Wally Gawron v SCI Operation Pty Ltd (t/as Smorgan Moulded Fibre Products and/or Pulp Moulded Containers Pty Ltd)

[1995] IRCA 94

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 718 of 1994

BETWEEN:

WALLY GAWRON
Applicant

AND

SCI OPERATIONS PTY LTD (T/AS SMORGON MOULDED FIBRE PRODUCTS AND/OR PULP MOULDED CONTAINERS PTY LTD)
Respondent

REASONS FOR JUDGMENT

15 March 1995  Judicial Registrar Fleming

History

Wally Gawron (“the Applicant”) has worked for the Respondent since 1959.  He commenced his employment with the Respondent when he was 15 years old and he has worked in the cannery, the moulded fibre products area, the paper mill, the meat works and in the cardboard pulp area, making egg cartons.

Prior to his dismissal Mr Gawron was working as a Production Supervisor and his duties involved supervising nineteen staff.  He had to report to the production manager, attend meetings, he had some say in relation to hiring and firing, checked compliance with safety regulations, checked times people came in and out and was involved in quality control.  He further had to ensure that the line kept running.

In about mid 1991 he slipped at work and injured his back.  Although he took no time off work he suffered some back pain

In January 1992 when the Applicant was on a holiday he was involved in a tragic car accident which caused the death of one of the occupants of the car in which he was a passenger.  His injuries were considerable and he still continues to suffer psychological reaction as a result, this was evidenced throughout Mr Gawron’s evidence.  Understandably he became upset when speaking of it and his evidence was that he is on medication and still has sleeping difficulties and has suffered a behavioural change.

In November 1992 he underwent major back surgery and in January 1993 he had a right ulna nerve relocation of the right elbow that was consequent on the car accident.  His evidence was that he has further dental work to be carried out and that he may need further surgery.

Circumstances Surrounding His Dismissal

Mr Gawron has not returned to work since the end of 1991.  As a result of the car accident he has received payments from T.A.C. and the Workcover Authority and in addition to those payments he has received varying amounts of make up pay commencing on 18 January 1992 and ceasing on 27 May 1994, which amounts in total to $35,886.70.  The Respondent has submitted that a proportion of this figure is made ex gratia.

Mr Gawron gave evidence that at no stage was he ever formally offered a position at work.  His evidence was that it was discussed with him generally that he could return to work and Mr Smith in fact said to him words to the effect that “there would always be a job for you when you’re well”.  Mr Smith was the senior manager at the Respondent’s premises at about the time when it is alleged that a job offer was made to Mr Gawron in September 1993.  Mr Gawron’s evidence was further that he denied there had been a  further job offer by Mr Wilson in January 1994 in relation to Mr Wilson’s department.  Mr Wilson gave evidence that such an offer was made.

Mr Gawron met with the representatives of the Respondent namely Mr Rosenthal (Mr Smith’s successor) and Mr Pearce on 31 May 1994.  Mr Rosenthal and Mr Pearce went to Mr Gawron’s home and handed him a letter, which is marked Exhibit D, stating that:

“Despite our several offers for you to return to work, and medical opinions that you are able to return to work, you have not returned as is required.

This can only be taken to mean that you have abandoned your employment.  The company accepts your rejection of the offer of continuing employment and therefore, all entitlements as at 30 May 1994 are set out in the attached summary and a cheque is attached as discharge of the company’s obligation of these entitlements.”

Attached to the letter of 31 May is the statement of termination with a cheque and a schedule detailing the long service leave entitlement and the annual leave entitlement.  Mr Gawron was paid out the amount of $16,805.95 which represented $11,083.90 in long service leave and $5,722.05 in annual leave.  There was no provision for any other entitlements in that pay out.  Mr Gawron gave evidence that at that meeting he was advised that he was being terminated and handed the letter.

Section 170DC(a)

It was argued by Counsel for the Respondent that the applicant was guilty of misconduct in that he had refused and/or failed to return to work and/or that the Applicant had the capacity to return to work.

Section 170DC provides that an employer must not terminate an employee’s employment for reasons related to the employees conduct or performance unless the employee has been given an opportunity to defend himself against the allegation made.  The section introduces into employment law the concept of procedural fairness.  Employees, other than excluded employees, now have a legal right to be treated fairly.  If an employee is denied procedural fairness, it will generally be unlawful to dismiss him, even for serious misconduct or significant deficiencies in work performance.

There seems to be no dispute as to what occurred on the day of dismissal at the Gawron home.

