Dr Mark Colson v Barwon Health Geelong Hospital
[2013] FWC 766
•11 FEBRUARY 2013
Note: Appeals pursuant to s.604 (C2013/3409 and C2013/3427) were lodged against this decision - refer to Full Bench decision dated 15 July 2013 [[2013] FWCFB 4515] for result of appeal.
[2013] FWC 766 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Dr Mark Colson
v
Barwon Health - Geelong Hospital
(U2012/10440)
COMMISSIONER ROE | MELBOURNE, 11 FEBRUARY 2013 |
Termination of employment.
[1] The matter arises from an application filed on 13 June 2012 under s 394 of the Fair Work Act 2009 (the Act) by Dr Mark Colson (the Applicant) for relief in respect to the termination of his employment as a specialist in anaesthesia from Barwon Health (the Respondent). The Applicant had been employed by Barwon Health at the Geelong Hospital since 1998 and was dismissed at the initiative of the employer on 30 May 2012.
[2] There is no dispute that the Applicant is protected from unfair dismissal and that:
● The Respondent is a large employer with specialist human resource management expertise.
● The Applicant was employed on a full time basis for a period exceeding six months.
● The Respondent is a national system employer.
● The employment of the Applicant by the Respondent is governed by the AMA - Barwon Health Full-Time Anaesthetists' Certified Agreement 2001 (the Agreement).
● There is no suggestion that the termination was for reasons of redundancy or unsatisfactory performance.
[3] The Applicant was terminated for serious misconduct on 30 May 2012 for allegedly:
● “Knowingly and willingly submitted claims for RVG payments in breach of Barwon Health billing guidelines and directives provided to you to comply with those guidelines” 1 (the first ground for termination). This ground has been restated in the Respondent’s submission as “repeatedly refusing to comply with Barwon Health’s billing practices for after hours work, and management directives to comply with those practices, and his stated intention not to comply in the future.”
● “Publication of your letter dated 23 March 2012 to the entire Department of Anaesthesia was intended to be deliberately offensive, a genuine challenge to the authority of management and was designed to embarrass Barwon Health and damage its reputation” 2 (the second ground for termination). This ground has been restated in the Respondent’s submission as “his publication of an offensive and derogatory letter to the entire Department of Anaesthesia which was disparaging of Barwon Health and its management, and calculated to challenge its authority and undermine its relationships with its staff”.
[4] I am satisfied that Dr Colson was advised of these matters in correspondence of 23 April 2012 including that his employment may be at risk 3 and was given an opportunity to respond including at a meeting on 14 May 2012 where a support person was present. The matters were put to Dr Colson again at the meeting of 14 May 2012.4 I am satisfied that the decision to terminate was taken after consideration of the responses of Dr Colson including at the meeting of 14 May 2012. The Applicant was advised of the termination at a further meeting and in writing on 30 May 2012. Mr Colson argues that it appears that the decision to terminate was taken within a few days of the 14 May 2012 meeting and therefore before the alternative minutes of the meeting of 14 May 2012 prepared by Dr Colson had been considered.5 However, Barwon Health in the termination letter makes it clear that they read and considered this document. I do not regard this as having created procedural unfairness given that the decision makers and Dr Colson and his representative were at the 14 May 2012 meeting.
[5] Notwithstanding that the termination was for serious misconduct the Applicant was paid three month’s pay in lieu of notice. Barwon Health has a number of policies in respect to discipline and termination. These policies provide for a process of escalating warnings in situations of concerns about performance or conduct but provide that these processes are not required to be followed in cases of serious misconduct warranting summary dismissal. Barwon Health accepts that it did not issue warnings in respect to the Applicant’s conduct and argues that the conduct of the Applicant was serious misconduct warranting summary termination. Barwon Health argue that the reasons for termination strike at the heart of the trust and confidence necessary to maintain an employment relationship and that it was “so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue employment”. 6
[6] The letter of termination states:
“Barwon Health....has concluded that the allegations against have been made out and that your conduct constitutes serious misconduct. Despite your conduct constituting serious misconduct, Barwon Health has decided to terminate your employment by providing you with notice pursuant to your Employment Contract rather than terminating your employment summarily. However, you are not required to work out your notice period and your employment with Barwon Health will cease immediately.” 7
[7] The letter of termination is confusing. It could be read as stating that the termination is not a summary termination. However, I consider that in context it is clear that Barwon Health has determined that the Applicant should be dismissed due to serious misconduct which would justify termination without the payment of notice. Barwon Health has decided notwithstanding this to pay notice. I am satisfied that the general industrial meaning of summary dismissal is dismissal without the requirement to pay notice pursuant to the NES, Award or Agreement.
[8] I am satisfied that if the conduct is not found to be serious misconduct then the termination would not be likely to be procedurally fair in the absence of a reasonable process of warning(s) as required by the Barwon Health policies. The Respondent does not submit that the process becomes fair simply because notice was paid.
[9] However, I reject the submission on behalf of the Applicant that because the termination letter states that the termination is not a summary termination, and or because of the payment of notice, that the termination cannot be procedurally fair because pursuant to the Barwon Health policies the normal warning process should have been followed in cases which are not summary termination without notice. I think that it is reasonably clear in the circumstances of this case that the employer was in fact dismissing Dr Colson for what it found was serious misconduct justifying dismissal without notice.
[10] Following an unsuccessful conciliation conference the matter proceeded to arbitration. The hearing of the matter was delayed at the request of the Applicant due to a family tragedy. The parties elected to proceed to a hearing on 14 and 15 January 2013.
[11] The Applicant argues that an analysis of the claims made for after hours work reveals that the Applicant was entitled to claim for more time units than he had submitted claims for and that Dr Colson was in fact eventually paid for the missing time units. The Applicant argues that the letter of 23 March 2012 was a forthright and direct response to the false allegation of fraud made by the Respondent. The Applicant argues that the letter challenged management’s judgment not management’s authority.
[12] Evidence was given by the Applicant and there was also evidence in support of the Applicant by: Dr Stephen Bolsin, who also worked in the anaesthetic department of Geelong Hospital; Dr Richard Grutzner, who is also an anaesthetist and who is Vice President of the Australian Society of Anaesthetists (ASA); Dr Bernie Creati, specialist anaesthetist who is a Visiting Medical Officer (VMO) at Geelong Hospital; and Mr Andrew Lewis, Senior Industrial Relations Advisor with the Australian Medical Association Victoria who appeared by summons.
[13] Evidence was given for the Respondent by: Dr Simon Tomlinson, Director of the Department of Anaesthesia, Perioperative and Pain Medicine (the Department); Dr Colin Gordon, Deputy Director of the Department; Mr Peter Watson, Executive Director Surgical Services; and Mr Perry Muncaster, Director of Human Resources.
FIRST GROUND FOR TERMINATION
[14] The first ground for termination was:
“Knowingly and willing submitted claims for RVG payments in breach of Barwon Health billing guidelines and directives provided to you to comply with those guidelines.”
Billing policy and practice in respect to after hours work
[15] The Applicant says that fees for out of hours work during the period of his employment have been charged by reference to the AMA Relative Value Guide (RVG).
[16] Dr Grutzner gave evidence that the Relative Value Guide is produced by the Australian Society of Anaesthetists (ASA) and is then published by the Australian Medical Association (AMA). The RVG is a system designed to assist anaesthetists in the determination of the fees charged for professional services. The system expresses the relativities of the various components of the delivery of anaesthesia services and results in a service being described as a total number of units. Base units are allocated for a particular procedure and for elements of the procedure with particular item numbers; time units are allocated at a rate of one unit for each 15 minutes or part thereof for the first two hours and one unit for each ten minutes or part thereof beyond two hours; and modifying units are allocated for factors such as extremes of age or systemic disease and for consultations and specialised situations. The units are totalled and a dollar value is attributed to a unit. A unit was worth approximately $32 in March 2012. Dr Grutzner gave evidence that the time units are on the basis that an anaesthetist is providing exclusive one on one care of a patient and can only charge for the care of one patient at any one time. 8
[17] Dr Grutzner gave evidence that the Commonwealth Medical Benefits Schedule (MBS) bears some similarities to the RVG but there is a difference in the dollar rate per unit and also there are some items which are included in the RVG but not acknowledged in the MBS.
[18] Dr Grutzner and the Applicant gave evidence that the Agreement provides that after hours work is billed and paid by reference to the RVG. However there were long standing modifications to the RVG to deal with the issue of multiple theatres including the supervision of trainees in anaesthesia which Dr Grutzner says are not covered in the RVG. Dr Grutzner gave evidence that the ASA has no policy in respect to how charges should be made where the anaesthetist is working in two theatres simultaneously and says this is a matter for local arrangement between the hospital and the specialist. The Applicant gave evidence that the rate paid for emergencies was specifically altered in the Agreement and confirmed that there was also an agreed local practice related to dual theatre operation.
[19] I accept Dr Grutzner’s evidence which was not challenged.
[20] It is not in contention that:
● The RVG applies under the Agreement with respect to claiming for out of hours operations with the exception of the after hours emergency loading.
● Pursuant to the RVG, time units are claimed at the rate of one per 15 minutes or part thereof (an escalating rate may apply for longer procedures).
● The RVG does not cover claims for more than one procedure at the same time; these matters are covered by local arrangement. 9
● Local arrangements were agreed for claims for more than one procedure around the time of finalisation of the Agreement in 2001.
● Dr Colson was involved in the resolution of those local arrangements.
● Essentially the local arrangement involved the ability to claim in accordance with the RVG for simultaneous or overlapping procedures with the exception of time units which could not be double counted. A start stop time was to be recorded for the period of dual theatre operation so that time unit calculations were performed for the entire period rather than for each patient separately, as would be the case with single theatre operations. 10
● The payroll and claims approval system requires the provision of claim sheets on which up to four procedures are included on each sheet. The payroll or claims system requires a start and a finish time on each sheet.
[21] The RVG can result in more than 4 time units being claimed in an hour for single theatre operation because each 15 minutes or part thereof with a particular patient is a claimable time unit. So for example, if there were four patients in an hour - two of twenty minutes duration and two of ten minutes duration 6 time units could be claimed. The Respondent claims that the practice when two theatres are operating concurrently has been that only 4 time units can be claimed in one hour.
[22] Dr Gordon and Dr Tomlinson gave evidence that this policy and practice was well known and implemented from 2001 onwards. Dr Gordon says that at some time prior to 2001 claims could only be made for one procedure at a time. Dr Gordon says that it was agreed around 2001 that no double counting meant a maximum of 4 time units could be claimed in each hour. In his view this is the only way you can implement the agreement that “time unit calculations were preformed for the entire period rather than for each patient separately” and the only way you can prevent “double counting”. Dr Tomlinson also says that there was a 4 units per hour rule in place and says that this was never changed. In support of this they both gave evidence that no one except Dr Colson claimed in a different manner.
[23] Dr Colson accepts that he interpreted the policy in the manner proposed by Dr Tomlinson and Dr Gordon until payroll told him that he had to put a finish time at the end of each sheet of four patients. From then on his practice was: “Where such a period spanned more than one claim form, my long-standing practice was to record the time of starting the first case on each subsequent claim form as the end time on the previous claim form.” 11 Dr Colson accepts that the capacity to claim for dual theatre operation has been in place since approximately 2001 and it has become more common in recent years.12
[24] Dr Colson’s practice is demonstrated by his March claims. 13 The start time for the first procedure on each sheet was recorded and that time was also recorded as the finish time on the earlier sheet. So for example the first sheet specified a start time of 8.30 and a finish time of 11.20 and the second sheet specified a start time of 11.20 and a finish time of 15.40. The time units claimed for these two sheets was 30 units but the actual time span was 7 hours and ten minutes which under the policy alleged by the Respondent was only 29 units. It should be noted that the Respondent accepts that part of 15 minutes is paid as with the RVG if the total is not a multiple of 15 minutes.
