Bronte Cooper v Balfours Bakery Pty Ltd
[2011] FWA 4595
•18 JULY 2011
Note: An appeal pursuant to s.604 (C2011/5372) was lodged against this decision - refer to Full Bench decision dated 2 December 2011 [[2011] FWAFB 8032] for result of appeal.
[2011] FWA 4595 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Bronte Cooper
v
Balfours Bakery Pty Ltd
(U2011/462)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN | ADELAIDE, 18 JULY 2011 |
Termination of employment - valid reason - absence from work on income protection insurance - frustration of employment - untruthfulness - reinstatement.
[1] On 7 March 2011 Mr Cooper lodged an application pursuant to s.394 of the Fair Work Act 2009 (the FW Act) through which he sought relief with respect to the termination of his employment by Balfours Bakery Pty Ltd (Balfours).
[2] Mr Cooper’s application was unable to be resolved through conciliation and was referred to me for arbitration. It was the subject of hearings on 20 and 29 June 2011.
[3] At these hearings Mr Cooper was represented by Mr Dean of United Voice and Balfours by Mr Manuel of counsel.
[4] The parties agree that the matters in s.396 of the FW Act did not apply to Mr Cooper’s circumstances.
[5] Mr Cooper worked for Balfours from May 1991. In 2008 Balfours was taken over but continued to operate as Balfours Bakery Pty Ltd. At the time of the termination of his employment, Mr Cooper was engaged as a delivery driver. Mr Cooper’s employment was governed by the provisions of the Balfours Pty Ltd Enterprise Agreement 2005 (the agreement). The agreement provides for income protection insurance through International Underwriting Services Pty Ltd (IUS). This cover provides for income protection for up to 24 months in the case of non-work-related injuries or illnesses.
[6] Over the duration of his employment, Mr Cooper lodged some 25 workers compensation claims and 40 incident reports 1. Some issues arose relative to Mr Cooper’s workers compensation history in 2006, but these were ultimately resolved following the involvement of his union.
[7] Shortly after his return from annual leave, on 8 April 2010, Mr Cooper advised a Balfours Employee Relations Officer, Ms Fonseca, that he had a shoulder condition which meant that he was unable to perform his work. Mr Cooper advised that he had treatment for the condition while he was on annual leave. Mr Cooper was certified unfit for work.
[8] Mr Cooper subsequently took sick leave and then applied for income protection insurance. He completed the income protection insurance claim form on 20 April 2010 and in so doing confirmed that his injury was not work-related and that he did not have a workers compensation claim.
[9] Mr Cooper was subsequently paid income protection insurance and he continues to receive those insurance payments. He provided medical certificates and assessments to IUS and Ms Fonseca spoke with him on a monthly basis about his condition. In June 2010 Balfours was advised that Mr Cooper declined to participate in a work capacity assessment arranged by IUS.
[10] Balfours has an internal policy whereby it does not provide restricted duties for employees covered by IUS insurance.
[11] On 12 November 2010 Balfours wrote to Mr Cooper and sought a meeting with him on the basis that unless it was advised that he was able to return to work within a reasonable period, his employment could be terminated.
[12] Mr Cooper, Ms Fonseca and Mr Banham, the Balfours Human Resources Manager, met on 17 November 2010. At some point in this meeting, Mr Cooper requested that a union representative attend the meeting. Balfours was either unable, or not prepared to release a union representative from production work. Balfours asserts that it offered to convene a further meeting so that arrangements could be made for a union representative to attend.
[13] On 18 November 2010 Balfours sent Mr Cooper further correspondence which stated:
“Following on from the meeting held on Wednesday, 17 November 2010 with Paula Fonseca and yourself, at which you were provided with an explanation of the company’s expectations for your return to work and at which you were given the opportunity to inform us of your progress to date; you have confirmed that you are still unable to perform the normal duties for which you were employed and there is no clear date for your definite return to normal duties. As discussed, the potential, unconfirmed timeframe for your possible return to work is not considered to be reasonable.
As we informed you at the meeting, we would require that you are able to return to the full range of your pre-injury duties and hours within a reasonable period. We are unable to continue to keep this position open. Before we make a final decision on your employment, we offer you a final opportunity to present any additional relevant information that we should take into consideration. In the absence of any new or different information being provided within 7 days from the date of this letter, we are likely to terminate your employment with Balfours Bakery Pty Ltd.
Should you wish to discuss your situation further please do not hesitate to contact Paula Fonseca on xx xxxxxxx.