Mr Gawron gave evidence that Mr Rosenthal telephoned him.  Mr Gawron had never met Mr Rosenthal.  Mr Gawron’s evidence was Mr Rosenthal said “I want to see you, I want to talk to you about your future”.

Mr Gawron gave evidence that in a further telephone conversation Mr Rosenthal is alleged to have said to Mr Gawron:

“‘We’re going to come down with a cheque and pay you off.’  So I said, ‘Well, that’s very sad,’ I said, ‘after all the years I work for company and I - I reckon I done my best all my life for the company’ and he says ‘Well, when can we come?’  I said, ‘Well, if you’ve got to come, what can I say?’  So he’s supposed to come one day, then he ring back.  He says they can’t make it, come that day, so he made another day.  That was about 4 days after he rang me the first day.  That’s the closest talk I had with him, 4 days before, or 5 days.  No more than that.  So he come down with Steve Pearce.  I’m not sure, what was it - it was on the 31^st when I went to see my specialist.  The same day I went to see my specialist.  They com in, come in, I let them inside.  First he said, look sorry, ‘It’s not a pleasure way to come down to see you.’  Well, I knew already.  I said, ‘Oh well, let’s -’  I lost my job.  I knew straightaway.  So he sit down, he put the papers in from of me and he says, ‘This is your cheque, this is your money.’  I looked and I said - oh - I sort of didn’t know what to say.  First thing he’d said to me after all the years, that’s the way they pay you off.  You know, didn’t even come and chat with me or, you know, some office.  That is something, something, at least, you know, thank you for all the years.  no, no such a thing.  He was very sort of ignorant to me too.  Very, very sort of, not nice way he’d done to me.  He’s very hard man, I think.  And Steve Pearce just sit there and say nothing, because he’s come down with Steve Pearce.  Steve Pearce just sit there.  And he was doing all the talking.  He said to me, ‘Can you sign this?’  I said, ‘Look, for my 35 years you give me $16,000.00 for all my work.’  Not even - I was expecting, okay, at least some redundancy for my - for my work I did for all the years.  And I work hard.  I work in the - well, that’s no guarantee to this, because I can write a book about this place.

Just take a look at this, would you? ---Yes.  That’s the one he come down with.  And when I read this - this, ‘Despite of our offer to you return to work’ ... indistinct ... I couldn’t believe.  I just couldn’t believe.  I just - I just burst out crying because I couldn’t believe I could get such a thing from company which I really loved to work for it, Smorgons company, and Mr Rosenthal, if I signed here, he could do this, when he never spoke to me before.  He never seen me before.”

Mr Rosenthal gave evidence that he spoke to Mr Gawron twice before the dismissal and he agreed that in the second telephone call he said he was “coming out to his home ... [to pay him off]”.

At no stage on that day did Mr Gawron have an opportunity to defend himself against the allegation that his absence from work amounted to misconduct.

Mr Gawron’s evidence is consistent throughout in so far as he has maintained that no formal job offers were made and at all stages prior to the involvement of Mr Rosenthal Mr Gawron’s return to work was discussed in an informal way where it was Mr Gawron’s understanding that he could return to work when he had recovered.  Mr Gawron’s Counsel relied on the medical certificates of Dr Kortis which were unchallenged that, Mr Gawron was currently totally incapacitated and Mr Rosenthal was aware that Mr Gawron was not 100% fit to return to work.  Mr Rosenthal in his own evidence said:

“It got to a point where I’d got advice that Mr Gawron had had a medical all clear as far as his physical condition was concerned.  We made suggestions as to coming back to work and it appeared that he couldn’t come back to work, for reasons as to which he is better aware than I.”

Mr Rosenthal furthermore could not identify any formal job offer made to Mr Gawron but relied instead on “suggestions” to get Mr Gawron back to work.

Mr Pearce who is the Respondent’s Rehabilitation Officer and the person who closed Mr Gawron’s rehabilitation file in November 1993, gave evidence that no firm offer was ever made to Mr Gawron.  Certainly no offer was put in writing.  Mr Pearce gave evidence that he had discussions with Mr Gawron:

“I’d be discussing different things that they do their normal job and also look at and discuss things with them that they might be able to do when they’re fit enough to return to work.”

Furthermore Mr Pearce gave evidence that:

“from the time I spoke to Wally in November, he would have thought the case would have been closed then because that’s what I had discussed with him.”

However, there was no evidence that at any stage was Mr Gawron advised that given the length of time he was absent from work he may be dismissed or that if he refused or was unable to return to work he would be dismissed.

