Raffoul, Leo v Blood Transfusion Service of the Australian Red Cross Society
[1997] FCA 1214
•10 NOVEMBER 1997
FEDERAL COURT OF AUSTRALIA
INDUSTRIAL LAW - termination of employment - unlawful termination - whether valid reason - operational requirements - dismissal of medical scientist at the same time as taking on medical scientists - obligation to afford employee preference in applying for positions - whether express term of contract - implied term of contract that employer would not, without reasonable cause, conduct itself in a manner likely to damage or destroy the relationship of confidence and trust between it and an employee - content of the obligation to give preference - whether employer had an obligation to give employee an opportunity to defend himself against allegations relating to conduct or performance taken into account in interview processes not relating to termination, but the effect of which was to leave the employee in danger of termination - whether reinstatement impracticable - whether reinstatement should be ordered - effect of agreement that applicant not be paid for period between adjournment of trial and date of judgment
Industrial Relations Act 1988 ss 170DC, 170DE(1), 170EDA(1), 170EE
Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144
Liddell v Lembke (t/as Cheryl’s Unisex Salon) (1994) 127 ALR 342
Fryar v Systems Services Pty Ltd (1995) 130 ALR 168
LEO RAFFOUL v BLOOD TRANSFUSION SERVICE OF THE AUSTRALIAN RED CROSS SOCIETY
VI 4347 of 1995
GRAY J
MELBOURNE
10 NOVEMBER 1997
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 4347 of 1995
BETWEEN:
LEO RAFFOUL
APPLICANTAND:
BLOOD TRANSFUSION SERVICE OF THE AUSTRALIAN RED CROSS SOCIETY
RESPONDENTJUDGE:
GRAY J
DATE OF ORDER:
10 NOVEMBER 1997
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
The respondent forthwith reinstate the applicant, by appointing the applicant to a position of Medical Scientist Grade 1 of the respondent’s choosing, on terms and conditions no less favourable than those on which the applicant was employed immediately prior to 1 September 1995.
The respondent treat the applicant in all respects as if he had been employed continuously by the respondent as a Medical Scientist Grade 1 from prior to 1 September 1995 until his reinstatement in accordance with paragraph 1 of this order, provided that the respondent is at liberty to treat the applicant as if he had been on leave without pay from 14 August 1997 until 10 November 1997.
The respondent pay to the applicant the remuneration lost by the applicant because of the termination of his employment on 1 September 1995, setting off any amounts already paid by the respondent to the applicant other than amounts to which he was entitled as at 1 September 1995 and any remuneration received by the applicant between 1 September 1995 and the date of his reinstatement in accordance with paragraph 1 of this order, provided that the respondent is at liberty to treat the applicant as if he had been on leave without pay from 14 August 1997 until 10 November 1997, and further provided that the respondent may pay to the Commissioner of Taxation any amounts properly payable by it in satisfaction of the applicant’s liability to taxation on the amounts paid by the respondent.
Liberty is reserved to either party to apply on seven days’ notice in writing to the other party in respect of the fixing of any amount or amounts contemplated by paragraph 3 of this order if the parties are unable to agree upon that amount or those amounts.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VI 4347 of 1995
BETWEEN:
LEO RAFFOUL
APPLICANTAND:
BLOOD TRANSFUSION SERVICE OF THE AUSTRALIAN RED CROSS SOCIETY
RESPONDENT
JUDGE:
GRAY J
DATE:
10 NOVEMBER 1997
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The applicant claims a remedy, pursuant to s 170EE of the Industrial Relations Act 1988 (“the Act”), as a result of the termination of his employment in the Blood Transfusion Service of the Australian Red Cross Society in Melbourne on 1 September 1995.
The precise identity of the employer is unclear, but I was assured by counsel for the respondent that it existed as a legal entity, for which he appeared. I therefore refer in these reasons for judgment to this employing entity as “the respondent”.
The applicant commenced employment with the respondent in its Haematology Unit as a trainee medical scientist on 6 October 1986. Having acquired the degree of Bachelor of Medical Science, he was appointed as a full time Medical Scientist Grade 1. From that time until December 1993, he worked in the Haematology Laboratory or the Quality Control Laboratory, both of which were within the Haematology Unit. His duties included: scientific work and investigation; development work and research projects; full investigation of blood products with appropriate scientific testing; routine biochemical and haematological analysis; modification of established methods; operation of scientific equipment; maintenance of the performance and statistical records of laboratory work; preparation and presentation of intra-department talks; supervision and training of new staff; publishing scientific papers; investigation of haematological red cell disorders; haematological assessment of blood bank donors; quality control investigations of donor blood products; performance of full blood count on a haematology analyser; writing up of reports for doctors; performance of internal and external quality control; preparation, evaluation and distribution of control products; monitoring of the validity of instruments and equipment; and attendance at scientific presentations, seminars and conferences within the blood bank and externally. Between June 1990 and September 1993, he was promoted on a rotational basis with other staff members to Medical Scientist Grade 2. During the periods in which he acted in this higher capacity, he had some supervisory functions. He was also involved in the establishment of the Quality Control Laboratory and assisted in the implementation of quality control procedures and programmes.