Yours faithfully
Duanne Banham
Human Resources Manager
Acting for and on behalf of Balfours Bakery Pty Ltd”
[14] On 23 November 2010 Mr Cooper provided Ms Fonseca with a WorkCover claim form in which he advised that he injured his shoulder on 4 February 2010 and confirmed his incapacity for work from 8 April 2010.
[15] Mr Cooper’s workers compensation claim was disputed and Balfours was advised on 7 February 2011 that it had been rejected. On 23 February 2011 Balfours was provided with a further IUS disability statement in which one of Mr Cooper’s doctors, Dr Sidhu, advised that he was unable to ascertain when Mr Cooper would be able to achieve a full capacity for return to work.
[16] On 24 February 2011 Balfours terminated Mr Cooper’s employment. The termination of employment letter stated:
“We acknowledge receiving a copy of your latest Disability Statement from Dr G Sidhu dated 23/02/11 concerning your ongoing medical condition. A period of total incapacity from 13/09/10 to continuing has been provided by Dr Henningson on 31/01/11. At the time Dr Henningson estimated a return to full duties within 2 - 6 months. A further assessment will take place in April 2011 for a full return to work.
Unfortunately given the above information and as discussed during our meeting held on 17/11/10 we are unable to continue to hold your position open and inform you that your employment with the Company will be terminated effective 28 February 2011.
Should you wish to discuss your change in employment status please do not hesitate to contact Paula Fonseca on xx xxxxxxxx
Yours faithfully
Duanne Banham
Human Resources Manager
Acting for and on behalf of Balfours Bakery Pty Ltd”
The Submissions
[17] Mr Cooper asserts that the termination of his employment was harsh, unjust or unreasonable in that, on the basis of the approach adopted by Northrop J in Selvechandron v Petersen Plastics Limited, the decision was capricious, marked by prejudice and by a failure to consider Mr Cooper’s capacity such that there was no valid reason for the dismissal. Mr Cooper asserts that the termination of employment decision was capricious in that Balfours was aware that he asserted that his injury was work-related and this position was supported by various medical advices. Further, that Balfours could have provided Mr Cooper with restricted duty work and chose not to do so. Finally, in this respect, that Balfours suffered no substantive ongoing loss from maintaining Mr Cooper’s employment.
[18] Mr Cooper asserts that the decision was characterised by prejudice in that he had previously been counselled for reporting workplace safety incidents and that Balfours advised Mr Cooper to pursue income protection insurance which was then a factor in the decision to terminate his employment. Mr Cooper asserts that Balfours failed to consider, or give due weight to the length of his employment, the potential to fill his role on a temporary basis and the degree of his incapacity and prospects for recovery.
[19] Mr Cooper asserts that the termination of his employment was procedurally flawed in that Balfours refused his request for a union representative to participate in the meeting on 17 November 2010.
[20] Mr Cooper asserts that he was not given a proper opportunity to respond to the proposed termination of his employment.
[21] On the basis that the termination of his employment was unfair, Mr Cooper seeks reinstatement to his delivery driver position or to another position on terms and conditions not less favourable, with the restoration of continuity of his employment. In the alternative, Mr Cooper seeks payment of compensation.
[22] The Balfours position is that, after considering the medical evidence and advice from Mr Cooper, and the fact that he remained unable to return to work for an indefinite time, it had no viable option other than the termination of his employment on the basis of frustration of the employment contract. Balfours does not dispute that Mr Cooper’s employment was terminated at the initiative of the employer.
[23] Balfours asserts that the frustration of the employment contract represented a valid reason in that it could not be expected to maintain Mr Cooper’s position for an indefinite period of time. Further, that Fair Work Australia should conclude that Mr Cooper lied about the cause of his shoulder injury in either his IUS claim or his WorkCover claim and that this behaviour should also be taken into account in the consideration of whether Mr Cooper was treated unfairly.
[24] Balfours asserts that the November 2010 meeting clearly put Mr Cooper on notice as to the possibility of termination of his employment and that he had the opportunity to request a further meeting or provide advice relative to his capacity to return to work, but did not do so.
The evidence
[25] Mr Cooper gave evidence about his employment with Balfours and the history of his shoulder injury, his IUS and his WorkCover claims. Mr Cooper’s evidence went to the discussions he had with his union and with Balfours management.
[26] I found Mr Cooper’s evidence with respect to the basis upon which he made his IUS and WorkCover claims to be inconsistent and unreliable. Mr Cooper was very experienced at making workers compensation claims and I do not accept that he was in any way a naive employee making a claim on his employer.
