Eileen Fitt and HSUA v Department of Health and Community Services
[1995] IRCA 613
•17 November 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 3530 of 1995
B E T W E E N :
EILEEN FITT & HSUA
Applicants
AND
DEPARTMENT OF HEALTH & COMMUNITY SERVICES
Respondent
Before: Judicial Registrar Murphy
Place: Melbourne
Date: 17 November 1995
REASONS FOR JUDGMENT
Within the public sector dedicated managers often seek to maintain service provision in the face of system-wide budgetary restraints and bureaucratic rigidities. In such an environment the central issue in this application was whether, following the departure of an incumbent employee, the replacement service being provided by the Applicant was as an employee or in some other capacity.
Dental Services at Kew Cottages
The Respondent, a large department of the State of Victoria, operates a residential care facility known as Kew Cottages (the Agency). For the 630 clients, dental services are provided on site. Prior to, and since February 1994 the services are provided by sessional dentists. Dentists require the assistance of nurses and prior to February 1994 there was a dental nurse on the staff of the Agency. She worked a 38 hour week and assisted the dentists during clinic hours. At other times she performed housekeeping functions in the clinic. In addition she performed other duties such as escorting clients to the Royal Dental Hospital in emergency situations.
In January 1994 the incumbent dental nurse accepted a “voluntary departure package (“VDP”)”. A VDP is a term used to describe a monetary payment to a departing public sector employee. For the government agency involved, however, the terms under which the VDP was issued were that thenceforth the agency would not be provided with funding for the salary costs of the position that had been vacated. The evident intention of the VDP was to force agencies to economise; to do more with less - “there was to be no back-filling of positions.” Where the agency still had to maintain the services that had been provided by the departing VDP employee this meant that funds had to be provided elsewhere within the agency budget for that service.
So it was that in February 1994 the Applicant, a highly qualified and experienced dental nurse, was advised that a position was available at Kew Cottages. She spoke to the principal sessional dentist, Dr Sutterby, who advised that she would need to complete the formality of an interview with Mr Pat Kelly (“Kelly”), a Sector Manager with the Agency.
On 18 February 1994 the Applicant attended an interview with Kelly and Ms Judith Corbett (“Corbett”), the Unit Manager of the Smorgon Health Complex (“the Complex”). Corbett reported, as one of a number of managers, to Kelly, and had budget and managerial responsibility for, inter alia, the dental clinic.
At the interview Kelly advised that because the previous nurse had accepted a VDP the staff position as dental nurse was not available. His evidence was that he made it clear that funding for the position was now coming out of the Agency’s operating budget, as distinct from the salary budget, and that the proposal was that the Applicant be paid on a four hourly sessional basis, working a total of 8 sessions per week. The Applicant’s unchallenged evidence was that Kelly said that because of the VDP requirements the Applicant would not be able to work five days per week, but only four.
The Applicant indicated that she wished to be paid $26,000.00 per annum for her duties. Kelly replied that the previous incumbent had only been paid $23,000.00 per annum. He, however, offered her sessional payments based on her salary requirement. Kelly proposed, and the Applicant accepted, that the Applicant work 8 sessions over four days, a total of 32 hours per week. On advice from senior management of the Respondent the Applicant’s conditions on a sessional basis were that she was to be responsible for her own Workcover, and “professional indemnity and personal liability insurance”. The Applicant was only to be paid for hours actually worked and not to be paid annual or sick leave, or public holidays. The Applicant was required to invoice the Agency each month for the services that she had rendered. No documents were exchanged at the meeting. They were to be drawn up. The Applicant commenced duties on 21 February.
On 22 February Kelly wrote to the Applicant (Exhibit A2) making an offer in these terms:-
“Further to our meeting of the 18th February, 1994 I write to confirm the offer made to you.
POSITION:Dental Nurse (sessional basis)
SessionsMaximum 8 sessions per week.
Monday to Thursday inclusive.
Hours4 hours per session (minimum)
Fees$67.50 per 4 hour session.
WorkcoverThat you provide your own Workcover.
Insurance That you provide your own Personal Indemnity and Personal Liability Insurance.
Payment Payment will be made on a monthly basis. An invoicing system which indicates hours and sessions worked is to be forwarded to the Sector 2 Manager at the end of each month. Payment will be made only for those hours and sessions actually worked.
