Keane v Marques

[1996] IRCA 241

DECISION NO:  241/96

C A T C H W O R D S

INDUSTRIAL LAW -  TERMINATION OF EMPLOYMENT - alleged unlawful termination - dentist - breach of professional code of ethics - whether valid reason - whether termination harsh, unjust or unreasonable.

INDUSTRIAL RELATIONS ACT 1988 Ss 170EA, 170DC, 170EDA(1)(a), 170EDA(1)(b).

Thomas George KEANE  -v-  Michael MARQUES  -  SA 1609 of 1995

BEFORE:        R. D. FARRELL JR
PLACE:           PERTH (heard in Adelaide)
DATE:             16 May 1996

IN THE INDUSTRIAL RELATIONS     )
COURT OF AUSTRALIA  )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )         No. SA 1609 of 1995

BETWEEN:  Thomas George KEANE
  -         Applicant

AND:  Michael MARQUES
  -         Respondent

MINUTE OF ORDERS

BEFORE:                R. D. FARRELL JR

PLACE:                   PERTH (heard in Adelaide)

DATE:  16 May 1996

THE COURT ORDERS THAT:

1.         The application is dismissed.

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

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY

SA1609 of 1995

BETWEEN:

Thomas George KEANE
Applicant

AND:

Michael MARQUES
Respondent

REASONS FOR DECISION

16 May 1996  R. D. FARRELL JR

1. This is an application under Section 170EA of the Industrial Relations Act 1988 for reinstatement or, if reinstatement is not practicable, compensation arising from the alleged unlawful termination of the employment of the applicant, Dr Thomas George Keane (“Dr Keane”), by the respondent, Dr Michael Marques (“Dr Marques”).

1. Orders were made prior to the hearing that the respondent be dux litis as to the reason for termination. The respondent had been ordered, therefore, to present his evidence in defence of the claim prior to the applicant being required to present his evidence in support of the claim. A summary of the evidence follows.

The Circumstances of the Termination

1. Dr Marques is a dental surgeon who has, since 1981, built up a practice in Gawler, a town about 40 kilometres north of Adelaide.

1. Dr Marques employed Dr Keane on a part time basis in 1988, with variations from time to time to his days and hours. Dr Keane had an unbroken period of part time employment from 1988 to 24 October 1995, when he was dismissed. At the time of his dismissal, he was employed on Mondays, Tuesdays, Thursdays and on Friday afternoons. Dr Keane worked for the other one and a half days of the week at a practice in Adelaide.

1. Dr Keane’s remuneration at the time of his dismissal was calculated in relation to the gross fees charged by him. Laboratory fees were deducted from the gross fees charged, and Dr Keane was paid 33 percent of the residue and was also paid superannuation. Dr Marques retained 67 percent, from which other overheads would be paid.

1. Dr Keane performed the general duties of a dentist. He was not supervised and had complete freedom with respect to decisions relating to treatment. However, he was required by Dr Marques to adhere to pricing schedules for treatment which were fixed by Dr Marques. Dr Marques took the view that to allow autonomy as to pricing would potentially result in internal competition between the other dentists employed by the practice. Also, if the price was not sufficient to meet overheads then Dr Marques could potentially lose money on treatment.

1. Dr Keane sometimes disagreed on the levels at which some of the prices were fixed, and this generated tension between Dr Keane and Dr Marques. The matter was expressly raised on 30 August 1994 at a meeting between Dr Marques, Dr Keane, another employed dentist, the dental nurse and the practice manager. The minutes of that meeting provide that:

   “prices as per price list to be charged at all times except at the dentist’s discretion. Dentist can give 10%. For major dentistry, dentist is to quote, and if dentist feels it is necessary, can send patient to see Barbara (to discuss payment).”

1. While there is no financial advantage to Dr Keane in cutting the prices, there was a potential financial disadvantage to Dr Marques. The issue arose less formally on other occasions. Mrs Barbara Hendry, the practice manager, gave evidence that the practice charged the average price for the various dental treatments.

1. Dr Marques gave evidence that, on or about 29 September 1995, his receptionist and his dental nurse bought to his attention their belief that some patients of the practice were treated by Dr Keane at the Adelaide practice for which he worked.

