Henry v Department of Health & Community Services, Victoria

[1996] IRCA 151

DECISION NO:  151/96

C A T C H W O R D S

INDUSTRIAL LAW - UNLAWFUL TERMINATION - VALID REASON - OPERATIONAL REQUIREMENTS - REDUNDANCY - HARSH, UNJUST OR UNREASONABLE TERMINATION - employee dismissed while on workers compensation - whether process followed or applicant unfairly targeted.

Industrial Relations Act 1988 ss.170DC, 170DE

CASES:

Kenefick v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197 (Wilcox CJ); (Unreported, Full Court, Ryan, Beazley and North JJ, 26 March 1996)
Selvachandran v Peteron Plastics Pty Ltd (Industrial Relations Court of Australia, Northrop J, 7 July 1995)

Jones v Department of Energy and Minerals (1995) 60 IR 304

JAMES PHILIP HENRY -v-
DEPARTMENT OF HEALTH & COMMUNITY SERVICES, VICTORIA

No. VI 3907/1995

Before:  Judicial Registrar Murphy
Place:  Melbourne
Date:  26 April 1996

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 3907 of 1995

B E T W E E N :

JAMES PHILIP HENRY
Applicant

AND

DEPARTMENT OF HEALTH & COMMUNITY SERVICES, VICTORIA
Respondent

MINUTES OF ORDERS

Judicial Registrar Murphy     26 April 1996

THE COURT ORDERS:

1. The application is dismissed.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 3905 of 1995

B E T W E E N :

JAMES PHILIP HENRY
Applicant

AND

DEPARTMENT OF HEALTH & COMMUNITY SERVICES VICTORIA
Respondent

Before:           Judicial Registrar Murphy
Place:              Melbourne
Date:              26 April 1996

REASONS FOR JUDGMENT

In these proceedings the applicant, a qualified psychiatric nurse, sought a remedy under Division 3 of Part VIA of the Industrial Relations Act (“the Act”) following the termination of his employment, on the grounds of redundancy. His position had been at Ballarat’s Lakeside Hospital, a facility within the Grampians Psychiatric Services region of the respondent. The applicant’s case was that following a resumption of work after a long period of incapacity he was pressured into transferring to non-nursing duties on an assurance that his employment was secure. He was later targeted for redundancy. During the process of making him redundant he sustained a further injury and was then terminated while still incapacitated.

De-institutionalisation, mainstreaming and decommissioning
The respondent’s defence to this application was that the applicant was made redundant as a result of its operational requirements.  Those operational requirements were the result of extensive changes in psychiatric service management that are encapsulated in the terms “de-institutionalisation”, “mainstreaming” and “decommissioning”.  The principal witness on these matters was Ms Laurie Bebbington, the Chief Executive Officer, Lakeside Hospital / Manager Grampians Psychiatric Services.  An impressive witness, she painted a picture of extensive change within the psychiatric health sector and in particular, the Grampians region.  “De-institutionalisation” is the term used to describe the downsizing of major psychiatric institutions and the placement of the patients into small, more dispersed community based facilities.  “Mainstreaming” is a process whereby psychiatric services are not provided by the respondent as distinct services and institutions, but are delivered as part of a general health facility such as a public hospital or nursing home.  Ms Bebbington gave as examples two special facilities that are being built within major public hospitals at Ballarat and Nhill.  The respondent will fund the two hospitals to provide services for the patients that it previously housed at Lakeside.  Ms Bebbington assumed the office of CEO, Lakeside in 1993 and a major priority is to complete the decommissioning of the hospital by 1997.  The decommissioning involves the building of seven community based institutions that will receive the patients formerly located at Lakeside.  Lakeside Hospital has been a major psychiatric institution that some years ago had over a thousand patients drawn from throughout Victoria.  At the present time it has only sixty-nine patients.