[25] Dr Gordon and Dr Tomlinson say that a time is required at the start and finish of each form but that at the end of the form if simultaneous operations are continuing it is not reasonable to put down an actual finish time which relates to a specific patient because, although there will be an end time for one patient, activity in respect to another patient will be continuing. Hence it is obvious in the view of Dr Gordon that the nearest 15 minute period should be specified as the end time on one sheet and the start time of the subsequent sheet. Dr Colson refers to such times as imaginary.
[26] I am satisfied that Dr Gordon and Dr Tomlinson are correct in their assessment that during two theatre operation the finish time at the end of a four patient sheet cannot be anything other than a nominal time.
[27] Dr Gordon and Dr Tomlinson both gave evidence that they checked the claim forms of all the specialist staff anaesthetists. I consider it probable that they checked the forms of Dr Colson in more detail after they discovered that he was claiming for time units in a different manner. I accept the evidence that Dr Gordon and Dr Tomlinson checked the claim forms of all specialist staff anaesthetists at least to an extent that they can be reasonably confident that generally it was only Dr Colson who claimed more than 4 time units per hour for dual theatre operation. I cannot exclude the possibility that other claims of the same type escaped detection.
[28] Dr Bolsin a witness for the Applicant who is in a similar position to Dr Colson gave evidence that he has always used the RVG as the basis for claiming payment for out of hours work. However, Dr Bolsin does not suggest in his witness statement that he adopted the same methodology as Dr Colson.
[29] Dr Creati has worked as a Visiting Medical Officer (VMO) since 2005. Dr Creati gave evidence that: “I have submitted claims for after-hours work using an identical system of calculating time units to that used by Dr Mark Colson. These claims were always paid in full and at no stage have I been accused of submitting false-claims.” 14 This was not challenged in cross examination. However, Dr Tomlinson says that Dr Creati as a VMO was not, and had not, been required to work dual theatres out of hours. The only VMO who had done such work in recent years was a VMO in the cardiac area.15 I cannot reject the evidence of Dr Creati given that his statement was not subject to cross examination. However, Dr Tomlinson convinced me that he had a good understanding of the incidence of out of hours claims by VMOs in recent years. I consider it likely that time unit claims for dual theatre operation by Dr Creati using the same system as Dr Colson would have been infrequent or a number of years ago.
[30] Dr Colson argues that a circular notice of 15 March 2006 from Dr Gordon suggests there was controversy and confusion over how to charge for after hours work. That circular begins “our system for RVG after hours claims is confusing in the following areas.” 16 The areas identified were; “we each have our own way of filling out the forms” and the way in which claims are made for cases taken over and elective cases commencing after 6pm. Dr Gordon accepts that there was some confusion over how to make time unit claims.17
[31] Dr Tomlinson in an email on 22 December 2011 refers to uncertainty and possible misunderstandings in the RVG system. 18
[32] Dr Colson points to minutes of the department meeting of 1 March 2012 - under the heading RVG there is a report of lively discussion about the interpretation and use of “this item number”. This is a clear reference to an ongoing dispute about claiming certain item numbers, I am satisfied that it is not about the controversy concerning claiming time units. 19
[33] The documentary evidence is that a range of issues were in debate; however, there is no evidence of widespread debate or confusion over claiming time units for dual theatre operation in late 2011 and in 2012.
Documented policy in respect to claims for time units after hours when in dual theatre operation
[34] Dr Gordon gave evidence of a document titled “Rules of Engagement After Hours Payments” published on 26 April 2006. 20 That document shows that only the start and the finish time need to be used for calculation of time units and that there is no need to record the start and finish times for each patient. Dr Gordon points to the last sentence in that section of the document which says: “if you claim for other cases during the time of the case that goes on longer than two hours...then you cannot claim for the greater time units as this would seem to be unfair and ? double dipping.”
[35] I accept the evidence of Dr Gordon that the Applicant was aware of the 2006 policy.
[36] The 2006 policy document does not specify that only four time units can be claimed per hour in dual theatre operation. The document provides some general support for the contention that there was a policy against “double dipping” and that there was no need to record the start and finish times for each patient. However, I am satisfied that because there was a requirement to put a finish time on each four patient sheet and no mention of the 4 units per hour rule this document does not constitute a policy or a direction which contradicts the practice of Dr Colson.
[37] Dr Gordon was absolutely convinced that it was clear that the 4 units per hour rule applied and that nothing had happened to change it. He appeared surprised when in cross examination it was demonstrated to him that the policy did not clearly specify this. 21 Dr Gordon says that he was angry and amazed when he saw the December claim forms of Dr Colson.22 I am satisfied that Dr Gordon’s conviction that the matter was very clear coloured his view and resulted in him failing to consider that Dr Colson’s claims may have resulted from a misunderstanding. Dr Gordon conceded that Dr Colson’s actions were in fact consistent with the rules as at December 2011.23
[38] Dr Tomlinson and Dr Gordon gave evidence that during late 2011 and the first part of 2012 they worked on clarification to the rules of engagement with the objective of ensuring that there was consistency in claiming practice. They gave evidence concerning a number of issues of controversy which particularly related to the claiming of particular item numbers. Dr Colson accepts that there was some controversy over the use of particular item numbers and he participated in debate on some of these issues. Dr Colson is a member of the ASA committee which dealt with billing policy. The Applicant accepts that there was some discussion of a proposal to produce hospital specific billing guidelines but the Applicant says that there was no formal discussion of this in 2011.
[39] Dr Colson was not present at a Departmental meeting in January 2012 when according to the minutes a “draft” document was discussed but he received the minutes of the meeting. Dr Colson gave evidence that he thought the document may be subject to further discussion and change. I am satisfied that this was not an unreasonable assumption.
[40] A new and operative version of the guidelines or rules of engagement was issued on Thursday 1 March 2012 and circulated to all staff anaesthetists. The Applicant says that he only scanned the document at the time and it was only after claims he made for work on Sunday 4 March 2012 had been challenged that he read the document properly. I accept this evidence and given the short period of time which had elapsed it would be unreasonable to expect that all anaesthetists would have read and understood the document.
[41] The minutes of the staff meeting of 1 March 2012 24 shows that there was debate about the use of RVG “item numbers.” As noted earlier, there is no mention of any debate about time unit claims. The minutes note that billing guidelines have now been publicised and printed.
[42] The 1 March 2012 guidelines 25 at page (v) provides that:
“Time units will be calculated at 4 units/hour amalgamating the times for consecutive patients on each sheet of four patients and documented in blocks of 15 minutes on the claim sheets. The number of units per hour does not increase as per the RVG when billing for multiple contemporaneous patients.”
[43] The Barwon Health Billing Guidelines issued on 1 March 2012 were destroyed on 8 June 2012 due to concerns about copyright raised by ASA. However, the Respondent says that the operative part of the guidelines which related to modifications or additions to the RVG were reissued and were not substantially altered. In particular the guidelines about the method for charging when two theatres were operating simultaneously remained in force.
[44] The post termination reissued document is very similar to the 1 March 2012 document in respect to the policy matters covered. There are however some variations. The reissued document deals with the time units policy for dual theatre operation as follows:
“Time units should be calculated at a flat rate of 4 units/hour. This should be documented in blocks of 15 minutes on individual claim sheets (independent of the actual times individual patients are cared for). The number of units per hour does not increase as per the RVG when billing for multiple contemporaneous patients.” 26
[45] I am satisfied that Dr Tomlinson and Dr Gordon believed that it was reasonably clear in the 1 March 2012 version of the guidelines that “blocks of 15 minutes” implied that part 15 minutes should not be included during dual theatre operation where an anaesthetist is charging for item numbers for procedures in both theatres. However, the absence of any direction about the times to be put at the end of each sheet creates some doubt. The preamble in the document 27 makes it reasonably clear that this rule only applies to dual theatre operation. However, it is also not beyond doubt.
[46] Dr Gordon agreed that the addition of the words “(independent of the actual times individual patients are cared for)” in the post termination version of the guidelines was made “to make it definitely clear and more robust.” 28 Dr Gordon conceded that Dr Colson was not in breach of the March 2012 guidelines;29 however, not much weight can be placed on this concession as Dr Gordon did not have the opportunity to consider the document at that time.30
[47] If an out of hours dual theatre claim only covers four patients then there is no difference between Dr Colson’s methodology and the methodology advocated by Barwon Health. This is because the RVG method of “15 minutes or part thereof” applies to the finish time of the dual theatre session. The difference is that if the session covers more than four patients Barwon Health require that, to avoid double counting and to be consistent with the 4 units per hour rule during a session of dual theatre operation, the finish time on the bottom of intermediate sheets must be a multiple of 15 minutes from the start time. This is why the policy or guideline does not rule out Dr Colson’s methodology unless it specifies that the finish times on these intermediate sheets are not required to coincide with the finish time for any particular patient.
[48] I accept that it would be unsafe and unreasonable to discipline Dr Colson for breach of policy on the basis of the written guidelines. The guidelines prior to the post termination version do not explicitly rule out the methodology utilised by Dr Colson. If the “flat rate of 4 units per hour” policy is read in conjunction with other instructions to “put a finish time on the bottom of each form” then Dr Colson’s methodology is not in breach of the policy. However, if it is read in conjunction with the post termination instruction “independent of the actual times individual patients are cared for” 31 then it would be clear that Dr Colson’s methodology would not be consistent.
[49] I am satisfied that prior to the termination the policy was not clearly documented in a policy or guidelines document in a manner which would exclude Dr Colson’s methodology for claiming time units. However, Barwon Health say that a directive was clearly stated to Dr Colson in an email from Dr Tomlinson to Dr Colson in December 2011. I will deal with that issue next.
The December 2011 claims
[50] An audit of the Applicant’s on call claims for 15, 18 and 20 December 2011 was conducted on 22 December 2011. A meeting was held between the Applicant and Doctors Tomlinson and Gordon. This revealed two instances of undercharging and two instances of overcharging. On balance there were 7 units of undercharging although the Applicant says that in fact a further 9 units of undercharging should have been credited. The method for claiming work when two theatres were in operation was the matter which led to the instances of alleged overcharging. The Director, Dr Tomlinson, sent the Applicant a detailed email regarding these issues following the meeting on 22 December 2011.
[51] This is the first occasion when it is alleged that a difference of approach to claiming time units was raised with Dr Colson.
[52] The Applicant argues, and a post termination examination by Dr Tomlinson of records from 2011 confirms, that the Applicant had been claiming time units for dual theatre operation in the manner objected to by the Respondent prior to December 2011. 32
[53] The email from Dr Tomlinson to the Applicant of 22 December 2011 is important. That email purports to summarise and therefore to emphasise in writing what had been discussed at the meeting. It begins with: “Dear Mark, Thank you for meeting with myself and Colin to discuss your RVG claims. As discussed....” 33
[54] The email then includes:
● A reminder that it is the Applicant’s responsibility to put in accurate claims not the responsibility of those checking them to find or correct errors.
● A reminder that inappropriate claims if repeated after appropriate education would almost certainly be regarded as fraudulent.
[55] The email states that:
“3. There are guidelines created by the department to clarify areas of uncertainty within the AMA RVG system which we have discussed at a number of departmental meetings.
4. We will continue to develop our RVG guidelines to minimise the possibility of any misunderstandings, and in light of our discussions today will include the following clarifications...” 34
[56] There were four clarifications set out. The clarification of greatest relevance to this case is the one related to claims for time units. It includes the following:
“4. Time units: as part of our employment contract we have an agreement that we can claim for cases occurring simultaneously, but not “double dip” on the time units. Therefore
1. While running 2 theatres/anaesthetising locations, time in attendance should be claimed at the rate of 4 units per hour. Documentation on the claim form must have start and finish times for each sheet, but they do not have to be accurate from a specific case perspective. The start and finish times for each period of attendance must reflect the actual time spent in the hospital. Cases longer than 2 hours occurring during this billing period do not attract the ascending time unit provision....” 35
[57] The email concluded with:
“If there are any uncertainties with future claims please don’t hesitate to discuss them with Colin or myself, prior to submission. I expect that these particular billing mistakes will not occur in the future, and if there are any changes to items in future editions of the RVG guide, I expect that your association with the ASA should prove valuable in clarifying the way they are to be used as soon as the new version comes out. Kind regards, Yours sincerely Simon” 36
[58] I am satisfied that the email makes it clear that only 4 units per hour can be claimed reflecting the total actual time spent in hospital during the dual theatre out of hours session. The email makes it clear that the times on the sheet do not have to be accurate from a specific case perspective.
