DECISION NO:47/97 CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - TERMINATION AT THE INITIATIVE OF THE EMPLOYER - VALID REASON - PARTIAL INCAPACITY FOR DUTIES - WORKERS COMPENSATION - CIRCUMSTANCES OF THE CASE Workplace Relations Act, 1996 ss 170DC DE, 170DF(1)(f) 170DF(2) 170EA 170EE(1) & (2) Workers Compensation Act (NSW), 1987 ss 66 & 77 Coal Mining Industry (Supervision and Administration) Interim Consent Award, 1990, New South Wales and Tasmania Mitchell -v- Macquarie Health Service (1996) 67 IR 107 Nicolson -v- Heaven & Earth Gallery Pty Limited (1994) 57 IR 50 Fuller -v- Botany Cranes & Forklift Services Pty Limited (Linkenbagh JR unreported) Decision No141/95 DARYL JAMES EDWARDS -v- BULGA COAL MANAGEMENT PTY LTD (ACN 055 534 391) NI 2059 of 1996 Coram: LINKENBAGH JR Place: SYDNEY Date: 14 FEBRUARY 1997 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 2059 of 1996 BETWEEN: DARYL JAMES EDWARDS Applicant AND BULGA COAL MANAGEMENT PTY LTD (ACN 055 534 391)Respondent MINUTES OF ORDERS 14 February 1997 LINKENBAGH JR THE COURT ORDERS THAT: The application be dismissed. Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 2059 of 1996 BETWEEN: DARYL JAMES EDWARDS Applicant AND BULGA COAL MANAGEMENT PTY LTD (ACN 055 534 391)Respondent REASONS FOR DECISION Delivered ex tempore and revised from the transcript 14 February 1997 LINKENBAGH JR This is an application pursuant to the provisions of section 170EA of the Workplace Relations Act, 1996. The application arises from the termination of the applicant's employment by the respondent. He was notified of the termination in a letter dated 20 November 1995 which was received by him in January of 1996. The applicant was employed at the Saxonvale Mine from 1981 and the last date on which he actually worked at the mine was 19 December 1994. The relevant events are as follows: 1985 - the applicant underwent an operation which resulted in his having an impairment of the use of one of his arms 1987, 1990, 1992 and 1993 - the applicant sustained four separate injuries to his back whilst at work July 1993 - the applicant underwent a two level spinal fusion and laminectomy operation on his back 25 October 1993 - the applicant returned to work following his operation and commenced a program of rehabilitation which involved a graduated return to work program which was undertaken with a view to the applicant's resuming his normal duties. 16 June 1994 - the rehabilitation program was brought to an end. The rehabilitation provider reported that the applicant had explained that he was able to perform most of his pre-injury duties with a manual handling restriction of 10 kilograms. She also reported "Mine are available to accommodate Mr Edwards long-term at his current working capacity". July of 1994 - the applicant experienced pain after a minor fall at the workplace. He had no time off work or medical treatment as a result. November 1994 - the respondent's performance of his duties was reviewed by Mr Lidbury. 2 December 1994 - the applicant's claims under section 66 and 67 of the Workers Compensation Act (NSW), 1987 were settled in proceedings before the Compensation Court. 15 December 1994 - the applicant underwent a special medical examination conducted by the occupational physician with the Joint Coal Board which examination was arranged at the request of the respondent. 19 December 1994 - the applicant was put off work and subsequently his weekly payments of compensation pursuant to the Workers' Compensation policy were restored from from 20 December 1994. February of 1995 - a meeting was convened and attended the applicant, Union representatives and management at which the applicant's circumstances were discussed. 20 December 1995 - the respondent wrote to the applicant informing him: By 18 January 1996 you will not have returned to normal duties for 18 months as a result of a permanent back injury. If you are not fully fit to return to normal duties by 18 January 1996, your employment at Bulga Coal Management Pty Limited will be terminated and you will revert to benefits under the Workers' Compensation Act. The respondent argues that Division 3 of Part 6A of the Workplace Relations Act, 1996 does not apply because the termination of the employment resulted from a frustration of the contract of employment because, the applicant being unfit for work, he was unable to fulfil his obligations pursuant to that contract. Counsel for the respondent relies on the decision of this Court in Fuller v Botany Cranes Pty Limited which is an unreported Decision 141/95. The Court there found that the applicant was permanently incapacitated for work and that in those circumstances it could not be said that the termination of the employment came about as a result of an act of the employer, but because of the fact of the incapacity of the employee, which was beyond the control of the employer. The Court noted in that case that the position may not be the same where the employee's medical prognosis as to his capacity for work falls short of the description "permanently incapacitated". In this case the Court finds that the applicant's condition does fall short of that description. Whilst on any view of the evidence before this Court the applicant is incapable of performing the whole range of duties applicable to his role as a storeman, there is no evidence that he is totally incapacitated for work of all kinds, which was the situation in Fuller v Botany Cranes and Fork Lift Services Pty Limited. This case is more in line with the facts of Mitchell v Macquarie Health Service, a decision of Judicial Registrar Walker, which is reported at [1996] 67 IR 107. There the applicant was unfit for her work as a nursing sister but was fit for other work. The Court dealt with the case on that basis and was not minded to treat the termination as one which was not at the initiative of the employer and therefore outside of the scope of the legislation. Counsel for the respondent argued another preliminary aspect which if it were accepted by the Court would bring these proceedings to an end without a need for further consideration of the facts. The applicant was employed under the Coal Mining Industry (Supervision and Administration) Interim Consent Award 1990 New South Wales and Tasmania. Clause 5(c) of the Award provides for termination by a week's notice on either side. Clause 28(g) of the Award reads as follows: (g) Termination. Where an employer gives notice of termination of employment other than a retrenchment notice ...