Jozef Banas v State of New South Wales - [2003] NSWIRComm 317 - NSWIRComm 2003 case summary — Zoe

NSWNSWIRComm

Jozef Banas v State of New South Wales

[2003] NSWIRComm 317

Industrial Relations Commission (NSW)|2003-07-01|Before: Haylen J, Peterson J, Dr J

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At a glance

Source facts

Court

Industrial Relations Commission (NSW)

Decision date

2003-07-01

Before

Haylen J, Peterson J, Dr J

Catchwords

03/11/2003
03/12/2003
03/13/2003
03/17/2003

Source

Original judgment source is linked above.

Catchwords

03/11/200303/12/200303/13/200303/17/200303/18/200303/19/200303/26/200307/15/2003 DATE OF JUDGMENT: 10/03/2003

Judgment (331 paragraphs)

[1]

Industrial Relations Commission of New South Wales in Court Session

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CITATION : Jozef Banas v State of New South Wales [2003] NSWIRComm 317 APPLICANT: Jozef Banas PARTIES : RESPONDENT: State of New South Wales FILE NUMBER: IRC 4628 of 2000 CORAM: Haylen J CATCHWORDS : Unfair Contract - s 106, Industrial Relations Act - redundancy in the public service - treatment of excess officers under Public Sector Management Act not a disqualification from remedies under s 106 - consideration of proposed orders discloses no inconsistency or contradictory operation with provisions of Public Sector Management Act - conduct of employer during three years applicant redundant and excess officer - failure of employer to fairly and properly apply redeployment policy to applicant - applicant permitted to remain unpaid whilst suffering from adjustment disorder and depressive condition - voluntary redundancy package not offered within reasonable period of time - medical condition directly related to treatment of applicant by employer - relief in relation to medical condition not precluded by provisions of Workers Compensation Act - relief related to contractual unfairness and not merely a common law claim for damages pressed as a claim under s 106 - orders proposed Brown v Rezitis (1970) 127 CLR 157 Burazin v Blacktown City Guardian Pty Ltd (1996) 142 ALR 144) Burswood Mangement Ltd v Attorney-General (Cth) (1990) 23 FCR 144, 146 ) Clark & Doherty v State of New South Wales [2002] NSWIRComm 274 per Peterson J Commissioner of Police v The Estate of Edward John Russell & ors (2002) 55 NSWLR 232 Daw v Toyworld (NSW) Pty Ltd [2001] NSWCA 25 (Director-General of Education v Suttling (1986-87) 162 CLR 427 at 437-438 Earle v Castlemaine District Community [1974] VR 722 Gala v State Bank of New South Wales (1998) 84 IR 216 Grant v State of New South Wales (No 2) (1991) 48 IR 314 Grljak v Trivan Pty Ltd (in Liq) (1994) 35 NSWLR Harcourt Brace & Co (Australia) Pty Ltd v Cory (1997) 81 IR 321 at 337 Jones v Dunkel (1959) 101 CLR 298 CASES CITED : King v State Bank of New South Wales (2000) NSWIRComm 229 King v State Bank of New South Wales (No 2) [2002] NSWIRComm 353. Lee v Jacka (1994) 125 ALR 459 Lynn v Byron (1995) NSWIRComm 114 Marlik v Bank of Credit and Commerce International SA (In Liq) [1998] AC 20 Moran v Amoret Installations Pty Ltd [2000] NSWCA 106 R v Welsh (1996) 90 A CrimR 364 Project BlueSky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Public Service Association of New South Wales & anor v Industrial Commission of New South Wales & anor (1985) 1 NSWLR 627 Pullen v R & C Products Pty Ltd (1994) 6 IR 138 at 214-216, Stevenson v Barham (1977) 136 CLR 192-200,201. Stoneham v Speaker of the Legislative Assembly (2000) 97 IR 325 Totalisator Agency Board v TAB Agents Association of NSW and ors (1995) 36 NSWLR 594 Walker v Industrial Court of New South Wales and anor (1994) 53 IR 121 Westfield Holdings v Adams (2001) 114 IR 241 HEARING DATES: 03/10/2003; 03/11/2003; 03/12/2003; 03/13/2003; 03/17/2003; 03/18/2003; 03/19/2003; 03/26/2003; 07/15/2003 DATE OF JUDGMENT: 10/03/2003