The impact on staff numbers of the change process just described is substantial.  As Lakeside was originally drawing patients from throughout Victoria, the deinstitutionalisation of its patients throughout Victoria means that the growth of staff numbers in substitute community based programs is not primarily in the Grampians region.  The impact of mainstreaming on staff numbers is most direct on non-clinical staff.  As a psychiatric service previously provided by Lakeside is transferred into the mainstream of health services, the clinical staff delivering the service are generally able to be absorbed into the new institution responsible for the program.  In the case of non-clinical staff however, the process involves substantial redundancies of those staff at Lakeside, as the new institutions are generally required to absorb the additional non-clinical workload from within their existing staffing and resources. 

The impact of the change process on staff numbers at Lakeside has been marked.  From staff numbers of over 400 in 1991, the numbers are expected to reduce to nil by 1997 when the facility closes.  Budgeting for the decommissioning process is on the basis that 166 departure packages will be provided to redundant staff.  Of the present staff of 280, 210 clinical staff will be absorbed by the new community based facilities as they are opened, while the balance will either be redeployed within the public sector or offered departure packages.  Non-clinical staff have fallen from 51 in June 1994 to 39 in June 1995 and are expected to fall to 11 by June this year (Exhibit R9).

As the decommissioning process unfolds the trigger for the transfer of clinical staff from Lakeside to new institutions is the completion of each of those institutions.  In October 1994 a new community based facility, Eastern View, was to commence operations.  In August 1994 clinical staff at Lakeside, including the applicant, were invited to submit expressions of interest for clinical positions at the new facility. 

The applicant’s career as a psychiatric nurse
The applicant is aged 40 and holds qualifications in general and psychiatric nursing.  At the time of these events he was registered by the Victorian Nursing Council as a psychiatric nurse.  From 1981 he worked at Lakeside and his classification was as a registered psychiatric nurse, grade 1 (RPN-1).  In 1989 the applicant suffered a shoulder and neck injury at work and was forced to cease work.  He was paid WorkCover payments for a period of two years.  He was then granted a temporary disability pension by the State Superannuation Board.  In April 1994 he was held by the Superannuation Board to be fit to resume suitable duties “where there was no repetitive use of the right arm or heavy lifting”.  After an interview he commenced work at the Garden Drive Rehabilitation Program within the Lakeside Hospital. 

At the time he commenced there the applicant acknowledged to Mr Pepplinkhouse, the manager of the program, and the acting coordinator, Mr Nykoluk, that as he had been away from nursing for some years he would have to undertake a program of re-education over the coming months to familiarise himself with current nursing practice, policies and procedures.  The applicant gave evidence that he told Mr Pepplinkhouse that he expected it would take him twelve months.  Upon commencing employment the applicant proceeded, with the support of his manager, to enrol in a number of courses stretching out to November 1994.  

Despite evidence from Mr Pepplinkhouse that the Garden Drive position was one of the easiest available at Lakeside, Mr John Mason, the unit manager of Garden Drive, gave evidence that on a number of occasions over the period May - August 1994 he raised with Mr Pepplinkhouse the applicant’s work performance.  One matter was raised officially with the applicant in early July 1994 when Mr Mason ascertained that the applicant was on medication that may have affected his ability to drive.  He asked the applicant to obtain a clearance from his doctor that he was fit to drive government vehicles.  The applicant was unable to obtain a full clearance from his doctor to this effect, and the result of the exchange was a directive by Mr Mason that the applicant was no longer to drive government cars.  The applicant complied with this directive.  Another incident raised in the evidence was a complaint by a patient about the applicant. This complaint was the subject of an investigation and found to be without foundation. 

