T9428
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TASMANIAN INDUSTRIAL COMMISSION Decision Appealed - See T9569 and T9577 Industrial Relations Act 1984 Lorraine May Hawksley and Launceston Linen Service Pty Ltd
Industrial dispute - alleged unfair termination - contract of employment not frustrated - valid reason for termination - summary termination unfair - compensation ordered REASONS FOR DECISION On 23 February 2001, Lorraine May Hawksley (the applicant) applied to the President, pursuant to Section 29(1A) of the Industrial Relations Act 1984, for a hearing before a Commissioner in respect of an industrial dispute with Launceston Linen Service Pty Ltd arising out of the alleged unfair termination of her employment. On 1 March 2001, the President convened a hearing before myself at the Supreme Court, Cameron Street, Launceston at 11.00am on Wednesday 28 March 2001. When this matter came on for hearing Mr R Collinson, a solicitor, sought and was granted leave to appear for the applicant. Mr A Cameron, of the Tasmanian Chamber of Commerce and Industry Limited (TCCI) appeared for the employer, together with Mr J Young. During opening submissions Mr Cameron foreshadowed a preliminary matter in that the employer contended that the contract of employment had been frustrated and that there had not been a termination at the initiative of the employer. No objection was however raised in respect of Mr Collinson's proposal for a conciliation conference. The ensuing conciliation conference failed to resolve the dispute and the parties agreed that the matter should proceed to a hearing forthwith. It was further agreed that the preliminary matter would be argued in the context of the overall application. For convenience, wherever the expression termination is used, it is a reference to the ending of the contract through the doctrine of frustration, or a termination at the initiative of the employer, without implying a predisposition to either. Evidence was taken from the following witnesses:
Background Ms Hawksley commenced employment on 10 July 1996 as a Laundry Hand employed on a full-time basis. Whilst there was some debate as to the nature of duties outlined during the interview process, it was common ground that very shortly after commencement, the task of feeding larger items into the ironing machine occupied a significant proportion [at least 50%] of her overall duties. In December 1996 Ms Hawksley experienced pain to her right arm which continued "on and off" through to June 1997. In July 1997 Ms Hawksley took annual leave and the symptoms gradually improved. Upon return to work the symptoms became worse. On 9 September 1998 the symptoms intensified and Ms Hawksley consulted her General Practitioner, Dr Allen. Dr Allen issued a sickness certificate for the period 11 to 21 September. Ms Hawksley returned to work on 21 September on "light duties". Whilst it was not tabled as evidence it is understood that Dr Allen had specified that Ms Hawksley should not work on the ironing machine or lift above shoulder height. This requirement was largely accommodated by the employer. Ms Hawksley submitted a workers' compensation claim. On 20 January 1999 the Workers' Rehabilitation and Compensation Tribunal found a genuine dispute to her claim on the basis that causation and a precise diagnosis was an issue. In February 1999 Ms Hawksley experienced sudden left shoulder pain when lifting sheets onto a shelf above shoulder height. On 19 March 1999 Ms Hawksley consulted Dr Hilton Francis, a Consultant Rheumatologist, who subsequently provided a written medical report1. The symptoms continued throughout 1999 although Ms Hawksley continued to work her normal hours, albeit on the modified duties. Ms Hawksley was unfit for work from 18 to 23 November 1999 as a consequence of symptoms experienced in her left arm. On 13 February 2001 Ms Hawksley experienced increasing pain in her right arm. She consulted Dr Allen who provided a sickness certificate2 for the period 13 to 15 February. This certificate had the following notation in relation to modified duties:
This notation covered the period 16 February to 16 April 2001. Immediately following the medical consultation Ms Hawksley telephoned Mr Young. The substance of this conversation is covered later in the decision. Ms Hawksley returned to work on 16 February. She was called to a meeting with Mr Young. Mr Vocke was also present. Mr Young asked Ms Hawksley to get a "certificate of clearance" by 20 February. Ms Hawksley worked normally on 19, 20 and 21 February. Towards the end of the shift on 21 February, Ms Hawksley was called to a further meeting with Mr Young in the presence of Mr Vocke. Mr Young asked whether Ms Hawksley had obtained the certificate of clearance from the doctor, to which she replied, "No". Mr Young then said:3