[59] Dr Colson suggests that the email is not clear because it does not say that you cannot put the actual finish time of a case at the end of each sheet. I reject this submission as an artificial and pedantic reading. The requirement for only 4 units per hour is to be read in conjunction with the provision that the times do not have to be accurate from a specific case perspective.
[60] Dr Colson suggests that it was not clear from the email that the strict 4 units per hour approach applied in each case given that the option of only claiming for one theatre in cases of long operations was offered. 37 I consider that this exception was clearly understood and did not detract from the clarity of the approach that if you wish to claim for two theatre operation, including the units for various item numbers in both theatres then only 4 time units can be claimed per hour.
[61] Dr Colson suggests that the email does not constitute a direction. In my view there are some aspects of the email which do constitute a direction and in particular statements:
● That incorrect claims may be regarded as fraudulent if repeated after appropriate education; and
● Emphasizing that it is the doctor’s responsibility to get it right; and
● Statements urging direct contact with Dr Tomlinson if anything is unclear.
[62] Dr Colson suggests that because there are some items in the email which he alleges were not specific problems in his particular claims he understood the email to be general advice not a specific instruction. Dr Colson says that he believed that it was an advice which had been circulated generally in the department but under cross examination Dr Colson could point to no satisfactory basis for such speculation. 38 Dr Tomlinson says that all of the items raised in the email were discussed at the meeting but it is not necessary to determine this matter. I am satisfied that the email was not general advice given that the email was specifically addressed to Dr Colson and Dr Colson only and that it followed directly upon the meeting to discuss Dr Colson’s claims.
[63] Dr Colson also suggests that the reference to “we will continue to develop our RVG guidelines to minimise the possibility of any misunderstandings” in a context where he knew the guidelines were still under development and discussion meant that he should regard the items listed as a draft and still subject to discussion. I accept that this is a reasonable reading even though it was not the intention of Dr Tomlinson. Support for Dr Tomlinson’s view that it was a direction and not open to discussion is given by words “in light of our discussions today (the guidelines) will include the following clarifications.” The conclusion of the email quoted earlier reinforces this message where it states: “I expect that these particular billing mistakes will not occur in the future...” However, the next phrase “and if there are any changes to items in future editions of the RVG guide, I expect that your association with the ASA should prove valuable in clarifying the way they are to be used as soon as the new version comes out” suggests a consultative approach to the finalisation of guidelines.
[64] Barwon Health submit that Dr Colson used the word “direction” himself when being cross examined about the email. 39 However, read in context I do not read this as a concession about how Dr Colson understood it at the time.
[65] The possibility of the requirements changing when the guidelines are finalised is also suggested by the first of the clarifications referred to in the email. 40 That clarification refers to the conditions under which item CV125 should be claimed. The item concludes: “None the less, if you wish to clarify this interpretation with the ASA I look forward to their response. In the meantime we will not support the use of this item in these circumstances.” Dr Colson gave unchallenged evidence that the ASA advice was that it was correct to claim three units in the disputed situation.41 A specific clarification in the form outlined in the email does not appear in the guidelines subsequently issued by Barwon Health.42 Dr Gordon, Dr Tomlinson and Dr Colson all agree that this was a significant topic of discussion at the meeting of 22 December 2011.
[66] I therefore accept that it would have been reasonable for Dr Colson to interpret the email as expressing Dr Tomlinson’s firm view as to what should be the proper practice but that the matter, including the matter of time units, would not be finalised as policy until the guidelines were finalised.
[67] Dr Gordon and Dr Tomlinson gave evidence that on 22 December 2011 they explained why the Applicant’s claim forms were incorrect and specifically that only 4 time units can be claimed in one hour when two or more cases were running simultaneously. Dr Gordon and Dr Tomlinson say that the Applicant acknowledged that he understood this and agreed to comply in the future.
[68] Dr Colson gave evidence that the problem with his approach to claiming time units for dual theatre operation was not discussed at the meeting on 22 December 2011. Dr Colson says that he and Dr Tomlinson discussed other matters whilst Dr Gordon worked through the claims in dispute. Dr Colson says that at the end of the meeting he asked Dr Gordon what the damage was and Dr Gordon said “I would have done the time units differently, but you're up.” 43 Both Dr Gordon and Dr Tomlinson vigorously deny this.
[69] Dr Colson described himself as having a robust approach to discussion with colleagues. The Applicant did not raise any concerns in response to the 22 December 2011 email. Given what I have observed of Dr Colson’s approach to matters where he has a disagreement with his colleagues, it is hard to imagine Dr Colson remaining silent if the matter had not been discussed at all.
[70] The minutes of the meeting of 14 May 2012 which led to the termination include the following account of the response of the Applicant to the discussion of time units at the 22 December 2011 meeting:
“time units were discussed, but with so many other things Colin wished to change that I did not fully appreciate his interpretation of time-unit calculations at that meeting, nor was it made clear in a follow-up email.” 44
This suggests that the issue was discussed.
[71] The reference to this matter in Dr Colson’s open letter to the anaesthetics department of 23 March 2012 also suggests that the issue was discussed.
[72] The Statement provided by Dr Colson for these proceedings does not suggest that the issue of time unit billing was not discussed at the meeting of 22 December 2011. His statement accepts that the purpose of the meeting was to audit the claim forms and he details in his statement the alleged errors identified during that audit.
[73] For these reasons I am satisfied that the issue of the method for claiming time units for dual theatre operation was discussed at the meeting of 22 December 2011.
[74] Doctors Tomlinson and Gordon say that the Applicant at the 22 December 2011 meeting agreed that he would comply with the billing requirements from that time on. 45 This does not sit well with the Applicant’s almost belligerent response on this issue when it was raised again in March 2012. Also it is not consistent with the nature of Dr Tomlinson’s email of 22 December 2011. The tone of that email suggests that Dr Tomlinson was not convinced that the Applicant was going to change his practices. If the Applicant had so clearly agreed to comply it would not have been necessary to set out the matters in such detail. I am not satisfied that Dr Colson was as definitive as suggested by Doctors Tomlinson and Gordon. It is more likely that there was a failure to contest rather than a positive agreement. I accept that this may have been because the overall result was underpayment.
[75] I am satisfied that the December email does make it clear how Dr Tomlinson wished Dr Colson to claim time units in the future. There is no ambiguity about the methodology proposed in the email. However, the December email is not a warning. It is a general direction to fill in claim sheets correctly and notice that there could be consequences if there was a continuing failure to do so. There were a range of errors including arithmetic and item number errors in Dr Colson’s claim.
[76] The December email does leave some question mark about what the final policy document will be and therefore it doesn’t provide a sound basis for discipline based on breach of policy, guideline or direction in respect to the method for claiming time units for dual theatre operation. This is because Dr Colson is a long serving senior employee who in March 2012 asserted a strongly held belief that his practice was consistent with policy and there was no sound basis for a conclusion that his practice was inconsistent with the written policy. I also consider it likely that Dr Colson believed when he made a further claim for time units using his preferred methodology in March 2012 that there was still room for debate, notwithstanding the explanation given to him and the expectation expressed by Dr Tomlinson at the meeting and in the email of 22 December 2011.That belief was reasonably open to him.
Was Dr Colson singled out for audit?
[77] Dr Bolsin gave evidence that from time to time there are errors made in timesheets and when errors are identified this is brought to his attention by the director or deputy director of the department and the matter is then rectified through consultation and agreement. Dr Gordon confirms that he has had to correct the majority, if not all of the anaesthetists claim forms at one time or another and that he has had meetings with various members of the department concerning their claim forms.
[78] Dr Bolsin gave evidence that he was not aware of any anaesthetist at the hospital other than the Applicant being subject to formal audit in respect to their out of hours claims.
[79] The Applicant gave evidence that reviews of claims became more frequent in 2011 and that some items previously allowed were challenged. He gave as an example that the hospital refused to pay an item which was included in the RVG but which was not included in the MBS. The Applicant disputed this decision.
[80] Dr Gordon says that he did check all claims but he did not usually check the time units. Dr Tomlinson accepted that prior to December 2011 he did not specifically check the time unit claims of other staff members in detail but he did check other elements of the RVG claiming system for other staff members and he did go over the sheets of all staff members. 46 In 2012 Dr Tomlinson did check all anaesthetists time sheets to observe whether there were any anomalies in the time unit claiming methodology.47
[81] I accept the evidence of Doctors Tomlinson and Gordon that all of the specialists’ claims were regularly checked. I accept the evidence of Dr Tomlinson that he did not check the addition of the units, this was done by someone else, but that he did scan through to check that the right methodology was being utilised. I accept that it was quite appropriate for Dr Colson’s claims to be more closely checked after December 2011 given that an error had been found in the methodology used by Dr Colson.
[82] Dr Colson argues that the suggestion that his December claims came under particular scrutiny because there was an unusually large number of claims at once lacks credibility. I accept the evidence of Dr Tomlinson and Dr Gordon that they were generally increasing the level of their supervision of claims and seeking to achieve greater consistency in approach over a number of years. I also accept the evidence, including of Dr Colson, that it was quite unusual for three days of after-hours work to be performed in such a short period (15, 18 and 20 December 2011). I also accept the evidence that in most cases claims for a single day are submitted. I therefore accept the evidence of Dr Gordon that his attention was drawn to these claims because there was a particularly large number of claims at once. I consider that Dr Gordon’s memory may be faulty about claims from November being included in the batch considered.
[83] I can find no basis for finding that Dr Colson was treated unfairly or unreasonably in the manner in which his claims were checked.
Reinforcement of the 22 December 2011 email
[84] On 31 January 2012 a set of hospital guidelines for charging was discussed at a department staff meeting which the Applicant did not attend due to leave. 48 The Applicant says that he read the minutes and concluded that the guidelines were still in draft format as the minutes said that they were to be finalised. Dr Colson says that he did not read the draft49 but the minutes of the meeting say that they had been circulated.
[85] The Applicant says that when he read the departmental meeting minutes from January 2012 which discussed changed guidelines he assumed he could continue with his traditional billing practice until there was a formal change. 50 The email of 22 December 2011 from Dr Tomlinson is contemporaneous evidence that the Applicant was clearly advised of the approach Dr Tomlinson wanted to be used for dual theatre operation billing and that this approach was not consistent with his traditional billing practice. The email implied that the draft guidelines probably would be a codification of what the Applicant was told in the 22 December 2011 email. However, as discussed earlier I accept that there was uncertainty about the final outcome and the Applicant’s assumption was reasonable.
Claims in January and February 2012
[86] Dr Tomlinson gives evidence that the claim forms submitted by the Applicant subsequent to the meeting of 22 December 2011 and prior to the 4 March 2012 claim (claim forms dated 31 December 2011, 6 January 2012 and 21 February 2012) were all completed appropriately as far as time units were concerned and consistent with the email of 22 December 2011. 51 This suggests that the Applicant understood the methodology set out in the email and was complying with it.
[87] This matter was put to the Applicant in the meeting of 14 May 2012 and he did not challenge the fact but suggested that it may be because the times happened to coincide with multiples of 15 minutes. 52
[88] In the proceedings Dr Colson responded to this as follows:
“What you did in the ensuing three months of - or these two months of January and February 2012, was you did bill in accordance with the four units per hour rate for dual operating theatres, didn't you?---Well, so I'm told, but I can only conclude that the real times happened to coincide with Colin's preferred system during that period. I didn't change - - -
You didn't intentionally comply. Is that what you're saying?---Sorry?
