T11054
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TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Michael Lewis and Coles Myer Logistics Pty Ltd
Industrial dispute - alleged unfair termination of employment - physical limitations on capacity - inherent requirement of position - operational requirements of employer's business - valid reason for termination found - return to work plan - redeployment - employer had not acted unfairly or unreasonably - no basis for intervention by Commission - application dismissed REASONS FOR DECISION [1] On 12 September 2003, Michael Lewis (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 Coles Myer Logistics Pty Ltd arising out of the alleged unfair termination of his employment. [2] On 8 August 2003 Mr Michael Lewis was terminated from his position as a Forklift Driver in the Distribution Centre (DC) operated by Coles Myer Logistics Pty Ltd in Garfield St, Launceston. The letter of termination stated inter alia:1
[3] A conciliation conference was held on 21 October 2003. This gave rise to a recommendation from the Commission that the employer further explore redeployment opportunities within the Coles Myer brands, but external to the DC. The matter was listed for hearing on 18 November in the event that these efforts proved unsuccessful. [4] At the request of the parties the hearing was deferred until 15 and 16 December 2003. Mr P Dixon, solicitor, sought and was granted leave to appear for the applicant. Mr M Rinaldi, barrister, sought and was granted leave to appear for the employer. At the commencement of the hearing I was advised that the redeployment efforts had not been successful. [5] Evidence was taken from the following witnesses:
Background [6] Mr Lewis commenced employment as a casual sales assistant with Coles Fosseys in November 1986. [7] In August 1989 he moved to the DC as a casual Picker. In March 1990 he was appointed as a full-time Picker. [8] In March 1994 Mr Lewis sustained a knee injury as a consequence of slipping off a battery truck. An arthroscopy was performed, Mr Lewis made a full recovery and continued stock picking. [9] In May 2000 Mr Lewis again injured his right knee. He said that his knee "locked" when he squatted down to pick up his daughter. [10] A further arthroscopy was performed in December 2000 resulting in total incapacitation for a period of 10 days. Mr Lewis returned to work with restrictions (no squatting or kneeling). [11] Rehabilitation efforts aimed at a gradual reintroduction of stock picking were unsuccessful. [12] In June 2001 Dr Andreas Ernst (Specialist, Occupational and Musculoskeletal Medicine) conducted a workplace assessment and provided a report.2 This report recommended that Mr Lewis be reclassified as a Forklift Driver. [13] On 19 June the employer wrote to Mr Lewis in the following terms:3
[14] Mr Lewis accepted this new position. [15] Mr Lewis said he continued to have problems with his knee in this new role. He said the knee was aggravated by the need to continuously get off and on the reach truck in particular. This aggravation he said adversely affected his family life. [16] On 9 May 2002 Mr Lewis presented a medical certificate from Dr Peachey (his GP) indicating that Mr Lewis could no longer drive the forklift and required modified duties. [17] As a consequence Mr Lewis was provided with temporary clerical duties in the receiving and dispatch areas. Mr Lewis acknowledged that these duties were temporary in nature.4 [18] At some stage during the relevant period CML moved from private workers' compensation insurance (Allianz Australia Ltd) to self-insurance. This is of some importance given the timing of Mr Lewis' injury/ies. [19] In July 2002 Mr Lewis was referred to Dr Tim Stewart who subsequently provided a report.5 A further report dated 14 November 2002 was received from Dr David Salter.6 [20] Both these reports tended to discount the extent of Mr Lewis' knee injury. Both reports also observed that Mr Lewis wished to move into a clerical role. However as neither party sought to rely to any extent on these reports, they are given little weight in this decision. [21] In December 2002 Rehabilitation Consultant, Melinda Riall of Recovre was engaged to formulate a Return to Work (RTW) program aimed at ultimately returning Mr Lewis to his pre injury duties as a Forklift Driver. Initially two hours per day on forklift operation was proposed. Whilst Dr Peachey indicated that there was some risk with this proposal, he would consider it under appropriate conditions of use. [22] Mr Lewis raised concerns as to who would accept liability (Allianz or CML) in the event that his knee injury was aggravated as a consequence of the RTW program. It would appear that he considered the response from the employer on this question to be unsatisfactory. In any event he declined to sign off on the RTW program. On 29 January 2003 Recovre closed the file stating "... we are unable to get a clearance for the forklift work". [23] The aborted RTW program is an important issue which I return to in greater detail later in the decision. [24] A "Position Suitability Analysis" was completed on 8 April 2003. This amounted to an analysis of all positions within the DC, together with the requirements for each role. Management stated that this was part of a general review, and not specific to Mr Lewis. The evidence of management representatives was that there was no full-time role that Mr Lewis could safely perform. Whilst there were certainly administrative and clerical tasks that he could perform within his restrictions, the requirement for flexibility and rotation of staff through various roles meant that there was no full-time position that could accommodate Mr Lewis' restrictions. In short, the requirement of the DC is that all employees must be able to pick orders, or drive a forklift with all functions attendant to that role. Mr Lewis could do neither. [25] On 28 April 2003 management met with Mr Lewis and his union representative. It would appear that Mr Lewis was told:
[26] This was Mr Lewis' last day at the DC. He then proceeded on a combination of sick leave, annual leave, long service leave, and later suspension on full pay. [27] During May there were a series of meetings involving Mr Lewis' union representatives. In large measure these meetings focussed on alternatives within the DC. They did not result in a solution. [28] On 21 May Mr Lewis presented a medical certificate from Dr Peachey, effectively clearing him for forklift operations without restrictions. However further inquiry revealed that this certificate had been issued without a medical examination. Mr Lewis was suspended on full pay so as to facilitate a joint approach to Dr Peachey for further advice. [29] A further medical report from Dr Peachey was provided on 4 June.7 In essence this report stated that Mr Lewis would continue to have problems whilst operating the forklift. If he was allowed to sit on the forklift with someone else doing the manual work, "this might be OK". Mr Lewis agreed that there were no longer any positions in the DC which could accommodate Dr Peachey's recommendations.8 [30] During June Mr Deakes approached all other CML operations in the Launceston area concerning possible redeployment opportunities. This proved to be unsuccessful. [31] On 14 July the Company wrote to Mr Lewis seeking further information from Dr Peachey. The letter in part read:9
[32] Dr Peachey declined to attend the worksite and did not provide a further report, indicating through Mr Lewis that he had answered most of the questions before.10 [33] On 29 July the Company wrote to Dr Ernst, referring to Dr Peachey's report and seeking specific advice on the following:11
[34] On 30 July Dr Ernst responded in the following terms:12
[35] Mr Lewis' own assessment of his capacity at the time of hearing was:13
[36] On 8 August 2003 Mr Lewis was terminated, with four weeks' pay in lieu of notice. [37] It was common ground that there were no disciplinary or performance issues involved in this case, other than the physical limitations imposed by Mr Lewis' medical condition. The Return to Work Program [38] The initial report from Recovre dated 19 December 2002 contains the following relevant comments:14
[39] Following the meeting on 20 December Recovre produced a further report dated 16 January 2003. The "Comments" from this report are reproduced in full:15
[40] The final report from Recovre was dated 29 January 2003. Again the "Comments" are reproduced in full:16
[41] It would appear from the evidence that Mr Lewis did not have a major problem in relation to the proposed two hours per day on the forklift.17 His major concern related to the "ownership" of liability in the event that his knee injury was aggravated. Under cross-examination Mr Lewis said:18
[42] The evidence of Ms Rigby in relation to this matter was:19
[43] On the evidence I am satisfied that the Company did explain to Mr Lewis the process to be followed in the event of an injury aggravation. I am satisfied that this explanation included advice to the effect that ownership of liability could not be determined in advance. [44] I am prepared to accept that Mr Lewis may have considered this to be an unsatisfactory response in that he was looking for a black or white answer with an absence of hassles. [45] I am also satisfied that Mr Lewis was told, and clearly understood, that irrespective of the outcome of the ownership dispute, he would not be financially disadvantaged. Flexibility of Staff [46] At the time of hearing the DC had a total staff of 50 of which five were categorised as management. A recurring theme throughout the evidence of management was the need for staff flexibility. [47] It would appear that a major driver for this is the fluctuating demand that occurs on a daily basis. According to Mr Costello daily throughput might fluctuate from 5500 cartons to 20000 cartons in any given week.20 [48] Mr Shane Lewis said that manning levels in the various sections were determined on a daily basis, depending on demand.21 A system of staff rotation operated throughout the DC and there was only one employee (for longstanding historical reasons) who could not be rotated through the various tasks. [49] Ms Rigby said that the move towards flexibility had occurred over the past two or three years which in essence meant that all staff needed to be able to pick orders or drive a forklift.22 On the reasons for staff rotation, Ms Rigby said:23
[50] On the same issue Mr Costello said:24
