Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division, and Wagga City Council [2003] NSWIRComm 1009 (27 March 2003)

Last Updated: 22 May 2003

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: McLEAY C

27 March 2003

Matter No IRC 2411 of 2002

Notification under section 130 by the Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division of a dispute with Wagga Wagga City Council re payment of sick leave

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DECISION

This is a notification by the Federated Municipal and Shire Council Employees' Union of Australia, New South Wales Division ("the union") of a dispute with Wagga Wagga City Council ("the Council") pursuant to section 130 of the Industrial Relations Act 1996 ("the Act").

The matter was allocated to Commissioner Tabbaa. Following conciliation directions were issued by Commissioner Tabbaa regarding the filing and serving of witness statements. The directions were later amended to allow for the respondent to have sufficient time to respond to the union's initial statements which were filed late and served well beyond time. Commissioner Tabbaa then issued a certificate of attempted conciliation and the matter was re-allocated to me pursuant to an application made in accordance with s 173 of the Act.

At the hearing, the applicant was represented by Mr J Klower who called evidence from Mr Raymond Lucas and Mr David Gardiner. The respondent was represented by Mr R Moore barrister with Ms M Simpson, solicitor, who called evidence from Mr Laurence Flack and Mr Robert Brown.

BACKGROUND

Mr Lucas had been an employee of the Council for 46 years, since January 1956. On 17 July 2001 Mr Lucas wrote to the General Manager of the Council in the following terms:

It is with regret that I hereby tender my resignation from the employ of the Council due to increased impaired hearing, as stated in the medical certificate attached. I propose to take annual leave from 7 August 2001 to 30 January 2002 and officially retire from Council on 30 January 2002. I respectfully request that Council give consideration to making payment of my accrued sick leave in accordance with the provisions of the award as the termination is due to ill health. I would like to thank Council for the opportunities it has afforded to me over the many years of service I have had with the Council. I would like to thank all staff both past and present for their support and friendship and wish you and the Council all the best for the future.

The provisions of the Local Government (State) Award 2001 referred to in Mr Lucas' letter of resignation are contained in subclause (vi) of clause 35, Savings and Transitional, which reads relevantly as follows:

Where an employee had an entitlement under awards rescinded and replaced by this award for the payment of unused sick leave arising out of the termination of employment due to ill-health or death and where such entitlement existed as at 15 February 1993 the following provisions apply: (a) In the event of the termination of service of an employee on account of ill-health and the council is satisfied that such ill-health renders the employee unable in the future to perform the duties of such appointed classification, the termination shall not be effected earlier than the date upon which the employee's credit of leave at full pay shall be exhausted unless the employee is paid any accrued sick leave at full pay to which such employee would be entitled under this clause. (b) .....

The award does not differentiate based on the nature of the termination of employment, that is, whether it be a resignation, retirement or dismissal.

The Leave Provisions generally are contained in clause 18 which states at A(iii):

The council may require employees to attend a doctor nominated by council at council's cost.

Council required Mr Lucas to attend a doctor nominated by the council, Mr Bal Krishan, Ear Nose and Throat Surgeon, which he did.

In a letter dated 24 January 2002, the General Manager wrote to Mr Lucas confirming acceptance of his resignation. In regard to the request for payment of accrued sick leave, the letter said:

Due consideration has been given to your request for accrued sick leave to be paid out on the grounds of ill-health. Based on a thorough review of medical details and reports provided by Dr Marcus Wilcox, Mr Bal Krishan and Dr Mutton, Council formally denies this request, and as such, no payment shall be made for accrued sick leave.

In these proceedings the union is seeking an interpretation of the award provisions in favour of Mr Lucas.

THE EVIDENCE

The evidence of Mr Flack, Manager Workplace Relations, and Mr Brown, Manager Strategic Planning & Policy, is that Mr Lucas had carried out his duties as Administration Supervisor without any apparent undue effort and without complaint by himself, work colleagues or the public. Mr Lucas had himself responded in the negative to the question Have you any known condition which the Council will need to accommodate either for interview or for you to perform the duties of the position for which you have applied? in March 1998. Mr Lucas wore a hearing aid but no particular accommodation for his hearing impairment had ever been requested or provided.

