McNeill v Board of Management, Avon Health Services

[1996] IRCA 428

DECISION NO: 428/96

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - claim of UNLAWFUL TERMINATION - hospital worker - series of EMPLOYMENT CONTRACTS - whether termination at initiative of employer - whether VALID REASON for termination - REINSTATEMENT.

Industrial Relations Act 1988 (C’th) Ss 170DE, 170DF(1)(e), 170EA, 170EDA(1)(a).

Stefanovski v Whiskisoda IRCA No. 177 of 1994, Millane JR, 6 February 1995, unreported.
Mohazab v Dick Smith Electronics (No.2) (1995) 62 IR 200.
Strecker v Metropolitan Cemeteries Board (1995) 64 IR 109.
Dadey v Edith Cowan University IRCA No. 308 of 1996, RD Farrell JR, 8 July 1996, unreported.
Senior v The Lower North Metropolitan Health Service Board of Management IRCA No. 342 of 1996, Ritter JR, 26 July 1996, unreported.

Peter Hugh McNEILL -v- THE BOARD OF MANAGEMENT, AVON HEALTH SERVICES 
WI 1208 of 1996

BEFORE:       R. D. FARRELL JR
PLACE:          PERTH
DATE:            29 August 1996

IN THE INDUSTRIAL RELATIONS    )
COURT OF AUSTRALIA                   )
WESTERN AUSTRALIA  )
DISTRICT REGISTRY  )         

No. WI 1208 of 1996

BETWEEN:  

Peter Hugh McNEILL
  Applicant

AND:  

THE BOARD OF MANAGEMENT,
  AVON HEALTH SERVICES
  Respondent

MINUTE OF ORDERS

BEFORE:               R. D. FARRELL JR

PLACE:                  PERTH

DATE:  29 August 1996

THE COURT DECLARES AND ORDERS THAT:

1.         The termination of the employment of the applicant by the respondent on
            2 May 1996 was unlawful.

2.         Within 21 days from the date of this Order, the respondent shall reinstate the      applicant to a position on terms and conditions no less favourable than     those on which he was employed immediately before the termination.

3.         Within 21 days from the date of this Order, the respondent shall pay to the        applicant all remuneration lost because of the termination and shall otherwise  treat the employment of the applicant as having been continuous since the   date of termination.

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

WI 1208 of 1996

BETWEEN:

Peter Hugh McNEILL
Applicant

AND:

THE BOARD OF MANAGEMENT,
AVON HEALTH SERVICES
Respondent

REASONS FOR DECISION

29 August 1996  R. D. FARRELL JR

1. This is an application under section 170EA of the Industrial Relations Act 1988 (C'th) for reinstatement or, in the alternative, compensation arising from the alleged unlawful termination of the employment of the applicant, Peter Hugh McNeill ("Mr McNeill") by the respondent, the Board of Management Avon Health Service ("the Health Service").

1. The respondent contends that there has been no termination of the employment relationship at the initiative of the respondent, so that the relevant provisions of the Act do not apply.

1. The applicant contends that there was a termination at the initiative of the employer and, further, that there was no valid reason for that termination.

1. The respondent submits that, if the Court finds there was a termination at the initiative of the employer, then that termination can be justified for reasons based upon the operational requirements of the Health Service.

History of Employment

1. Mr McNeill was a fitter and turner by trade.  He had been a first class sergeant in the police force.  He retired from the police force and ran a hotel for a time as part of a partnership.  That business was not a success.  Since his time running the hotel, he had been unemployed for more than 12 months. He lived in Northam and heard from a friend that the Northam hospital was looking for orderlies. 

1. On about Tuesday, 25 July 1995, he attended a meeting with Mr John Ranger, who was Manager of Support Services at the Northam Hospital at that time. The Northam Hospital is run by the Health Service. Mr Ranger told him there may be some work for him as a "casual call-in" and arranged for him to attend for work the next day, Wednesday 26 July 1995.

