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Federal Court of Australia |
Termination of employment - whether partially incapacitated employee with residual capacity to perform activities consistent with requirements of work duties should expend that capacity in the performance of work duties in priority to all personal and domestic demands.
Wyndham Lodge Nursing Home Inc. v Reader (No.2) (1996) 65 IR (applied)
McMahon v Gould (1982) 7 ACLR 202 (cited)
State of Western Australia v Bond Corporation Holdings Pty Ltd and Others (1992) 114 ALR 275 (cited)
Ramsay v Pigram [1968] HCA 34; (1968) 118 CLR 271 (followed)
North v Television Corporation Limited (1976) 11 ALR 599 (cited)
Bartucciotto v Euro Printing Company Pty Ltd, von Doussa J, unreported, IRCA 72/96, 21 February 1996 (cited)
Workers Rehabilitation and Compensation Corporation v James (1991) 56 SASR 414 (applied)
Bi Lo Pty Ltd v Hooper (1994) 53 IR 224 (cited)
Sangwin v Imogen Pty Ltd, unreported, Industrial Relations Court of Australia, 8 March 1996 (cited)
Aronson and Dyer, "Judicial Review of Administrative Action" (1996)
de Smith, "Judicial Review of Administrative Action" 5th ed (1995)
Matter No. SG61 of 1997
TIMOTHY WARREN SUTCLIFFE v GENERAL MOTORS-HOLDEN'S AUTOMOTIVE LIMITED
VON DOUSSA J
ADELAIDE
19 FEBRUARY 1998
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| SOUTH AUSTRALIA DISTRICT REGISTRY | SG 61 of 1997 |
|
BETWEEN: | timothy warren sutcliffe
Applicant |
|
AND: | general motors-holden's automotive limited
Respondent |
|
JUDGE: | VON DOUSSA |
| DATE OF ORDER: | 19 february 1998 |
| WHERE MADE: | ADELAIDE |
THE COURT ORDERS THAT:
The matter be relisted to hear the parties as to the orders which should be made in light of the reasons for judgment delivered this day.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| SOUTH AUSTRALIA DISTRICT REGISTRY | SG 61 of 1997 |
|
BETWEEN: | timothy warren sutcliffe
Applicant |
|
AND: | general motors-holden's automotive limited
Respondent |
JUDGE:
VON DOUSSA DATE: 19 february 1998 PLACE: ADELAIDE
Pursuant to notices of motion dated 15 July 1997 and 23 July 1997 the respondent seeks review under s 377 of the Workplace Relations Act 1996 ("the Act") of a decision of Judicial Registrar L Farrell delivered on 25 June 1997, and of orders that the Judicial Registrar made in consequence of her decision on 22 July 1997 respectively. The jurisdiction of this Court to conduct the review arises by operation of schedule 16 of the Workplace Relations and Other Legislation Amendment Act 1996 (Cth).
The proceedings were commenced by application filed in the Australian Industrial Relations Commission under s 170EA(1) of the Act by Timothy Sutcliffe. Mr Sutcliffe alleged that on 13 September 1996 his employment had been unlawfully terminated by his employer, the respondent General Motors-Holden's Automotive Limited ("GMH"). The Judicial Registrar held that GMH did not have a valid reason for the termination of the applicant's employment and that whilst GMH purported to terminate Mr Sutcliffe's employment for reasons related to his conduct, Mr Sutcliffe had not been given the opportunity to defend himself against the allegations made. The termination of his employment was therefore in breach of ss 170DE(1) and 170DC(1) of the Act. On 22 July 1997 the Judicial Registrar gave effect to these conclusions by ordering that Mr Sutcliffe be reinstated within 21 days to the position in which he was employed prior to the termination of his employment by GMH, and made orders for remuneration lost and the preservation of continuity of his employment.
GMH seeks review of the decision and orders based on the papers, that is on the transcript of evidence and on the exhibits submitted at trial. Neither party has supplemented that material for the purposes of the review. The review is by way of a rehearing de novo, and the function of the Court is to look afresh at the case. Where there is a dispute as to primary facts on the evidence at trial, a particular problem is presented to the reviewing Court when it is asked to conduct the review on the papers. The judge conducting the review does not then have the benefit of seeing and hearing the witnesses who have given the evidence which is in conflict. These difficulties have been considered in a number of decisions of the Industrial Relations Court of Australia which were reviewed by a Full Court in Wyndham Lodge Nursing Home Inc. v Reader (No.2) (1996) 65 IR 253. At 258 the Full Court summarised the position:
"...where there is a dispute as to primary facts, it will usually be impossible for the judge to resolve it `on the papers'. Determination of a dispute about primary facts involves choosing between conflicting elements of the evidence. This almost always involves an assessment of the witnesses, not only as to their truthfulness but also as their characters and personalities and the likelihood that they acted in a particular way. Without seeing and hearing the witnesses, a judge has no basis for substituting his or her opinion on such matters for that of the judicial registrar. The judge will be bound to hold that the party who bears the onus of proof on the disputed issue has failed to discharge that onus. It is important that parties understand this in determining how they wish a review to be conducted."
With only one exception, the chronology of events relevant to the proceedings was not in dispute at trial. The exception concerned the date of a communication between Mr Sutcliffe and an officer of GMH, Mr Nuske. On that matter the Judicial Registrar preferred the evidence of Mr Sutcliffe. For reasons which will appear, the credibility of Mr Sutcliffe was a matter of central importance to the outcome of the case. That was noted by the Judicial Registrar who, under the heading of "credibility" said:
"In my view this is a matter in which the credibility of the applicant is of prime importance and I have given careful consideration to his evidence, its consistency and the way in which he conducted himself whilst giving evidence. The applicant was cross-examined about a number of matters...his explanations were understandable and they were not substantially challenged except by the evidence of Mr Nuske, whose evidence I do not accept where it differs from that of the applicant ...".
It will be necessary to return to questions concerning the credibility of the applicant later in these reasons, when considering the evidence about his motives for events which occurred.
Some of the facts recorded in the following summary are based solely on the oral evidence of Mr Sutcliffe. On the review, counsel for GMH did not dispute his evidence on these matters. Any attempt to do so would have been fraught with difficulty having regard to the Judicial Registrar's finding as to credibility.
Mr Sutcliffe was employed on the production line at the Elizabeth plant of GMH. It was common ground that he suffered an injury to his back in the course of his employment in mid February 1996. In the course of his duties he began to suffer pain in his back, hip and right leg. On 12 March 1996 he lodged a notice of disability and claim for compensation. Subsequent diagnostic investigations established that he had a disc protrusion at the penultimate disc level in his lower back with disc material impinging on the sciatic nerve on the right side. On 15 March 1996 GMH accepted the claim, and apart from three days total incapacity in May 1996 when he received an epidural injection, Mr Sutcliffe was on alternative duties pursuant to medical certificates certifying partial incapacity for work. The alternative duties involved four hours work per day, five days per week on "buy-out" and "RF tags" duties. These duties were, generally speaking, of a light nature but did involve standing, squatting, and a degree of bending. Mr Sutcliffe said in evidence that he had good days and bad days, and that his pain increased towards the end of each period of work.
Mr Sutcliffe initially consulted his general practitioner, Dr Cheung, and was referred by him to an orthopaedic surgeon, Dr Cullen. Following a review on 20 August 1996 Dr Cullen wrote to GMH on 21 August 1996 saying that she thought Mr Sutcliffe may require surgical intervention, and that she had arranged for a second opinion from, and ongoing management by, Mr Osti, an orthopaedic and spinal surgeon, who was to see Mr Sutcliffe on 28 August 1996.
