Roger Wilkes v Maytec Australia Pty Ltd - [2011] FWA 3700

[2011] FWA 3700

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Roger Wilkes
v
Maytec Australia Pty Ltd
(U2010/14591)

COMMISSIONER MCKENNA

SYDNEY, 17 JUNE 2011

Unfair dismissal - compensation ordered.

[1] Roger Wilkes (“the applicant”) has filed an application pursuant to s.394 of the Fair Work Act 2009 (“the Act”) for an unfair dismissal remedy. Maytec Australia Pty Ltd (“the respondent”) opposed the application on various bases.

[2] The respondent’s principal business is the assembly and sale of lengths of aluminium profile, including accessories such as castors, hinges and fastenings. The respondent has an association with, and reports to, a German company named Maytec Aluminium Systemtechnik GMBH (“Maytec Germany”), which holds a controlling 51 per cent of the ordinary shares in the respondent.

[3] Until his termination of employment in 2010, the applicant had been employed by the respondent since 1999 undertaking a variety of tasks relevant to the respondent’s operations which involved storeperson duties (including forklift driving) and production-related responsibilities such as the operation of machinery (including high speed drilling machinery), as well as other responsibilities as described in the evidence.

[4] The applicant was an apparently well-regarded employee, save as to some concerns that arose in the year or two preceding the termination of his employment. The respondent’s managing director, Michael Harman, was of the view that the applicant was having increasing difficulty in satisfactorily performing his duties during that period. Mr Harman attributed these difficulties to matters such as increasing age and certain physical restrictions. The respondent gave the applicant data entry work to perform instead of some of the heavier physical work, but he allegedly had a high rate of error in such entries. The applicant denied that his abilities or capacity had decreased for the reasons described by Mr Harman. Irrespective of whose version is to be preferred, there was no suggestion the applicant was counselled or warned about any such concerns or that the applicant was otherwise in jeopardy of dismissal as a result of any such concerns held by the respondent. That is, Mr Harman’s evidence indicated the respondent was “very happy with Roger”.

[5] On 28 April 2010, the applicant suffered a stroke while at work and was admitted to hospital. The events that then followed formed the immediate backdrop to the application now before Fair Work Australia, although, as I have noted, the respondent’s evidence indicated there were certain age and physical capacity-related concerns about the applicant prior to his stroke on 28 April 2010. I should note also that, although one of the respondent’s employees, of her own initiative, made some form of notification to the workers’ compensation insurer because the stroke had occurred at the workplace, the applicant himself did not make any workers’ compensation claim with respect to the stroke as he did not consider it was work-related. Hence, workers’ compensation-related issues do not arise in relation to this application.

[6] As a consequence of the applicant’s absence from work following the stroke on 28 April 2010, the respondent redistributed or absorbed the applicant’s tasks among its existing employees.

[7] Following the stroke, the applicant had some speech difficulties and some level of physical impairment. Those initial post-stroke difficulties began to abate following his period of three weeks’ hospitalisation, at which time he was assessed as being fit to return to work but only on light duties, with a view to resuming full duties.

[8] On 1 July 2010, a medical report noted as follows:

“Mr Wilkes attended outpatient clinic today at the ARU at Mona Vale Hospital. He has been doing well since his stroke in late April. Currently he is spending time at home but is considering returning back to work as a fork lift operator. He has admitted that he has been driving occasionally with an L plate with a friend. I have advised him not to drive until he has a driving assessment and have faxed the assessment forms to the Royal Rehabilitation Centre for a date.

On examination today, his BP was 130/70 lying with no postural drop. Neurologically, he did not appear to have any residual weakness but still had some mild dysdiadochokinesis on his left hand and some clumsiness on tapping with his left foot. His gait has improved considerately and is quite steady at the moment. The rest of his examinations were unremarkable.

He has been assessed by the outpatient occupational therapist and will follow him up and make arrangements to assess him for suitability to return back to work.

We shall review him again in 3-4 months time.”

[9] The applicant’s accrued sick leave entitlements exhausted on 6 August 2010. The applicant returned to work on 6 August 2010 and, upon reporting for duty, was handed a letter (being a letter which had been drafted with legal advice from the respondent’s former solicitors). While I note there was dispute on the evidence about the circumstances surrounding the letter, it relevantly read as follows:

“I hope this letter finds you in better health and that your recovery from the recent stroke is progressing well. Together with our production manager, we have assessed the situation regarding your employment in the warehouse and feel that due to your current medical condition, it would be potentially unsafe to allow you back in control of the forklift and the high speed milling and cutting machines which we use on a daily basis. After having used these machines for several years, I am sure that you understand this decision and the potential danger which could be caused by the slightest loss of coordination or a mistake in judgment.