1. Mr McNeill recalls Mr Ranger indicating that although he would be casual for a while, it could turn out to be permanent employment, given the shortage of workers.  Mr Ranger denies saying this.  In any event, I would regard it as a prediction, rather than an undertaking.

1. The orderlies worked in shifts.  One orderly worked a day shift and two orderlies worked on the afternoon shift. There was also a van-driver's position, which was performed by another orderly.

1. Mr McNeill was engaged as an orderly from Wednesday 26 July to Friday, 28 July 1995 and again from Monday 31 July to Wednesday 2 August 1995.  He resumed the following Monday 7 August  to Friday 11 August 1995.  This pattern of intermittent employment seems to have continued for a while, with Mr McNeill rostered to work two or three days on average each week.

1. It has been difficult, to establish the full extent of Mr McNeill's hours of employment.  Duty rosters were tendered, but Mr McNeill maintains that he would often fill in for other orderlies who were unexpectedly unavailable due to illness or other reasons.  He said he sometimes did double shifts in those circumstances.

1. A comparison between the duty rosters and the "contract of employment for casual employee" forms which were completed by Mr McNeill indicate that the duty rosters do not provide a comprehensive record of his employment.  The set of casual contract forms which were tendered were incomplete, so that a full comparison was not possible. 

1. By 11 September 1995 it is clear that Mr McNeill had started working in “the stores”, in addition to his work as an orderly.  From that time on, it appears that Mr McNeill's employment was effectively full-time. He worked at least five shifts a week either as an orderly or in the stores position. He continued to be paid as a casual, receiving a 20 per cent loading on his pay, and the hospital continued to require that he sign its Casual Contract of Employment form for each day on which he worked. 

1. Much of Mr McNeill's work could be characterised as "relief work", in that he did work that otherwise would have been done by employees who were absent due to illness or leave. 

1. This was certainly the case in the stores area, where a senior employee was absent on stress leave, so that the tasks to be performed in that area had to be redistributed among the remaining employees.  Mr McNeill was able to assist in some of the less senior duties. During the period from mid-October 1995 to late April 1996 when Mr McNeill was working in the stores, a number of the other employees in the store were rostered to take their annual leave. 

1. Mr Ranger, who coordinated the orderlies, reviewed the orderlies' duty roster as part of the respondent’s preparation for this hearing, and assigned reasons for each occasion on which Mr McNeill was rostered as an orderly throughout his employment with the hospital.  Mr Ranger appears to have relied solely on his memory and reference to the roster itself for this exercise, and its accuracy might be doubtful.

1. The respondent submitted that there was relief work available for Mr McNeill in the

orderly area because Mr Tony De Vos, another orderly, had had a heart attack and was unable to work for a considerable period of time. It was submitted that I should accept that, if Mr De Vos had been on the roster then the Applicant would never have been on it.

1. An examination of the rosters which were tendered indicates that Mr De Vos was still being rostered up until at least the end of 1995, during which time Mr McNeill appears to have been rostered.

1. In any event, it is apparent that on at least some of the days upon which Mr McNeill was required to work as an orderly, he was required merely to "cover the roster". Mr Ranger conceded that it was sometimes necessary to engage Mr McNeill to work as an orderly, even where there were no unusual absences, merely because there were insufficient permanent employees to fully staff the roster. 

1. Given the inevitability that orderlies and store employees would be absent for annual leave, sick leave, rostered days off and sometimes workers' compensation, it is perhaps not surprising that Mr McNeill was effectively fully employed from at least 11 September 1995.

1. The respondent appears to have proceeded on the assumption that the concept of a “permanent relief worker” was an oxymoron. It seems to me, however, that the operational requirements of a business may be such that an employer could readily offer permanent employment to an employee whose sole role was to fill in for other employees who were away on scheduled or unscheduled absences. It seems that Mr McNeill had full time employment in such a relief role for the period from 11 September 1995 to 2 May 1996, leaving aside the issue of whether or not that employment was permanent.

