Castlemaine Tooheys Limited & Others v The State of South Australia

Industrial Relations Commission (NSW)|1999-09-03|Before: Boland J, Mr P

CITATION : Australian Salaried Medical Officers' Federation (New South Wales) on behalf of Professor Bruce Hall and South Western Sydney Area Health Service [2003] NSWIRComm 8 APPLICANT Australian Salaried Medical Officers' Federation (New South Wales) PARTIES : RESPONDENT South Western Sydney Area Health Service FILE NUMBER: IRC 4503 of 2002 CORAM: Boland J CATCHWORDS : Unfair dismissal - Threatened dismissal of senior manager - Allegations of maladministration and poor management practices - Application for interlocutory order - Orders granted LEGISLATION CITED : Industrial Relations Act 1996 Protected Disclosures Act 1994 A and The Commission for Children and Young People (No 4) (2000) 104 IR 131 Australian Salaried Medical Officers' Federation (New South Wales) (on behalf of Dhayanithi Sivathondan) and South Western Sydney Area Health Service [2002] NSWIRComm 98 Castlemaine Tooheys Limited & Others v The State of South Australia (1986) 161 CLR 148 CASES CITED : Ellen Ford v W D & H O Wills (Australia) Ltd (Unreported, Matter No IRC99/4549, 3 September 1999) Four Sons Pty Limited v Sakchai Limsiripothong (2000) 98 IR 1 Hill v Director-General of the Department of Education and Training (NSW) (1998) 85 IR 201 Public Service Association v NSW Fisheries (Unreported, Matter No. IRC98/5120, 8 April 1999) HEARING DATES: 11/14/2002 DATE OF JUDGMENT: 02/05/2003

LEGAL REPRESENTATIVES: RESPONDENT Mr G Driver of South Western Sydney Area Health Service

INTERVENOR Mr N Morris of University of New South Wales

JUDGMENT: - 14 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: Boland J Date: 5 February, 2003

NOTIFICATION UNDER SECTION 130 BY AUSTRALIAN SALARIED MEDICAL OFFICERS' FEDERATION OF A DISPUTE WITH SOUTH WESTERN SYDNEY AREA HEALTH SERVICE JUDGMENT 1 On 14 November 2002 the Commission as presently constituted made orders under s 89(7) of the Industrial Relations Act 1996 as follows: 1. Subject to further order of the Commission, South Western Sydney Area Health Service is not to dismiss Professor Hall in accordance with the threat of dismissal contained in the letter from Mr Ian Southwell, Chief Executive Officer of the Respondent dated 29 October, 2002. 2. The parties shall report back to the Commission at 2.00pm on Thursday 5 December 2002 for the purpose of the Commission being informed of the outcome of Sir Gerard Brennan's inquiry and for the purposes of determining whether there should be any further orders made in this matter.

2 At the time of making the orders the Commission indicated that it would provide reasons at a later date. What follows are the reasons for making the orders under s 89(7).

3 On 5 August 2002 the Australian Salaried Medical Officers Federation (NSW) ("ASMOF") notified the Commission of an industrial dispute pursuant to s 132 of the Industrial Relations Act. The dispute was said to involve the proposed removal of Professor Bruce Hall, a member of ASMOF, from his management responsibilities at the South Western Sydney Area Health Service ("SWSAHS"). The notification indicated that the University of New South Wales ("UNSW") was a party interested in the dispute.

4 In a letter accompanying the dispute notification the secretary of ASMOF, Mr Geoffrey Duggin, indicated that "the proposed removal of our member is scheduled to be debated at a meeting on 12 August 2002" and Mr Duggin requested that the dispute be listed before the Commission as a matter of urgency.