Term This contract shall be effective from Monday, 21st February, 1994 for a period of 3 calendar months.”
The Applicant did not sign this letter. She took it to her Union, the Second Applicant, to seek advice. She was concerned that payment by the month would cause her financial difficulties. She had never had to provide insurance and Workcover before. Further, when she sought to obtain Workcover insurance she was unable to do so. She was also concerned about the 3 months proposed duration. As a result of these matters she had further discussions with Kelly.
On 19 April, Kelly, after seeking advice in relation to the Workcover issue, wrote to the Applicant offering a contract, (Exhibit A3) in identical terms to Exhibit A2, but providing that the Agency provide Workcover “during your sessional periods”. The contract was to last for a period of 3 months from 25 April.
The contract also proposed to reduce the payment from $67.50 per four hour session to $64.00 per four hour session, reflecting the cost to the Agency of Workcover for the Applicant. The document also provided that where a public holiday fell on Monday - Thursday no additional sessions would be worked.
In response to this letter the Applicant wrote a letter to Kelly on 6 May (Exhibit R5). In that letter she asked Kelly to clarify a few issues for her. One of the issues she sought to clarify was whether, given that she was under the direct supervision of dentists for 24 of her 32 hours per week: “I am not an independent contractor but rather an employee. Is this correct?” She also sought to clarify, if she was an employee, deduction of taxation from her wages, and worker’s compensation arrangements.
On 11 May 1995 there was a meeting between the Applicant and Kelly. The evidence was that the Applicant wanted to become a permanent staff member with the Agency. I am satisfied that Kelly advised the Applicant at that meeting that his hands were tied “on the matter of employee/sessional position”. He advised that a staff position for a dental nurse did not exist on either a full time or casual basis. He also advised her that he had raised with the dentist, Dr Sutterby, that the dentist actually employ her but he had declined. He further advised her in that meeting that the basis of her sessional remuneration ($1,084 per fortnight) was she would be paid $26,000 per annum but this was calculated on a sessional basis over 48 weeks.
After the meeting the Applicant sought a meeting between Kelly and her union representative, Mr Etterschank (“Etterschank”). Before that meeting Kelly advised the Applicant that he had sought advice and it was not possible for the Agency to change the position of the Applicant’s status as a sessional nurse. At a meeting with Etterschank the latter raised the issue that the Agency appeared to be in breach of the law by failing to deduct PAYE taxation from the Applicant’s remuneration. Kelly’s evidence was that he advised Etterschank that the Applicant was in the same position as other contractors of the Agency such as dentists and “we don’t pay their taxes”.
Following the discussions between the Applicant and Kelly in May the status quo continued. The Applicant was paid fortnightly and the Agency accepted responsibility for Workcover. The Applicant did not sign any written agreement with the Agency. The proposed reduction in the sessional payment from $67.50 to $64 to cover the Agency’s Workcover cost did not eventuate. Nothing was said at the expiration of the three months contract period referred to in Exhibit A3 and the Applicant continued working.
In September the Applicant wrote to Kelly in these terms (Exhibit R3):-
“It has been several months since our discussion regarding the terms of my employment with Kew Cottages.
Understanding the difficulties that you are faced with I am prepared to work along the current lines, however I do wish to have Workcover by Kew Cottages.
I would appreciate your attention to this matter enabling me to report back to David Etterschank.”
Kelly put the question of further negotiations with the Applicant in the hands of Corbett who presented to the Applicant in November a proposed contract (Exhibit A4) in virtually identical terms to that proposed in April (Exhibit A3). The only significant difference was that the reference to personal liability insurance had been deleted and the number of sessions was described as “maximum 8 sessions per week within the period Monday - Friday only”. The contract was to be effective for a period of six calendar months from 1 December. The Applicant did not sign this contract. She continued working.
In relation to the working relationship between the parties three other matters are of significance. The first was the issue of public holidays. The Applicant was originally to work Monday - Thursday. At some stage Kelly agreed with the Applicant that where a public holiday fell on a Monday the Applicant could work on the Friday of that week to maintain her 4 days/8 sessions per week arrangement. This Monday - Friday arrangement for the provision of the 8 sessions appears to be reflected in the November contract (Exhibit A4) referred to above.
