Act provides:
"(1) If within the period referred to in sub-section (3) after a worker commences to be entitled to receive weekly payments in respect of an injury arising out of or in the course of employment with an employer--
(a) the worker no longer has an incapacity for work, the employer must provide employment for the worker in a position which is the same as or equivalent to the position which he or she held before the injury; or
(b) the worker has a current work capacity, the employer must provide suitable employment for the worker.
(2) Sub-section (1) does not apply if the employer can demonstrate to the Authority's satisfaction that it is not possible for the employer to provide employment in accordance with sub-section (1)(a) or suitable employment in accordance with sub-section (1)(b).
(2A) This section does not apply to an employer of a worker in respect of a worker who is a pupil at a school within the meaning of Part IVA of the Education Act 1958 and employed pursuant to a work experience arrangement under that Part.
(3) For the purposes of this section, the period for the purposes of sub-section (1) after a worker commences to be entitled to receive weekly payments is the period of 12 months or the sum of the periods not exceeding, in the aggregate, 12 months first occurring after the injury during which the worker has an incapacity for work.
(4) The Authority must not commence proceedings against an employer under section 242(1) unless--
(a) the Authority has given the employer notice in writing that the Authority intends to file a charge against the employer for failing to comply with sub-section (1) unless within the period of 60 days after service of the notice the employer can demonstrate to the Authority's satisfaction that it was not possible for the employer to comply with sub-section (1) at the time of the alleged offence; and (b) the employer fails within that period to provide any information or sufficient information to demonstrate to the Authority's satisfaction that it was not possible for the employer to comply with sub-section (1).
(4A) Sub-section (2) does not apply if the Authority has given notice in writing under sub-section (4)."
[67] In the twelve months following his injury Mr Dundovich had only partial capacity for work, hence it is argued that in accordance with s.122(1)(b) of the AC Act P&O were obliged to provide him with `suitable employment'. Section 5 of the AC Act defines `suitable employment' in these terms:
". . . suitable employment", in relation to a worker, means employment in work for which the worker is currently suited (whether or not that work is available), having regard to the following:
(a) the nature of the worker's incapacity and pre-injury employment;
(b) the worker's age, education, skills and work experience;
(c) the worker's place of residence;
(d) the details given in medial information including the medical certificate supplied by the worker;
(e) the worker's return to work plan, if any;
(f) if any occupational rehabilitation services are being provided to or for the worker;"
[68] Counsel for the appellant contended that the two week return to work program implemented by P&O, which formed the basis of the decision to terminate Mr Dundovich's employment, was unrealistic and unreasonable. The following points were made in support of that position:
¬ Mr Dundovich was multi-skilled with the skill sets of foreman, portainer driver and straddle driver;
¬ P&O appeared committed to limiting Mr Dundovich's return to work options to straddle driving;
¬ there was no good reason why the return to work program had to be structured or time limited in the way that it was; and
¬ at the relevant time Mr Dundovich was on medication for clinical depression and Mr Hindle was concerned about that fact. None of the medical reports indicated that Mr Dundovich would be able to reduce or eliminate his medication of the course of a two week return to work program.
[69] It was argued that P&O had failed in its obligation under s.122(1)(b) of the AC Act to explore what suitable employment may have been available to Mr Dundovich given the range of skills he possessed. In terminating Mr Dundovich's employment just nine months after he became entitled to weekly payments of compensation P&O has acted prematurely as it had an obligation to keep the employment open for a period of twelve months.
[70] In advancing the above submissions the appellant made it clear that they were not intended to make the Commission the de facto enforcer of s.122. It was acknowledged that s.122 was a penal provision which did not give rise to a personal right of action in the event of it breach38 but did expose an employer, who failed to comply with its obligations, to significant monetary penalty. Rather, P&O's failure to meet its obligations under the AC Act were said to "shine a torch" on various matters that are relevant as to whether an employee has had a "fair go" including:
¬ the attempts made by the employer to find suitable employment for a worker injured in the course of his or her employment with a partial capacity for work;
¬ the structuring of any return to work plan for such an injured worker; and
¬ the time at which any employer decides to act having regard to the twelve month duration of obligations under section 122 of the AC Act.
[71] Further, the appellant accepts that the Magistrate's Court's judgment itself was not a circumstance in existence at the time of Mr Dundovich's termination, that would be a chronological impossibility. But that judgment is said to be significant because it was declaratory of the circumstance which existed at the time of the decision to terminate - namely that Mr Dundovich had a work-related injury which gave him certain rights under s.122 of the AC Act. In this context the appellant submitted that:
"The court decision was irrebutable evidence available to the Commission (remembering the Commission's obligation to determine the application on the basis of the evidence before it) of a circumstance in existence at the time of the termination."39
[72] The appellant contended that the error in the decision subject to appeal was that the Commissioner conflated the circumstance of the Magistrate's Court's judgment of 20 July 2001 and the circumstance of the existence of a compensable workplace injury although the two are distinct circumstances.