1. They told Dr Marques that one patient, Mr David Schubert, had made two appointments with the Gawler practice, the first for preparation of a bridge and the second for a fit. They said he cancelled the first appointment but forgot to cancel the second appointment. On being contacted by the practice regarding his failure to attend the second appointment, they said he volunteered that he was being treated by Dr Keane in Adelaide. Dr Marques knew that Mr Schubert had been treated by the Gawler practice since 1988, and had had the misfortune to require treatment on 30 or more occasions during that time. Dr Marques said in evidence that he was surprised to learn of this apparent change, and that Dr Keane had never mentioned treating any of the Gawler practice’s patients elsewhere.

1. Dr Marques was also told by the receptionist and the nurse that another patient of the Gawler practice, Mrs Mary Bell, was being treated by Dr Keane in Adelaide as well.

1. Dr Marques gave evidence that he was upset at this news. He says he regarded Dr Keane’s actions in treating the patients as disloyal and in breach of the dentists’ code of ethics. He believed Dr Keane was taking clients of the practice and treating them elsewhere. He gave evidence that he consulted with solicitors who advised him that if Dr Keane had been unethical, that it was appropriate to dismiss him. He also spoke to the medical board. They noted clause 4.5.5 of the dental board of South Australia’s code of ethics (exhibit M1) which provides that:

   “a dentist shall not attempt to entice patients away from a practice by using the position as an employee or former employee of that practice........ ”.

1. The board advised Dr Marques that if Dr Keane was in breach of that clause, then his immediate dismissal would be justified. Dr Marques also gave evidence of other similar advice he received on the matter.

1. Dr Marques also gave evidence that he was made aware of a bill for stationery for Dr Keane which was received by the practice and referred on to Dr Keane. Dr Marques was told by his office manager that the bill was for letterhead ordered by Dr Keane which bore the addresses of both the Gawler practice and the Adelaide practice. Dr Marques says that he was outraged to learn that such stationery had been ordered, as it indicated that Dr Keane regarded himself as practising independently and that he regarded the patients as his patients rather than the patients of the Gawler practice and the Adelaide practice respectively.

1. On Tuesday, 24 October 1995, Dr Marques told Dr Keane that he wanted to see him after work. The meeting took place in Dr Marques’ office and was also attended by Barbara Hendry, the practice manager, at Dr Marques’ request. Mrs Hendry had taken the patient records of David Schubert and Mary Bell to the meeting, together with the invoice for the stationery which had been ordered. In the event, these documents were not referred to during the meeting.

1. The Court heard only the evidence of Dr Marques and Mrs Hendry. Their evidence was not contested by any evidence from Dr Keane.

1. Dr Marques began the meeting by telling Dr Keane that it had come to his attention that Dr Keane was treating patients of the Gawler practice at the Adelaide practice.

1. Dr Marques told Dr Keane that he was very disappointed to learn of this and that he believed that Dr Keane had been disloyal and unethical. Dr Marques had a copy of the Code of Ethics at the interview, but doesn’t recall whether he referred to it.

1. Dr Marques asked Dr Keane for his thoughts.

1. Dr Keane replied that he didn’t want to upset Dr Marques. Mrs Hendry recalls Dr Keane saying that he didn’t know what to say. Dr Marques says that Dr Keane looked shaken and shocked.

1. Dr Keane did not deny the allegation. He didn’t ask for any further detail as to what was alleged against him. Nor did Dr Marques volunteer any further detail. Dr Keane offered no explanation nor apology. Dr Marques says it was obvious to him that Dr Keane knew what Dr Marques was talking about. He says Dr Keane looked nervous and worried and that his hands were shaking. Dr Marques took Dr Keane’s silence as a tacit admission of the allegation.

1. Mrs Hendry agrees that there were no details given of the allegation. She says that Dr Keane didn’t deny or try to discuss the allegation. He didn’t agree or disagree with it.

1. Dr Marques told Dr Keane that his actions were unreasonable, that they diminished Dr Marques’ practice and made it less of an asset for him in his retirement. Dr Marques referred to the potential impact on the support staff of Dr Keane’s actions. I accept that Dr Marques told Dr Keane that Dr Marques had lost his trust in Dr Keane.