Something similar occurred around Christmas 1994. The dentists were to be on leave so it appeared that the services of the Applicant were not required. The Applicant proposed to Corbett that the Agency retain the services of other dentists so that the clinic could remain functioning as the Applicant did not wish to take any leave at that time. Corbett managed to arrange other dentists so that the Applicant’s services were utilised over the holiday period.
Another matter which arose in late 1994 was that the Applicant became aware that her daughter, in the United Kingdom, was expecting. She raised with Corbett “the not unreasonable” (Corbett’s evidence) request that she have a period of leave around the time of the birth. In April 1995 the Applicant renewed the request. Corbett said that there would be no difficulty and asked the Applicant for the precise dates. Corbett maintained however that the Applicant did not really need to obtain permission. Corbett arranged for a dental nurse from an agency to replace the Applicant and there was a short changeover period. The Applicant went on leave on 18 May 1995 and was due to return to work on 22 June 1995.
The Applicant’s Duties as Dental Nurse
The Applicant commenced her engagement as a dental nurse on 21 February 1994. She provided her own uniform. The dental clinic had dentists present Tuesday - Thursday. The dentists at that stage worked five 3 hour sessions per week. There was a further session each week involving a dentist working with the assistance of an anaesthetist. The Applicant assisted the dentists and anaesthetist for each of those 6 sessions. In addition the Applicant had two sessions, or one day per week, “housekeeping” where she cleaned the surgery equipment and attended to other duties including stock control and appointments. The Applicant worked Monday - Thursday. She usually commenced duties at 7.00am and worked until 3.00pm. On some days she commenced at 6.00am. An ophthalmologist attended at the clinic from time to time and the Applicant worked as his nurse and was paid for those sessions.
In late 1994 there was a review (Exhibit A5) of the dental clinic undertaken by a senior employee of the Respondent, Ms Chong. The responsibilities of the dental nurse, as described in the review, were accepted at the hearing as a fair description. They were as follows:-
“1.Co-ordinates all dental appointments in consultation with Unit Managers and Clinic staff.
2.Provide clinical chairside assistance to Dentist using four-handed dentistry technique.
3.Prepare the surgery for use each day.
4.Sterilise all dental equipment and maintain surgery infection control.
5.Monitor, replenish and order stores.
6.Provide chairside assistance during general anaesthetics.
7.Assist with promotional dental health projects as required.
8.Pour and prepare models.
9.Mix all alginate materials for impression taking by dental officers.”
While performing her duties within the clinic the Applicant was under the direct supervision and control of the dentists. When the dentists were not present she would, on a daily basis, liaise with Corbett about a variety of matters. In particular Corbett, as part of her duties as the unit manager of the Smorgon complex, at one stage asked the Applicant to attend a meeting designed to ensure that the dental clinic, medical clinic and hospital all worked closer together. Corbett gave evidence that the Applicant was asked to report to her on matters such as the number of clients in the clinic. She gave evidence that on a number of occasions she had sought to have the Applicant commence her duties at 8.00am. She was unsuccessful in changing the Applicant’s custom, apparently to avoid traffic difficulties, of commencing at 7.00am or earlier. Corbett also made a number of requests of the Applicant that she register drugs located in the clinic. Corbett also discussed procedures for the re-ordering of materials with the Applicant and the need for the Applicant to contact Corbett before taking such an action. Eventually the Applicant met Corbett’s requirements in each of these two areas.
Corbett’s evidence was that she had difficulty “exercising direction and control” over the Applicant. She maintained however that she believed she had a right to check the hours that the Applicant was claiming and to discipline the Applicant. It was her role, she maintained, to see that the entire unit, which included the clinic, was run smoothly and to ensure that any queries, complaints or concerns people had raised were met.
In the review (Exhibit A5) Corbett’s responsibilities in relation to the clinic are set out as follows:-
“RESPONSIBILITIES OF UNIT MANAGER OF SMORGON HEALTH COMPLEX.
1.The structure of Dental Service should be under the management of the Unit Manager of Smorgon Health Complex.
2.Any concerns, request & queries from Dentists & Dental Nurse should be directed to Unit Managers.
3. Updating Policy and Procedure for Dental Care and readdress currents forms in consultation with the Dentist, Dental Nurse and Unit Managers.