[73] In reply the respondent relied on the submissions it put at first instance with respect to the issue of whether there was a "valid reason" for the termination of Mr Dundovich's employment.40 In addition the respondent advanced the following points in response to the appellant's submissions on this issue:
¬ section 122 of the AC Act does not provide a private right of action in an employee should an employer fail to provide employment as required by s.122. Rather, the right of action lies with the Victorian Workcover Authority;
¬ section 122 of the AC Act imposes obligations on an employer for a period of twelve months from the date an employee commences to be entitled to weekly payments of compensation. Specifically, where an employee has a partial incapacity s.122 requires an employer to provide "suitable" alternative employment once an employee "commences to be entitled to receive weekly payments in respect of an injury arising out of or in the course of employment with an employer . . .";
¬ Mr Dundovich filed his claim for worker's compensation payment on 13 June 2000. That claim was rejected by P&O's insurers. As a result of that rejection Mr Dundovich was not entitled to weekly payments of compensation at the time his employment was terminated on 30 March 2001. Hence at that time P&O had no obligation to provide suitable alternative employment pursuant to s.122;
¬ at the time of his dismissal Mr Dundovich had a right to pursue his claim for compensation in the Magistrate's Court. This was a fact (or material circumstance) in existence at the time of the dismissal. This fact was properly considered by the Commissioner - see paragraph 54 of the decision subject to appeal. The Commissioner did not fail to take into account a material consideration with respect to the AC Act and there is no appellable error in the House v King sense; and
¬ even if s.122 was relevant, it does not lead to a finding that there was no valid reason. The evidence clearly establishes that the appellant was not able to perform his contract of employment and was unlikely to be able to do so in the foreseeable future.
[74] We now turn to consider the submissions directed at whether there was a valid reason for the termination of Mr Dundovich's employment.
[75] The approach of the Commission to this issue was discussed in Australia Meat Holdings Pty Ltd v McLauchlan.41 In that case a Full Bench of the Commission concluded:
". . . we are of the view that in determining a s.170CE(1)(a) application the Commission is bound to consider whether, on the evidence in the proceedings before it, the termination was `harsh, unjust or unreasonable', provided that the evidence concerns circumstances in existence when the decision to terminate the employment was made."42
[76] The central issue in this case concerns the nature of the "circumstances in existence when the decision to terminate" Mr Dundovich's employment was made. At paragraph 54 of the decision subject to appeal the Commissioner identifies the following facts that were in existence at the relevant time:
"_ the applicant had lodged a WorkCover claim.
· the company's insurer had rejected the claim.
· there had been an unsuccessful WorkCover conciliation.
· the rejection of the applicant's claim by the insurer was to be determined in the Magistrate's Court."
[77] The Commissioner went on to reject the proposition that the judgment of Magistrate Jones given on 20 July 2001 was a circumstance in existence at the time the decision was taken to terminate Mr Dundovich's employment.
[78] We think that the Commissioner erred in her consideration of Magistrate Jones' judgment. The effect of that judgment was to determine that since 13 June 2000 Mr Dundovich had an entitlement to weekly payments of compensation pursuant to the AC Act. The Magistrate's judgment did not bring into existence the compensable injury, rather, it confirmed it as a fact in existence at the time of dismissal. We accept the appellant's submission that the Magistrate's decision was declaratory of the circumstances which existed at the time of the decision to terminate Mr Dundovich's employment.
[79] In her consideration of the circumstances in existence at the relevant time the Commissioner failed to have regard to a material consideration, that is, at the time of the decision to terminate Mr Dundovich's employment he had a work related injury and was entitled to weekly payments of compensation pursuant to the AC Act. That this fact was not known to the employer at the time of the decision to terminate Mr Dundovich's employment is not determinative. As the Full Bench in McLauchlan's case observed, facts which existed at the time of dismissal but only come to light after the decision may render a termination of employment harsh, unjust or unreasonable.
[80] Even if we are wrong about the views expressed above and it is appropriate to have regard to the knowledge that the employer had at the time of the termination we would have reached the same conclusion. At the time of the termination the employer was aware that the applicant considered himself entitled to weekly payments of compensation, and despite the risk that s.122 would be later found to apply the employer decided to terminate Mr Dundovich's employment. In our view we should have regard to the circumstances of the employer's actions, and give weight to it. It may be given less weight than if the employer took action in circumstances where the employee was actually in receipt of weekly payments, and therefore in full knowledge that the obligations under s.122 were in operation, but nevertheless it must be given some weight.