5 The matter was listed before me on 6 August 2002. At that time I was informed that: (a) Professor Hall is employed by the University of New South Wales as a senior academic staff member under a federal certified agreement. His duties include teaching, research and clinical services. Professor Hall is also employed by SWSAHS under the Salaried Senior Medical Practitioners (State) Award in the roles of Acting Director of the Division of Medicine, Area Director of Renal Services and Area Adviser in Medicine. The University and SWSAHS apparently share the cost of Professor Hall's remuneration. (b) In about September 2001 an employee of SWSAHS and two employees of UNSW made a number of allegations against Professor Hall. The allegations ranged from scientific fraud to a number of management issues. (c) UNSW investigated all of the allegations. The investigation "largely" exonerated Professor Hall. The investigator's report remained confidential because it involved disclosures under the Protected Disclosures Act 1994. (d) In addition to the UNSW's investigation, SWSAHS conducted its own parallel investigation into the allegations into Professor Hall's management style and practices. That report was also confidential and was provided to Professor Hall on 29 July 2002. (e) SWSAHS sought a response from Professor Hall to its investigation report by 8 August and advised Professor Hall that the Board of SWSAHS would consider recommendations in the report on Monday evening 12 August 2002. The recommendations had implications for Professor Hall's continued employment with SWSAHS. (f) Due to the connections between the UNSW and SWSAHS investigations, a meeting was planned between the two bodies for Thursday 8 August 2002 with a further meeting planned between ASMOF, representing Professor Hall and SWSAHS on Monday morning 12 August.

6 In the result, I recommended to the parties that the Board of SWSAHS not make any decision in relation to the investigation report until such time as the parties had exhausted their discussions and in any event not before the parties reported back to the Commission at 3.00 pm 13 August 2002.

7 On 13 August there was agreement amongst the parties that the matter should be stood over until Friday 30 August 2002 and then again by agreement stood over until 11 September 2002. At ASMOF's request the report back on 11 September was vacated and a new date set of 2 October 2002. On that date I was informed that discussions were continuing between the parties and that the SWSAHS Board was to meet to consider the issue on 14 October 2002. Consequently, the matter was set down for report back on 17 October 2002 but at ASMOF's request that date was vacated and the report back moved to 24 October 2002.

8 On 24 October I was informed that the SWSAHS Board had met on 22 October but had not released any decision as to Professor Hall's future. The matter was adjourned until 7 November 2002. That date was subsequently vacated and the matter set down for 14 November 2002. 9 In the proceedings on 14 November I was informed that on 29 October SWSAHS had written to ASMOF advising that its Board had resolved to remove Professor Hall from his three managerial positions with SWSAHS. The letter provided 14 days' notice of the implementation of the Board's decision. On 8 November ASMOF had written to SWSAHS requesting that the decision to terminate be delayed until the outcome of an independent inquiry established by the UNSW's University Council was made known. That inquiry was being conducted by a former Chief Justice of the High Court, Sir Gerard Brennan. On 12 November ASMOF was advised by SWSAHS that it would not consent to delaying the decision to terminate. I was informed that the outcome of the Brennan Inquiry was expected to be known by the end of November 2002.

10 In the circumstances, Mr P Ginters of counsel for ASMOF sought orders pursuant to s 89(7) of the Industrial Relations Act. Section 89(7) provides that: (7) Threat of dismissal In determining a claim relating to a threat of dismissal, the Commission may order the employer not to dismiss the employee in accordance with that threat.

11 Mr Ginters tendered an affidavit by Simeon Mead an industrial officer with ASMOF. The affidavit provided the background to the dispute as well as two annexures which were reports into Professor Hall's conduct. These annexures were marked as confidential and only accessible to the Commission and the parties' legal advisers because they contained protected disclosures. The reports contained in the confidential annexures were authored by Mr A Daley, Director of Human Resources, Wentworth Area Health Service and Mr L Payne, an independent consultant retained by SWSAHS. The Daley report said that "The preliminary interviews have revealed a number of serious allegations related to possible corruption, maladministration, scientific misconduct/fraud as well as poor working relationships within Professor Hall's Research Group." The report outlined the major allegations by individuals and recommended that before the working relationship issues were addressed, the University of New South Wales be advised of the more serious allegations regarding scientific misconduct/fraud and corruption and that the Independent Commission Against Corruption (ICAC) be notified to review these allegations. Mr Ginters indicated that as far as he was aware ICAC was not pursuing the allegations.

12 Mr Payne was asked by the Chief Executive Officer of SWSAHS on 7 December 2001 to conduct a review of matters which have been alleged to have occurred in the SWSAHS workplace with regard to Professor Hall and specifically in relation to Professor Hall's management style and practices and matters of alleged harassment.