4.Review the Dental Nurse duties.
5.Co-ordinate all leave coverage of the Dental Service staff.”
I am satisfied that this is a fair description of Corbett’s responsibilities in relation to the dental clinic.
A matter of dispute in the proceeding was whether the Applicant was in fact performing, or was treated, differently from the previous employee nurse. Kelly gave evidence that he saw subtle differences between the duties of the previous incumbent of the position and the Applicant. He referred to the fact that the Applicant only worked four days per week and thus her duties were more limited. He noted that there was a “totally different method of remuneration” but that “relations between Corbett and (the Applicant) were essentially the same” (as with the previous incumbent). Because the Applicant would not be working five days per week the Agency took the opportunity to restructure the position by reducing it to four days per week. This meant that the duties that had been performed by the previous incumbent, such as escorting patients to the Royal Dental Hospital, were no longer performed by the Applicant as she was not present at the site five days per week. The Applicant was not required to complete time sheets for payroll purposes, but she did complete a daily attendance sheet. She also did not appear on the Complex’s annual leave roster.
The Relationship is Terminated
On 18 May 1995 the Applicant, after a hand-over period with her nursing agency replacement, took her leave. Corbett’s evidence was that during the first two weeks of the Applicant’s absence there were “discrepancies and mismanagement” matters relating to the Applicant’s performance that caused her to form a view as to the Applicant’s future. Corbett had previously discussed other incidents with the Applicant. These had caused her to form a view of a need to discipline the Applicant. Corbett had ascertained, however, that the Agency’s discipline procedure did not contain guidelines for discipline for sessional workers. She had however raised some matters verbally with the Applicant.
In relation to the matters that became clear in the first two weeks after the Applicant went on leave Corbett did not, however, discuss them with the Applicant. The Applicant was overseas and Corbett herself was about to leave the Respondent. Corbett thought it inappropriate to leave the question of the Applicant’s future to her successor. On the basis of advice from Corbett, Kelly and another member of management of the Agency decided to dispense with the Applicant’s services. This decision was taken 2 to 3 weeks after the Applicant commenced on leave.
The Applicant was due to resume work on 22 June. On 20 June 1995 a letter (Exhibit A6) was forwarded to her which read:-
“We have decided to review our arrangements in the operation of the Dental Clinic at Kew Residential Services.
As a consequence of this restructuring I have to advise you that we no longer require the sessional arrangements with you, opting instead for arrangements with a Dental Nurses Agency.
In view of the absence of any written contract, we are prepared to make you a payment by way of termination of our current verbal arrangements.
You will not be required to perform any further services and need not attend Kew Residential Clinic any further.
I would like to thank you for your services here and offer my best wishes for the future.
Yours sincerely
Gary Radler
A/Manager, Kew Residential Services”
The Applicant arrived back in Melbourne on 20 June. She contacted Corbett to advise her that she had returned and would resume work two days later. Corbett queried whether the Applicant had received the letter of 20 June. The Applicant advised that she had not. Corbett advised that her services had been terminated and the reason would be contained in the letter. The Applicant received it later that day. The Applicant was subsequently paid $1,084 being a fortnight’s sessional pay.
Kelly and Corbett gave evidence that since the Applicant left for her leave on 18 May the Agency and the sessional dentists have been happy with the services that they had been receiving from agency dental nurses. The quality of the nurses “has been excellent”.
Distilling the Agreement Between the Parties
In this case there was little real dispute on the evidence. Kelly had a better recollection on many matters than the Applicant. On the basis of his evidence I am satisfied that the essential terms of the agreement between the parties were orally agreed in the meeting on 18 February 1994. Those terms are set out in Exhibit A2. Save for the provision relating to the “term” of the contract I am satisfied that the parties agreed that the Applicant would be engaged on the basis set out for an indefinite period.
Upon receiving the proposed written contract (Exhibit A2) the parties then, at the Applicant’s instigation, renegotiated some aspects of the agreement between them. The aspects renegotiated were: payment fortnightly rather than monthly; work on Fridays where there was a public holiday on a Monday; and the Agency to cover the Applicant for Workcover.
Despite these specific matters that were the subject of mutually agreed variations to the original agreement I am satisfied that the original agreement was that the Applicant would be engaged as a “dental nurse (sessional basis)” on the terms set out (Exhibit A2). The question is whether she was so engaged as an employee.
