Cramer v SmithKline Beecham
[1997] FCA 606
•2 July 1997
FEDERAL COURT OF AUSTRALIA
INDUSTRIAL LAW - termination of employment - incapacity - allergic reaction to products manufactured by employer - relocation of employees - reoccurrence of allergic reaction - medical recommendations for employment off site - inherent requirements of employment in a chemical manufacturing plant - valid reasons for termination
Workplace Relations Act 1996 ss.170DE, 170DF, 170EA
CASES:
Winter v Australian National Hotels (1995) 60 IR 316
Selvachandran v Peteron Plastics (1995) 62 IR 371
Nettlefold v Kym Smoker (1996) 69 IR 370
Kerr and Jaroma Pty Ltd (1996) 70 IR 469
CRAMER -v- SMITHKLINE BEECHAM
No. VI-1164 of 1997
VANGRAMBERG -v- SMITHKLINE BEECHAM
No. VI-1165 of 1997
Ryan JR
Melbourne
2 July 1997
FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1164 of 1997
B E T W E E N :
TRISETTE CRAMER
Applicant
AND
SMITHKLINE BEECHAM
Respondent
VI-1165 of 1997
B E T W E E N :
LORETTA VANGRAMBERG
Applicant
AND
SMITHKLINE BEECHAM
Respondent
MINUTES OF ORDERS
Judicial Registrar Ryan 2 July 1997
THE COURT ORDERS:
That the applications be dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules
FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI-1164 of 1997
B E T W E E N :
TRISETTE CRAMER
Applicant
AND
SMITHKLINE BEECHAM
Respondent
VI-1165 of 1997
B E T W E E N :
LORETTA VANGRAMBERG
Applicant
AND
SMITHKLINE BEECHAM
Respondent
Ryan JR
Melbourne
2 July 1997
REASONS FOR JUDGMENT
(Delivered Ex Tempore - revised from Transcript)
The Applicants are sisters who worked for the Respondent at the Dandenong Chemical Plant. Both had their employment terminated on 19 November 1996. Both sought compensation in claims of unlawful termination of employment.
Early in the hearing, Mr Isles, counsel for the Applicants, indicated that the validity of the terminations would be attacked on several grounds including the failure of the Respondent to provide a penicillin-free environment. The Applicants had been diagnosed as penicillin sensitive. At this stage the Court raised the question of why the Applicants were not seeking reinstatement given the argument that the terminations were unlawful for reasons which included a failure to provide a penicillin-free environment and assertions that such an environment should have been provided. Counsel for the Applicants indicated that he had intended to apply at the commencement of the trial to amend the applications to seek reinstatement and he made an application to that effect. Reinstatement is the primary remedy and the applications were amended.
Ms Davis, counsel for the Respondent, tabled a chronology relating to the appointment, allergy-related relocations and termination of employment of both Applicants. The evidence confirms the general accuracy of the chronology. The judgment refers to some of the dates and events. Those events and dates which are not mentioned are accepted as having occurred on or about the dates and months outlined in the chronology.
Mrs Cramer and Mrs Vangramberg were employed in various production, packaging and clerical positions with the Respondent. Both began at the Dandenong plant as packaging assistants - Mrs Cramer, on 25 July 1986, and Mrs Vangramberg almost three years later on 28 March 1989. Both worked initially in the packaging hall in the antibiotic factory.
In October 1992 Mrs Vangramberg developed sensitivity to penicillin. A Dr Nixon confirmed penicillin sensitivity on 15 January 1993.
On 19 August 1994 Mrs Cramer reported the possibility that she too was penicillin sensitive. On 25 August 1994 a Dr Nash did not confirm penicillin sensitivity but certified Mrs Cramer was unfit for work.
On 6 September 1994 Mrs Cramer returned to work in the antibiotic factory packing hall in an area where it was thought she would experience no direct contact with penicillin. Symptoms re-occurred on 13 September 1994 and she was absent from work until 19 September 1994 when she returned to work in the quaintly called “non-antibiotic” RX factory packing hall. On 26 October 1994 a Dr Reid stated that Mrs Cramer was not to work in contact with cimetidine and she was immediately relocated into the technical operations building. She returned to the RX factory packing hall on 7 February 1995, reported allergic reaction and did not work from 8 February 1995 to 10 April 1995.