In the meantime, on 14 August 1996 GMH had arranged for Mr Sutcliffe to be examined by another surgeon, Mr Ross Johnson. On 14 August 1996 Mr Johnson reported following his examination that the disc prolapse had been confirmed by x-ray investigations. Dr Johnson recorded the following history given by Mr Sutcliffe:
"He has no back pain. His most severe pain is in the lateral aspect of his right buttock and this is present 24 hours a day. This pain is constant and is eased to some degree by tablets. He works a four and a half hour (sic) shift from 7.00 p.m. until 11.00 p.m. For three and a half hours his symptoms are not too bad but during the last half hour the pain becomes more severe and radiates from his right buttock down to his right ankle.
Mr Sutcliffe goes home to rest and his symptoms improve and he is able to get to sleep about 4.00 a.m. to 5.00 a.m.
The above has been much the same pattern over the last six months...".
Mr Johnson considered that Mr Sutcliffe, who presented to him in a straightforward manner, had right sciatic pain attributable to his work environment at GMH. He considered that the preferable option would be surgical intervention which Mr Sutcliffe was to discuss with his own surgeon.
Mr Sutcliffe worked his normal four hour shift on the evening of Thursday 22 August 1996. He did not attend work the following day. He says he telephoned GMH to advise that he would be unable to attend. Mr Sutcliffe says that he suffered an aggravation of his back condition in the course of his work on 22 August 1996 as there had been a problem on the production line. A robot had broken down. Equipment used to rectify the problem restricted access in the immediate area where he worked, and increased the degree of bending and twisting required of Mr Sutcliffe in order to carry out his duties. This caused an increase of pain which led to him resting the following day and over the weekend. He consulted Dr Cheung on Monday 26 August 1996. He reported to Dr Cheung that he had aggravated his back the preceding week, and that he was due to be examined by Mr Osti two days later. Dr Cheung, who was well familiar with Mr Sutcliffe's medical condition, accepted that history and gave Mr Sutcliffe a certificate for total incapacity from 23 August 1996 to 28 August 1996. Dr Cheung did not think it necessary to examine Mr Sutcliffe as an examination could have added to his pain, and as he was due to see Mr Osti. The medical certificate was given by Mr Sutcliffe to GMH.
On 28 August 1996 Mr Sutcliffe consulted Mr Osti. Mr Osti conducted a full examination and gave Mr Sutcliffe a certificate certifying him unfit for work until 7 September 1996. Mr Osti arranged for Mr Sutcliffe to undergo a magnetic resonance scan on 30 August 1996 and wrote to Dr Cheung saying that if the scan confirmed the presence of a nerve entrapment he would offer surgical intervention to Mr Sutcliffe. The scan did confirm the presence of a lateral protrusion from the injured disc, and at a later examination on 11 September 1996 Mr Osti discussed surgery with Mr Sutcliffe.
It is against this medical background, which shows a clearly established back injury that had been affecting Mr Sutcliffe's capacity for work since March 1996, that the following events, which caused GMH to dismiss Mr Sutcliffe, must be considered.
In 1995 Mr Sutcliffe and his wife had separated. Mr Sutcliffe continued to live in the matrimonial home but had been attempting to sell it. One contract of sale had fallen through as the intending purchaser did not pay the deposit. On 22 August 1996 Mr Sutcliffe signed a further contract for the sale of his house. He says, however, that he had no confidence that the sale would go through and took no action on the contract until the deposit was paid on 28 August 1996. The contract provided for an early settlement, on 12 September 1996. It was necessary for Mr Sutcliffe to give vacant possession, and to clear his house in the meantime. On 28 August 1996 after the deposit was paid he telephoned Mr Nuske at GMH and enquired if his employer would provide assistance to him to move house. Mr Sutcliffe was informed that it was not the policy of GMH to provide assistance of that kind but if he wrote a "tearful letter" to GMH, the company would give it consideration. Mr Sutcliffe said that he would not write such a letter. Mr Nuske's response to the request was to arrange for an enquiry agent to watch the activities of Mr Sutcliffe over the following days. It seems that surveillance started about Monday 2 September 1996.
Mr Sutcliffe gave evidence that he arranged the following steps to move house. On Saturday 31 August 1996 friends assisted him and he supervised the moving of bulky items of furniture. On Monday, 2 September 1996 second-hand dealers came to his house and bought various items. A very short segment of film was taken this day by the enquiry agent showing the unremarkable activity of Mr Sutcliffe bending into the door of a motor vehicle.
On Tuesday, 3 September 1996 he arranged for boxes to be stored or given away, and he arranged to borrow a utility from a friend to remove the main rubbish from his house. A short segment of film was taken by the enquiry agent showing Mr Sutcliffe, in an upright position, carrying lengths of light pipe to the utility. Mr Sutcliffe explained in evidence that he was doing so as the owner of the utility needed to deliver the pipes to a customer before the utility could be given to Mr Sutcliffe.
On Wednesday 4 September 1996 with the assistance of a friend, Mr Blackwell, rubbish was loaded on to the utility. They drove to a dump, but it was closed when they arrived. The rubbish remained on the vehicle until the following morning. On 5 September 1996 Mr Sutcliffe drove the utility to the dump by himself, as Mr Blackwell was not available first thing in the morning, and unloaded it. A film was taken of the unloading process which extended over 13 minutes. Mr Sutcliffe said in evidence that he then collected Mr Blackwell who helped him take another load of rubbish to the dump, although this was not filmed. It was established that the second load arrived at the dump at 10.42 am. Mr Sutcliffe said that the rubbish clearing was completed in the morning, and he was then in considerable pain which required him to rest for the balance of the day.
On Friday 6 September 1996 with the assistance of another friend Mr Sutcliffe took a final load of rubbish to the dump. A film lasting for six minutes was taken showing Mr Sutcliffe unloading the utility.
The films show Mr Sutcliffe engaging in light work for the duration of the film. During this time he exhibited a good range of movement of the back, and his activity is not suggestive of someone in serious pain.
On 9 September 1996 Mr Sutcliffe reported for work at the usual time, but was informed that he could not commence work without a medical certificate certifying him as fit to return to his light duties. The employer was unable to find the medical certificate from Mr Osti which certified total incapacity only to 7 September 1996. Accordingly he was sent away to obtain another medical clearance.
Mr Sutcliffe consulted Dr Cheung on 10 September 1996. He told Dr Cheung that GMH had asked him to get a clearance before he could return to work. Dr Cheung was aware that Mr Sutcliffe was to see Mr Osti again the following day. Dr Cheung assumed that Mr Osti had some reason for certifying him as totally incapacitated for the period from 28 August to 7 September 1996, and informed Mr Sutcliffe that he should continue to stay away from work until he again saw Mr Osti. To that end he gave him a further medical certificate certifying total incapacity from 9 to 11 September 1996, and did so without any examination of Mr Sutcliffe.
It appears that Mr Osti did not give Mr Sutcliffe a further medical certificate at the consultation on 11 September 1996.
Mr Sutcliffe returned to his light duties at GMH on 12 September 1996. As he did not have a medical certificate from Mr Osti, he produced a copy of an earlier certificate which had been issued by Dr Cullen on 20 August 1996 certifying him as fit for light duties for one month to 20 September 1996. GMH accepted this certificate as sufficient to allow the resumption of work.