[27] Mr Boyd is the union official servicing United Voice members employed at Balfour’s. His evidence went to his understanding of the Balfour’s delivery functions and his understanding that Balfours could temporarily replace Mr Cooper with other personnel, Mr Boyd advised that he was aware of other employees taking extended periods away from work under IUS insurance and was not aware of the termination of employment of employees in those circumstances.
[28] The evidence of Mr Banham, the Balfours Human Resources Manager went to his involvement with Ms Fonseca in consideration of Mr Cooper’s work situation, the subsequent correspondence and discussions with him and his final decision to terminate Mr Cooper’s employment.
[29] Ms Fonseca’s evidence went to her dealings with Mr Cooper both before, and during his absence under the IUS income protection insurance and his WorkCover claim. Her evidence went to the manner in which Balfours managed employee absences and the conclusions she reached with respect to Mr Cooper’s claim and ongoing absence from work.
[30] To the extent that there are differences between the evidence of Mr Cooper and that of Mr Banham and Ms Fonseca, I prefer the evidence of the latter as I am satisfied that it was more reliably provided.
Findings
[31] Before reaching a conclusion with respect to the fairness of the termination of Mr Cooper’s employment, I have considered a number of matters about which the parties differ.
[32] Mr Cooper has made a very large number of WorkCover claims and incident reports. These issues may have given rise to questions about his suitability for continued work as a delivery driver in or around 2006 but, I am satisfied that they were ultimately resolved. I do not consider that the events of 2006 were taken into account by Balfour’s in deciding to terminate Mr Cooper’s employment in 2011.
[33] I have concluded that Mr Cooper lodged his IUS claim on his own volition in April 2010 and that he was not encouraged to do so by Ms Fonseca. In this respect I have concluded that Mr Cooper advised Ms Fonseca that the injury occurred outside of work and that he understood the basis of the IUS claim. The Balfour’s policies, Mr Cooper’s experience in making WorkCover claims, his evidence and that of Ms Fonseca all contributed to that conclusion.
[34] On various occasions Mr Cooper advised a number of his doctors and treating medical practitioners that his shoulder injury was not work-related and/or that it did not involve a WorkCover claim. He also advised at least some of these doctors that his shoulder injury was work-related. I am neither required, nor consider it appropriate that I reach a conclusion about this issue. However, I have concluded that Mr Cooper clearly acknowledged that his injury was not work-related when he lodged his income protection claim with IUS in April 2010 and that he changed his position after discussions with his union following the 17 November 2010 meeting with Balfours human resource management personnel, such that he lodged his WorkCover claim.
[35] I have concluded that Balfours was not prepared to make restricted duties available to Mr Cooper and that this reflected its general approach to employees on income protection insurance. The evidence of Mr Banham and Ms Fonseca was that Balfours had a policy of not creating or providing restricted duty positions for employees on income protection insurance. I have concluded that this policy reflects an assessment of the risk of aggravation.
[36] I have concluded that Mr Cooper chose not to participate in the work site assessment commissioned by IUS in June 2010 and that he did not authorise the disclosure of medical information to Balfours. However, Balfours was provided with medical information in the form of limited reports pursuant to the IUS income protection plan and WorkCover information.
[37] The evidence of Mr Banham was that Balfours generally review the continuing employment of employees on income protection insurance after six months. Whilst Mr Boyd’s evidence was to the effect that he was aware of other employees on income protection insurance remaining in employment for substantially longer than that time, details to confirm this were not provided. I note that Mr Dean was invited to pursue an earlier request for discovery of documentation relating to the duration of income protection insurance absences but did not do so. Consequently, I have not drawn any conclusions about Mr Cooper’s situation in comparison with that of other Balfours employees.
[38] The evidence of Mr Banham and Ms Fonseca was that towards the end of the meeting on 17 November 2010, Mr Cooper requested a union representative and that Balfours was not able to release a delegate for that purpose. I have concluded that Mr Cooper was offered the opportunity for a further meeting but that, while he subsequently visited the union officers and lodged his WorkCover claim, he did not request that meeting.
Harsh, unjust or unreasonable
[39] Section 387 states:
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
[40] I have considered these factors.
Valid Reason
[41] In Selvechandron v Petersen Plastics Ltd 2, Northrop J stated:
“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that the employer and employee are treated fairly”.
[42] Notwithstanding that the FW Act now separately identifies a number of the factors which were, at that time, part of the concept of a valid reason, I have adopted this principle.