Mr Rosenthal gave evidence that he relied  on the advice of Mr Pearce and Mr Wilson in relation to the future of Mr Gawron’s employment.

Mr Pearce however gave evidence that in relation to a firm job offer being made that was not his role in the company but rather “firm offers were normally looked after by another section of the company”.

Unfortunately for the Respondent there has been a lack of co-ordination in relation to the dismissal of this employee and Mr Rosenthal conceded that “there is no set procedure for termination”.

On 31 May 1994 the day of the dismissal I find that Mr Gawron was not accorded procedural fairness and the absence of procedural fairness in these circumstances amounts to an unlawful dismissal of the Applicant.

Abandonment Of Employment

It was also argued that the Applicant had abandoned his employment.  This was the reason given for the dismissal as detailed in Exhibit D, the letter of dismissal.  It states “abandonment of employment” as the reason.  On the evidence before me it is apparent “suggestions” were made to Mr Gawron and returning to work was discussed generally.  It is apparent to this Court that Mr Gawron at not stage believed he was being offered a position which if he refused would lead to his dismissal.  Mr Gawron appeared to be surprised by the Respondent’s allegation of abandonment.  The previous discussion concerning the alleged misconduct of the Applicant is relevant in this context.  No formal and/or firm offers of employment were made to Mr Gawron.  I am satisfied that in the circumstances of this case the Applicant has not abandoned his employment.

Given my finding that the Applicant did not abandon his employment and given the employer’s failure to accord procedural fairness I find that the decision to dismiss was contrary to the Act.

Remedy

Pursuant to s.170EE this Court has the power to re‑instate Mr Gawron.  It was submitted by Mr Bingham that if it is not appropriate to appoint Mr Gawron to the very position in which he was previously the Court can re‑instate him to another position.

The Court has some flexibility in relation to re‑instatement of an employee and Mr Rosenthal gave evidence that there are other jobs, apart from Production Supervisor, which Mr Gawron could do, that is training, health and safety.

Section 170EE(1) of the Act gives the Court an overriding discretion to refuse to order re‑instatement in circumstances were re‑instatement is impracticable.

Pursuant to s.170EE(2) the remedy of compensation is available only “if the Court thinks that re‑instatement of the employee is impracticable”.

As submissions were not made by Counsel in relation to the meaning of “impracticable” I rely on the decision of Liddell v Cheryl Lembke T/As Cheryls Unisex Salon, (Industrial Relations Court of Australia, Wilcox CJ, Keely and Gray JJ, unreported, 3 November 1994, 139/94) wherein Wilcox CJ and Keely J stated that “‘impracticable’ does not mean ‘impossible’ it means more than ‘inconvenient’ or “difficult’”.

Re‑instatement is the primary remedy of this legislation.  The Applicant seeks re‑instatement  and the Respondent has not provided evidence to suggest that it cannot provide suitable employment for the Applicant subject to the Applicant’s own limitations, quite the opposite.  Mr Rosenthal gave evidence that there was a position Mr Gawron could have filled had he been able to return to work on 31 May 1994

In this proceeding re‑instatement should be provided if it can be done.  The Respondent can still employ Mr Gawron to another position.  This Court accepts that it will be difficult and inconvenient for the Respondent to accommodate the Applicant due to his current condition of health but it is certainly not impossible.

The submission by Mr Bingham that Mr Gawron be re‑instated and to work out his accrued sick leave entitlements during which time a return to work plan can be created is a sound solution especially given the length of service of Mr Gawron and way he was dismissed.

The Applicant tendered the Enterprise Agreement 1994.  Clause 22 of the Agreement deals with sick leave.  The clause states:

“22.1Entitlement to sick leave shall be 35 hours during the first year of employment and 70 hours in the second and subsequent years of employment.  The First of July is the relevant date for the allocation of sick leave entitlement so the initial entitlement of 70 hours is prorated until 1 July.

Out of this entitlement an employee who is absent from work on account of personal illness or injury shall be paid for this absence subject to the following conditions:

The employee shall not be eligible for such payment or any period in respect of which there is an entitlement to Worker’s Compensation.

The employee shall provide to the satisfaction of the employer of the inability, on account of the illness or injury, to attend for duty on the employee shall advice the employer, of their inability to attend for duty stating  as far as practicable the illness or injury and the estimated duration of the absence.

In the event of an employee’s dying, the employer shall pay to the deceased employee’s estate the monetary value of all sick leave credits.