On 13 September 1996 when Mr Sutcliffe attended for work, he was called to an interview with senior officers of GMH, including Mr Fox, the senior employee relations officer, and Mr Brown, a production supervisor. Also at the interview were two shop stewards from the union of which Mr Sutcliffe was a member. Mr Sutcliffe was informed that GMH had a film of his activities. He was warned that anything he said at the interview might be used in evidence against him, and the possibility of a prosecution was mentioned. He was then shown the enquiry agent's film showing his activities on 2, 3, 5 and 6 September 1996. He was asked if the film identified him. He said it did. He was asked to give an explanation of "his circumstances". There is no substantial disagreement between the evidence of Mr Sutcliffe and that of Mr Fox and Mr Brown as to the explanation then given. Mr Sutcliffe explained that he had been separated from his wife and that the separation was caused by the strains that shift work had placed on the marriage. As a result he had to sell the house. It had been on the market for a long time. It had recently been sold and he had to move quickly. He had requested help from GMH, and had been told that he would have to make such a request in a "tearful" letter which he declined to do. He said he was from Tasmania and had no family in South Australia. He had no alternative but to play some part in the moving. He had moved the very light pipes shown in the film so that he could borrow the utility. He had visited the dump with a friend the night before but it had been closed. His friends were at work so that they could not assist him. He had increased his medication and suffered for it not long after. He explained that he had been in considerable pain but had paced himself and taken painkillers. He said that he wanted to become a leading hand supervisor, that he was a good worker who was always punctual. He understood that his proposed surgery would be paid for.
Messrs Fox and Brown informed him that they believed that if he could do what he was shown to be doing on the films, he could perform light duties at GMH, and should have come to work. He was told that he had been guilty of serious and wilful misconduct and would be dismissed. There was some discussion about him resigning but that was not pursued. At the end of the interview Mr Sutcliffe was given a "notice of discontinuance" informing him that his services were terminated for "misconduct".
On 19 September 1996 Mr Sutcliffe was given a long letter said to be a notice under the provisions of the Workers Rehabilitation and Compensation Act 1986 (S.A.). The notice informed him that his payments of regular income maintenance would be discontinued as from 10 October 1996. The letter included the following statements:
3. "The specific fact or facts on which the Company has made its decision or determination:
Your employment with this Company was terminated on the 13th September, 1996 on the grounds of serious and wilful misconduct, alleged to have occurred between 3rd September, 1996 and 6th September, 1996.
4. Details of any conclusions drawn from that fact or those facts:
a. It is alleged that as an employee of this company on 13th September, 1996 your employment was terminated on the grounds of serious and wilful misconduct between 3rd and 6th September, 1996.
b. You have submitted a claim for compensation dated 12th March, 1996 in which you allege that you suffered a back strain injury.
c. You were certified as totally incapacitated for work between 3rd September, 1996 and 6th September, 1996 by workers compensation medical certificates.
d. GMH has carried out various investigations and enquiries to determine your claim for compensation.
e. Such investigations, including video film, indicate that your activities which include unloading and loading a utility with various items are inconsistent with an alleged back strain injury, for which you had certification of total incapacity...".
On 26 September 1996 Mr Sutcliffe commenced proceedings in the Industrial Relations Commission pursuant to s 170EA. Those proceedings were referred to the Court on 6 December 1996. At a directions hearing on 12 December 1996 mutual discovery and other pretrial issues were discussed. The directions hearing was adjourned to 6 February 1997. On 6 February 1997, a trial date for 1 and 2 May 1997 was fixed and the time for GMH to make discovery was extended. An affidavit of discovery was filed by GMH on 28 February 1997. That document was sworn by Mr D C Weinel who deposed that he was an officer of GMH authorised to swear the affidavit.
On 17 April 1997 GMH applied to the Judicial Registrar to have the trial stayed on the ground that criminal proceedings would be brought in the Magistrates Court against Mr Sutcliffe alleging offences by him under the Workers Rehabilitation and Compensation Act. It was contended that as the proposed criminal proceedings related to the same conduct which had caused GMH to dismiss Mr Sutcliffe, the civil proceedings brought by him should be stayed until the completion of the Magistrates Court proceedings. The Judicial Registrar declined the application and ruled that the trial should proceed as arranged on 1 and 2 May 1997. The trial took place on those dates.
On 29 April 1997 a complaint was laid in the Magistrates Court by "Dennis Charles Weinel of General Motors-Holden's Automotive Limited, Phillip Highway, Elizabeth in the State of South Australia". The three counts charged were as follows:
"COUNT 1
STATEMENT OF OFFENCE
On or about the 12th day of September 1996 obtained by dishonest means a payment under the Workers Rehabilitation and Compensation Act 1986 (section 120(1)(a) of the said Act).
Particulars of Offence
On or about the 12th day of September 1996 obtained from General Motors-Holden's Automotive Limited (`the employer') a payment of income maintenance of $248 for the period between 3 September 1996 and 6 September 1996 inclusive by pretending that by reason of the effects of a lower back injury, allegedly suffered by him in the course of his employment with the employer in or about February 1996, he was totally incapacitated for work available with the employer whereas he was capable of carrying out alternative duties for four hours per day, five days per week.
COUNT 2
STATEMENT OF OFFENCE
On or about the 19th day of September 1996 obtained by dishonest means a payment under the Workers Rehabilitation and Compensation Act 1986 (section 120(1)(a) of the said Act).
Particulars of Offence
On or about the 19th day of September 1996 obtained from the employer a payment of income maintenance of $186 for the period between 9 September 1996 and 11 September 1996 inclusive by pretending that by reason of the effects of a lower back injury, allegedly suffered by him in the course of his employment with the employer in or about February 1996, he was totally incapacitated for work available with the employer whereas he was capable of carrying out alternative duties for four hours per day, five days per week.
COUNT 3
STATEMENT OF OFFENCE
On the 30th day of August 1996 at Elizabeth dishonestly made a statement about a claim under the Workers Rehabilitation and Compensation Act 1986 knowing the statement was false or misleading (section 120(1)(c) of the said Act).
Particulars of Offence
On the 30th day of August 1996 at Elizabeth in connection with a claim for compensation for an injury to his lower back, which was allegedly suffered by him in the course of his employment with the employer in or about February 1996, made a statement to Mr David Nuske that he was totally incapacitated with his back strain and barely able to move
WHEREAS it was well known to the defendant that this statement was false or misleading as he was not totally incapacitated because of his back strain, nor was he only barely able to move."
The proceedings in the Magistrates Court have not yet been dealt with. They have been adjourned from time to time pending the completion of the proceedings before this Court.
At trial before the Judicial Registrar the following witnesses gave evidence and were cross-examined: Mr Sutcliffe, Mr Blackwell, Dr Cheung and Mr Osti for Mr Sutcliffe, and Mr Nuske, Mr Fox, Mr Brown, Mr Hemer (a leading hand who described the alternative duties performed by Mr Sutcliffe at GMH), Mr Nesbit (a production supervisor who confirmed that there had been a robot breakdown on the production line on 22 August 1996) and Mr Fry for GMH. Mr Fry is an orthopaedic surgeon. At no time did he examine Mr Sutcliffe. He had however, read medical reports from other doctors relating to Mr Sutcliffe's condition, and had viewed the film.