13 Mr Payne investigated eight allegations in relation to Professor Hall and found three were sustainable. These involved a failure to communicate properly with a member of the University staff; a failure to appropriately respond to the concerns of his staff; Professor Hall's behaviour and management as a senior manager towards a particular staff member had not been appropriate at all times.

14 Mr Payne's recommendations included that: 1. In view of Professor Hall's poor management abilities he be relieved of management responsibilities, in particular but not necessarily limited to, for the Division of Medicine, the Renal service and Area services. 2. Should Professor Hall retain any management responsibilities he be required to undertake an appropriate course in management which includes topics on management models, human resources, (including interpersonal and industrial relations), and the principles of management. 3. Professor Hall be disciplined with regard to his poor relationships with staff and counselled with a view to improving his interpersonal and communication skills. …

15 Also tendered by Mr Ginters was a "Response by the Vice-Chancellor to the Report on Disclosures involving Professor Bruce Hall". This was a response by Professor John Niland, the Vice-Chancellor of UNSW to a report from Professor John Ingleson (Deputy Vice-Chancellor, Education and Enterprise) regarding "disclosures involving Professor Bruce Hall, Head of the Department of Medicine at Liverpool Hospital." The Response referred to complaints against Professor Hall grouped under five headings: 1. That Professor Hall has inappropriately named Dr Suzanne Hodgkinson as a co-inventor on a patent related to IL-5 and antibodies; 2. That Professor Hall has mismanaged grant funds; 3. That Professor Hall is guilty of scientific misconduct and scientific fraud; 4. That Professor Hall has wrongly included and deleted names of individuals as co-authors on published abstracts and manuscripts; 5. That Professor Hall's behaviour in the workplace is inappropriate and amounts to bullying.

16 The Response then outlined the chronology and process regarding an investigation into Professor Hall's conduct and referred to inquiries into that conduct by Professor Bruce Dowton, Dean of the Faculty of Medicine and Professor Elspeth McLachlan. Professor McLachlan had been requested to investigate the scientific issues raised by the complainants.

17 The Vice-Chancellor concluded that he should "accept the recommendation of Professor Ingleson that I accept Professor Dowton's conclusions, which I endorse for implementation". Those recommendations included a number going to Professor Hall's management style and practice including that: a) Professor Hall should be instructed to formally apologise to appropriate individuals where errors have been made or where he has been found to have transgressed acceptable work-place behaviour. …. i) Professor Hall should be required to undertake a training program in staff management to include specific instruction in management of staff and how to manage poor performance. He should also receive specific instruction about UNSW policies and procedures for managing such matters.

18 The were no recommendations in Professor Dowton's report that Professor Hall should be removed from his management roles. In relation to the scientific issues the Vice-Chancellor noted that Professor McLachlan had been unable to satisfy herself on some issues. The Vice-Chancellor determined that an "External Independent Inquiry" would be established to address any issues of scientific misconduct and scientific fraud (the Brennan Inquiry).

19 Following the Payne report there was various correspondence between ASMOF and SWSAHS regarding the findings in that report and in respect of other relevant matters. ASMOF challenged the bases upon which SWSAHS had called upon Professor Hall to justify why he should not be removed from his managerial roles and SWSAHS responded to that challenge. The correspondence culminated in a letter to ASMOF from the SWSAHS on 20 October 2002 indicating the Board's reaffirmation that it no longer had confidence in Professor Hall's ability to provide leadership and undertake senior management roles and confirmed its intention to terminate Professor Hall's appointments with SWSAHS.

20 On 8 November 2002 ASMOF wrote to SWSAHS asking whether it would consent to a recommendation by the Commission that SWSAHS not act on its stated intention to terminate Professor Hall's appointments until the outcome of the Brennan Inquiry was known, which was expected to be later in November. SWSAHS indicated to the Commission in proceedings on 14 November that it would not consent to such a recommendation, hence Mr Ginters' application under s 89(7) of the Act.

21 Mr G Driver for the respondent submitted that in the absence of any application by the applicant under s 84 there was real doubt that the Commission had the power to deal with the matter under s 89(7). Mr Driver submitted that the only proceeding before the Commission was a notification pursuant to s 132 of the Act.