[43] Critical to this issue is the Balfours position that the termination of Mr Cooper’s employment occurred because of the frustration of the employment relationship. As I have indicated, there is no dispute that Mr Cooper’s employment was terminated at the initiative of the employer. The issue is whether Mr Cooper’s absence and the uncertainty associated with any return to work represents a frustration of that employment contract such that the absence was a valid reason for the termination of employment.
[44] The issue of incapacity as a result of illness or injury was addressed at some length by a Full Bench of the Australian Industrial Relations Commission in Smith and others v Moore Paragon Australia Ltd 3 (Moore Paragon) in the following terms:
“[48] The traditional view was that when an employee is so incapacitated by illness or injury that he or she cannot work, at least in the longer term, the contract may be frustrated and thus terminated by operation of law and not at the initiative of the employer. In Marshall v. Harland & Wolff Ltd Donaldson J, giving the judgment of UK National Industrial Relations Court stated:
“In the context of incapacity due to sickness, the question of whether or not the relationship has come to an end by frustration sounds more difficult than it is. The tribunal must ask itself: ‘Was the employee’s incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and agreed to be accepted by the employer under the agreed terms of his employment?’ In considering the answer to this question, the tribunal should take account of:
(a) The terms of the contract, including the provisions as to sickness pay
The whole basis of weekly employment may be destroyed more quickly than that of monthly employment and that in turn more quickly than annual employment. When the contract provides for sick pay, it is plain that the contract cannot be frustrated so long as the employee returns to work, or appears likely to return to work, within the period during which such sick pay is payable. But the converse is not necessarily true, for the right to sick pay may expire before the incapacity has gone on, or appears likely to go on, for so long as to make a return to work impossible or radically different from the obligations undertaken under the contract of employment.
(b) How long the employment was likely to last in the absence of sickness
The relationship is less likely to survive if the employment was inherently temporary in its nature or for the duration of a particular job than if it was expected to be long term or even lifelong.
(c) The nature of the employment
Where the employee is one of many in the same category, the relationship is more likely to survive the period of incapacity than if he occupies a key post which must be filled and filled on a permanent basis if his absence is prolonged.
(d) The nature of the illness or injury and how long it has already continued and the prospects of recovery
The greater the degree of incapacity and the longer the period over which it has persisted and is likely to persist, the more likely it is that the relationship has been destroyed.
(e) The period of past employment
A relationship which is of long standing is not so easily destroyed as one which has but a short history. This is good sense and, we think, no less good law, even if it involves some implied and scarcely detectable change in the contract of employment year by year as the duration of the relationship lengthens. The legal basis is that over a long period of service the parties must be assumed to have contemplated a longer period or periods of sickness than over a shorter period.
These factors are inter-related and cumulative, but are not necessarily exhaustive of those which have to be taken into account. The question is and remains: ‘Was the employee’s incapacity, looked at before the purported dismissal, of such a nature, or did it appear likely to continue for such a period, that further performance of his obligations in the future would either be impossible or would be a thing radically different from that undertaken by him and accepted by the employer under the agreed terms of his employment?’ Any other factors which bear on this issue must also be considered.”
[49] The traditional approach was subjected to a careful and comprehensive analysis by Wootten J in Finch v Sayers who concluded49
“The review of the authorities shows that, before one can answer the question whether a contract of employment is frustrated, one must look at the whole of the terms of the contract, express and implied, and at all the surrounding circumstances, including the provisions made for the sickness and retirement of the employee and the general practice of the particular employer, or in similar employment. When one does this, it may well be that, in many areas of employment in contemporary society, particularly where one is dealing with an indefinitely continuing relationship, and not the performance of a specific task, there is relatively little room for the operation of the doctrine of frustration due to illness. It is notable that...employers...in every reported case in the last seventy years, have in fact acted on the basis that it was for them to terminate the sick employee’s employment when they were no longer willing to maintain the continuity of his employment.”
[50] The approach of Wootten J in Finch v Sayers has been approved and applied by the New South Wales Industrial Relations Commission in Court Session in Cachia v State Authorities Superannuation Board and in Hilton Hotels of Australia Limited v Pasovska. It has also been applied in this Commission by Simmonds C in his careful decision in Foster v Copper Mines of Tasmania Pty Ltd. We endorse that approach.”
[45] In Smith v Capral Aluminium 4 Lawler VP recited the approach in Moore Paragon and concluded that:
“[16] It seems to me that these principles are equally applicable when considering whether incapacity arising from a work-related injury provides a valid reason for terminating the employment of an employee.
