PR953320 PR953320 Download Word Document [Note: a correction has been issued to this document - see PR957156 signed 11 April 2005] AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170CE application for relief in respect of termination of employment Danny Stergioti and Toyota Motor Corporation Australia Limited (U2004/3368) SENIOR DEPUTY PRESIDENT DUNCAN SYDNEY, 17 NOVEMBER 2004 Termination of employment. DECISION [1] On 22 April 2004 an application was lodged under s.170CE of the Workplace Relations Act 1996 (the Act) alleging an unfair dismissal of Mr Danny Stergioti by Toyota Motor Corporation Australia Limited (TMCAL) on 20 April 2004. It was said that the termination was harsh, unjust or unreasonable and reinstatement was sought. The termination was contained in a letter of 13 April 2004 which omitting formal parts, stated as follows: "As per the Problem Resolution Committee (PRC) findings we have received a copy of the letter from your Doctor advising of an increase in available duties. TMCA has reviewed the letter and discussed it with your Doctor. Your Doctor has confirmed that you are permanently restricted from driving 8 metre forklifts and as a result you are permanently unable to return to pre injury duties. As a result of this permanent restriction Toyota is unable to offer you ongoing duties in the warehouse and has been unable to find a redeployment opportunity at Woolooware Bay. As a result your employment with Toyota will be terminated effective 20th April 2004. You will have access to redeployment services. Please review your situation and advise if there are any valid reasons why your employment should not be terminated by Close of Business 20th April 2004." [2] The application proceeded to conciliation in accordance with the requirements of the Act. This was unsuccessful and the matter proceeded to arbitration. It was before the Commission for this purpose on 30 and 31 August, 2 September and 11 October 2004. [3] There is substantial evidence and submissions to be considered in the matter. [4] For the applicant, Mr Stergioti, evidence was given by himself, by Ms Margaret Buchanan who is employed by TMCAL as a team leader in the mezzanine area of the company's warehouse at Woolooware Bay, Mr Roy Smith employed by the respondent as store person, Mr Stephen Johnson, union organiser for the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU), and Mr C. Marmara, senior site coordinator for the AMWU at the respondent's warehouse. [5] For the respondent TMCAL evidence was given by Mr G.P. Morton, manager of the company's parts distribution centre at Woolooware Bay, Mr L.R. Whitehurst a resources consultant at the warehouse, Ms P.D. Moore employed by Elumina Group Pty Limited performing work as the return to work coordinator at TMCAL, Mr D. Berrie, national workers compensation manager for the respondent, Mr P. Fayd'herbe de Maudave who is manager national distribution centre, national parts accessories and service division of TMCAL and Ms D. Dickens, human resources manager Sydney and regions for the company. [6] I do not summarise the evidence of all these witnesses, rather I first set out matters which are not contested or are quite simply decided and then deal with such matters of evidence as are contested and which require resolution as part of the process of considering the overall claim. [7] The matters which I find relevant and not contested are as follows: Mr Stergioti has been an employee at TMCAL for approximately six years. He was employed as a store person and under the terms of the Toyota Workplace Agreements (Port Melbourne, Sydney and Regions) 2002 (the agreement) he had progressed to the SKTM2 classification. he suffered a workplace injury on 19 April 2000 while he was operating an 8 metre reach forklift putting away stock in the Kaizen department. He reported the pain and the incident to a supervisor. For the next 14 months he continued to work on the machinery on a rotating basis. On 28 June 2001 he was operating a Crown stacker when he felt a pain in his neck. He reported the injury immediately and left work for medical assistance; he was certified unfit for work from 28 June to 5 July 2001. On 14 September 2001 he had a recurrence of the injury with this time the pain being felt in his back. The incident was reported but he did not have any time off. He suffered a further strain to his neck on 23 November 2001 and he reported this incident. On or about 26 April 2002 he was assessed for the purposes of the implementation of a return to work programme. On or about 13 May 2002 he was issued with a return to work plan, it prohibited him from driving 8 metre or Crown forklifts. On 13 June 2002 he was issued with a revised rehabilitation plan from Work Focus Australia; the return to work plan was developed in consultation with Mr Whitehurst. On or about 16 July 2002 a further return to work plan was issued and as he progressed through the various return to work plans he started to go back to working on machines. On 30 September 2002 he was issued with a further report from Work Focus detailing a return to work plan. This authorised a return to normal hours on suitable duties. Mr Stergioti was working in the mezzanine area picking/packing. A further plan was provided on 7 November 2002, it increased his hours on machinery to an average of 2.5 to 3 hours per day. On 7 January 2003 the return to work plan provided that he was to trial permanently modified duties, he was permitted on and from 10 February 2003 to operate machinery for a period of up to four hours per day. Mr Stergioti took this report as establishing and reconfirming earlier reports where it was a stated goal that he would return to work on permanently modified duties. After a further report from Work Focus on 7 May 2003 Mr Stergioti elected to have his rehabilitation plan and return to work programme provided by the Workers Health Centre. They provided various plans, with the stated goal of returning to pre injury duties. On or about 8 December 2003 a case closure report from Mr Ed Zelma of the Workers Health Centre was issued. It states in part that: "Workers Health Centre has monitored the progress of Mr Stergioti performing modified pre injury duties for at least four weeks, additionally Mr Stergioti has been provided with a final medical certificate from Dr Brown (25 November 2003) with the following permanent restrictions: No machinery driving No repetitive lifting or twisting No overtime Breaks through day as required" The report went on to say that Ms Maker of TMCAL had advised that these restrictions could be accommodated and had agreed to having Mr Stergioti's case closed. Mr Stergioti also agreed to that happening. After Workers Health Centre closed the case TMCAL provided internally developed return to work plans. On or about 22 January 2004 a letter from TMCAL under the hand of Mr Berrie said that given that two years had elapsed since the injury it was appropriate to review the rehabilitation goals. It said there were three potential options: (i) Return to normal pre injury employment duties as a team member in the warehouse; (ii) Identify a full-time permanent suitable duties role within Toyota; (iii) Vocational assessment and redeployment with a new employer. After advice from Mr Fayd'herbe de Maudave Mr Stergioti approached his doctor to ensure that the restrictions were permanent. Dr Brown provided a letter which reiterated that the new Crown machines could be operated by Mr Stergioti on a trial basis one hour per day for two days a week with a medical review after two months and for operation of the chaser a similar trial arrangement but as far as operation of the 8 metre forklift was concerned there would be no operation of this machine as the restriction was permanent. On 3 March 2004 TMCAL wrote advising Mr Stergioti that the company had decided to withdraw his suitable duties condition. He was informed by Ms Moore that he would be sent home without pay as there were no suitable duties available. This led to a dispute which was notified to the Commission. During the hearing he was reinstated with pay although not allowed to return to work. Redmond C recommended that a Problem Resolution Committee (PRC) (a body provided for under the agreement's resolution of workplace disputes clause) involve itself in the dispute. The PRC issued its findings on 24 March. On 13 April 2004 Mr Stergioti was requested to attend the site for a meeting. Present were Mr Whitehurst and Mr Morton and Mr Johnson of the AMWU. A letter was handed over informing Mr Stergioti that his employment would be terminated to take effect on 20 April 2004. Management asked Mr Stergioti to provide reasons why his employment should not be terminated. After a further hearing in the Commission on 20 April 2004 failed to bring about a resolution a letter of termination was given Mr Stergioti. TMCAL at the time of the termination employed approximately 144 persons at the Woolooware Bay warehouse and about 100 were fit to drive machinery. At that time the respondent operated 14 8 metre fork lifts, 14 Crown, 12 stock chasers and one turret. APPLICANT'S SUBMISSIONS Section 170CG(3)(a) - was the reason for termination valid [8] It was submitted on behalf of the applicant that a valid reason for dismissal must be one that was "sound, defensible and well founded" Selvachandra v. Peteron Plastics Pty Ltd [(1995) 62 IR 371 at 373] and it was submitted that the test was not met by the provision of a general reason relating to the operational requirement of the employer's undertaking, but that there must be a valid reason for the dismissal of the particular employee in question. The reason which apparently was relied on by the respondent is one based fundamentally on frustration of contract. An enquiry to be undertaken by the Commission in determining whether there was a valid reason is not limited to the consideration of the reasons given by the respondent for the termination. [9] Lawler VP in Michael Smith v. Capral Aluminium [ PR944238 at 17] provided three circumstances in which a termination arising from a work-related injury can provide a valid reason - further performance of the employee's contract would either be impossible or radically different from that originally undertaken, continued employment would involve imposing a material productivity burden on the employer or thirdly, continued employment would impose an unreasonable burden on other employees. [10] The Commission must therefore take into account a number of factors in determining whether there was a valid reason. These were: the respondent's understanding of the applicant's restrictions; whether performance of the employer's contractual obligations in the future would either be impossible or would be radically different from that originally undertaken by him; the applicant's workers compensation status; and whether continued employment would involve imposing a productivity burden or some other unreasonable burden on the employer. [11] As for the first it was submitted that the evidence of Mr Morton established that the respondent was labouring under a misapprehension, that is, at the date of termination, the applicant was only able to work in two zones. It was said that MM Cables v. Victor Zammit Print S8106 at 42 established