Principles for Resolving Disputed Cases of Employment
In a recent ruling (Garth v Innerspace Wardrobes (Industrial Relations Court of Australia, Murphy JR, 22 September, 1995)) I have considered the principles to be applied in resolving disputed cases of employment and I will not repeat what was there set out.
Before turning to an application of the relevant tests one issue which must considered here is how the parties themselves described the relationship between them. While the parties’ own description of the relationship will not be decisive, it may remove ambiguity: Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 at 389. The comments of Gray J in Re Porter; Re TWU (1989) 34 IR 179, 184 are apposite:-
“Although the parties are free, as a matter of law, to choose the nature of the contract which they will make between themselves, their own characterisation of that contract will not be conclusive. A court will always look at all of the terms of the contract, to determine its true essence, and will not be bound by the express choice of the parties as to the label to be attached to it. As [counsel for the applicants] put it in the present case, the parties cannot create something which has every feature of a rooster, but call it a duck and insist that everybody else recognise it as a duck.”
Despite a suggestion by Corbett that Kelly told the Applicant during the initial interview on 18 February 1994 that she was to be an independent contractor I am satisfied that this was not the description used by Kelly at that meeting. He gave no such evidence. His evidence was that he told the Applicant that she could not be classified as a staff employee because of the VDP requirements. I find that the parties were content, in the terms articulated in Kelly’s letter of 22 February (Exhibit A2), to describe the Applicant’s engagement with the Agency as being “on a sessional basis”. I am satisfied that the reason for this description was that payment to the Applicant by the Agency could not be categorised as salary. Payments to the Applicant had to come from the operating budget of the Agency. The Agency could not describe the Applicant as an employee because there was no staff position in existence. I am satisfied, however, that the parties did not, in contrast, choose to describe the Applicant as an independent contractor.
Bearing these comments in mind the approach to the issue of categorising persons as employees/contractors since the decision in Stevens v Brodribb Sawmilling Company Pty Ltd (1985) 160 CLR 16 is to have regard to a variety of indicia and to the totality of the relationship between the parties.
An important indicia is the issue of control of the putative employee by the employer. Here it was common ground that in relation to “chairside” matters the Applicant was under the control of the sessional dentist or anaesthetist. For six of the eight sessions she worked per week she was assisting a dentist. Those dentists however only worked three hour sessions whereas the Applicant worked four hour sessions. Corbett’s evidence was that the dental clinic was part of her managerial responsibilities. This is reflected in the review (Exhibit A5) which in an organisational chart had the dental nurse reporting to a dentist who in turn reported to Corbett. Corbett’s evidence was that she asserted the right to discipline the Applicant and to liaise with her on a daily basis in relation to some aspects of her duties, and in particular the non-surgical duties. Corbett’s evidence was that in relation to two particular matters, namely registering of drugs and re-ordering materials, the Applicant, under sufferance, came to accept her requirements. She attempted unsuccessfully to require the Applicant to work different hours of work.
Kelly’s evidence was that the relations between Corbett and the Applicant were little different from the relations between Corbett and the previous dental nurse who was an employee.
On the basis of this evidence I am satisfied that the Agency here did reserve to itself a right to control the Applicant. This control could not be exercised to the extent that the Applicant was under the direct supervision of a dentist but in all other respects she was part of the Complex which was under the responsibility of Corbett. The fact that, in relation to her strictly clinical duties, the Agency could not directly control the Applicant is of little weight “because a high measure of independence of skilled workers is now a commonplace in the workforce”: Articulate Restorations and Development Pty Ltd v Crawford (1994) 57 IR 371 at 380 per Kirby P. There is also a close analogy between the detailed responsibilities of the position as set out in the review and the set of instructions regarded as decisive by Lee J in Barone v Olympic Industries Pty Ltd (1984) 8 IR 439.
I am therefore satisfied that in relation to the important indicia of control the evidence points to the conclusion that the Applicant was an employee.
