Leeann Mandic v Bupa Care Services Pty Ltd

[2011] FWA 2241

[2011] FWA 2241

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Leeann Mandic
v
Bupa Care Services Pty Ltd
(U2010/12790)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 12 APRIL 2011

Termination of employment - termination deemed unfair - remedy - multiple employment - workers compensation.

[1] On 23 February 2011 I issued a decision [2011] FWA 849 in which I found that the termination of Ms Mandic’s employment by Bupa Care Services Pty Ltd (Bupa) was harsh, unjust or unreasonable. In that decision I advised that the application would be relisted to enable more fulsome consideration on the issue of the appropriate remedy. I observed that the submissions provided to me with respect to remedy were seriously deficient and identified a number of issues for consideration.

[2] The issue of remedy was listed for hearing on 14 March 2011. On that date I agreed to further defer consideration of the matter on the basis that Bupa sought additional time to obtain evidence with respect to other employment undertaken by Ms Mandic. The matter finally proceeded on 30 March 2011. As was the case in the earlier proceedings, Mr Saies, of counsel represented Ms Mandic and Mr Lazaravich, of counsel, Bupa.

[3] The key issues of fact relevant to the matter of remedy are summarised below on the basis of material before me at the initial hearing on the merits, and the material provided to me on 30 March 2011. I have noted that Ms Mandic did not give further evidence after the initial hearing. Notwithstanding that on 30 March 2011 I was advised that she was caring for her sick mother and hence could not attend that hearing, opportunities for additional evidence following the initial hearing were available and could have facilitated the clarification of a number of issues. In so far as evidence could have been provided to clarify Ms Mandic’s position with respect to her working arrangements and efforts to replace her Bupa income I have applied the Jones and Dunkel inference from the absence of any such evidence.

[4] Ms Mandic worked for Bupa for some five years. At the time of the termination of her employment she was a personal carer at the Campbelltown aged care facility. Ms Mandic worked an average of 73 hours a fortnight. The termination of her employment followed an incident involving an elderly male resident.

[5] In my decision of 23 February 2011 I found:

“[51] In summary terms, I am satisfied that the process adopted by Bupa was fair. I am not satisfied that Bupa have made out a valid reason for the termination of Ms Mandic’s employment in this situation in terms of establishing that she verbally abused the resident or was untruthful relative to that conduct. To the extent that Ms Mandic did disturb other residents, I am satisfied that her reaction to the actions of the resident she was trying to put into a wheelchair were both understandable and not so extreme that they warranted termination of employment.

[52] Accordingly, I consider that the termination of Ms Mandic’s employment was harsh in that it lacked a proper foundation and it was unreasonable to the extent that it relied on unsubstantiated assumptions about the capacity for an assault against Ms Mandic.”

[6] In addition to her Bupa employment, Ms Mandic’s evidence was that she continued to work for a similar number of hours for a second employer 1. Further, she had, for some time, a third employer2. The information now available to me discloses that this third employer was Mary MacKillop Care SA Ltd (MacKillop) where Ms Mandic worked on a regular basis for around 63 hours a fortnight. Ms Mandic is currently pursuing an unfair dismissal claim against MacKillop with respect to the termination of that employment. This claim has not yet been determined.

[7] The combined total number of hours worked by Ms Mandic at the time of the termination of her employment by Bupa was approximately 104 per week.

[8] Ms Mandic was paid five weeks pay by Bupa on the termination of her employment.

[9] In the course of the 30 March 2011 hearing I admitted the majority of an affidavit made out by the MacKillop Payroll Officer, subject to determination of a dispute over the inclusion of references to the reasons for the termination of Ms Mandic’s employment by MacKillop. I do not consider it appropriate to admit this part of the affidavit, or, for that matter, the unfair dismissal application made out by Ms Mandic against MacKillop. Evidence relative to the actual reasons for the termination of that employment is not available such that I can rely on this information.

[10] Following, or around the time of the termination of Ms Mandic’s employment, she lodged a workers compensation claim in relation to bruising, laceration, tooth and shoulder damage and a separate claim for stress and mental injuries. Information confirming acceptance of her claim for medical expenses has been provided to me. Ms Mandic sought, and was paid interim workers compensation payments. These payments are continuing. Although the evidence about the exact quantum of the payments is unclear, I have taken this to be 80% of the $1400 gross per fortnight which Ms Mandic received from her employment at Bupa. I note that in January 2011 the WorkCover claims agent Employers Mutual Ltd (EML) rejected Ms Mandic’s stress claim but this has not resulted in a cessation of the payments being made to her. I also note that, contrary to the advice provided to me at the initial hearing, on 30 March, I was later advised that the workers compensation payments made to Ms Mandic are interim payments which, unlike provisional payments, may be required to be repaid to the WorkCover Corporation.