where the employer had dismissed an employee on the basis of a misunderstanding as to the duties that could be performed by the employee that did not constitute a valid reason. [12] As to the employee's contractual obligations there was no evidence advanced by the respondent as to the terms and conditions of the relevant contract. It was said that Mr Stergioti was performing work which was required to be performed. He was performing it productively in the same manner as others - based on the evidence of Ms Buchanan. Although limited the contractual obligations as provided for in the relevant workplace agreement could be carried out. [13] The respondent considered that Mr Stergioti at the time of termination was "not currently premium sensitive". This meant that the employee had not made a claim for workers compensation for three premium years. It was submitted that an inference could be drawn from the provable facts but an important consideration in terminating Mr Stergioti's employment was that his status was not premium sensitive and therefore there was a concern that should suitable duties not be withdrawn a further claim might be made which would affect the employer insurance premium. This inference was said to be not sound, defensible or well founded. It was in fact capricious and prejudiced. [14] The fourth point made on behalf of the applicant in this connection is that there had been an increase in productivity in the relevant period and Ms Buchanan had stated that she was of the opinion that the applicant was productive in his role even with his suitable duties limitation. It was said further that there was insufficient evidence before the Commission to allow for a finding that accommodation of the applicant's restriction placed a burden on productivity and therefore this was not the source of a valid reason. [15] As for the argument based on frustration of contract it was said that the decisions relied on by the respondent Linning v. Jupiters Limited t/a Conrad International Hotel and Treasury Casino [Print Q7852] and D. Murthi v. Fibre Containers Queensland Pty Ltd [Print S5849] could be distinguished. Rather reliance was placed on the decision of Whelan C in Payne v. Lafarge Plasterboard Pty Ltd [ PR934967 ] in which the Commissioner rejected the respondent's argument that it was suffering operationally by the continued employment of the employee in question. The Commissioner found it significant that the employee was gainfully employed with the respondent prior to the termination of his employment. The position was the same in the current case. Section 170CG(3)(b) - was the applicant notified of the reason for his termination [16] It was submitted that the applicant was informed on 13 April 2004 that his employment was to be terminated for the stated reason that he was unable to drive the 8 metre fork lift and therefore unable to return to full pre-injury duties. This was the only reason advanced. Section 170CG(3)(c) - was the applicant given a chance to respond [17] In this consideration it was submitted that following a managerial meeting of 17 February 2004, the respondent was set upon a course to terminate the applicant's employment. This meant that the opportunity provided on 13 April 2004 was meaningless and consequently s.170CG(3)(c) is breached. Section 170CG(3)(d) - was the applicant warned about unsatisfactory performance [18] This consideration was said to be irrelevant in the circumstances of the case. Section 170CG(3)(da) - size of the employer's undertaking [19] This was said to be an irrelevant consideration. Section 170CG(3)(db) - availability of human resources expertise [20] There was a dedicated human resource expertise and there is no relevant application of this consideration. Section 170CG(3)(e) - other matters [21] Under this head the applicant considered whether the termination was harsh, unjust or unreasonable in all the circumstances. It was argued that the termination could be for a valid reason but still be harsh, unjust or unreasonable and reliance was placed for what might be harsh, unjust or unreasonable on the well known dicta of McHugh and Gummow JJ in Byrne and Frew v. Australian Airlines Ltd [(1995) 61 IR 32 at 72] and in accordance with this the Commission should consider each element of the question separately, that is the termination harsh or unjust or unreasonable or a combination. [22] It was submitted that the termination was harsh because the respondent failed to take account of the consequences for the personal and economic situation faced by the applicant in terminating his employment. The evidence of the applicant is that he had been unable to secure any alternative employment, notwithstanding his attempts to do so. As a result he is suffering financially in that he is not in receipt of any financial payments from Centrelink yet he is still required to service his mortgage. [23] It was submitted that the termination was unjust in that it was inconsistent with the provisions of the rehabilitation agreement [annexure C of exhibit Stergioti 7] which is given life through the EBA [appendix K] and further it was contrary to the decision of the PRC. In the former reliance was placed on the statement in the policy [at 4.2(c)]: "Provide suitable alternative duties for injured workers who are cleared to return to suitable duties." and further, 4.2(m): "Not terminate an employee suffering from a compensible disability unless with the disability it is determined that the worker can no longer continue with reemployment." [24] The other limbs of this argument was that the action of the company was contrary to the decision of the PRC a body which is empowered under the EBA and its decisions must be followed. Its findings on 22 March 2004 were: "Danny Stergioti is to provide to Barry Woods a copy of the letter from his doctor advising of an increase in available duties. On receipt of that letter, TCMA will then liase with the treating doctor re the return to work." [25] It was submitted that there were only two witnesses who were involved in the PRCs decision, Mr Marmara and Ms Dickens. It was said that the evidence of Mr Marmara was that if the applicant produced the letter from his doctor advising of an increase in duties, then the threat of termination would be lifted and as he had produced such a letter termination was in direct contravention of the PRC recommendations and findings. On the other hand Ms Dickens said that she did not understand, as a result of the deliberations, that the PRC findings meant that Toyota could not, after reviewing the certificate to be provided by Mr Stergioti, take any appropriate action in relation to him including confirmation of the withdrawal of suitable duties and where necessary the termination of his employment. [26] It was pointed out in the face of this competing evidence it will be necessary for the Commission to make a finding as to the outcome of the PRC. It was said in this regard that there was no evidence that the respondent had liased with the applicant's treating doctor and that liaison was for the purpose of ensuring a return to work. A result was that the respondent had contravened the decision of the PRC in terminating the applicant's employment following the provision of a letter from Mr Stergioti's treating doctor advising of an increase in available duties. [27] It was said that the termination was unreasonable because the respondent was labouring under a misapprehension as to extent of the applicant's restrictions. The respondent had not undertaken an exercise of determining whether there was sufficient employees available to provide for the "four hour rotation on machinery". The fact that the evidence was that there were approximately 100 employees who were available to work on the 8 metre fork lift at the busiest time of the day 28 employees would be required to ensure the four hour rotation on the 8 metre fork lift and this was the only machine which the applicant was restricted from operating. Further the respondent did not conduct any formalised process to determine whether there were sufficient resources to put in place for four hour rotation through machinery. A fair go all round [28] It was submitted that in the circumstances the applicant did not receive a fair go all round. The reasons were: the respondent had not undertaken a proper assessment of the requirements of its operations to determine a sufficient number of employees to introduce a rotation for the 8 metre fork lift; the respondent terminated the applicant's employment without providing the applicant an opportunity to trial the Crown and chaser; the respondent was labouring under a misapprehension as to the level of the applicant's restrictions; the respondent failed to abide by the decision of the PRC; and the respondent breached the terms of the rehabilitation agreement. For these reasons the Commission should find that the termination was harsh, or unjust, or unreasonable or a combination of any tow or more of them. [29] The applicant's submissions on remedy were addressed to the requirements of s.170CH(2) and (3). They are summarised as follows: Section 170CH(2)(a) - effect of order on employer's business [30] It was submitted that the employer is a large company and well resourced. There is no evidence it would be economically disadvantaged by any order made pursuant to these proceedings. Section 170CH(2)(b) - employee's length of service [31] The applicant had a reasonable expectation of seeing out his working life with the respondent, an expectation that has been seriously jeopardised by the respondent in dismissing the applicant. Section 170CH(2)(c) - remuneration which the employee would have received but for the termination [32] There is no evidence that the applicant would not have continued to work for the respondent for the foreseeable future in that there was no question of performance issues which may have led to earlier termination nor was there any evidence of the applicant being made redundant or otherwise terminated. All this meant that it was open to the Commission to find that the applicant would have remained in the respondent's employment for at least another two years. Section 170CH(2)(d) - attempts to mitigate loss [33] The evidence of Mr Stergioti establishes that he has made genuine and reasonable attempts to find alternative work and mitigate his loss. He should therefore not be penalised for failing to take such steps. Section 170CH(2)(e) - any other relevant matter [34] It was submitted that there was no amount of compensation which would be as effective a remedy in this matter as reinstatement. It was said that the applicant had lost a very significant intangible benefit in his loss of secure long term employment in a position for which he is uniquely trained. Section 170CH(3) - is reinstatement or reemployment an appropriate remedy [35] The applicant relied on principles for reinstatement addressed by the Full Bench in Smith v. Moore Paragon Australia Ltd [ PR942856 at para. 51], which in short replicate those items identified by VP Lawler in Smith v. Capral . These issues had been dealt with under s.170CG(3)(a). It was submitted they remained relevant for present purposes and for those reasons the applicant should be reinstated. Further there was no