The Judicial Registrar accepted the credibility of the applicant. Mr Nuske in his evidence had asserted that his conversation with Mr Sutcliffe occurred on 30 August 1996, and he did so relying on notes that he said were contemporaneous. However, the evidence left little doubt that the conversation was actually on 28 August 1996 and the Judicial Registrar said that Mr Nuske's explanation for the apparent error left her with some doubt about the reliability of his evidence and notes, hence her preference for the evidence of the applicant where there was conflict. I have read the evidence of Mr Nuske, and I too am left with some doubt about the reliability of his evidence. Without the benefit of seeing and hearing Mr Sutcliffe and Mr Nuske give evidence, insofar as GMH seeks to rely on Mr Nuske's evidence in preference to that of the applicant to establish a valid reason for the termination of the applicant's employment, GMH has failed to discharge the onus of proof which rests upon it.
However, apart from minor conflicts in the evidence of Mr Sutcliffe and Mr Nuske, there were no conflicts of substance about the primary facts. The dispute between the parties at trial concerned Mr Sutcliffe's motives and intention, and the inferences to be drawn from the primary facts. The acceptance by the Judicial Registrar of the credibility of Mr Sutcliffe remains a matter to which the reviewing Court must defer in accordance with the principles discussed in Wyndham Nursing Home v Reader (No.2), but otherwise the reviewing Court is free to, and must, draw whatever inferences it thinks are warranted from the primary facts.
In deciding what inferences are properly to be drawn from the films, regard must be had to the opinions of the medical experts who gave evidence at the trial. Dr Cheung considered that the actions of Mr Sutcliffe shown in the films were not inconsistent with his understanding of the injury or the medical imaging reports. In relation to bending activity shown in the film Dr Cheung commented that, apart from at early consultations (around March 1996), Mr Sutcliffe had displayed a good range of back movement, his complaint being not his back but his leg. Towards the end of his cross-examination when it was put to Dr Cheung that the films displayed activities inconsistent with Mr Sutcliffe's presentation to him, the doctor responded:
"Well, a summation - well, he did some movement (sic - which?) I think is consistent with his presentation and with the clinical finding all along, but whether - but as we also mentioned he could have some pain or discomfort afterwards. Whether he should do it or not, I guess depends on the condition - depends on his situation as well. (175)
And later he stressed his view that the filmed activities of Mr Sutcliffe had to be interpreted in the context that Mr Sutcliffe had no choice but to remove the rubbish to the dump himself.
The Judicial Registrar described Mr Osti as an impressive witness. By a series of tests Mr Osti has satisfied himself that there were no signs of a non-physical cause for Mr Sutcliffe's complaints of pain. He was aware that Mr Sutcliffe had been away from work from 22 August 1996. At the time when he examined Mr Sutcliffe on 28 August 1996 he thought Mr Sutcliffe was totally incapacitated for work and he gave him a certificate for total incapacity up to 7 September 1996 - not only because of the amount of pain that he thought was present at the time of the examination, but because he wanted Mr Sutcliffe to be in a good physical and mental condition to address the option of surgery. He said he did not explain his reason to Mr Sutcliffe for certifying him as totally incapacitated for work until 7 September 1996. He said that as a consequence of the action taken by GMH against Mr Sutcliffe, he now makes it his practice to explain to his patients their obligations relating to certification of incapacity. On the assumption that he had suffered an aggravation of his back condition at work on 22 August 1996, Mr Osti thought that the aggravation would take a few days to settle, so that by the time the films were taken Mr Sutcliffe's condition could have improved, although not significantly.
Mr Osti had no recollection of Mr Sutcliffe seeking a certificate for total incapacity from him. Rather, Mr Osti himself decided that he should certify total incapacity to 7 September 1996 in the best interests of Mr Sutcliffe.
In the course of Mr Osti's examination in chief the following discourse occurred:
"Now, having seen that video [the film] did that change your view about the genuineness of Mr Sutcliffe's presentation to you on the 28th?---It would have if I hadn't been aware of the circumstances. Why Mr Sutcliffe was at the dump and the circumstances which led him to perform the task that he did perform. So, I believe that although there is some contradiction between my certification of Mr Sutcliffe being unfit to work in any capacity and Mr Sutcliffe performing physical tasks which you may specify if you like as heavy or not so heavy or whatever, I think this inconsistency can be explained on the specific circumstances of the incident...
Is it the case that the activities shown on the video are inconsistent with him being totally incapacitated for work?---Yes.
But they are not inconsistent with what he was capable of doing given his condition?---Well, he was doing them so clearly he was capable of doing the things that he was filmed doing but if you imply consistent with his condition again, we know that he has a condition. He is not a subjective assessment. He has had extensive investigation that prove that he does have pathology in his lumbar spine with pressure on the nerve. The question is, if you have a disc prolapse and you have sciatica can you go to the dump and unload furniture? Can you carry small or thin pipes on your shoulder? The answer clearly is yes and Mr Sutcliffe is proof that you can do these sort of things with a condition like a lumbar spine thing. The other answer is that is because Mr Sutcliffe goes to the dump and carries pipes does that make him fit to work? The answer is yes, it does make him fit to work. So if he is certified unfit to work and he performs this task, even if they are light physical tasks, that is an inconsistency and that is what I said initially. There is an inconsistency. I would not have expected Mr Sutcliffe to go to the dump when I had certified him unfit to work but the problem was that Mr Sutcliffe like any other patient with a back condition is at times able to perform physical tasks with pain which may be controlled by analgesia or other methods and so on but that he should not be considered fit to perform repetitive physical tasks. Not because he cannot do them but because if he did do this task repetitively they are likely to result in exacerbation and aggravation of his condition."
Mr Osti denied the suggestion put to him in cross-examination that the film showed that he had been misled by Mr Sutcliffe.
Mr Fry said that in his opinion the films showed Mr Sutcliffe "working in a thoroughly normal sort of fashion. He didn't seem to be totally and utterly incapacitated for all known forms of work". Mr Fry considered the activities in the film showed that Mr Sutcliffe was at least fit for the modified duties which had been provided to Mr Sutcliffe by GMH from March 1996. Significantly however, Mr Fry was not informed, as part of the history that was given to him, that Mr Sutcliffe had aggravated his back condition at work on 22 August 1996. His evidence to the effect that the film showed there was no justification for a certificate for total incapacity during the period from 22 August through to the period which the films were taken is based on an incorrect factual premise.
Both Mr Fox and Mr Brown said in evidence that when they first viewed the film of Mr Sutcliffe they formed the view that no doctor seeing the activity in the films would certify a person capable of such activity as totally incapacitated and that Mr Sutcliffe had therefore deceived his doctors and deceived GMH, and that he should be dismissed for doing so. They did not seek to obtain any medical opinion regarding the significance of the films in light of the medical history and diagnosis available in reports on the GMH workmen's compensation file. Mr Fox, when asked if he had considered consulting a medical practitioner about the films said:
"I understand that there may be therapeutic value for a medical point of view in terms of some forms of functions that patients might carry out. I failed to see how any doctor given that this man is saying that he's going to have a back operation shortly down the track would agree that these functions that he was performing were compatible with that condition."
Having formed the views which they did about the significance of the films, Mr Fox and Mr Brown then went through the process of arranging the interview with Mr Sutcliffe. At that interview they did not put to Mr Sutcliffe that he had deceived his doctors, or GMH.
