Algeri v GGA Law Practice Pty Ltd trading as Galluzzo Golotta Andriano

1 This is an application by Lana Maree Algeri for unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 (the Act). The application shows that Ms Algeri had been employed as a receptionist in a solicitor's office on a full-time basis since 15 May 2000, having commenced in that position on a part-time basis on 17 October 1996. The applicant was dismissed on 11 January 2006. 2 A letter of termination read as follows: Re Your Workers Compensation Claim We refer to your matter and your medical certificate provided by your doctor and advise that as opening envelopes is such an integral part of your duties we cannot maintain your employment. Regrettably we do not have light duty work available consistent with the certificate and we advise that your employment is terminated. 3 The reference in the letter of dismissal is to a medical certificate, one of a series of WorkCover NSW medical certificates provided by the applicant to her employer following an injury on 1 July 2005. The initial WorkCover certificate was dated 29 November 2005. In total the medical certificates provided in evidence cover the period from 30 November 2005 to 27 May 2006. The one relevant at the time of the dismissal was dated 6 January 2006 and covered the period of 9 January 2006 to 30 January 2006. At that time the doctor certified that the applicant was capable of working for four hours a day on three days a week with limitations including not opening mail without splints and avoiding addressing mail, typing envelopes or lifting the phone. It was noted that she could use a headset to answer the phone. 4 At the commencement of the hearing of this matter Mr Patch for the respondent stated that the respondent did not dispute that the termination was unjust. He said that there were a number of matters not in dispute between the parties and they were: 1. That the applicant received workers' compensation from the date of termination up to the date of hearing at the rate of $580 per week gross. 2. That the amount of compensation received was equal to the amount that the applicant was earning at the date of termination. 3. That prior to 21 October 2005 the applicant had been receiving $550 per week gross. 4. That the applicant's employment was terminated on 12 January 2006. 5. That at the time of termination the applicant was paid an amount equal to two weeks' pay in lieu of notice. 6. That the applicant is 58 years of age. 5 On the basis of the respondent's concession and the matters agreed between the parties, it was further agreed that the matter would proceed by way of submissions in regard to compensation. Submissions 6 Mr Sunna for the applicant said that the applicant did not wish to be reinstated because of the breakdown of the relationship in a small family run business where a large number of family members were employed. The respondent said that on the basis that the applicant did not wish to be reinstated it would be impracticable to force her to be re-instated against her will. 7 Orders for compensation are available in accordance with section 89 where section 89 reads in relevant part as follows: (5) Compensation. If the Commission considers that it would be impracticable to make an order for reinstatement or re-employment, the Commission may order the employer to pay to the applicant an amount of compensation not exceeding the amount of remuneration of the applicant during the period of six months immediately before being dismissed. If the applicant was on leave without full pay during any part of that period, the maximum amount of compensation is to be determined as if the applicant had received full pay while on leave. (6) When assessing any compensation payable, the Commission is to take into account whether the applicant made a reasonable attempt to find alternative employment and the remuneration received in alternative employment, or that would have been payable if the applicant had succeeded in obtaining alternative employment. 8 The effect of the limitation defined in section 89(6) is that the Commission generally considers alternative income available to the respondent during the period of about six months following any termination of employment. In this case the applicant maintained some incapacity and while under medical certificates was paid workers' compensation. In the circumstances it is reasonable that she was not available for alternative employment or did not seek it. She has however been in receipt of payment equal to the amount she had received prior to termination. On this basis Mr Patch for the respondent submitted that there should be no compensation ordered. 9 Mr Sunna on the other hand submitted that the maximum compensation available should be ordered for Ms Algeri. He said that the respondent's action was an attempt to circumvent their obligations of rehabilitation under the Act and was a blatant disregard for their statutory obligations. He said they knew that the applicant was injured and had disregarded the fact that her injuries were short term in making their decision to terminate her employment. 10 Mr Sunna submitted that the applicant's opportunity to recover and return to work was frustrated by the respondent's action in terminating her employment rather than providing a gradual return in accordance with her medical advice. He said Ms Algeri was now thrust out on the open labour market at 58 years of age. She has lost the benefit of 10 years' experience and an expectation that she would continue to work for the respondent for at least a further seven years until she retired. 11 It was further submitted that because the respondent was a firm of legal practitioners they owed a higher standard of duty in their professional conduct and that the illegal action taken by them was a consideration in regard to the issue of compensation. 12 Mr Sunna submitted that the conduct of the employer should be taken into account in determining compensation. Mr Patch suggested that the cases in which the action of the employer had been taken into account were mainly unfair contract matters. In this case there was nothing unusual about the termination of employment, that is, there was no psychological damage, humiliation or stress such as to warrant the conduct of the employer being taken into account in determining the amount of compensation. 13 The critical issue relied upon by Mr Sunna was that the basis of the applicant's claim was that she was dismissed within six months of her injury. This is in breach of section 99 of the Act. Mr Sunna submitted that the protection of an injured worker principle set out in the Act was eroded by the respondent's conduct. Because of this he said that the income through the workers' compensation insurance should simply apply as an entitlement of the employee and should not apply in consideration of section 89(6). If Ms Algeri recovers she will be without a job and without any workers' compensation entitlement. Her losses are likely to crystallise after the six month period when she is likely to be fit for work but will have difficulty competing in the labour market because of her age and other factors. 14 Mr Sunna submitted that the respondent had acted illegally in dismissing Ms Algeri in breach of section 99 of the Act. Section 99 reads as follows: (1) An employer of an injured employee who dismisses the employee is guilty of an offence if: (a) the employee is dismissed because the employee is not fit for employment as a result of the injury, and (b) the employee is dismissed during the relevant period after the employee first became unfit for employment. Maximum penalty: 100 penalty units. (1A) For the purposes of subsection (1), the relevant period is: (a) the period of 6 months after the employee first became unfit for employment, except as provided by paragraph (b), or (b) if the employee is entitled under a Commonwealth or State industrial instrument to accident pay as a result of the injury for a period exceeding that period of 6 months - the period during which the employee is entitled to accident pay. 15 It is available for the applicant to make application under section 93 which is contained within Part 7 of Chapter 2 of the Act. That type of application is available for applicants who are fit for employment within two years of being dismissed because of an injury for which the employee is entitled to receive compensation under the Workers' Compensation Act. The relevant period as defined in the Act is the period of six months after the employee first became unfit for employment or the period during which the employee is entitled to accident pay. Clearly in the current circumstances the employee was receiving workers' compensation benefits and continues to do so. Because of the alleged illegality of the offence Mr Sunna submitted that the benefit received through the workers' compensation should not be a primary consideration in determining the compensation ordered to the applicant in response to her claim under section 84. 16 Mr Patch submitted that the only admission by the respondent was that the termination was unjust. The respondent does not admit that it acted illegally or in breach of section 99. Nor does the respondent admit that the termination of employment was harsh or unreasonable. 17 Mr Patch further submitted that any higher standard which Mr Sunna referred to has no bearing on compensation for the purpose of applications under Part 6 of Chapter 2. He submitted that compensation was not for punitive damages for illegal conduct but was simply compensation for loss of wages and that such issues as those raised by Mr Sunna were irrelevant. 18 Because Ms Algeri is not out of pocket at all for the period of six months following the termination of employment, Mr Patch submitted that a plethora of Decisions show that the amount of compensation should be zero or minimal. He said that because Ms Algeri was likely to be receiving compensation benefits for the whole of the six months following the termination of her employment, the compensation should in this case be zero. Consideration 19 It was appropriate that the respondent did not dispute that the termination of Ms Algeri's employment was unjust. Indeed the letter of dismissal makes it clear that the termination was because of her workers' compensation injuries. 20 That the parties put certain matters of fact as being not in dispute was also a sensible and practical approach to these proceedings which is appreciated by the Commission. 21 In Banning v Great Lakes Council [2002] NSWIRComm 47, his Honour Deputy President Harrison found that a termination of employment in breach of the provisions of s 99 was unlawful, rendering the dismissal harsh, unreasonable and unjust. In ordering reinstatement of Mr Banning, his Honour found that "compensation is not an appropriate or adequate remedy" since in the circumstances of workers' compensation payments being paid, "the limit of the Commission's jurisdiction in the circumstances of this case would result in a small if not negligible payment".