evidence that there had been any breakdown in the employment relationships and the evidence of Ms Buchanan, Mr Smith and Mr Johnson is that the work which is performed by the applicant is still required to be performed and that he could readily return. It is undoubtedly harsh that the applicant has been removed from work and it is unlikely that he will find suitable alternative work. In all the circumstances reinstatement is appropriate. Section 170CH(4) - is it appropriate to order continuity of employment and loss remuneration [36] Back pay from the date of termination should be ordered and it would be remarkably harsh to return the applicant to work and yet remove his continuity of service. That should also be awarded. Section 170CH(7) - Calculation of an amount in view of reinstatement [37] The applicant did not resile from the claim that the appropriate remedy was reinstatement. However it was submitted on his behalf that if the Commission considered reinstatement to be inappropriate compensation should be awarded. It was submitted that the matters listed in s.170CH(6) sets out the considerations relevant to compensation and these had also been dealt with in the applicant's submissions relating to s.170CH(2). The compensation process was said to be that established in the Full Bench decision of Sprigg v. Pauls Licensed Festival Supermarket [(1998) 88 IR p. 21]. Application of these principles would result in a figure above the statutory maximum of 26 weeks and accordingly the applicant should be awarded 26 weeks of pay calculated on the rate of pay earned by him over the twelve month period prior to termination. RESPONDENTS SUBMISSIONS [38] While the respondent addressed the various statutory elements the submission is not divided into the itemised factors as the applicant's submission were. [39] The respondent submitted that it is within the power of an employer to decide whether to terminate an employee's employment in circumstances where an employee is permanently unable to perform the duties and functions of the role or position in which he or she is employed. It was further submitted that the reason advanced for termination in this case was primarily that TMCAL's business and operational needs require a flexible workforce. Reinstatement of the applicant in this case would effectively deny the respondent the ability to exercise its rights. This was neither in the public interest nor did it afford the respondent a fair go all round. The evidence as to the extent to which the respondent has utilised this right in the past is not to the point. [40] Mr Stergioti's treating doctor had stated that he was permanently restricted from operating certain machinery. No evidence could or did point to the conclusion that the applicant may have ever returned to his pre injury duties and TMCAL could not offer permanently modified duties on an ongoing basis for the reasons already outlined. It was therefore the position that the applicant is unable to perform the inherent requirement of the position in which he was originally engaged. The Commission should not endorse a principle that employers should be unable to terminate employees who suffer an injury which results in their permanent inability to fulfil the requirements of their role. The opposite was inherent in the workers compensation system as set out in the Workplace Injury Management and Workers Compensation Act 1998 (New South Wales) and the provisions of the Industrial Relations Act 1996 (New South Wales) . [41] It was acknowledged that the applicant's employment was subject to the Toyota Workplace Agreement (Port Melbourne, Sydney and Regions) 2002 (otherwise referred to as "the agreement") . This established that TMCAL has paid for the flexibility required of its employees and indeed all but one of the employees at the warehouse had progressed to SKTM2, the highest classification. [42] The respondent utilised a comprehensive career progression model at its warehouse and pay was on the basis of competencies achieved. It was submitted that Mr Johnson in his evidence had accepted that it was fair that if the employer is paying for the competencies the employer should be entitled to access them. Prior to suffering the injury to his neck, the applicant regularly worked in all areas of the warehouse. After his injury he returned to work on modified duties, as part of the rehabilitation programme developed for him. He continued to perform modified duties, within his classification, until his termination took effect on 20 April 2004. [43] On the basis of the observations by McHugh J in Qantas Airways Ltd v. Christie [(1998) 193 CLR 280 at 304] it was said that in the applicant's case his position was his job. Before his injury his job was to perform the tasks required of a person classified at the SKTM2 level. His position or job was not the post injury modified duties which he engaged in as part of numerous rehabilitation programmes. It was an inherent requirement of the applicant's position that he be required to use regularly all of the relevant pieces of machinery within the warehouse and engage in repetitive bending and twisting as required in relation to picking in the warehouse. It was perfectly clear that after the injury he could not do this. This was confirmed by the final medical certificate which expressed permanent restrictions. As Gummow and Hayne JJ make clear in X v. The Commonwealth [(1999) 200 CLR 177 at 208] the inherent requirements of a particular position for employment are not judged by performance of work modified from that originally performed by an employee to assist his rehabilitation needs. That decision also stands for the proposition that an employer is able to terminate the employment of an employee where the employee is unable to fulfil the duties required of the role. Mr Stergioti was unable to do this. [44] Similarly it was submitted that the applicant misconstrued the reasoning in Payne v. Lafarge Plasterboard Pty Ltd because Whelan C found in that case that there was no evidence to suggest that the company was suffering operationally because of Mr Payne's work restrictions. In the present matter there was clear evidence that the applicant was permanently restricted from driving certain machinery. He did not, as was evidenced in the Payne case, assist with the training of new employees or demonstrate that his experience was otherwise useful to the respondent. [45] In relation to VP Lawler's comments in Michael Smith v. Capral Aluminium the respondent's position was that in the present case each of the circumstances outlined by VP Lawler and referred to earlier in this decision would be satisfied in relation to the applicant. [46] Evidence before the Commission is unambiguous in relation to the applicant's fitness to fulfil the requirements of the role for which he had been engaged. There is a notable restriction related to the 8 metre fork lift. While the applicant insisted he was able to operate all machinery except the 8 metre fork lift this was insufficient particularly as the use of other types of machinery was restricted in time. These periods were not of any useful lengths and not for the periods of time required by the employer's business operations. It was submitted that there was no expectation that the applicant's hours on those machines would increase, rather that the aim of any trial would be to increase the hours depending on a review. The evidence before the Commission is that driving machinery is a significant aspect of the role of all employees at the warehouse. On this basis the respondent had a clear and valid reason for the termination of the applicant's employment. It would be a serious result if the Commission were to endorse an approach to a course such as 11.3 of the agreement that, taken to its logical conclusion, even where an employee is permanently unable to complete the vast majority of tasks which are required as an employee at that classification, they nevertheless may not have their employment terminated, but must remain employed indefinitely and paid on the basis of that classification. [47] It was submitted that the alleged misunderstandings on the part of the respondent as to the applicant's capacity to work in the warehouse which were relied on quite heavily by the applicant, are trivial and of no consequence. There is no evidence that, had the misunderstandings been corrected by the applicant, the respondent would have changed its decision to terminate the applicant's employment or as it put to the respondent's witnesses. [48] The decision in Zammit [ MM Cables v. Zammit Print S8106] can be distinguished on the basis that whilst Mr Morton understood that the applicant was working in two zones in the mezzanine the applicant was in fact working in only three zones which were within the same area of the warehouse. This did not affect an increase or an improved capacity on the applicant's part beyond that which Mr Morton understood. The misunderstanding was therefore trivial. [49] Further the applicant was given an opportunity to respond to the respondent's indication that it was unable to offer him a suitable position on the basis that he was permanently to rotate to zones outside the mezzanine. Mr Morton was fully aware of the information in that regard contained in the medical certificate dated 16 February 2004. Finally, the reasons for the termination of the applicant's employment did not include that he was able to work in only two zones in the mezzanine rather than three in which he was working. The applicant's primary incapacity related to his ability to drive machinery rather than his work within the mezzanine area. [50] The decision of Pejic v. Sydney RJV Pty Ltd [ PR924848 ] was also relied on by the applicant but the decision could be distinguished because Cargill C in that case found that at the point of termination the respondent had before it a medical certificate of the previous day which stated that the applicant was fit for pre injury duty. In that case the misunderstanding went to the very question of whether the applicant was fit for pre injury duties or not. In the present case it is clear from the evidence of Mr Morton that the respondent understood that the applicant remained unfit for pre injury duties. [51] The applicant further alleged that a misunderstanding as to the hours which Mr Stergioti was able to work each day had an impact on the decision to terminate his employment. In reply it was submitted that this was not a material misapprehension. Again no questions were put to the relevant witnesses about whether such a misunderstanding would have changed the decision to terminate the applicant's employment. An inference may safely be drawn in view of the minor and trivial nature of the misunderstanding that they could not have altered the respondent's final decision. [52] The respondent relied on the rotation of its employees through work on different machinery in the warehouse. The applicant's witnesses accepted that the workload in the areas in the warehouse varied on a day to day basis which engendered the need for a rotation policy and it was accepted by the applicant that he was rotated through different zones and machinery throughout the warehouse prior to the injury [PN236, 503] and Ms Buchanan [PN862]. Indeed