You didn't intentionally comply with 4.4.1?---No. I don't believe I did anything differently until 4 March.
It's a coincidence, you say, that your claim forms complied with the rule in the interim period?---I guess so.” 53
[89] The Respondent did not produce the claim forms but in cross examination Dr Tomlinson said that he had the forms with him and could produce them.
[90] I consider it to be unlikely that the finish times for the patients in one theatre would have coincided with exact quarter hours. However, I cannot exclude the possibility that the Applicant’s forms complied with the methodology sought by Dr Tomlinson by coincidence rather than design.
March 2012 claims
[91] Dr Gordon and Dr Tomlinson give evidence that a further instance of incorrect claims occurred in respect to on call work and associated forms submitted on 4 March 2012.
[92] For the reasons stated earlier, I accept that Dr Colson did not read the 1 March 2012 policy prior to submitting the claims and to rely on a breach of that policy so soon after it was issued could not in itself be reasonable grounds for termination. Furthermore, as discussed earlier the March policy does not exclude Dr Colson’s methodology.
[93] The claims made were rejected on the basis that they did not comply with the new guidelines and the discussion with the Applicant confirmed in the email of 22 December 2011. The claims were later audited and the 244 units claimed was altered to 242 units which were eventually paid. The Respondent claimed that there had been 2 units overcharged. The issue again related to the way in which claims for periods when two theatres were operating simultaneously were made.
[94] Dr Tomlinson says that he returned the forms to Dr Colson’s pigeon hole with a post it note attached. That post it note explained why the claims had been rejected and asked Dr Colson to correct the claims. Dr Colson says that there was no post it note on the forms but that the forms had been stamped approved. Dr Colson also says that the forms did not however have the normal authorising signature or initials on them.
[95] The usual practice was that if the forms were regarded as OK they went directly from Dr Tomlinson or Dr Gordon to the administrative assistant and they were stamped approved and the unit total initialled and then sent for payment and the doctor making the claims would then get a copy of the forms. In the alternative if there were any corrections to be made these were discussed with the claiming doctor and then Dr Gordon or Dr Tomlinson would make corrections on the forms and then the forms would be initialled and would be sent for payment and the doctor making the claims would then get a copy of the forms.
[96] Dr Colson says he returned them to the administrative assistant’s desk for payment. It was not the normal process for forms which did not have any errors or queries to be returned to the claiming doctor prior to being submitted for payment.
[97] Dr Tomlinson says that he was unaware that Dr Colson had forwarded the claims on to the administrative assistant but followed up his post it note by an email on the morning of 7 March 2012. Dr Tomlinson says that the email was delayed for a day due to other work priorities. That email explained that:
“I have sent the above claim back for revision - the documentation of time in less than 15 minute blocks leads to claiming twice for some periods of time which constitutes double dipping (as Colin and myself discussed with you earlier this year); nor does it comply with the published guidelines from the department. Please re-write it so that it complies with our agreed rules.” 54
[98] The Applicant responded on 8 March 2012:
“The time at the end of each sheet is the time that the last case on that sheet finishes - or the next one starts if there is a subsequent sheet. There is no provision within the RVG for rounding these times to 15 min blocks which is what you seem to suggest... I’m happy to record a start and stop time for the whole block (as I used to do in fact) - but if pay office require a time on each sheet, there can be little doubt about what time that should be. I’m happy to refer the sheets to ASA for their opinion.” 55
[99] Contrary to the submission of Barwon Health this email cannot be read as a refusal to abide by the approach to claiming time units requested by Dr Tomlinson. Dr Tomlinson referred in earlier correspondence to “our agreed rules”. This is consistent with the collegiate and collaborative approach to these matters signalled in the earlier emails and meetings about the guidelines. Dr Colson is suggesting that compliance might be an outcome following further process.
[100] This response in a situation where the Applicant says that he did not have the claim forms in front of him because he had returned them for payment suggests that the Applicant well understood the issue and that the Applicant’s actions in respect to the claim for time units may have been conscious and deliberate.
[101] The Applicant sent a further email that day objecting to the withholding of payment. Dr Tomlinson gave evidence in the proceedings that a claim for Sunday would not normally have been in the next pay. 56 In that email Dr Colson says: “Further to this email sent earlier, you are entitled to withhold payment for that part of my after- hours work which is in dispute - namely 1 time unit.” This suggests that the Applicant understood the nature of the issue in dispute.
[102] The Applicant continues in the 8 March 2012 email:
“Furthermore, in your email you imply this is a repeat offence which is NOT true. It is true you audited my RVG claim in December, and that my claims on that occasion contained several minor mistakes, probably related to the fact that I had completed the claim form at 02.30 AM. It is also highly relevant that some of these mistakes were in Barwon Health’s favour. In fact, I claimed 544 units, when in fact the correct amount owing was 551. Given that I had deprived myself of 7 units, the insinuation that I had somehow been guilty of “double dipping” on a previous occasion is quite insulting and inflammatory.” 57
[103] This suggests that the Applicant was well aware of the nature of the mistakes made in the December claim and that some of the claims were overcharging. The Applicant was aware that they included alleged errors in the methodology for claiming time units as these were the only overcharging errors. I understand the Applicant to be expressing the view that he believes that because these errors were offset by other errors in his favour those errors could not be held against him and that this meant that the errors in time units in December could not be described as “double dipping.” This was not an unreasonable point for him to make.
[104] Dr Tomlinson responded on 11 March 2012 that:
“I haven’t withheld anything - I have sent back an incorrectly completed claim sheet for correction. As soon as I receive an accurate claim which complies with the agreed rules of engagement I will sign off on it and it can be paid. Colin and myself will discuss these issues with you when Colin returns from leave later this week.” 58
The 23 March 2012 letter from Barwon Health
[105] The Applicant acknowledged that when he read in Dr Tomlinson’s email of 7 March 2012 59 “I have sent the above claim back for revision” that he understood Dr Tomlinson had returned the forms to him on 5 March 2012 for him to correct and that he, Dr Colson, had resubmitted the sheets to which Dr Tomlinson was referring.60 Even if one accepts that Dr Colson had not seen the post it note, Dr Colson was by now very well aware of what was wrong with his claim and what he was being asked to do to resolve the issue.
[106] The Applicant suggested in proceedings that he took action to retrieve the forms by asking the administrative assistant where they were. I found this evidence unconvincing but in any case the email of 8 March 2012 and the email to Mr Muncaster of 13 March 2012 satisfy me that Dr Colson had no intention of correcting the forms and resubmitting them at that stage. 61 I am satisfied that Dr Colson took no action to alter the claim forms but instead wrote to Mr Muncaster in Human Resources on 13 March 2012 complaining that he had been singled out for audit and that pay was being withheld and asking to come and see Mr Muncaster “to discuss the policy wrt pay withholding as well as more general aspects of Simon Tomlinson’s behaviour at your earliest convenience...”62 He complained in the email about Dr Tomlinson “withholding my pay for a full day on-call over a dispute about rounding of one time unit - in which my approach has the full endorsement of the ASA.”
[107] The Applicant says that his email to Mr Muncaster was an attempt by him to de-escalate the situation. 63 I can see nothing in this email which suggests an attempt to de-escalate the situation. Dr Colson is not seeking to fix the problem by correcting the claim forms or by saying that he had been acting in good faith but now understood and accepted what was required. I am satisfied Dr Colson sent the email to Mr Muncaster because he was angry at pay being withheld and wanted to escalate his complaints about Dr Tomlinson’s behaviour and to argue about the appropriate policy.
[108] At the meeting in response to the allegations on 14 May 2012 Dr Colson is critical of Doctors Tomlinson and Gordon for not returning the forms to him to correct. However, in the meeting notes he does not suggest that he took any action to request the return of the forms or to retrieve the forms. 64
[109] The evidence does not support Dr Colson’s contention that his approach in respect of time units had the endorsement of the ASA as the RVG which they produce does not deal with the issue in dispute.
[110] Mr Muncaster says that he discussed the situation with Dr Tomlinson and Dr Gordon and encouraged them to fix it internally and to pay those units which were not in dispute. 65 He did not respond to Dr Colson.
[111] When Dr Gordon returned from leave Dr Colson was requested to attend a meeting to discuss the matter. Dr Colson said that he would not attend without Mr Muncaster. Mr Muncaster says that he told Doctors Tomlinson and Gordon that if it was being elevated to include him it needed to be made more formal and the three of them collaborated to produce a letter to Dr Colson requiring him to attend a meeting and setting out the allegations they wished him to answer namely the allegation that he “may be knowingly and willingly submitting false claims for RVG payments.” 66 That letter was sent on 23 March 2012.
[112] I accept that Dr Tomlinson and Mr Muncaster believed that Dr Colson had received the post it note and the follow up email from Dr Tomlinson advising Dr Colson of the error in his 4 March claim and requesting him to resubmit the claim form in a corrected manner. They then believed that Dr Colson had knowingly resubmitted the same forms without any corrections.
[113] Mr Muncaster gave evidence that it was the resubmission of the claims without correction after an instruction had been given which led him to conclude that it was appropriate to require Dr Colson to respond to an allegation that he may have knowingly and willingly submitted false claims for RVG payments. Mr Muncaster says that he would not have used the term “false claim” if it was not for these circumstances. Mr Muncaster provided the advice to Dr Gordon to use this expression in the letter of 23 March 2012. 67
[114] Barwon Health accepted after the 14 May 2012 disciplinary meeting that this allegation could not be proven. I agree with the conclusion reached by Barwon Health. It is possible that Dr Colson did in fact see the post it note and did resubmit the forms in defiance of that note but the evidence is insufficient to be able to reach a conclusion that this is what happened.
[115] Dr Tomlinson gave evidence in proceedings about putting the post it note on the forms and I accept that evidence. Even if I was to reject Dr Colson’s evidence and decide that Dr Colson had seen the post it note, it would not alter my conclusion that this is not a situation where false claims were submitted, that is where Dr Colson was seeking to be paid money to which he was not entitled. I am satisfied that it was a situation where Dr Colson was seeking to contest the right of Dr Tomlinson to change the billing practice where Dr Colson believed that his methodology was consistent with established practice and was not in conflict with previously agreed local arrangements, 68 the Agreement or the RVG.
[116] Dr Colson was outraged at the allegation in the 23 March 2012 letter and responded aggressively and defensively. Dr Colson read this in the context of the suggestion in the December email that inappropriate claims, if repeated after appropriate education, would almost certainly be regarded as fraudulent. Dr Colson regarded an allegation that he had willing submitted false claims as an allegation that he had engaged in fraudulent behaviour. I agree with Dr Colson that the use of the words “willing submitting false claims” does suggest deliberate dishonesty or fraud.
[117] Barwon Health argues that “false claims” is properly understood in this context to mean “incorrect or not in accordance with the directed requirements of Barwon Health.” Barwon Health refer to the evidence of Mr Muncaster for this interpretation. 69 I do not accept this submission. If the allegation was “breach of policy” or “breach of direction” then there is no reason why words to this effect would not be used. In this context a response from Dr Colson about “which policy’ or “which direction” would have been reasonable and could then have led to a discussion and resolution. The ordinary meaning of a false claim in the context of a claim for payment contains the implication of deliberate dishonesty or deliberate seeking of financial gain to which the person is not entitled and knows they are not entitled. In this context the fact that the December claims had resulted in underpayment has some relevance.
[118] Dr Gordon suggests that it was considered at the time that action had to be taken against Dr Colson because action had been taken against non-medical staff for such practices including cleaning staff and a nurse having falsified timesheets. 70 This suggests that the term false claims did have the meaning attributed to it by the Applicant.