22 Section 84 provides: If an employer dismisses an employee and the employee claims that the dismissal is harsh, unreasonable and unjust, the employee may apply to the Commission for the claim to be dealt with under this Part. 23 Section 83(5) defines "dismissal" to include the threat of dismissal.

24 The applicant has made it clear that he considers the letter from Mr Southwell to Mr Duggin of 29 October 2002 constituted a threat of dismissal and with that I agree. The applicant has also made it clear that he regards the threat of dismissal as harsh, unreasonable or unjust. On 14 November 2002 the applicant applied to the Commission to have his claim dealt with under s 89(7) of the Act. It seems to me the requirements of s 84 have been satisfied. The fact that the applicant did not submit his claim in the prescribed form is of no consequence, in my opinion.

25 As to the requirements under s 87(1) that the Commission satisfy itself that reasonable attempts to settle the applicant's claim by conciliation have been made but have been unsuccessful, I am so satisfied. The parties have met in order to attempt to resolve the matter and it is clear to me that conciliation has been unsuccessful.

26 The order that the applicant seeks in this matter is an interim or interlocutory order. In other words, the applicant is seeking an order that the respondent not dismiss the applicant until such time as the applicant is in a position to pursue a final order, either under s 89(7) or s 84, if such application becomes necessary following the parties' consideration of the Brennan Inquiry Report.

27 The power to make interlocutory orders under s 89(7) is, I believe, well settled: see Hill v Director-General of the Department of Education and Training (NSW) (1998) 85 IR 201; Australian Salaried Medical Officers' Federation (New South Wales) (on behalf of Dhayanithi Sivathondan) and South Western Sydney Area Health Service [2002] NSWIRComm 98; A and The Commission for Children and Young People (No 4) (2000) 104 IR 131; Four Sons Pty Limited v Sakchai Limsiripothong (2000) 98 IR 1; Public Service Association v NSW Fisheries (Unreported, Matter No. IRC98/5120, 8 April 1999); Ellen Ford v W D & H O Wills (Australia) Ltd (Unreported, Matter No IRC99/4549, 3 September 1999).

28 The exercise of the power to make interlocutory orders under s 89(7) is obviously discretionary. However, as Schmidt J pointed out in Hill (at 208) the Commission will not lightly interfere with an employer's contractual (or statutory) right to terminate the employment of an employee.

29 The conventional approach to apply in granting or refusing interlocutory orders is that identified by Mason ACJ in Castlemaine Tooheys Limited & Others v The State of South Australia (1986) 161 CLR 148 at 153. The relevant principles are as follows: The principles governing the grant or refusal of interlocutory injunctions in private law litigation have been applied in public law cases, including constitutional cases, notwithstanding that different factors arise for consideration. In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.

30 These tests were applied in Hill and Sivathondan. In considering whether there is a serious question to be tried it has to be seen in the context of whether a final order should be made under s 89(7) or under s 84. In other words, is there a serious question to be tried in relation to whether the threat of dismissal, or dismissal, would be harsh, unreasonable or unjust? In this respect it is to be observed that Professor Hall has been employed with the respondent for a period of 11 years. He holds senior management positions with the respondent. Three persons made complaints about Professor Hall, these complaints being protected disclosures under the Protected Disclosures Act 1994. The complainants were an employee of SWSAHS and two employees of UNSW. The complaints were investigated by the UNSW and SWSAHS. The SWSAHS investigation into Professor Hall's management style and practice substantiated three of eight complaints made against him by the University employees.

31 On the face of the findings of the Payne inquiry, I must say it is difficult for me to come to the conclusion that there were grounds to terminate Professor Hall's appointment. Clearly, there were some problems with Professor Hall's management style and he did not, on three occasions, deal with staff and issues in an appropriate manner. But as the Payne report conceded, Professor Hall's conduct did not amount to harassment or bullying. Moreover, I note that there were issues of excessive workload being undertaken by Professor Hall and the matter of Professor Hall's alleged ill health during 2001. The first issue was touched on briefly by Mr Payne but the second issue of ill health was not referred to despite relevant documentation being provided.