[81] The Commissioner's failure to have regard to the fact that Mr Dundovich had a work related compensable injury at the time of the decision to terminate his employment is an error in the Commissioner's decision making process. On this basis we have decided to grant leave to appeal.
[82] We now turn to consider for ourselves the question of whether the termination of Mr Dundovich's employment was harsh, unjust or unreasonable.
[83] Section 170CG(3) of the Act provides:
"(3) In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to:
(a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and
(b) whether the employee was notified of that reason; and
(c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and
(d) if the termination related to unsatisfactory performance by the employee-whether the employee had been warned about that unsatisfactory performance before the termination; and
(e) any other matters that the Commission considers relevant."
[84] It is clear from both the language and structure of s.170CG(3), and the statutory context in which it appears, that the section requires the Commission to consider each of the matters referred to in paragraphs 170CG(3)(a) to (e). Not only must the matters be considered but the words "have regard to" signify that each must be treated as a matter of significance in the decision making process. But the Commission is only required to have consideration to such matters in so far as they have application43 or are relevant to the factual circumstances of the particular case.44
[85] We turn first to the question of whether there was a valid reason for the termination of Mr Dundovich's employment.
[86] Mr Dundovich's employment was terminated after he had participated in a two week return to work program, the purpose of which was to desensitise him to straddle driving. We accept that Mr Dundovich and his representatives did not object to the return to work program and that at the meeting on 15 March 2001 they were told (by Mr Hindle) that if at the end of the two week program Mr Dundovich was not able to work on the straddle then his employment would be terminated.45
[87] We are not satisfied that there was a valid reason for the termination within the meaning of s.170CG(3)(a). Mr Dundovich was suffering from a work related injury at the time of the decision to terminate his employment. We accept the proposition advanced on behalf of the appellant that the scheme of the AC Act casts an obligation on employers to assist an injured worker to return to work and to assist in their rehabilitation. This is evident from both the objects of that act and the terms of s.122. Further, as Hamilton DP observed in Beames v BDRP Falconer Pty Ltd:
"It would be a strange result if a breach of a statutory scheme for return to work of employees following injury and workers compensation payments was not relevant to an assessment of whether their termination was harsh, unjust or unreasonable."46
[88] In our view P&O did not do enough to assist Mr Dundovich to return to work. We are not persuaded by the reasons advanced on behalf of the respondent as to why the company acted when it did.47 Having regard to all of the circumstances we think that the company acted too quickly in moving to terminate Mr Dundovich's employment.
[89] If there is no valid reason then in our view paragraphs 170CG(3)(b) and (c) have no application. This is because these paragraphs refer to "that reason" and "any reason related to the capacity or conduct of the employee". In the context of s.170CG(3) these references are clearly to the "valid reason" referred to in s.170CG(3)(a).48 Similarly, unless the termination is related to unsatisfactory performance paragraph 170CG(3)(d) is of no relevance.
[90] In Chubb Security Australia Pty Ltd v John Thomas a Full Bench expressed the Commission's obligations under s.170CG(3) in the following way:
" . . . subject to the qualifications we express in the next paragraph, the Commission, in our view, is not able to have regard to the circumstances specified in ss.170CG(3)(a) to (d) without making a finding with respect to each of them.
We qualify what we have said in the previous paragraph in two respects:
(1) The circumstance in s.170CG(3)(a) contains three considerations:
· the capacity of the employee, or
· the conduct of the employee, or
· the operational requirements of the employer's undertaking, establishment or service.
The need to make a finding under s.170CG(3)(a) will only be in respect of such of these three considerations as is relevant. (In the present case, for instance, the relevant consideration is whether there was a valid reason for the termination of Mr Thomas related to his conduct.)
(2) The circumstance in s.170CG(3)(d) is only relevant `if the termination related to unsatisfactory performance of the employee' (opening words of s.170CG(3)(d)).