(reads)... from the date of injury, whichever event shall first occur. The remaining part of the clause is not relevant to these proceedings. Counsel for the respondent argues that that clause gives the respondent a right to terminate, The Court does not agree with that proposition. The right to terminate exists and is expressed in clause 5(c). The true interpretation of clause 28(g) is that if a notice of termination is given to an employee who is absent from work on accident pay, then that notice does not take effect except on the terms set out in the clause. Counsel for the respondent argues that clause 28(g) giving a right to terminate provides a reason for termination behind which this Court cannot look, or to put it another way, which is on its face, a valid reason for termination within the meaning of section 170DE(1) of the Workplace Relations Act 1996. The Court does not agree that that is a proper construction of clause 28(g), which provides only for the date of the taking of effect of a notice of termination rather than conferring any right to terminate employment. It may well be that it is the practice in the coal mining industry for workers on accident pay to be given notice of termination but that does not advance the argument any further. Evidence was given by several witnesses. The applicant's immediate supervisor in the work place was a Mr Lennard. Mr Lennard was not called to give evidence by either party to these proceedings. He has left the employ of the respondent, apparently in circumstances where the respondent did not feel free to engage him as a witness in these proceedings. The Court is asked by the applicant to draw inferences from the failure of the respondent to call Mr Lennard. It is not appropriate to do so. Mr Lennard is not a witness who is in the employ of the respondent. It was open to either party to call him as a witness and it would be unfair to draw any adverse inference against either or both parties arising out of the failure to bring Mr Lennard to the witness box. The duties of a storeman at the mine were described by the various witnesses. They included some clerical and administrative tasks and the receiving, unpacking and storage of goods, together with attending to requests from workmen for stores and loading items on to vehicles. The kind of goods which were dealt with by the store included pumps, boxes containing items such as filters and shoes, spare parts for machinery, stationery, belts, and drums and other containers of various substances. The items varied in size and weight and the method of handling the items depended upon the physical characteristics of the items to be handled. It is common ground that as at October of 1993 the applicant's ability to perform the full range of duties in the store was restricted by his medical condition. Exhibit E confirms that by June of 1994 he was able to perform most of his pre-injury duties with a manual handling restriction of 10 kilograms. By December of 1994 the respondent, and Mr Lidbury in particular, were of the view that the applicant was not performing a sufficient range of his normal duties and Mr Lidbury perceived the need for the special medical examination. Mr Lidbury prepared a list which is exhibit A and forwarded it to the Joint Coal Board and apparently on the basis of that list Dr Pollock assessed the applicant and wrote his report which is exhibit J on 15 December 1994. That report reads: Thanks for referring Daryl for a special medical assessment. He has long standing lower back problems which resulted in a spinal fusion in 1993. He is back at work as a stores clerk but avoids heavy lifting and other strenuous activities. On examination his back movements are very restricted and cause some discomfort. I do not believe Daryl should undertake heavy lifting or repetitive bending (Daryl told me his specialist recommended a limit of 10 kilograms). Clearly he is unsuited to perform the duties of storeman as outlined in your referral letter. There has been a considerable amount of evidence given in these proceedings as to whether the extent of the duties set forth in exhibit A reflects the normal duties of a storeman at the mine, and how that list of duties varies from the duties which were being undertaken by the applicant in December of 1994. Exhibit A presents problems as to its terminology and interpretation. The Court did not have the benefit of hearing from Dr Pollock and offers no criticism in that regard. The evidence of Dr Pollock that the applicant is unsuited to perform the duties of storeman as set out in exhibit A can be given little weight by this Court because of the difficulties of interpretation which are presented on the face of exhibit A. That is particularly so when the content of exhibit A is seen in the context of the description of the day to day activities in the store which has been given to the Court by various witnesses. Nevertheless there is other evidence as to the applicant's duties and his performance of them and as to his medical condition. Dr Pollock observed that on examination the applicant's back movements were very restricted and caused discomfort and he advised against heavy lifting (whatever that might be) or repetitive bending. Mr Harding was a witness who impressed the Court as giving reasonable and considered opinions and accurate recollections of events. He told the Court that the applicant had reported to him that he sustained some pain on aspects of operating the forklift and