[119] Doctors Tomlinson and Gordon both say that they told Dr Colson at the 22 December 2011 meeting that incorrect claims if repeated after education could potentially be considered fraud or fraudulent. 71 Dr Tomlinson repeated this in the 22 December 2011 email. It is reasonable that Dr Colson would have considered the issue when raised again in March in this context. Mr Watson agreed that a claim of knowingly submitting false claims is akin to an allegation of fraud.72
[120] Doctors Tomlinson and Gordon and Mr Muncaster are of the view that the matter could have been resolved much more informally at the departmental level if Dr Colson had agreed to meet directly with Doctors Tomlinson and Gordon as requested by Dr Tomlinson. I agree that they were correct. Dr Colson argues that he wanted the involvement of Mr Muncaster because of a long history of conflict with Dr Tomlinson and his belief that Dr Tomlinson was out to remove him from the department. I accept that this was a factor motivating Dr Colson. I also accept that the issue would have been resolved if Dr Colson had taken the initiative to retrieve the claim forms and correct them.
Further conclusions regarding the first ground for termination
[121] Dr Tomlinson believes that the Applicant was well aware prior to the 22 December 2011 meeting that his method for claiming for dual theatre operation was not consistent with policy, however, he believes that if there was any doubt this was removed by the 22 December 2011 meeting and confirming email.
[122] Given that there had been no challenge to Dr Colson’s practice and no clear written policy, his practice prior to December 2011 cannot be subject to valid disciplinary action. Furthermore, it was not fanciful for Dr Colson to regard his practice as consistent with existing policy and with the principle of not double counting for time during dual theatre operation.
[123] I have earlier concluded that although it was reasonable for Barwon Health to regard Dr Colson’s methodology as inconsistent with the principle of no double counting, it was not fanciful or fraudulent or directly inconsistent with policy in March 2012. I therefore, cannot accept that his actions were dishonest or in defiance of any policy or directive.
[124] In his response to the allegation of 28 March 2012 the Applicant claims that he found the explanation of the time unit policy for two theatre operation to be “completely unintelligible” and that he did not understand the instruction that the start and finish times on each claim sheet “do not have to be accurate from a specific case perspective” to mean that it was wrong to record actual, specific times.
[125] I do not accept the Applicant’s claim in this respect for a number of reasons which I have mentioned earlier.
[126] I agree with the submission of Barwon Health that after 8 March 2012 the approach advocated by Barwon Health was regarded as unclear by Dr Colson primarily because he thought it was wrong and he disagreed with it. 73 However, it was legitimate for Dr Colson to be critical of inconsistencies and lack of clarity in the written versions of the policy.
[127] The Applicant argued in his correspondence of 23 and 28 March 2012 in response to the allegation that the methodology (as set out in the email of 22 December 2011 and the policy issued on 1 March 2012) is not consistent with the Agreement. Clause 22.1 of the Agreement states that:
“after hours work additional to the normal roster shall be paid on the basis of the AMA Anaesthetic Relative Value Guide (RVG) in effect at the time, with the exception that the After Hrs Emergency loading will not apply. Instead the M2 Modifier will be applied in the case of after hours emergencies.”
[128] As stated earlier, Dr Grutzner gave evidence that the RVG is “premised on the fact that an anaesthetist is providing exclusive one on one care of a patient and can only charge for the care of one patient at any time.” 74 However, Dr Grutzner does not suggest that local modifications to address the situation of two operating theatres concurrently is contrary to the RVG. In fact Dr Grutzner gives evidence that “the ASA has no policy on this particular situation”.75 He also says that it is “entirely ethical and professional for an anaesthetist to provide anaesthesia services in one theatre whilst supervising a trainee or less experienced medical colleague in another theatre at the same time. The practice is widespread at public hospitals in Victoria.”76
[129] I do not read Clause 22.1 of the Agreement as excluding local policy and practice concerning the method for claiming time units where two theatres are operating concurrently.
[130] Dr Colson submits that because the RVG provides for units to be claimed for part of 15 minutes the exclusion of this right during two theatre operation may be in breach of the Agreement. This argument is not sustainable. The RVG does not apply to two theatre operation. If the RVG was applied it would be much less lucrative for the anaesthetists as they could only claim for one patient at a time. The time units are generally a relatively small proportion of the total units applicable for each patient. The payments for dual theatre operation will generally be in excess of the payments which are applicable under the RVG even with the application of the 4 units per hour rule. A possible exception to this might be for particularly long operations but the Barwon Health guidelines allow for reversion to single theatre RVG rules in such cases.
[131] The Applicant submitted that the 1 March 2012 guidelines 77 were inconsistent in important respects with the Agreement. This is because the guidelines do not make it clear that the 4 time units per hour policy only applies to dual theatre operation and that the RVG 15 minutes or part thereof policy applies to single theatre operation. Dr Tomlinson and Dr Gordon accept that the 4 time units per hour policy only applies to dual theatre operation. There was no evidence that Barwon Health were failing to pay time units consistent with the RVG policy for single theatre operation. Furthermore, I consider it is reasonably apparent that the section on time units on page (v) relates to dual theatre operation because the section on page (i) which refers to the 15 minutes or part thereof is clearly the more general provision.
[132] I accept that it was legitimate for Dr Colson to raise this lack of clarity in the guidelines. Given the approach to issues I observed Dr Colson took, I accept that in part Dr Colson may have been making this point in his responses alleging that the guidelines were inconsistent with the RVG and the Agreement. Dr Colson also regarded some of the provisions in the guidelines about when particular procedural units could be claimed to be inconsistent with the RVG. The evidence suggests that some of these issues were subject to lively debate and that the guidelines may have changed in respect to some of these matters in response to that debate. Again it is likely given Dr Colson’s approach that he may have been in part referring to these issues when he was alleging that the guidelines were inconsistent with the RVG and the Agreement.
[133] At the meeting to respond to the allegations on 14 May 2012, the Applicant said “it is ludicrous to modify and distribute Barwon Health Billing Guidelines when the AMA RVG is in place as the long-accepted means of remuneration for after-hours work. I question the very legitimacy of the Barwon Health Billing Guidelines.” 78 This seems to be a rejection of any local guidelines not simply a criticism of particular aspects for lack of clarity or consistency with the RVG. Dr Colson was well aware that there were issues which required clarification including the issue of time units for dual theatre operation which he knew were not covered by the RVG. However, given Dr Colson’s absolutist approach it is likely this statement was related to perceived inconsistencies between the guidelines and the RVG.
[134] The actions of December and March do not constitute a repeated refusal to comply with billing practices and directives. He had not refused to comply. His actions in March do suggest defiance of what he had been told in December. However, for the reasons given earlier I do not consider that there was a clear policy directive at that time.
[135] The 22 December 2011 email stated that action would be taken “if behaviour was repeated after appropriate education.” 79 The guidelines issued on 1 March 2012 says “repeated failures to follow department guidelines will be regarded in the same light as false or misleading claims, which constitute fraud and leave the practitioner open to formal disciplinary action by Barwon Health.”80 The guidelines when they were reissued after the termination refer to breach of code of conduct that could result in activation of disciplinary process.81
[136] I have found earlier that it is likely that Dr Colson with some justification believed that there was still some room to debate the policy in respect to claiming time units for dual theatre operation until the policy guidelines were finalised. The finalised guidelines were issued on 1 March 2012 but Dr Colson had not had time to read them. In any case a single act of breach of a policy or direction cannot be regarded as a repeated refusal to comply with billing practise and directives. It is a single instance which in this context could reasonably have resulted in a clear direction and a possible warning.
[137] Barwon Health submits that Dr Colson had no intention to comply with the policy in the future and in support of this refers to the statement of Dr Colson that he stood by what he said in the 8 March 2012 email.
“You had no intention to comply with the rules?---I wanted to. I respond as per the email. I stand by what I say in that email.” 82
He also said earlier that “That's what I believe on 8 March.” 83
[138] I do not accept the Barwon Health submission. I regard this as another example of defensiveness by Dr Colson. In the 8 March 2012 email he offers to return to his earlier practice and he offers to refer his sheets to the ASA for their opinion. I do not see the 8 March 2012 email as a clear statement of intention not to comply with policy in the future.
[139] Dr Colson said under cross examination “I would have complied but the problem was before I was given the opportunity to comply I’d been accused of fraud.” 84 I accept that there is some truth in this statement even though the term used was “false claims” not “fraud”.
[140] The Respondent argues that the identification of errors in the Applicant’s favour in the 22 December 2011 audit is irrelevant. In one sense this is correct. The alleged misconduct is the failure to follow policy or direction.
[141] However, there is a sense in which the error in the Applicant’s favour is relevant. It suggests that the Applicant was not making the claims falsely or fraudulently or for personal financial gain. I do not consider that the claim in March was an accident. The tone of the letter of 23 March 2012, the response to the allegations of 28 March 2012 and the Applicant’s statement in these proceedings suggests that the Applicant did not accept the right of the Respondent to impose what the Applicant saw as a change in his billing or claiming practice until he was satisfied that the policy was consistent with the Agreement, the RVG and local policy.
[142] The fact that the errors in the December claims were in the Applicant’s favour also explains why the Applicant was so enraged by the allegation of false claims and why he became so focused on proving he was right, including by arguing against the legitimacy of the policy.
[143] I have earlier found that the December 2011 meeting and email could have left Dr Colson in no doubt about what Dr Tomlinson regarded as the correct methodology for time unit claims. The statement of expectations by Dr Tomlinson needs to be considered in the context of the particular workplace. In many workplaces such a statement may be regarded as a direction and disciplinary consequences would then be sustainable in the event of subsequent deliberate breaches. However, the evidence concerning this particular work group is different. Both Dr Gordon and Dr Tomlinson emphasised their view that the matter should have been handled internally and were critical of Dr Colson’s failure to allow this to happen. The evidence shows that there were regular Departmental meetings. The participants in these meetings were senior colleagues including Dr Colson. Dr Colson and his colleagues are all highly educated and experienced medical specialists who are paid around half a million dollars per year by the hospital. Dr Gordon, Dr Tomlinson and Dr Colson all gave evidence that “robust” communication was common between Dr Colson and his colleagues. As cited earlier Dr Tomlinson’s communications referred to “agreed” guidelines. The collegiate nature of the workplace suggests it was reasonable for Dr Colson to expect that changes to his work practices would be subject to consultation and wherever possible agreement. The December 2011 email is consistent with this approach and suggests that the finalisation of the guidelines will be subject to further internal process. The December 2011 email acknowledges that the Applicant through his position on the ASA billing policy committee will have a particular role and input.
[144] I am satisfied that it has not been established that Dr Colson “knowingly and willing submitted claims for RVG payments in breach of Barwon Health billing guidelines and directives provided to you to comply with those guidelines.”
[145] Barwon Health argue that there was also a valid reason for termination because the Applicant was “repeatedly refusing to comply with Barwon Health’s billing practices for after hours work, and management directives to comply with those practices, and his stated intention not to comply in the future.” Even though this was not what was stated in the reasons for termination these were matters which were effectively put to the Applicant at the meeting on 14 May 2012. However, for the reasons stated earlier I am not satisfied that the actions of Dr Colson in his claims in December 2011 and March 2012 can be characterised as a refusal to comply with billing practices and or directives. Dr Colson had not demonstrated repeated refusal to comply with policy or direction. His actions in defence of the allegation against him during the period up to the 14 May 2012 meeting may have been ill advised but they were a defence of his position and cannot, when seen in context, be seen as a refusal to comply with a policy or direction.
[146] The remaining element of the Barwon Health argument is Dr Colson’s alleged “stated intention not to comply in the future.”
[147] The Applicant in a formal response to the claim that he had submitted false claims offered to change his billing practice where two theatres are operating concurrently provided that the RVG was utilised at all other times and provided that he received a formal apology in respect to the allegations that he had knowingly and willingly submitted false claims and that there be no further action. 85
[148] Barwon Health submitted that these demands were totally unreasonable and effectively amounted to a refusal to comply with direction and the billing policy in the future.