[51] I was also referred to the Coles Myer Logistics Launceston Distribution Centre SDA Industrial Agreement 200225 which identifies the requirement to "... perform a range of tasks across all areas of the Distribution Centre" in the descriptors applicable to the classification levels. Closing Submissions Mr Dixon, for the applicant: [52] Mr Lewis' contract of employment has not been frustrated. [53] The test for frustration is two fold. Is future performance impossible and is the work performed radically different from that originally contemplated (see Launceston Linen Services Pty Limited v Hawksley26)? [54] Mr Lewis is able to carry out a substantial part of his employment contract, and is not so radically different from that originally contemplated so as to constitute frustration. [55] The work performed by Mr Lewis was not supernumerary. Staff are rotated through the tasks performed by Mr Lewis and hence the work clearly needed to be done. [56] The work performed by Mr Lewis fell within the scope of the 2001 contract, which in turn did not apportion any time to be spent on particular duties. [57] Mr Lewis was able to perform a substantial part of the duties he was contracted to perform and his ability to carry these out still afforded the DC the flexibility they required from their employees. [58] Mr Lewis has been a long serving and loyal employee. There is no suggestion of any disciplinary issues that might prove a barrier to reinstatement. [59] Mr Lewis was not afforded a "fair go all round". He was placed in a position of either obtaining a total medical clearance (and in doing so lose any entitlement to workers' compensation payments), or alternatively obtaining a certificate of total incapacity. He was not given the option of partial incapacity as contemplated in the workers' compensation certificate. The fact that he was not given the option of something in between was unfair. [60] There was a failure by anyone in CML to take ownership of Mr Lewis' redeployment elsewhere within the CML brands. It was unreasonable to ask Mr Lewis what positions he might be interested in. [61] Reinstatement would allow for further medical assessment and the possible offer of an official classification within the DC. The medical evidence relied on to date was inadequate. Reinstatement would allow events to take their natural course (see Meyer v Qantas Airways Ltd).27 Mr Rinaldi, for the employer: [62] The doctrine of frustration is largely irrelevant to these proceedings. The critical consideration relates to the requirements of the Act. [63] The operational requirements of the employer require staff flexibility. This means that all staff must be able to either pick orders or operate a forklift, with the duties that attend to that role. [64] The requirement for staff flexibility is enshrined in the SDA Industrial Agreement. [65] It was not practical to provide an additional staff member to undertake the manual handling and "gopher" tasks whilst Mr Lewis simply operated the forklift from a sitting position. This was acknowledged by Mr Lewis. [66] When Dr Peachey declined to provide a further report advice was sought from Dr Ernst. His report indicated that the elimination of risks could only be achieved by a fundamental redesign of the warehouse. Again this was impractical at least in the short to medium term. [67] There is not a capacity to fulfil the inherent requirements of the job and this clearly amounts to a valid reason for termination (see Selvachandran v Petroleum Plastics Pty Ltd28 Re: valid reason). [68] Mr Lewis declined to participate in the Return To Work plan despite assurances that he would be paid irrespective of the outcome as to ownership of liability. This was an unreasonable refusal on Mr Lewis' part. [69] When the employer became aware that Mr Lewis was unable to operate the forklift it began to do the things that it had to do. This included provision of alternative duties and the opportunity of a graduated return to forklift duties. It also embraced a "suitability analysis", options for redeployment and an investigation of possible task redesign. [70] It is quite unreasonable to expect the employer to provide temporary duties on an indefinite basis (see Taleviski v R J Gilbertsons P/L29; Bye v Longford Meat Company30). [71] The employer, both prior to the termination and following the conciliation conference, explored redeployment options. [72] Any role that Mr Lewis could safely perform would have to be artificially created and would involve periods of down time. Such an arrangement would have an adverse effect on productivity within the DC. [73] In all the circumstances the employer acted reasonably and there is no basis for the Commission to substitute its view (see Kenefick v Australian Submarine Corporation Pty Ltd31;Wadey v YWCA Canberra32; AWU v Pasminco Metals - EZ33). Findings [74] The relevant sections of the Act read:
[75] Throughout the hearing there was a considerable amount of evidence as to the physical limitations arising as a consequence of Mr Lewis' knee injury. It is beyond contest, however, that Mr Lewis does suffer from a knee problem which severely limits his capacity to perform other than clerical, administrative and cleaning duties. [76] I am satisfied on the evidence, that staff flexibility is an operational requirement of the employer. In the case of this employer "staff flexibility" means that all staff must be able to either pick orders or operate a forklift. I am satisfied that the above physical limitations prevent Mr Lewis from performing either role. [77] On the available evidence there is nothing to indicate that this position is likely to change for the better in the foreseeable future. [78] I accept that the duties that Mr Lewis performed after May 2002 were duties that were required to be performed. In that context it would be wrong to describe these duties as "supernumerary". [79] It is however clear from the evidence that there is no full-time position available that could accommodate Mr Lewis' limitations. It follows that for Mr Lewis to be