that he occasionally complained of sleeplessness as a result of pain caused by his activities at work on the previous day. Mr Harding observed that the applicant did not operate the forklift in the workplace towards the end of 1994. The Court is unable to make the same assessment of Mr Lidbury as a witness. That is not to say that Mr Lidbury did not try to give his evidence in the best manner, but some of his responses were evasive and incomplete. Mr Lidbury was the author of exhibit A, which, to say the least, maximises the physical capacity required in performing the duties of the storeman. The Court has some reservations in accepting Mr Lidbury's evidence that as at November of 1994 the applicant exhibited a 50 per cent restriction in the performance of his range of duties. Nevertheless some weight must be given to Mr Lidbury's evidence, which is supported by that of Mr Harding, that the applicant could not drive a forklift. Mr Lidbury's assertion that the applicant only performed clerical duties must be viewed in light of the fact that he only observed the applicant for limited periods in November and early December of 1994. Further evidence of the applicant's ability to perform his duties comes from the applicant himself. He said: As time progressed I was forced into working on my own. That evidence suggests that any assistance he was being offered by other members of the staff became increasingly unavailable. That is consistent with Mr Harding's evidence that he received complaints from the other storemen about the applicant's performing fewer tasks. Further evidence of the applicant as to his ability comes from his evidence that when the rehabilitation arrangement was negotiated in June of 1994 he anticipated that he would be performing clerical duties similar to those carried out by the Purchasing Clerks. His evidence indicated that he never anticipated that he would go back to performing manual work to anything like the same extent that he had done prior to his injury. The Court finds that the applicant's actual performance of his duties decreased towards the end of 1994 and that decrease in his performance caused the respondent to have him submit to the special medical examination. He was destined to fail that examination, not only because of the terms of reference contained in exhibit A, but because of his actual medical condition. He had by that stage been compensated for 25 per cent loss of the efficient use of his back, and in June of 1994 the restriction placed on him was that of lifting no more than 10 kilograms in weight. Exhibit C is a series of medical certificates obtained for WorkCover purposes through 1995 by the applicant from his own doctor, Dr Straughan. The most recent of those certificates is dated 18 December 1996 and indicates that he is fit to return to modified duties with limitations. The specific physical restrictions or limitations are identified as "restricted bending/lifting/twisting" and the doctor further indicates that his condition is to be reviewed on 18 March 1997. That certificate is in identical terms to the other certificates which were issued on a regular basis prior to it. The restrictions indicated in the certificates which are exhibit C are more extensive than the 10 kilogram lifting restriction which existed as at June 1994. Mrs Wolfgang, who was the Occupational Therapist who assisted the applicant's rehabilitation program gave very clear and helpful evidence to the Court, and she said, for example, that the applicant could never lift items out of crates. That was one of the tasks about which there was no contest that it was one of the applicant's normal duties. The Court further notes that during 1995 the applicant made no attempt to seek other employment of any kind and that he did not place himself on the Union's redundancy list. That might have assisted in giving him some priority if work for which he was physically capable became available. In the context of the meeting of February 1995 which was attended by the applicant, the Union and management, work was sought on behalf of the applicant which would take account of his limitations and there was a specific request for work in the nature of secretarial work. The evidence supports the finding that as at December 1994 the applicant was not performing nor was he fit to perform the range of duties of a storeman and his ability to perform and his actual performance of duties had decreased since June 1994. Therefore, whilst the Court can place no weight on the result of Dr Pollock's assessment in relation to the list which is exhibit A, it is satisfied because of the other aspects of the evidence that the applicant's ability to perform his duties was wanting. Something must be said by the Court of the conduct of the respondent. Reference has been made to the terms of exhibit A which in the view of this Court set an impossible test for the applicant to pass. Nor does it on its face give the doctor a clear and balanced view or overall picture of the duties which were required of the applicant. It can be said, and has been said by Mr Warren for the applicant in no uncertain terms, that the respondent has paid little heed to the terms of its own rehabilitation program. Mr Lidbury's evidence indicates that he did not take the rehabilitation status of the applicant into account when he wrote to Dr Pollock and prepared exhibit A. His evidence was that he relied on the doctor to do that because the doctor was aware of the history. If the respondent wishes to be seen as paying more than lip service to its rehabilitation policy then something more than what Mr Lidbury did is required. Nevertheless, the overwhelming evidence is that even if consideration of the rehabilitation status had been given at the time, the result for the applicant would have been unchanged. Aspects of the applicant's conduct are also deserving of some criticism. The applicant as a witness was honest and forthright and very helpful and his memory of events was