1. In late October or early November 1995, the staff of the Northam Hospital had a meeting with management.  Mr McNeill recalls being told by management at this meeting that cuts in health funding would require management to "trim the meat off the bone".  It was understood that cuts may be necessary in staffing.

1. Mr McNeill took it upon himself to suggest to Mrs Christine Churchill, a Finance Manager, that the Health Service may be able to take advantage of the Federal Government’s Jobstart program with respect to his employment.  He qualified as "long-term unemployed" for the purposes of that scheme and the hospital could, by employing him, access a significant subsidy for his wages.  Mrs Churchill pursued the idea.

1. Miss Ballard, the Health Service Manager, signed the wage subsidy agreement with the Department of Employment, Education and Training on 3 November 1995.   Mr McNeill was signed up on to a "contract of employment for temporary employment" commencing on 24 November 1995.  His entitlement to the 20% casual leave loading was treated as having ceased from 3 November 1995.  He was signed up on further temporary contracts on 12 January 1996 and 23 February 1996.

1. There was a delay in putting the Jobstart agreement into place, due to logistical difficulties in arranging the method of payment of the wage subsidy. 

1. By 8 March 1996, however, Miss Ballard was able to write to Mr McNeill in the following terms:-

   “This is a letter outlining the formal agreement to employ you for
   26 weeks under the CES Jobstart Scheme from 3 November 1995 to
   2 May1996.

   Your initial employment status under the agreement was as an orderly for 38 hours per week at the salary rate of $399.40 per week. To enable you to gain more skills, experience as a store person has been given and paid at the appropriate rate.

   To ensure that minimal administrative problems are experienced when you switch from one award to another, we will pay you at the above base rate with higher duties allowance for any days you may work in areas      which attract a higher base salary.

   I would also advise that there is no guarantee that we will be able to offer you employment after 2 May 1996. If there are any issues on which you are not clear, please do not hesitate to contact me."

1. The result of this arrangement was that Mr McNeill was still employed as an orderly and was still answerable to Mr Ranger.  However, he would work most of the time in the stores area, only working as an orderly when specifically required by Mr Ranger.  The rosters indicate that Mr McNeill was still required to work as an orderly from time to time through March and April 1996.

1. In mid-April 1996, a new Regional Purchasing Officer was appointed for the stores area, to replace the employee who was absent on stress leave. I am satisfied that in mid-April, with all stores employees returned from annual leave and with the new Regional Purchasing Officer in place, a decision was made by management that Mr McNeill's services would not be required in the stores area after 2 May 1996 for the foreseeable future.

1. Mr McNeill agrees that he was told by Mr Gordon, a Human Resources manager, at the time of the appointment of the new Regional Purchasing Officer, that there probably wouldn’t be anymore work in the stores area for him. It seems clear that Mr McNeill was aware by the beginning of May that he would not be working in the stores after 2 May 1996, though he doesn’t recall how he reached that conclusion.

1. Mr McNeill's Jobstart subsidy was due to expire on 2 May 1996, as was the Health Service's formal agreement to employ him under the Jobstart Scheme.  They had not guaranteed to be able to offer him employment after 2 May 1996.

1. I am satisfied that the expiry of the wages subsidy was not a significant factor in the decision that Mr McNeill would not be required in the stores after 2 May 1996. I accept that his continuing to work in the stores from 16 April to 2 May assisted the clearing of the backlog of work which had arisen when employees had been absent, and gave the new Regional Purchasing Officer time to settle in. It is also clear that Miss Ballard regarded the Health Service as having an obligation to provide Mr McNeill with full-time work until 2 May 1996.

1. In April 1996, a Mr John Edwards ("Mr Edwards") was employed by the Health Service as a Patient Service Assistant on a casual call-in basis. He also received training as an orderly. 