1. Dr Marques told Dr Keane that he wanted him to leave the Gawler practice and asked him to resign. He said he would be happier for Dr Keane to find a job somewhere else and wouldn’t stand in his way. He says that by this he intended to imply that he would give Dr Keane a satisfactory reference.

1. Mrs Hendry says that Dr Keane appeared shocked at Dr Marques decision that he should leave the practice.

1. Dr Keane refused to sign a draft letter of resignation that had been prepared in advance by Dr Marques. He told Dr Marques that he wished to continue working for the practice because he lived in Gawler and his family were in Gawler. He said he had commitments and dependants. Dr Keane conceded that he had occasional disagreements on clinical matters with Dr Marques but said he didn’t want to leave the practice. Dr Keane asked Dr Marques to reconsider, but Dr Marques said that his mind was made up.

1. When Dr Keane persisted in refusing to sign the draft resignation, Dr Marques handed him a notice of dismissal. It was in the following terms:

“24 October 1995

Dr Thomas George Keane is hereby dismissed from the employment of Dr Michael W V Marques, as from today’s date, for reason of Breach of Code of Ethics, July 1994, clause 4.5.5.

(signed)

Dr W V Marques”

1. Dr Marques asked for the key to the door of the practice. Dr Keane gave it to him and left. Dr Marques subsequently forwarded personal items on to Dr Keane and arranged for payment for work done prior to dismissal.

1. There was no discussion of Dr Keane’s previous work record. Dr Marques can’t recall whether he raised the ordering of the letterhead at the meeting or not. There is no evidence that it was raised.

1. Dr Marques says that they went over things on quite a number of occasions during this meeting. Mrs Hendry says that there were times when it was very quiet, when everyone just sat there waiting for somebody to say something.

1. The evidence summarised to this point represents what was directly known or believed by Dr Marques at the time of the dismissal.

1. However, Mrs Mary Bell, one of the patients involved, also gave evidence. She lives at Yattalonga, a locality near Gawler. Mrs Bell told the court that she was very nervous of dentists and had not seen a dentist for some 3 years before 1995 as a result of an unpleasant experience with a previous dentist at another practice. She made an appointment to see Dr Keane at the Gawler practice, and her husband had a word to Dr Keane about her apprehension prior to the appointment. She was very happy with Dr Keane’s treatment of her.

1. In mid-1995, Mrs Bell suffered from a broken tooth which required urgent treatment. She made an appointment with the Gawler practice to see Dr Keane, but on presenting herself for treatment was told by Dr Marques that Dr Keane was not available and that Dr Marques would attend to her. The problem was attended to in that appointment, but Mrs Bell was concerned that she had not been able to see Dr Keane. She spoke with her husband about it and he wrote to Dr Keane complaining that they had not been able to see him.

1. Dr Keane rang Mrs Bell to apologise. He told her that he hadn’t known she was seeking an appointment on that day.

1. Mrs Bell told Dr Keane that she did not wish to go back and see Dr Marques for the scheduled “follow up” appointment and that she would prefer to see Dr Keane. Mrs Bell said that Dr Marques had said something about additional treatment that had had the effect of frightening her. However, she said she would feel embarrassed to go back to the Gawler practice and not to see Dr Marques. She established that Dr Keane worked in a practice in Adelaide when he was not in Gawler. Mrs Bell said in evidence that Dr Keane was reluctant to divulge the location of that practice and that she had had to “get it out of him”. Eventually Dr Keane told her that if she made an appointment at the Adelaide practice then he would see her. She told him that it was more convenient for her to see him in Adelaide in any event.

1. Mrs Bell agreed in cross-examination that her decision to make an appointment to see Dr Keane in Adelaide was not made on the basis of anything Dr Keane had said to her. She agreed that he had done nothing to entice her away from the Gawler practice and did not instigate her decision to see him at the Adelaide practice.

1. Dr Marques’ counsel, Mr Birchall, advised at the conclusion of Mrs Bell’s evidence that they wished to call the other patient, Mr Schubert, but that he had not been subpoenaed and he was not in attendance. Mr Birchall therefore sought an adjournment.