THE CASE FOR THE APPLICANT

Mr Klower submitted that Mr Lucas' hearing impairment, as certified by three doctors, precluded him from carrying out his allocated position with the Council, and that he was entitled to payment of his accrued sick leave on termination of his employment, in accordance with the award. The union is seeking an interpretation of subclause (vi) of clause 35, Savings and Transitional in favour of Mr Lucas. The requirement for provision of proof of illness is contained in clause 18, Leave Provisions.

Mr Klower sought that the Commission "exercise its powers under section 175 of the Act to interpret the provisions of the award in those regards, as well as provisions of the Industrial Relations Act in regards to resignation and in regards to the terminology of disability which is included in the Anti-Discrimination Act and discriminations on the grounds of disability as determined in the Anti-Discrimination Act."

Mr Klower had estimated the amount of accrued sick leave owing to Mr Lucas to be "73.7 weeks times $853.69, equating to an estimated total of $62635.23 [sic]".

Mr Klower submitted that Mr Lucas had been afforded the payment of sick leave when he had attended his doctors for diagnosis or operations which endeavoured to correct his hearing impairment. The applicant has provided medical certificates from his own doctors and from the doctor that the Council required him to attend prior to the termination of his employment. He submitted that the reports of Doctors Wilcox, Mutton and Krishan support Mr Lucas' application for payment of untaken sick leave and his resignation due to ill health.

Mr Klower quoted from the Recommendation contained in a memorandum from Mr Flack to the Director Corporate Services to support his position. The Recommendation reads as follows:

It is recommended that Wagga Wagga City Council endorse a pre-resignation/termination on ill health grounds medical. [sic] Prior to approving resignation/termination of the services of an employee on account of ill health Council will be satisfied that such health renders the employee unable in the future to perform the duties of such appointed classification. (emphasis added) In order for Council to make such a decision the Human Resources Manager or nominee will arrange a medical examination by an appropriate specialist in the field of the alleged illness and based on the report of Council's examining doctor the Human Resources Manager in conjunction with the relevant Director will then report the matter to Council for their action.

Mr Klower further quoted from the memorandum:

There is a need to ensure that payments are in accordance with the spirit and intent of the Local Government Award.

Council had acknowledged an paid accrued sick leave to other employees on termination, and Mr Lucas was equally entitled to receive payment.

In preparing their report to Council as set out in the policy statement, Mr Klower submitted that neither Mr Flack nor Mr Brown approached Mr Lucas, nor was an expert workplace assessor involved. Nor did they assess whether Mr Lucas' duties could have been changed to accommodate his medical condition, in accordance with stated policy.

Mr Klower submitted that Mr Lucas' capacity to undertake his duties up until 17 July 20001 has "no relevance" in determining his ability to carry out his duties in the future.

THE CASE FOR THE RESPONDENT

Mr Moore for the Council submitted that the matter before the Commission falls to be determined in accordance with section 136 of the Act, not section 175 on which Mr Klower relies.

In determining how clause 35 of the award should be interpreted, Mr Moore relies on City of Wanneroo v Michael Lindsay Holmes (1989) 30 IR 362 in which it is said that "the interpretation of an award begins with a consideration of the natural and ordinary meaning of its words". Further, "evidence of the conduct of the parties subsequent to the making of the award however, cannot be relied upon to construe it".

Mr Moore submitted that the words in clause 35(vi)(a) give the Council a unilateral discretion to determine whether or not it is satisfied in each case that comes before it. In Mr Lucas' case, the Council was not satisfied on the evidence before it that Mr Lucas' ill-health rendered him unable to perform the duties of his position. On the contrary, the assessment carried out by Mr Brown, it was submitted, showed that Mr Lucas had been able to perform his duties.

The medical opinions differ in that while Dr Krishan found that Mr Lucas was totally and permanently disabled, Dr Mutton did not. Mr Moore submitted that the Council was not satisfied on the medical evidence.

Mr Moore submitted that Mr Lucas had the most recent audiogram on 31 January 2001 but did not submit it to Council until he provided his letter of resignation, indicating that he intended to resign in any case. The only issue was whether or not he might receive an additional payment on resignation.