1. The orderlies' staffing rosters were usually put up by Mr Ranger about two days before the period covered by the roster.  Mr McNeill gave evidence of a conversation with Mr Ranger, soon after he had put up the roster for the period commencing 3 May 1996.

1. Mr McNeill says that as he approached the roster, he saw another orderly pointing to the roster, and overheard him say to Mr Ranger, "I see you've done it". Mr McNeill noted that, unusually, he had not been rostered to work as an orderly at all in the fortnight commencing 3 May 1996. Mr Edwards had been rostered to work as an orderly instead. 

1. Mr McNeill says he asked Mr Ranger what was going on and whether he would be getting any more work. He says Mr Ranger looked sheepish, and said he did not know what was going on and that Mr McNeill should ask Ms Ballard.

1. Mr McNeill says he then went to the management office and, in Ms Ballard's absence, he spoke with Mrs Churchill. Mr McNeill asked Mrs Churchill what was going on, because he was not on the roster and it looked like he was not getting any work. He asked Mrs Churchill how it was he was not on the roster. He says that Mrs Churchill responded:

   "It's called ‘continuity’ - if we employ you any further, the union will make us employ you full-time."

1. Mr McNeill, who conceded he was a bit hot under the collar by this point, responded:

"Bugger the union - I want a job." 

1. Mrs Churchill concedes she may have referred to continuity and told the court that the Health Services management needed to have an awareness of the status of employees with regard to permanency.

1. On 2 May 1996, Mr McNeill raised the matter with Mr Ranger again. This time, Mr Ranger told him that Ms Ballard had said Mr McNeill was not to get any more work. 

1. This led Mr McNeill to approach Mrs Churchill again.  He asked her if he had done anything wrong or blotted his copybook.  He was assured that he had done nothing wrong and that he was "one of our favourites". She told Mr McNeill that he would get work if the occasion arose.

1. Mr McNeill explained that he had debts and that he had to have work in order to meet them.  Mrs Churchill responded, "I could say it's not our problem, but I won't."  She explained in her evidence that she was referring here to the fact that the hospital had never guaranteed ongoing employment to Mr McNeill.

1. Mr  Ranger concedes he told Mr McNeill that he would not be getting any more work in the hospital.  At first, he said this was because of changes in the orderlies' rosters, so that Mr McNeill would not be needed.

1. The orderlies' rosters were changed in about April 1996, so that there was one orderly on morning shift and one orderly on afternoon shift, together with the van driver.  At that time, there were five permanent orderlies available to be rostered.  This does not explain, however, how it was that Mr Edwards, who was a casual call-in much more recently employed than Mr McNeill, came to be rostered for the fortnight commencing 3 May 1996. I infer from this that there were insufficient permanent employees available to cover the roster.

1. Eventually, Mr Ranger conceded in cross-examination that he had been told by either Ms Ballard or Mrs Churchill that Mr McNeill would not be getting any more work, and that he was not to use Mr McNeill. He concedes he told Mr McNeill that this was the case.

1. Mr Ranger is adamant that he was given the instruction not to use Mr McNeill before 2 May 1996. Mrs Churchill does not recall giving Mr Ranger any such instruction. Ms Ballard says that she told Mr Ranger not to roster Mr McNeill after the Health Service received the section 170EA application, because it "didn't seem morally right to ask him to work" in those circumstances. She denies having issued any such instruction before that time. I accept Mr Ranger’s evidence on this point.

1. As a result, Mr Ranger has only scheduled Mr Edwards as a casual call-in since 2 May 1996, and not Mr McNeill. There are no other casual call-ins who are trained to act as orderlies.

1. Mr McNeill has not been offered any work by the hospital since 2 May 1996. Since then, two of the five permanent orderlies have accepted voluntary redundancies, namely Mr De Vos and Mr Ranger.