1. I accepted that the fault for Mr Schubert’s failure to attend lay with the respondent and that Dr Keane should not suffer the prejudice of the additional cost of an extra day’s hearing through no fault of his own. Accordingly I refused the adjournment and Dr Marques closed his case.

1. Dr Keane then advised he did not wish to lead further evidence but would rely on such evidence that had been presented by Dr Marques. Submissions were made based upon that evidence.

1. At the conclusion of submissions, Mr Birchall advised the court that Mr Schubert had now arrived at the court and applied to reopen the respondent’s case to enable Mr Schubert to give evidence. I gave leave for the case to be reopened and Mr Schubert proceeded to give evidence.

1. Mr Schubert confirmed that he had received all of his dental treatment from the Gawler practice from 1988 to September 1995. He had no private health insurance. He continued to return to the Gawler practice despite having since moved to Adelaide.

1. He had had a partial denture prepared several years earlier to address difficulties he had with his teeth. Upon visiting Dr Keane at the Gawler practice when a front filling had fallen out, Dr Keane raised the possibility of Mr Schubert having bridge work done instead, as the partial denture was proving unsatisfactory.

1. According to Mr Schubert, Dr Keane told him that it could be done at a reasonable price. Mr Schubert recalls Dr Keane saying that some would charge $1800.00 or $2000.00, but that Dr Keane could do it for “around the $1200.00 mark”. In cross examination, Mr Schubert recalled that all this had been said “pretty much in the same mouthful”. It was not his recollection that he indicated to Dr Keane that he couldn’t afford $1800.00 to $2000.00. He accepted that Dr Keane would have been aware he didn’t have health cover. Mr Schubert agreed to having the bridge work done, on the basis that it would cost $1200.00, and he would be billed at the completion of the work.

1. Mr Schubert says that the first one or two appointments, where initial impressions were taken, were at the Gawler practice. He was then advised by telephone at home that the remaining appointments would be at the Adelaide practice. There were then an additional two or three appointments at the Adelaide practice. Mr Schubert’s evidence was clear that the change to the Adelaide practice was not at his own initiative. While accepting that it was more convenient for him to be treated at Adelaide than at Gawler, he said he had not had any difficulty attending appointments at the Gawler practice.

1. When Mr Schubert had concluded his evidence, I gave Dr Keane the opportunity to lead additional evidence. Dr Keane chose not to do so. I must therefore regard Mr Schubert’s evidence as uncontested.

Whether There was a Valid Reason for Termination

1. Section 170EDA(1)(a) confers the onus on the employer to prove that there was a valid reason for the termination of the employee’s employment connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.

1. The letter of termination gives Dr Keane’s alleged breach of the Code of Ethics, July 1994, clause 4.5.5., which provides that “a dentist shall not attempt to entice patients away from a practice by using the position as an employee or former employee of that practice........ ”, as the reason for dismissal.

2. In evidence, Dr Marques also cited Dr Keane’s conduct in “enticing” patients away from the Gawler practice as the sole reason for dismissal.

1. Dr Marques stated that he believed Dr Keane had an obligation to inform him that he was treating patients of the Gawler practice elsewhere, and that he believed that Mr Schubert and Mrs Bell had been treated by Dr Keane elsewhere without Dr Marques’ knowledge and without his consent.

1. Dr Marques says that any concerns he may have had about possible undercharging by Dr Keane were not in his mind when he decided that Dr Keane should leave the practice.

1. I find that conduct in breach of the relevant clause of the dentist’s Code of Ethics would be a valid reason for dismissal for the purposes of Section 170DE (1) of the Act. The clause is in any event a specific formulation of an employee’s more general common law duty of fidelity and good faith.

1. I am satisfied that Dr Keane’s conduct in relation to the treatment of Mr Schubert was in breach of clause 4.5.5. of the Code of Ethics. Mr Schubert’s treatment was redirected to the Adelaide practice. I accept Mr Schubert’s evidence that the change in the location of his treatment was not made at his initiative, and indeed was without consultation with him. I therefore infer that it happened at the initiative of Dr Keane, and that Mr Schubert could therefore be said to have been “enticed” to the Adelaide practice. Though there are some troubling aspects to Dr Keane’s dealings with Mrs Bell, I would not have been satisfied, in all the circumstances, that she could be said to have been so enticed.