[17] Thus, subject to an obligation to provide continued employment arising under state legislation, incapacity arising from a work-related injury provides a valid reason for termination of the employment of an incapacitated employee where:
(a) further performance of the employee’s contractual obligations in the future would either be impossible or would be a thing radically different from that undertaken by him or her and accepted by the employer under the agreed terms of his or her contract of employment; or
(b) continued employment would involve imposing a material productivity burden or some other unreasonable burden on the employer; or
(c) continued employment would impose an unreasonable burden on other employees.
If the termination of an employee on account of incapacity arising from a work-related injury involves a breach of an obligation arising under state legislation to provide continued employment to that employee then such incapacity will usually not constitute a reason for termination that is “sound, defensible or well-founded” and thus a valid reason within the meaning of s.170CG(3)(a).”
[46] A Full Bench in J Boag & Son Brewing v Button 5 observed:
“[29] It is well established that a valid reason is one which is “sound, defensible or well founded”, but not “capricious, fanciful, spiteful or prejudiced”. An inability to perform the inherent requirements of a position will generally provide a valid reason for dismissal. But this will not invariably be so. For example, the dismissal may be prohibited by State workers compensation legislation or otherwise unlawful. It is highly likely, bordering on certain, that there could be no valid reason for the dismissal in that event. Further, a dismissal based on an incapacity to perform the inherent requirements of a position may not be valid reason for dismissal if the employee has a capacity to perform the inherent requirements of their job. Plainly, there can be a valid reason for the dismissal of an employee where he or she simply does not have the capacity (or ability) to do their job. But, again, there may be circumstances where such incapacity does not constitute a valid reason in the relevant sense.
[30] In the present case, it is clear that both Mr Button’s position and his job had important features that he could not perform because of his lifting restriction. Mr Button had an incapacity to perform the all of the inherent requirements of his job and, on balance, this constituted a valid reason for his dismissal.”
[47] The Full Federal Court further dealt with the issue of an employee’s capacity to do a job in Crozier 6 on the basis that an employee’s incapacity to do the job can represent a valid reason for dismissal.
[48] I have approached Mr Cooper’s situation from the starting point that his demonstrated incapacity to do his job may represent a valid reason for the termination of his employment. Clearly, however, an incapacity to do a job cannot always represent a valid reason for employment termination. In order to determine whether the extent of Mr Cooper’s incapacity represented such a valid reason I have considered his particular circumstances.
[49] The medical advice provided to Balfours with respect to Mr Cooper was limited by Mr Cooper’s decision not to make all of that advice available to his employer. The medical information that was available to Balfours was, to some extent inconsistent. The information provided to Balfours in February 2011 when the termination of employment decision was made, confirmed that Dr Graham, an Occupational Physician, to whom the WorkCover claim manager had referred Mr Cooper, concluded:
“At the time of consultation Mr Cooper stated that his left shoulder was 80-85% recovered. He remained aware of a decreased range of adduction, moving the arm across his body and a decreased range of internal rotation, moving the arm up behind his back. He described no difficulty lifting objects but stated that he felt discomfort if he ‘overstretched’.” 7
and, further:
“I would anticipate a return to pre injury duties in the foreseeable future. I anticipate that his symptoms will decrease further and he will be able to carry out all his normal duties. Although he will need to take care with his work practices.” 8
[50] Mr Henningsen, who was Mr Cooper’s Orthopaedic Surgeon stated in December 2010:
“The patient has only been reviewed on a single occasion following his surgery on the 25th of October 2010 and at that stage was considered unsuited to return to any of his pre-injury duties.” 9
....
It is hoped that at review in late January 2011 that Mr Cooper will have experienced a steady and significant improvement in his left shoulder, comfort, strength and range of motion and that he can start a return to work regime at that stage.” 10
[51] In the Continuing Disability Statement advice provided to Balfours on 1 February 2011 11 on Mr Cooper’s behalf he advised that he was able to perform light duties. However, the accompanying advice from Mr Henningsen was that he was still totally incapacitated and would be reassessed for a full return to work in April 2011.12
[52] Again, on 23 February 2011 Mr Cooper advised Balfours he was fit for light duties. However the accompanying advice from Dr Sidhu was that he was still totally incapacitated and that Dr Sidhu was unsure when he would be able to return to full duties.
[53] The prescribed medical certificates provided under Mr Cooper’s workers compensation claim, dated 30 November 2010 13 and 12 December 201014 indicate that Mr Cooper was cleared to return to work, but I am not satisfied that this information was provided to Balfours.