[11] The evidence of Ms Mandic was that following the termination of her Bupa employment she maintained her employment at her second job but had not sought additional hours 3. Further, Ms Mandic did not apply for alternative work4. Ms Mandic advised that she was studying nursing and this study involved four hours for two days each week5.

[12] Ms Mandic seeks reinstatement to Bupa with the payment of wages lost from the time of the termination of her employment.

[13] Section 390 establishes that Fair Work Australia (FWA) may order a remedy contingent on a finding that the termination of Ms Mandic’s employment was harsh, unjust or unreasonable. Whilst reinstatement and compensation are the recognised remedies, s.390(3) requires that reinstatement is considered as the primary remedy and that compensation can only be granted if, firstly, FWA is satisfied that reinstatement is inappropriate, and secondly, that an order for compensation is appropriate.

[14] Section 391 relevantly states:

“391 Remedy—reinstatement etc.

Reinstatement

(1) An order for a person’s reinstatement must be an order that the person’s employer at the time of the dismissal reinstate the person by:

(a) reappointing the person to the position in which the person was employed immediately before the dismissal; or

(b) appointing the person to another position on terms and conditions no less favourable than those on which the person was employed immediately before the dismissal.”

[15] I have taken into account the considerations relevant to reinstatement that were addressed by a Full Bench of FWA in Regional Express Holdings Limited t/as Rex Airlines v R Richards 6 in the following terms:

“[24] In relation to remedy, therefore, the first question is whether reinstatement is appropriate. In considering that question the issue which looms large in Rex’s submissions is that reinstatement is inappropriate because the chief pilot has lost trust in the professionalism and integrity of the respondent. The Commissioner found that the trust and confidence necessary for an ongoing employment relationship had not been irrevocably destroyed. We have reached the same conclusion.

[25] Rex relied on the evidence of the chief pilot, Mr Hine. When it was put to Mr Hine that if the tribunal were to find that the respondent had not been guilty of misconduct he would not have any difficulty rehabilitating a relationship with the respondent, he answered:

“No, sir, I would ... ... if it was to be found that there was indeed no deliberate act or wilful misconduct, I have to answer the question that I would have difficulty going forward. I would have difficulty in overcoming the loss of trust and the loss of integrity irrespective of what was found.”

[26] Whenever an employer dismisses an employee for misconduct, assuming the employer is acting honestly, there is an implied loss of trust and confidence in the employee. If it is subsequently found that the termination was harsh, unjust or unreasonable it is appropriate to consider whether the relationship can be restored if the employee is reinstated. That question cannot be answered solely by reference to the views of management witnesses. All of the circumstances should be taken into account. In this case there is a number of relevant matters. They include the fact that not all of the conduct alleged against the respondent has been proven, the respondent’s apparently unblemished record in the performance of his flying duties over a period of 14 years, the fact that the misconduct is not directly related to the performance of the respondent’s professional duties as a first officer and Rex’s failure to pursue any substantial disciplinary action against another pilot who, it is alleged, has been guilty of misconduct at least as serious as that of which the respondent was accused. The significance of the last consideration is that the pilot in question is still carrying out the full range of his duties, despite allegations of conduct of a kind which, in the respondent’s case, is said to have led to an irrevocable loss of trust and confidence. Assuming a positive approach on both sides we find there is a reasonable chance that the employment relationship can be restored with the necessary level of mutual trust.”

[16] Ms Mandic’s evidence with respect to reinstatement was, like a number of other parts of her evidence, somewhat confusing. In her witness statement she asserted:

“....

My trust in management’s accountability has been tarnished beyond repair. I question how it is possible for 2 people with such a low standard of ethics, have been able to make it to where they have, in an industry such as nursing, which my definition is the work of caring for the sick or injured.

Since being assaulted at Bupa I have been under enormous stress. It has impacted heavily on my entire life, and of the lives of my friends and family. I was assaulted at work and then denied what should be my basic rights as an Australia citizen.

If there had been rules put in place back when it was first discovered that the resident poses a risk to carers, then all of this would have been avoided. Instead of management taking accountability they have attempted to make me look responsible.