32 Then there are the UNSW's findings that Professor Hall's management style and practices were definitely deficient but not warranting dismissal. The UNSW report recommended that Professor Hall undertake appropriate training and counselling and Professor Hall has indicated he is willing to undertake such training and counselling.

33 I note from the correspondence tendered in the proceedings that in addition to the Payne report SWSAHS referred to a number of examples that "illustrate the nature of the concerns held by the Area concerning Professor Hall's suitability to retain management roles with the Area". These included: allegations that in August 1995 there was a lack of adequate follow up of issues; in July 1997 a lack of recognition of the need to protect the Area's interests; in June 2001, May and August 2002 a lack of adherence to effective systems and processes; and, in August 2001, January and April 2002 inappropriate behaviour.

34 In a reply to SWSAHS dated 27 September 2002, ASMOF systematically rejected the allegations on various grounds including that: the allegations arose prior to an offer to Professor Hall in December 2001 of reappointment to the position of divisional director; the matter was not previously raised as a performance issue with Professor Hall; and/or, the allegations had no substance.

35 I have no doubt that on the basis of the foregoing considerations there is a serious issue to be tried.

36 The second principle governing the grant or refusal of interlocutory injunctions raises for consideration whether Professor Hall will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted. Mr Driver for the respondent submitted that it was not the intention to remove Professor Hall from his clinical role, only from his management roles. Further, that Professor Hall's appointments were not being terminated for any reason related to questions of scientific fraud but only for reasons related to his management style and practices. Consequently, it was submitted, the issue of irreparable damage did not arise.

37 The respondent's position would appear to suggest that if Professor Hall was being terminated for reasons related to scientific fraud or that he was being terminated in relation to his clinical role, irreparable damage may be a consideration but that it was not a consideration in relation to the termination of his management roles. It does not seem to me that such a distinction is sustainable.

38 Professor Hall occupies senior management roles within the Area Health Service as well as a senior clinical role. If he is terminated in relation to his management role it must do damage to his career and reputation. The maximum compensation to which he would be entitled to under the Act would be, in effect, six months' pay. I do not consider that amount of compensation would be adequate in the circumstances. As to the remedy of reinstatement, it seems to me that in any proceedings concerned with final relief there is every prospect that reinstatement would be found to be entirely impracticable.

39 There is also a very real danger that, even though the grounds upon which SWSAHS might proceed to terminate Professor Hall's appointments in the absence of an injunctive order would be based on his management style and practices, confusion and misunderstanding would occur. For instance, if SWSAHS were to proceed to terminate and Professor Hall was later cleared by the Brennan Inquiry of scientific fraud, it is highly probable, given the proximate relationship between the fraud allegations and the management style allegations, that doubt would be created as to the reasons why he was dismissed. Did they involve an element of concern over the fraud issues despite the fact Professor Hall was later cleared? If this were to occur it could only have adverse consequences for Professor Hall and his scientific reputation. Reputations in the elite international scientific community in which Professor Hall operates are all-important and the merest shadow of doubt cast over a reputation could be devastating.

40 The third principle concerns the balance of convenience. The applicant submitted that the respondent should be restrained from threatening dismissal at least until the outcome of the Brennan Inquiry was known and that was expected to be within the next two weeks; no real inconvenience would be caused to the respondent in having to wait two weeks.

41 Mr Driver for the respondent submitted that any constraints on SWSAHS to move Professor Hall aside from his management positions would cause considerable inconvenience because the Area Health Service would not be able to make an appropriate appointment to replace him. This, it was submitted, was an important consideration in circumstances of a Health Service with a budget of $67 million per annum.

42 I acknowledge the legitimacy of Mr Driver's concern. However, in weighing up the balance I consider that the proper course is to restrain the respondent from threatening dismissal until such time as the outcome of the Brennan Inquiry is known.

43 If the Brennan Inquiry finds Professor Hall guilty of scientific fraud then circumstances may change considerably and may require Professor Hall to re-assess his position regarding the respondent's threat of dismissal. If he is not guilty then it will be a question of determining whether the interlocutory orders I have made should or should not become final, or that some alternative remedy should apply. _________________________________

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Cases Cited (5)