Ruiz v BHP (AWI) Pty Ltd [1996] IRCA 628

DECISION NO:628/96 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 1490 of 1996 ROY LEONARDO RUIZ Applicant BHP (AWI) PTY LTD Respondent Coram: Judicial Registrar Linkenbagh Place: Sydney Date: 24 December 1996 REASONS FOR JUDGMENT This is an application filed in the Australian Industrial Relations Commission on 14 February 1996 in which the applicant seeks a remedy pursuant to the provisions of s170EA of the Industrial Relations Act 1994 which since 25 November 1996 is entitled The Workplace Relations Act 1996. The Court finds the facts as follows: 1. The applicant was born on 8 July 1950 and his country of origin is The Philippines. 2. The first language of the applicant is the Pilipino language. 3. The applicant was employed between 7 April 1987 and 29 January 1996 as a machine operator at the respondent's factory at Five Dock in Sydney. 4. The applicant's work history was without incident until January of 1996. 5. On 6 December 1995 the applicant sustained an injury to his chest when a swinging arm being part of a machine which he was operating at the respondent's premises hit him in the chest. 6. The applicant saw Dr R P Foley, a medical practitioner engaged by the respondent on 6 December 1995. Dr Foley diagnosed a soft tissue injury and arranged for X-rays. 7. The applicant returned to work on 7 December 1996 and performed his normal range of duties until the commencement of the Christmas break. 8. Over the Christmas break the applicant experienced pain to his chest and his wife cared for him. 9. The applicant returned to work on the first day of work after the Christmas break, 8 January 1996. 10. The applicant was unable to work because of pain in his chest and saw his own doctor Dr John Won on 9 January 1996. Dr Won arranged for further X-rays and advised the applicant to take a couple of days off work. 11. On 10 January 1996 George Valentine on behalf of the respondent telephoned the applicant to inform him that the respondent required the applicant to have another consultation with Dr Foley and that took place on 11 January 1996. On that day Dr Foley certified "? fractured sternum" and certified the applicant unfit for any duties from 11 January 1996 to 19 January 1996. 12. On 15 January 1996 the applicant underwent a scan which disclosed that he had suffered a fracture to the sternum and on that day Dr Won certified him unfit for any duties from 9 January 1996 to 23 February 1996. The medical certificates are exhibits "A" and "B". 13. Dr Won advised the applicant to stay at home rest and avoid heavy lifting. 14. The applicant delivered Dr Won's medical certificate to Mr Valentine on 16 January 1996. Mr Valentine observed some paint on the side of the applicant's right hand below his little finger. 15. The respondent arranged for private investigators to conduct surveillance of the applicant at his home. 16. On 18 January 1996 the private investigators made a video tape of the applicant which is exhibit "G". 17. The applicant is a member of a Union. 18. The respondent is a self insurer for the purposes of the Workers Compensation Act 1987 (NSW). On 29 January 1996 Mr Tim Martin on behalf of the respondent telephoned the applicant and requested that he come to the workplace as soon as possible to discuss an important matter. The applicant informed Mr Martin that he had an appointment with a solicitor to discuss his workers compensation claim that afternoon at 2.00pm. The applicant went to the work place at about 10.00am. 19. The applicant, Mr Martin, Mr Steve Cross and Mr Frank Thunes had a discussion in Mr Martin's office and the applicant was shown the video. At the conclusion of the meeting the applicant signed two documents which are exhibit "C" and which were prepared by the respondent. The documents read as follows: BHP Wire Products - Sydney Wiremill 29.1.96 I, Roy Ruiz tender my resignation to BHP-Wire Products effective immediately 29th January. Roy Ruiz (signed) 29.1.95 I, Roy Ruiz, hereby withdraw any claim for compensation for weekly benefits in regard to a chest injury which occurred on 6 December 1995. I have not sustained any incapacity for employment as a result of this injury. I fully understand the above stated action and sign this document voluntarily. (Signed) Roy Ruiz Date: 29.1.95 20. Figures relevant to the amount of remuneration received by the applicant are:- Gross income 1994/5 financial year $53,338.00 and $950.00 productivity payment - total $1044.00 per week. 1995/6 financial year 1 July 1995 - 29 January 1996, $26,050.00 for 30 weeks being $868.00 per week. Gross pay for week ended 26 November 1995, $974.00 Gross pay for week ended 3 December 1995 $1,389.00. Income 1 July 1995 to 3 December 1995 - $21,529.76 for 22 weeks or $978.00 per week. Exhibit "F" calculation based on actual income for the 26 week period ended 29 January 1996 total income $18,053.00 or $694.00 per week. 21. The applicant remained unemployed until 27 June 1996. 