Webster v Hurford's Building Supplies Pty Limited [1995] IRCA 426

C A T C H W O R D S INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - VALID REASON - COMPENSATION. Industrial Relations Act 1988 Disability Discrimination Act 1992 Siagian v Sanel Pty Ltd (1994) 1 IRCR 1 Association of Professional Engineers, Scientists and Managers Australia v Skilled Engineering Pty Ltd (1994) 1 IRCR 106 Grout v Gunnedah Shire Council (1994) 1 IRCR 143 Liddell v Lembke (t/as Cheryl's Unisex Salon) (1994)127 ALR 342 WEBSTER v HURFORD'S BUILDING SUPPLIES PTY LIMITED - No. NI 1713 of 1995 Before: Judicial Registrar WALKER Place: Lismore Hearing Date: 17 July 1995 Judgment Date: 1 September 1995

INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N0. NI 1713 of 1995 Between: ANTHONY PETER WEBSTER Applicant And: HURFORD'S BUILDING SUPPLIES PTY LIMITED Respondent Before: Judicial Registrar WALKER Place: Lismore Hearing Date: 17 July 1995 Judgment Date: 1 September 1995 MINUTES OF ORDER THE COURT DECLARES: 1. There was a termination of the applicant's employment and that the termination contravened Division 3 of Part VIA of the Industrial Relations Act 1988. AND THE COURT ORDERS THAT: 1. The respondent pay to the applicant compensation in the sum of $10,756.20. 2. Such payment be made within 21 days of the date of this judgment. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N0. NI 1713 of 1995

Between: ANTHONY PETER WEBSTER Applicant And: HURFORD'S BUILDING SUPPLIES PTY LIMITED Respondent Before: Judicial Registrar WALKER Place: Lismore Hearing Date: 17 July 1995 Judgment Date: 1 September 1995 REASONS FOR JUDGMENT The applicant in this case, Anthony Webster was born on 6 January 1965 and grew up in the Lismore area. He attended Richmond River High School where he achieved his School Certificate and at sixteen years of age, commenced working as a truck driver's offsider, delivering butchery and catering supplies. For about four years he worked in Lismore for City Toyota selling spare parts. When he turned twenty-one he commenced employment with Wollongbar Hire as a labourer, delivering and installing power poles, toilets and other hire equipment. He was also required to deliver steel beams to building sites, some of which weighed up to 200kg and although, he sometimes was assisted by an offsider, he often carried out the unloading by himself. In about 1990, he found employment with Vince McNamara Engineering, again as a labourer, working on heavy machinery where he was often required to carry out heavy lifting in difficult positions. In August 1993, he made application to the respondent company, Hurford's Building Supplies for the position of truck driver and commenced there on Monday 30 August 1993. This work involved the applicant delivering building supplies around Lismore and adjacent areas, with the use of an eight ton truck which was fitted with a hoist. The applicant gave unchallenged evidence, that at no time in his previous career as a labourer had he ever made a claim for workers' compensation or for that matter, ever received an injury to his back. On 10 November 1994, while unloading a sling of timber at Jiggi, north of Lismore, he did injure his back and subsequently was paid workers' compensation and was placed on a rehabilitation scheme, undertaking light duties for the respondent. On 27 February 1995, the Assistant Manager, Mr Macgregor-Skinner called the applicant into the office and according to the applicant, the following conversation took place: "We've got a copy of a letter QBE have sent to you that said they are dropping Workcover because they have a record of a previous childhood injury." I said, "What record would that be, because I haven't had any childhood injuries?" He said, "But you've got it." I said, "Well, I've got Scheuermann's disease." He then said words to the effect, "Why didn't you disclose this disease on your QBE claim form?" I said, "I've never had a back injury before - I have this disease." He then said, "Why didn't you tell us about it when you applied for this job?" I said, "If I told you I had Scheuermann's disease, would you employ me?" He didn't answer. He then said, "From the 12 March onwards there's no longer any work for you here." I said, "What, there's nothing at all I can do here?" He said, "No." The following morning, the applicant approached Mr Macgregor-Skinner when he arrived at work and asked if he could have a copy of the letter from QBE. The applicant then said Mr Macgregor-Skinner said to him, that he would be paid up to the 12th. He said he was told, that if he liked he could leave sooner as it was okay with them, but they would still pay him up to the 12th. Later during the day, the applicant was delivered a memorandum