I have been nothing but loyal and hard working when it comes to my work as a carer. It frustrates me that management are not only willing but able to treat employees in way (sic) that they have treated me, just to avoid adhering to standard policies and procedures put in place by the standards. I love my work, but in the past months my thoughts and life have been consumed by what has happened.”  7

[17] Notwithstanding this, Ms Mandic gave evidence in the following terms 8:

“MR LAZAREVICH:

....

In your witness statement, you said on the final page that your trust in management’s accountability has been tarnished beyond repair?---That’s correct.

You were referring there to Zoe Hubball and Cath McDonald?---I was referring to how the interview went, how I wasn’t allowed to answer and tell my side of the story. I wasn’t treated fairly in that interview process and I was just thinking, well, why would management do that to you? If you were a valued employee, why would you do that to someone?

So the question was, you were talking about Cath McDonald and Zoe Hubball?

---That’s correct, yes.

You questioned how it’s possible for two people with such a low standard of ethics to be able to make it where they have in an industry such as nursing?

---That’s correct.

Zoe Hubball is someone that you would report directly to if you were working back at Bupa?---That’s correct. I hold nothing against Zoe.

In this particular though, you’re not ?---That was at the time. Yes, at that time that that was made, you think, you know - the thing is, I’ve done nothing wrong and I’ve had reports, like I said, with the - it’s made it brought forward now, and made it look like I’ve abused staff. Things have been falsified and made look like I’m a bad person. That’s what I was referring to. How could people do that? You know, once I was supposed to have had a disciplinary hearing. Well, now it’s gone from a disciplinary hearing to I’ve been counselled. You know, why would people do that? Why would you do that? I’ve never been counselled. I’ve never had a disciplinary hearing. I’ve done nothing wrong. I won the award at Bupa

**** LEEANN MANDIC XXN MR LAZAREVICH

I might interrupt you?---No, that’s - I can’t understand it.

My question is only that you would be reporting to Zoe Hubball if you ?

---That’s correct, yes, I would.

You would have to deal with her on a daily basis?---That’s correct.

You would also have to have regular dealings with Cath McDonald?---Well, Cath McDonald doesn’t work at our facility, does she?

You would also have to see other witnesses who have given evidence in this matter?---Well, that’s correct. I don’t hold any grudges about anyone. You know, if people want to give a statement and they think they’re helping management to give a statement, you know, that’s their choice but we’re civil people. We all can get along. I hold no grudges against anyone.”

[18] I note that Ms Hubball was Ms Mandic’s manager at the Campbelltown facility and that Ms MacDonald has overall management responsibility for a number of Bupa aged care facilities.

[19] Bupa assert that Ms Mandic’s reinstatement to either the Campbelltown facility, or another Bupa aged care facility would be inappropriate on the basis that it had no continuing confidence in her as an employee. In this respect, Bupa asserts that Ms Mandic’s responses in the investigation interview prior to the termination of her employment were not honest. Further, that her engagement on three jobs was entirely inappropriate and her evidence about a third job was a further indication of dishonesty, and this excessive work represented a logical reason for a difficult workplace demeanour.

[20] At the initial hearing Ms Hubball’s evidence was that:

“If Ms Mandic were to be reinstated, I believe there is a real risk that she would again address our elderly residents in a disrespectful and inappropriate manner. I believe that Ms Mandic has a “short fuse” and that it would be inevitable that she would find herself in a situation with a resident under her care where she would respond inappropriately. I also note that the response of staff since she has left has been to note a change in the workplace since she has left with a lighter atmosphere. They have reported that she can be difficult to work with, and can be controlling and hostile in her demeanour. I am also concerned about how she would treat staff who have given statements in this matter.”  9

[21] I do not regard Ms Mandic’s behaviour in the investigation interview which occurred before the termination of her employment to be of such significance that it precludes reinstatement.

[22] Having reviewed all of the material before me, I do not consider that it would be appropriate to reinstate Ms Mandic to her former position at the Bupa Campbelltown facility. On her own evidence, I am not satisfied that Ms Mandic would in fact be able to maintain a sustainable working relationship with Ms Hubball or other nursing and patient care staff.

[23] I have considered whether reinstatement to another reasonably proximate Bupa aged care facility would be appropriate in the context of Ms Hubball’s concerns over the number of hours worked by Ms Mandic. Ms Hubball’s concerns were based on her understanding of Ms Mandic’s employment at Bupa and her second job. There is no evidence that Ms Hubball was aware of the extent of Ms Mandic’s third job and I have concluded that her concerns in this respect would be further exacerbated if she was aware that Ms Mandic was averaging over 100 hours work per week.