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3 October 2003 Matter No. IRC 4628 of 2000 JOZEF BANAS v STATE OF NEW SOUTH WALES APPLICATION UNDER s 106 OF THE INDUSTRIAL RELATIONS ACT 1996 JUDGMENT [2003] NSWIRComm 317 INTRODUCTION 1 The applicant Mr Josef Banas moved to the Central Region of the Department of Corrective Services in 1992, having been appointed to the position of Regional Finance and Administration Manager Grade 9/10. This was a senior position in the administrative and clerical gradings within the public service and represented a considerable personal achievement for a person who had arrived in Australia as a non-English speaking Polish migrant. Mr Banas was considered to be a valuable employee and performed well in this senior role. However, in 1996, the Central Region was disbanded and his position, along with 15 to 20 other administrative and clerical positions, was abolished. Mr Banas became, in the language of the public service, a "displaced person" - a notion he had some familiarity with in deciding to leave his homeland just two months before martial law was declared. This case, brought under s 106 of the Industrial Relations Act, examines his treatment as a displaced person, the alleged unfairness of the Department in handling his redeployment and the psychological disorder said to result from the mishandling of his situation which occurred during the three years before his "voluntary redundancy" in December 1999. THE APPLICANT'S CASE OPENED 2 In opening his case, it was submitted that Mr Banas was a capable and dedicated officer while carrying out his duties. In 1992, he moved on transfer to Blacktown to take up his position which was a senior accountancy position Grade 9/10 on the clerical scale. In December 1996, the Centre in which he worked was closed resulting in a number of positions being made redundant, including that of Mr Banas. Thereafter, Mr Banas experienced severe difficulty in finding suitable positions. While Mr Banas sought positions in other departments without success, the Department of Corrective Services offered only unsuitable positions. The issue of the reasonableness of the Department's treatment of him while investigating re-deployment and/or considering voluntary redundancy was said to be at the heart of the case.

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31 He applied for a Treasury position in the city and had been offered a three month trial under conditions, namelyn that he improve his English skills by course work and that there would be an assessment of him in three month's time. Mr Banas said that Mr Peters was involved in this matter and that he had been offered a course to overcome his stutter which was a problem Mr Peters had identified. Mr Banas was worried about satisfying conditions for the Treasury job. He regarded it as the best job that he could get. At the time that he refused the trial period in the job, he was working in Campbell Street and travelling two and a half hours a day on the bus. He was frustrated at the time, with little to do and travelling a lot to and from work. He did not regard the work at Campbell Street as a real job. He thought the trial period and the English course conditions for the Treasury job were unreasonable when he had priority of placement under the policy. At this time, although he was complaining about travel, he was able to travel from Baulkham Hills to the CBD and that was not unreasonable, but he had lost his self esteem and thought that he could lose out overall if he was not given the Treasury job after three months. 32 It was put to Mr Banas that, in relation to a number of the outside positions for which he had applied, for whatever reason, ultimately he had declined to attend interviews in relation to those positions. Mr Banas said that in relation to the Long Service Payments Corporation he had declined to attend a second interview because a question arose as to whether he had priority for the position. In relation to the Fair Trading Department position, he was told that it was a promotion that he thought had fitted the flexibility of the guidelines but, ultimately, he did not know if he was eligible for priority or not. In relation to the position at the RTA he had discussed it and tried to find out about the position but was given no information. He could not recall what had happened but he had not attended for the interviews. When he was told that he did not have basic accounting skills during the course of looking for new positions, he became dejected and angry and declined to attend further interviews. He had taken this approach because, without priority, he thought attending the interviews was pointless and he had lost faith in the system.