In about March 1993, the respondent decided to reorganise its haematology and quality control operations. The decision was forced on it by new legislation governing the respondent as a manufacturer of therapeutic goods. These were blood products, which were distributed to hospitals and similar institutions throughout Victoria. At the time when this decision was made, there were seven medical scientists and seven medical technicians employed in the haematology and quality control areas. The Haematology Unit Manager, Mr Patrick Conte, prepared a document described as an employee impact statement, which dealt with the consequences of the proposed reorganisation for staff working in the area. The document was the product of negotiations between management of the respondent and unions, including the Medical Scientists Association, of which the applicant was a member. It drew upon a document known as the “RRR” agreement. This was an agreement relating to organisational change, consultation, redeployment, retraining and redundancy in the Victorian public health sector. The respondent was not a party to the RRR agreement, but was prepared to treat it as guidelines with which the respondent would comply. The final version of the employee impact statement was dated 25 March 1993. It proposed that the fourteen members of staff in the haematology and quality control areas be reduced to eleven, who would work in a newly established Quality Assurance Unit. For this purpose, the staff were divided into three groups. Five persons were designated as constituting group A, who would perform mainly quality assurance functions. Group B was to consist of six persons, chosen from the remaining nine, to continue to perform duties in the haematology area. The three people who missed out on membership of group B were to comprise group C. With respect to these persons, the employee impact statement provided:
“In the interim period, these individuals will be given the opportunity to transfer to another Unit whether it be a laboratory or other, if positions are available and position criteria met.
If by 1st December 1993 there has not been a satisfactory redeployment, then these individuals will be transferred to the Donor Services Unit, where they will continue to retain the first option of transferring to another Unit.”
Under the heading “Redeployment to other Laboratories”, the employee impact statement had this to say with respect to those who were to become members of Group C:
“In accordance with Section 2.5 of the RRR Health Sector Agreement, these individuals will be given preference to vacant positions within the organization, provided the redeployees meet the relevant criteria for the position. To this end, the Personnel Officer has been notified and a memo sent through the latter to all Laboratory Unit managers.
NB:
Redeployed staff who fill temporary maternity leave positions within the organization, will not relinquish their permanency and therefore will be found other suitable positions within the RCBBV [Red Cross Blood Bank Victoria] at the end of the maternity leave period.
Training requirements will be identified once new positions have been allocated to these individuals. It is envisaged that in some areas, re-training will be required. Costs of any retraining program will be born by the organization. Efforts should also be made to compensate these individuals by introducing them to multi-skilling.”
In May 1993, eight of the nine employees concerned were interviewed to determine which of them would be placed in group B and which in group C. The one who was not interviewed was Nicole Loidl, who had been given twelve months’ leave without pay from the respondent, on the basis that her job would be available for her when she returned. She was still on this leave, and overseas, at the time of the selection process. It was considered that this arrangement, and the difficulty of interviewing her, necessitated that she be a member of group B. The interview panel consisted of three people. One was Mr Conte; another was Ms Pat Casey, the respondent’s Personnel Services Manager; the third was from the Donor Services Unit. Each of the interviewers had notes of standard matters which were to be the subject of questions for each interviewee. Each interviewer allocated to each interviewee a score out of five or ten in respect of each of a number of designated subjects. Each interviewer’s scores were totalled and then the scores of the three interviewers for each candidate were totalled. In this process, the applicant scored the least points of all; he was marked the lowest by two interviewers and the second lowest (by a margin of two) by one. The result of the selection process was that the applicant, Julie Lind and Vuong Duong (both of whom were medical technicians) were consigned to group C.
One portion of the interviewer’s notes, for which a score was not allocated, was headed “Critical Assessment of the Individual by QA Unit Manager”. The notes read:
“* Assessment by Unit Manager (Team Leader) on the suitability of
employee to adequately perform QA functions to a required standard.* Review of all items 1 - 9 (above) and taking into account personal
knowledge of the individuals’ previous performances, skills and
commitment.”
In the space provided, Mr Conte, who was the relevant unit manager, wrote the following:
“Unfortunately, my experiences with Leo indicate that he is not committed enough to his work, has poor organizational skills, is a bit too slow at his work and does not have the confidence and support of peer staff and senior supervisors. If remains in Group B, then will need close supervision which may not be possible. The rest of the group may not be able to carry him. Perhaps could suggest that he would be better suited to Immunohaem. etc.”
In his evidence, Mr Conte conceded that the adverse allegations about the applicant contained in these notes were not put to the applicant and he was not given an opportunity to respond to them. When he was asked whether he had ever spoken to the applicant about these matters, Mr Conte suggested that he and supervisors within the unit had had conversations with the applicant from time to time about his performance. Mr Conte gave evidence of a conversation between himself and the applicant about a matter which was not one of those noted. The applicant had never been the subject of a formal process, such as a warning, in respect of his performance in the Haematology Unit. The contents of Mr Conte’s notes were not communicated to Ms Casey. The other interviewer did not give evidence.
On 3 May 1993, Mr Conte wrote to the applicant, informing him that he had not been successful in securing a position as a member of the quality assurance technical team. The letter contained the following:
“It was felt that you possessed special skills and attributes which will be of a definite advantage to some of the other areas of the Blood Bank.
The implications for you are, that as of this date, you are free and encouraged to apply for other positions within the Blood Bank. As has been stated in the “Employee Impact Statement” dated 26 March 1993, you will be given priority over other applicants for vacant positions. If you do not move to a new position by 1 December 1993, you will have to temporarily transfer to Donor Services until you find a satisfactory position. Hopefully, you will benefit by becoming multi-skilled in the Blood Bank field.”
