Industrial Relations Commission of New South Wales in Court Session CITATION : Shop, Distributive and Allied Employees' Association v Kandos Traders Pty Ltd [2003] NSWIRComm 140 APPLICANT Shop, Distributive Allied Employees Association, New South Wales (on behalf of Kylie Michelle Godwin) PARTIES : DEFENDANT Kandos Traders Pty Limited FILE NUMBER: IRC 5438 of 2002 CORAM: Boland J CATCHWORDS : Dismissal of injured employee - Application under s 99 of Industrial Relations Act 1996 - Shop assistant injured her back whilst at work and was consequently terminated - Employer received incorrect advice - Seriousness of offence - Need for deterrence - Whether section 10 of Crimes (Sentencing Procedure) Act 1999 should be applied - Offence proven - Fine imposed Compensation Act 1998 Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED : Industrial Relations Act 1996 Victims Compensation Act 1996 Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998 CASES CITED : HEARING DATES: 03/19/2003 DATE OF JUDGMENT: 06/26/2003 PROSECUTOR Mr L Kinley Shop, Distributive & Allied Employees' Association, New South Wales LEGAL REPRESENTATIVES: DEFENDANT Ms E Brus of counsel with Mr Gillan The Australian Retailers Association (NSW) JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Boland J Thursday 26 June 2003 Matter No IRC 5438 of 2002 SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES' ASSOCIATION, NEW SOUTH WALES (on behalf of Kylie Michelle Godwin) v KANDOS TRADERS PTY LTD Prosecution under s 99 of the Industrial Relations Act 1996 JUDGMENT [2003] NSWIRComm 140 1 On 25 September 2002, the Shop, Distributive & Allied Employees' Association, New South Wales, by its Secretary-Treasurer Gregory John Donnelly, filed an Application for Order alleging the defendant in these proceedings, Kandos Traders Pty Ltd: Failed to comply with subsection [sic] 99(1) of the Industrial Relations Act 1996 by dismissing Kylie Michelle Godwin ("the employee"), an employee of the defendant, during the period of 6 months after the employee first became unfit for employment as a result of an injury that the employee has received. Being an injury for which the employee was entitled to receive compensation under the Workers Compensation Act 1987 and the Workplace Injury Management Act 1998 (sic). 2 Section 99(1) of the Industrial Relations Act 1996 provides: 99 Dismissal within 6 months of injury an offence (1) An employer of an injured employee who dismisses the employee is guilty of an offence if: (a) the employee is dismissed because the employee is not fit for employment as a result of the injury, and (b) the employee is dismissed during the relevant period after the employee first became unfit for employment. Maximum penalty: 100 penalty units. (1A) For the purposes of subsection (1), the "relevant period" is: (a) the period of 6 months after the employee first became unfit for employment, except as provided by paragraph (b), or (b) if the employee is entitled under a Commonwealth or State industrial instrument to accident pay as a result of the injury for a period exceeding that period of 6 months—the period during which the employee is entitled to accident pay. Accident pay is an entitlement of the employee to payment by the employer, while the employee is unfit for employment, that is described as accident pay in the relevant industrial instrument. The Facts 3 The defendant in these proceedings, trading as IGA Kandos, carried on a retail supermarket business and had done so since 1 October 2000. 4 Ms Kylie Michelle Godwin was employed by the defendant since the time at which it procured the business. She was employed as a full time shop assistant between the hours of 9.00am and 6.00pm on Monday to Friday. 5 The defendant is a relatively small concern employing four full time employees working 38 hours per week and four casual employees who worked alternate weekends or when full time employees took their rostered days off. 6 On 18 September 2001 Ms Godwin was carrying out her duties as a shop assistant on the defendant's premises. At or about 2:45pm she had packed a trolley with stock, namely boxes containing dog food, with the intention of stacking the shelves with same. By her own account, she was injured when she attempted to catch a whole case of dog food falling from the trolley. According to Ms Godwin, this incident was reported to a co-worker, Ms Jane Johnson as there was no injury report book on the premises at the time. 7 As the pain had not subsided, on or about 19 or 20 September 2001 the employee informed the sole director of the defendant company, Mr Shakeel Ahmedi, of the injury sustained and was duly provided with a compensation claim form. 8 Mr Ahmedi said in his evidence in the proceedings that Ms Godwin's inability to perform pre-injury duties placed a considerable degree of strain on the business. He said he tried to accommodate her but did not have sufficient light work to maintain such an arrangement. He said this led him to contact the Food Retailers' Association (NSW) and seek advice. Mr Ahmedi said in his evidence he was advised that he could terminate Ms Godwin's full time