[54] I have concluded that Balfours was aware that Mr Cooper was recovering, and that a return to full duties was envisaged, although an expected date for this was not specified although his surgeon, Mr Henningsen would be reviewing this in April 2011.
[55] I have concluded that Balfours’ decision not to offer Mr Cooper light duty work reflects a discretionary approach in that there is no absolute obligation to do so in contrast with the legislative obligations under the South Australian WorkCover scheme.
[56] Mr Cooper was granted sick leave before his application for income protection insurance was approved by IUS.
[57] Income protection insurance is provided pursuant to the terms of the agreement regulating Mr Cooper’s employment. Clause 11 of that agreement states:
“The Company agrees to supply to all employees covered under the scope of the awards as outlined in Clause 5, relationship to parent award with the International Underwriting Services Pty Ltd, Total Income Protection Insurance Scheme.
The insurance premium required to be paid by the Company is capped at 2.1%. The company will not be responsible for the funding of any premium increases. The EBA Committee will reconvene to discuss how to manage payment (such as direct employee deductions) if the premium is increased or to discuss insurance options if the current insurer does not offer ongoing cover.
The waiting period has altered from 14 to 21 days. The Company will pay the additional 7 days waiting period in the case of the first 15 claims accepted by IUS in any 12 month period 1st June to 31st May.”
[58] The agreement appears to envisage absences due to illness or injury may extend over at least one year. Leaving aside the extent to which clause 13 is consistent with the now applicable National Employment Standards, this clause deals with the relationship between income protection insurance and sick leave in the following terms:
“D. Should an employee access the provisions of Clause 11 Income Protection Insurance then an employee will only be eligible to apply for payment of 50% of the remaining accrued (76 hours) sick leave for that year.
Eg. Accrual 76 hours
38 hours taken then Income Protection accessed
Leaving 38 hours Accrued
50% of 38 hours = 19 hours to be paid out.”
[59] Mr Cooper’s absence from work appears to me to reflect a foreseeable absence and a foreseeable return to work capacity. The income protection insurance scheme does not support the termination of employment as a consequence of frustration of the employment relationship within the period or circumstances involved here.
[60] The concept of income protection insurance appears to me to reflect a protection from lost income for either a specific period or until an employee is able to return to his or her job. Both Balfours and Mr Cooper appeared well aware that the income protection insurance was for a maximum of two years and both parties were aware that Mr Henningsen, as Mr Cooper’s surgeon, was to review his capacity to return to his full time duties in April 2011. Mr Cooper did not hold a particularly complex job and, on the evidence before me, a delivery driver role still exists even though delivery routes have been altered. Mr Cooper had held this job for a very long time.
[61] Consequently, I consider that the Balfours conclusion that Mr Cooper’s absence from work over the period from April 2010 to February 2011 represented a frustration of the employment relationship was inconsistent with the income protection insurance arrangements and did not represent a valid reason for the termination of Mr Cooper’s employment.
[62] If the advice of Mr Cooper’s medical condition confirmed that he was unlikely to ever return to work, or that he was unlikely to be able to ever resume his driving duties, I may well have arrived at a different conclusion. However, the existence of those income protection insurance arrangements appears to me to indicate that protracted absences were foreseeable and capable of being recognised in a manner similar in concept to annual, sick and other leave.
[63] I do not consider that the termination of Mr Cooper’s employment was capricious, prejudiced or spiteful. There is no evidence to support these contentions. However, in the context of the nature and likely duration of the absence and the income protection insurance arrangements, I do not consider Mr Cooper’s absence to be a sound, defensible or well founded basis for the termination of his employment such that it frustrated his employment contract.
[64] A valid reason for the termination of Mr Cooper’s employment is not necessarily restricted to the reason relied upon by Balfours. I have concluded that the information provided by Mr Cooper in either his IUS claim or his WorkCover claim must be incorrect. In his income protection insurance claim form, Mr Cooper acknowledged that his injury was not work-related. If this is correct, Mr Cooper’s subsequent advice to various of his doctors where he asserts that the injury was work-related is, at best, misleading in so far as it relates to the cause of his injury. If Mr Cooper’s workers compensation claim is correct, his earlier advice, which underpinned his income protection insurance claim must have been false. Information which establishes the basis upon which Mr Cooper’s workers compensation claim was founded is not clear.