The case for GMH, as put to Mr Sutcliffe at trial, was that he had "orchestrated" the total period of time off from work - from 23 August 1996 to 7 September 1996 - to enable him to clear out his house in readiness to complete the contract of sale. Implicit in the findings of the Judicial Registrar is a rejection of that contention. Expressly the Judicial Registrar rejected the view of Mr Fox and Mr Brown that Mr Sutcliffe had deliberately deceived his doctors and GMH. The Judicial Registrar said:
"Having said that I accept the applicant as a truthful witness, I accept that he did not engage in a course of conduct with the intent of deceiving the medical practitioners or the respondent."
The Judicial Registrar considered that Mr Fox and Mr Brown had based their opinion on a number of false premises, and said that it was very unfortunate that no attempt was made to show the film to Mr Sutcliffe's doctors prior to the decision to terminate his employment. The Judicial Registrar held that the decision to terminate Mr Sutcliffe's employment was flawed by false assumptions made by the decision makers, and by their failure to obtain medical opinion from Mr Sutcliffe's medical practitioners.
The Judicial Registrar further held that the failure to put to Mr Sutcliffe that he had deceived his doctors and GMH meant that he was not given a proper opportunity to defend himself against the allegations that led to his dismissal.
Upon the review three matters were advanced on behalf of GMH; first that the Judicial Registrar erred in not staying the proceedings before her until the completion of the proceedings in the Magistrates Court; secondly, that there was a valid reason for Mr Sutcliffe's dismissal; and thirdly, that he was given a reasonable opportunity to defend himself in the interview conducted in the presence of Mr Fox and Mr Brown.
As to the first of these matters, when the request for the stay was refused, the proceedings in the Magistrates Court had not been commenced, but the refusal was not on that ground. Although the Judicial Registrar did not give reasons for her decision, it appears that she refused the stay because Mr Sutcliffe indicated that he wished his claim to proceed notwithstanding the proposed criminal proceedings. Through his lawyer he said that he considered GMH had fundamentally misunderstood the facts, and he wished to have the merits aired as soon as possible to demonstrate that this was so.
Not uncommonly both civil and criminal proceedings may arise from the same factual situation. Where this occurs, the defendant in the criminal proceedings may also be a defendant in the civil proceedings. In this situation the court seized of the civil proceedings sometimes exercises a discretionary power to order a stay until the criminal proceedings are completed. A comprehensive statement of the considerations that may be relevant to the exercise of that power was given by Wootten J in McMahon v Gould (1982) 7 ACLR 202. The guidelines enunciated by his Honour have been approved in a number of a later decisions in this Court: see State of Western Australia v Bond Corporation Holdings Pty Ltd and Others (1992) 114 ALR 275 at 296.
Where it is the defendant in the contemporaneous criminal proceedings who applies for a stay, prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court, and the burden is on the defendant seeking a stay to show that it is just and convenient that the plaintiff's ordinary right should be interfered with. An important factor is the defendant's so called "right of silence" which applies in the criminal jurisdiction. That right might be impaired if the defendant is required to disclose his grounds of defence, or to break his silence before being called upon to answer the charges against him in the criminal jurisdiction. Another factor is the possible burden on the defendant of preparing for two sets of proceedings concurrently.
In the present case however, these considerations did not arise on the application before the Judicial Registrar as the defendant in the proposed criminal proceedings was the applicant in the Industrial Relations Court. In the capacity of applicant, Mr Sutcliffe expressed his desire to state his position as soon as possible and his "right of silence" was not a factor raised by him.
There is another unusual feature in the facts of this case, although as the complaint had not then been laid in the Magistrates Court, this may not have been apparent at the time the Judicial Registrar considered the application. Normally, where civil and criminal proceedings arise out of the same factual situation, there will not be an identity of parties in the two proceedings. The prosecutor will not be one of the parties in the civil proceedings. No issue of res judicata or issue estoppel could arise. In the present case however, the description of Mr Weinel as complainant in the Magistrates Court proceedings, and his involvement as authorised officer for GMH in the Industrial Relations Court proceedings, indicates that in reality there is a commonality of interest between the parties such that a judicial determination directly involving an issue of fact or law in one action would dispose of the issue once and for all: see Blair v Curran [1939] HCA 23; (1939) 62 CLR 464 at 531 and Ramsay v Pigram [1968] HCA 34; (1968) 118 CLR 271 at 279. The differing onuses of proof applying in the civil and the criminal jurisdictions could give rise to a factor important in the exercise of the discretion to stay the proceedings. However, in the present case Mr Sutcliffe indicated that he was prepared to have the veracity of his version of events decided in the civil proceedings where the onus on GMH would be to establish the valid reason for his dismissal on the balance of probabilities (whereas in the criminal proceedings allegations made against Mr Sutcliffe would have to be proved beyond reasonable doubt). Any issue arising from the different onuses of proof could not warrant granting GMH a stay of the criminal proceedings.
GMH has not established that the Judicial Registrar erred in the exercise of her discretion.
The second matter advanced on behalf of GMH is that there existed a valid reason for the summary dismissal of Mr Sutcliffe, namely serious and wilful misconduct on his part.
The identification of the conduct alleged by GMH to constitute serious and wilful misconduct justifying termination of Mr Sutcliffe's employment has varied from time to time. What was put to Mr Sutcliffe at the interview on 13 September 1996 was that his activities shown on the films were more than would be expected of him at work, and that he should therefore have come to work and done his job. That identification of the relevant conduct also finds expression in the letter under the Workers Rehabilitation and Compensation Act dated 19 September 1996, paragraphs 3 and 4 of which are set out earlier in these reasons. That letter alleged serious and wilful misconduct between 3 and 6 September 1996. In paragraph 4(e) it is said that the activities shown on the films "are inconsistent with an alleged back strain injury, for which you had certification of total incapacity".
At trial, the allegation was that Mr Sutcliffe had orchestrated time off work from the period from 22 August through to 7 September 1996 so that he could clear out his house.
Upon the review before me, the serious and wilful misconduct was said to be the fact that Mr Sutcliffe obtained payments of compensation for alleged total incapacity for work, when the film evidence demonstrated that he was fit to perform the modified duties provided by GMH. It was submitted that the films demonstrated that he was probably fit for those duties even on 28 August 1996 when Mr Osti first saw him, but certainly from 4 September onwards. Counsel said that the serious and wilful misconduct which justified dismissal was the conduct charged in the Magistrates Court, presumably in counts 1 and 2 which allege Mr Sutcliffe obtained payments under the Workers Rehabilitation and Compensation Act by dishonest means. The allegations in count 3, namely that a false statement was made to Mr Nuske on 30 August 1996, was not a reason which led to the decision to dismiss Mr Sutcliffe, nor was it put to him in any form at the interview on 13 September 1996. Insofar as it might be possible now to rely after the event on such a false statement as constituting a valid ground for dismissal (cf Byrne v Australian Airlines Limited [1995] HCA 24; (1995) 131 ALR 422 at 462-463), it is clear on the evidence that no communication occurred between Mr Sutcliffe and Mr Nuske on 30 August 1996. Furthermore, the Judicial Registrar accepted, in preference to the evidence of Mr Nuske, Mr Sutcliffe's denial that the statement alleged in the particulars of offence was made when a conversation did occur on 28 August 1996. In short, GMH has not proved the particulars of that charge. However, even if such a false statement could now be relied upon for the purposes of s 170DE(1), there would remain a contravention of s 170DC(1) as the particular conduct was not at any time put to Mr Sutcliffe. No further reference to the subject matter of count 3 of the complaint is necessary.
Whatever the formulation of the alleged serious and wilful misconduct, the onus of establishing that misconduct as a valid reason for termination of the employment lies on GMH: s 170EDA(1).