The applicant is transferred from Garden Drive
When staff throughout Lakeside were invited to submit expressions of interest for clinical positions at the Eastern View facility the applicant did so.  On 8 August 1994 Mr Zeegers, who was responsible for  the establishment of the Eastern View facility, acknowledged the applicant’s expression of interest in a RPN-1 position, and said he will be contacted “in the near future regarding the next process to be taken in matching of positions to the new service”.  (Exhibit A7)

On 10 August the applicant was called to a meeting with Mr Zeegers.  Also present was his unit manager, Mr Mason.  Mr Mason gave evidence that as a result of a discussion with Mr Zeegers, he understood that the meeting was to be an interview with the applicant to assess his suitability for a position at Eastern View.  He and Mr Zeegers discussed the format of the interview, which involved each asking a number of questions relating to the duties and functions of the proposed position.  Mr Mason gave evidence that at the commencement of the interview the applicant was told that he was being interviewed following his expression of interest for a position at Eastern View. 

The applicant’s evidence was that he was not told that the meeting was in fact an interview for a position.  He said Mr Zeegers stated that this was a “chat” to discuss his progress since he returned to work, and that he wanted to make the meeting as informal as possible.  Messrs Zeegers and Mason then proceeded to ask the applicant to give a short response to a number of questions.  The applicant said the meeting went for between 15 - 30 minutes whilst Mr Mason said that it was about 45 minutes.  Mr Mason said that at the end of the meeting the applicant was informed that he didn’t do very well.  He said that the parties discussed the applicant’s need for re-education and more staff development.   Mr Mason’s opinion was that in the course of the interview the applicant displayed a level of knowledge that was poor and that he had to be brought up to a level for proper patient care - the applicant had exhibited the knowledge of a second year student.  In cross-examination the applicant admitted that at the time “I knew I was having trouble”.  He thought he “would have to do more courses and try harder”.  The applicant’s supervisor, Mr Wilson, gave evidence.  He said he was aware that the applicant had been called to a meeting and said that when the applicant returned after the meeting he appeared upset.

After the meeting a report (Exhibit R4) was prepared and signed by Messrs Zeegers and Mason.  It was critical of the applicant’s knowledge and concluded that he displayed a “lack of basic knowledge of the standards expected of an RPN-1 position (at Eastern View)”.  It also said that he demonstrated an attitude that was not “conducive to good psychiatric practice” and went on to state that he “has had the opportunity to develop these skills at work, and commitment to self-improvement would have resulted in a better outcome”.  The report recommended that he not be considered for a position at Eastern View and that he undertake “a significant re-education program”.

When this report was transmitted to Mr Pepplinkhouse, he said he was shocked and  horrified by parts of it.  The report carried additional weight because of the extensive experience of the two signatories in the field of nursing education.  He raised the matter with Ms Bebbington who reminded him of his duty of care to his patients. 

Mr Pepplinkhouse then arranged a meeting with the applicant.   Mr Pepplinkhouse said that at the meeting he first showed the applicant the report and then proceeded to discuss its implications with him.  He said he laid out his expectations for patient care and the implications of the report for the applicant’s future in nursing.  He told him he  needed to look at the career choices open to him as he hadn’t been able to achieve an appropriate standard as a nurse since returning to work.  He said that the options open to the applicant were that if he wanted to stay in nursing he would have to continue the re-education program and prove that he was suitable to maintain his registration.  He said that he “couldn’t allow him to continue as a nurse without supervision”.   If the applicant chose not to do this, the applicant would have to consider other career options.  The two discussed the applicant’s personal skills, his interest in computers and the possibility of the applicant looking for other jobs within the respondent.  The applicant was told that the respondent would support him in whatever decision he made.  Mr Pepplinkhouse said that the tone of the meeting was amicable and he invited the applicant to consider the matter for a couple of days and return with his decision.

The applicant’s version of the interview was that he was not given a copy of the report at the beginning.  He also said that he had protested about the conduct of the “interview” with Messrs Mason and Zeegers.  The applicant said that he wished to have union involvement in the matter and Mr Pepplinkhouse had said that if the union became involved he would deny the existence of the interview report.  Mr Pepplinkhouse denied this and stated that subsequently the union organizer, Mr Wheatley, had been provided with a copy of the report and had discussed it with him.  The applicant also said that Mr Pepplinkhouse told him that he was a permanent public servant and that he would be “looked after”.  Mr Pepplinkhouse denied this statement and said the applicant was told he would be supported in whatever decision he took. 