22. Since 27 June 1996 the applicant has been employed as a bus driver with the state transit authority earning $498.00 per week gross. THE CASE FOR THE RESPONDENT The respondent's case was that the applicant had deceived Dr Foley as to the extent of his incapacity for work and had deceived the respondent in accepting Workers Compensation benefits at a time when he was actually fit for work and that because of that deception the respondent was justified in bringing about the summary termination of the applicant's employment. The respondent conceded at the commencement of the hearing that it could not argue in the circumstances that it had not initiated the termination of the employment, notwithstanding the document quoted above in which the applicant tenders his resignation. THE CASE FOR THE APPLICANT The applicant's case is that the respondent is in breach of sections 170DE(1), 170DC and 170DB of the Act. The applicant seeks damages at the rate calculated in accordance with the provisions of s170DB which in the circumstances is the equivalent of 5 weeks remuneration. The applicant does not seek reinstatement and given that he is now settled into alternative permanent employment and given the circumstances of the termination of his relationship with the respondent the Court considers it would be inappropriate to make an order requiring the employer to reinstate the applicant. The applicant therefore seeks compensation for the breaches he alleges of sections 170DE(1) and 170DC. The maximum amount of the compensation is calculated according to the provisions of s170EE(3) and it must not exceed the amount of remuneration that the applicant would have received in respect of the period immediately following 29 January 1996 if the respondent had not terminated the employment and if the applicant had continued to receive remuneration at the rate which he had received it immediately before the termination. Bearing in mind the figures set out above the Court is of the view that it is reasonable to base the calculation of the maximum compensation which may be payable in this matter on a weekly figure of $950.00. The applicant's last "normal" week of work was the week ending 3 December 1995 for which he was paid $1,389.00 gross. For the week ending 26 November 1995 he was paid $974.00 gross and on the other figures set out above if his income is averaged out over the relevant period it falls between $868.00 per week and $1,044.00 per week. There is of necessity always an element of probability in the calculation of the cap on compensation pursuant to the provisions of s170EE(3). This Court determines that in this case the figure of $950.00 per week or $24,700.00 is the cap and the applicant's claim for compensation converts to that maximum sum. BREACH OF S170DE(1) The respondent is in breach of this section of the Act unless there was a valid reason for the termination of the employment. The Court is not satisfied that there was a valid reason in this case. The conduct of the respondent's personnel can only be described as an exercise worthy of amateur detectives. The evidence clearly demonstrates that their over zealous enthusiasm at the prospect of detecting a fraud perpetrated by the applicant on the respondent adversely affected their judgment and assessment of the facts. They converted their erroneous conclusions about the facts, in a manner which can only be described as that of bush lawyers, into justification for the termination of the applicant's employment and his entitlement to Workers Compensation. At 29 January 1996 the respondent was in possession of a certificate from Dr Won certifying the applicant unfit for duties until 23 February 1996. The certificate of Dr Foley, the medical practitioner chosen by the respondent, had expired on 19 January 1996. The respondent was in possession of the video tape. It depicts the applicant painting a pole on the verandah of the home unit where he resided, for a period of about 10 minutes. On the tape the applicant reaches above his head and appears to move freely. The tape also depicts the garage at the home unit building where there is a vehicle with the bonnet raised. The applicant is seen to pick an item up from the floor, bend with a straight back, raise his hands and place them on the bonnet, lean into the engine bay of the vehicle, shut the bonnet, squat with his elbow on his knee apparently cleaning a small item lie down on his back under the car and close the tilt door of the garage. The tape shows the applicant in activities of that kind for about 40 minutes. The applicant's evidence was that he was assisting his friend who was the owner of the vehicle to cure a mis-firing problem in the vehicle. The evidence is that the applicant was under surveillance for some days and the length of time under which he was observed to obtain the tape which is exhibit "G" should be taken in that context. The respondent's representatives concluded on viewing the video tape that the applicant was in fact fit for work. They did not make any further enquiry with a view to resolving the conflict between the view that they had formed and the opinion expressed in Dr Won's medical certificate, nor did they ask the applicant to undergo further medical assessment by Dr Foley. The respondent alleged that the applicant had refused to perform light duties. The respondent has in place a comprehensive program for the rehabilitation of injured workers. There is no evidence that the applicant was invited to engage in any rehabilitative program and no evidence that any proposal which included the hours and days and nature of specific light duties was ever put to the applicant. Mr Valentine was pressed in his oral evidence to explain the statement in his file note of his conversation with the applicant on 16 January 1996, which is exhibit "H", '"I then offered Roy suitable duties". His reply was "No I can't my chest is painful and I need total rest"'. It would be surprising indeed if the respondent