The question whether an employee has been guilty of serious and wilful misconduct requires an examination not only of his actions but also of his mental processes relative to them. The misconduct must be conduct so seriously in breach of the contract of employment that by standards of fairness and justice the employer should not be bound to continue the employment. The conduct must also have the quality that it is "wilful", that is it must amount to a deliberate flouting of the essential contractual conditions: see North v Television Corporation Limited (1976) 11 ALR 599, Gooley v Westpac Banking Corporation [1995] IRCA 658; (1995) 59 IR 262 at 269 and Bartucciotto v Euro Printing Company Pty Ltd, von Doussa J, unreported, IRCA 72/96, 21 February 1996 at 17-18.
In my opinion on each of the formulations of the alleged serious and wilful misconduct, the evidence fails to establish that Mr Sutcliffe was guilty of such conduct.
The first formulation postulates that the activities shown in the film are inconsistent with an injury for which total incapacity has been certified.
It is clear on the medical evidence that the activities shown are not inconsistent with the diagnosis of a prolapsed disc. Indeed the fact of that pathology is beyond question. In theory there may be room to argue whether the pathology produces the degree of pain and disability after activity which Mr Sutcliffe has consistently reported since March 1996. However, apart from the films, there is no evidence which raises a doubt about the veracity of his complaints, and they have not been doubted by his medical advisers, or by Dr Johnson. The Judicial Registrar accepted the truthfulness of Mr Sutcliffe's evidence that he had suffered the pain which he reported to the doctors, and accordingly the theoretical possibility that the objective evidence of abnormality was not causing disability is disproved.
The medical evidence from Dr Cheung and Mr Osti denies that the films are inconsistent with the diagnosed nature of the injury and those doctors are in a superior position to Mr Fry in terms of their ability to express a view on that topic as they have examined Mr Sutcliffe on many occasions. Again, the Judicial Registrar accepted their evidence in preference to that of Mr Fry, and weight must be given to that fact. However, quite apart from the preference expressed by the Judicial Registrar, bearing in mind that the onus of proof rests on the employer, the reviewing Court would not be justified in rejecting the evidence of the two treating doctors in favour of the view expressed by another doctor who has not examined the worker, and who was given an incomplete history.
Accepting that the injury has been correctly diagnosed by Dr Cheung and Mr Osti, do the films establish that the degree of disability suffered by Mr Sutcliffe between 3 and 6 September 1996 was not such as to incapacitate him from the work that was available to him at GMH? If this question is answered in the negative, Mr Sutcliffe was not guilty of misconduct. If the question is answered in the affirmative, the further question then arises whether the misconduct was sufficiently serious and wilful as to justify dismissal.
The films must be interpreted in light of the medical evidence, and the evidence of Mr Sutcliffe. In particular, regard must be had to the evidence that even the light work activities at GMH induced pain after less than four hours work, that the activities undertaken on the days between 3 and 6 September 1996 caused pain requiring a greater than normal ingestion of painkillers and rest, and that the activities were undertaken to complete a domestic task that had to be done.
The first formulation of the GMH case depends on the proposition that if a partially incapacitated employee on a given day has the capacity to perform activities consistent with the requirements of his or her work duties, the employee should expend that capacity in the performance of work duties in priority to all personal and domestic demands. This proposition does not withstand testing, and in my view is wrong.
Normal healthy employees in full time employment can be expected to have and to exercise a capacity for physical activity which considerably exceeds that required in the ordinary hours of a full time contract of employment. At the least, in addition to employment, activities will involve those customarily pursued in day to day living - the domestic requirements of keeping house, shopping, maintaining a place of abode, and often caring for children. Additional activities may also include such things as exercising pets, engaging in sporting activities and engaging in overtime or additional paid remuneration. The minimum domestic requirements of many employees, particularly those required to maintain a domestic environment and care for children, are considerable.
If such an employee is injured, he or she is still required to fulfil the domestic requirements of the kind mentioned or at least many of them. It is common place for employees to be certified as totally incapacitated for work, yet for them to have the capacity to attend to essential household duties. If an employee before injury participated in sporting and other plainly optional pleasure activities, after injury he or she would reasonably be expected to first use a residual partial capacity for activity in whatever rehabilitative or light work duties that are offered by the employer before enjoying optional pleasure activities. However, activities that are reasonably necessary and required by that person's established lifestyle stand in quite a different position. Take a single supporting parent who suffers a work related injury as an example. The necessary domestic activities of such a person are likely to require physical activity for, say, three hours per day on such matters as bathing, dressing, preparing meals, shopping, cleaning, and so on. In this situation, when these reasonably necessary duties are fulfilled the injured employee might have no remaining capacity to engage in paid work. In my opinion that person would be totally incapacitated for work within the meaning of the Workers Rehabilitation and Compensation Act.
The notion that under the Workers Rehabilitation and Compensation Act partial incapacity for work is to be assessed having regard only to the objective extent of the physical capabilities of an employee has been rejected both at first instance and on appeal by the Supreme Court of South Australia: see Workers Rehabilitation and Compensation Corporation v James (1991) 56 SASR 414, and on appeal (1992) 57 SASR 365. The legislation does not disregard the "normal life" requirements of an employee: cf Workers Rehabilitation and Compensation Corporation v Phillips [1991] SASC 2863; (1991) 56 SASR 72 per King CJ at 74, with whom Millhouse J agreed. What activities carried out by a particular employee are part of that person's necessary domestic activities is a matter for judgment having regard to that person's established lifestyle and community standards. I respectfully agree with the test formulated by Mullighan J in James' case at first instance at 425, and approved by the members of the Full Court at 377 and 385:
"It is the concept of reasonableness which is the safeguard."
As Mullighan J observed at 425, it would make nonsense of the legislation if genuine and proper reasons relating to the personal situation of an employee were of no relevance.
The law does not require a disabled employee to abandon the performance of reasonably necessary domestic activities, for example by hiring domestic assistance, or searching out gratuitous services from family or friends, so that whatever limited capacity for activity remains can be devoted exclusively to light work provided by the employer.
In the present case, had Mr Sutcliffe not been injured at all he would have had the capacity to clear out his house, and to continue at work. Even after the injury in early 1996, had the aggravation injury on 22 August 1996 not happened, Mr Sutcliffe would have had sufficient residual capacity for activity to perform his domestic duties, to engage in certain pleasure pursuits (including riding a motor bike) and to perform the alternative duties that were provided for him by GMH. But for the aggravation on 22 August 1996 he may well have had the capacity to attend the afternoon four hour shifts for which he was rostered, and also to have performed the house clearing activities. It would certainly have been reasonable for him to attempt to do so. Had he followed this course, the moving activities during the day may have aggravated the underlying back condition so that he suffered pain which prevented him from attending work later in the day. In this situation I consider he would have been totally incapacitated from performing his light duties at GMH on those days. In my opinion, the house clearing activities performed by Mr Sutcliffe on 3-6 September 1996 were of a reasonably necessary kind. He would have been able to perform them without difficulty but for his injuries. As it was, and probably because of the aggravation on 22 August 1996, the house clearing activities exhausted his limited capacity for activity on the days in question. In my view the evidence fails to establish that Mr Sutcliffe was not totally incapacitated for work on those days, having regard to his medical condition and his personal circumstances. As I understand the evidence of both Dr Cheung and Mr Osti, this is the point they were endeavouring to make when it was suggested to them that the films showed that Mr Sutcliffe was not totally incapacitated.