In a memorandum dated 19 October 1993 to the Technical Services Manager and the Laboratory Services Manager, with copies to the Deputy Director, QA Team Leader, Distribution Manager and Personnel Services Manager, the Director of Administration, Mr Gavin Wigginton, said:
“You will recall that in March 1993 the Blood Bank concluded a reorganisation of the Haematology/QC function which involved the establishment of a Quality Assurance Unit and significant redeployment of staff. This reorganisation was achieved through extensive consultation, and the terms of the change were enshrined in the attached Employee Impact Statement the contents of which were agreed by all the parties concerned.
Following agreement on the Employee Impact Statement, selection of staff to fill new positions took place according to Clause 5 of the document leaving three individuals who form Group C.
The purpose of this Memo is to draw to your attention the section of the EIS which refers to Redeployment. In particular, may I point out that we undertook to give Group C individuals preference in appointment to vacant positions provided the redeployees meet the relevant criteria. The purpose of this clause is to ensure that we minimise the disadvantage to the individuals concerned, and the spirit of the clause requires that we do our best to accommodate them if at all possible.
Please ensure that all Unit Managers are aware of and adhere to the spirit of the EIS.”
By December 1993, the applicant had not been successful in being appointed to a position anywhere else in the respondent’s operations. He was therefore transferred to the Donor Services Unit. In that unit, his duties fell into two parts. He was responsible for taking samples of blood from intending donors (“finger pricking”) and performing haemoglobin tests on those samples. He also spent part of his time in checking, which involved ensuring that blood donated by donors was correctly labelled and directed to its intended destination. In or about January 1994, he applied unsuccessfully for a position as a Medical Scientist Grade 1 in the Red Cell Serology Unit.
The work in the Donor Services Unit was not satisfying to the applicant, did not make full use of his qualifications and experience, and did not allow him opportunities to maintain his laboratory skills. He protested about this and his union representative, Mr Sam Eichenbaum, took the issue up with management. The result was that the applicant was offered a position as a trainee medical scientist in the respondent’s Red Cell Serology Unit. He was transferred to the unit as a trainee at the end of February 1994.
The Red Cell Serology Unit was managed by Ms Blandina Baratti, who was not called to give evidence. Her deputy, and the highest ranked scientist in the unit, was Ms Denise Herbert, who did give evidence. The applicant alleged that neither Ms Baratti nor Ms Herbert wanted him in the Red Cell Serology Unit and that Ms Herbert told him this on the day that he began his training there. Ms Herbert denied this very hotly and was upset to a considerable degree by the allegation. I accept that, in her case, it was untrue and that she did devote herself conscientiously to training the applicant. My acceptance of Ms Herbert’s evidence on this point must cast some doubt on the applicant’s evidence that both she and Ms Baratti resented his presence in the Red Cell Serology Unit. In addition, I accept the evidence of Ms Herbert that the presence of an extra person in red cell serology, to share a heavy work load, was welcomed. Despite the absence of Ms Baratti from the witness box, which was not explained, I am of the view that it is more probable than not that she did not oppose the applicant’s presence in her unit from the beginning.
The applicant did not perform well in his training. He conceded that he was slow at picking things up. He asserted that there was no training manual, of a kind which he had seen in the Haematology Unit, and blamed the fact that the training was all oral for his slowness. I accept the evidence of Ms Herbert that a training manual did exist for the Red Cell Serology Unit. The applicant denied having seen it and claimed that the only documents he saw were the written operators’ instructions for the tasks required in the unit. I am satisfied that he was shown the parts of the training manual which it was necessary for him to see as part of his training.
The applicant’s training in red cell serology began with the loading of the large machine which is used to test blood samples for blood grouping and the presence of syphilis and other antibodies. According to Ms Herbert, training on loading took an inordinate time. Ordinarily, it is a matter of days. In the case of the applicant, it was eight weeks before he could be signed off as having completed this aspect of the training. It was necessary for her to try a variety of training methods, and to bring in other trainers, in case the applicant’s slowness was due to personality factors. After the applicant had been signed off as trained for loading the machines, he went on to manual testing, before being put onto the operation of the machine itself.
On 6 May 1994, the applicant loaded the control specimens into the testing machine in the wrong order. The error was detected by the operator of the machine, who reported the matter to Ms Baratti. On being questioned about the incident, the applicant claimed that he changed the order of the controls deliberately, in order to see if the operator would pick up the error. He said that he had been told by Ms Herbert to do this. In her evidence, Ms Herbert denied having told the applicant to change the order of the controls. She gave evidence of a conversation with the applicant in which she had said that the order in which the controls were loaded was not particularly important and she wondered if an operator would notice if it were changed. The applicant suggested that he might change the order of the controls, to see if the operator noticed and Ms Herbert told him not to. I accept the evidence of Ms Herbert on this matter. A formal incident report in relation to this occurrence was prepared by Ms Baratti.
On 22 June 1994, while the applicant was operating the testing machine in red cell serology, a further incident occurred. A series of controls was being run through the machine. The purpose of this exercise is to ensure that the machine is functioning correctly. Each control sequence has nine wells, corresponding to nine fields on a computer screen. The machine does not give readings for the wells other than the ones for which it is testing in the particular control sequence. The other wells are empty. On some occasions, the operator must enter results which are deliberately “nonsense” for the empty wells, by using the computer keyboard. On other occasions, no intervention through the keyboard is required. In the incident which occurred on 22 June, the entry of “nonsense” results for empty wells could be done without adverse effect, but it was unnecessary for the operator to enter them. The applicant did enter results for empty wells, but instead of entering “nonsense” results, he hit the “-” key on the computer keyboard. As a result, the computer print-out indicated blood of the O negative group in the empty wells. The applicant did this twice, in respect of both the “anti D” control sequences, which were designed to test that the antibody screen of the testing system was working. He then repeated the error in respect of the first “GAST” control sequence, which was designed to test whether the syphilis screen was working. The result was a computer print-out which read as if there were a sample of blood of the O negative group which had tested positive for syphilis.