[65] I consider Mr Cooper to be well aware of the requirements of the workers compensation scheme, and have concluded that he pursued income protection insurance because that was the more beneficial option open to him. I have concluded that his later pursuit of a workers compensation claim was an attempt slow, or prevent the foreshadowed termination of his employment. On the information before me, I am not able to conclude whether Mr Cooper deliberately lied to IUS or to WorkCover. Balfours was aware, from the time that Mr Cooper lodged his WorkCover claim, that this claim was inconsistent with his IUS claim. While a mistruth of that nature has the potential to be a valid reason for the termination of Mr Cooper’s employment, the nature of the mistruth and the circumstances surrounding it would need to be established to me on the evidence. I am not satisfied that the evidence before me permits such a conclusion or that Balfours behaviour consequent upon its awareness of the likelihood of such a mistruth establishes this to be a valid reason for his dismissal.
Notification of the reason
[66] Mr Cooper was notified of the reason for the termination of his employment.
Opportunity to respond
[67] In November 2010 Mr Cooper was given an opportunity to respond to the proposition that his employment could be terminated unless he could establish some certainty relative to his return to full duties. This matter was discussed with him. This meeting concluded unsatisfactorily from Mr Cooper’s perspective in that he sought, but was not able to access a union support person.
[68] I have concluded that Mr Banham did offer to convene a further meeting but that Mr Cooper did not request that second meeting.
[69] During the delay between the November 2010 meeting and the February 2011 termination of employment, additional information relative to Mr Cooper’s medical condition was provided to Balfours. This was not discussed with Mr Cooper in the context of the decision to terminate his employment.
[70] Further, to the extent that Balfours was concerned that Mr Cooper’s IUS and WorkCover claims were inconsistent, there was no opportunity provided to Mr Cooper to respond to those concerns.
[71] In overall terms, I am not satisfied that Mr Cooper was given a fair opportunity to respond to the proposition that his employment should be terminated.
Unreasonable refusal of a support person
[72] I accept that towards the end of the meeting with Mr Cooper on 17 November 2010, he asked for a union delegate to support him. I am satisfied that Balfours was not able to locate or release such a delegate. Given Mr Banham’s subsequent invitation to convene a second meeting, I do not consider this to represent an unfairness. However, as I have noted above, three months then elapsed before the termination of Mr Cooper’s employment.
Unsatisfactory performance
[73] I do not consider that the termination of Mr Cooper’s employment occurred because of unsatisfactory performance.
Impact of Balfours size on procedures
[74] Balfours is a substantial employer and I have concluded that it has sophisticated procedures regarding employment issues.
Dedicated Human Resource Management specialists
[75] I am satisfied that Balfours had access to human resource management specialists such as Mr Banham and Ms Fonseca who were integral to this matter.
Other matters considered relevant.
[76] Notwithstanding my conclusions with respect to whether there was a valid reason for the termination of his employment, I have reviewed Mr Cooper’s behaviour in pursuing both his income protection insurance claim and his WorkCover claim. Had Balfours tested its understanding of Mr Cooper’s two claims with him before it terminated his employment, his behaviour in this respect might well have been established as a factor favouring termination of employment. However I am not satisfied that this was actually done.
[77] I have noted Mr Cooper’s substantial history of workers compensation claims but there is no evidence before me which permits a conclusion that this was a factor relevant to the termination of his employment.
[78] Finally, I have noted the changes to Balfours delivery routes. Again, there is no evidence before me that suggests that these changes were factors relevant to the termination of Mr Cooper’s employment.
Conclusion
[79] I have concluded that the termination of Mr Cooper’s employment was harsh in that it failed to take proper account of the medical advice indicating that Mr Cooper’s capacity for a full return to work could be reached by his surgeon, Mr Henningsen, in April 2011.
[80] I have concluded that the termination of Mr Cooper’s employment was unjust and the process followed by Balfours was inherently flawed. The 17 November 2010 meeting concluded on an unsatisfactory basis, further information was then available to, and was relied upon by Balfours some three months later but Mr Cooper was not given an opportunity to respond in this respect.
[81] I have concluded that the dismissal was unreasonable in that it was based on the proposition that his absence frustrated the employment relationship. As I have indicated, I do not believe that the nature of the employment relationship, the relevant agreement arrangements, and Mr Cooper’s injury circumstances enabled Balfours to conclude that there was a valid basis for that dismissal.
[82] Further, even if Mr Cooper’s behaviour in making conflicting income protection and worker’s compensation was considered a valid reason for the termination of his employment, the fact that this was not put to him and the procedural flaws in the Balfour’s dismissal process would have led me to conclude that the termination was unjust.