1. Once it was clear to him he would no longer be in full-time employment, and given the doubt that there would be any further work allocated to him at all, Mr McNeill sought a Department of Social Security separation certificate from the Health Service so that he could apply for Social Security payments.  A certificate was issued which indicated that employment was terminated due to shortage of work.  His accrued annual leave was paid out.

1. Mr McNeill has been unable to find alternative employment since 2 May 1996, despite his best efforts.  He is 49 years of age and explained to the Court that there was "no job market in Northam".

1. He says he would be able to work in the hospital as a cleaner, an orderly or in the Stores section.  He has also done some training in typing and could perform some office clerical functions.

Whether Termination at the Initiative of the Employer

1. The onus falls upon the applicant to establish that the termination was at the initiative of the respondent: Stefanovski v Whiskisoda (IRCA No. 177 of 1994, Millane JR, 6 February 1995, unreported)

1. The termination of the employment relationship is what is comprehended by the expression “termination of employment”: Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200 per the Full Court. It was held in Strecker v Metropolitan Cemeteries Board (1995) 64 IR 109 at 120, per Boon JR, that an employer can act to bring to an end the employer/employee relationship by making a decision about whether or not the employment relationship is to continue and by communicating that decision to the applicant.

1. In Dadey v Edith Cowan University (IRCA No. 308 of 1996, RD Farrell JR, 8 July 1996, unreported), I noted at page 8 that:

   “whether or not there can be said to have been a decision which constitutes a act done by the employer terminating the employment will be a matter for evidence in each case. In this case, the University made it clear it followed it’s policy, which required a decision to be taken. In another case, the employer may never have considered the possibility of offering a new contract to the employee, so that there could be no question of the employment relationship extending beyond the particular employment contract. The Court would usually be more likely to find, as a question of fact, that the employer considered renewing the contract where there has been a history of back - to - back contracts”.

1. In the period leading up to 2 May 1996, Mr McNeill had been a full time employee of the Health Service. While Ms Ballard’s letter dated 8 March 1996 outlining the agreement advised Mr McNeill that “there is no guarantee that we will be able to offer you employment after 2 May 1996”, it did not indicate that Mr McNeill would certainly not be offered further employment. Prior to 8 March 1996 there had been a number of back to back temporary contracts of employment between Mr McNeill and the hospital.

1. In all the circumstances, I am satisfied that a decision was taken by the respondent prior to the expiry of Mr McNeill’s 26 week contract that he no longer be employed on a full time basis.

1. The respondent argued that it had merely allowed the 26 week contract to lapse and that the employment relationship between the Health Service and Mr McNeill reverted to the “casual call in” status that had been in place prior to the commencement of the temporary contracts. There are a number of difficulties with this submission.

1. First, as a matter of fact, Mr McNeill has not in fact been offered work since 2 May 1996. It therefore seems somewhat artificial to suggest that the employment relationship continues.

1. Second, if the respondent sought to rely upon the applicant’s actions in seeking a separation certificate and initiating the proceedings in this Court as an explanation for the failure to offer him any additional work, then, leaving aside any considerations arising under Section 170DF(1)(e), the decision to change Mr McNeill’s hours of employment from a guaranteed 38 hours per week to no guaranteed hours of employment at all, and removal of his entitlement to accrue leave, in my view, would amount to a repudiatory change in the terms of the employment relationship which Mr McNeill would be justified as treating as a dismissal. In the case of Senior v The Lower North Metropolitan Health Service, Board of Management (IRCA No. 342 of 1996, Ritter JR, 26 July 1996, unreported) which was cited by the respondent as an example of such an employment relationship continuing, there was no such change in the pattern of employment.

1. Third, I find on the evidence that Mr Ranger was positively instructed by the management of the Health Service not to engage Mr McNeill as a casual call in after 2 May 1996. I accept that the instruction from management was motivated by a mistaken belief as to the necessity to avoid Mr McNeill achieving the status of permanent employment, so that he did not qualify for various entitlements as a result.