At this point, the applicant became aware that a mistake had been made and sought to attract the attention of another medical scientist working in the laboratory. He stated that he could not understand why his O negative control was turning up as positive on the syphilis test. In fact, the test was intended to reveal that the machine was testing correctly for syphilis, and not to show a blood group at all. The only reason it showed the blood group was that the applicant had hit the “-” key in respect of the other fields. Ms Herbert was called to attend to the matter. According to her, the applicant could not understand why what he thought were the controls designed to show that the machine was reading O negative blood groups correctly were also causing it to read positive for syphilis. His failure to comprehend what occurred caused Ms Herbert to remove him from operating the machine. Again, the matter was the subject of a formal incident report by Ms Baratti. The applicant believed he had been dealt with unjustly. In his view, he had made a keyboard error which had been blown out of all proportion. Again, I accept Ms Herbert’s evidence that the applicant’s failure to understand the significance of what he had done was the reason for the serious view taken of the incident.
After the incident of 22 June 1994, the applicant returned to manual testing in the Red Cell Serology Unit for a time. A decision was then made to terminate his training in that unit early and he was returned to the Donor Services Unit. Mr Eichenbaum took up on the applicant’s behalf his complaint that his training had been terminated early. After some negotiation, the applicant accepted his return to the Donor Services Unit. Mr Eichenbaum said that he accepted this on the basis that he realised that the applicant would have problems with the personalities in the Red Cell Serology Unit. I find that the applicant had proved himself to be unsuitable for training to be a Medical Scientist Grade 1 in the Red Cell Serology Unit.
The respondent made no further attempt to find a position as a Medical Scientist Grade 1 for the applicant, but left him in donor services. Its position at the trial, however, was that it did not regard its obligation to give preference, or priority, to the applicant, for a vacant position for which he met the relevant criteria, as spent.
In September 1994, the respondent began a review of the organisation of the Donor Services Unit, with particular reference to haemoglobin testing. The review led to a decision to change the organisation of the unit. Instead of proposed donors being interviewed by registered nurses and then passed to others, such as the applicant, for finger pricking and haemoglobin testing, it was proposed that intending donors be offered a “one stop shop”. Registered nurses would conduct the interview, do the finger pricking and test the sample for haemoglobin. Relevant employee unions were consulted about the proposed change. By letter dated 20 March 1995, the Acting Director of the respondent advised the relevant unions that the redeployment of a scientist and a technician to other work areas would need to be addressed. The scientist concerned was the applicant. The technician was Vuong Duong, another member of group C. The remaining member of group C, Julie Lind, had already been given a position as a medical technician in one of the respondent’s units.
By letter dated 10 May 1995, the respondent informed the applicant as follows:
“Arising from the proposed transfer of haemoglobin testing into Assessing, your current position is no longer required to be performed by anyone. We seek immediate discussions with you or your representatives on the questions of redeployment options and/or redundancy.
The date of effect of the change is 1 July 1995.”
On 18 May 1995, the applicant applied for a position as a Medical Technician in the respondent’s Distribution Unit. It should be noted that the position of Medical Technician is of a lower status than that of Medical Scientist Grade 1. The applicant was interviewed for the position, along with other applicants. The interview was based on detailed recruitment specifications which were not shown to the applicant in advance. The interview panel consisted of three persons, one of whom was Gabrielle Hewitson, the Deputy Manager, Distribution (who was acting as manager at the time). Ms Hewitson was of the view that the applicant failed to satisfy a number of the criteria in the recruitment specifications. In the case of some criteria, her conclusion was based on the applicant’s performance in the interview. In the case of others, it was based on information obtained from referees, which related to the conduct and performance of the applicant but which he was given no opportunity to respond to. In the case of some criteria, the failure was based on a combination of the interview performance and the referees’ information. Ms Hewitson was the only one of the interviewers who gave evidence. The notes of one other interviewer, Ms Rosemary Hill, the scientist in charge from the Production Unit, indicate that she also based her decision that the applicant failed to meet certain of the criteria partly on his interview performance and partly on information from referees. I am satisfied that, despite his qualifications, the applicant did fail to meet some of the criteria for the position of Medical Technician in the Distribution Unit. In particular, I am satisfied that his interview performance demonstrated his inability to meet the requirement for communication skills. Having seen the applicant appear in court and heard him give evidence, I can understand readily how it appeared to the interviewers that he did not listen to questions put to him and often gave answers which were not responsive to the questions. He displayed the same characteristics in court, both as an advocate and as a witness. I am therefore satisfied that, even apart from the information obtained from referees, which the applicant had no opportunity to answer, he did not meet the criteria for this position.
On 3 July 1995, the applicant ceased working in the Donor Services Unit. He was referred to a consultant, described as an “outplacement agency” to assist him in obtaining outside employment. He spent eight weeks seeking employment, with the assistance of this consultant.