Ms Buchanan confirmed that employees would rotate and that it would happen daily dependant on the requirements of the work within the areas (although she did mention that there are certain people within her area that had never moved in years. This was because they had injuries and were not able to drive machinery so they had been put within the mezzanine area and left there). For these reasons it was the respondent's submission that the applicant accepts that there is a need to rotate employees and accordingly he was aware that if he was permanently unable to rotate his position in the mezzanine might not be secure. The only conclusion available was that the applicant was permanently unable to complete the requirements of his role which included the ability to rotate on machinery throughout the warehouse. [53] It was noted that the applicant had made submissions to the effect that his productivity in the mezzanine area was sufficient. The respondent acknowledged that there were circumstances in which work performed by the applicant after his injury might be described as productive, but the applicant being employed to operate a range of machinery throughout the warehouse means that it could not be said that the applicant is performing the requirements of his role in a productive fashion after he was on modified duties. The issue in question is not whether the applicant could perform any work at all, but his capacity to perform the requirements of the position in which he was employed. [54] The applicant was being paid in accordance with his classification of SKTM2 but was not able to perform duties in accordance with that classification. [55] The respondent stated that the applicant submitted that an inference ought to be drawn to the effect that one of the reasons for the termination of the applicant's employment was that his injury was "not premium sensitive". The respondent denies this. It was said that the uncontested evidence is that at the time of the withdrawal of suitable duties and the termination of employment, the applicant did not have a current active workers compensation claim, as his claim had been denied by the insurers. The applicant's intention to appeal the decision made by the insurer to deny liability does not change that fact. It was accepted that the applicant did not have a currently active workers compensation claim. However it is the respondent's submission that there is no evidence that the fact that the applicant's injury was "not premium sensitive" was a reason for the decision to terminate and there is no basis for an inference to that effect to be drawn. It was also the respondent's submission that questions should have been put to the relevant witnesses in relation to this issue and they were not and this also denied the possibility of an inference that this matter played a part in the decision to terminate the applicant's employment. This is particularly so in relation to the evidence of Mr Morton who gave the reasons for the decision to terminate and was available to be cross-examined in relation to the issue of premium sensitivity and he was not asked whether that formed part of his reasons. This was because there is a difference between the factual practice in relation to the workers compensation system (about which the respondent's witnesses were questioned) and the motivation for a decision being made to terminate employment (about which they were not questioned). [56] It was further submitted that the applicant's submission on this point ran contrary to logic. The applicant suggests that one of the considerations was that if the applicant's employment was not terminated then he may make another (workers compensation) claim. The possibility existed at any time for any employee of the respondent and a claim being made the employee would then become premium sensitive. The fact that such a claim could be made could hardly be said to justify the termination of a workers employment before such a claim was made. Again this point was not put to the respondent's witnesses. While it was acknowledged that workers compensations were reviewed this was a normal practice to be assumed to exist in any large company. [57] The respondent addressed the number of issues which had been raised by the applicant in the context of whether there was anything harsh, unjust or unreasonable in the procedure by which the respondent terminated the applicant's employment. These are now summarised: Whether the respondent complied with the findings of the Problem Resolutions Committee [58] The respondent said that the primary basis for this submission is the assertion that the PRC determined that once the applicant produced a further medical certificate his employment could continue. In response it was argued that the role of the PRC is to resolve disputes not to remove management prerogative in running the business. [59] The PRC did not concern itself with the applicant's ongoing employment at all and the evidence before the Commission demonstrates that the finding of the PRC imposed no requirement on the respondent to continue with the applicant's employment. It was said that the applicant agreed that his understanding of the issue before the PRC related to his "concern that Toyota had not looked at or considered a letter from (his) doctor before they withdrew the suitable duties" [PN14]. Mr Marmara's evidence that if the PRC found that if the applicant produced a letter from his doctor advising of an increase in duties then "the threat of termination would be lifted". This evidence does not square with the findings of the PRC. No reference is made there to the threat of termination or even to termination. The respondent complied with the findings of the PRC insofar as it contacted the applicant's treating doctor in relation to the applicant's capacity to return to work. Nothing in the findings required the continued employment of the applicant if the doctor confirmed that the applicant was subject to the same restriction. In short the Commission should find that the PRC determined only that there would be a liaison in relation to a return to work. That liaison did occur witness the evidence of Ms Moore [para. 45 and 46 of her statement]. [60] The applicant's submission that the PRC should have been reconstituted if the applicant's employment was to be terminated is unfounded. Its findings did not contain any such statement and if there had been a need for a report back such a requirement would have been specified in the findings by the PRC. Rehabilitation Agreement [61] In response to the submission of the applicant that the respondent breached the rehabilitation agreement the respondent denied that this was so. Indeed it asserted that it had complied with the requirement of that agreement. Thus Mr Johnson accepted that it might be necessary to terminate an employee's employment if the employee were unable to return to pre injury duties [PN1176-1180]. The agreement contemplates that reemployment within the respondent's operations may not be possible. Clause 3 of the agreement required only that a graduated return to work and modified duties be considered a proposition with which Mr Johnson agreed [PN1213 and 1216] and it was clear that both options had been considered and offered to the applicant [PN1219-1234]. [62] The allegation that the respondent breached the agreement because it did not commence a return to work programme for the applicant until about five months after his injury was irrelevant. It could not now be a source of any unfairness in relation to the termination. There was three years of rehabilitation, there was never during that time a complaint that the rehabilitation policy was breached. [63] In relation to the alleged breaches of clause 4.2(c) and 5.1 of the rehabilitation agreement it was submitted that the respondent did provide suitable alternative duties for a significant period during which time the applicant was certified to return to suitable duties. However when the applicant provided the certificate stating that he had permanent restrictions the respondent took action in relation to assessing whether it could continue to provide suitable alternative duties on a permanent basis. Its determination that it could not do this was in accordance with the rehabilitation agreement. There was no ongoing obligation to provide permanently modified duties to employees who are permanently medically restricted from performing their roles. [64] The respondent submitted that the evidence discloses that it properly considered whether the applicant could be afforded another role within the respondent's operations both at Woolooware Bay and elsewhere within its business. On the evidence the argument is not about the respondent's efforts in this regard but rather whether the respondent consulted with the union in relation to the redeployment opportunities. This emerges from Mr Johnson's evidence at PN1343: at no time did the respondent come to the union while Mr Stergioti was in employment and say what about retraining, there's positions here, look at this look at that. The witness maintains this is a breach of policy. [65] The evidence of Mr Whitehurst is that the applicant was offered a job at the Altona factory on a number of occasions and the applicant did not accept it. These occasions included January 2004 [PN2743], March 2004 at the Rydges Hotel Cronulla with Mr Johnson [PN2751] and April 2004 at the Commission [PN2746]. The respondent further submitted that even if the Commission found that it failed to consult with the applicant or the union such a failure was not a source of unfairness in the termination of the applicant's employment. The searches for alternative positions are fully documented in the material before the Commission. This search was comprehensive and transparent and genuine and its adequacy was not attacked in cross-examination. [66] It was accepted by the respondent that the vocational assessment conducted by Mr Ross Miller in relation to the applicant actually occurred after his termination. It says that the assessment was organised for the applicant prior to that termination but that he did not complete it prior to that time. The offer was made well before the termination commencing in fact in January 2004 by Ms Marie Maker [PN2693-2762] and at the time of the withdrawal of suitable duties [PN2710]. It is clear therefore that the vocational assessment could have occurred before the termination of the employment but the applicant refused or was unable to participate in such an assessment. [67] As to notification of reasons for termination the respondent submits the applicant was given ample notification of the reasons. Mr Berrie's evidence is that in early September 2003 he provided a letter to the applicant outlining the future process in relation to the applicant's return to work. In particular the letter made it clear that if the applicant could not return to pre injury duty and no alternative roles were available, the applicant's employment would be terminated and redeployment investigated. The applicant accepted that this was the effects of the letter [PN585]. On 22 January 2004 he was advised that unless he was cleared for pre injury duty he would be put through the external redeployment programme as Toyota