McGarva v Enghouse Australia Pty Ltd
[2014] FCCA 1522
•15 July 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| McGARVA v ENGHOUSE AUSTRALIA PTY LTD | [2014] FCCA 1522 |
| Catchwords: INDUSTRIAL LAW – Dismissal as a consequence of extended absence due to serious illness – consideration whether action that is authorised by s.352 of the Fair Work Act 2009 (Cth) can be nevertheless actionable pursuant to s.351 of that Act. |
| Legislation: Disability Discrimination Act 1992 (Cth), s.15 |
| Flavel v Railpro Services Pty Ltd [2013] FCCA 1189 McGarva v Enghouse Australia Pty Ltd [2013] FCCA 1565 |
| Applicant: | ELLIOT ALEXANDER McGARVA |
| Respondent: | ENGHOUSE AUSTRALIA PTY LTD |
| File Number: | SYG 2108 of 2013 |
| Judgment of: | Judge Driver |
| Hearing date: | 15 July 2014 |
| Delivered at: | Sydney |
| Delivered on: | 15 July 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr C Cassimatis |
| Solicitors for the Applicant: | Maddocks |
| Solicitors for the Respondent: | Mr D Mendelssohn David Mendelssohn, Solicitor |
INTERLOCUTORY ORDER
The Court declares that the answer to the preliminary question of law is “no”.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 2108 of 2013
| ELLIOT ALEXANDER McGARVA |
Applicant
And
| ENGHOUSE AUSTRALIA PTY LTD |
Respondent
REASONS FOR JUDGMENT
(revised from transcript)
On 10 April 2014, I made the following order:
1.The following point of law be determined at a hearing at 10.15am on 15 July 2014, prior to the listing of the substantive matter for hearing:
(a)without considering whether s.351(2) of the Fair Work Act 2009 (Cth) (Act) applies, is the dismissal of an employee for the reason of the employee’s physical disability unable to constitute “adverse action” under s.351 of the Act for the reason that:
(i) section 342(3)(a) of the Act excludes from the meaning of “adverse action” any action that is authorized by or under the Act; and
(ii) the employer was not, at the time of dismissal, prohibited from dismissing the employee under s.352 of the Act in circumstances where the employee’s disability at the time of dismissal was not a prescribed kind of illness or injury pursuant to subregulation 3.01 of the Fair Work Regulations 2009 (Cth)?
I also made a number of ancillary orders. The parties and the Court had in mind that if the point of law was to be determined against the applicant, that might be the end of the proceedings. However, if the point of law was determined against the respondent (Enghouse), then the parties would engage in a mediation. Although a mediation had earlier been attempted, the parties saw merit in a further attempt at mediation depending on the outcome of the trial of the point of law.
The parties have prepared written submissions in relation to the preliminary issue. The applicant’s outline filed on 3 July 2014 sets out the relevant background facts, which I adopt.
On 5 July 2013, Mr McGarva’s employment as channel manager – Northern Region, with Enghouse, was terminated in writing (termination letter). He had been absent from work since about August 2012 suffering grade IV stomach and liver cancer.
For the entire period of his absence, Mr McGarva updated Enghouse about his progress. In about June 2013, Mr McGarva commenced discussions with his manager, Mr Petruccelli about returning to work.
On 20 June 2013, Mr McGarva sent Mr Petruccelli an email confirming he was looking at a possible return to work within two to four weeks.
At that time, Mr McGarva had exhausted his accrued personal leave and was on unpaid leave.
Enghouse responded with the termination letter. In the termination letter, Enghouse stated (among other things) it was Mr McGarva’s “extended leave of absence”, which gave Enghouse “no choice” other than to terminate the employment.
By email dated 17 July 2013, Enghouse asserted that:
a)Enghouse could have terminated Mr McGarva’s employment due to medical reasons after an absence of three months, but waited until Mr McGarva had been absent for 10 months; and
b)Mr McGarva’s employment was terminated, solely on the basis of his extended leave of absence.
Enghouse asserts that because Mr McGarva was absent from work for more than three months, Mr McGarva’s illness did not fall within the meaning of a prescribed illness or injury under regulation 3.01 of the Fair Work Regulations (Cth) (Regulations) and, as a result, the termination:
a)was lawful; and
b)is not capable of constituting “adverse action” within the meaning of s.342 of the Fair Work Act 2009 (Cth) (Fair Work Act) because s.342(3) excludes from the meaning of “adverse action” any action that is authorised by or under the Fair Work Act.
I received as untested evidence for the purposes of this interlocutory hearing the affidavit of the applicant, Elliot Alexander McGarva made on 30 June 2014 and the affidavit of Patrick Gallagher, representing the employer, made on 2 October 2013.
The legal issue in dispute between the parties focuses on s.342(3) of the Fair Work Act, which specifies that adverse action as defined does not include action that is authorised by or under:
a)the Fair Work Act or any other law of the Commonwealth; or
b)a law of the State or Territory prescribed by the Regulations.
Enghouse takes the view that the termination of Mr McGarva’s employment was authorised pursuant to s.352 of the Fair Work Act, he being absent from duty because of an illness extending for a period beyond three months.