A short time after this meeting the applicant again saw Mr Pepplinkhouse.  At that stage the applicant had already been moved from his position at Garden Drive to other nursing duties.  The applicant told Mr Pepplinkhouse he preferred to chose the option of trying to find work in another area.  Mr Pepplinkhouse advised the applicant to report to the manager of the General Services Department for his interim duties and told him that “a position has been created to pursue your other options”.  The applicant’s evidence was that he told Mr Pepplinkhouse that he would co-operate with him.  Mr Pepplinkhouse could not recall this statement.  The applicant in his evidence said that he believed that Mr Pepplinkhouse in their discussions was trying to help him.

After the applicant had been transferred to the other duties he saw Mr Pepplinkhouse on a regular basis.  Mr Pepplinkhouse said he appeared content in the duties.  The applicant’s duties included a number of special projects and he also worked two days per week in medical records.  Ms Bebbington gave evidence that in fact she was responsible for some of the duties that the applicant was assigned to within the General Services Department.

The applicant is made redundant
Some time after August 1994 Ms Bebbington became aware that the applicant was no longer working in clinical duties.  In October she sought advice from the Personnel Manager on the process to have the applicant’s position declared redundant.  Her evidence was that as she was responsible for the overall decommissioning program she made the decision in relation to the identification of surplus positions in the non-clinical areas.     A further factor in her close involvement in this aspect of the process was a changeover of the manager of the General Services Department in late 1994.  In relation to clinical personnel Ms Bebbington sought the advice of the relevant program manager.  In a memorandum to the Personnel Manager on 10 October 1994 (Exhibit R3) she outlined the applicant’s recent history at Lakeside and enclosed a copy of the interview report (Exhibit R4).  At that stage the applicant was not told of the proposal to make his position redundant.

On 6 March 1995 Ms Bebbington again wrote to the Personnel Manager of the Region (Exhibit R5) with a request to declare twelve positions surplus.  That document identified twelve positions with ten named individuals attached to those positions.  One of them was the applicant and his position was described as a RPN-1.  The other positions were facilities services officers, a trades assistant and two pharmacists.  Two staff in medical records, where the applicant worked two days per week, were included.  According to Ms Bebbington the applicant was redundant because as a supernumerary administrative officer the decommissioning process was at the point where there were no duties for him.

Ms Bebbington gave evidence that when the decision is taken to declare a position surplus the respondent is required to follow a set of procedures known as the Staffing and Mobility Guidelines (Exhibit A1) (“the Guidelines”).  Under the Guidelines the request to declare a position redundant must be accompanied by a number of attachments.  One of those attachments is known as the “Redundant Position Proposal”.  In the case of the applicant the document was completed by Ms Susan Simcocks, who was attached to the Lakeside decommissioning team.  The document (Exhibit A4) records that the applicant was not currently working in his position as a RPN-1 and was “medically unfit to work as RPN-1 (Returned superannuant).  Has been working on interim duties in Medical Records - not an ongoing position.”    The document also records as the response to whether the officer had been informed of the proposal:   “Yes.... Received the information well.  Declined HACSU (union) representation - has good knowledge of current legislation, awards, etc.”  It also records that “no opportunities” exist for job redesign or placement of the officer within the region.  Ms Bebbington’s request of 6 March 1995 to declare the twelve positions surplus was accepted by the respondent’s Assistant Director, Personnel Management and Review on 20 April 1995 (Exhibit R7).

The Guidelines also require the respondent to notify the relevant union and on 31 March 1995 Ms Bebbington wrote to Mr P Wheatley, an organiser of the Health & Community Services Union, listing eleven positions to be declared surplus to requirements on 3 April 1995 (Exhibit R6).  The applicant’s position was included.  A further letter of confirmation was sent on 26 May 1995 (Exhibit R8).