would be unable to accommodate the restrictions which the treating doctor had placed on his work capacity. Mr Stergioti agreed that that was what was said to him at that meeting [PN378] and in [PN380] he reiterated that if he did not get a clearance there would be an (external) redeployment. [68] The respondent accepts that it did not notify the applicant that a reason for the termination of his employment was that his injury was not "premium sensitive". This is because that factor played no part in the reasons for termination. Representations made about being permanently accommodated [69] The respondent replied to the applicant's submission that representations made by the respondent led the applicant to believe that he would be accommodated by the respondent as long as he remained able to be usefully employed by submitting that at no time during the course of the applicant's employment did the respondent suggest that. There is no direct evidence on this merely that the applicant stated that it was his "impression" and "opinion" that he would be afforded such a position. It was said that the applicant appeared to accept that he would be accommodated as long as he remained usefully employed. It was accepted that such work would be productive but not that an employer should be required to continue to pay an employee with a significantly less flexible and productive ability in the same manner as other employees who were exercising a range of skills throughout the warehouse. [70] The applicant's evidence that he understood that the respondent would offer permanently modified duties contradicts his evidence that from at least January 2004 he was aware that unless he was cleared for pre injury duties he would be put through an external redeployment programme. The letter of September 2003 clearly points to this outcome. [71] The respondent submitted that the evidence established that the goal was always to return the applicant to his full pre injury duties. TMCAL afforded the applicant sufficient time to return to this and only once the applicant provided a medical certificate indicating that his injury was permanent in its effect. TMCAL took steps to examine whether it could make modified duties available on a permanent basis. This view of the situation was said to be confirmed by the applicant's letter requesting a change of provider [letter of 30 May 2003 annexure 36 to the statement of Ms Moore]. Mr Stergioti indicates that he understood that the goal of the return to work programme was to return him to his "normal duties" [PN331-334]. Opportunity to respond [72] It was said to be clear on the evidence that the applicant had a number of opportunities to respond to the respondent's concern about the applicant's ability to perform the functions and tasks required of his role. In particular the respondent submitted that the suggestion that the respondent should have provided criterion which the respondent considered relevant to satisfactory reasons for non termination of employment is not required at general law or in the Workplace Relations Act . It was said that this view was confirmed by Mr Johnson in cross-examination at PN1313-1314. At PN1318 Mr Johnson said he did not have a problem with the proposition that on one view telling the employee what you proposed to do giving them a week to come back to you with any comments that they want gives rise to no complaint on that aspect of the process. [73] Further the applicant at no time enquired of the respondent what reasons might be considered valid and indeed provided no formal response to the respondent. The absence of the response leads to an inference that the opportunity so given was meaningless. There was no basis for suggesting that the respondent would not have properly considered any material which the applicant decided to put before it. [74] In relation to the allegation that the respondent was set on its course from 17 February 2004 it was clear on the evidence that the Toyota Claims Review document [exhibit Stergioti 11] consisted of discussion points which were considered at the meeting on that day. These points did not set in stone the course of the respondent. In particular the respondent points to the evidence of Mr Fayd'herbe at PN3227 and following that termination would only occur if the applicant's restrictions were confirmed to be permanent. There was thus no basis for the assertion that the respondent was set upon its course in February. The evidence is clear that from as early as January 2004 the applicant was put on notice that his continued employment was at risk due to his permanent restrictions. From this time to the time of his termination four months passed. During that a number of meetings were held between the respondent, the applicant and the applicant's representative in relation to his employment. In addition the applicant would have been well aware that his employment at the respondent was under consideration from the time of the withdrawal of suitable duties on 4 March. The termination did not take effect until 1½ months later. In all these circumstances the time and opportunity offered to the applicant to respond to the notice of his impending termination was more than adequate. Opportunity to trial machinery [75] The medical certificate provided by the applicant of February 2004 referred to a trial of the Crown and chaser machines. The respondent submitted that there was no obligation on its part to afford the applicant a trial on the machinery. This was because the respondent properly held the view (through Mr Morton) that the capacity of the applicant, being four hours per week, was simply insufficient to be able to maintain the applicant in his position. The possible outcome of any such trial is irrelevant. In the absence of evidence about the trial it must be assumed that there is just as much likelihood that the applicant would not be able to continue to operate machinery following the trial as there is of an increase in the hours he could so operate. Fair go all round [76] The first proposition the respondent noted was that while, pursuant to s.170CA(2) of the Act, the Commission should accord the parties "a fair go all round" there was no requirement in the Act for the Commission to consider whether an employer had afforded the employee a "fair go all round". Even where the Commission considers that this was a relevant consideration for the present case the respondent submitted that on the basis of the material it had afforded the applicant "a fair go all round". In particular the respondent had afforded substantial rehabilitation opportunities for over three years and following this substantial period the respondent workers compensation insurer determined that it should deny the applicant's continued workers compensation claim on the basis that he was fully fit for pre injury duties. However the applicant's treating practitioner continued to assert that he was unfit to drive machinery. It is the respondent's submission that giving consideration to a "fair go all round" and in considering the position of both the applicant and the respondent the considerable expense, effort and time put into the applicant's return to work over three years should be afforded significant weight in the Commission's consideration. Harsh [77] The termination of the applicant's employment was not harsh in all the circumstances. There had been three years support given to efforts to rehabilitate. The effect on the applicant's ability to service his mortgage could not be an unduly harsh outcome as it does not relate to his particular circumstances but is an outcome which would follow from the termination of employment of most employees. Similarly the loss of one of the benefits of his employment, the applicant's car lease, could not be the source of harshness in the termination. Unjust [78] In response to the applicant's assertion that the respondent's alleged breach of the rehabilitation agreement and the findings of the PRC meant that the termination of his employment was unjust the respondent submitted that there was no breach of either the rehabilitation agreement or the findings of the PRC and the termination could not be unjust on this basis. In the event that the Commission finds there were breaches of the agreement and the PRC finding it is the respondent's submission that any such breaches would not sufficiently affect the termination to warrant a finding that the termination was unjust in all the circumstances. In particular the alleged breaches primarily relate to procedural aspects of the termination of the applicant's employment rather than to the outcome of the process. Unreasonableness [79] The respondent submitted that such matters as the misapprehension alleged to exist in the respondent as to the applicant's capacity were not material and would not have impacted on the decision to terminate. That was because the reasons for which the applicant's employment was terminated did not relate to the matters which were allegedly misunderstood. It was clear from the evidence of Mr Morton that the applicant's restrictions in relations to the driving of machinery in the warehouse were foremost in his mind in the determination he made. [80] The applicant also said that the termination of the applicant's employment was unreasonable because the respondent had not undertaken an exercise of determining whether there was sufficient employees available to provide for a four hour rotation on machinery. This need was expressed by Mr Morton and Mr Whitehurst to be one of the primary reasons that there was no position available for the applicant - that is the respondent requires all of its employees to be able to operate all machinery in the warehouse to ensure that its rotation policies can have full affect and that the workload is spread across the whole workforce. The applicant's permanent medical restriction meant that he could not work on the 8 metre machine, which in turn meant that the respondent was unable to implement its rotation policy as well as it might otherwise. Given many opportunities for rehabilitation and the situation that the applicant is permanently unable to perform the requirements of his role it was not unreasonable for the respondent to terminate the applicant's employment. Remedy [81] It is the respondent's primary submission that as the termination of the applicant's employment was not harsh, unjust or unreasonable the application should be dismissed and consequently no remedy should be awarded. Against the eventuality that the Commission considers that there existed some unfairness in the termination of the applicant's employment the respondent made a number of submissions in relation to remedy. [82] An order under s.170CH is discretionary. The Commission can not make an order unless it is satisfied that the remedy ordered is appropriate. In determining whether a particular remedy is appropriate the Commission must have regard to all the circumstances of the case including the matters set out in paras. (a) to (d) of s.170CH(2) and any other matter that the Commission considers relevant. [83] Reinstatement is one of the possible remedies. It can only be ordered if it is considered to be appropriate: s.170CH(3). If reinstatement is ordered consequential orders are