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94 The second letter sent by Mr Schipp was dated 27 August 1998 and was addressed to Mr Banas. It referred to Mr Schipp's previous letter of 19 August 1998 and his request that Mr Banas confirm that he would be entering Job Search Leave as agreed from 31 August. The letter noted that no response had been received by the specified date, namely 21 August 1998, and informed Mr Banas that, if he did not proceed on Job Search Leave as agreed, the Department would consider this as a breach of the offer and acceptance of voluntary redundancy. The letter then stated: Following discussions with both the executive director, human resources and the Department's corporate counsel, I must inform you of the impact that this will have and the action that the Department should be required to take. The offer of redundancy would be withdrawn by the Department following the breach of agreement. Benefits already provided including payment of expenses incurred and salary paid whilst on re-training need to be recovered. The Department would endeavour to place you into a position equivalent to your current salary. If this is not possible, placement at a lower grade with up to 12 months salary maintenance may be provided. Such a placement may not be in your current location and if not, the provision of the Transferred Officers' Award may be applicable. 95 On 1 September 1998, Mr Schipp provided a briefing to the Commissioner in relation to the circumstances surrounding Mr Banas' voluntary redundancy. In that briefing, the Commissioner was informed of the arrangements made for voluntary redundancy and Mr Banas' claim for "additional compensation" and the agreement reached that the compensation claim would be dealt with separately from the voluntary redundancy process. Mr Banas in a letter dated 30 June 1998, had noted that issues of voluntary redundancy and compensation were being treated separately - he had elected to proceed on Job Search Leave on 31 August 1998 and received benefits under the Job Assistance Scheme including reimbursement of expenses and leave to attend various training courses, having accepted the offer of voluntary redundancy. The briefing informed the Commissioner that following the acceptance of voluntary redundancy, "meaningful work" was no longer provided to Mr Banas in order to afford him every opportunity to formulate his job assistance strategy and seek out training needs. However, on 17 and 19 August 1998, Mr Banas had advised Mr Schipp of his intention to continue to attend work as he had not received satisfactory advice regarding the issue of "additional compensation". The briefing from Mr Schipp contained the following: In view of this breach of good faith in the agreement to accept V R and proceed on Job Search Leave I recommend that the offer of V R be withdrawn and the Department now proceed to place Mr Banas into a vacant position. If in fact Mr Banas had formed an intention some time ago not to proceed on Job Search Leave, and notwithstanding that, continued to accept salary payments while not performing any work, it is arguable that he has received money under false pretences. This may amount to a breach of discipline and entitle the Department to recover such payments from him. In the circumstances, I suggest corporate counsel's advice be sought on this aspect.

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96 Mr Schipp said that of the four jobs offered to Mr Banas the position at the Academy was the more urgent and appropriate one. He stated that, in June or July 1998, there were voluntary redundancy opportunities because a number of staff had been supernumerary for some time due to initiatives and restructures within the Department. Those without substantive positions were offered voluntary redundancy. He had put Mr Banas forward as a candidate for voluntary redundancy and an offer had been made to him. 97 Between June and July to the end of August 1998, Mr Schipp said that, when Mr Banas was at work and not working on special projects allocated to him, he was preparing his re-training plan as part of the redundancy arrangements. The Department had asked him to submit a re-training plan. 98 The first discussion he had with Mr Banas was at the end of March 1998. Mr Banas was concerned about his CV having a gap due to being displaced. He required adequate compensation for this gap as he would have to explain in future interviews for jobs what he was doing for the past 18 months. He said he did not want to work for the Department of Corrective Services but wanted redeployment in another department. WMC had told him there could be other work available. In this discussion, Mr Schipp had replied that compensation was beyond the Department's guidelines and was a separate issue and, in any event, was beyond his brief. Mr Banas was told that he must see Human Resources or Corporate Counsel about that claim. The Department's commitment to those who were redundant was to get them another job and, if not, voluntary redundancy. 99 In cross-examination, it was put to Mr Schipp that there was no justification for the view that, unless a person took up job assistance they could not take the voluntary redundancy package. Mr Schipp stated that he was not an expert in this area of the guidelines and its application. He concluded that the departure from the arrangements was a breach of the guidelines and then sought advice from Ms Lord and Corporate Counsel.