as set out hereunder: "Memo to: ANTHONY WEBSTER Pursuant to our conversation yesterday and this morning, following receipt of the QBE letter to you dated 27 February 1995 terminating your Workers' Compensation payments from 12 March 1995. We provided a part-time supernumerary position in the interest of your rehabilitation and eventual continuance of your normal duties. These part-time duties will not now be available from and including 13 March 1995. Subject to your physical fitness and medical advice you can recommence your normal duties at this time. John Macgregor-Skinner. On the following day, 1 March 1995 the applicant was again approached by Mr Macgregor-Skinner and in his affidavit, he gave evidence that he was asked: "How did you go yesterday?" The applicant said he took this to mean how did his discussion go with his solicitor and he replied: "Well, because you said that after the 12th, there will be no longer a job, well that's when I finish up." The applicant said that Mr Macgregor-Skinner then said, "fine," and walked off and a short time later returned and said: "So, are you resigning?" The applicant then said he replied: "No - you leave me no choice as I can't do my driving job and I'm medically unfit - I take that as there being no job." And Mr Macgregor-Skinner then said: "I'm not going to sack you because it is illegal but after the 10 May 1995 you'll be on sick pay until it runs out - then you will be on leave without pay." The applicant said: "The 6 months after my injury is not up. I should still get full pay." Mr Macgregor-Skinner replied: "Workers comp has been dropped, you will have to resign, I won't sack you." Later on that day at about 12.30pm, the applicant was called to the main office to see Mr Robert Hurford, the General Manager. The applicant's evidence was: "Mr Macgregor-Skinner said, 'We want to give you the time off until the 12 March 1995 on full pay." I said, "I can't do that as that is just the same as saying I resign and I don't want to do that. I am staying." Rob Hurford then said, "Just go and I'll see you on the 13 March 1995." I said, "I still can't go." Rob Hurford then turned around in his chair and said, "You are a con artist because you didn't tell Hurford's when you applied for the job that you had Scheuermann's disease nor did you tell QBE." The applicant's evidence then was: "I left work at 1.00pm on the 1 March 1995, in the belief that I would receive full pay until the 12 March 1995, but there was no work for me thereafter." On 13 March 1995, the applicant presented himself at the respondent's office at 7.00am with a medical certificate which restricted his work to 5 hours per day with no lifting over 20 kg due to a disc protrusion in his lower back. Mr Macgregor-Skinner then told the applicant that there was no job available for him to do, and the applicant then said, he said goodbye to Ross and Stuart and thanked them for what they had done for him and then went home. WAS THERE A TERMINATION OF EMPLOYMENT? The applicant gave evidence that there was a discussion between him and Mr Macgregor-Skinner on 1 March 1995. The transcript of that evidence is set out hereunder: Q. What did he say?... A. John came up and asked - he said, "So are you resigning?" and I said, "No," I said, "You leave me no obligation. You said my job is no longer here after the 12th, so I finish up on the 10th, which is a Friday." Q. Did he say anything else?... A. He then turned round and said that - he said, "Oh no," he said, "I'm not sacking you." He said, "I can't sack you," he said, "I'll go to gaol." In cross examination, Mr Macgregor-Skinner said that he did not say that he would go to gaol if he terminated the applicant, but that he said he would be, "subject to prosecution" if he terminated him. Mr Ross McDougall, the applicant's direct supervisor gave evidence-in-chief that at the meeting of 27 February 1995: "At that meeting, John Macgregor-Skinner came down. He called Tony and I into the office and notified both of us that he'd just received a fax from QBE Workers' Compensation notifying that Tony's claim for back injury had been rejected on the ground of childhood injury. Then went on - Tony denied that he had a childhood injury in that meeting but did say that he did have Scheuermann's disease and had had it for some time, but didn't feel that that was, in any way, affecting, you know, the back injury. And in that meeting John more or less specified that the QBE payments for compensation would cease on 12th March of this year and that after that, basically, Tony's - well, Tony wouldn't have his position because he couldn't do the work of that position which is truck driving." Later on in evidence-in-chief, counsel asked Mr McDougall, if at any