also discretionary and should only be made if considered appropriate. Compensation is an alternative which the Commission may order if it considers it appropriate in all the circumstances of the case and the Commission thinks that reinstatement of the employee is inappropriate. [84] The specific factors to be considered were addressed by the respondent. Section 170CH(2)(a) - effect of the order on the viability of the employer's undertaking [85] It was submitted that the termination of the applicant's employment was for a valid reason, due to operational requirements and the evidence establishes that there are no suitable alternative positions. The ordinary definition of viable includes "practicable and workable". Clearly an order for reinstatement as an employee in circumstances where the employee is unable to fulfil the requirements of his role is not viable and will create an unworkable and impracticable situation at the employer's undertaking. Section 170CH(2)(b) - length of employee's service with the employer [86] The response to the applicant's submission that his expectation of "seeing out his working life with the respondent" is a relevant consideration was to submit that whether or not the applicant had an expectation to that effect it is not relevant to a consideration of the length of his service with the employer. Such a matter is neither here nor there in relation to the matters which the Commission must consider. All that is required to be considered under this head is the period of service and in this case whilst the applicant served for almost six years the Commission should take into account that for approximately three of those years he was completing significantly modified duties as a result of his injury. Section 170CH(2(c) - the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated [87] It was submitted that only nominal compensation be awarded if there was a procedural fault brought home to the respondent. The applicant had been on notice since at least January 2004 that his continuing employment was being considered by the respondent and the provision of a final medical certificate was relevant. Any procedural defect does not change the substantive decision reached by the respondent that there were no positions available to the applicant. Even if it could have been said that other steps were required before termination should have occurred, employment would not have continued for any significant period before the company implemented its decision to terminate. There was therefore no basis for the Commission concluding that any further employment would have been longer than at the most one week. It was further submitted that the Commission should not accept the assertion by the applicant that he expects to continue employment indefinitely especially in circumstances in circumstances where the applicant's own medical evidence has been that he was, and is, unable to perform the full complement of duties required of employees in the applicant's position. In addition it should be noted that the applicant was paid from 4 March 2004 (the time of the withdrawal of suitable duties) until the termination of his employment on 20 April 2004 despite not attending for work during that time. Section 170CH(2)(d) - the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination [88] The evidence establishes that in the course of the six months from the time of termination the applicant had applied for only six jobs. He has completed only a very limited set of "Chronological Recommendations for Successful Redeployment" set out in the rotational assessment conducted by Mr Ross Miller. There is no evidence provided by the applicant that he is engaged in any other attempts to mitigate his loss. However he relies on the bald assertion that the injury he suffered while employed by the respondent had been responsible for hampering his job prospects. Reinstatement [89] It is the respondent's submission that reinstatement is not an appropriate remedy in the applicant's circumstances. The primary reason for this is that the applicant remains unable to perform full pre injury duties. No where has the applicant indicated that he would like to return to pre injury duties or improve his status or that he expects his capacity to work in the warehouse will improve over time. Rather he seeks reinstatement to a position involving permanently modified duties. [90] An order for reinstatement would effectively mean that the respondent would be bound to continue the applicant's employment in the mezzanine area. In addition, given his doctor's certificate the occupational health and safety risks associated with the applicant's reinstatement should not be forced upon the respondent. There is no evidence before the Commission that the applicant's capacity has expanded beyond that referred to in the 16 February 2004 medical certificate and it is submitted that the restrictions on the applicant's capacity are significant and impose serious burdens upon the respondent. Whilst the work is still required to be performed as submitted by the applicant, it is clear on the evidence before the Commission that his inability to rotate through other areas of the warehouse for any significant period of time seriously hampers the respondent's ability to access the flexibility it requires of its employees. It is substantially unable to fulfil the requirements of the role in which he was originally engaged. It was accepted that the work being performed by the applicant was "meaningful" but was not required to be done by so many employees. In the context of the warehouse which has become substantially busier over the past five years, the implementation of a rotation policy and where importance of meeting customer deadlines is accept generally it is the respondent's submission that the reinstatement of the applicant would be an inappropriate remedy. Calculation of amount in lieu of reinstatement [91] Section 170CH(6) of the Act provides that if the Commission considers that reinstatement is inappropriate, the Commission may, if it considers it appropriate, make an order requiring the payment of an amount in lieu of reinstatement. This is clearly at the discretion of the Commission submits the respondent. [92] Section 170CH(7) sets out a number of factors which the Commission must consider if it is contemplating compensation. If the Commission considers that reinstatement is inappropriate it is the respondent's submission that any order for compensation be minimal or nominal. The respondent submits that "in all the circumstances, the applicant has already received substantial compensation from the respondent in relation to the termination of his employment". The applicant baldly asserts that he would have been employed for another two years if not longer. The respondent submits that this is a mere assertion without any basis in evidence. The question of the future length of the applicant's employment is only relevant to the extent that the Commission finds that there was no valid reason for the termination of the applicant's employment. If the Commission finds that there was some procedural defect in the termination while there was a valid reason for the termination then it is clear that the applicant's employment would not be continued for any significant period. The submission noted the maximum amount which the Commission may fix as compensation. These are not the statutory minimum amount as submitted by the applicant. CONSIDERATION [93] Section 170CG(3) itemises a number of factors to which the Commission must have regard in determining whether a termination was harsh, unjust or unreasonable. I consider those factors now. Section 170CG(3)(a) - whether there was a valid reason [94] The respondent, in its termination letter of 13 April 2004 which I quote in paragraph [1] of this decision, relies on one factor - that because the applicant was permanently restricted from driving 8 metre forklifts he was unable to return to pre injury duties. TMCAL went on to say it had been unable to find redeployment on site and "as a result" his employment would terminate effective 20 April. [95] TMCAL denied that it was influenced by potential cost of future workers compensation claim. I deal with that now. There is no evidence that this was so. The only matter to consider in this regard is the managerial review of outstanding injury cases and there is nothing in the evidence on that which supports the submission made on behalf of the applicant. [96] Much was made of the respondent's misunderstanding of the restrictions placed on the applicant. There does appear to be a misunderstanding in that Mr Morton believed the applicant could only work in two zones of the centre when he could do more. However this misunderstanding was not one which meant that Mr Stergioti was in fact able to perform all pre-injury duties rather that he was less incapable than believed. The position remains that he could not perform all his pre injury duties. This was sufficient reason for the termination. [97] Mr O'Sullivan, correctly in my view, submitted that much of the respondent's approach depended on the concept of frustration of contract. However Mr O'Sullivan went on to submit that given his medical restrictions Mr Stergioti was exercising a full-range of duties. This mistakes the position. The evidence establishes and indeed the applicant's case accepts that Mr Stergioti was not performing all his pre injury duties. I am satisfied that driving the 8 metre fork lift was a significant part of the duties which the contract of employment and the provisions of the agreement required to be performed. Inability to perform that duty by an employee established that the employee was not performing what the employer was entitled under those concepts to expect. The employer was not obliged either at law or under the agreement to accept less than that. Clause 11.3 of the agreement makes this clear: "It is intended to provide an integrated career structure supported by training to enable all employees to achieve their maximum potential. In this context, employees will be expected to perform any duty in which they have received training and in which they are capable of performing in a safe and competent fashion . It is the intention of the parties to provide the mechanisms to facilitate movement both within and between career streams, consistent with individual employees' developmental objectives, classification structures and the needs of Toyota." [98] Two of the decisions referred to in argument require consideration. The first is Linning v. Jupiters Limited t/a Conrad International Hotel and Treasury Casino. This is a decision of Bacon C and the opening paragraph under the heading of "Conclusion", in my opinion, puts precisely the argument for the respondent in this case. Bacon C says: "It is common ground that at the time of the termination of her employment, the applicant, due to restrictions put in place by a medical practitioner was unable to fulfill the duties of Dealer within the Casino. These were the duties for which the applicant was employed. The incapacity of the applicant to undertake the duties for which she was employed constitutes a valid reason for the termination of the applicant's employment and is a matter to which the