22 In acknowledging the limitation imposed on me by s89(6), I share his Honour's view that compensation is not an appropriate or adequate remedy. However, I am not prepared to determine that reinstatement is practicable in a small family-operated business where the applicant sought not to be returned to the workplace. I accept the submissions of Mr Sunna that reinstatement or re-employment would be impracticable, and note this approach was not disputed by the respondent. 23 I must reject Mr Sunna's submission that the workers' compensation benefit should not be taken into account in determining the amount of compensation. I must also reject the notion that the respondent carries a higher onus than would otherwise apply. It follows that the applicant must bear the consequences of both the statutory limitation and her own desire not to return to the workplace. 24 It therefore remains for the Commission to consider what compensation might be ordered, if any, in all of the circumstances. These circumstances include primarily an unjust termination where the applicant continues to receive income through workers' compensation benefits up to the time of hearing. The current medical certificate is for the period to 27 May 2006. 25 While the period for which Ms Algeri will continue to receive workers' compensation benefit is not known. Mr Sunna conceded in his submissions on behalf of the applicant that she is likely to be able to return to work within about two months with the assistance of physiotherapy. If he is correct in this assessment, the applicant would remain incapacitated for a total of five and a half months from the date of her dismissal. There remains a period in which the applicant may have been back at work if she had not been dismissed. Alternately, this period is one during which Ms Algeri may be able to seek alternative employment. Taking into account her age and the nature of the open labour market it is unlikely that she would immediately find employment on being certified to return to work. It follows that there may be a period of one to two weeks when she may not be in receipt of income from workers' compensation benefit or from any other source. 26 It was agreed by Mr Patch on questioning by the Commission that the applicant, if she had continued to be employed, would have accrued some annual leave and long service leave during the period following the termination of her employment. 27 Added to the potential loss of income outlined above is the loss of annual leave which would have accrued during the period of unemployment. As it is not known how long that unemployment may last, it is reasonable to take into account at least the two weeks annual leave that would have accrued during the period of six months following termination. 28 A further loss to the applicant is the long service leave that might have accrued. In the current circumstances because she has lost her position after 10 years where she would have been immediately accruing and accessing further long service leave, she is now in a position of starting afresh with a new employer and will not become entitled to long leave in the normal course until after a period of 10 years has elapsed. Because of her age and the likelihood, as submitted by Mr Sunna, that she would retire in seven years, she has lost all access to any further long service leave from any prospective employer. If her relationship with the respondent had continued, she could have accrued a substantial number of weeks' long service leave. 29 Given the circumstances of this case, it is impossible to be precise in terms of the applicant's loss. However, it is appropriate to use the potential or likely losses as identified above to determine an order for compensation, and I do so. 30 I find that the termination of employment was unjust. This finding is no less serious because of the admission by the respondent. It is appropriate in the circumstances that the order for compensation take into account the workers' compensation benefit received by the applicant, but it also ought properly take into account the range of losses which she has sustained and will continue to sustain because of the unjust termination of her employment. For these reasons I make the following orders.

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Judgment (13 paragraphs)

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