Unfortunately we do not have any other positions currently available which would suite [sic] your skill sets or physical ability. We therefore regret that we are unable to offer you a position in the company at this stage.

According to our records, you have 96 sick days owing of which 28 have been used over the last 10 years. This leaves 68 days available from the day of your accident (28th of April) which takes you through to the 6th of August.

You also have 30 days vacation owing and 8 weeks long service leave which will take you through to November the 12th. We are therefore happy to continue paying your salary through to that date.

I want to thank you for your long service at Maytec and for the support and friendship you have given to me and all the staff over the last 10 years. We hope that you are able to drop by from time to time and keep in touch.

We wish you all the best for your retirement and a speedy recovery.”

[10] Mr Harman’s evidence indicated that the decision to continue to pay the applicant’s accrued entitlements to 12 November 2010 was as a result of a request from the applicant, although the respondent might otherwise have made a lump sum payment on termination of employment.

[11] Mr Harman’s own observations of the applicant were that the after-effects of the stroke were still evident and were such that he considered the applicant would not be able to undertake his former duties. That is, Mr Harman considered the stroke had left the applicant with a range of stroke-related impairments that meant he could not perform his former tasks in an effective way or in a safe way, and, for reasons based on those concerns, the respondent/Mr Harman was disinclined to facilitate the applicant’s requests for a return to work. Mr Harman considered the applicant was suffering badly from the stroke; he considered the applicant was unsteady and “did not seem to be functioning well, mentally”. Heather Lyall, the respondent’s office manager, also gave evidence as to her observations of the applicant following the stroke to about June 2010. It appears to be common ground that, among other discussions, Mr Harman had held discussions with the applicant articulating certain concerns prior to 6 August 2010 in circumstances where the applicant had made earlier representations about a return to work. It appears also the applicant and Mr Harman may have held some discussions about the applicant applying to Centrelink for benefits (and the applicant’s own evidence indicated he had been considering retiring), although the circumstances of the discussions and their import were in sharp dispute.

[12] Upon receiving the letter dated 6 August 2010, the applicant immediately made an appointment to see an occupational therapist for assessment concerning his driver’s licence. In late-August 2010, the occupational therapist reported and recommended to the NSW Roads and Traffic Authority (“RTA”) that the applicant was medically fit to retain his driver’s licence. In early-September 2010, the RTA advised the applicant that the RTA considered the applicant was fit to continue to hold his driver’s licence. The applicant apparently hoped or considered that the advice about the licence would result in a return to work.

[13] The applicant was not, at any stage, given the opportunity to perform any of his former duties following the stroke, although the respondent subsequently gave the applicant a number of paid shifts to perform cleaning and gardening tasks during the period 7 to 16 September 2010, while he was simultaneously otherwise also in receipt of periodic payments with respect to annual leave or long service leave. Mr Harman did not consider the applicant performed those cleaning duties satisfactorily (although he did not counsel or warn him), whereas the applicant said that the only difficulty he had with doing the cleaning was “boredom”.

[14] On 24 September 2010, the applicant’s solicitors wrote to the respondent seeking the applicant’s return to full-time employment. The letter read:

“We hold instructions to act for Mr Wilkes.

We refer to correspondence sent to our client dated the 6th August 2010, effectively dismissing him from his employment as a result of an illness that he has suffered in the workplace.

Your letter conveys the notion that our client’s work responsibilities extended only to driving the forklift and controlling the high speed milling and cutting machines.

We are instructed that this is not the case and that a large portion of his time consisted of Data Entry, picking and packing, and that you have jobs available in these areas.

We are further instructed that notwithstanding your correspondence sent to him terminating his employment you have re-employed him on a casual basis for 4 hours per week and that he receives about $80.00 net per week.

It would appear that your actions can be described as harsh and unjust, considering that he suffered a stroke whilst working for you.

It would further appear that the contract of employment that he entered into with you 11 years ago could be described as unfair as it is likely that it made no provision for his dismissal consequent upon suffering a medical condition.

We ask that our client be restored to his full working hours, failing that we have instruction to bring an action for unfair dismissal against you forthwith.”

[15] The applicant’s evidence suggested that Mr Harman and the applicant had a telephone conversation after this letter had been sent to the respondent, the effect of which was to inform the applicant that there would be no more casual work for the applicant. The content of the conversation as alleged by the applicant was denied by Mr Harman; the respondent’s evidence, for its part, indicated the applicant was not given any further shifts as the cleaning work had been performed unsatisfactorily. One way or the other, the applicant was not given any further shifts after 16 September 2010.

[16] On 20 October 2010, the respondent’s former solicitors sent a reply to the letter from the applicant’s solicitors dated 24 September 2010 which read:

“We act for MayTec Australia Pty Ltd (‘MayTec’) in this matter.