Commission must have regard (s.170CG(3)(a)) when determining whether or not the termination was harsh, unjust or unreasonable." It is said by the applicant that in Linning the applicant was entirely unable to perform the role which she was employed to perform and that is not the case here. However the difference is one of degree. I have found that the applicant is unable to perform all of the duties that could reasonably be expected of him and Bacon C recognises that: "the incapacity of the applicant to undertake the duties for which she was employed constitutes a valid reason for the termination of the applicant's employment . . ." [99] In Payne v. Lafarge Plasterboard Pty Ltd Whelan C said: "[63] Without any professional assistance or advice the company in this matter has determined that Mr Payne is incapable of performing any other role in the plant except that of dry end inspector. Again, without any professional assistance or advice, they have determined that a medical certificate describing his condition as "chronic" and his restrictions to be `indefinite' to mean that: `There is no prognosis for an improvement in your condition. In fact your doctor has expressed that you will not return to pre-injury duties.' [64] There was no evidence to suggest that the company was suffering operationally because of Mr Payne's work restrictions or that it was impossible for other employees to gain the necessary skills to progress through the classification structure because of Mr Payne. Indeed, I accept the evidence that Mr Payne assisted new employees and at a time of high staff turnover his experience was useful to them." [our emphasis] In the present case there was professional opinion on disability and there is no evidence of any special or unique attribute. Further, on the issue of rotation, there is evidence of an operational impact. [100] The observations of McHugh J in X v. The Commonwealth are directly concerned with a specific item of legislation but provide a relevant concept for the consideration of the respondent's argument. At p.208 of the report [(1999) 200 CLR his Honour says: "Section 15(4)(a) contains a number of elements that must be taken into account in seeking to apply it. First, the inquiry is whether ` because of [the person's] disability' he or she would be unable to carry out the inherent requirements of the particular employment. That is, the search is for a causal relationship between disability and being unable to carry out the inherent requirements of that employment. Secondly, the provision applies only if the person would be unable to carry out those requirements. No doubt inability must be assessed in a practical way but it is inability, not difficulty, that must be demonstrated. Thirdly, the requirements to which reference must be made are the ` inherent requirements of the particular employment'. The reference to `inherent' requirements invites attention to what are the characteristic or essential requirements of the employment as opposed to those requirements that might be described as peripheral[90]. Further, the reference to `inherent' requirements would deal with at least some, and probably all, cases in which a discriminatory employer seeks to contrive the result that the disabled are excluded from a job. But the requirements that are to be considered are the requirements of the particular employment, not the requirements of employment of some identified type or some different employment modified to meet the needs of a disabled employee or applicant for work." [101] The misunderstanding by Mr Morton of the exact effect the restrictions placed on Mr Stergioti was trivial. It has, in my mind, no effect on the decision to terminate. [102] I have already considered and dismissed the possibility that the actual reason for the termination was simply the possibility of future workers' compensation claims. [103] The applicant's submission that retaining Mr Stergioti would not affect productivity is irrelevant to the question whether or not there was a valid reason for the dismissal. It may be relevant to considering whether the termination was harsh, unjust or unreasonable but does not go to whether or not there was a valid reason for the termination. This is because the reason put forward, by the respondent, the inability to perform pre injury duties is sufficient in itself. The argument is not whether the applicant is productive in the work he actually does and the evidence of Ms Buchanan, which I accept, is that he was, rather whether the productivity is that which can be expected from a person who is able to perform all the duties expected. Thus the restrictions on rotation can be said to affect productivity. [104] In these circumstances I am satisfied that the reason for termination given in the letter of 13 April, in short, that Mr Stergioti could not fulfil all the requirements of his job, is a valid reason. [105] I find that there is a valid reason for the termination of Mr Stergioti's employment by TMCAL that reason, Mr Stergioti's inability to perform all his duties being "sound, defensible and well founded". Sound because TMCAL was entitled to expect performance of a full range of duties, defensible because it was operationally required and well founded being based on the history of the case which appears from the facts found in paragraph [7] hereof. The first of these was inherent in the terms of the certified agreement. Further the decision was justifiable under each of the acceptable grounds outlined by Lawler VP in Michael Smith v. Capral Aluminium [ PR944238 ]. [106] The evidence that there were many employees on restricted duties is relevant to the manner in which Mr Stergioti's employment was terminated. [107] In so far as it is important for the validity of the reason for termination I find that it was a necessary inference from the last certificate issued by the applicant's treating doctor that Mr Stergioti was not likely ever to return to his full pre injury duties. Section 170CG(3)(b) - was the applicant notified of the reason for his termination? [108] Yes. The letter of 13 April 2004 advised Mr Stergioti of the reason for terminating his employment. I find that this was the only reason for that termination. Section 170CG(3)(3) - was the applicant given a chance to respond? [109] The applicant's advocate submits that Mr Stergioti was not given a chance to respond because following the management meeting of 17 February 2004 the respondent was set upon a course leading to termination. This meant that the opportunity provided on 13 April 2004 was meaningless. Further, the respondent never advised the applicant of the criteria which the respondent required any response to address. [110] As for the last mentioned I agree with Mr Longland that there is no requirement on the respondent to provide any criteria. Indeed I think that to do so would be limiting and could itself, depending on the circumstances, make the opportunity ineffective. [111] As for the first point, which is more substantial, I accept that the evidence before the Commission precludes my finding that the respondent was set on a course towards termination from the 17 February meeting. There is no doubt that it was considered and Mr Stergioti was put on notice from January that his employment was at risk because of his permanent restrictions. The letter of 22 January to Mr Stergioti from Mr Berrie is relevant. Extracts relevant are as follows: "It has now been 2 years (D.O.I - 23.11.2001) since your injury and you have been provided with a final certificate for permanently modified suitable duties from your treating doctor. Given that 2 years have elapsed since your injury, it is an appropriate time to review the rehabilitation goals that have been set. There are essentially three potential options and these are described below. Your input will be critical in assisting us determine which goal will lead to the best outcome for both you and Toyota. 1. Return to normal pre-injury employment duties as a Team Member in Warehouse The objective of any rehabilitation process is to restore an injured employee to his or her maximum level of function. The usual goal is to safely return an injured person to his or her full-time pre-injury duties. It will ultimately be a medical determination as to whether you will ever be able to resume your normal pre-injury work as a Team Member However, we would still appreciate your thoughts on whether you consider this as a realistic goal, and if so, in what sort of time frame you think this could be achieved. If it is unlikely that you will be considered fit to return to your pre-injury duties, it will be appropriate for us to focus on goals two or three. 2. Identify a full time permanent suitable duties role within Toyota For this to be a realistic goal, the following criteria will need to be met. That the job identified is: i) Real and available; ii) Full-time; iii) Meaningful and productive; iv) Commensurate with your skills and experience; v) Does not place you at risk of further injury; and vi) Not of a token or demeaning nature. It is also expected that: i) Medical information is provided confirming that your injury and level of incapacity has stabilised and is considered to be permanent; ii) Your physical limitations are clearly defined and agreed upon by any examining and treating Doctors; iii) Any disparate medical opinion between Doctors in respect of the nature and/or extent of your injuries is resolved prior to you returning to work iv) Any proposed permanent suitable employment is medically evaluated and approved by way of a workplace visit by your treating medical practitioner and I or any Doctor nominated by Toyota; v) You are subject of the same work performance criteria that applies to other employees performing the same or similar job; and vi) It is clearly understood and accepted by you that any demonstrated inability on your part to fulfil the inherent requirements of any identified suitable job, may lead to withdrawal of the suitable employment and implementation of a vocational redeployment process described in point 3 below. There is obviously a lot to consider in respect of this option. Depending upon your response to the first possible goal, we will arrange to meet with you and explain the process relating to this option. In the meantime, we would be happy for you to suggest any jobs that you think might meet the job criteria noted above. 3. Vocational assessment and redeployment with a new employer Vocational redeployment is usually commenced when an employee is unable to return to his or her pre-injury duties after a lengthy period of rehabilitation, and when alternative suitable duties options have been exhausted. This process aims to identify permanent jobs in the general labour market (with another employer) that are considered to be suitable for an injured person. Vocational options identified will be commensurate with the injured person's skills, experience, physical capacity etc. The process is coordinated through an external rehabilitation provider who undertakes appropriate assessments to identify suitable vocational options and then provides assistance to you in pursuing those options. If goals one and two are not considered to be realistic options, a vocational redeployment program will need to be considered. What do you need to do? 1. Talk to your treating Doctor and/or your Rehabilitation Provider about the three options referred to above. Feel free to provide your Doctor or Rehabilitation Provider with a copy of this letter. 