[24] To the extent that it warrants any serious consideration, I reject Mr Saies contention that there could be opportunities for Ms Mandic to sleep whilst she undertook nightshift work. Not only is this contention unsupported, it is speculative of acceptance of conduct which may well be regarded as serious misconduct.

[25] I regard Ms Mandic’s work in excess of 100 hours per week as excessive and consider that Bupa would be entitled to express occupational health and safety and other concerns to Ms Mandic about such arrangements. If Ms Mandic did not adequately respond to those concerns, this could ultimately result in the termination of her employment at Bupa. However, the requirement for a “fair go all round” referenced in s.381 as an object of Part 3-2 of the Act, suggests that Ms Mandic be given an opportunity to respond to concerns of that nature. It is quite conceivable that this could result in Ms Mandic reducing her workload. Accordingly, I do not regard these concerns as fundamental impediments to reinstatement at another Bupa aged care facility.

[26] The more fundamental issue relative to reinstatement is Ms Mandic’s stress related workers compensation claim. In its rejection of this claim on 18 January 2011 EML states:

“This letter is to advise you that after careful consideration of all the available information, your claim for stress, mental injuries which you claim occurred on 28/08/10, has been rejected.” 10

[27] Ms Mandic is challenging that rejection through the Workers Compensation Tribunal. There is no evidence before me of a medical nature that approves a return to work at Bupa.

[28] The medical advice EML apparently relied on to reject Ms Mandic’s stress claim advised that Ms Mandic has, and had no psychological injury. Ms Mandic is disputing this EML position. I am unable to reconcile reinstatement to Bupa with Ms Mandic’s continuing position that she has or had a psychiatric condition arising from her employment at Bupa. Irrespective of whether or not Ms Mandic is successful in her challenge to the EML position, Ms Mandic’s witness statement, in which she refers to her stressed condition, when seen in the context of this workers compensation claim means that reinstatement cannot be regarded as appropriate. Further, Ms Mandic has not provided medical advice that reinstatement is appropriate in the context of her workers compensation claim.

[29] As a consequence, I have concluded that reinstatement is inappropriate. An order for payment of compensation may therefore be granted if I consider this to be appropriate in all the circumstances of the case. I believe such an order is appropriate.

[30] In considering all the circumstances I have noted that Ms Mandic has maintained her second job and elected not to pursue an alternative to working at Bupa. She is now studying nursing and identifies this as a reason for not seeking alternative employment. That reflects a personal decision but I note that, on the basis of her employment record, Ms Mandic could have attempted to obtain an alternative job had she wished to do so.

[31] Further, Ms Mandic is continuing to receive interim workers compensation payments equating to 80% of her Bupa earnings. I note that no reason for these continuing payments has been put to me and Ms Mandic may be required to repay this amount.

[32] Section 392(2) states:

“Criteria for deciding amounts

(2) In determining an amount for the purposes of an order under subsection (1), FWA must take into account all the circumstances of the case including:

(a) the effect of the order on the viability of the employer’s enterprise; and

(b) the length of the person’s service with the employer; and

(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and

(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and

(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and

(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and

(g) any other matter that FWA considers relevant.”

[33] I do not consider the amount being contemplated will affect the viability of Bupa as a very substantial employer.

[34] I have noted that Ms Mandic was employed for approximate five years and consider this to be a substantial, but not extraordinary long time.

[35] There is no evidence that establishes whether, had Ms Mandic not been dismissed, she would have claimed income maintenance for an absence through the workers compensation system. Had Ms Mandic not been dismissed, I would have expected her to have been given a final warning. I do not consider that Ms Mandic’s employment would have been likely to have been of a long duration as a consequence of disciplinary issues and the sustainability and likely identification of concerns over working hours.

[36] To some extent Ms Mandic has mitigated her losses by claiming workers compensation. A more substantial conclusion in this respect is that she elected not to seek a replacement position and instead, to pursue her nursing studies.

[37] Since the termination of her Bupa employment, Ms Mandic has continued to earn income from a second job, and, for a time, from MacKillop, in addition to her interim workers compensation payments.

[38] I consider it likely that Ms Mandic will continue to receive income from her second job and, irrespective of this, interim workers compensation payments, until any award of compensation is actually paid to her.