The process within the public sector where positions are redundant is that in the first instance there is an attempt to redeploy redundant officers elsewhere within the relevant department.  If this cannot be achieved then  a unit  of the Department of Treasury, the Workforce Management Unit (“WMU”), must be notified of the proposed redundancies.  That unit then attempts to place the redundant officer elsewhere within the public sector.  In the case of the applicant, an additional requirement imposed on the respondent was that where a registered psychiatric nurse is to be declared redundant permission must be sought from the respondent’s Director, Psychiatric Services.  The reason for this is that there is a shortage of registered psychiatric nurses in the metropolitan area.  On 10 April 1995 that permission was sought and it was granted on 9 May 1995 (Exhibit R2).

The evidence of Ms Bebbington and Mr Jim Giannakis, who was then the respondent’s Acting Manager, Recruitment and Staffing Services, was that the Guidelines were followed in the case of the applicant and the other officers on the list signed by Ms Bebbington on 6  March.  Those procedures included advising and counselling the applicant of the fact that his position was to become redundant and looking for positions elsewhere within the respondent.  They also included a visit to Ballarat by the officers of the WMU who interviewed the applicant to discuss possible redeployment options.  In his evidence the applicant admitted that when he was interviewed by the respondent’s redeployment officer, Mr Kerry Boehm, he was advised that the prospects of him being redeployed were virtually nil.  Mr Giannakis’ evidence was that this was the position for staff like the applicant at the time. 

The respondent’s evidence was that a large number of individuals in the Grampians Region had been the subject of attempted redeployment and ultimately targeted (involuntarily) separation packages (“TSP”) over the period April - June 1995 (see Exhibit R13).  When the respondent was advised by the WMU on 22 May 1995 (Exhibit R12)  that it had been unable to place a number of staff, including the applicant, detailed on a list, the letter stated : 

“These staff have been assessed as being unable to be redeployed in the current circumstances having regard to : 

·   WMU experience to date in endeavouring to secure their redeployment;

·   employment background/skills of the staff;

·   the incidence of current and likely future vacancies in their occupational categories and/or their home locations.”

In evidence Ms Bebbington stated that although it was not until 22 May 1995 that the respondent had clearance from the WMU that it had completed its requirements in attempting to redeploy the applicant and the other listed persons throughout the public sector, the decision to apply a TSP to the applicant had been taken prior to 12 May.  The reason for this was that as the applicant was unable to perform clinical duties, the only other positions available within the Grampians Region were non-clinical duties.  Ms Bebbington was aware of the totally diminished opportunities in that region as a result of the decommissioning of Lakeside Hospital.  Thus, although technically the respondent was not in a position to make a formal decision that the applicant was to be the subject of a TSP until the WMU procedures had been complied with, the decision had effectively been taken much earlier than that.  Ms Bebbington further said that the respondent had been informally advised in early May that the WMU would not be able to redeploy the applicant.

The applicant was notified by letter dated 6 June 1995 (Exhibit A13) that his employment would end on 23 June.  He was paid the standard TSP payment of four weeks salary plus two weeks salary per year of service, as well as his other accrued entitlements.  In the letter advising him that he was to be terminated he was advised that he could not be redeployed due to :
           “l  the lack of suitable positions in your preferred employment background and
                skills;

·   H&CS and WMU experience to date in endeavouring to secure your redeployment.”

He was offered a range of support services comprising support counselling, financial counselling, career transition training and outplacement services.

The applicant’s criticism of the redundancy process
The applicant attacked the validity of his redundancy on a number of bases.  The first was to suggest a conspiracy to target him, commencing with the interview with Messrs Zeegers and Mason on 10 August 1994.  He maintained he was disadvantaged by the interview and pressured by Mr Pepplinkhouse to accept the move to non-clinical duties.  He maintained that he did so on the basis of an assurance by Mr Pepplinkhouse that he would be looked after and be given a position. 