Where an employee retires due to age or incapacity or employment terminates, any unused sick leave credits shall be paid to the employee.

Sick leave credits may be subject to agreement where employees with 10 years service or more may elect to cash in their excess credits over 70 hours at the agreed wage rate applicable for classification.

Sick leave credits will be paid out in cases of redundancy for employees irrespective of service.

Mr Rosenthal gave evidence that the Agreement came in around September 1994 and prior to this agreement it seems Mr Gawron’s contract of employment was uncertain.  Mr Rosenthal gave evidence that Mr Gawron was not on an award nor did he have a written contract but:

“I think everyone had a pretty general idea of what their pay and conditions were and what it was based on .  It was all in payroll.”

Mr Rosenthal gave evidence that Mr Gawron was “staff” and that staff were not on awards and that staff would be treated more generously than award workers.

Mr Bingham relied on the decision of Wootten J. in Finch -v- Sayers [1976] 2 NSWLR 540. The facts of the decision are somewhat similar to this case. In that case the terms of Mr Finch’s employment were deficient in express terms and it was thereby left to be deduced from the nature of his employment. His Honour said (at p.549):

“today, an important aspect of an employment may be to provide security for an employee in just such eventualities as prolonged illness, and that part of the aspect in this case was to reward Finch’s long and faithful service with the benefits of the insurance policy and the superannuation deed.”

In my view the Enterprise Agreement can be relied upon as a guide to the Applicant’s sick leave entitlements.  Mr Rosenthal said that staff would be treated more generously than award workers.  On this basis the applicant would have accumulated a minimum of 70 hours sick leave per year after his first year of service.  On this basis the Applicant’s sick leave should still be continuing.

It is the Court’s view that when Mr Gawron’s sick leave entitlement expires, his employment will not automatically determine.  It simply means that the Respondent is no longer required to pay him.

In making my decision I take into account the generosity of the Respondent in making ex gratia make up payment to Mr Gawron in excess of 52 weeks and I also take into account Mr Gawron’s length of service with the Respondent, that being 35 years.

Order Of The Court

1. THAT, the Respondent re‑instate the Applicant by reappointing him to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination.

2. THAT, the Respondent pay to the Applicant the remuneration he would have received but for the termination that amount being $15,516.00.

3. THAT, the Applicant’s employment with the Respondent be treated as being continuous for all purposes.

I certify that this and the preceding ten (10) pages are a true copy of the reasons for judgment of Judicial Registrar Fleming.

Associate:

Dated:  

Solicitors for the Applicant: Counsel for the Applicant:	Patrick Robinson & Co. Mr P. Bingham
Solicitor for the Respondent: Counsel for the Respondent:	Blake Dawson Waldron Mr B. D. Lawrence
Dates of hearing:	20 & 30 November 1994
Date of Judgment:	15 March 1995

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 718 of 1994

BETWEEN:

WALLY GAWRON
Applicant

AND

SCI OPERATIONS PTY LTD (T/AS SMORGON MOULDED FIBRE PRODUCTS AND/OR PULP MOULDED CONTAINERS PTY LTD)
Respondent

MINUTES OF ORDER

15 March 1995  Judicial Registrar Fleming

THE COURT ORDERS THAT:

1. THAT, the Respondent re‑instate the Applicant by reappointing him to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination.

2. THAT, the Respondent pay to the Applicant the remuneration he would have received but for the termination that amount being $15,516.00

3. THAT, the Applicant’s employment with the Respondent be treated as being continuous for all purposes.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

CATCHWORDS

INDUSTRIAL LAW - Abandonment of employment - remedy - whether reinstatement practicable.

Industrial Relations Act 1988, ss.s.170DC, 170DE, 170EE

Finch -v- Sayers [1976] 2 NSWLR 540

Liddell v Cherly Lembke T/As Cheryls Unisex Salon, (Industrial Relations Court of Australia, Wilcox CJ, Keely and Gray JJ, unreported, 3 November 1994, 139/94)

Liddell v Cheryl Lembke T/As Cheryls Unisex Salon, (Industrial Relations Court of Australia, Wilcox CJ, Keely and Gray JJ, unreported, 3 November 1994, 139/94)

Wally Gawron -v- SCI Operations Pty Ltd (T/As Smorgon Moulded Fibre Products   And/Or Pulp Moulded Containers Pty Ltd)

NO. VI 718 of 1994

Before:     FLEMING JR

Place:      MELBOURNE

Date:       15 MARCH 1995