[83] Accordingly, pursuant to s.385 I consider that the termination of Mr Cooper’s employment was unfair.
Remedy
[84] Section 390 provides that, in these circumstances a remedy may be ordered. The primary remedy is that of reinstatement. Section 391 identifies the reinstatement options available to Fair Work Australia in the following terms:
“391 Remedy—reinstatement etc.
Reinstatement
(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:
(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or
(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.
(1A) If:
(a) the position in which the person was employed immediately before the dismissal is no longer a position with the person’s employer at the time of the dismissal; and
(b) that position, or an equivalent position, is a position with an associated entity of the employer;
the order under subsection (1) may be an order to the associated entity to:
(c) appoint the person to the position in which the person was employed immediately before the dismissal; or
(d) appoint the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.”
[85] I have concluded that reinstatement is appropriate in these circumstances. Clearly, Mr Cooper will not be able to undertake his driving duties, until or unless, he is medically cleared to do so. Leaving aside the reassessment to be undertaken by Mr Henningsen in April 2011, the medical evidence referred to in part, a partial return to work and Mr Cooper’s own assessment is that he is able to return to work on a restricted basis. There is no evidence which indicates that Mr Cooper’s disability is likely to be permanent.
[86] In concluding that reinstatement is appropriate I have had particular regard to the Full Bench Decision in Moore Paragon. 15
“[51] The weight to be accorded to ongoing incapacity on the part of an employee when considering whether reinstatement pursuant to s.170CH(3) is appropriate will depend upon all the circumstances of the case. However, when considering whether reinstatement is appropriate for an employee who has an ongoing incapacity arising from illness or injury, the guiding principle ought be that generally reinstatement of a materially incapacitated employee will not be appropriate where:
• further performance of the employee’s contractual obligations in the future would either be impossible or would be a thing radically different from that undertaken by him or her and accepted by the employer under the agreed terms of his or her contract of employment;
• reinstatement would involve imposing a material future productivity burden or some other unreasonable burden on the employer; or
• reinstatement would impose an unreasonable burden on other employees.
Exceptional circumstances would be necessary before reinstatement could properly be regarded as appropriate in such cases.”
[87] The medical advice available to me indicates that Mr Cooper may be able to return to delivery driving duties in the foreseeable future or at least within the period of income protection insurance. That income protection insurance means that Balfours are not required to suffer a cost or productivity burden associated with limitations on Mr Cooper’s work capacity. There is no information which indicates that Mr Cooper’s continuation of income protection insurance would impose a burden on other employees.
[88] Section 391(2) provides the capacity for Fair Work Australia to order the maintenance of the continuity of Mr Cooper’s service. I consider that is appropriate in these circumstances in so far as it is consistent with the concept of continuing employment for employees covered by income protection insurance.
[89] Mr Cooper has been receiving income protection insurance since April 2010. Accordingly, I do not consider that any payment since the termination of his employment is appropriate.
[90] Mr Cooper’s capacity to receive income protection payments in the future will be dependent upon his ability to return to work. I anticipate that his capacity to return to full duties will depend on medical assessments. To the extent that Mr Cooper is requested to participate in return to work assessments directed toward this end, a failure to do so may place his employment at risk. Additionally, if Balfours conclude that Mr Cooper’s future behaviour is dishonest, he should expect that this could result in the termination of his employment.
[91] An Order [PR511635] reflecting this decision will be issued.
SENIOR DEPUTY PRESIDENT
Appearances:
P Dean, of United Voice, appearing for Mr Cooper.
R Manuel, counsel for Balfours Bakery Pty Ltd.
Hearing details:
2011.
Adelaide:
June 20 and 29.
1 Exhibit B2, paragraph 9
2 (1995) 62 IR 371 at 373
3 PR942856
4 PR944238
5 [2010] FWAFB 4022
6 [2001] FCA 1031
7 Exhibit B2, Attachment PF17, (Dr G Graham, page 2)
8 Exhibit B2, Attachment PF17, (Dr G Graham, page 4)
9 Exhibit B2, Attachment PF17, (Mr M Henningsen, page 3)
10 Exhibit B2, Attachment PF17, (Mr M Henningsen, page 4)
11 Exhibit B2 Attachment PF8
12 Exhibit B2, Attachment PF8
13 Exhibit C2, Attachment H
14 Exhibit C2, Attachment I
15 PR942856
Printed by authority of the Commonwealth Government Printer
<Price code C, PR511636>
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