The oral and documentary evidence do not support the applicant’s assertion.  I prefer Mr Mason’s evidence as to the meeting of 10 August 1994 and find that the applicant was told that the meeting was in response to his expression of interest for a position at Eastern View.   I cannot accept the applicant’s evidence that he thought it was merely a meeting to discuss his progress at Lakeside when Mr Zeegers was not his immediate manager, and two days earlier he had received an acknowledgment of his expression of interest. 

I also prefer Mr Pepplinkhouse’s version of events relating to the transfer across to the General Services Department.  On his own evidence the applicant accepted that the respondent was trying to help him, and it is clear that as a result of the conclusions of the interviewers the applicant faced a difficult choice.  He obviously felt, particularly given his physical condition, that it was in his interest to explore options in a non-clinical area.  He did this by accepting the offer of a move to non-clinical duties.  The evidence of Mr Pepplinkhouse that he advised the applicant to keep a lookout in the respondent’s job vacancies, which was not challenged, supports the conclusion that Mr Pepplinkhouse gave the applicant no assurance in relation to any new position.  Mr Pepplinkhouse was in no position to give such an undertaking or assurance.  The fact that the applicant did not take any action with his superiors between August  1994 and March 1995 to secure, in the face of the evident wind-down of Lakeside, any permanent position is also confirmation that the non-clinical position was, as indicated in evidence, of an interim nature.   As Ms Bebbington said “he was a supernumerary”.

The applicant’s criticisms of his redundancy made in this proceeding mirrored those he made after he ceased employment with the respondent on 23 June 1995.  He then lodged a grievance under the Public Sector Management Act.  The grievance alleged that he had been targeted for redundancy because of both his original injury and his further injury on 12 May 1995.  He claimed that he was unable to explore the redeployment options open to him due to his condition at the time.  In the grievance (Exhibit A14) no mention was made of the move to non-clinical duties in August 1994.  Counsel for the respondent submitted that this suggested that the applicant’s complaint about the events of August 1994 therefore smacks of recent invention.  I accept that submission and prefer the respondent’s version of events relating to the transfer to non-clinical duties.  I find there was no coercion or any representation of a permanent non-clinical position in the events of August 1994.

There was a lack of substance in the applicant’s criticisms of the procedures undertaken by the respondent after he was advised of his selection for redundancy.  The applicant did refer to the fact that one particular bulletin of possible job vacancies that he was promised had arrived too late, but otherwise the criticism that he made was as to the speed of the redundancy/redeployment decision-making process. The evidence, however, did not suggest that the process was other than in compliance with what was required in the Guidelines. 

The applicant did not call Mr Wheatley from the relevant union to corroborate his unhappiness with the process.  Mr Pepplinkhouse gave evidence that Mr Wheatley queried the respondent for including the applicant,  an RPN-1, in the list of positions targeted for redundancy.  In a consultative meeting Mr Pepplinkhouse explained the reasons why the applicant was on the list and said that neither the applicant nor Mr Wheatley raised any protest.  It was at that same meeting that Mr Wheatley was provided with a copy of the August 1994 interview report (Exhibit R4).  The failure of the applicant to call  Mr Wheatley allows the Court to readily accept the respondent’s evidence that the requirements of the Guidelines in relation to consultation with the union were satisfied.

Another matter raised by the applicant was the possibility that the adverse conclusions of the August 1994 report (Exhibit R4) may have impacted on his redeployment prospects.  On this issue I accept the evidence of Ms Bebbington and Mr Giannakis that the redundancy process of the respondent and the WMU is unconcerned with and separate from performance issues.  It is hardly surprising that the applicant was unable to be deployed given his inability and/or unwillingness to work as a psychiatric nurse and his limited experience in other non-clinical occupations.  The scarcity of redeployment possibilities and the high level of position shedding over the period April - June 1995 emerged strongly from the material before the Court.

The applicant’s substantive complaint about his redundancy related to the fact that on 12 May 1995 he sustained a further injury at work.  It appears that he was then incapacitated for work and received WorkCover payments.  A particular matter of grievance of the applicant was that under the Accident Compensation Act the TSP paid to the applicant created a period of non-entitlement to WorkCover benefits.  The applicant queried this issue before he was terminated but was advised in writing that that was the position.