In October 1994 Mrs Vangramberg, who had been working in the RX factory since February 1993, reported rash symptoms and a medical certificate dated 2 November 1994 stated she should not be exposed to cimetidine. On 5 December 1994 Dr Nash recommended that she not work in any production environment at the Respondent's Dandenong site. Mrs Vangramberg was then relocated into the technical operations building where she continued to report allergy problems and she was off work from 13 January 1995 to 10 April 1995.
On 10 April 1995 both Mrs Cramer and Mrs Vangramberg reported to work in response to letters of 29 March 1995. They began work performing clerical duties for the training officer in the commercial building. Both reported allergic symptoms that day and neither worked after that date. The area was swabbed, penicillin was located, the area was cleaned and another swab taken was negative to penicillin.
On 21 June 1995 the Respondent offered Mrs Cramer a return to work in the commercial building. A similar offer was made to Mrs Vangramberg on 28 June.
Mrs Cramer's solicitors unsuccessfully sought an absolute guarantee that Mrs Cramer, on return to work, would not be exposed to penicillin.
Mrs Vangramberg indicated that on the basis of medical advice she would not return to work.
On 21 July 1995 the Respondent's insurers engaged Work Solutions Pty Limited to provide vocational assessment and assistance and “outplacement” for both Mrs Cramer and Mrs Vangramberg.
From September 1995 to November 1996 the Respondent negotiated with the National Union of Workers in respect of an illness/injury policy and those negotiations included negotiations in respect of the likely termination of the Applicants.
By November 1996 both Applicants had been absent from work for almost two years with the exception of a few hours in the commercial building on 10 April 1996. Work Solutions had failed to obtain outplacement for either Applicant. On 7 November 1996 the Respondent wrote to both Applicants and expressed concern about their continued inability to work at SmithKline Beecham International and indicated that since Monday, 10 April 1995, they had been unable to attend work and also indicated that medical evidence suggested that they were permanently unable to work for SmithKline International.
The letters of 7 November also indicated an intention on the part of the Respondent to terminate employment on Monday 18 November, unless in each case, the Applicant was able to provide medical evidence that the Applicant was able to return to work.
On 19 November 1996 the Respondent terminated the employment of both Applicants and wrote to each of them and advised of an intention to terminate employment effective that day, 19 November 1996, and advising each Applicant that they would be paid four weeks in lieu of notice as per clause 14(a) of an Enterprise Agreement and outstanding entitlements. Evidence was given that, following further negotiations with the union, both were paid an additional two weeks salary.
Counsel for the Respondent submits the following is relevant to lawful termination for valid reason. (I quote here from paragraph 12 of her written submission):
(a)a thorough assessment of the positions available for the Applicants was made by the Respondent and each of these positions at each of the possible locations was in fact attempted, albeit unsuccessfully.
(b)every effort was made to redeploy the Applicants to positions within the Respondent company, including packing different products, warehouse duties, security duties and administrative duties. All such avenues were tried and, in the case of the failed return to work of the Applicants in April 1995, there was an attempt, in the light of a clean-up of the commercial building, to have another attempt at redeployment in July 1995 but the Applicants did not attend the work place on that occasion.
(c) efforts were made to retrain the Applicants.
(d) medical experts were consulted as to appropriate positions for the Applicants and those experts recommended employment for the Applicants outside and away from the Dandenong site.
(e) having exhausted all avenues for redeployment within the company the Respondent arranged for formal vocational assessment;
(f)the Applicants should have been aware of the likelihood of termination well before November 1996 during negotiations of the draft policy with the unions.
(g)the Applicants were independently represented by their union during the rehabilitation process.
(h)the Applicants' positions as clerical assistants were not made redundant and they were not entitled to apply for a voluntary redundancy.
the Applicants were paid all amounts owing to them upon termination of their employment under the enterprise agreement.