had proposed to the applicant that he return to work on any basis as at 16 January 1996 without obtaining some further advice from a doctor or rehabilitation provider, given that it had that day been informed that the applicant had sustained a fracture of the sternum, which doctors had failed to diagnose between 6 December 1995 and 15 January 1996, and there were current certificates from two doctors as to his unfitness for work. The respondent relied upon the performance of the tasks by the applicant which are depicted in the video tape as evidence that the applicant was not following the advice of his doctor, which was to "rest", and that he was therefore in breach of his obligations to his employer. That proposition depends upon the understanding of the word "rest" in this context. It appears that the respondent's representatives had a different view as to the meaning of that word from the view held by the applicant. It is understandable that different people will have, in differing circumstances, different perceptions of what is "rest" and it would be unsafe for the Court to conclude that on the basis of the video tape that the applicant was not taking the degree of rest which was appropriate given the nature of his injury. The respondent argued that because the applicant was "working" on the car in the manner shown in the video tape he was fit for work, and that during the interview on 29 January 1996 the applicant had agreed he was "working" on the car. Again, the word "work" has different meanings to different people depending on the context, and it is a giant leap to conclude that even if the applicant had been doing "work" on the car he was capable of performing the duties required in the course of his employment with the respondent, in the circumstances and in the absence of other evidence. The respondent relies on the evidence of Mr Martin and Mr Cross that admissions were made by the applicant at the interview on 29 January. If indeed there was evidence that precise admissions of fact were made by the applicant then those admissions must be viewed in the context of the procedure which was followed by the respondent's representatives in relation to the conduct of the interview, which will be referred to later in these reasons. The respondent did not make any record of the interview as it took place. The evidence for the respondent of what took place at the interview is the file notes of Mr Martin and Mr Cross which are exhibits "J" and "L" and their oral evidence. The file notes are in narrative form and it is not possible for the Court to come to any conclusion as to the precise form of the questions and answers. One illustration of that difficulty is that the file note of Mr Martin reads on page 3 "At this point I asked Roy if he had done any painting at his unit" while Mr Cross' file note reads "At this point TM asked Roy if he had recently painted his unit". Mr Martin recorded that the applicant '"immediately said no, but when asked if he was sure, said that he had painted a pole that it had only been "a few minutes"'. Mr Cross on the other hand records "Roy replied that he had painted a pole." There is no evidence upon which the Court can rely as to precisely what was said at the meeting on 29 January 1996. The respondent was in possession of medical evidence provided by the applicant that he was unfit for work. The respondent had the opportunity to confirm the view which was formed by Mr Martin, that the applicant was malingering, by requiring the applicant to have a further consultation with Dr Foley. That did not happen. Mr Martin did not see any need to obtain any further medical advice or to obtain an opinion from Dr Foley based on the video tape. Dr Foley viewed the video tape for the first time in September 1996. He gave evidence and he expressed opinions to the Court that on the video tape the applicant appeared to have no restriction of movement and no discomfort or pain and that he would have been fit for some work. That opinion is to be weighed against the other evidence given by Dr Foley, including his evidence that although on the basis of the video he expressed the view that the applicant was fit for normal duties, he did not know the applicant's designation in the workplace or precisely what duties he performed. Dr Foley agreed that there was a difference between the performance of the tasks depicted on the video tape and working for a forty to forty-eight hour week on a full time basis and he agreed that there was no reason to doubt Dr Won's diagnosis. Dr Foley said that it was prudent to allow time for an injury of this nature to heal and that any estimate of the time in which the injury might heal was a matter of opinion and that he did not disagree with the opinion of Dr Won. Further, Dr Foley's evidence is to the effect that there would be some pain associated with the injury and the process of healing the injury. He agreed that the applicant was shown on the video squatting in an upright stance, consistent with advice which he had been given at an earlier time when he had had a back injury. Dr Foley described the applicant as "not a whimp" and "a decent chap" and his evidence was that he was surprised at the suggestion that the applicant was being deceptive, based on his past contact with the applicant. There is no basis on the evidence before this Court that there was a valid reason for the termination of the applicant's employment on 29 January 1996. The respondent acted in haste