time in his presence, was it said to the applicant that his employment was terminated, and Mr McDougall replied: "I'd have to say no. In that initial meeting on the 27th in the office, they did say that there wouldn't be a job for Tony after the 12 March. He didn't say he had actually been terminated or his job had been terminated; he just said that position would not be there because Tony would not be able to do it." The meaning of the expression termination of employment at the initiative of the employer has been considered in several cases before the Court: see Siagian v Sanel Pty Ltd (1994) 1 IRCR 1, Association of Professional Engineers, Scientists and Managers Australia v Skilled Engineering Pty Ltd (1994) 1 IRCR 106, Grout v Gunnedah Shire Council (1994) 1 IRCR 143. It is clear from these cases that termination of employment in Division 3 of Pt VIA of the Act includes any act that brings to an end the employer - employee relationship and not necessarily the contract of employment. Mr Macgregor-Skinner's assertion that he was not terminating the applicant's employment was merely a tactical ruse to disguise the reality that the applicant was no longer to be employed by the respondent. The respondent was aware that without proper rehabilitation, the applicant would never be in a position to be physically able to undertake his pre-injury work ever again. The applicant had sustained a prolapsed disc while undertaking his work with the respondent and the prospect of him ever being able to undertake heavy lifting again was very slim indeed. The assertion therefore that his old job was still there was nothing more than a cynical goad. In the circumstances of this case, therefore I find that the applicant's employment was in fact terminated at the initiative of the employer. THE REASON FOR THE TERMINATION The applicant was progressing well on the rehabilitation plan that had been implemented post his injury to the lumbar spine. He was undertaking certain office duties and from the evidence was carrying out those duties efficiently and effectively. The intervening factor was the medical report of Dr Neil G. Thompson of 7 February 1995. Dr Thompson carried out an examination of the applicant for QBE Workers' Compensation and during that examination, the applicant told Dr Thompson that he had been diagnosed as having Scheuermann's disease when he was eighteen years of age. On the basis of this information, Dr Thompson in his wisdom attributed the applicant's lower lumbar injury not to be work related. However, his report does seem to be slightly ambiguous when addressing the injury received at work and the subsequent exacerbation when lifting his baby from the bath. Whatever the reasons for the doctor's conclusions, they are of no matter in this case, except that on the basis of his report QBE Insurance discontinued Workers' Compensation payments and unfortunately Mr Macgregor-Skinner and Mr Hurford relied upon this action to effectively terminate the applicant from his employment. They were under the impression that the applicant was a, "con artist," as he had failed to disclose the fact that he suffered from Scheuermann's disease on his application form. They then attempted to engineer a way so that he would be forced to leave without there being any overt act of termination and therefore no breach of the industrial law. The offer of Mr Macgregor-Skinner in his memo of 28 February 1995 to the applicant, that he could commence his normal duties as a truck driver from 13 March 1995, was an unreasonable condition imposed upon the applicant which was designed to make the applicant leave his employment. THE APPLICANT'S SCHEUERMANN'S DISEASE It would appear from the evidence that the applicant became aware that he had suffered the condition called Scheuermann's disease in about 1991 or 1992 when he had undertaken X-rays and scans by his local doctor. When he had applied for the position of truck driver with the respondent, he did not indicate on his application form that he had had the disease in his early youth and in fact the application form does not ask the question as to whether the applicant suffered any prior diseases. The form is set out hereunder: HURFORD'S BUILDING SUPPLIES PTY LTD EMPLOYMENT APPLICATION FORM FOR 1993 Name: Address: Date of Birth: Marital Status: Smoker... Non Smoker... Have you worked for this company previously? Any previous workers' compensation claims? If yes, give details. Do you have a criminal record? Any sport or other injuries? Previous work experience for the last three years? General health? Any problems associated with lifting? The applicant did not fill out the question as to previous workers' compensation claims, as he gave evidence that he had