[39] In terms of other matters relevant, I have taken into account, the likelihood that, even if Ms Mandic had not been dismissed, one or more of the three employers then applicable would be likely to request her to reduce her working hours. While she was not aware of Ms Mandic’s third job, Ms Hubball’s evidence was that:

“MR LAZAREVICH: Do you have any concerns as an employer over an employee working as a minimum two 38-hour weeks effectively?---Yes, I would. I would have concerns about the safety of the person working outside and also the safety of the residents that they are looking after. I think it would be very difficult to look after people if you've worked that many hours per day and to actually have a rest day and recuperate and come back to work fresh. 11

[40] I consider that other Bupa managers would adopt a similar position in this respect.

[41] Having taken all of the factors in s.392(2) into account, I consider that an award of compensation of $3500.00 less tax is appropriate. This equates to a further 5 weeks pay.

[42] Notwithstanding that I have substantial reservations about its applicability in this particular circumstance, the approach I have adopted to the calculation of this amount is consistent with that set out in Sprigg v Paul’s Licensed Festival Supermarkets 12 (Sprigg) in the following terms:

“STEP 1: Estimate the remuneration the employee would have received, or have been likely to have received, if the employer had not terminated the employment.

STEP 2: Deduct moneys earned since termination. Workers compensation payments are deducted but not social security payments. The failure of an applicant to mitigate his or her loss may lead to a reduction in the amount of compensation awarded.

STEP 3: The remaining amount of compensation is discounted for contingencies.

STEP 4: The impact of taxation is calculated to ensure that the employee receives the actual amount he or she would have received if they had continued in their employment.

STEP 5: The legislative cap on compensation is applied. Section 170EE(3) limits the Court and the Commission to an amount not exceeding the amount of remuneration that the employee would have earned in the six months immediately following the termination, if the termination had not occurred. This is simply an arbitrary cap on the amount that may be awarded. It does not operate as a maximum amount to be awarded only in the most grievous or serious cases: [Perrin v Des Taylor Pty Ltd (1995) 58 IR 254; Bean v Milstern Retirement Services Pty Ltd (unreported, Industrial Relations Court of Australia, 2 June 1995); Cox v South Australian Meat Corporation (1995) 60 IR 293; Messervy v Maldoc Pty Ltd (1995) 63 IR 61; Slifka v J W Sanders Pty Ltd (1995) 67 IR 316 (see generally Slifka v J W Sanders Pty Ltd)].”

[43] I have considered the interim workers compensation payments paid to Ms Mandic in the context of the approach adopted by a Full Bench in Smith and others v Moore Paragon Australia Ltd 13(Moore Paragon) but have not made any deductions for these payments as I anticipate that these amounts may need to be repaid. Had those payments been made on the basis that they could not be recovered, I may have arrived at a different conclusion.

[44] There was no argument put to me that Ms Mandic is suffering from an ongoing disability that stops her from working and her continued employment in her second job and desire for reinstatement distinguish her situation from that addressed in Moore Paragon.

[45] In terms of the Sprigg principles, I have concluded that, had Ms Mandic not been dismissed, she would have had minimal time off work on workers compensation but that her employment would have been of a limited duration. Further, her dismissal by MacKillop in November 2010 would have reduced her total employment hours. I have assessed Ms Mandic’s lost Bupa remuneration on the basis of her income, less the five weeks paid to her on termination of employment. I have made a significant deduction from this amount on the basis of Ms Mandic’s decision not to attempt to mitigate her losses.

[46] My final gross payment calculation takes a 15% contingency estimate into account. Given the workers compensation uncertainties I consider this is conservative.

[47] An Order [PR506655] reflecting this decision will be issued.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr Saies counsel for the Applicant.

Mr Lazaravich counsel for the Respondent.

Hearing details:

2011.
Adelaide:
March 14 and 30.

 1   Transcript 21 January 2011 (PN120)

 2   Transcript 21 January 2011 (PN122)

 3   Transcript 21 January 2011 (PN801)

 4   Transcript 21 January 2011 (PN810)

 5   Transcript 21 January 2011 (PN822)

 6   [2010] FWAFB 8753

 7   Exhibit M1

 8   Transcript 21 January 2011 (PN840 - 850)

 9   Exhibit B4 (para 25)

 10   Exhibit M10 (first para)

 11   Transcript 21 January 2011 (PN1231)

 12 (1998) 88 IR 21 (Munro J, Duncan DP and Jones C)

 13   PR915674 (Ross VP, Lacy SDP and Simmonds C, 21 March 2002)

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