It follows, in Enghouse’s submission, that that is a complete answer to the claim. The issue was raised in a different context when I dealt with the question of whether time should be extended for the filing of the originating process. In a judgment given on 4 October 2013[1], I extended time and made a number of observations which are pertinent at [7]-[9] of that judgment:
The other issue of concern to me is the prospect of success of the proceedings. It is put against Mr McGarva by Enghouse that the proceedings are hopeless. The known facts are that Mr McGarva ceased work because of a diagnosis of stomach cancer and liver cancer which was obviously a very serious condition. He was absent from work for over 10 months. He initially took sick leave. When that leave ran out, he was left on leave without pay. It appears that in mid 2013 Mr McGarva approached Enghouse because he was feeling better, although not then in remission, and wanted to explore with his employer, who had kept his job open, the prospect of returning to work at some time on some basis.
Enghouse wrote to Mr McGarva on 3 July 2013 to advise that a return to work was not possible. Relevantly, the letter states that over the period that Mr McGarva had been absent from work there had been a lot of change in the business and the market, and as a result Enghouse had had no alternative but to terminate his employment effective from 5 July 2013. The letter expresses the view [that] this action was taken lawfully under the Fair Work Act and the Regulations made under it. It is probable that Enghouse had regard to s.352 of the Fair Work Act and regulation 3.01 made under it.
If Mr McGarva had alleged that he was dismissed unlawfully simply because of his illness and the leave he had taken, the short answer to such a claim would have been that he had been absent for a period in excess of 10 months and the employer was entitled to dismiss him after three months. That, however, is not a complete answer to the claim of disability discrimination advanced pursuant to s.351 of the Fair Work Act. The Court would need to consider whether Mr McGarva was treated less favourably than a comparable employee without his disability (assuming it is a disability) would have been treated or whether Mr McGarva was subjected to a condition or requirement which he could not meet and which a person without his disability could have met in the same, or similar, circumstances.
[1] McGarva v Enghouse Australia Pty Ltd [2013] FCCA 1565
At least in part, the present separate issue is an invitation to the Court to revisit the views I expressed in that initial interlocutory judgment.
Having heard from the parties, I have come to the firm view that the reference to action authorised by or under law in s.342(3) should be read in a cumulative fashion. That is, the mere fact that action – in this case, relevantly, a dismissal – may be authorised under s.352 of the Fair Work Act and the Regulations does not carry an implication for any claim under s.351. A dismissal may be authorised due to the period of absence but it may still constitute an unlawful dismissal under Commonwealth or state anti-discrimination legislation.
This was implicitly recognised by this Court in Flavel v Railpro Services Pty Ltd[2]. In that case, the Court found that the action complained of was not in breach of s.352 but did constitute a breach of the Disability Discrimination Act 1992 (Cth) (Disability Discrimination Act) and hence the dismissal in that case was in breach of s.351 of the Fair Work Act. To put the matter beyond doubt, the Court should make the point express. I otherwise agree with and adopt Mr McGarva’s written submissions.
[2] [2013] FCCA 1189 at [88] and [89]
Section 342(3) of the Fair Work Act provides:
Adverse action does not include action that is authorised by or under:
(a) this Act or any other law of the Commonwealth; or
(b) a law of a State or Territory prescribed by the regulations.
Section 352 of the Fair Work Act provides that:
an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the Regulations.
Regulation 3.01 of the Regulations provides that:
the Regulations prescribe the kinds of illness or injury for section 352 of the Act.
Relevantly, regulation 3.01(5) of the Regulations provides that an illness or injury is not a prescribed kind of illness or injury if the conditions in subregulation 3.01(5)(a) and (b) are satisfied. That is, if the applicant’s absence extends for more than three months, or, the total absences in a 12 month period have been more than three months.
Given Mr McGarva was absent for almost a year before his employment was terminated, his illness was not prescribed and falls outside the purview of s.352 of the Fair Work Act. But that does not abrogate his rights under s.351 of the Fair Work Act or s.15 of the Disability Discrimination Act.[3]
[3] Flavel v Railpro Services Pty Ltd [2013] FCCA 1189 at [88] and [89]
There may have been some misunderstanding on Enghouse’s part as to what could be achieved at the hearing of the separate issue today. Enghouse sought to advance evidence which would, if accepted, have hypothetically established that there was no breach of s.351(2) of the Fair Work Act. I was unwilling to proceed in that way for two reasons. First, the order that I made on 10 April 2014 specified that the Court would not consider whether s.351(2) of the Fair Work Act applied.
Secondly, there is no summary dismissal application before the Court which, in my view, would be a procedural necessity in order to ensure that the relevant issues were squarely identified for an interlocutory proceeding in reliance upon s.351(2). Enghouse would contend at a final hearing that Mr McGarva was dismissed not because of his disability but because he had been away from work for 10 months and was unable to return fulltime. It may or may not be that that would be a good defence to Mr McGarva’s claim in reliance upon the Disability Discrimination Act.
A number of issues would need to be explored including to what extent the claim is based on an assertion of direct or indirect discrimination or both, what was the reason or reasons for the dismissal and, to the extent that Mr McGarva was seeking an accommodation in relation to his employment, whether that accommodation was reasonable in the circumstances. Those would all be matters to be addressed at a final hearing. They are not matters that need or that should be resolved today. Having resolved the point of law raised as a separate issue, the Court would now encourage the parties to address their substantive issues in dispute between them at a further mediation as proposed.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Driver
Associate:
Date: 17 July 2014
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