This conclusion is reinforced by considering the issue of control within the context of what is known as the “organisation” test. In Connolly v Wells (1994) 55 IR 73 at 93 Clarke JA describes the organisation test as providing “no more than an additional criterion for consideration”. Here it is clear that the Applicant was closely affiliated with the Agency as an organisation. She was not, in any real sense, carrying on a business on her own account, although Kelly required her to submit invoices. She had never been in business as such, had no registered business name, and her profession can hardly be described as one usually carried on by self-employed individuals. In contrast, the clinic was an integral part of the Agency and the work that she performed was “not peripheral, but was integral to the (Agency’s organisation)”: Australian Timber Worker’s Union v Monaro Sawmills Pty Ltd (1980) 29 ALR 322 at 329 per JB Sweeney and Evatt JJ. See also the comments of Kirby P at 380 and Mahoney JA at 381 in Articulate Restorations and Development Pty Ltd v Crawford (above).
The only aspect possibly relating to a business was the provision by the Applicant of her own uniform. In relation to an employee or a worker such as a nurse this is not surprising. It is also significant, and has been referred to in cases such as Connolly v Wells (above) and Articulate Restorations and Development Pty Ltd v Crawford (above) that the Applicant was only providing her services to the Respondent. The economic reality was that the Applicant was supplying her labour exclusively to the Agency. It wasn’t as though she was involved with a number of different employers, such as she might have been had she been involved with a nursing agency. Further it is difficult to see how she could have delegated her duties to someone else given her close daily involvement with Corbett. I regard the discussions between Corbett and the Applicant in relation to the May leave as of little significance. The fact was the Applicant thought it proper to request the leave. She was granted leave. She did not have her leave arrangements integrated with other staff because of the need not to classify her as staff and as she was not part of the normal payroll system.
Counsel for the Respondent placed strong reliance on the mode of remuneration as indicating that the Applicant was a contractor. In particular he relied on comments in Builder’s Workers Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104, 126 as follows:-
“However, the agreement that Troubleshooter’s workers are not to receive annual leave or sick leave or any payment referable to those entitlements and that no deduction of income tax is to be made from their remuneration signifies a mutual intention that they are not to be regarded as employees.”
This submission however is weakened by a consideration of the question of remuneration in Barone v Olympic Industries Pty Ltd (above) at 441 where Lee J pointed out that many of these matters flow from the original decision in relation to the mode of remuneration. Here, as a result of the VDP requirements, Kelly was required to remunerate the Applicant other than out of a salary budget. As was said, “she was paid out of a different bucket of money.” Thus he chose to remunerate her on a gross basis without any annual or sick leave. He could not do anything other than this because he was not allowed to treat her as a member of staff. The arrangement between the parties in relation to Workcover and personal insurance followed from this stricture on Kelly. While on their own they are an indication against a relationship of employment, when the whole of the relationship between the parties is considered they are of lesser significance.
This is reinforced by Kelly’s evidence that the relationship between Corbett and the Applicant was essentially the same as between Corbett and the previous incumbent employee. In relation to matters other than remuneration and annual leave the Applicant appears not to have been treated by the Agency differently from an employee.
When all these factors tending one way or the other are considered I am satisfied that the weight of the indicia between the Agency and the Applicant point towards her being an employee. As “a matter of impression” (Gray J in Re Porter (above)) she was an employee. This is in spite of the fact that Kelly was unable to describe her as such for bureaucratic reasons only. The essential conclusion here is that the Applicant, in reality, filled the shoes of the previous incumbent employee. I find that the Applicant too was an employee.
Was the Termination of Employment in Breach of the Act?
Corbett readily acknowledged that she chose to deal with the termination of the Applicant’s engagement while the Applicant was overseas. While such an approach may have been neater and simpler for Corbett’s successor as Unit Manager of the Complex, it was at the expense of the Applicant’s rights under the Industrial Relations Act (“the Act”).
The Respondent’s reasons for the termination are not fully revealed in Exhibit A6. That letter refers to a “review of our arrangements” and “this restructuring”. Corbett’s evidence was that the Applicant “provided a service...it did not meet our needs....(and) we no longer required the service.” She also said that she “highlighted (to Kelly and an Industrial adviser) the problem we had to manage”. The decision to dispense with the Applicant’s services was taken on the basis of information that Corbett had provided.
On the basis of Corbett’s evidence I am satisfied that the true reason for the termination of the Applicant’s services was not “restructuring” as alleged in Exhibit A6. It was not related to the operational requirements of the agency. It was because of reasons related to the Applicant’s performance.