offered such a position on a permanent basis, it would be necessary to artificially create such a position. [80] I accept that the duties performed by Mr Lewis during this period were temporary in nature and clearly understood as such. [81] Section 30[3][b] clearly refers to "the operational requirements of the employer's business". [82] It follows that in terms of "valid reason", the operational requirements can only be determined by the employer. It might be that such operational requirements are unreasonable and impact unfairly on an employee. In such circumstances the Commission may find that a termination was unfair notwithstanding the existence of a valid reason. However in the first instance it is the employer who determines what the operational requirements are. [83] In the instant case Mr Lewis was terminated because the employer was unable to offer a permanent position that was consistent with its operational requirements. [84] I am satisfied that Mr Lewis' inability to fulfil his contract of employment is a direct consequence of his physical limitations, and hence I find that the termination was connected with the "capacity" of the employee [s.30(3)(a)]. [85] To the extent that these limitations may be described as a physical disability, I accept that the flexibility required by the employer is an "inherent requirement". I therefore find that the termination was not unlawful in terms of s.30(4)(d). [86] I conclude that the employer has satisfied the onus of proving the existence of a valid reason for termination. [87] I now turn to the question of whether the termination was unfair. [88] In Youd v Naracaa Pty Ltd34 the Full Bench noted and endorsed the following comment of the Commissioner at first instance:
[89] In closing submissions Mr Rinaldi accepted that this was an appropriate test. [90] Section 138A of the Workers Rehabilitation and Compensation Act 1988 requires an employer, where practicable, to keep the job of an injured worker open for a period of 12 months. I would observe in the context of the above, that mere compliance with this minimum statutory requirement, would not of itself necessarily render an employer immune from an unfair dismissal claim. In the context of the Industrial Relations Act, it is necessary to ensure that fair consideration is accorded to both parties and all the circumstances taken into account. [91] Mr Lewis impressed as a diligent, loyal, long serving employee with an apparently blemish free record. He has done nothing wrong and clearly wishes to return to work at the DC. This probably explains (but not necessarily excuses) his apparent lack of enthusiasm for redeployment outside the DC. [92] I am at a loss to understand why Mr Lewis failed to co-operate with the Return To Work plan. His concerns related not so much to his capacity to undertake a graduated return to forklift duties, but to the ownership of liability in the event of an aggravation. Whilst a desire to avoid "hassles" is understandable, in the circumstances it was quite unreasonable to expect the employer to give an unequivocal undertaking as to liability for an event which had not yet occurred. This is particularly so given that Mr Lewis was told that he would not be disadvantaged, irrespective of the outcome. [93] There seems little doubt that in failing to cooperate with the RTW program, Mr Lewis has regrettably contributed to his own demise. On the available evidence the employer appears to be supportive of employees on such programs. In the case of Mr Lewis, the absence of such a program might understandably have caused management to form a view that there was no end in sight. [94] I am satisfied that the "Suitability Analysis" was based on objective criteria and assessed fairly so far as Mr Lewis was concerned. [95] I am satisfied that the employer did attempt to find alternative employment elsewhere within the CML brands in the Launceston area. I suspect however that, given the corporate structure and the autonomous nature of the brands, such efforts were at the level of a polite inquiry, and perhaps unlikely to bring success. In my view the onus was on the employer to take the initiative in relation to redeployment rather than rely on Mr Lewis to identify options. I also accept that Mr Lewis' apparent lack of interest in the process might have impacted negatively on the degree of vigour with which these avenues were explored by management. [96] I am satisfied that the company sought professional advice from both Dr Peachey and Dr Ernst both as to operational and/or equipment modifications which would assist Mr Lewis to productively perform his job. I accept that none of the alternatives suggested were practical in the circumstances. [97] There was no allegation that procedural fairness had been denied. Indeed Mr Lewis appeared to have union representation at all relevant times and was given every opportunity to respond and have input into the process. [98] Against this background the employer chose to terminate Mr Lewis' contract of employment. [99] It is well established that it is not the role of the Commission to substitute its view for that of management, simply because it may have acted differently faced with the same circumstances. The Commission will properly intervene only when it considers the employer has acted unreasonably and/or unfairly. [100] In the instant case I detect no grounds that would warrant intervention. [101] The application is dismissed. I so order.
Tim Abey Appearances: Date and Place of Hearing: 1 Exhibit R1.18 |