In July 1995, the respondent advertised a vacant position for a Medical Scientist Grade 1 in its Virus Serology Unit. The applicant applied. He was interviewed, again by three persons. Two of them, Mr Gregory Cooper and Mr Simon Payne gave evidence. Mr Cooper was the Unit Manager of the Virus Serology Unit. Mr Payne was the respondent’s Training Manager. The recruitment specification for this position was also in evidence. The criteria were far less specific than the criteria for the position in the Distribution Unit, for which the applicant had applied unsuccessfully. Previous experience in various areas was expressed to be “desirable”. It is clear that the applicant satisfied the criteria so specified. Mr Payne, whom the applicant called to give evidence, said so expressly and was not shaken in cross-examination. Mr Cooper, who was called on behalf of the respondent, would not be led into giving evidence that the applicant failed any of the expressed criteria. Counsel for the respondent did obtain from him evidence that the applicant would not have been able to work in the Virus Serology Unit without training. Mr Cooper agreed with counsel for the respondent that, in this sense, the applicant did not meet the criteria. There is nothing in the recruitment specification, or in the advertisement for the position, suggesting that an applicant for the position should not need training. Further, it must be remembered that Mr Conte’s employee impact statement had recognised specifically the respondent’s need to train members of group C when they were redeployed to other units. I therefore find that the applicant satisfied the criteria for this position. As a result of the selection process, two appointments were made to positions of Medical Scientist Grade 1 in the Virus Serology Unit, one on a permanent basis and the other temporary, for twelve months. Neither position was offered to the applicant. Each was filled by an applicant from outside the respondent’s organisation.
Prior to interviewing applicants for the position in the Distribution Unit, Ms Hewitson sought guidance from the personnel department as to whether, and if so how, she should give preference to the applicant. She was told that, so long as he or she met the criteria for a position, it was the respondent’s policy to try to appoint an internal applicant, rather than an external one. Prior to the interviews for the position in the Virus Serology Unit, Mr Cooper sought similar guidance. The applicant had approached him, claiming that he was entitled to preference. Mr Cooper consulted Mr Joe Goddard, the respondent’s Human Resources Manager, who told Mr Cooper that he was to select the most qualified and most suitable
candidate. In other words, no preference was to be given to the applicant at all.
By letter dated 3 August 1995, signed by Mr Goddard, the respondent informed the applicant that:
“due to organisational requirements your employment will effectively cease on Friday 2 September unless an alternative position has been offered appropriate to your background, experience and qualifications.”
Together with a letter dated 1 September 1995, the applicant received four cheques totalling $35,092.87. The first cheque was for $20,180, which included the applicant’s entitlement to notice and to redundancy pay, together with an additional payment of $10,000, less amounts in respect of income tax. A second cheque for $2,137.20 was described as “balance of package”. A cheque for $11,930.87 was for accrued annual leave and pro rata long service leave (to which the applicant was not strictly entitled). The fourth cheque, for $844.80, was the applicant’s ordinary pay for the week ending 3 September, including an outstanding ADO credit, which I take to be in respect of accrued days off. Initially, the applicant refrained from banking all four cheques. As time passed, and he found it difficult to obtain employment, he banked the proceeds of the cheques but left the amount untouched in his bank account and drew only interest accruing on it.
Even prior to the cessation of his employment, the applicant filed an application in the Industrial Relations Court of Australia, alleging unlawful termination of employment. The application was heard by a judicial registrar on 14 and 15 December 1995. On 20 December 1995, the judicial registrar dismissed the application. The applicant sought a review of the exercise of the powers of the court by the judicial registrar. Such a review was available to him as of right. It was ordered that the review be by way of a complete re-hearing, without any regard being had to the evidence before the judicial registrar. This is the basis on which I have conducted the review.
The application was first listed for trial on 6 March 1997. It was adjourned because the applicant’s then legal adviser had become ill and was unable to appear. It was again listed for trial on 14 August 1997, on which day the applicant’s then legal adviser was attending the funeral of a former colleague of his in federal parliament. On each occasion, the respondent did not oppose the application for the adjournment. On the second occasion, it consented to the adjournment on the basis of an agreement that, if the applicant were to succeed and to be reinstated in his employment, he would not claim lost remuneration for the period between 14 August 1997 and the date on which judgment was given.
As it stood at the relevant time, s 170DE(1) provided:
“An employer must not terminate an employee’s employment unless there is a valid reason, or valid reasons, connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.”
In the case of reasons related to the employee’s conduct or performance, s 170DC required that the employee be given the opportunity to defend himself or herself against the allegations made, unless the employer could not reasonably be expected to give the employee that opportunity. By s 170EDA(1), the onus of proving that there was a valid reason, or there were valid reasons, of a kind referred to in s 170DE(1), lay on the employer.
In the present case, the respondent undertook the task of proving that there was a valid reason for terminating the applicant’s employment, based on the operational requirements of the respondent’s undertaking. In its simplest form, the respondent’s case was that it had decided, for sound operational reasons, to combine the finger pricking and testing functions, performed by the applicant, with the interview function, performed by others, and to have the combined functions performed by registered nurses. The result was that the applicant’s job disappeared and his employment was terminated because there was nothing else for him to do.
On the facts as they emerged, the flaw in this line of reasoning is obvious. The applicant was not employed in the Donor Services Unit doing finger pricking for any reason other than that the respondent had placed him there until another position was found for him. In July 1995, immediately prior to the notification to the applicant that his employment would be terminated, the respondent took steps to fill a vacancy for a Medical Scientist Grade 1 in the Virus Serology Unit. Although the applicant sought this position, it was filled by someone from outside the respondent’s employment. At about the same time, a second position in the same unit was filled by another medical scientist from outside. The applicant was qualified as a Medical Scientist Grade 1 and had worked for the respondent as a Medical Scientist Grade 1, until he was transferred to the Donor Services Unit to await his transfer to another job. Whilst there was a valid reason, based on operational requirements, for the applicant to cease finger pricking in the Donor Services Unit, it did not follow that there was a valid reason for terminating his employment. All of the operational requirements of the respondent would have been satisfied if the applicant had been appointed to one of the vacant positions of Medical Scientist Grade 1 in the Virus Serology Unit. As I have found, he met the criteria specified in the recruitment specification for this position. It follows that, even in the absence of any obligation on the respondent to give preference to the applicant for any other position within its organisation, there was no valid reason for the termination of the applicant’s employment, based on the operational requirements of the respondent.