We refer to your letter dated 24 September 2010 addressed to Mr. Harman, Managing Director of MayTec and we respond as follows.

We are instructed that Mr. Roger Wilkes was employed by Maytec in its warehouse as a storeman and that Mr. Wilkes’ primary role was as a forklift/machine operator, but that Mr. Wilkes also performed other supporting duties associated with the warehouse such as heavy lifting, picking orders from high storage shelves using a ladder, packing orders and the dispatch of orders.

We note that MayTec is a small business with a total of only eight (8) employees. As such MayTec comes within the scope of the Small Business Fair Dismissal Code. In line with this, your reference to a contract of employment may better be defined as an offer of employment on very general grounds, noting the letter in question is eleven (11) years ago.

It should be appreciated that over time within any small business the nature and scope of the business and the work positions change, and with such changes the roles and responsibilities of employees within the business also change. No business remains static, new business opportunities emerge with new clients and new products acquired, but some opportunities and clients are also lost or change with time. With changes in the nature of any business comes a general restructuring of the business in order to accommodate the changes.

For a number of reasons MayTec has seen fit to restructure its business operations. Along with the restructuring has been a change in the roles and responsibilities of some employee positions within MayTec, including Mr. Wilkes’ position. As such the restructure has resulted in a change to the position in which Mr. Wilkes was employed, which position no longer exists. It should be noted that no new person has been engaged to replace Mr. Wilkes.

We are also instructed that Mr. Wilkes has been on sick leave for some months as the direct result of a medical condition (stroke). This stroke has left Mr. Wilkes unable to safely perform the duties required of him by MayTec, particularly his former primary function of operating the forklift truck and the high speed cutting and drilling machinery within and about the warehouse. It has also left Mr. Wilkes unable to fulfil duties such heavy lifting and picking product at height using ladders. In this regard Mr. Wilkes has been afforded full support and has availed himself of all of his employee entitlements including sick leave, annual leave and other leave provisions. However, these entitlements will be exhausted on 12 November 2010.

As the safety and security of employees at work is both a legal and moral obligation for any employer, including MayTec, it is apparent that due to Mr. Wilkes’ medical condition, and quite apart from the restructure of positions within MayTec, that Mr. Wilkes is neither fit nor able to safely operate any machinery or a forklift. Mr. Wilkes therefore constitutes a real and potential danger to both himself and to other personnel at MayTec.

Throughout both the period of change within MayTec and throughout Mr.Wilkes’ illness the management of MayTec has provided Mr Wilkes with information as to the changes being made within the company and have attempted in every way reasonably possible to accommodate the needs of Mr.Wilkes. In no way could the actions of Maytec be described as harsh and/or unjust. Indeed, it is for this very reason that Maytec has attempted to assist Mr. Wilkes by providing him with some hours of casual and temporary work as a general handyman. Strict instructions were provided to Mr. Wilkes that he was not to operate any machinery or lift/pick or pack any product during these hours of work. Mr Wilkes was specifically instructed to restrict his duties to cleaning the warehouse and to carrying out certain general duties, all on a casual and temporary basis.

Please feel at liberty to discuss the matter with the writer so that any concerns which Mr. Wilkes has may be addressed and explained.”

[17] On 12 November 2010, the applicant’s paid leave entitlements exhausted. He was not given any work thereafter.

[18] Documentary materials indicated that on 2 November 2010 the applicant contacted Centrelink about his intention to claim an age pension/pension bonus. Centrelink then provided, effective from 17 November 2011 an age pension, pension supplements and rent assistance.

CONSIDERATION - PRELIMINARY MATTERS

[19] The respective cases presented by the parties before Fair Work Australia by way, for example, of filed documentation and the evidence and submissions in relation to earlier proceedings and the proceedings concerning the substantive application have contended for differing and oftentimes internally-irreconcilable positions. I do not consider it necessary to outline the detail of the contradictions; the findings that follow constitute a distillation of matters relevant to my conclusions in relation to the application. I note and have considered the fact there were submissions and evidence contending for contrary conclusions.

Application made within time

[20] The applicant had filed a first unfair dismissal application (U2010/13223) which was subsequently discontinued on 25 November 2010, apparently on the basis it may have been filed prematurely. This application (U2010/14591), which is the applicant’s second unfair dismissal application, was filed on 26 November 2010.

[21] The respondent took preliminary objection to the second application on two bases, including the basis it had been made out-of-time. In a decision in transcript given on 11 March 2011, Cargill C tended to the view that the termination of employment did not take effect until 12 November 2010 and an extension of time was not, thereby, required; but, as the evidence was equivocal and in the event she was wrong as to the date being 12 November 2010, there were exceptional circumstances such as to warrant an extension of time if the application was out-of-time. Given the decision by Cargill C, which was not appealed, I do not propose to further canvass issues as to the date of the dismissal, even though issues relating to the date of the termination of employment were, in part, canvassed afresh before me in terms different from those that earlier had been contended. In any event, I respectfully agree with the conclusions by Cargill C that if it was the case that this application was indeed filed late, there were exceptional circumstances favouring an extension of time.