Ms Hawksley was paid wages and accrued entitlements up to the time of termination. Events Immediately Prior to "Termination" On 13 February 2001 Ms Hawksley experienced an increased pain and ache in her right arm. After consulting with Mr Vocke and her immediate supervisor, Ms Hawksley went home pending an appointment with Dr Allen at 4pm. Dr Allen issued a sickness certificate for 13 to 15 February together with a notation concerning modified duties for the next two months4. At approximately 5pm Ms Hawksley telephoned Mr Young. Her recollection of the conversation was as follows:5
And later under cross-examination:6
In relation to the same conversation Mr Young said:7
On 16 February Ms Hawksley was called to a meeting with Mr Young. She was offered the opportunity to have someone else present, and although Ms Hawksley initially requested a "union rep", it is common ground that she was happy with the presence of Mr Vocke. Ms Hawksley recalled the substance of that meeting as follows:8
Mr Young said in relation to this meeting:9
The slight inconsistency between the evidence of Ms Hawksley and Mr Young is of some importance as the time frame of the medical clearance was a subject of debate. Mr Vocke's recollection of this meeting was as follows:10
Ms Hawksley did not attempt to obtain the medical clearance requested by Mr Young. Her explanation for this was:11
Duties and Work Performance When interviewed for the position Ms Hawksley said there was no mention of feeding into the ironer. Mr Young could not recall the specifics of the interview but said that Ms Hawksley was employed as a laundry hand and that involved "... whatever is required in the laundry, except unloading and loading washing machines".12 He went on to say that the predominant task is the ironing machine which "... is probably the heart of the place".13 Irrespective of what was discussed at the initial interview it is common ground that Ms Hawksley was engaged in feeding the ironing machine within the first week of her employment. The evidence varied as to the amount of time spent on this task but certainly it would not have been less than 50%. Following the onset of the injury Dr Allen issued a number of sickness certificates with the following notation:14
Mr Young said he was able to accommodate Ms Hawksley in that position and said the fact that a workers' compensation claim had been made had no bearing on this decision.15 Ms Hawksley said that after the change in her duties she spent about two thirds of the day in the dry cleaning section with the balance of the day on folding and feeding smalls into the ironing machine. She said that the only restriction was feeding larger items into the ironing machine. Further, she had never refused to do any task.16 In terms of impact on the business Mr Young said:17
Mr Young said that whilst the dry cleaning function was not a role normally performed by laundry hands, "It's not impossible that they would, if they weren't busy down the back ...".18 It was evident that an informal roster system was in place to facilitate rotation of tasks, particularly in relation to the ironing machine. According to the evidence of Ms Hawksley, of the seven employees in the laundry section, two worked on the ironing machine only occasionally. The three employees in the dry cleaning section did not work on the ironing machine at all.19 Mr Young described the work performance of Ms Hawksley as "fairly good".20 Asked whether he had any difficulties with the quality of Ms Hawksley's work, Mr Vocke responded, "No. Definitely not".21 Mr Vocke agreed that notwithstanding the fact that she was rotated into other positions, Ms Hawksley still made a useful contribution to the factory, and further, her pay for the work she was performing was just. According to the evidence there had been no formal complaints from other staff members. Mr Young said, "There were murmurs".22 Mr Vocke referred to "... off the cuff remarks",23 and later:24
In terms of absenteeism, Ms Hawksley had sickness certificates relating to the injury for a total of 19 days over a two and a half year period, translating to nine days in the past two years and three days in the last 12 months. Mr Vocke referred to eight or 10 occasions in the past 18 months when Ms Hawksley went home during a shift as a consequence of soreness. It is not clear whether there is any crossover with the certificates referred to above. The Nature of the Injury On 19 March 1999 Ms Hawksley attended Dr Hilton Francis, a Consultant Rheumatologist. Dr Francis subsequently provided a detailed medical report dated 11 August 1999.25 This report reads in part:
Doctrine of Frustration Mr Cameron argued that the contract had come to an end as a consequence of the doctrine of frustration. As such, the Commission lacked jurisdiction to determine the matter in accordance with the unfair termination provisions of the Act. His position was well summarised as follows:26
Simply stated, Mr Cameron contends that Ms Hawksley was employed as a Laundry Hand and that a significant component [50% or more] of the duties of a laundry hand involve feeding the ironing machine. Ms Hawksley can no longer perform this role and as a consequence, through no fault of her own or the employer, the contract is ended through frustration. Mr Cameron urged the Commission to disregard the terms used by the parties at the final meeting and cited in support of this the authority of Hirji Mulji v Cheong Yeu:27
On this point I accept Mr Collinson's construction that the language used is not necessarily weighty evidence but it is a factor to be taken into consideration. Mr Cameron said that the alternative duties arranged following the injury were as a consequence of the requirements of the Workers Rehabilitation and Compensation Act 1988, and should not be construed as a permanent change in the duties contemplated under the contract. Whilst I accept that this may have been a factor of some influence, I do note Mr Young's evidence that this action was taken as a consequence of the medical certificate, and the workers' compensation had no bearing on the decision. Mr Collinson rejected the frustration argument as being "... at best spurious and at worst arrant nonsense".28 Mr Collinson cited what he described as the leading decision on the doctrine of frustration being Finch v Sayers.29 In this decision Wooton J said at page 548:
And later at page 558:
Wooton J adopted the judgement of Donaldson J in Marshall v Harland & Wolff Ltd.30 Donaldson J said that in addressing the question of frustration, a Tribunal must ask itself:
In considering this question the judge said a Tribunal should take account of a number of factors which Mr Collinson urged that I apply to Ms Hawksley's case. These factors are considered below: 1. The terms of the contract, including the provisions as to sickness pay Mr Collinson argued that where there is full-time work with provision for sick pay, a court is less likely to import frustration where that occurs as opposed to a contract of shorter duration with no sick pay. I accept that this is consistent with the finding of Donaldson J. Applied to the instant case, it is clear that Ms Hawksley had not exhausted her sick leave entitlements. Even if that was not the case, on the authority of Finch, frustration would not be a likely outcome if there was a reasonable prospect of a return to work in the foreseeable future. Mr Collinson further contended that there was nothing said at the point of engagement indicating that feeding the ironer was at the core of the contract. This goes to the critical issue of this case which I will address separately. 2. How long the employment was likely to last in the absence of sickness On this question I accept Mr Collinson's contention that where the employment is ongoing and indefinite a court is less likely to apply frustration. In the case of Ms Hawksley, she had been employed for four and a half years and there is nothing to suggest that ongoing employment was not available. 3. The nature of employment Mr Collinson correctly interpreted this as meaning that a court is less likely to import frustration where the employee is one of many doing essentially the same task or tasks as distinct from someone holding a key or unique position within a business. Ms Hawksley was one of a number of laundry hands and was not a key player in a unique position within the Company. 4. The nature of the illness or injury and how long it has already continued and the prospects for recovery According to the medical report of Dr Francis31 the injury is minor. Nonetheless it is of relatively long standing and there is no real prospect of a change for the better in the foreseeable future. 5. The period of past employment Under this heading Donaldson J. said:
Mr Collinson submitted that this logic should extend to the nature of the duties performed. He said:
This brings me to a consideration of what I consider to be the critical issue. That being, in the terms of Donaldson J, whether the future employment of Ms Hawksley would be "... a thing radically different from that undertaken by [her] and agreed to be accepted by the employer under the agreed terms of [her] employment?" Ms Hawksley said that the task of feeding the ironing machine was not specifically raised during the initial interview. Mr Young understandably could not recall the details of the interview. In the circumstances I can only conclude that the task of feeding the ironing machine was neither specifically included or excluded from Ms Hawksley's contract of employment. It is however agreed that this task did form a substantial part of her duties soon after commencement. I also accept without hesitation that this task is contemplated within the range of duties normally associated with that of a laundry hand. I therefore conclude feeding the ironing machine is a duty which could reasonably form part of Ms Hawksley's contract of employment. On the same rationale I also conclude that tasks in the dry cleaning section of the business could also be contemplated in Ms Hawksley's contract of employment. Presumably this task was neither specifically ruled in or out at the initial interview. Mr Young said that it "was not impossible" for a laundry hand to perform this role. Notwithstanding her inability to feed heavy items into the ironing machine, the evidence is that Ms Hawksley was an otherwise productive employee. There is no evidence to suggest that her work was supernumerary in nature or that the employer had suffered economic damage as a consequence of the revised duties. But for the action taken by Mr Young, I have no doubt that Ms Hawksley would still be performing her work role today in the same manner as she had for at least the previous two years. In Finch v Sayers, Wootten J observed:32
Having regard to all the circumstances I am unable to conclude that Ms Hawksley's contract of employment came to an end as a consequence of the doctrine of frustration. It follows that I find that this was a termination at the initiative of the employer and that Mr Cameron's preliminary jurisdictional argument is rejected. Was the Termination Fair in all the Circumstances? Having found against the employer on the frustration argument, it is now necessary to assess the termination against the specific requirements of Section 30 of the Act. I turn firstly to the question of whether there was a valid reason. Section 30[3] states:
Section 30[4] specifies a number of matters which are specifically excluded as valid reasons for termination. So far as this application is concerned, the following exclusions are relevant:
I turn firstly to the question of absenteeism. According to the evidence Ms Hawksley did not, as a consequence of her injury, incur any absences necessitating a medical certificate between 23 November 1999 and 13 February 2001. Mr Vocke spoke of some "8 or 10 occasions over an eighteen month period" when Ms Hawksley apparently left work prior to the completion of the shift. However at no stage did the employer contend that Ms Hawksley was terminated on account of persistent or unjustified absenteeism and in any event the evidence would not support such a finding. This leaves the question of whether the inherent nature of the work precludes the employment of Ms Hawksley as a consequence of her physical disability. Mr Cameron relied on two decisions in support of the employer's position. In Taleviski v RJ Gilbertson Pty Ltd33 Farrell JR determined an application under S170EA of the Commonwealth Act concerning an employee on "light duties" in a meat processing plant. At first glance there are some similarities between Taleviski and the instant case. Mr Cameron relied in particular on the following comment from the Judicial Registrar:34
Mr Cameron contended that this was support for the position that the Commission was precluded from ordering reinstatement, or in the alternative, re-employment, because Ms Hawksley was simply not capable of 50% or more of the tasks required. On closer examination I consider that Taleviski can be distinguished on the facts. At page 3 Farrell JR said:
And later:35
Neither of these comments, which I suspect were pivotal to the Judicial Registrar's finding, could be fairly applied to the circumstances of this application. Mr Cameron also referred to a decision by Leary C in relation to the Longford Meat Company.36 Again I consider that this decision can be distinguished in that it concerned three employees on long term workers' compensation with little or no prospect of returning to work. Further, the application concerned eligibility for redundancy payments rather than reinstatement or compensation. I have no doubt that Ms Hawksley is not capable of performing the full range of tasks envisaged by Mr Young when she was first employed. Against that, the evidence is that she performed a range of duties, all of which could be reasonably contemplated in a contract of employment for a laundry hand, in a competent and efficient manner. The employer did not submit that he had suffered an economic loss as a consequence of Ms Hawksley's continuing employment. Mr