It must be remembered that the applicant was working in the Donor Services Unit on the basis that he would be given preference, or priority, for a position as a Medical Scientist Grade 1 for which he met the relevant criteria. Counsel for the respondent accepted that the respondent was under an obligation to afford preference to the applicant. The basis for this concession was not expressed. It may be that the obligation to give preference (or “priority” as it was called in the letter of Mr Conte dated 3 May 1993) became an express term of the applicant’s contract of employment. The applicant was offered preference, or priority, in consideration of his agreeing to perform work, which was not that of a medical scientist, in the Donor Services Unit. Alternatively, it was an implied term of the contract of employment that the respondent would not, without reasonable cause, conduct itself in a manner likely to damage or destroy the relationship of confidence and trust between it and the applicant. See Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144, at 151, and the cases there cited. Having given the applicant the understanding that it would afford him preference, or priority, in relation to a vacant position for a Medical Scientist Grade 1 for which the applicant met the relevant criteria, the respondent was in breach of this implied term, and therefore of the contract of employment, by failing to do so.
Various views were expressed as to the content of the obligation to give preference. On the one hand, Mr Eichenbaum was of the view that the employee impact statement of 25 March 1993 and the letter from Mr Conte to the applicant of 3 May 1993 did not express adequately the understanding which the applicant’s union had reached with Mr Wigginton. Mr Eichenbaum thought that the applicant was to be given preference for a position for which he was qualified, as distinct from a position for which he met the selection criteria, and was to be guaranteed permanent employment. Mr Wigginton, who gave evidence on behalf of the applicant, saw the matter more as a policy of finding employment within the respondent’s organisation, if at all possible. At the other end of the spectrum was Ms Casey’s view that preference to the applicant meant no more than that he was entitled to be offered a position if he was one of two candidates of equal merit and there was no candidate of greater merit. This view cannot be accepted. It would rob the word “preference”, or the word “priority”, of any significant meaning to hold that it required that the applicant be the best, or the equal best, candidate for a position before he would be offered it. In the absence of any particular express meaning given to the word “preference”, or the word “priority”, or of any evidence that those words had any particular connotation within the relevant industry or trade, the ordinary meaning of each expression is the relevant one. That is to say, the word “preference” and the word “priority” must be understood as they would have been understood by ordinary people. In my view, in the context in which they were used, they would have been understood as meaning that the applicant was to be offered any position for which he applied and satisfied the relevant criteria, even though more worthy candidates from outside the respondent’s organisation, or from within it but with no entitlement to preference, might present themselves. As I have said, preference or priority in this sense was what the respondent failed to give to the applicant when it engaged outside candidates for the permanent and temporary positions in the Virus Serology Unit in July 1995.
The respondent therefore contravened s 170DE(1) of the Act. This conclusion makes it unnecessary for me to deal with the possibility of a contravention of s 170DC. There was no suggestion that any aspect of the applicant’s performance or conduct in the Donor Services Unit led to the termination of his employment. It must be remembered, however, that he was only working in the Donor Services Unit as a consequence of the reorganisation of the Haematology and Quality Control Unit in 1993. At that time, Mr Conte, as one of the interview panel, took into account aspects of the applicant’s conduct and performance which were never put to the applicant and on which he had no opportunity to defend himself. Mr Conte was entitled to do this. It was open to the respondent to take into account uncommunicated information for the purpose of deciding whether the applicant would be one of the people who succeeded in retaining their jobs in the reorganised haematology and quality assurance areas. The applicant’s employment was not being terminated at that time. Even if it had been, the relevant provisions of the Act had not then been enacted. Later, when the applicant applied unsuccessfully for the position in the Distribution Unit, he was assessed by at least one member of the interview panel by reference to information obtained from other persons, which reflected on the applicant’s performance and conduct. Again, he was not told of this information and not given an opportunity to defend himself in respect of any allegations against him. Again, the purpose of the interviews was not the termination of the employment of the applicant. It is clear, however, that the combination of the applicant’s lack of success in retaining his position in 1993 and in securing the position in the Distribution Unit in 1995 left him in the Donor Services Unit, vulnerable to dismissal from his employment when the decision was made to reorganise that unit. The decision of the interview panel in 1993 put the applicant in the condemned cell and the decision of the Distribution Unit interview panel in 1995 left him there. If he were then to be executed, it may be that an obligation fell upon the respondent to give him an opportunity to defend himself against the unrevealed allegations which had led to him being in danger of termination. This issue was not argued fully and I do not express a concluded view upon it.
Once the conclusion has been reached that the respondent contravened s 170DE(1) by terminating the applicant’s employment without a valid reason, the question is what, if any remedy, should be granted to the applicant. The relevant provisions of the Act, as they stood at the relevant time, were found in s 170EE:
“(1) In respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, the Court may, if the Court considers it appropriate in all the circumstances of the case, make the following orders:
(a) an order requiring the employer to reinstate the employee by:
(i) reappointing the employee to the position in which the employee was employed immediately before the termination; or
(ii) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination; and
(b) if the Court makes an order under paragraph (a):
(i) any order that it thinks necessary to maintain the continuity of the employee’s employment; and
(ii) an order requiring the employer to pay to the employee the remuneration lost by the employee because of the termination.