A person protected from unfair dismissal

[22] There was nothing to suggest the applicant was not a person protected from unfair dismissal. The applicant had been employed by the respondent approximately eleven years. The industrial instrument that covered the applicant was not identified, but the storeperson and related duties he performed were of a type that readily would be considered to be award-covered. The applicant earned $35,000 a year.

Small Business Fair Dismissal Code

[23] Maytec Germany holds 51 per cent of the ordinary shares in the respondent, and the respondent reports to Maytec Germany. The respondent employs fewer than 15 employees and Maytec Germany employs approximately 50 employees. The applicant submitted the Small Business Fair Dismissal Code (“the Code”) did not apply to the termination of the applicant’s employment when the combined number of German and Australian employees was considered, whereas the respondent’s solicitor submitted the respondent was a small business and the Code did apply.

[24] The evidence and submissions were not, in my opinion, sufficiently well-developed to allow a proper consideration of the mixed questions of fact and law as to whether the number of Maytec Germany’s employees should be taken into account in determining whether the Code applied. In any event, even if the respondent was not technically a small business if the number of employees of Maytec Germany were properly to be taken into account, I consider the respondent was, for all practical intents and purposes, a small business of the type envisaged in the Act. That is, so far as the Australian operations are concerned, the respondent is a small business - and, plainly, all the usual exigencies associated with small business status arose in relation to the respondent.

[25] I proceed on the basis that the respondent is a small business to which the Code applied in relation to the termination of the applicant’s employment. The Code provides as follows:

“The Code

Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal.

Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[26] The Code, as cast, seems, by and large, to be directed to dismissals stemming from reasons other than genuine, illness-related reasons. Given that the termination of employment had here arisen in circumstances related to the fact the applicant suffered a stroke, the usual considerations arising in relation to the Code do not appear to be particularly apposite. However, to the extent the Code is relevant and findings are required as to the matters it addresses, I make the following observations.

The Code - summary dismissal

[27] Although certain reliance was placed on the letter dated 6 August 2010 as a letter advising of termination of employment, the evidence in cross-examination of Mr Harman plainly indicated that the letter was not intended to constitute a letter advising the applicant of his dismissal, and Mr Harman was not under the “impression” at the time that it was terminating the applicant’s employment. The letter, Mr Harman said, was intended to facilitate an application by the applicant to Centrelink for pension benefits in circumstances where he was of the view that the applicant was unable to safely perform tasks at work; while the letter did not specifically state the applicant’s employment was being terminated, it nonetheless “in effect” said the applicant’s employment was being terminated.

[28] Counsel for the applicant submitted that the termination of employment amounted to a summary dismissal, without a period of notice or a payment in lieu of notice. The respondent disputed the contention that the applicant had not been given notice of termination of employment, on the basis that “discussion with him of his condition and his inability to work in his former role went on for some time”. The respondent’s submissions also suggested that the applicant was, in effect, on approximately three months’ notice given the letter dated 6 August 2010.

[29] I tend primarily to the view that the characterisation advanced by the applicant may well be a better characterisation than that advanced by the respondent in this respect. That is, it appears that, at least as at 6 August 2010 (if not earlier), the respondent, through Mr Harman, had probably determined that the employment relationship would terminate finally on 12 November 2010, once the applicant had exhausted the balance of his paid leave entitlements. However, there is no evidence that the respondent actually gave the applicant advice that his employment would be terminated on that date and nor was the applicant given a period of notice or a payment in lieu of notice with respect to that termination of employment. The letter dated 6 August 2010 did not, within terms, advise the applicant that his employment would be terminated upon the exhaustion of his paid leave entitlements on 12 November 2010. Moreover, I note Mr Harman’s evidence indicated that the respondent would have been prepared to make a lump sum payment of accrued entitlements upon the termination of the applicant’s employment, but for acceding to the applicant’s request for periodic payments until his paid leave entitlements were exhausted. Had the respondent elected, for example, to determine to terminate the applicant’s employment on a date prior to a date that coincided with the exhaustion of paid leave entitlements for reasons of alleged incapacity or redundancy, it would have been required, by the National Employment Standards, to provide to the applicant a period of notice or a payment in lieu of notice in connection with that dismissal. I would not have thought that the period of time constituting the exhaustion of the applicant’s own, accrued paid leave entitlements in the circumstances of this case inferentially could have discharged the respondent’s obligations concerning the proper provision of a period of notice or a payment in lieu of notice in connection with an intended, albeit not specifically communicated, termination of employment.