[149] In the notes of the 14 May 2012 meeting prepared by Dr Colson he does make it clear that his conditions are not non-negotiable. 86 Mr Muncaster accepts that Dr Colson did in fact say that his conditions were not non-negotiable.87 In this respect Mr Muncaster confirms that Dr Colson’s record of the meeting were more complete than the Barwon Health version. I am satisfied that a comparison of the two versions suggests that this is generally the case. Mr Watson also agrees that Dr Colson said that his conditions were not non-negotiable.88
[150] The direct response of Dr Colson at the 14 May 2012 meeting to the proposition that he had no intention of complying with billing practices and directives was “no, it’s not correct.” 89
[151] In the 14 May 2012 meeting Dr Colson said:
“I intend to continue my long-standing practice and bill in accordance with my certified agreement until such time as the agreement states otherwise.” 90
[152] This statement was at the end of a long explanation of why Dr Colson did not believe that his claims were fraudulent and why the requirement to round off times or in his words use “imaginary times” was not appropriate. It is not a refusal to abide by policy and direction in the future; it is a reaffirmation of Dr Colson’s view that his claims were not inappropriate and that there were aspects of the guidelines which were inconsistent with the Agreement and the RVG. Dr Colson also regarded the 1 March 2012 version of the guidelines to be in breach of copyright.
[153] Barwon Health accepted that it could not be established that Dr Colson had deliberately made false claims. This was not part of the reasons for termination although it was part of the original allegation to which Dr Colson was required to respond. There was a dispute between Dr Colson and Barwon Health about billing practice. There is no issue about the RVG being utilised at all other times given this was clearly provided for in the Agreement. However Dr Colson argued some aspects of the Barwon Health guideline were contrary to the RVG. In context it was understandable for Dr Colson to demand a formal apology for allegations that he had submitted false claims and that it be the end of the matter. Dr Colson says that his demand that the matter never be raised again was specifically related to the allegation of false claims.
“But if you did the same thing again after all of this, if you claimed five units when there were really four, do you not accept that Barwon Health would be entitled to use, to have regard to, the fact that you'd done it previously?---Yes. They would but that's not what I mean by that. That sentence is not written very clearly, I accept that, and what I meant was that I don't want the fraud allegation raised again”. 91
[154] I accept Dr Colson’s explanation of the demand that this matter never be raised again.
[155] The version of the minutes produced by Dr Colson of the meeting of 14 May 2012 92 suggest that when Dr Colson says that he does not accept the Barwon Health Billing Guidelines and insists that the RVG guidelines be used he is not just referring to the method of claiming time units. He says: “I offer to accept Colin’s method of imaginary time recording but only in the specific circumstance where two operating theatres are running concurrently.” It is clear from the minutes of various departmental meetings and other correspondence that there was lively internal debate about modifications in respect to particular item numbers. The minutes of the meeting of 1 March 2012 specifically refer to this continuing notwithstanding the publication of the guidelines.93 The December 2011 email also provided for the possibility of such continuing debate involving input from Dr Colson. Even in respect to time units Dr Colson’s version of the minutes suggests that Dr Colson is concerned that the guidelines do not make it clear that the 4 units per hour rule only applies to dual theatre operation.94
[156] In my view although it was understandable that Dr Colson make such demands it was also reasonable for Barwon Health to reject such demands as unreasonable.
[157] The 14 May 2012 meeting was not a situation where Dr Colson was being directed to perform some action such as to perform a procedure or complete an administrative task. In that situation refusal to comply with a reasonable direction could constitute a valid reason for termination. The 14 May 2012 meeting was a situation where Dr Colson was being asked to respond to allegations that he had made false claims and breached policy and direction. In response to this Dr Colson disputed the legitimacy of the policy. In some respects the policy was not clear and some aspects of the policy may have been legitimately open to debate.
[158] I am not satisfied that the responses of Dr Colson in demanding the apology on 28 March and or in his responses at the 14 May 2012 meeting can be properly interpreted as refusing to comply with the Barwon Health billing guidelines in the future. However, I am satisfied that the responses do lead to a conclusion that there was a risk that Dr Colson would not comply in the future.
[159] The first ground for termination cannot be sustained. Dr Colson’s billing practice did not constitute serious misconduct or provide a valid reason for termination. However, it would have been reasonable for Barwon Health to put Dr Colson on notice that disciplinary action would be taken should Dr Colson fail to comply with the billing policy including the policy in respect to time units for dual theatre operation in the future.
THE SECOND GROUND FOR TERMINATION
[160] The second ground for termination was:
“Publication of your letter dated 23 March 2012 to the entire Department of Anaesthesia was intended to be deliberately offensive, a genuine challenge to the authority of management and was designed to embarrass Barwon Health and damage its reputation.”
[239] Sixthly, the fact that the response of Dr Colson in writing the letter was disproportionate and that at the termination meeting some seven weeks later Dr Colson continued to defend the correspondence and prior to the termination did not apologise for it. This is a significant factor which favours a finding that the termination was not unfair.
[240] Seventhly, Dr Colson requested to be able to make an audio recording of the meeting of 14 May 2012 and that request was refused by Barwon Health. Dr Colson proceeded without advising Barwon Health to create a record of the proceedings using digital transcription software on his laptop. I cannot see any difference between using digital transcription software and an audio recording, except that an audio recording is not retained in the former process. 141 It seems obvious that in refusing an audio recording the employer was making it clear that the proceedings should not be recorded by any form of technology. In the circumstances this is not a factor which significantly affects the fairness of the termination but it does have some impact on the relationship between Dr Colson and Barwon Health.
Conclusion regarding the fairness of the termination
[241] Having considered these factors I am satisfied that the termination was unfair.
[242] I am also satisfied that in all of the circumstances the conduct was misconduct but not serious misconduct justifying summary termination.
Remedy
[243] The Act requires that I consider the following:
“390 When FWA may order remedy for unfair dismissal
(1) Subject to subsection (3), FWA may order a person’s reinstatement, or the payment of compensation to a person, if:
(a) FWA is satisfied that the person was protected from unfair dismissal (see Division 2) at the time of being dismissed; and
(b) the person has been unfairly dismissed (see Division 3).
(2) FWA may make the order only if the person has made an application under section 394.
(3) FWA must not order the payment of compensation to the person unless:
(a) FWA is satisfied that reinstatement of the person is inappropriate; and
(b) FWA considers an order for payment of compensation is appropriate in all the circumstances of the case.
Note: Division 5 deals with procedural matters such as applications for remedies.
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.
Order to maintain continuity
(2) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to maintain the following:
(a) the continuity of the person’s employment;
(b) the period of the person’s continuous service with the employer, or (if subsection (1A) applies) the associated entity.
Order to restore lost pay
(3) If FWA makes an order under subsection (1) and considers it appropriate to do so, FWA may also make any order that FWA considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.
(4) In determining an amount for the purposes of an order under subsection (3), FWA must take into account:
(a) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for reinstatement; and
(b) the amount of any remuneration reasonably likely to be so earned by the person during the period between the making of the order for reinstatement and the actual reinstatement.”
[244] Dr Colson argues that compensation would be inadequate given that the maximum compensation allowable would be little more than a month’s pay. I do not accept that this is a relevant consideration. The Parliament has determined the cap for compensation. It is not for me to decide whether or not that is an adequate remedy. The question on which I must focus is: “would reinstatement of Dr Colson be inappropriate.” There has been no suggestion of any issues with Dr Colson’s clinical performance. I have found that Dr Colson’s conduct did amount to misconduct but in all the circumstances not serious misconduct. I am satisfied that both the anaesthetics department and Barwon Health are large enough to accommodate Dr Colson should FWC determine that he be reinstated. That is a position can be made available for Dr Colson and the economic viability of Barwon Health would not be threatened. 142 In the circumstances of the case, since reinstatement is the primary remedy, the only matter which I consider could render reinstatement inappropriate would be if I concluded that trust and confidence was so damaged that reinstatement was not appropriate.
[245] The parties have urged me to consider a number of matters which they say are relevant to this question.
[246] Mr Watson, Dr Tomlinson and Dr Gordon have very forcefully argued that trust and confidence is irreparably damaged. I consider that their position is best summed up by Mr Watson in the following exchange:
“So the principal impediment is the popularity with management of such a decision being taken. The operational issues about whether there is actually a position on the ground, they're more easily able to be resolved. Would you agree with that?
---No, I don't agree with that. I think this isn't a popularity contest with the director or the deputy director. I believe there's a fundamental breach of an employee's obligations as an employee. You know, as executive director of surgical services, it's a hundred million dollar public hospital surgical business; 20 thousand operations, 650 staff, a couple hundred doctors; and if it happens that a doctor can choose - or in fact anyone, this applies to nurses, techs, everyone - if you choose that you will only follow those directives that you happen to personally agree with and disregard the ones you don't, and have the right to be able to write to all your peers and admonish the manager for making the - well, putting pressure that you need to comply, we'd be in a sorry state and there would be fundamental chaos in the employment places. It would be unacceptable and I believe Dr Colson, through his behaviours, through his processes, has demonstrated a lack of preparedness to change, and I don't believe he would behave any different in the workplace going forward, as he has in the workplace in the past. 143
You said before, it's not a popularity contest?---No. 144
You agree that whether he is of particular popularity with senior management within the organisation, isn't a particularly significant issue in terms of whether he would be able to resume employment. Would you agree with that?---I would agree that the relationship between Barwon Health and Dr Colson is irreparably damaged. I believe that it's untenable to have a continued employment relationship going forward, given these events, the events that have followed since here, the communications that have been circulated widely throughout the Department of Surgical Services, including surgeons and nurses external to Barwon Health. I think the emails and the stories that have been circulated around Geelong medical fraternity are such that there's a significant divide and an inconsistency between Barwon Health and where Dr Colson stands. 145
When you say, "The events that followed the termination," you're talking about the AMA meeting, which followed from the MSG meeting - or on two occasions - and the resolutions passed, and the various petitions and letters of support that I've taken you to. It's matters of that nature, is it, that make it untenable for him to come back?---Those are contributing. The matters in themselves, the continued avoidance of accepting that Barwon Health has a right to set guidelines and he has an obligation to accept those. His continued defiance of doing that and going forward into the future. All those things, and other communications and emails that have flowed since. 146
I will be submitting on behalf of my client, in due course to the Commissioner, that Dr Colson is prepared to abide by and follow the policies of Barwon Health in relation to after hours claims, and that the previous conditions that he had imposed on the compliance with those policies or guidelines are no longer applicable. Now, if that issue dissolves and Dr Colson has apologised for the letter that he sent, I put it to you that there's no impediment to his return to duties. What do you say to that?---I would say I have zero confidence that Dr Colson will behave any differently into the future than he has behaved for the period in the past.” 147
[247] In support of this position I note that at the 14 May 2012 meeting to answer the allegations Dr Colson was given the opportunity at the end to raise anything further he wished to say. This would have been an opportunity to apologise for the 23 March 2012 letter but instead Dr Colson took the opportunity to raise once again his complaints about Dr Tomlinson’s alleged previous behaviour towards him.
[248] In the proceedings Dr Colson says that he would have said that he would comply with directives in the future at the 14 May 2012 meeting if he had been told that would have saved his job but this wasn’t suggested and the question wasn’t posed to him in those terms. 148 I accept that Dr Colson did not want to make any concessions about the validity of the billing policy because he believed that if he did so this could lead to Barwon Health finding that he had knowingly submitted false claims, or in his view that he had been dishonest or fraudulent. I have earlier rejected the submission of Barwon Health that Dr Colson’s responses when read as a whole amount to a statement that he would not comply with policy or direction in the future. However, I have accepted that there is a risk that Dr Colson may not comply with policy in the future.