The evidence of Ms Bebbington and Mr Giannakis was that the applicant’s period of incapacity for work had no effect on the redundancy decision of the respondent.  That decision was based on the fact that the applicant’s position was surplus as a result of the decommissioning of Lakeside.  The fact that at the time his redundancy was implemented he was incapacitated was irrelevant.  I accept the respondent’s evidence on this issue. There was ample material before the Court that a large number of redundancies were occurring within the respondent at the time and the applicant has not raised any material that suggests that his injury and incapacity impugned the process or took his case outside the requirements laid out in the Guidelines.

The applicant was made redundant as a result of a process that commenced in October 1994.  The process, as it was required to do, followed the Guidelines, and was unaffected by his temporary incapacity for work after 12 May.  A particular criticism of the actual amount of the TSP was that it was calculated on a basis which excluded certain allowances that had been paid to the applicant prior to him ceasing work due to injury on 12 May.  I accept the respondent’s evidence that the Guidelines in relation to the amount of the payment were followed and there is no basis for this criticism.

Did the employer have a valid reason to terminate the employment ?
The respondent carries the onus of proof that it had a valid reason, in the sense of a “sound, defensible or well-founded” reason, based on its operational requirements, to terminate the applicant’s employment (see ss170EDA(1)(a) and 170DE(1) of the Act and Selvachandran v Peteron Plastics Pty Ltd (Industrial Relations Court of Australia, Northrop J, 7 July 1995)).

In Kenefick v Australian Submarine Corporation Pty Ltd (1995) 131 ALR 197, 208 Wilcox CJ adopted the comments in Selvachandran (above) and said :

“I respectfully agree, and I think it follows that the reason must be genuine, that there must be a causal relationship between the reason and the termination and that the termination must be a logical response to the employee’s capacity or conduct or the employers operational requirements.  Of course, there is often more than one logical way of dealing with a problem. While the subsection requires the employer to establish that the termination was a logical way of dealing with the problem of employee capacity or conduct, or operational requirements, that gave rise to it, it does not require proof that this was the only logical course.  The subsection was designed to inhibit capricious terminations, not to put the court in the employer’s managerial chair.”

Although the learned Chief Justice’s decision has been reversed (Kenefick v Australian Submarine Corporation Pty Ltd, Industrial Relations Court of Australia, Ryan, Beazley and North JJ, 26 March 1996) these comments were not criticised by the Full Court.  The Full Court has indicated however that the employer has the onus of proof that there was a valid reason for the reduction in its workforce and the selection of an individual employee.

The respondent has provided ample evidence that its operational requirements required the reduction of its Lakeside workforce. Ms Bebbington’s evidence was that she regarded it as a priority to advance the decommissioning process. Such a process, of necessity, created surplus staff, particularly in non-clinical areas. I am further satisfied that the respondent has discharged its onus of proof that it had a valid reason to terminate the applicant’s services. I accept Ms Bebbington’s evidence that there were no other duties available for the applicant to perform in his interim position within the General Services Department. The decommissioning process required that non-clinical staff be reduced as clinical functions were mainstreamed. This led to the applicant, as an officer not holding any substantive position, being placed on the list dated 6 March 1995 (Exhibit R5). I am further satisfied that the respondent’s decision cannot be characterised as a capricious decision as alleged by the applicant. The evidence of Ms Bebbington was that conduct or performance issues relating to the applicant were not relevant to the decision that he be made redundant. Given my findings that the transfer to non-clinical duties in August 1994 was not as a result of coercion, the applicant has not satisfied me that this initial step was capricious. Given the evidence that the redundancy of the applicant had been in train since October 1994, and effectively concluded prior to his injury on 12 May 1995, I am not satisfied that proceeding with the redundancy while the applicant was on WorkCover leads to the conclusion that this constituted capricious conduct by the respondent and resulted in the termination infringing s170DE(1). The respondent had a sound and valid reason to terminate the applicant’s employment and has discharged its onus of proof.