good. However, that impression of the applicant as a witness is inconsistent with some aspects of his conduct. In particular, whilst he now challenges the terms of exhibit A, he did not do so and his Union only made a limited attempt to do so in December 1994 and February 1995. The applicant acquiesced in the request by his employer that he resume Workers Compensation payments in December 1994 and he did not challenge the decision of the employer to consign him to workers compensation status until he received the letter terminating his employment. Further, as has been noted, whilst he now asserts that he was not totally incapacitated for work of any kind, he has taken no steps to mitigate his loss. The only explanation that he could give the Court for that was by way of an excuse, that he wanted this particular job back and for that reason did not pursue other employment. There is therefore a question mark over the integrity of the applicant. Turning to the application of the law to those findings of fact, the applicant argues that the respondent is in breach of section 170DE(1) because there was no valid reason for the termination of his employment. The Court finds that there was a valid reason for the termination of the employment, that reason being that the applicant was incapable of performing his duties as a storeman. The applicant was employed as a storeman and if there were evidence that the respondent had other work available which he could do, as was the case in Mitchell v Macquarie Health Service then the matter may have been different. However, this was a job as a storeman at a mine and the applicant suffered a physical condition which, albeit a result of an injury at work, nevertheless left him with a physical impairment and inability to perform his duties. The applicant further argues that the respondent is in breach of section 170DF(1)(f) which enjoins an employer from terminating employment for any one or more of stated reasons or for reasons including any one or more of those reasons. One of the reasons set out is "physical or mental disability". An employer is saved from breach of 170DF(1) if he satisfies the Court pursuant to section 170DF(2) that the reason was based on the inherent requirements of "the particular position". In this case, the particular position was that of a storeman and the evidence quite clearly is that the applicant was incapable of performing the range of duties applicable to that particular position. The respondent is therefore not in breach of section 170DF(1)(f). In saying that, the Court leaves to one side consideration of whether or not the applicant's condition falls within the phrase "physical disability" and accepts that for the purposes of this case he suffered a physical disability. In other cases there may be an argument as to the precise meaning of those words. The applicant further argues that the respondent is in breach of the provisions of section 170DC of the Act and the Court finds that on the facts there is evidence of some breach of section 170DC. That section prohibits termination of employment for reasons relating to the employee's conduct or performance unless the applicant has been given the opportunity to defend himself or herself against the allegations made or the employer could not reasonably be expected to give the employee that opportunity. The reason for termination in this case could be said to be related to the applicant's performance of his duties in that he was physically unable to perform those duties. The action of the respondent in terminating the employment by a letter some 12 months after its last personal conduct with the applicant is unsympathetic to say the least. The applicant was not given an opportunity at the time of the termination was effected to respond to the allegations. Nevertheless he had been receiving Workers Compensation payments for 12 months or so and had in that time had the opportunity to present medical certificates to substantiate his claim for Worker's Compensation. He and his Union must have been aware of the effect of the provisions of clause 28 of the Award and the practice in the industry and must have known that there was a real likelihood of a crisis in his income status when the time provided for in clause 28(g) of the Award was to expire in January 1996. The respondent acted in what can only be seen as a very insensitive and unsympathetic manner in terminating the employment by a letter which was forwarded to an address from which he had moved and was not received by him for some weeks after it was dated. The question of a remedy therefore arises. The only breach of the Act that has been found is the breach of section 170DC. In determining whether a remedy is appropriate the Court must, under the provisions of section 170EE(1) and (2), take into account all of the circumstances of the case. Reality in this case is that the applicant's employment as a storeman was doomed to come to an end. Another aspect of reality is that the applicant had the benefit of what can only be described as most generous Award provisions, in that he received accident pay and bonus payments in addition to the statutory payment of Worker's Compensation for 78 weeks from the time of his original injury. The applicant has had the benefits of very generous payments already and in all of the circumstances and bearing in mind the words of the Chief Justice in Nicolson -v- Heaven and Earth Gallery Pty Limited [1994] 57 IR 50 as the employment was destined to come to an end in any event the Court does not consider in all the circumstances of this case that any remedy is appropriate. I certify that this and the preceding 12 pages are a true copy of my Reasons for Decision Judicial Registrar Linkenbagh Date: 28 February 1997 APPEARANCES Counsel for the applicant: Mr R S Warren Solicitors for the applicant: Reid & Reid Counsel for the respondent: Mr G. J. Hatcher Solicitors for the respondent: Allen, Allen & Hemsley Dates of hearing: 12, 13 & 14 February 1997