1. I do not accept the submission of Dr Keane’s counsel, Mr Bourne, that other provisions of the Code of Ethics operate to over-ride the requirements of clause 4.5.5 in the circumstances of Mr Schubert’s case.

Whether the Termination was Harsh, Unjust or Unreasonable

1. The next matter for determination is whether the termination is harsh, unjust or unreasonable.

1. Section 170EDA(1)(b) confers the onus on the employee to prove that, because the termination is harsh, unjust or unreasonable, there was not a valid reason for the termination.

1. I accept that Dr Keane did not act for personal gain. I am satisfied, on all the evidence before me, that he genuinely held the view, whether correctly or not, that the prices he was required to charge for bridgework at the Gawler practice were unreasonably high, and that he was motivated by the desire to provide a cheaper service to Mr Schubert. Mr Schubert’s evidence was clear however that he did not indicate any difficulty in paying before Dr Keane nominated the rate. Dr Keane offered the cheaper service at his own initiative. However, while Dr Keane may not have gained from his actions, I am satisfied that the Gawler practice lost from those actions.

1. I also note that Mrs Hendry expressed the view that Dr Keane looked during the interview as if he thought he hadn’t done anything wrong. While I place no great weight on her assessment of his demeanour, the evidence as to Dr Keane’s ordering of the letterhead showing the addresses of both the practices at which he worked demonstrated either a blatant disregard for or perhaps an ignorance of his duties with respect to the preservation of the good will of his respective employers.

1. I have considered whether in these circumstances, it was harsh, unjust or unreasonable for Dr Marques to have acted to immediately dismiss Dr Keane rather than, for example, give him a warning. Finally, I am not satisfied that it was, in these circumstances, harsh, unjust or unreasonable. Given Dr Keane’s status as a professional, I accept that Dr Marques was entitled to proceed on the basis that Dr Keane was aware of the ethical obligations of his profession. I am not satisfied that Dr Marques was required by the Act to remind Dr Keane of those obligations before dismissing him.

Procedural Fairness

1. Dr Marques said he believed Dr Keane’s actions were unethical unless he had some explanation for them. He said that if Dr Keane had come up with some plausible reason for treating the patients elsewhere, the outcome of the meeting might have been different.

1. Dr Keane’s response to the allegation as it was put to him was minimal. Mrs Hendry recalls him saying simply that he didn’t know what to say. Dr Marques recalls him saying that he didn’t want to upset Dr Marques, which is at best an ambiguous response. Dr Keane said nothing that could be categorised as a denial. Most of what he said at the meeting would better be categorised as a “plea in mitigation”.

1. Mr Bourne, who appeared for Dr Keane, correctly pointed out that the terms of the allegation were vague. Dr Marques says he would have identified the patients who were the subject of the allegation had Dr Keane asked him to. Mrs Hendry had the relevant materials with her. I accept that the reason he didn’t go to that level of detail was because he interpreted Dr Keane’s reaction as an admission of the allegation. While it would have been preferable that the allegation be put in more detail, compliance with Section 170DC requires no particular formality, and the interview conducted by Dr Marques was considerably more than perfunctory. I am satisfied that the failure to provide more detail in these circumstances did not amount to failure to give Dr Keane the opportunity to defend himself against the allegation.

1. While no specific allegation was put to Dr Keane concerning his production of letterhead displaying the addresses of both practices, I am satisfied that the reason Dr Marques dismissed Dr Keane was his belief that Dr Keane had enticed Mr Schubert and Mrs Bell to the Adelaide practice, rather than the production of the letterhead.

Conclusion

1. I will order that the application be dismissed.

   I certify that this and the preceding 13 pages
   are a true copy of the reasons for decision of
   Judicial Registrar R.D. Farrell.

   Associate:
   Dated:

   APPEARANCES

   Counsel appearing for the applicant:          Mr T. Bourne
   Solicitors for the applicant:  Stanley & Partners

   Counsel appearing for the respondent:      Mr T. Birchall
   Solicitors for the respondent:  Clelands

   Dates of Hearing:  11 & 12 March 1995

   Date of Judgment:  16 May 1996