2. Your Doctor is more than welcome to contact us to discuss your situation and help us work out the most appropriate rehabilitation option. Your Doctor is also welcome to visit the worksite to view your pre-injury duties, if that helps determine the most suitable goal. 3. Your Doctor should provide a report that confirms: a. The nature of your injury; b. Whether your injury has stabilised or whether further improvement or deterioration is expected; c. The details of any restrictions that need to be adhered to, and the expected duration of those restrictions; d. The recommended treatment program, including the nature of treatment recommended and the expected frequency and duration of that treatment; e. Your prognosis. Should you have any questions or enquires, please do not hesitate to contact us." Mr Stergioti was cross-examined on this letter at PN566-585 and concedes that the third part quoted in full above, was clear. I have referred to the letter in its entirety because it sets out the procedure to be followed and, subject to a matter to which I will return as part of my consideration of (e) as it provides an answer to the general proposition advanced by the applicant that he did not get a fair go all round. [112] This and other incidents and conversations lead me to the conclusion that the applicant was given ample opportunity to respond. As for being set on a course I find that while that was an option for the respondent and considered as such the conduct of the respondent's officers in the period January - April 2004 as detailed in the evidence is not sufficient to convince me that, on balance, there was only one objective at that time. Section 170CG(3)(d) - was the employee warned about unsatisfactory performance? [113] On the facts of this matter this consideration does not arise. Section 170CG(3)(da) - size of the employers undertaking and (db) availability of human resources expertise [114] I agree with the applicant that these matters are of no consequence in this application. Section 170CG(3)(e) - any other matters which the Commission considers relevant [115] I agree with the submission by Mr O'Sullivan that the existence of a valid reason for termination does not bar a conclusion that overall, a termination can be harsh, unjust or unreasonable. Such is clearly established by the Full Bench decision in Windsor Smith v. Liu and ors [Print Q3462]. I also agree that the dictum of McHugh and Gummow JJ in Byrne and Frew v. Australian Airlines Ltd : "It may be that the termination is harsh but not unjust or unreasonable, or unreasonable but not harsh or unjust. In many cases the concept will overpay. Thus, one termination of employment may be unreasonable because it-was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employee acted." states the accepted position. One result is that the three possibilities must be considered separately. [116] The first category is that the termination was harsh in the circumstances. It was submitted that the respondent failed to take account of the personal and economic consequences of the termination. The response to this was that the consequences alleged were normal consequences and were in any event to be set off by the lengthy period in which efforts were made to effect a return to pre injury work. Bearing in mind the length of service, which is neither unique or significant I am satisfied that in the circumstances the termination was not harsh. [117] It is claimed that the decision was unjust because it was inconsistent with the provisions of the rehabilitation agreement and (independently) was contrary to a decision of the PRC. [118] The first of these grounds was the subject of evidence from Mr Johnson. He said that TMCAL had breached subclauses 3.5, 3.9, 4.2(a), (d) and (m). He also said that TMCAL has historically never terminated the services of an employee "as a result of workers compensation restrictions" and there are approximately 40 (out of some 140) employees in a similar position to the applicant in so far as they have long standing medial restrictions and perform permanently modified duties. In cross-examination he accepted that it may be necessary to terminate an employee's employment if they are unable to return to pre injury duties [PN1176-1180] and that the rehabilitation agreement contemplates that reemployment within the respondent's operations may not be possible if certain preliminary steps are taken [PN1198] thus leading to "redeployment" externally. [119] I find that TMCAL has not breached 4.2(c) of the rehabilitation agreement. It did provide suitable alternative duties for Mr Stergioti as required by the subclause but the subclause does not require that provision to be indefinite. Such an extreme position could not be inferred but would have to be explicitly stated. The same applies to 5.1(l). As for 4.2(m) it contemplates the very situation in which TMCAL operated. The other breaches alleged generally by Mr Johnson are not established. [120] As for the decision of the PRC I find that Ms Dickens' understanding of the position created by the decision to be more likely the correct one rather than Mr Marmara's. Again the decision simply does not state that there is to be an indefinite return to work, rather, there is to be a liaison over the return to work, what the outcome will be is not determined by the PRC. Indeed the PRC could not do that on the material before it. I therefore reject the proposition that the actual termination was contrary to the PRC's recommendation. [121] The next matter identified by McHugh and Gummow JJ is that the decision may be unreasonable. The applicant asserts that the instant decision was unreasonable because based on a misapprehension. I have already dealt with that: any misapprehension was a degree which did not infect the decision. [122] It is also said that the respondent had not undertaken the exercise of determining whether there were sufficient employees or resources to provide for the four hour rotation. I fail to see how this would be, as it is claimed to be, unreasonable. I do not accept the premise on which these submissions are based. That is, that the employer must accept the modified suitability of the employee and place him somewhere, it matters not where. That ignores the fact that the respondent is entitled to expect that, under the agreement at least, an employee must be capable of performing the full range of duties required. No amount of determining whether there may be sufficient employees to effect the four hour rotation will alter that fact. [123] There is, however, the context in which this termination occurred. Two matters are of some significance. The first is Mr Johnson's evidence, which was not denied that there were some 40 out of 140 (or thereabouts) employees on compensation restricted duties. This, combined with Mr Stergioti's assertion that he understood or was under the impression that his goal was resumption of work on restricted duties (like the 40 just referred to) or, put another way, he would be found a job consistent with his limitations, leads me to the conclusion that he was sincere in that belief and, more importantly, that management could have done more to disabuse him. This conclusion is reached notwithstanding his concession that he was aware that termination was a possibility. Mr Stergioti was not a self-serving witness and, subject to memory lapses, his evidence was acceptable. With 40 out of 140 on what used to be called "light duties", Mr Stergioti could be forgiven for having the views he had, those figures strongly suggest a culture inconsistent with the precise terms of the rehabilitation agreement. Was Mr Stergioti the first dealt with under a new policy? There is no evidence to enable me to answer that question but simply on the facts in Mr Stergioti's case there are grounds for concluding that for one reason and one only, the termination of Mr Stergioti's employment was unreasonable. [124] As for the remedy, reinstatement is not appropriate. I accept the submission of Mr Longland in this regard. They are set out at para. [87] to [88] I do not repeat them. It is therefore necessary to consider whether compensation should be ordered. In that consideration I am able to be more confident than in most cases as to what the future held. The reason I have found the termination of Mr Stergioti's employment unreasonable is a fault in procedure which could easily have been remedied. At most there would have been a month involved in ensuring that Mr Stergioti knew his position in so far as it may have involved a change from past practice. [125] In these circumstances the uncertainties which Sprigg deals with are not present and there is no need to embark on the exercise outlined in that decision. In adopting this course I am influenced by the observation of the Full Bench in Enhance Systems Pty Ltd v. Cox [ PR910779 at para. 38]: "[38] Any discount for contingencies depends upon the circumstances of each particular case. As was said in Ellawala : A discount for contingencies is a means of taking into account the various probabilities that might otherwise affect earning capacity. [39] For the period from the date of the termination of employment until the hearing of this application by the Commission at first instance, the economic effect of the termination of the respondent's employment is known and capable of calculation. There is considerable force in the argument that any discount for contingencies should only be applied in respect to an ` anticipated period of employment ' that is not actually known, i.e. a period that is prospective to the date of the decision. We make no discount for the period actually known." [126] The order implementing this decision issues contemporaneously. BY THE COMMISSION: SENIOR DEPUTY PRESIDENT Appearances: D. O'Sullivan for the applicant. A. Longland for the respondent. Hearing details: 2004. Sydney: August 27, 30, 31; September 2; October 11. Decision Summary Termination of employment - unfair dismissal - valid reason - inherent requirement - rehabilitation plans - applicant permanently restricted by pre-injury duties fromdriving particular machine - applicant gainfully employed prior to termination on modified duties - whether applicant had capacity to perform requirements of classification position - that suitable restricted duties or redeployment were unavailable on permanent basis was determined in accordance with rehabilitation agreement - employment status not `premium sensitive' - held: applicant could be forgiven for assuming continued employment as significant number of employees on light duties - reinstatement not appropriate - termination unreasonable due to fault in procedure which could have easily been remedied - 4 weeks compensation - at most one month involved to ensure applicant knew his position may have changed from past practice. Stergioti v Toyota Motor Corporation Australia Limited U2004/3368 PR953320 Duncan SDP Sydney 17 November 2004 Printed by authority of the Commonwealth Government Printer <Price code G>