Essentially, submitted Mr Moore, Mr Lucas carried out administrative and clerical duties, usually communication in writing, and with a successfully work history. Mr Lucas himself admitted that he could communicate verbally when he placed himself in an appropriate position. Mr Gardiner said that when Mr Lucas wore his hearing aid, communication with him was "just like talking to a normal person".

Mr Moore submitted that other positions existed at a similar level to the one occupied by Mr Lucas, but that Council did not need to consider alternatives because there had been no request made in the past and no need to do so at a time when Mr Lucas had submitted his resignation.

Mr Moore conceded that Mr Moore has a disability as defined in the Anti-Discrimination Act, and that disability caused a difficulty in doing some aspects of his job, was not such as would warrant that payment of moneys on retirement as sought. Mr Lucas had developed an appropriate practice of delegating certain work that is, public inquiry work, to others.

In summary, submitted Mr Moore, while his doctor said that Mr Lucas could not do his work, and advised him to retire, those who worked with him gave evidence that Mr Lucas could do the work. Council was satisfied, on this basis, that Mr Lucas could continue his duties in the future unimpeded because he could do so in the past.

CONSIDERATION

The matter came before me as a dispute notification pursuant to s 130 of the Act.

S136 reads:

(1)   The Commission may, in arbitration proceedings, do any one or more of the following: (a)   make a recommendation or give a direction to the parties to the industrial dispute, (b)   make or vary an award under Part 1 of Chapter 2, (c)   make a dispute order under Part 2, (d)   make any other kind of order it is authorised to make (including an order made on an interim basis). (2)   Any such action may be taken by the Commission on its own initiative or on application by any person authorised to notify the Commission of the industrial dispute.

Mr Klower referred to s 175 which provides:

The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument).

Mr Moore submitted that the powers of the Commission in this case were limited to those set out in Chapter 3, Industrial Disputes of the Act. However, s 136 allows, by use of the word "may", certain things to be done. It does not restrict the Commission to those things only. The powers contained in Chapter 3 can be read in conjunction with other powers set out in Part 5 of Chapter 4.

For present purposes, suffice to say that s 175 empowers the Commission to determine the interpretation and application of clause 35 of the award. In doing so, the Commission may make a recommendation or give a direction to the parties to the dispute, in accordance with s 136 (1) (a) above.

The term "Council" was used variously during the proceedings to indicate either the elected Council members or the Council officers. I make no effort to differentiate the action of the officers from that of the elected Council, using the term generically, except where a particular officer is named.

It is appropriate to commence with the natural and ordinary meaning of the words set out in clause 35. On its face, I find no ambiguity contained in the relevant part of the clause.

The subclause can be considered in its parts. Firstly, it is undisputed that Mr Lucas is an employee who had an existing entitlement at 15 February 1993. Secondly, the letter of resignation shows that the termination of Mr Lucas' service is on account of his "increased impaired hearing, as stated in the medical certificate attached". There was no issue raised as to impaired hearing not fitting the meaning of the term "ill-health" as generally understood in its context. Thirdly, there was no dispute about the nature and type of duties performed by Mr Lucas.

While the union did not pose a particular question for consideration, Mr Moore submitted that Council acted within its obligations when it was satisfied that Mr Lucas' hearing impairment did not render him unable to perform the duties of his appointed classification. Essentially, there remains only one issue for determination, namely, whether it was available to the Council in all the circumstances to be so satisfied.

The circumstances are these:

•	Mr Lucas commenced employment with the Council as a Junior Clerk in January 1956.
•	For the last fifteen years of his employment, Mr Lucas held the position of Administration Supervisor.
•	Mr Lucas submitted notice of his resignation for reason of his hearing impairment in July 2001, attaching a medical certificate from Dr Wilcox supporting his application for retirement on medical grounds. The resignation was to be effective on 30 January 2002, following a lengthy period of annual leave.
•	Prior to this time, the Council was aware that Mr Lucas wore a hearing aid, but was not aware that he experienced any difficulty in the performance of his duties.
•	On receipt of the notice and accompanying certificate, Mr Flack talked with his Manager, Mr Brown, who reported no knowledge of any problems communicating with Mr Lucas.
•	In the months following the presentation of his notice, the Council did not respond to Mr Lucas. He made an appointment to see the General Manager late in November 2001. On the day following the making of the appointment, Mr Flack sent correspondence to Mr Lucas requesting authorisation to obtain medical reports.
•	Dr Krishan, an ENT specialist attended by Mr Lucas since 1984, reported to the Council in December 2001 that Mr Lucas had total deafness of 78.7% in his right ear and 80.5% in his left ear, and that "he is now totally and permanently unfit for carrying out his job".
•	The Council required Mr Lucas to attend Dr Phil Mutton, a Consultant Occupational Physician, on 10 January 2002. Dr Mutton reported that "I do not consider that Mr Lucas is totally and permanently incapacitated in as much as his job can be changed or modified ...."
•	On 24 January 2002 the Council wrote to Mr Lucas informing him that they were denying his request for accrued sick leave.

While at work, Mr Lucas did not complain about his hearing loss. He refused duties because he could not hear to take minutes, but told his superviser that he did not want the work because of personal commitments. During performance appraisals he did not admit any difficulty in carrying out his duties.

Dr Wilcox reported significant hearing loss and that Mr Lucas had expressed to him that he was "just coping" or "struggling". Dr Krishan reported that three or four previous surgical attempts to improve his hearing have not been successful in restoring his hearing. Dr Mutton reported Mr Lucas' stated difficulty with telephone work and localising sound, and a significant loss of ability to detect simple sounds whispered at 1.5 metres. He concluded that Mr Lucas "would have significant problems with hearing for communication purposes". Several times in evidence Mr Lucas stated that he was "struggling" at work.

Mr Lucas said he did not discuss his difficulty at work for fear of being dismissed, but brought no evidence to support this as a valid view.

Mr Flack gave evidence that, if he had been aware of any difficulties effecting Mr Lucas' work performance, he would have taken steps to accommodate the difficulty. In cross-examination, Mr Flack confirmed that the audiograms provided in evidence were on Mr Lucas' personal file. He acknowledged Mr Lucas' hearing impairment but did not regard him as disabled. In spite of the medical reports, Mr Flack made no attempt to change the work situation because Mr Lucas had already indicated an intention to retire. Mr Flack made no attempt to contact Mr Lucas during this time, except to arrange the medical appointment. He and Mr Brown assessed the situation and provided a report to Council.

Mr Brown gave evidence that he had not seen the medical reports, apart from the one attached to the letter of resignation, at the time of making the assessment about whether Mr Lucas should be paid his accrued sick leave.

In his written statement of evidence, Mr Brown said that Mr Lucas had written in an earlier performance appraisal that his aim was to "hopefully retire". Under cross-examination Mr Brown conceded that this was written in the context of a previously stated aim to "win Lotto".

Council's lack of attention to Mr Lucas' request in the early days following the submission of his request for paid accrued sick may have prejudiced the outcome of the application. It was clear that Mr Lucas' intention was to resign because of his hearing impairment. He provided a medical certificate supporting his retirement on medical grounds. When he heard nothing from Council he sought an appointment with the General Manager, cancelling the appointment when advised that he was to attend a doctor nominated by Council. Mr Lucas cooperated with this request. In the ordinary course, he would reasonably have expected his application to be granted. When told of Council decision within days of his impending retirement, having given six months notice, he had little choice but to proceed with his plans.

Council did nothing to effect its policy until November, despite Mr Lucas' request having been submitted in July. The initial medical certificate from Dr Wilcox provided by Mr Lucas was supportive of his retirement on medical grounds. The further report from Dr Wilcox in December 2001 said that while Mr Lucas was not permanently unfit for all types of employment, he was not suited to the duties of the position he then occupied because of his hearing impairment. Dr Krishan supported this view. Dr Mutton expressed a view that the job would need to be modified to accommodate Mr Lucas' hearing difficulty.

Council took into account its observations of Mr Lucas' performance prior to his submitting his resignation, and balanced that against the views of the medical practitioners.