[30] If it is the case that the applicant’s termination of employment comprised a summary dismissal effected without a period of notice or a payment in lieu of notice, the circumstances were not such as would be contemplated as being fair within the summary dismissal provisions in the Code.

The Code - other dismissal

[31] If I am wrong in my primary conclusion that the applicant was summarily dismissed without being properly given a period of notice or a payment in lieu of notice in connection with an intended dismissal on 12 November 2010 (for example, that the letter dated 6 August 2010 properly should be construed as having given three months’ notice of the intended dismissal), then the respondent would have been required by the Code to give the applicant reason, warning and opportunity to respond prior to effecting the dismissal. Once again, the provisions of the Code seem somewhat inapt given that the termination of employment stemmed solely or principally from reasons associated with the applicant’s stroke or a redundancy of his position brought about by reason only of a restructure consequent upon his absence from work while on paid leave entitlements following the stroke.

[32] Nonetheless, to the extent the provisions of the Code did apply and arise for consideration, the evidence indicated that Mr Harman expressed concern to the applicant about his post-stroke capacity to return to the duties of his former position, but not to such an extent that Mr Harman informed the applicant that he was at risk of actually being dismissed due to matters related to that perceived lack of capacity. The applicant was not warned by the respondent that he risked being dismissed if his perceived capacity did not improve to a level acceptable to the respondent. The applicant was not otherwise given an opportunity to attempt to demonstrate his level of capacity through, for example, a return to any of the duties of his pre-stroke position on either a full-time or part-time basis; and the applicant was not, by way of further example, given the opportunity to provide medical opinion or evidence as to his capacity to return to the duties of his pre-stroke position on or around the date he was given the letter dated 6 August 2010 or on or around 12 November 2010 when his paid leave entitlements exhausted.

[33] The circumstances described in the evidence do not lead to a conclusion that the relevant criteria contained in the Code have been met or met substantially; and nor did the respondent adduce evidence satisfactorily demonstrating compliance thereto.

Redundancy

[34] The evidence does not support a conclusion that the termination of employment was a genuine redundancy because the respondent no longer required the applicant’s job to be performed by anyone because of changes in the operational requirements of the respondent’s enterprise. There was no evidence of an operational requirements-related change to the respondent’s enterprise as being the cause of the applicant’s termination of employment by restructuring and redundancy. The evidence squarely disclosed that the applicant suffered a stroke and that, as an immediate result of the applicant’s indefinite absence from work following the stroke, the applicant’s duties were absorbed by existing employees. It is an everyday incident of employment that employees cover the work of other employees who are absent on sick leave and other forms of leave; the fact that this similarly occurred when the applicant was absent on paid sick leave, annual leave and long service leave do not lead me to the conclusion that the circumstances here constituted a genuine redundancy of the type contemplated in s.389(1)(a) of the Act. There was no evidence as to the relevant modern award or any enterprise agreement that may have applied and, hence, no evidence one way or the other as to whether the respondent complied with any obligation in a modern award or enterprise agreement to consult about the redundancy. The evidence suggested that the respondent would not, given its small size, have had the capacity to fully redeploy the applicant within the respondent’s enterprise, although the applicant was given some limited shifts to undertake handyperson work. The only other (potentially) associated entity for the purposes of s.389(2)(b) of the Act is located in Germany and, thus, that entity does not relevantly arise in relation to redeployment.

[35] I have noted and accepted the respondent’s evidence which indicated the applicant’s position has not been refilled and that the rearrangement of duties that commenced from the day the applicant suffered the stroke has continued to operate. While it may be accepted that a redistribution of an employee’s tasks among existing employees can constitute a redundancy of an employee’s position, one corollary to the acceptance of the respondent’s contentions applied to the facts of this case would be that the redundancy of the applicant’s former position effectively occurred on the same day the applicant suffered the stroke at work and was admitted to hospital. Indeed, this much was advanced in the respondent’s submissions. That is, the respondent’s solicitor submitted that the restructure/redundancy must have occurred on the day of the stoke, 28 April 2010, when the applicant’s duties were assumed by other employees, even if the dismissal did not then take effect until 12 November 2011. If the respondent had determined on the date of the applicant’s stroke to effect a restructure that resulted in the redundancy of his position (and I would have thought that a problematic proposition in any event), then that advice was not communicated to the applicant around the time of the stroke. Moreover, the applicant’s prognosis was not known on the date of the stroke and, when the applicant first visited the workplace after the stroke, he asked about returning to work but was told he “needed to recover first”. He was not informed there was no job for him to return to because operations had been restructured and his position was redundant.