In some cases where films are advanced in defence of a compensation claim, the filmed activities of the claimant stand in such marked contrast with earlier accounts of symptoms given to doctors and others, that the films serve to discredit the claimant. If the filmed activities of Mr Sutcliffe had been inconsistent with complaints of pain or disability made by him to the doctors, for example by demonstrating movements which he had denied, the films would have had that effect. Insofar as the diagnosis depended upon the veracity of subjective complaints, that diagnosis would be in doubt. Insofar as the diagnosis was objectively inconsistent with the demonstrated movements, the diagnosis would be disproved. However, in the present case, the treating doctors, whose evidence must be the primary guide to the Court, did not consider the movements were inconsistent either with the subjective complaints made by Mr Sutcliffe, or with the diagnosis. The films do not establish that the Judicial Registrar erred in accepting the credibility of Mr Sutcliffe.
GMH has argued that the Judicial Registrar erred in treating the credibility of the applicant as of prime importance. I disagree. In my opinion the credibility of Mr Sutcliffe is important on every formulation of the case of GMH. In particular, his credit is important in deciding whether, after performing necessary domestic activities on the days when the films were taken, he had no further capacity to perform work of the kind available to him at GMH. His evidence is that the dumping activities were performed by him under the influence of a high dose of painkillers, and that he suffered afterwards, and was required to rest. Once that evidence is accepted, he did not have the capacity to undertake an additional four hours duties for GMH on those days.
The second formulation of the allegation of serious and wilful misconduct is that Mr Sutcliffe deliberately contrived to take time off from 22 August 1996 through to 7 September 1996 to clear his house, and to this end deceived his doctor so as to obtain the medical certificates. The evidence fails to establish this allegation. The evidence of Mr Fox and Mr Brown indicates that they were, at least on 13 September 1996, disbelieving of the allegation that Mr Sutcliffe had suffered an aggravation on 22 August 1996, and treated as suspicious the fact that Dr Cheung had on 26 August 1996, given a certificate retrospectively covering 23 August 1996. However, the evidence of Mr Nesbit confirmed that there had been a breakdown of a robot as alleged by Mr Sutcliffe, and the evidence of Dr Cheung lends no support to the view that he was deceived into giving the certificate. The certificate that covered the period 3-6 September 1996 was given by Mr Osti. Notwithstanding the films, Mr Osti denied that he had been deceived. He had no recollection of being asked to give a medical certificate and his decision to give one was based substantially on the objective diagnostic evidence available to him. Apart from these matters, the acceptance by the Judicial Registrar of the credit of Mr Sutcliffe must lead to the conclusion by this Court that the onus of proof which rests upon GMH to make out the allegation has not been discharged.
The third formulation of the GMH case is that Mr Sutcliffe was guilty of dishonesty by obtaining income maintenance payments on or about 12 September 1996 and 19 September 1996 as alleged in the criminal proceedings. The particulars of offence pleaded in counts 1 and 2 of the complaint are not without their difficulties. The films were taken some days before the alleged obtaining by dishonest means, and certainly by 19 September 1996 a decision had already been made to dismiss Mr Sutcliffe. It seems GMH was aware of the conduct of Mr Sutcliffe on which they now rely, yet they chose to pay him nonetheless. Interesting questions of causation arise. It is also difficult to determine exactly what it is that is alleged to have constituted the dishonest pretence. Count 1 deals with income maintenance for the period between 3 and 6 September 1996. The medical certificate from Mr Osti which covered that period was apparently given to GMH at about the time that it was issued - about 28 August 1996. On the assumption that Mr Sutcliffe suffered an aggravation on 22 August 1996 the evidence shows that he was on 28 August 1996 totally incapacitated for work. However, by 3 September 1996 the aggravation was subsiding and he was obviously capable, for the period shown in the film at least, of a range of light activities of the kind which he had been performing at GMH. The alleged pretence in count 1, presumably lies in a failure by Mr Sutcliffe to tell GMH prior to 12 September 1996 that, notwithstanding the medical certificate, he had been fit for duties of this kind on the days alleged.
In relation to count 2, Mr Sutcliffe reported for work on 9 September 1996 and was sent away. There is no evidence that he engaged in activities on 10 and 11 September 1996 inconsistent with his certification. The allegation against him appears to be that, notwithstanding the advice received from his doctors, he knew that he was fit for his GMH duties and dishonestly allowed Dr Cheung to certify otherwise, or alternatively, knowing that the certificate was wrong, failed to tell GMH that that was the case. (The attitude of GMH on 9 September 1996 suggests that even if he had told GMH he was fit for work, they would not have allowed him to work, in light of Dr Cheung's certificate).
In the interpretation of s 120 of the Workers Rehabilitation and Compensation Act, under which counts 1 and 2 were laid, the Supreme Court of South Australia has applied the test of dishonesty propounded in R v Ghosh [1982] 2 QB 1053: see Weinel v Fedcheshen [1995] SASC 5216; (1995) 65 SASR 156 at 172. The Court must first be satisfied that the defendant acted dishonestly by reference to the general standards of the community. Then the Court must be satisfied that the prosecution has proved that the defendant realised that his or her actions were, according to those standards, dishonest. In my opinion, the conduct of Mr Sutcliffe was not dishonest by ordinary standards. Further, on his explanation for his conduct it could not be said that he realised that his actions were dishonest. The acceptance of his credit by the Judicial Registrar means that GMH has failed, even on the balance of probabilities, to establish either of counts 1 or 2 in the complaint.
The Judicial Registrar expressed her conclusion on the question whether a valid reason existed for the dismissal of Mr Sutcliffe as follows:
"In my view the respondent's decision to terminate the applicant's employment was flawed by the assumptions made by the decision makers and by their failure to obtain medical opinion from the applicant's treating doctors prior to the termination of his employment. In my view the respondent did not have a valid reason for the termination of the applicant's employment."
This passage of the reasons for decision has been criticised by counsel for GMH, and in particular counsel contends that the Judicial Registrar erred in concluding that the decision to terminate was flawed by the failure to obtain medical opinion from the applicant's doctors. I reject these submissions. In my opinion this passage, though brief, is expressed in terms that reflect a correct application of legal principle to the facts of the case.
Where an employer seeks to dismiss an employee for alleged serious and wilful misconduct - and particularly where the employee makes it known that he does not agree that he has been guilty of such conduct - the employer, to satisfy the evidentiary onus of establishing that a valid reason for termination exists, must show that the employer has investigated the alleged conduct of the employer to an extent that is reasonable and sufficient in all the circumstances.
A "valid reason" within the meaning of s 170DE(1) is a reason that is "sound, defensible or well founded": Senathirajah Selvachandran v Peteron Plastics Pty Ltd [1995] 62 IR 371 at 373.
An allegation of serious and wilful misconduct will not constitute a defensible or well founded reason for termination unless it has been sufficiently investigated.
In Bi Lo Pty Ltd v Hooper (1994) 53 IR 224 the South Australian Industrial Relations Commission, in considering whether a summary dismissal on the ground of serious and wilful misconduct was harsh, unjust or unreasonable, said:
"An employee is entitled to both substantive and procedural fairness in respect of a dismissal. Substantive fairness will be satisfied if the grounds upon which dismissal occurs are fair grounds. Broadly speaking a dismissal will be procedurally fair if the manner or process of dismissal and the investigation leading up to the decision to dismiss is just.