[249] Both parties point to the debate about Dr Colson’s actions and his termination within Barwon Health and outside it. There has been significant support for Dr Colson and opposition to the actions of management from amongst his colleagues. Other colleagues have expressed their support for the position of management. Both parties also point to public statements which have been made. I do not consider that any of the public statements directly attributable to Barwon Health or Dr Colson seriously affect the capacity for a successful employment relationship to be restored. Dr Colson said some offensive and personal things in his correspondence of 23 March 2012 but the worst that can be said about his limited more public communications is that they have been partial and partisan in their account of the issues facing him. 149 I do not consider that Dr Colson’s involvement in an industrial campaign protesting at his dismissal is necessarily destructive of trust and confidence.
[250] Dr Colson argues that the witnesses for Barwon Health conceded that the issues could have been resolved internally at a lower level which suggests that trust and confidence were not fractured and had no reason to be fractured. I reject this submission because the witnesses for Barwon Health do not suggest that the matter could have been resolved internally at a lower level once Dr Colson had written the letter of 23 March 2012.
[251] Dr Colson also argues that the work of an anaesthetist is largely based on individual clinical responsibilities rather than some communal or corporate cooperative effort. Those individual clinical responsibilities are Dr Colson’s primary role and there is no lack of trust in his ability to do this job. Dr Tomlinson gave evidence, which I accept, about the importance of the non-clinical duties of staff anaesthetists in a public hospital and also of the importance of cooperative work within the department. 150 I was satisfied by the evidence of the importance of a collegiate approach in a specialist department. However, I accept that to a very significant extent a specialist anaesthetist of Dr Colson’s seniority does not perform the clinical work under supervision and is highly autonomous in most aspects of their work. I accept that the relationship between a specialist anaesthetist and his managers both in the department and in the administration is not similar to the relationship between a Chief Executive Officer and his/her personal assistant or between a Minister and his/her personal adviser or a bank with its employees. This is not a case of a person who is entrusted with sensitive trade secrets or financial information where loss of trust would pose an impediment to the person resuming duties or where a strong interpersonal bond is essential for the functions of the position to be carried out.
Trust and confidence
[252] The invocation of the concept known as trust and confidence should not be a mantra that can be relied upon as a shield against the primary relief of reinstatement.
[253] Many of the features of the modern contract of employment derive from the earlier law of master and servant. Sir William Blackstone in the eighteenth century described the master and servant relationship as one of the three most important relations of private life, together with marriage and parenthood. 151
[254] Author P Selznick explained the features of the law of master and servant as follows:
“The law of master and servant was rooted in a society in which everyone was presumed to belong somewhere, and the great parameters of belonging were kinship, locality, religion, occupation and social class. In all spheres of life, including spiritual communion, subordination to legitimate authority was thought to be a natural, inevitable and even welcome accompaniment of moral grace and practical virtue.
The old law of master servant looked to the household as a model and saw in its just governance the foundations of orderly society. The household model made sense in an overwhelmingly agricultural economy where hired labour, largely permanent, supplemented the work of family members and all were subject to authority and tutelage of the father-manager. The model also fit the early pattern of work training among skilled artisans. In this setting, the relation of master and servant was highly diffuse and paternalistic. Work was carried out in the house of the master or a small shop nearby. The workman lived as a member of the household and often remained for life with the same master. It was against this background that the law of master and servant developed.” 152
[255] The legal basis of the employment relationship has changed over time. In the late eighteenth and early nineteenth centuries, the relationship between master and servant became more contractual.
[256] As McHugh and Gummow JJ observed in Byrne v Australian Airlines Ltd: 153
“The evolution in the common law as to the relationship of employment has been seen as a classic illustration of the shift from status (that of master and servant) to that of contract (between employer and employee).” 154
[257] The right of a master to dismiss a misbehaving servant for immoral conduct without the permission of the magistrates was first recognised in a 1777 case where a maid servant was found to be with child. 155 The master discharged the maid and the court upheld his right to do so. The master had daughters and it was said that to be bound to keep her would be scandalous and dangerous. From 1831 the common law recognised that ‘moral misconduct’ was a ground for dismissing an inferior servant.156
[258] From the late nineteenth century employees had a duty not to do an act incompatible with employment. 157 In Blyth Chemicals Ltd v Bushnell,158 Dixon and McTiernan JJ stated that conduct in respect of important matters that is ‘destructive of the necessary confidence between employer and employee, is a ground of dismissal’.
“Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal (Boston Deep Sea Fishing and Ice Co. v. Ansell; English and Australian Copper Co. v. Johnson; Shepherd v. Felt and Textiles of Australia Ltd.). But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises”. 159
[259] In more recent times the words ‘trust’ and ‘confidence’ are more about the ability of work to proceed in a commercially or legally correct manner than with the ingredients of an interpersonal relationship.
[260] The issue of reinstatement as a primary remedy for unfair dismissal, and whether a loss of trust and confident in the employee is a valid argument against granting the primary remedy of reinstatement was addressed extensively in Perkins v Grace Worldwide (Aust) Pty Ltd. 160
[261] In this case, Wilcox CJ and Marshall and North JJ made the following comments:
“[t]rust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage the relationship or destroy the relationship of trust and confidence between the parties, without reasonable cause: see Burazin v Blacktown City Guardian Pty Ltd (unreported, Industrial Relations Court of Australia, Full Court, No. 606/96, 13 December 1996). The implication is not confined to employers, it extends to employees: see for example Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81-82 and North v Television Corporation Ltd (1976) 11 ALR 599 at 609. So we accept that the question whether there has been a loss of trust and confidence is a relevant consideration in determining whether reinstatement is impracticable, provided that such loss of trust and confidence is soundly and rationally based.
...
Each case must be decided on its own merits. There may be cases where any ripple on the surface of the employment relationship will destroy its viability. For example the life of the employer, or some other person or persons, might depend on the reliability of the terminated employee, and the employer has a reasonable doubt about that reliability. There may be a case where there is a question about the discretion of an employee who is required to handle highly confidential information. But those are relatively uncommon situations. In most cases, the employment relationship is capable of withstanding some friction and doubts. Trust and confidence are concepts of degree. It is rare for any human being to have total trust in another. What is important in the employment relationship is that there be sufficient trust to make the relationship viable and productive. Whether that standard is reached in any particular case must depend upon the circumstances of the particular case. And in assessing that question, it is appropriate to consider the rationality of any attitude taken by a party.
It may be difficult or embarrassing for an employer to be required to re-employ a person the employer believed to have been guilty of wrongdoing. The requirement may cause inconvenience to the employer. But if there is such a requirement, it will be because the employee's employment was earlier terminated without a valid reason or without extending procedural fairness to the employee. The problems will be of the employer’s own making. If the employer is of even average fair-mindedness, they are likely to prove short-lived. Problems such as this do not necessarily indicate such a loss of confidence as to make the restoration of the employment relationship impracticable.”
[262] Bromberg J also indicated in Quinn v Overland 161 that a break down in trust and confidence will not always be a valid reason to avoid the primary remedy of reinstatement.
“Dismissed employees are regularly reinstated into their former employments without apparent consequent difficulties. The long-standing nature of this remedy, and its acceptance as part of the industrial furniture, is a testament to the fact that as a matter of practice, a breakdown in confidence is not necessarily irreconcilable. What needs to be achieved by a reconciliation is a sufficient level of cooperation for a proper working relationship to resume; mutual affection and friendship are not essential. 162
[263] Whether sufficient trust and confidence exists between the parties depends on a number of factors, such as the nature of the employment, the work performed, the employee’s competence, whether a personal relationship exists between the employer and the employee and whether that relationship has broken down.
[264] Gray J in Australian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd 163 suggested that where the employer is a large enterprise or a corporation, the personal relationship between the employer and the employee may be of less importance.
“The law relating to the need for trust and confidence in an employment relationship was developed at a time when employment invariably involved a close personal relationship between employer and employee. The advent of corporate employers has diminished the importance of this element of the employment relationship. A corporation has no sensitivity. The crucial question must be what effect, if any, loss of trust by a manager in an employee is likely to have on the operation of the workplace concerned.” 164
[265] While some of the above caseswere decided under the former statutory scheme the observations around whether it is impracticable to reinstate a dismissed employee remain relevant to the question of whether reinstatement is appropriate in a particular case.
[266] In Abbott-Etherington v Houghton Motors Pty Limited, 165 Marshall J found that reinstatement of a managerial employee was not impracticable, despite a claim by the respondent that they had lost confidence in her. He said that:
“It is entirely inappropriate ... for the respondent to rely in part on its very basis for its termination of the applicant’s employment to seek to deny the applicant her primary remedy.
In almost every conceivable case where the Court has found that an employer has terminated the employment of an employee in contravention of Div 3 of Pt VIA of the Act it is likely that an employer will form the view that harmony at the workplace will be affected by the return to work of the employee it has terminated. Such a happening, I believe, is unexceptionable. In my view it is no more than a view that reinstatement is ‘inconvenient’ or ‘difficult’ if an employer says that harmony may be affected by an employee’s return to work in such circumstances. ...
I agree with Gray J in Liddell at 494, 166 at least in so far as his Honour made the following observations:
1. The Court ‘does not possess an unfettered discretion to refuse that remedy [of reinstatement] upon any view as to the relevant merits of the parties’...
2. ‘Its [reinstatement’s] practicability does not depend on notions of loss of confidence in the employee’...”
[267] Whilst still a relevant and important consideration in many cases, courts are now reluctant to accept an unfounded assertion by an employer that a loss of trust and confidence in an employee is a valid argument against granting the primary remedy of reinstatement. It is clear that there must now be a rational basis to the argument and that the loss of trust and confidence is so detrimental that reinstatement would cause significant disruption to the workforce in order for the argument to be accepted.
[268] As the employment relationship shifted away from a personal relationship towards a contractual one, the context and significance of trust and confidence in employment has gradually changed. Furthermore many modern productive workplaces require critical thinking, creativity, flexibility, accountability and autonomy from employees and a degree of tolerance of diversity, discussion and dissent is essential to this. It has therefore become more difficult to argue that an employee should not be reinstated on the basis of a loss of trust and confidence.
[269] In the circumstances of this case I accept that it will be embarrassing for Barwon Health to reemploy Dr Colson. However, this is not a circumstance where lives will be endangered or where confidential relationships will be at risk if reinstatement occurs.
[270] The Judges in Perkins and Grace said that there must be “sufficient trust to make the relationship viable and productive.” 167They also said that in assessing this matter I should consider the rationality of any attitude taken by a party. The concern of Dr Tomlinson and Dr Gordon about the behaviour of Dr Colson in personally and unfairly criticising them to his colleagues is rational. The concern about the impact of Dr Colson’s behaviour on their ability to provide effective leadership in the Department is also rational. However, a significant issue to which they both refer is the issue of Dr Colson’s refusal to accept direction and to abide by the billing policy and the impact that has on their managerial ability and authority. Although I do not doubt the sincerity of their views about this matter I have found that the allegations against Dr Colson in respect to this matter were not established. This should not be the basis for deciding that the relationship cannot be restored for the reason stated by Justice Marshall: "It is entirely inappropriate ... for the respondent to rely in part on its very basis for its termination of the applicant’s employment to seek to deny the applicant her primary remedy.”168
[271] The relationship continued successfully for 14 years prior to the incidents which led to the termination. I have found that there was misconduct in the material circulated by Dr Colson within the department. There is no doubt that this material was undermining of Dr Tomlinson and Dr Gordon. However, the nature of what was said is unlikely to have changed the attitude of other employees in the department to the authority of Dr Tomlinson and Dr Gordon or to have significantly undermined their trust and confidence in them. Dr Colson’s colleagues are all highly educated. I am confident that his colleagues would understand Dr Colson’s individual style and would be little influenced by his emotive and inappropriate comments. The evidence supports a conclusion that the topics included in the letter of 23 March 2012 were in the main matters which had either been the subject of discussion involving Dr Colson’s colleagues or matters with which they would be familiar. There was no evidence before me to suggest that Dr Colson’s inappropriate personal comments about Doctors Tomlinson and Gordon have been adopted by or have influenced others. Of course, the partial and unbalanced comments by Dr Colson about the unfairness of his treatment may well have influenced the views of others about that matter. I am not satisfied that this will significantly undermine trust and confidence in the longer term particularly in light of the rest of my decision. Dr Colson, Dr Tomlinson and Dr Gordon have mutual trust in the professional ability of each other. I am satisfied that there is sufficient trust to make the relationship viable and productive.