I am further satisfied that the applicant’s conduct was not a factor in the respondent’s decision making process and that s170DC of the Act has no application here.

Substantive unfairness - s170DE(2)
The applicant carries the onus of proof that his termination of employment contravened s170DE(2) because it was harsh, unjust or unreasonable.

In Jones v Department of Energy and Minerals (1995) 60 IR 304, Ryan J considered a public sector redundancy. I am satisfied that the reasons for the redundancy (departmental restructuring), and the procedures adopted and approved in that case were substantially similar to the position here. In that case Ryan J held that the dismissal did not contravene s170DE(2) on either substantive or procedural grounds. There the termination had a harsh emotional impact on the employee, yet the Court held that this did not mean that it infringed s170DE(2) of the Act. Importantly Ryan J at 310 said :

“However, a distinction needs to be drawn between those elements in the total matrix surrounding a dismissal which can render it unlawful, and those which do not.  The nature of the distinction was succinctly indicated by Commissioner Chambers in Monsanto Chemicals (Australia) Ltd v Amalgamated Engineering Union (Australian Section) (1958) 90 CAR 27 at 31:

“A dismissal, to be “harsh and unreasonable” must be of a nature very different from the normal case.  For the employee dismissed to be concerned, embarrassed financially, disturbed in the normal pattern of life, is not sufficient, unless it can be shown that the employer created all these like difficulties by effecting dismissal without regard for all the reasonable and fair considerations one is entitled to expect in the employer/employee relationship...”

Turning to procedural fairness, Ryan J considered a process of consultation and referral to the WMU not dissimilar to that which occurred in this case.  At 313 he said:

“In summary, I am not able on the evidence to find that the respondent failed to adopt procedures of the kind which any reasonable employer in similar circumstances would have followed.  Its conduct in giving early notification of the possibility of termination, together with the opportunities given to Mr Jones to explore options for deployment, support the conclusion that it discharged its duty to afford procedural fairness in the circumstances.”

In this case I come to a similar conclusion.  The applicant claimed that by virtue of his position in the public sector he was entitled to expect that following his return to work after his work related injury in 1989, and his further injury in May 1995, he would be rehabilitated into another career within the public sector.  I am satisfied that given the overall circumstances of the applicant and the operational requirements of the respondent the applicant has not made out any such entitlement.  I am not satisfied that his incapacity for work from 12 May rendered the continuation of the redundancy process harsh.  The respondent’s operational requirements were that the decommissioning of Lakeside proceed.  His redundancy was processed, along with a number of others, in accordance with the Guidelines.  I am satisfied that the way in which it was processed did not disadvantage or unfairly impact on the applicant by virtue of his injury.  The monetary impact of the TDP on his WorkCover entitlements was as a result of a legislative provision of general application.  The respondent’s obligations to the applicant under the Accident Compensation Act remain and are independent of the cessation of his employment with the respondent.  The coincidence of his work related incapacity and the redundancy, when the operational requirements of the respondent and the dearth of alternative public sector positions are considered, do not put the applicant in a category that makes the overall termination “of a nature very different from the normal case” (Jones (above)).  It is thus not liable to be characterised as harsh, unjust or unreasonable. 

The respondent has not contravened s170DE(2) or any other provision of the Act and the application must be dismissed.

MINUTES OF ORDERS

THE COURT ORDERS:

1. That the application is dismissed.

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 sixteen (16) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.

Associate:                   
Dated:  26 April 1996.

Solicitors for the Applicant:               Maurice Blackburn & Co., Ballarat
Counsel for the Applicant:                 Mr L Carter

Representative for the Respondent:   Department of Health & Community Services,
  Victoria
Counsel for the Respondent:             Mr M McDonald

Date of hearing:  18 & 19 March 1996
Date of judgment:  26 April 1996