Council did not interview Mr Lucas, nor write to him asking whether he had experienced difficulties at work, or whether his decision to retire was dependent on the success or otherwise of his application for payment of accrued sick leave. Nor did they give him early notice of the decision to refuse his application. After 46 years of service to a single employer, Mr Lucas deserved better.

The behaviour of Council appears to be to be contrived to ensure that Mr Lucas left the service of the Council without the payment of his accrued sick leave. It was right to ask him to visit a medical specialist. It was not right to wait so long that there was little room to negotiate after the report was received. It was not right to act against the medical views expressed in written reports to the Council.

Mr Lucas made it clear that his resignation was due to increased impaired hearing. If Council did not accept that Mr Lucas suffered from increased impaired hearing, the grounds for his resignation no longer existed. Alternatives to resignation should have been discussed. No such opportunity for discussion was offered to Mr Lucas. In fact, Mr Flack expressed the view under cross-examination that he did not believe that Mr Lucas had a disability. He confirmed that Council took no steps to accommodate Mr Lucas' hearing loss because he was retiring.

However, in determining the question before me, which is essentially the exercise of power contained in s 175 of the Act, the issues outlined in the above paragraphs are not directly relevant. The relevant issues are as follows.

Council took more notice of its own observations of Mr Lucas' past behaviour than it did of the medical practitioners' observations in regard to his future capacity. Council was aware that Mr Lucas wore a hearing aid, and that he had had time off for a number of operations on his ears. Mr Lucas had not assisted Council to gain an unbiased view of his disability when he did not complain about his problems at work, he did not record any difficulty, and had given a less than truthful reason for not wanting to perform that part of his duties that involved working overtime and taking minutes at meetings. Once the disability was admitted in the letter of resignation, Council denied it as being sufficient reason to satisfy the requirements of clause 35(iv) that "the ill-health renders [Mr Lucas] unable in the future to perform the duties of [his] appointed classification".

Council did not give Mr Lucas the opportunity to show that he could or could not perform his duties but relied, in accordance with the award provision, on the view of the qualified medical practitioners.

The dispute has arisen because Council obtained three medical opinions, two of which - Dr Wilcox and Dr Krishan - supported the application for payment of accrued sick leave entitlements. The third opinion - that of Dr Mutton - can best be described as equivocal, requiring some changes to the position to accommodate Mr Lucas. Council made no such changes. Dr Mutton's opinion is that Mr Lucas is not "totally and permanently incapacitated in so much as his job can be changed". The converse follows: that without such changes to the duties and the work environment as outlined in the report, Dr Mutton's opinion is that Mr Lucas is incapacitated.

It is inconsistent that Council did not accept that Mr Lucas' ill-health was sufficient grounds to retire, yet accepted his resignation given on that very basis.

CONCLUSION

Council denied the applicant's request for payment of accrued sick leave at the time of the termination of his employment, based on "a thorough review of medical details and reports". I have posed the question: was it available to the Council in all the circumstances to be satisfied that Mr Lucas' hearing impairment did not render him unable in the future to perform the duties of his appointed classification.

The first two doctors supported the application. The third doctor stated that the applicant was not totally and permanently incapacitated in so much as the job can be changed. Council made no effort to make any changes to the job. Therefore, the report of the consultant occupation physician cannot be read to say that the applicant was able to perform the duties of his appointed classification. Without the changes to the duties of the position, Dr Mutton's report is not useful in determining Mr Lucas's capacity to perform the position as it existed at the time of the report being written and at the time of the termination of the employment relationship. It remains to rely on the other two medical reports both of which are unequivocal in supporting the application to retire on medical grounds.

On this basis, I find that it was not available to the Council to be satisfied that Mr Lucas' impaired hearing rendered him unable in the future to perform his duties. On the basis of the medical reports and the nature of the duties and the work environment that Council made no effort to change, Council was in error in not accepting the medical opinions which supported Mr Lucas' application.

I leave the resolution of the outstanding issue of payment in the hands of the parties. Leave is granted to either party to seek the matter to be relisted for the purpose of seeking orders, if it be considered necessary to do so. If I do not hear from the parties within 21 days from the date of this decision I will consider the matter concluded by this decision and close the file accordingly.

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