1. I accept that, viewing together what had been communicated to him by Mr Ranger and Mrs Churchill, Mr McNeill had a reasonable basis for concluding that his employment relationship with the Health Service had been terminated. Mr McNeill would not have stopped working for the Health Service had work been offered. 

1. Accordingly, I am satisfied that Mr McNeill’s employment relationship was terminated at the initiative of  the respondent, so that it was a termination to which the Act applied.

Whether there was Valid Reason for Termination

1. Section 170 EDA(1)(a) confers the onus on the Health Service to prove that there was a valid reason for the termination of its employment relationship with Mr McNeill based upon the operational requirements of the Health Service.

1. I have found that the reason for the termination of the employment relationship was a mistaken belief as to the consequences with regard to permanency of Mr McNeill being offered further work. I find that that does not constitute a valid reason for termination of the employment relationship. Given that Mr Edwards, who was engaged some ten months after Mr McNeill, was offered employment in the fortnight after 2 May 1996, I am not satisfied that the refusal to offer Mr McNeill further work was based on the operational requirements of the Health Service, as the respondent contends.

1. Had management’s decision been merely to change Mr McNeill’s employment from full time employment to casual employment, and had that decision resulted in the termination of the employment relationship, then I would have found that there was a valid reason for the termination based upon the operational requirements of the business. I accept that at the time of the termination, there was no longer full time employment available for Mr McNeill, due to the reorganisation of the stores area.

1. However, I have found that management’s decision went further, to denying him further casual employment, for reasons which I have already held were not valid reasons for the purposes of Section 170DE(1). It is therefore not necessary for me to determine whether the termination was harsh, unjust or unreasonable.

Remedy

1. Mr McNeill seeks reinstatement. Reinstatement is the primary remedy under the Act.

1. Mr McNeill possesses skills and abilities to perform many functions which are required by the Health Service. The respondent is a relative large employer, with about 60 non-nursing employees.

1. The mere fact that the respondent has a surplus of employees over its allocated number  of “FTE’s” is not conclusive with regard to the practicality of reinstatement. It suggests that the respondent might have a valid reason for terminating the employment of some of its employees. It does not necessarily show that the respondent would have had a valid reason for terminating the employment of Mr McNeill in particular. Nor does it necessarily show that reinstatement of Mr McNeill is impracticable, particularly given the breadth of his skills. While I accept that there was not full time employment available to the applicant as at 2 May 1996, since then two permanent orderlies have accepted voluntary redundancy. Given the ongoing need to roster relief orderlies before those redundancies, that need will presumably increase now that there are fewer permanent orderlies. Ms Ballard indicated there would be further relief work needed in the stores area in the near future. Accordingly, I will order reinstatement.

1. The respondent made no submissions as to the nature of the position to which any reinstatement should be ordered, if the Court decided to order reinstatement.

1. The applicant has submitted that Mr McNeill should be reinstated to a position on terms and conditions no less favourable than those on which he was employed immediately before the termination.

1. Nor has the respondent made submissions as to the appropriate orders for  remuneration of the applicant for the period between termination and reinstatement, if the Court decided to order reinstatement.

1. Having considered the matter, and in the absence of any argument to the contrary, I am satisfied that the orders sought by the applicant should be granted.

   I certify that this and the preceding (15) pages
   are a true copy of the reasons for decision of
   Judicial Registrar R.D. Farrell.

   Associate:
   Dated:  29 August 1996

   APPEARANCES

   Counsel appearing for the applicant:       Mr N Ellery

   Australian Liquor, Hospitality &   Miscellaneous Workers Union

   Counsel appearing for the respondent:    Ms C Paterson

   Solicitors for the respondent:                   Crown Solicitor for the

   State of Western Australia

   Dates of Hearing:  16 August 1996

   Date of Judgment:  29 August 1996

   Written Submissions Complete:               27 August 1996