and the conduct of its representatives lacked prudence and sound judgment in all of the circumstances. The Court finds that there is no evidence to support the conclusion reached by Mr Martin that the applicant had lied and misled the respondent in respect of his injury and capacity to work and that that had caused a breakdown in the relationship between the applicant and the respondent. BREACH OF SECTION 170DC The facts of this matter indicate blatant breaches of the requirements of sections 170DC of the Act. That section prohibits termination of employment for reasons related to the employee's conduct unless the employee has been given the opportunity to defend himself against the allegations made. What is a sufficient opportunity varies from case to case. In this case the applicant was an employee of 9 years standing and there is no contest that he had been a good employee over the whole of that time. He had suffered an injury on 6 December 1995 which was not accurately diagnosed until 15 January 1996. He worked after sustaining the injury between 7 December 1995 and the Christmas break and he returned to work on 9 January 1996. He is from a non-English speaking background and whilst he is competent to some degree his ability to use and understand the English language is limited. He is a member of a Union and to the employer's knowledge he had on 29 January 1996 consulted a solicitor. The employer was, as at 29 January 1996, in possession of a medical certificate certifying the applicant unfit for work until 23 February 1996. In all of those circumstances the respondent ordered the applicant to attend the meeting on 29 January 1996. At that meeting the applicant was unaccompanied and there were three senior personnel of the respondent present. The applicant was interrogated and then sent out of the room for a short time. On his return he was informed that the respondent intended to terminate his employment but that he could resign. The respondent's representatives mentioned the avoidance of embarrassment to the applicant in the eyes of his fellow workers, the involvement of the police, the possibility of charges being laid against the applicant alleging fraud and the involvement of the Department of Social Security. The file note of Mr Cross reads "we agreed that if he resigned and withdrew his claim for weekly benefits we would take no further action regarding disputation of the claim or referring the matter for fraud". It is of little wonder that in those circumstances the applicant signed the documents which were prepared for him by the respondent's representatives. Further, the applicant was given no opportunity to provide further medical evidence as to his capacity to work. It could be said that he was entitled to rely upon the evidence which existed at that stage which was the certificate of Dr Won. The evidence indicates that the termination of the applicant's employment was a forgone conclusion, a conclusion formed in the mind of Mr Martin before the interview on 29 January 1996. The purpose of the interview on 29 January can only be seen as action for Mr Martin to set the scene for obtaining statements or admissions from the applicant which he might use to justify the decision which he had already made. The conduct of the representatives of the respondent was in blatant breach of the requirements of s170DC and totally ignored the purpose for which provisions in s170DC were inserted in this legislation. BREACH OF SECTION 170DB The Court has found that there was no valid reason for the termination of this employment, let alone any valid reason for the instant dismissal of the applicant. The applicant is therefore entitled to the payment of damages calculated pursuant to the provisions of s170DB. CALCULATION OF COMPENSATION The applicant was unemployed for 21.5 weeks and at the rate of $950.00 per week his actual loss was $20,425.00. Since 27 June 1996 he has earned $498.00 per week gross and his ongoing loss is at the rate of $452.00 per week. Applying the reasoning of Chief Justice Wilcox of this Court in Christine May -v- Lilyvale Hotel Pty Limited (1995) 68 IR 112 the applicant's right to compensation is not restricted to the loss he sustained during the period of six months immediately succeeding the date of termination of the employment. The applicant lost $20,425.00 up to 27 June 1996 and from that date to the expiry of 26 weeks from the date of termination of employment his actual loss was a further $2,486.00. As the applicant's loss was ongoing and had at the date of the hearing of the application exceeded the amount calculated in accordance with the provisions of s170EE(3) the applicant is therefore entitled to an order for compensation in an amount equivalent to the cap as calculated pursuant to s170EE(3) which in this case is $24,700.00. The Court makes the following orders: (1) Pursuant to the provisions of s170EE(2) and (3) of the Act the respondent pay to the applicant compensation in the sum of $24,700.00. (2) Pursuant to the provisions of s170EE(5) the respondent pay to the applicant damages in the sum of $4,750.00. I certify that this and the preceding 10 pages are a true copy of the Reasons for Judgment of Judicial Registrar Linkenbagh Associate: Renee Cauchi Date: 24 December 1996 Counsel for the Applicant: Mr R de Meyrick Solicitors for the Applicant: Mr P O'Neill Counsel for the Respondent: Mr I M Neil Solicitors for the Respondent: Blake Dawson Waldron Date of hearing: 18 December 1996