employment provided he offered her casual work. 9 Some ten days after the accident (28 September) Mr Ahmedi forwarded correspondence to the employee terminating her full time employment in the following terms: Dear Kylie In view of your persistent back problem we have had to give consideration to alternative means to get the job done. Accordingly, it is our decision to terminate you as a full-time employee and place you on casual work effective Monday 8th October. You will receive all monies inclusive of holiday to date. The casual employment rate is $13.92 inclusive of holiday pay. We look forward to your continued cooperation. Sincerely Shakeel Ahmeedi 10 Ms Godwin took annual leave from 5 October 2001 until 6 November 2001. She attended the Rylstone District Hospital on 6 October 2001 where a medical certificate was issued to her by Dr A Mackay for a strain of the lower thoracic spine. The employee was also certified fit for suitable duties from the date of the certificate (6 October). Whilst Dr Mackay apparently did not feel it necessary to reduce the number of hours worked or increase the frequency of breaks, he did restrict the employee from lifting any more than five kilograms and from repetitive bending and climbing. 11 Ms Godwin was later certified fit to resume pre-injury duties without restriction by Dr Mackay on 6 November 2001. She commenced casual employment with the defendant on 7 November 2001 and continued in that employment until about 20 December 2001 when she presented the defendant with a "return to work form" indicating she was not to climb ladders or lift more than 5 to 10 kilograms. The defendant informed Ms Godwin that in light of the restrictions on her capacity to work he was unable to offer her any work. 12 It then appears that Ms Godwin came under the care of Dr Alan McLeay on 31 December 2001, when she was certified totally unfit for work from 18 September 2001 to 31 March 2002 inclusive, due to lower back pain. It was Dr McLeay's prognosis that the employee would be fit for work as of 31 March 2002. However, a further medical certificate issued by Dr McLeay dated 30 May 2002 confirmed the employee's unfitness for work from 7 April 2002 to 7 July 2002. Submissions of the prosecutor 13 Mr L Kinley, solicitor for the Shop, Distributive & Allied Employees' Association appeared on for the prosecutor. 14 Mr Kinley contended that the offence committed by the defendant was at the worst end of the spectrum. He referred to the contravention as a "grave criminal offence", submitting that: 1. The employee had informed the defendant of her injury one week prior to the termination of her full time employment. 2. Regardless of the defendant's difficulties in supplying the employee with suitable duties, the defendant had no idea as to whether she would be capable of returning to work and also had no clear idea as to the employee's physical state, prognosis and diagnosis at the time of termination. 3. Section 99 of the Act, in conjunction with s 49 of the Workplace Injury Management and Workers Compensation Act 1998 afford protection to injured workers and allow them a time frame to make genuine attempts to return to work. Section 49, when applied to a situation like this, opened the door to the withdrawal of light duties but at no time did it allow for the employer to terminate the employee. Section 49 of the Workplace Injury Management and Workers Compensation Act provides: 49 Employer must provide suitable work (1) If a worker who has been totally or partially incapacitated for work as a result of an injury is able to return to work (whether on a full-time or part-time basis and whether or not to his or her previous employment), the employer liable to pay compensation to the worker under this Act in respect of the injury must at the request of the worker provide suitable employment for the worker. (2) The employment that the employer must provide is employment that is both suitable employment (as defined in section 43A of the 1987 Act) and (subject to that qualification) so far as reasonably practicable the same as, or equivalent to, the employment in which the worker was at the time of the injury. (3) This section does not apply if: (a) it is not reasonably practicable to provide employment in accordance with this section, or (b) the worker voluntarily left the employment of that employer after the injury happened (whether before or after the commencement of the incapacity for work), or (c) the employer terminated the worker's employment after the injury happened, other than for the reason that the worker was not fit for employment as a result of the injury. 15 Mr Kinley referred to s 10 of the Crimes (Sentencing Procedure) Act 1999 which provides that: 10. Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years, (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. (2) An order referred to in subsection (1) (b) may be made if the court is satisfied: (a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or (b) that it is expedient to release the person on a good behaviour bond. (2A) An order referred to in subsection (1) (c) may be made if the court is satisfied that it would reduce the likelihood of the person committing further offences by promoting the treatment or rehabilitation of the person. (2B) Subsection (1) (c) is subject to Part 8C. (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. (4) An order under this section has the same effect as a conviction: (a) for the purposes of any law with respect to the revesting or restoring of stolen property, and (b) for the purpose of enabling a court to give directions for compensation under Part 4 of the Victims Compensation Act 1996 , and (c) for the purpose of enabling a court to give orders with respect to the restitution or delivery of property or the payment of money in connection with the restitution or delivery of property. (5) A person with respect to whom an order under this section is made has the same right to appeal on the ground that the person is not guilty of the offence as the person would have had if the person had been convicted of the offence. 16 Mr Kinley contended that: 1. Having regard to all of the factors and the gravity of the offence, this is a case where it is appropriate to record a conviction; 2. This case is not trivial in nature; 3. Ignorance or incorrect advice are not excuses for committing criminal offences; 4. If it is accepted that the defendant did receive incorrect advice from the Food Retailers Association NSW, it is a matter for the defendant and that organisation and the Court should give little or no weight to it or any other mitigating circumstances; 5. The defendant could not have known of or had difficulties in providing light duties as the employee was terminated from full time employment only a week after her injury; 6. The defendant, it was conceded, had no prior convictions. 17 Mr Kinley submitted that due to such a clear and blatant breach of the Act, the Court should record the maximum penalty against the defendant. The fact that the employee was dismissed within a week of her accident demonstrates much more of a serious and clear breach than if she had been terminated five months and three weeks after her injury. 18 Mr Kinley sought payment of the penalty to the prosecutor under s 403 of the Act. Mr Kinley indicated the payment would be passed on to Ms Godwin. Submissions for the defendant 19 Ms E Brus of counsel appeared for the defendant in these proceedings. Ms Brus' submissions may be summarised as follows: 1) The employee's injury created genuine difficulties for the defendant in that the light work that was available was not enough to keep her busy on a full time basis. On about 20 December 2001 the employment relationship ended because of the employee's injuries and restrictions and the defendant's inability to provide the employee with any suitable work. 2) Due to the restrictions created by her injury the employee was unable to perform her duties of stocking shelves, which required her to be on a ladder 50 per cent of the time. 3) The employee was unable to lift heavy groceries and, therefore, was not able to carry out her duties in the course of cash register operation. Having other employees help her with heavy items proved to be quite inefficient. 4) Mr Ahmedi was in an isolated location and was inexperienced in employment matters. He did not have the benefit of interaction with other retailers as his colleagues in metropolitan areas would have. Furthermore, the defendant's access to normal industry groups was limited in comparison to retailers operating in a metropolitan region. 5) The breach arose from incorrect advice proffered by the Food Retailers' Association, an association of which the defendant was a member and acted upon their advice in good faith. 6) Whilst ignorance of the law is no excuse for the breach, the Court should still have regard to the fact that the defendant received incorrect advice. 7) By making enquiries in relation to Ms Godwin, Mr Ahmedi demonstrated cautious rather than rash behaviour. 8) The decision to terminate the employment contract did not arise from any malice or animosity. 9) Had the defendant been a member of the Australian Retailers' Association (NSW) ("ARA") and sought advice from them in relation to the employees' termination, the breach would more than likely have not occurred. 10) The defendant is now a member of the above organisation and now consults them before making any workplace relations decisions. Mr Ahmedi has also enrolled in seminars conducted by the ARA, those being "Know Your Award" and "Counselling & Termination". 11) The Act does not stipulate that a breach that occurs one week after an injury is reported is more serious than a breach that occurs five months and three weeks after an injury is reported. 12) In separate proceedings relating to workers' compensation, Ms Godwin relied on a medical certificate stating she was unfit for work from the date of her injury until 31 March 2002. As far as the defendant is aware she is still unfit for work. If Ms Godwin had moved promptly after her injury to obtain a medical certificate stating she was unfit for work she would not have been at work, the defendant would not have terminated her employment and, presumably, she would have been entitled to workers compensation payments. What the prosecutor is, in effect, contending is that Ms Godwin was terminated unlawfully but the fact she should not have been working at the time of her termination should be conveniently ignored. 