Further, it is not, we think, possible to have regard to s.170CG(3)(b) until a finding has been made with regard to s.170CG(3)(a). Section 170CG(3)(b) refers to `that reason'; that is `a valid reason', being the term used in s.170CG(3)(a). If there is no valid reason, s.170CG(3)(b) has no application. Neither, we think, has s.170CG(3)(c)."49
[91] If we are wrong about the relevance of paragraphs 170CG(3)(b), (c) and (d) to the matter before us and we assume that the termination was procedurally fair those circumstances would not affect the result in the context of the matter before us. Indeed we find it difficult to conceive of the circumstances in which it could reasonably be said that despite the absence of a valid reason for termination the employee had been accorded procedural fairness and therefore the termination was not "harsh, unjust or unreasonable". As the Full Bench in Steggles Limited v West observed:
"Pursuit of an otherwise faultless process does not imbue merit into a situation otherwise devoid of such a characteristic."50
[92] We have had regard to matters referred to s.170CG(3) insofar as they are relevant to the factual circumstances of the application before us. We have concluded that the termination of Mr Dundovich's employment was harsh, unjust and unreasonable. Accordingly we have decided to uphold the appeal and quash the Commissioner's decision.
[93] In view of the conclusion we have reached in relation to the `valid reason' ground it is unnecessary for us to deal with the other grounds of appeal advanced.
Conclusion
[94] In failing to take account of the fact that at the time of the decision to terminate Mr Dundovich's employment he had a compensable work related injury the Commissioner failed to take into account a material consideration. In doing so the Commissioner erred in the exercise of her discretion.
[95] For the reasons given we grant leave to appeal, uphold the appeal and quash the Commissioner's decision.
[96] We have concluded that the termination of Mr Dundovich's employment was harsh, unjust and unreasonable. We have decided to remit the matter to Deputy President Hamilton pursuant to s.45(7)(c) to determine the question of remedy after providing the parties with a further opportunity to be heard. We would encourage the parties to meet and confer with a view to reaching a settlement of this matter.
BY THE COMMISSION:
VICE PRESIDENT
Appearances:
M. Champion of counsel for the appellant.
R. Dalton for the respondent.
Hearing details:
2002.
Melbourne:
July 16.
Printed by authority of the Commonwealth Government Printer
<Price code F>
3 See Exhibit R2 at paragraphs 27-29 and Annexure `SS-2'.
4 Annexure `SS-4' to Exhibit R2.
5 See Annexure `SS-8' to Exhibit R2.
6 See Annexure `SS-16' to Exhibit R2.
7 See Exhibit R6 at paragraph 39 and Attachment RMH 2 to Exhibit R2.
8 See Annexure `SS-18' to Exhibit R2.
9 See Annexure `SS-19' to Exhibit R2.
10 See Annexure `SS-20' to Exhibit R2.
11 See Annexure `SS-22' to Exhibit R2.
12 See Annexure `SS-24' to Exhibit R2.
13 See Exhibit A1 at paragraph 36
14 See Annexure 9 to Exhibit A1.
15 See Annexure 7 to Exhibit A1.
16 Print PR917063, 23 April 2002.
17 Print PR917063 at paragraph 50.
18 Print PR917063 at paragraph 49.
19 Print PR917063 at paragraphs 49 and 50.
20 Print PR917063 at paragraphs 49 and 50.
21 Print PR917063 at paragraphs 55 and 56.
22 Print PR917063 at paragraphs 57 - 60.
23 Print PR917063 at paragraph 63.
24 Print PR917063 at paragraph 64.
25 Print PR917063 at paragraph 65.
26 Print PR917063 at paragraph 66.
27 Print PR917063 at paragraph 68.
28 Print PR917063 at paragraph 68.
29 Print PR917063 at paragraph 71.
30 Print PR917063 at paragraph 72.
31 Print T2277, 19 October 2000 per Ross VP, Acton SDP and Simmonds C.
33 See paragraphs 11 and 12 of Mr Dundovich's affidavit of 21 May 2002.
34 Edwards v Giudice [1999] FCA 1836 per Moore J.
36 [2000] HCA 47 at paragraph 17.
37 [2000] HCA 47 at paragraph 21.
38 See Gardiner v State of Victoria [1999] VSCA 100, 2 July 1999.
39 Exhibit A1 at paragraph 40.
40 See paragraphs 2374 - 2541 of the proceedings at first instance.
43 Chubb Security Australia Pty Ltd v Thomas, Print S2679, 2 February 2000 per McIntyre VP, Marsh SDP and Larkin C.
44 King v Freshmore (Vic) Pty Ltd, Print L4213, 17 March 2000 per Ross VP, Williams SDP and Hingley C.
45 Transcript, 18 September 2001 at paragraphs 750 to 758.
46 PR916075, 28 March 2002 at paragraph 28.
47 Transcript, 16 July 2002 at paragraphs 192 - 225.
48 Tenix Defence Systems Pty Ltd v Fearnley, Print S6238, 22 May 2000 per Ross VP, Polities SDP and Smith C; Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport (2000) 98 IR 137 at paragraph 64.
50 Print S5876, 11 May 2000 per Watson SDP, Williams SDP and Smith C at paragraph 9.