In the course of the proceeding the Respondent conceded that it had not put to the Applicant the performance matters that it sought to argue justified the dispensation of her services. Following that concession the Court ruled that evidence as to the Applicant’s performance was irrelevant to the proceedings. The basis of the ruling follows from the requirements of Section 170DC of the Act that where the reason for the termination relates to the employees’ “conduct or performance” the employee must be given an opportunity to make a case.
Corbett sought to wrap up the matter before she left the Agency’s employ. A respondent employer cannot use these proceedings to put to an employee matters that should have been put to that employee prior to the decision to terminate the employment: Bostik (Australia) Pty Ltd v Georgevski (No. 1) (1992) 36 FCR 20 at 35 per Gray J. Here the Applicant was not treated fairly and given an opportunity to make a case: Gibson v Bosmac Pty Ltd (1995) 130 ALR 245, 252 per Wilcox CJ.
It follows that, as the representative for the Applicant argued, the Respondent has breached its obligations under Section 170DC of the Act.
If the Court is wrong in concluding that the real reason for the termination here related to the Applicant’s conduct and performance and that the reason was in fact an operational decision to utilise the services of dental agency nurses, then in any event the Respondent has breached Section 170DE(1) of the Act. The Respondent failed to give the Applicant any opportunity to be consulted or to respond to the suggestion that she was delivering a service that was inferior to that provided by the agency nurses. The Respondent cannot be said to have a “sound, defensible or well founded” (Selvachandran v Peteron Plastics Pty Ltd, Industrial Relations Court of Australia, 7 July 1995, Northrop J) reason to restructure part of its operation unless at the least it consults the actual service provider before dispensing with the service.
Further, given the manner of execution of the decision to dismiss the Applicant, on any view the termination was harsh, unjust or unreasonable and thus in breach of s.170DE(2) of the Act.
Remedy
The Applicant, although she has obtained other employment, sought reinstatement to her former position with the Respondent. The Respondent argued that reinstatement was impracticable. It sought to lead evidence from the dentists in the clinic that the Applicant’s performance was such that they and the Agency had lost confidence in her and that it was impracticable to reinstate her.
The Court ruled that evidence as to deficiencies in the Applicant’s performance was irrelevant to the issue of the practicability or otherwise of reinstatement. The Court ruled that evidence that may go to the Applicant’s present capacity to perform the duties could be relevant but that evidence they sought merely to agitate matters relating to her performance that she had not had an opportunity to respond to before termination was irrelevant.
The reason for this ruling is that unless the evidence sought to be adduced was in the nature of material that could not have been ascertained by the Respondent during the employment (Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427) the hearing of the proceeding is a very unsatisfactory forum to consider matters which had not, during the employment, prompted the Respondent to seek to terminate the employment.
The Respondent was content to retain the Applicant’s services, allow her to take five weeks leave, and, without reverting to her, discharge her services while on leave. In doing so it infringed her rights under s.170DC of the Act. As Wilcox CJ and Keely J said in Liddell v Lembke (1994) 127 ALR 342, 359-360:-
“The subject matter of this legislation is unlawful termination of employment. Its scope and purpose is the provision of legally enforceable remedies for people whose employment is terminated in breach of the internationally-accepted standards introduced by the Act into Australian domestic law. Because of these considerations, and the fact that the Commonwealth Act makes a termination in violation of the requirements of s 170DC unlawful in itself, whatever the employee’s merits or lack of them, it would not be right to withhold a remedy for a breach of s 170DC because of considerations listed in s 170DE(1). They are factors that permit an employer acting fairly to terminate an employee’s employment.”
In Abbott-Etherington v Houghton Motors Pty Limited, (Industrial Relations Court of Australia, 28 September 1995, Marshall J) the Court said:-
“The evidence really supports the proposition that the respondent did not think the applicant was fit to be a manager. That is why it terminated her employment. It so terminated her employment in contravention of the Act. It is entirely inappropriate in the circumstances 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.”