13) Ms Godwin has not suffered any disadvantage as a consequence of the termination because she has been unable to work in any event. 14) Whilst the defendant admits a breach, it is one of a technical nature. In finding the defendant guilty of the offence the Court should exercise its discretion under s 10 of the Crimes (Sentencing Procedure) Act. If the Court is minded to impose a penalty it should not be higher than the lower range of the scale. The defendant has learnt its lesson, is regretful and contrite, and has taken all reasonable steps to ensure that it does not unwittingly breach the Act again. Consideration 20 I find that the plea of guilty was properly entered and the offence is proven. 21 Section 99 of the Industrial Relations Act is obviously designed to assist in protecting the employment security of employees by providing a deterrent against unscrupulous and uncaring employers from dismissing such employees in the aftermath of an injury sustained at work thereby denying them a reasonable period of time to overcome their injury and return to work. 22 Section 99, when read in conjunction with s 17 of the Crimes (Sentencing Procedure) Act, provides for a maximum penalty of 100 penalty units, thus a maximum fine of $11,000. 23 The prosecutor submitted that because the defendant terminated Ms Godwin's employment just one week after she notified the defendant of her injury, this demonstrates a serious breach. By terminating Ms Godwin so quickly, it was submitted, the defendant gave no consideration to how long she might be incapacitated and acted in flagrant disregard of its obligation to provide her with a reasonable opportunity of recovering from her injury and returning to work. 24 In considering the objective seriousness of the offence which is the subject of these proceedings, I cannot agree with the prosecutor that the offence falls anywhere near the worst case. Indeed, it could not be described as serious although, on the other hand, it was not trivial. Ms Godwin injured her back. Mr Ahmedi tried to accommodate Ms Godwin on light duties but because of the small size of his business he was unable to do so. He sought advice as to his options from an organisation which, in good faith, he believed could provide such advice. He was given the wrong advice and terminated Ms Godwin's full time employment. He offered her casual work which she accepted and performed until she advised the defendant of new restrictions on her capacity to work. The defendant informed Ms Godwin that in light of her limitations it was unable to provide further work. 25 There was no deliberate or wilful, or even reckless, breach by the defendant. I do not consider the defendant was purposefully seeking to avoid its obligations in respect of an injured worker but did it through ignorance and having received wrong advice. 26 There is obviously a strong public interest in ensuring the protection of injured workers. It is important that all employers understand that dismissal of an injured employee in contravention of s 99 is unacceptable conduct. Whilst there was no evidence that breaches of s 99 were prevalent, it seems to me that weight should be given to general deterrence in determining an appropriate penalty. As to specific deterrence, the risk of the defendant re-offending is, I consider, slight and I do not, therefore, propose to impose a penalty that reflects a particular need for specific deterrence. 27 As to subjective factors I consider the defendant is of good character and has no prior convictions under the Act. The defendant entered an early plea and has taken practical steps to inform itself of the relevant laws governing the employment relationship in order to avoid any recurrence of the offence. 28 I have given careful consideration to whether I should exercise my discretion under s 10(1) of the Crimes (Sentencing Procedure) Act. I have come to the view, however, that having regard to the factors to be taken into account in s 10(3) of that Act and, in particular, whether the nature of the offence could be considered to be trivial, I decline to exercise my discretion under s 10(1). 29 Having regard to the objective seriousness of the offence committed by the defendant, I consider an appropriate penalty to be $2,000 with a discount for the early plea of 25 per cent and a further 10 per cent for other subjective factors. This results in a fine of $1300. Orders 30 The Court makes the following orders: 1) The offence is proven and a verdict of guilty is entered. 2) The defendant is convicted of the offence as charged. 3) The defendant is fined an amount of $1300. 4) The defendant shall pay the prosecutor's cost of the proceedings in an amount as agreed or, if agreement cannot be reached, leave is granted to either party to approach the Court for final orders as to costs. 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