(2) If the Court thinks, in respect of a contravention of a provision of this Division (other than section 170DB or 170DD) constituted by the termination of employment of an employee, that the reinstatement of the employee is impracticable, the Court may, if the Court considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate.”
These provisions plainly require that one or other form of reinstatement is to be the remedy first considered. It can only be granted if the court considers it appropriate in all the circumstances of the case. Compensation can only be ordered if reinstatement is impracticable and if the court considers it appropriate in all the circumstances of the case. Reinstatement is therefore a discretionary remedy. If reinstatement is not impracticable, however, the court should be slow to exercise its discretion not to grant it as a remedy. If reinstatement is practicable but is refused on discretionary grounds, then a successful applicant will depart empty handed, because compensation can only be ordered if reinstatement is impracticable.
I have expressed the view that the word “impracticable” should be construed in its strict sense. See Liddell v Lembke (t/as Cheryl’s Unisex Salon) (1994) 127 ALR 342, at 367-8 and Fryar v Systems Services Pty Ltd (1995) 130 ALR 168, at 185 and 189. That is to say, if reinstatement is possible, it should be ordered. Its practicability is not a matter of its convenience, or even its undesirability. The legislation is designed to protect the jobs of those who are working. Those views were expressed prior to the amendments which placed the provisions of s 170EE in the form in which I am considering them in this case. Nevertheless, I adhere to my view. One thing which the legislation was not intended to do was to reproduce the judge-made law which existed previously. It is well known that courts of equity were reluctant to force people into a working relationship when one asserted that the trust and confidence considered necessary to such a relationship had been destroyed. The reluctance (which is no longer absolute refusal) of courts of equity to grant injunctions preserving contracts of employment was the primary reason which necessitated legislation of this nature. The difficulties created by the amendments which made the remedy of reinstatement truly discretionary, and which have the effect of barring compensation when the discretion is exercised not to reinstate, are not solved properly by equating the exercise of the discretion not to reinstate with the impracticability of reinstatement. Badly drafted legislation is not well remedied by loose construction.
Whatever view be taken of the meaning of the word “impracticable”, reinstatement of the kind contemplated by s 170EE(1)(a)(ii) is eminently practicable in the present case. The respondent employs a large number of persons in the classification Medical Scientist Grade 1 in a variety of its operations. The mere fact that there might not be a vacancy in any one of those positions at the time when the Court makes its order cannot prevent the making of an order for reinstatement. If an employer could defeat the remedy of reinstatement by ensuring that all appropriate positions were filled at the appropriate time, the legislation would be all but meaningless. When a significant number of persons is employed in a particular classification, inevitably there will be some turnover. The respondent employs fifty or sixty medical scientists at any one time. The burden of carrying the applicant as an extra Medical Scientist Grade 1, until a suitable position becomes vacant, is by no means intolerable for the respondent, even if it is engaged in reducing its staff at the present time. It would not be practicable to order the respondent to reappoint the applicant to the position in which he was employed immediately before the termination; that position has effectively disappeared and was, in any event, nothing but a holding position until a vacancy for the applicant was found. There can be no objection on grounds of practicability in the present case to an order directing the respondent to appoint the applicant to another position on terms and conditions no less favourable than those on which he was employed immediately before the termination.
Is such an order appropriate in all the circumstances of the case? The answer to this must clearly be yes. The applicant managed to perform the functions of a Medical Scientist Grade 1, and at times of a Medical Scientist Grade 2, in the Haematology Unit of the respondent for upwards of six years. He did so without being the subject of any formal warning or complaint about his conduct or performance. It may be, as Mr Conte said in evidence, that supervisors found it necessary to speak to the applicant from time to time about his performance and conduct. It is not unusual for supervisors to draw the attention of employees to lapses in their performance or to exhort them to greater efforts. It should not be assumed from Mr Conte’s evidence that the applicant is a bad employee. It is necessary to take into account the fact that the applicant was unsuccessful in completing the training which he underwent in the Red Cell Serology Unit. Similarly, I take into account my findings as to the applicant’s performance in the interview for the position in the Distribution Unit. As I have said, the applicant does have a habit of being unresponsive to questions. Since the termination of his employment, he has discovered that he has a hearing problem and he now wears a hearing aid in each ear. I do not think that this hearing problem provides the full explanation for his failure to satisfy the communication criterion for the position in the Distribution Unit. The applicant does not give sufficient attention to listening to questions. I also take into account the fact that the applicant would need training in order to function as a Medical Scientist Grade 1 in the Virus Serology Unit. There may be other positions for which he will need training. Nonetheless, he has the qualifications for a Medical Scientist Grade 1 and the experience of his years in the Haematology Unit. There is no reason why he should not be able to perform adequately in the role of a Medical Scientist Grade 1 for the respondent, even though he might not be the best person who could be found to perform the job.
I have not overlooked the question of personal difficulties. It is quite possible that the applicant is viewed by some people in the respondent’s organisation as a nuisance. He has become so by asserting his rights and by applying for every position advertised by the respondent since the termination of his employment. In the manner in which he conducted himself at the trial, he has possibly alienated some people, particularly Ms Herbert. It may take some time and effort on the part of many people employed by the respondent to fit the applicant back into the organisation. The applicant will also have to recognise that he needs to act with sensitivity, in order to fit back into the workplace.