not in the past suffered any injury and had not made any claims. To the question as to sports injuries, he indicated, "no," and as to general health he set out, "good." As to the question, any problems associated with lifting he said, "no." The medical reports tendered in this matter show that the applicant had only suffered a mild effect from his having Scheuermann's disease in his youth (see Dr R. J. Michael's report 24 June 1994: exhibit 5) and according to Dr Tan, the applicant would be fit to return to truck driving although heavy lifting should not be undertaken. Scheuermann's disease is an inflammatory disease of the bone and cartilage involving the vertebrae associated with kyphosis (humpback) in adolescence and is usually connected with the thoracic spine. The applicant's injury sustained during the unloading of the truck and the subsequent injury when lifting his child out of the bath is in the lower lumbar spine and therefore, there will no doubt be a complicated dispute between the medical experts in the workers' compensation claim. The denial of liability by QBE should never have been the basis for the respondent bringing to an end the employer - employee relationship. As to the applicant not revealing to his employer that he had suffered Scheuermann's disease in his youth, I am satisfied that taking into account his prior work history as a labourer involved in heavy lifting and the fact that he had prior to this injury never suffered a back injury, he was therefore not obliged to disclose this personal information. The applicant was unaware that he had suffered this disease until recently, as it was only of a mild form in any case and there was no evidence that the applicant knew that it would have had any detrimental effect on him carrying out the occupation of a truck driver. The application form for employment did not ask for the applicant to disclose any diseases that he had suffered and to be expected to include the condition as an injury is a ridiculous proposition. It must also be taken into account that the applicant volunteered to QBE's doctor that he had suffered from the condition and this admission falls strongly in the applicant's favour. The requirement to disclose such information may also be in contravention of the Disability Discrimination Act 1992 and to terminate a person because they have sustained an injury is in breach of Section 170DF(1)(f) of the Industrial Relations Act 1988. The termination of the applicant's employment, whether it was because the respondent was of the opinion that the applicant was a "con-man," or that he was not now able to undertake the position of truck driver, matters not, the termination was not for a valid reason. REMEDY As I am of the opinion that reinstatement would be impractical in the circumstances of this matter, I am therefore required to award an appropriate amount of compensation. In Liddell v Lembke (t/as Cheryl's Unisex Salon) (1994)127 ALR 342 at 368,Mr Justice Gray considered the issue of compensation as follows: "Only if reinstatement is "impracticable" is the Court to turn its attention to the remedy of compensation. In such a case, the Court will not have an unfettered discretion to refuse compensation. Nor will it be able to adjust the measure of compensation according to its opinion of the conduct of the employee. It is required to order the employer to compensate the employee as far as possible, up to the limit specified, in respect of any loss which the employee has suffered by reason of the termination. It is to be noted that the limit specified is a limit on what the Court can order by way of compensation, not a limit on what the employee can receive from the employer. Thus, even if an employer has already paid a sum of money designed to compensate the employee for dismissal, if the employee is entitled to greater compensation, the Court must award it up to the limit specified." The applicant in this case has found himself in a very difficult position, both financially and physically as a result of an accident sustained while in the employment of the respondent company. His history of employment is that of a labourer, an occupation that would now appear to be lost to him forever at the age of thirty. It is more than likely that he will now have to be re-trained into a position that will not aggravate his lower back injury. However, taking into account the very high unemployment in the area of Lismore, his chances of obtaining employment in the near future looks bleak. For these reasons, I am satisfied that the applicant should receive the maximum amount of compensation pursuant to the Act. I therefore find that the appropriate amount of compensation is the amount of $10,756.20 and do so order.