The Court does not accept that comments of CJ Wilcox in Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 1 IRCR 199 at 410 in relation to the term “impracticability” dictate that this type of evidence should be admissible and relevant on the question of remedy. The position may be different where the Respondent, at the time of the termination, had advised the Applicant that it sought to terminate her services for performance related reasons. It did not and it now cannot seek to use evidence relating to her performance to resist the primary remedy under the Act. The evidence sought to be led is analagous to evidence to support an argument, rejected by the Court in Johns v Gunns Limited (Industrial Relations Court of Australia, 18 May 1995, Northrop J) that reinstatement was impracticable because the position of the dismissed employee had been filled.
The evidence was that the services previously provided by the Applicant are now being provided by agency dental nurses. There is therefore no good reason why the Applicant cannot be reinstated to her position. I am satisfied that it is an appropriate order for the Court to make. I propose to order that the Applicant be reinstated to her position and that the Respondent be ordered to pay to the Applicant, subject to PAYE taxation, the amount of the remuneration that she has lost by reason of the termination of her employment. The parties are in a position to agree on the actual figure after taking into account the amount already paid by the Respondent and the Applicant’s earnings. There will be liberty to apply in the event of any failure to agree.
MINUTES OF ORDERS
THE COURT ORDERS:
That the Applicant be reinstated to her position as a sessional dental nurse with the Respondent.
The employment of the Applicant is deemed to have been continuous for all purposes from the date of termination to date.
That within 14 days the Respondent pay to the Applicant the remuneration lost by reason of the termination.
Liberty to apply.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
I certify that this and the preceding twenty-one (21) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.
Associate:
Dated: 17 November 1995
Representative for the Applicants: Mr John Clancy from HSUA
Solicitor for the Respondent: Mr P Murphy
Counsel for the Respondent: Mr T Ginnane
Date of hearing: 2 November 1995
Date of judgment: 17 November 1995
C A T C H W O R D S
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - EMPLOYMENT CONTRACT OR SERVICES CONTRACT - Tests for whether independent contractor or employee - PROCEDURAL FAIRNESS - VALID REASON - REINSTATEMENT - relevance of performance prior to termination to REMEDY.
Industrial Relations Act 1988 ss.170DC & 170DE.
CASES:Garth v Innerspace Wardrobes (Industrial Relations Court of Australia, Murphy JR, 22 September, 1995)
Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385
Re Porter; Re TWU (1989) 34 IR 179
Stevens v Brodribb Sawmilling Company Pty Ltd (1985) 160 CLR 16
Articulate Restorations and Development Pty Ltd v Crawford (1994) 57 IR 371
Barone v Olympic Industries Pty Ltd (1984) 8 IR 439
Connolly v Wells (1994) 55 IR 73
Australian Timber Worker’s Union v Monaro Sawmills Pty Ltd (1980) 29 ALR 322
Builder’s Workers Industrial Union of Australia v Odco Pty Ltd (1991) 29 FCR 104
Gibson v Bosmac Pty Ltd (1995) 130 ALR 245
Bostik (Australia) Pty Ltd v Georgevski (No. 1) (1992) 36 FCR 20
Selvachandran v Peteron Plastics Pty Ltd, (Industrial Relations Court of Australia, 7 July 1995, Northrop J)
Lane v Arrowcrest Group Pty Ltd (1990) 27 FCR 427
Liddell v Lembke (1994) 127 ALR 342
Abbott-Etherington v Houghton Motors Pty Limited, (Industrial Relations Court of Australia, 28 September 1995, Marshall J)
Nicolson v Heaven & Earth Gallery Pty Ltd (1994) 1 IRCR 199
Johns v Gunns Limited (Industrial Relations Court of Australia, 18 May 1995, Northrop J)
EILEEN FITT & HSUA -v- DEPARTMENT OF HEALTH & COMMUNITY SERVICES
No. VI 3530 of 1995
Before: Judicial Registrar Murphy
Place: Melbourne
Date: 17 November 1995
INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 3530 of 1995
B E T W E E N :
EILEEN FITT & HSUA
Applicants
AND
DEPARTMENT OF HEALTH & COMMUNITY SERVICES
Respondent
MINUTES OF ORDERS
Judicial Registrar Murphy 17 November 1995
THE COURT ORDERS:
That the Applicant be reinstated to her position as a sessional dental nurse with the Respondent.
The employment of the Applicant is deemed to have been continuous for all purposes from the date of termination to date.
That within 14 days the Respondent pay to the Applicant the remuneration lost by reason of the termination.
Liberty to apply.
NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.
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