Young said the fact that Ms Hawksley could not participate in the ironing machine roster "made life a little bit more difficult". There was also a hint of some discontent amongst other staff but no formal complaints had been lodged. It is reasonable for any employer to desire a workforce with maximum flexibility. In this context it is to Mr Young's credit that he accommodated Dr Allen's requirements for a period of some two and a half years. The extent to which any employer can accommodate employees with less than optimum flexibility will depend on a range of factors. Invariably the size of the operation and the number of employees involved will be a critical issue. In the instant case clearly it would be quite unrealistic to expect the employer to accommodate the requirements of all or even a number of employees if they had similar physical restrictions as does Ms Hawksley. But that does not appear to be the case. On the available evidence it is only Ms Hawksley out of seven laundry hands with a physical limitation. In this context I am puzzled why, after an extended period of accommodation and minimal absenteeism, Mr Young felt compelled to take the action he did. The following exchange perhaps throws some light on Mr Young's thinking:37
It is however the employer's responsibility to determine staffing requirements and I accept that the inability of Ms Hawksley to feed the ironing machine did constitute a valid reason for termination within the context of the Act. The existence however of a valid reason does not necessarily lead to the automatic conclusion that the termination was fair. In this particular case Ms Hawksley was blameless and I consider the loss of employment in the circumstances in which it occurred to constitute a particularly harsh outcome and the applicant is entitled to an appropriate remedy. I turn now to the question of procedural fairness. Mr Young agreed that, prior to 13 February 2001, he had not told Ms Hawksley that her employment would be terminated if she could not feed sheets into the ironer.38 However, as we are not dealing with performance related issues, that is probably not of great significance in terms of procedural fairness. Certainly Ms Hawksley was happy with the presence of Mr Vocke at the two meetings in question and I am reasonably satisfied that she understood what was required to keep her job. There was some debate as to whether the required medical clearance was to be immediate or at some point in the future. There was also an implied criticism of Ms Hawksley for not taking steps to clarify the requirements and for not attempting to obtain the medical release. I make two observations. Firstly, it is the responsibility of the party which initiates the action to spell out the requirements in unambiguous terms. Any doubts should be clarified and a further opportunity allowed to facilitate compliance. In relation to the medical clearance, Ms Hawksley submitted a medical certificate39 following her consultation on 13 February. This certificate specified, "as before, no heavy lifting, no activity which increases pain", effective for the period 16/02/01 to 16/04/01. Given this certificate and the previous prognosis of Dr Francis, Ms Hawksley knew that any attempt to obtain a full medical clearance was futile. Even if she had gone to another doctor the outcome would have inevitably been the same. Whilst I do not find any serious fault insofar as procedural fairness was concerned, the die was effectively cast when the employer took the decision that he was only prepared to continue Ms Hawksley's employment if she could provide an unqualified medical clearance. That decision was open to the employer and is not one that I would contemplate interfering with. Nonetheless, having taken that decision I do consider the employer had a moral obligation to mitigate to the extent possible the loss that Ms Hawksley faced. This is particularly so in light of Ms Hawksley's length of service and work performance. I believe a far better approach would have been an extended period of notice ideally with some assistance in finding an alternative position. For these reasons I conclude that the termination of Ms Hawksley in such a summary manner was unfair and that modest compensation is appropriate. It is clear that reinstatement is impracticable given the decision taken by the employer. ORDER Pursuant to Section 31[1B] of the Industrial Relations Act 1984 I hereby order that Launceston Linen Service Pty Ltd pay to Lorraine May Hawksley of 24 Albion Street, Invermay, Tasmania 7248 the sum of two thousand five hundred dollars ($2500), such payment to be made within 21 days of the date of this decision.
Tim Abey Appearances: Date and Place of Hearing: 1 Exhibit A2 |