Where the dismissal is based upon the alleged misconduct of the employee, the employer will satisfy the evidentiary onus which is cast upon it if it demonstrates that insofar as was within its power, before dismissing the employee, it conducted as full and extensive investigation into all of the relevant matters surrounding the alleged misconduct as was reasonable in the circumstances; it gave the employee every reasonable opportunity and sufficient time to answer all allegations and respond thereto; and that having done those things the employer honestly and genuinely believed and had reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged; and that, taking into account any mitigating circumstances either associated with the misconduct or the employee's work record, such misconduct justified dismissal. A failure to satisfactorily establish any of those matters will probably render the dismissal harsh, unjust or unreasonable."
In Sangwin v Imogen Pty Ltd, unreported, Industrial Relations Court of Australia, 8 March 1996, I considered what was required under s 170DE(1) of the Act to constitute a "valid reason" based on an allegation of serious and wilful misconduct. I concluded, at p14 that:
"...if the employer honestly believes on reasonable grounds after sufficient inquiry that the employee has been guilty of serious misconduct a valid ground within the meaning of s.170ED(1) exists for terminating the employment of the employee."
In the present case, the Judicial Registrar plainly had this principle in mind in expressing her conclusion. The Judicial Registrar considered that GMH had insufficiently investigated the allegation. To obtain medical opinion from the treating doctors, was a reasonable and necessary step to sufficiently investigate the allegations made against Mr Sutcliffe. Had this step been taken, the opinion of the doctors, which did not support the inferences drawn by the decision makers from the films, would have become known.
I agree with the Judicial Registrar that the reasoning process of Mr Fox and Mr Brown, which led them to conclude that a valid reason existed for terminating Mr Sutcliffe's employment, was flawed. They were wrong in assuming that the films showed activities that were inconsistent with the diagnosis. They were wrong in assuming that he had lied to the doctors and deceived them. They were wrong in assuming that he had deliberately set out to mislead GMH. The fact that Mr Sutcliffe telephoned Mr Nuske and informed him of his pending activities should have caused them to wonder if they had mistaken his motives.
Finally, it was contended on behalf of GMH that by the interview process on 13 September 1996 Mr Sutcliffe had been given a sufficient opportunity to defend himself against the allegations made, so as to comply with s 170DC. I do not accept that submission. I do not consider that the misconduct perceived by Mr Fox and Mr Brown which led to the decision to terminate Mr Sutcliffe's employment was sufficiently put to him, nor do I consider that he was given sufficient time or opportunity to prepare his answer to the allegations made against him.
It was not put to Mr Sutcliffe that he had deceived his doctors - presumably both Dr Cheung and Mr Osti. Had that allegation been put, it is likely that Mr Sutcliffe would have been alerted to the need to obtain information from his doctors, or at least to direct GMH to the doctors. Insofar as it may have been a reason for his dismissal, it was not put to Mr Sutcliffe that he had dishonestly embarked on a course of conduct from 22 August 1996 to give him days away from work to clear out his house. The suspicion that there had been no alteration in his capacity for work on and from 22 August 1996 was not put to Mr Sutcliffe. Had it been, his account of the aggravation injury on 22 August 1996 would have been disclosed, and would have given an added reason for GMH to consult his doctors.
An "opportunity", within the meaning of s 170DC, to defend the allegations requires not only that the allegations be made known, but that time be given to understand and consider those allegations, and, where appropriate, to get advice and to gather evidence. The general statement of principle in relation to the right to be heard at common law made by Aronson and Dyer in "Judicial Review of Administrative Action", (1996) applies equally to s 170DC.
The authors say at 528:
"The right to be heard will also count for little if a person is not allowed sufficient time to prepare her or his submissions and gather evidence. What amounts to an adequate period of notice will clearly vary, depending on such factors as the complexity of the issues, the amount and availability of materials to be considered and evidence to be organised, statutory time constraints, and the need for urgency."
In the present case there was no urgency to complete the interview process on 13 September 1996. Mr Sutcliffe had returned to work the preceding day. Even if it were felt inappropriate to allow him to return to duties pending the completion of inquiries, including receiving Mr Sutcliffe's defence, he could have been suspended, and the interview stood over. Had Mr Sutcliffe been allowed time to get legal advice, it is, at the least, highly likely that his doctors would have been consulted by his legal advisers. That in turn would have caused the importance of obtaining medical opinion from the treating doctors to be brought to the attention of the decision makers.
Further, the evidence of both Mr Fox and Mr Brown strongly suggests that they had each decided, on seeing the film, that Mr Sutcliffe had been guilty of serious and wilful misconduct, and that the interview process was merely a matter of form that had to be gone through. If the purported opportunity extended to an employee under s 170DC to defend himself is no more than a ritualistic exercise by a decision maker who has a closed mind, no real opportunity is extended to the employee. An employee does not receive an opportunity to defend himself unless the decision maker before whom he presents his defence has a mind that is still open; see de Smith, "Judicial Review of Administrative Action", (1995) 5th ed. p 505.
Counsel for GMH argued strenuously that the evidence of Mr Fox and Mr Brown should not be taken too literally, and whilst they agreed with leading questions to the effect that they knew that they "had to engage in a process which was to get Mr Sutcliffe's version of events" before they could act on their view that his conduct warranted dismissal, the Court should construe the whole process as a fair one. Having read the evidence of both these witnesses, I am left with the impression that it is likely that the interview process was merely one of form conducted before decision makers who had already made up their minds that Mr Sutcliffe should be dismissed. However, it is not necessary to make such a finding, as for other reasons already given, Mr Sutcliffe was not given a proper or sufficient opportunity to defend himself.
For these reasons I consider that the conclusions of the Judicial Registrar that the employment of Mr Sutcliffe was terminated in contravention of ss 170DE(1) and 170DC(1) should be confirmed.
On the hearing of the notices of motion counsel made submissions regarding the reinstatement order made by the Judicial Registrar. It was contended on behalf of GMH that reinstatement was inappropriate whilst the criminal charges were outstanding as this would place the employer and employee in a situation where they were each preparing a case against the other. I have already found that GMH has failed to establish, even on the balance of probabilities, any of the counts charged. Moreover, it would appear that the result of these proceedings will finally decide the critical issues which form the substance of the charges. In these circumstances the fact that the criminal proceedings remain extant hardly seems a reason for not making a reinstatement order. Moreover, an application by GMH to stay the order for reinstatement was dismissed by Marshall J on 25 July 1997 and the reinstatement order has been in operation since then. That is a further reason for not disturbing the order. However, counsel for GMH requested that, in the event that the review was otherwise decided adversely to GMH, an opportunity be given to further address the Court on the question of reinstatement in light of the Court's reasons. Accordingly, the orders of the Court will be a declaration that the employment of Timothy Warren Sutcliffe was terminated on 13 September 1996 in contravention of ss 170DE(1) and 170DC(1) of the Act, and that the question of the appropriate remedy be stood over to enable submissions on that question to be made.
|
I certify that this and the preceding twenty-nine (29) pages are a true copy of the Reasons for Judgment herein of the Honourable
Justice von Doussa |
Associate:
Dated:
|
Counsel for the Applicant: | Mr S Blewett, instructed by the Australian Manufacturing Workers Union |
| Counsel for the Respondent: | Mr D Smith and Mr R Bönig |
| Solicitor for the Respondent: | Fountain and Bönig |
| Date of Hearing: | 17 & 18 September 1997 |
| Date of Judgment: | '9 February 1998 |
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