[36] If the restructure occurred on some date on or after 28 April 2010 resulting in a redundancy of the applicant’s position, there was no evidence that the respondent ever advised the applicant about this restructure and consequential redundancy. The first time that the issue of restructuring/redundancy was raised as a reason for the termination of the applicant’s employment was, it seems, when the respondent’s former solicitors advised of this in correspondence dated 20 October 2010, after the applicant’s solicitors had sought a return to full-time work for the applicant.

[37] The termination of the applicant’s employment was not, in my opinion, an operational requirements-related redundancy of the applicant’s position. If, however, there was indeed a redundancy of the applicant’s position on the date of his stroke or at some indeterminate date thereafter between the date of the applicant’s stroke and the letter dated 20 October 2010, any termination of employment by redundancy was, root and branch, it seems to me, for reasons arising solely or principally from the fact the applicant was absent on paid leave after he had suffered a stroke rather than for any reason that could be characterised as a genuinely-based operational reason.

Dismissal

[38] I am satisfied the applicant’s employment was terminated on the initiative of the respondent and that the termination of employment amounted to a dismissal. I do not accept that the termination of the applicant’s employment was, as was variously otherwise contended, a voluntary, applicant-initiated resignation or an applicant-initiated retirement. The facts are that the respondent would not countenance the applicant’s return to work, despite his requests personally and through his solicitors in the period from May to September 2010, except for a number of casual shifts to do handyperson tasks.

CONSIDERATION - HARSHNESS ETC

Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)

[39] The applicant was an apparently well-regarded employee who had worked for the respondent for eleven years. On 28 April 2010, the applicant suffered a stroke. The evidence indicated that the applicant has recovered well from the initially-debilitating effects of the stroke.

[40] The evidence also indicated the applicant had been seeking to return to work either on a graduated basis or on a full-time basis in the time to the date his paid leave entitlements exhausted on 12 November 2010. The evidence indicated the applicant was deemed fit by an occupational therapist and the RTA to retain his driver’s licence in late-August/early-September 2010, which I conclude would have been the earliest time that it would, by extension, have been appropriate for the applicant to drive/operate a forklift. There was evidence of a report from a specialist physician who had examined the applicant on a number of occasions prior to the preparation of a report dated 29 March 2011 (there was no evidence that was more proximate to the time around 12 November 2010). The medical report, which I reproduce below, indicated that the applicant had made a “very good recovery”:

“Mr Wilkes was admitted to Mona Vale Hospital on the 28th April 2010 with acute onset of dysarthria, left-sided weakness and left facial drop which apparently occurred at work. A CT scan of the brain showed a large right intracerebral bleed.

He was transferred to Royal North Shore Hospital for neurosurgical assessment but no surgery was carried out. He was treated conservatively and started on metoprolol for hypertension.

There was a background history of hypertension, hypercholesterolemia and peripheral vascular disease having had stents in his lower limb vessels for claudication.

He was transferred back to Mona Vale Hospital on the 1st May 2010 and then admitted to the Rehabilitation Unit at the hospital and stayed until the 21st May 2010.

I have reviewed him on a number of occasions since discharge, the last on the 17th February 2011. As expected with these types of strokes, he has made a very good recovery. He lives with his wife in rental accommodation. He is fully independent with most functional tasks at home. He is handling his own money and operating a computer. He was also assessed for driving and passed the assessment.

Neurologically his power and sensation in the limbs bilaterally was basically normal. There was no neglect. His tone and reflexes were increased on the left side and there was mild in-coordination on the left side all consistent with the residual effects from the stroke. He walked normally without aid.

He continues to take his medications Metoprolol and Lipitor and his blood pressure on last assessment was 120/80 lying and standing.

Prior to the stroke he was working full-time for 11 years as a storeman. He described his duties as follows: driving a fork lift, stocking aluminium extrusions, filling orders in preparation for delivery, operating equipment to cut extrusions to size and punch holes, collecting and/or fitting accessories, lifting, using computer spreadsheets and occasionally doing engineering drawings.

As I understand he did return to work for 2 hours per day for 2 days sweeping the floor and was offered 4 hours per week of sweeping.

Given that Mr Wilkes has made a good functional recovery from his stroke then he should be able to do most if not all his duties at work.

I would support an assessment by an occupational therapist at his work. He could be given restricted duties initially and I would expect that he would return to most of his duties, if not all over a short period of time.

The possibility of another stroke is increased compared to the general community but he is now taking regular preventative medication which should reduce the risk.”