(j) the Applicants' letters of appointment provided for termination of employment in the event of allergies to the Respondents' product.
I have concluded both terminations were for valid reason and I shall return to that later.
Counsel for the Applicants has asserted that the terminations were not for a valid reason because, inter alia, the Respondent failed to provide and could have provided and should have provided a penicillin-free environment.
The Court does not accept that the Respondent could guarantee such an environment given the nature of its business.
Counsel for the Applicants relied to some extent on Winter v Australian National Hotels (1995) 60 IR 316. The circumstances in Winter are readily distinguishable from those applying to Mrs Cramer and Mrs Vangramberg. Firstly, in Winter, the employer did not attempt to discharge the onus cast upon it by section 170EDA(1)(a). Its case was that it had not terminated the employment of Winter and that it was Winter who had brought the employment to an end.
Secondly, Lee J held in Winter that if it could be said that there was a valid reason for the termination of employment connected with capacity the circumstances show that in all the circumstances the termination for that reason was unreasonable.
Thirdly, Lee J found that at the material times the employer had the capacity to arrange the duties of security officers to accommodate Winter's inability to work in one particular area, the discotheque area, and a reasonable course for the employer to have followed was to have maintained the status quo whereby Mr Winter had not been required for some time to work in the disco area.
With Mrs Cramer and Mrs Vangramberg, the Respondent concluded, on the basis of the reactions reported by both Applicants when they worked in any and all areas of the plant, and on the basis of medical reports, that the Applicants were unable to effectively work without allergic reaction in any area of the plant.
The Respondent concluded that neither Applicant had the capacity to perform production, packing or clerical duties in any area of the plant.
The Respondent formed the view that medical evidence indicated that both Applicants were permanently unable to work at the Dandenong site and advised both in writing on 7 November 1996 that it was intended that employment be terminated on 18 November 1996 unless the Applicants were able to provide medical evidence that they were able to return to work.
These are different circumstances to an employer in Winter's case imposing a condition that employment of an employee would not be continued unless the employee produced medical evidence he was not fit to work in one particular area where he had not been required to work for some time because of sensitivity to high levels of tobacco smoke.
The circumstances are also different in that the Respondent has always conceded that the employment of both Applicants was terminated by the employer. The Respondent here has not departed from the terms of the contract of employment. Indeed, the Respondent asserts that the Applicants are unable to fulfil the inherent requirements of their contracts of employment.
I have concluded, after assessment of the documentary evidence, and the evidence given by both Applicants, and by Mr David Young, Environmental Occupational Health and Safety Officer, and Ms Valerie Renton, Human Resources Manager, that there was a valid reason connected with the capacity of each Applicant, which warranted the termination of employment in each case.
I consider the reason valid in each case in terms of Selvachandran v Peteron Plastics (1995) 62 IR 371 and fair and just, in terms of Nettlefold v Kym Smoker (1996) 69 IR 370 and objectively defensible in terms of Kerr v Jaroma Pty Limited (1996) 70 IR 469.
I reject the proposition put by counsel for the Applicants that the terminations were in breach of s.170DF(1)(f) and were prohibited terminations because the terminations were for a reason or reasons including physical disability. I have found the terminations were for valid reason connected with capacity; in these cases, the incapacity of either Applicant to meet the inherent requirements of working in a chemical manufacturing plant. In this respect, I note the terms of s.170DF(2), which reads:
“Sub-section (1) does not prevent a matter referred to in paragraph 1(f) from being a reason for terminating employment, if the reason is based on the inherent requirements of the particular position.”
Having concluded the terminations were for valid reason, the order of the Court is that the applications be dismissed.
MINUTES OF ORDERS
THE COURT ORDERS:
The applications are dismissed.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules
I certify that this and the preceding 5 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan.
Associate:
Dated: 9 July 1997
Solicitor for the Applicants: Lalith P Thalakada
Counsel for the Applicants: Mr J Isles
Solicitors for the Respondent: Arthur Robinson Hedderwicks
Counsel for the Respondent: Ms S Davis
Date of hearing: 1 and 2 July 1997
Date of judgment: 2 July 1997
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