[272] Justice Gray said that “the crucial question must be what effect, if any, loss of trust by a manager in an employee is likely to have on the operation of the workplace concerned.” 169 I am satisfied that the loss of trust Dr Tomlinson and Dr Gordon have in Dr Colson is not likely to significantly impact the clinical operations at the hospital and that effective and cooperative management of the department and its administration will also be possible. I am confident that Dr Colson will be clearly and appropriately on notice that failure to comply with reasonable direction and or a repeat of his inappropriate communications may result in termination.
[273] Justice Bromberg said that there must be a “sufficient level of cooperation for a proper working relationship to resume; mutual affection and friendship are not essential.” 170I have taken into consideration the statements of Dr Gordon including that he feels hurt and betrayed by Dr Colson’s actions and the statements of Dr Tomlinson about the difficulties he will have in carrying out his management function having been undermined by Dr Colson. These statements have also been supported by Mr Watson. However, the successful performance of Dr Colson’s clinical and non-clinical responsibilities over the previous fourteen years strongly suggests that there will be a sufficient level of cooperation for a proper working relationship to resume. I was impressed by the integrity of both Dr Tomlinson and Dr Gordon and I have no doubt about their capacity to handle the situation in a professional manner. I am satisfied that Mr Muncaster is an experienced and talented human resources manager who will also provide professional assistance.
[274] Dr Colson’s behaviour in writing the 23 March 2012 letter demonstrated a lack of awareness of the impact of his behaviour on others. This was also demonstrated in Dr Colson’s lack of constructive response at the 14 May 2012 meeting but this may in part have been due to poor advice. I have found earlier that it was also due to his view that he should not make any concession whilst the accusation of making false claims was still live. However, Dr Colson’s behaviour is generally professional and he makes a significant contribution in a collaborative way to his profession. Dr Gordon acknowledged that Dr Colson’s contribution to the training of others was appreciated. I am satisfied that there is a sufficient level of cooperation for a proper working relationship to resume.
[275] For these reasons I am not satisfied that the reinstatement of Dr Colson is inappropriate. I must therefore order the reinstatement of Dr Colson.
[276] There was nothing in the evidence before me to suggest that I should not order that Dr Colson be reappointed to the position in which he was employed immediately before the dismissal. I will so Order. However, I will provide liberty to the parties to apply for variation to this aspect of the Order should they wish to argue that I should consider an alternative equivalent position with Barwon Health to be more appropriate.
[277] I consider it appropriate to Order that Dr Colson have continuity of employment and that his period of service with Barwon Health should be continuous.
[278] Dr Colson submits, and it was not contested, that his remuneration package totalled $587,182 in the year prior to termination. Dr Colson received three months pay upon termination and has earned some monies since termination. This amounts to $155,276. Dr Colson therefore estimates the lost income during the period since the termination up to 30 January 2013 to be $236,179. Dr Colson estimates that this will increase by $11,292 per week for each week between 30 January 2013 and the making of my Order. Of course any income expected to be earned during the period since 30 January 2013 should be deducted from this amount. Dr Colson gave evidence that he does have some work later this month but I am satisfied that he will not earn income during the period between 30 January and the making of my Order.
[279] I may “make any order that FWC considers appropriate to cause the employer to pay to the person an amount for the remuneration lost, or likely to have been lost, by the person because of the dismissal.” In the circumstances of this case I consider that it is not appropriate to make such an Order. I accept that the amount of remuneration lost because of the dismissal exceeds $236,179 and that this is a substantial sum. However, I consider it appropriate to take into account the misconduct of Dr Colson. I consider that misconduct to be of some significance. I also consider it relevant that Dr Colson only belatedly apologised for that conduct. I also consider it relevant that Dr Colson did not appear to fully understand the significance of his misconduct. I consider that declining to exercise my discretion to order restoration of lost pay may assist Dr Colson to understand this and may also facilitate the restoration of proper working relationships.
[280] The Order is published separately.
COMMISSIONER
Appearances:
Mr R Millar appeared for the Applicant.
Mr M Rinaldi appeared for the Respondent.
Hearing details:
2013
Melbourne
January 14, 15, 22, 30
1 Exhibit B11, Attachment PW3.
2 Exhibit B11, Attachment PW3.
3 Exhibit B11, Attachment PW1.
4 Exhibit B11. Attachment PW2 and Exhibit C9.
5 PN3998, PN4017 and PN4020.
6 North v Television Corporation Limited (1976) ALR 599, 608-9.
7 Exhibit B11, Attachment PW3.
8 Exhibit C3 at paragraph 4.
9 This was accepted by the Applicant at PN1171 to PN1172.
10 Exhibit C4 at paragraph 4.2.
11 Exhibit C4 at paragraph 4.2.
12 PN794.
13 Exhibit B1, Exhibit C7 and Exhibit C8.
14 Exhibit C15 at paragraph 2.
15 PN3561 to PN3565.
16 Exhibit C24.
17 PN2906.
18 Exhibit B10, Attachment ST1.
19 Exhibit C25.
20 Exhibit B6, Attachment CG1.
21 PN2923 to PN2938.
22 PN2816 to PN2817.
23 PN2838.
24 Exhibit C25.
25 Exhibit B2.
26 Exhibit B6, Attachment CG3.
27 Exhibit B2 at pages 4 and 5.
28 PN3103.
29 PN2950.
30 PN2948 to PN2949.
31 Exhibit B6, Attachment CG3.
32 Exhibit B10 at paragraph 18 and Attachment ST4.
33 Exhibit B10, Attachment ST1.
34 Exhibit B10, Attachment ST1.
35 Exhibit B10, Attachment ST1.
36 Exhibit B10, Attachment ST1.
37 PN850.
38 PN995 to PN1005.
39 PN902.
40 Exhibit B10, Attachment ST1. Note the time units matter is the fourth of the “clarifications”.
41 PN924.
42 Exhibit B2, Exhibit B6 Attachment CG3 and also see PN4527-8
43 PN929.
44 Exhibit C9, Response to Question 2(c).
45 Exhibit B10 at paragraph 6, and Exhibit B6 at paragraph 6.
46 PN3464 to PN3466 and PN3582 to PN3586.
47 PN3625 to PN3627.
48 PN1031.
49 PN1037.
50 Exhibit C4 at paragraph 15.
51 Exhibit B10 at paragraph 11.
52 Exhibit C9, Response to question 2(b). This is not included in the Barwon Health version of the minutes which is Exhibit B11, Attachment PW2.
53 PN988 to PN991.
54 Exhibit B10, Attachment ST2.
55 Exhibit B10, Attachment ST3.
56 PN3604.
57 Exhibit B10, Attachment ST3.
58 Exhibit B10, Attachment ST3.
59 Exhibit B10, Attachment ST2.
60 PN1229 to PN1230.
61 PN1230 and PN1272.
62 Exhibit C14.
63 PN1271.
64 Exhibit C9 at questions 3(a) and 3(b).
65 PN2307 and PN2318 to PN2321.
66 Exhibit B6, Attachment CG2.
67 PN2447.
68 PN790.
69 PN2384 to PN2388.
70 PN2957 and PN2965.
71 PN2883, PN2887 and PN3530.
72 PN3925.
73 PN891 to PN907 and PN1059 to PN1061.
74 Exhibit C3 at paragraph 4.
75 Exhibit C3 at paragraph 7.
76 Exhibit C3 at paragraph 8.
77 Exhibit B2.
78 Exhibit C9.
79 Exhibit B10, Attachment ST1 at point 2.
80 Exhibit B2.
81 Exhibit B6, Attachment CG3.
82 PN1236.
83 PN1080.
84 PN1397.
85 Exhibit B6, Attachment CG6.
86 Exhibit C9 at question 7.
87 PN2343.
88 PN3989.
89 Exhibit C9 at point 4 - Minutes prepared by applicant of 14 May 2012 meeting
90 Exhibit C9 at point 2(b) - Minutes prepared by applicant of 14 May 2012 meeting.
91 PN1457.
92 Exhibit C9 at question 4 and question 2(b).
93 Exhibit C25 under the heading RVG.
94 Exhibit C9 at question 4.
95 PN1453.
96 PN1358 to PN1362.
97 Exhibit B6, Attachment CG4.
98 PN1111 to PN1363.
99 Exhibit C28.
100 PN3004 to PN3008.
101 PN3682 to PN3684.
102 PN1375 to PN1383.
103 PN1173 to PN1174.
104 PN1311 to PN1313.
105 PN3314.
106 PN1125.
107 Exhibit C28.
108 Exhibit C30.
109 PN3412.
110 Exhibit C35 and PN3883.
111 PN2782.
112 PN2781.
113 PN3337 to PN3346.
114 Exhibit C28.
115 Exhibit C28.
116 PN2774.
117 PN3004.
118 Exhibit C29.
119 Exhibit C30.
120 Exhibit C28.
121 Exhibit C30.
122 Exhibit C30.
123 Exhibit C35.
124 Exhibit C36.
125 Exhibit C36.
126 PN3446 to PN3454.
127 Exhibit C19.
128 PN2047 and PN3901.
129 PN2253.
130 PN3686.
131 PN1468.
132 Exhibit C9 and Exhibit B11, Attachment PW2.
133 PN1861.
134 Exhibit C9 at question 5.
135 Exhibit C9.
136 Exhibit C12.
137 Exhibit C12.
138 PN4072.
139 Exhibit B5, Attachments PM2 and PM3.
140 PN1187 to PN1188.
141 PN682.
142 PN4075 to PN4077.
143 PN4077.
144 PN4078.
145 PN4079.
146 PN4080.
147 PN4081.
148 PN1890.
149 For example, Exhibit B5, Attachment PM3.
150 PN3778 to PN3786.
151 Sir William Blackstone, Blackstone's Commentaries on the Laws of England Book the First: Chapter the Fourteenth: Of Master and Servant, Oxford: Printed at the Clarendon Press, 1765-1769.
152 P Selznick, Law, Society and Industrial Justice, Russell Sage Foundation, New York, 1969, pp 122-3.
153 Byrne v Australian Airlines Ltd [1995] HCA 24.
154 Byrne v Australian Airlines Ltd [1995] HCA 24, para 27.
155 R v Inhabitants of Brampton (1777) Cald Mag Cas 11.
156 See for example Callo v Brouncker (1831) 172 ER 807. This principle was commonly referred to throughout the nineteenth century.
157 Pearce v Foster and Others (1886) 17 QBD 563.
158 Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66.
159 Blyth Chemicals Ltd v Bushnell [1933] HCA 8; (1933) 49 CLR 66.
160 Perkins v Grace Worldwide (Aust) Pty Ltd [1997] IRCA 15.
161 Quinn v Overland [2010] FCA 799.
162 Quinn v Overland [2010] FCA 799, para 98.
163 Australian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd [2000] FCA 627.
164 Australian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd [2000] FCA 627, para 42.
165 Abbott-Etherington v Houghton Motors Pty Limited (1995) 63 IR 394, paras 396-397.
166 Robin Beadon Liddell v Cheryl Lembke t/as Cheryls Unisex Salon [1994] IRCA 142.
167 Perkins v Grace Worldwide (Aust) Pty Ltd [1997] IRCA 15.
168 Abbott-Etherington v Houghton Motors Pty Limited (1995) 63 IR 394, paras 396-397.
169 Australian Meat Industry Employees’ Union v G & K O’Connor Pty Ltd [2000] FCA 627, para 42.
170 Quinn v Overland [2010] FCA 799, para 98.
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