[41] There was no medical or specialist evidence adduced by the respondent to contradict the assessment in that medical report. To the extent the respondent determined that the applicant would not be allowed to return to work given concerns about the applicant’s perceived post-stroke (in)capacity relating to the performance of his former tasks, that determination by the respondent was made without advice or opinion from anyone with relevant expertise. For example, Mr Harman’s evidence suggested that the stroke had left the applicant mentally impaired, but there was no medical evidence whatsoever to support that view; indeed that conclusion is against the evidence. The decision to dismiss the applicant was made by the respondent without allowing the applicant to provide anything as to, for example, his then state of fitness. The respondent failed also or refused to allow the applicant to return to the duties of his former position on a basis that would, for example, have allowed observation and assessment of the applicant’s capacity in relation to the performance of his former duties.

[42] It may be the case that if steps consistent with affording the applicant substantive and procedural fairness as to assessment of his capacity to return to work had been adopted the applicant’s employment would have continued beyond 12 November 2010; equally, it is possible that, having approached the matter in a manner that was more appropriate than the course adopted by the respondent, the applicant’s employment may then have been terminated in any event, but more fairly so. As things stand, however, the respondent simply failed or refused to allow the applicant to return to work apart from a number of shifts in September to do handyperson tasks, despite requests made by the applicant and his solicitors. In this respect, it may be noted that Mr Harman’s evidence indicated that, with the benefit of hindsight, the respondent should not have benignly provided the casual work in September 2010 as it seemed to Mr Harman that the applicant “mistook our intentions”.

[43] Counsel for the applicant submitted that what the respondent did here was to conclude, “as if it is some medical expert”, that by looking at the applicant it could assess that he could not return to work. Counsel submitted that the respondent had not sought to submit the employee to a medical examination or ask for a separate medical examination for opinion as to when, if ever, he would be fit for full duties. Nor, he submitted, was there any evidence that the respondent was otherwise prepared to give the applicant on even a supervised, trial return to his duties.

[44] The respondent’s case contended that there was a valid reason for the dismissal based on the applicant’s capacity to perform and safely perform his pre-stroke duties. The respondent appears to have determined not to allow the applicant to return to work on the basis of the applicant’s presumed incapacity or disability. While I accept Mr Harman was firmly of the view that the applicant did not, following his stroke, have the capacity to perform and perform safely the tasks of the position that the applicant undertook before his stroke (and that there was a period of time when the respondent legitimately could have concluded, without recourse, for example, to specialist opinion, the applicant would not then have had the capacity to perform or safely perform the tasks of the position), the evidence does not, however, establish that the applicant was, on or around 12 November 2010, incapable of performing, or safely performing, the inherent requirements of the position. Despite the matters advanced in the respondent’s case, the evidence did not establish that there was an occupational health and safety-based imperative to dismiss the applicant.

[45] The evidence does not lead to a conclusion that there was a valid reason for the dismissal.

Whether the person was notified of that reason

[46] The evidence was somewhat unclear as to whether the applicant was notified, or at least notified properly, of the reason for the dismissal. For example, the letter dated 6 August 2010 referred, among other matters, to concerns about the applicant’s post-stroke capacities and wished the applicant well in his “retirement”, whereas the letter dated 20 October 2010 to operational restructuring and redundancy of the applicant’s position, as well as stroke-related issues. (I note that, otherwise, the case advanced before me by the respondent was that the applicant had voluntarily retired, but that proposition cannot be accepted given the evidence of the various requests by the applicant and his solicitors seeking a return to work.) I think that the submissions for the applicant were persuasive in suggesting that the respondent had equivocated and, in some senses, the applicant did not really know where he stood.

Whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person

[47] The evidence would not lead me to the view that that applicant was given any reasonable opportunity to respond to the issues related to his capacity. It seems that the decision may have been made to terminate the applicant’s employment from at least as early as 6 August 2010 (but possibly earlier), and that decision was made without reference to any current or pending medical advice as to capacity/fitness around 6 August 2010 or on any date thereafter to 12 November 2010.

Any unreasonable refusal by the employer to allow the person to have a support person present to assist in any discussions

[48] There is no evidence that the respondent refused to allow the applicant to have a support person to assist in discussions and, in the time to 12 November 2010, the applicant’s solicitors made representations seeking the applicant’s return to work.

If the dismissal related to unsatisfactory performance by the person - whether the person had been warned about that unsatisfactory performance before the dismissal

[49] The dismissal did not relate to unsatisfactory performance, as such. Rather, it appears to have been premised on the assumption by the respondent that the applicant did not, following his stroke, have the capacity to perform his duties.

The degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal

[50] The respondent, I have concluded, is, for all practical purposes, a small business employer notwithstanding the potential effect of the Maytec Germany operations. I accept that the small, local size of the respondent may have had an impact on the (ultimately deficient) procedures it adopted.

The degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal

[51] While the respondent has an office manager who attends to staff-related matters among her other responsibilities, the respondent does not have any in-house human resource management specialists or expertise. However, the respondent did seek advice from its former solicitors concerning the content of the letter dated 6 August 2010 before providing it to the applicant and the respondent’s solicitors also responded on 20 October 2010 to the request from the applicant’s solicitors which had sought the applicant’s return to work.

Any other matters that Fair Work Australia considers relevant

[52] There were no matters raised by the parties as to other matters of relevance.

CONSIDERATION - REMEDY

[53] I am satisfied that the applicant was unfairly dismissed in that the dismissal was harsh, unjust and unreasonable and that he should have a remedy. The applicant did not seek reinstatement and the remedy of reinstatement (indeed any remedy) was opposed by the respondent. Given it is common ground between the parties that reinstatement would be inappropriate, I am also satisfied that reinstatement would be inappropriate.

[54] I turn now to the remedy of compensation in lieu of reinstatement.

The effect of the order on the viability of the employer’s enterprise

[55] There was no evidence to suggest that an order for compensation in the applicant’s favour would have any effect on the viability of the respondent’s enterprise.

The length of the person’s service with the employer

[56] The applicant had been employed by the respondent since 10 September 1999 until 12 November 2010.

The remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed

[57] The applicant had not received any prior performance-related or conduct-related warnings and, although there was some suggestion that the applicant’s performance had deteriorated in the prior year or two, the respondent was nonetheless “very happy” with the applicant. The applicant was 67 years old when his employment was terminated and file materials suggest the applicant had expected to work with the respondent until he turned 70, at which time certain pension-related benefits would have maximised, although it may be noted there was evidence that he had been considering retiring following the stroke.

[58] Unless the respondent had determined to terminate the applicant’s employment, it may be expected that, absent any other considerations, the applicant would have continued to work until the date he had determined to retire - most likely when the pension-related benefits would have maximised. In this respect, I note also the applicant’s evidence that he would rather have a job than a pension.

The efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal

[59] The applicant endeavoured to return to work for the respondent and to avert the termination of the employment relationship. That is, it is common ground that the applicant had made a number of requests to return to work between May and September 2010. The respondent would not permit the applicant to return to work other than on the basis of the provision of limited work in September 2010 when the applicant’s accrued paid leave entitlements were otherwise being paid periodically to an end-date of 12 November 2010. The applicant also sought, through his solicitors, a return to full-time work prior to 12 November 2010. Although these events preceded 12 November 2010 and may not strictly arise as evidence of attempts to mitigate loss suffered because of the dismissal, I think they may be considered, in a more generalised sense, to be efforts by the applicant to mitigate what proved to be eventual income losses once his paid leave entitlements exhausted. The applicant’s actions demonstrate that he was endeavouring to return to work with the respondent so as to mitigate any losses, but the respondent did not allow the applicant to work other than on a limited basis in September 2010.

[60] The evidence indicated that the applicant has not applied for any alternative positions since his termination of employment with the respondent (he has derived income from his superannuation and Centrelink benefits) although I note and accept the submissions by the applicant’s counsel that, given the applicant’s age (now 68) and given that he had suffered illness, he would have been unlikely to have obtained alternative employment and, hence, income from alternative employment.

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

[61] There was no evidence of any remuneration from employment or other work. However, the applicant has been in receipt of certain Commonwealth Government benefits from Centrelink effective from 17 November 2010 (and the applicant will be expected to advise Centrelink of the order for compensation arising from these proceedings).

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

[62] There was no evidence that the applicant would be reasonably likely to obtain any income (from other employment or work) during the period between the making of the order for compensation and the actual compensation. However, I would infer that the applicant would continue to receive certain Commonwealth Government benefits from Centrelink during this period.

Any other matter that Fair Work Australia considers relevant

[63] There were no matters raised by the parties as to other matters of relevance. I do not accept the respondent’s submission that an applicant “approaching retirement age”, if found to have been unfairly dismissed, could not claim the maximum compensation.

Misconduct-related reduction

[64] There are no issues of misconduct in relation to the termination of the applicant’s employment that would operate to reduce the order for compensation.

Shock, distress etc

[65] The order for compensation does not include any component of the type described in s.392(4) of the Act.

Order for compensation

[66] Counsel for the applicant submitted that is an application where a case has been established for an order of 26 weeks’ wages calculated on the applicant’s annual wages of $35,000. Having considered the totality of evidence and submissions in the context of the considerations in the Act, I am well-satisfied that it is appropriate to accept counsel’s submissions in this respect as to remedy. An order to that effect has been issued in conjunction with the publication of this decision.

COMMISSIONER

Appearances:

Mr A McQuillen of counsel, for the applicant

Mr D Palmer, solicitor for the respondent

Hearing details:

Sydney

2011

6 & 7 June

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