Despite the applicant’s limitations, both professional and personal, he should not be sent away empty handed. Appointment to a position of Medical Scientist Grade 1 of the respondent’s choosing, on terms and conditions no less favourable than those on which the applicant was employed immediately before the termination of his employment, is an appropriate remedy.
It is then necessary to consider the appropriateness in the circumstances of the case of orders under s 170EE(1)(b). Since the termination of his employment, the applicant has applied unsuccessfully for approximately 110 jobs. He has received some social security payments and has performed some casual work as a watch repairer, for which he has earned a total of $15,509 before tax, up to 30 September 1997. In addition, he has earned $810 for participating in a market research project. Except in two respects, counsel for the respondent did not contend that I should refrain from ordering the respondent to pay to the applicant the remuneration lost because of the termination. The first respect concerned the agreement which arose out of the adjournment of the trial on 14 August 1997. At that time, it was agreed between the parties that there should be no payment by the respondent in respect of the period between 14 August 1997 and the date of judgment, if the applicant were to succeed. I am bound to give effect to this agreement, although I do not consider that it was warranted entirely by the circumstances. An agreement for no payment during the period from 14 August 1997 until the trial actually began would have been more appropriate. There was no particular reason why the persons advising the applicant at that time should have seen fit to subject him to losing pay during the time taken to complete the trial and any period during which judgment was reserved. In the result, the applicant will lose a few weeks’ pay unnecessarily. My understanding of the agreement is that it also applies to the remedy contemplated by s 170EE(1)(b)(i). In other words, any order to maintain the continuity of the applicant’s employment should not provide him with benefits in respect of the period from 14 August 1997 until the date of judgment. In my view, the easiest way to express this is to make an order permitting the respondent to treat the applicant as having been on leave without pay during that period.
Counsel for the respondent also argued that the applicant should receive no lost remuneration and should be denied the benefits of continuity of employment for the period from 6 March 1997 until 14 August 1997. It will be recalled that the trial was adjourned on 6 March because the applicant’s then legal adviser suffered a heart attack. Counsel for the respondent maintains that the applicant should bear the burden of this misfortune. I do not agree. From time to time, cases are unable to proceed as listed, for various reasons. On occasions, a party is unable to commence a trial because of the unavailability of a legal practitioner properly acquainted with the case, due to illness, injury or accident. In those circumstances, the length of the adjournment depends as much upon the ability of the Court to find room in its lists as on anything else. The present case could not be given another listing date until August. Given that the respondent has contravened s 170DE of the Act, it should not be permitted to escape its obligations because of the ill health of the applicant’s legal adviser. It matters not that the applicant ultimately appeared in person at the trial. In March 1997, he was proposing to be represented.
I am therefore of the view that the circumstances of the case demand that the respondent treat the applicant for all purposes (including superannuation) as having been in its employ continuously until he is reinstated in accordance with the order of the Court, except that it be at liberty to treat him as having been on leave without pay for the period from 14 August 1997 until 10 November 1997. The applicant is also entitled to his lost remuneration from the date of his termination until the date of his reinstatement, except for the period from 14 August 1997 until 10 November 1997. I do not have the means of calculating his entitlement precisely. I have been told his rate of pay at the date of termination and the rate of pay to which he would have been entitled at the time of the trial. I do not know when any increase or increases from one to the other occurred. It will be necessary for the applicant to bring to account the appropriate amounts which he received upon his termination and remuneration which he has earned in the meantime. The respondent may, of course, deduct amounts which it is required to pay to the Commissioner of Taxation in respect of remuneration to the applicant. An order in terms such as these, coupled with a reservation of liberty to apply if the parties are unable to agree as to the appropriate amount, appears to be the best course.
In the result, therefore, the order of the Court is that:
The respondent forthwith reinstate the applicant, by appointing the applicant to a position of Medical Scientist Grade 1 of the respondent’s choosing, on terms and conditions no less favourable than those on which the applicant was employed immediately prior to 1 September 1995.
The respondent treat the applicant in all respects as if he had been employed continuously by the respondent as a Medical Scientist Grade 1 from prior to 1 September 1995 until his reinstatement in accordance with paragraph 1 of this order, provided that the respondent is at liberty to treat the applicant as if he had been on leave without pay from 14 August 1997 until 10 November 1997.
The respondent pay to the applicant the remuneration lost by the applicant because of the termination of his employment on 1 September 1995, setting off any amounts already paid by the respondent to the applicant other than amounts to which he was entitled as at 1 September 1995 and any remuneration received by the applicant between 1 September 1995 and the date of his reinstatement in accordance with paragraph 1 of this order, provided that the respondent is at liberty to treat the applicant as if he had been on leave without pay from 14 August 1997 until 10 November 1997, and further provided that the respondent may pay to the Commissioner of Taxation any amounts properly payable by it in satisfaction of the applicant’s liability to taxation on the amounts paid by the respondent.
Liberty is reserved to either party to apply on seven days’ notice in writing to the other party in respect of the fixing of any amount or amounts contemplated by paragraph 3 of this order if the parties are unable to agree upon that amount or those amounts.
I certify that this and the preceding twenty-one (21) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray
Associate:
Dated: 10 November 1997
The applicant appeared in person Counsel for the respondent: Mr A. McNab Person representing the respondent, pursuant to s 469(7) of the Workplace Relations Act 1996: Mr Renato E. Marasco of the Victorian Employers’ Chamber of Commerce and Industry Date of Hearing:
6, 7, 8 & 9 October 1997 Date of Judgment: 10 November 1997
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