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105 By June 1998, Ms Lord had reached the view, as a pragmatic matter, that redundancy ought to be considered although redeployment was still feasible. She said that she was concerned that the matter had dragged on for some considerable time and that Mr Banas had expressed an unwillingness to take up any of the positions offered to him. She was also anxious to bring to a conclusion any outstanding matters associated with the closure of the Department's Central Region. Ms Lord sought and obtained approval to offer Mr Banas a redundancy package as was set out in a letter addressed to him on 18 June 1998. That letter set out the terms of the package and contained a provision whereby Ms Lord had determined 30 June 1998, "as an appropriate last day of service unless special circumstances could be demonstrated". Mr Banas thought that this was a letter of dismissal in its terms, but that was denied by Ms Lord. The letter was simply acceding to Mr Banas' request for voluntary redundancy. Ms Lord said she was unaware at the time she wrote the letter of 18 June that Mr Banas was seeking compensation over and above voluntary redundancy. 106 Ms Lord confirmed that she did meet Mr Banas at his request on 18 June 1998 to discuss his redeployment. During the course of this meeting, she became aware of Mr Banas' letter to the Commissioner of 12 May 1998. In that letter, amongst other things, Mr Banas had said that redundancy was the only permanent solution and he had not been given any other realistic alternatives. However, for the outcome to be fair the redundancy package had to include additional compensation for the damage "the Department had caused him". That was a "fair outcome" in terms of the displaced employees' policy. Ms Lord said that she explained the redundancy package in detail to Mr Banas as he appeared not to have any understanding of the benefits available. The meeting concluded on the basis that she would follow up matters that he had raised in his correspondence of 12 May 1998.

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107 Ms Lord said that she received a further letter from Mr Banas dated 19 June 1998, in which he raised a number of matters concerning the redundancy package and the conditions of the Job Search Leave. At the conclusion of that letter, having recorded the agreement to alter the termination date of his service to allow him to complete appropriate training courses before commencement of Job Search Leave, with a termination date to be determined after he provided her with his training plan, Mr Banas said that he understood the Department's legal branch would write to him separately on the issue of "the fair outcome", which he raised in his latest correspondence to the Commissioner and the Director-General of the Premier's Department. Ms Lord said she met Mr Banas on 24 June 1998 and 26 June 1998 to discuss, amongst other things, his training plan and the job assistance scheme on his last day of service. Mr Banas had proposed that because of the training course and the examinations he was pursuing, that his last day of service should be shortly after 20 November 1998, and that his Job Search Leave should start 12 weeks earlier, ie on Monday 31 August 1998. Ms Lord informed him that he could go on Job Search Leave on either 18 July 1998 or 20 November 1998 but that it was not convenient for him to attend certain nominated training courses during work time. On 26 June 1998, Ms Lord also informed him that the Department intended to treat the issue of additional compensation as a separate matter and that it was not possible to deal with his claim for additional compensation at that time. Ms Lord also informed Mr Banas that the Department would extend the offer of a redundancy package until 30 June 1998 and he was handed a letter to that effect. In that letter, Ms Lord required a response from Mr Banas accepting the voluntary redundancy package by 30 June 1998. The letter records that she had accepted the advice of Corporate Counsel that the claim for compensation would be dealt with as a separate issue and that the claim for compensation could not be concluded "at this time".

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109 On or about 3 July 1998, Ms Lord received a letter from solicitors acting for Mr Banas. That letter acknowledged that the voluntary redundancy package had been offered and accepted by Mr Banas and accepted the terms of the letter of 26 June 1998, whereby Mr Banas' claim for compensation would be dealt with as a separate issue to that of redundancy. The Department was invited to consider Mr Banas' case for compensation and to put forward a proposal for consideration. Having regard to the delays already experienced and the considerable complexity of the matter, the proposal was asked to be forwarded within 14 days. In closing, the letter noted that Mr Banas would not hesitate to commence legal proceedings under s 106 of the Act should a suitable outcome not be achieved from the proposed discussions. Ms Lord forwarded that letter to Corporate Counsel, Mr Nash. 110 Ms Lord emphasised that she and others had explained to Mr Banas that the confirmation of his last day of duty and entry on Job Search Leave was "integral to the offer of voluntary redundancy and that his refusal to enter on to Job Search Leave amounted to a repudiation of the agreement". Ms Lord confirmed that, on 1 September 1998, Mr Schipp prepared a briefing note for the Commissioner recommending that, in the circumstances, the offer of voluntary redundancy be withdrawn and that the Department proceed to place Mr Banas in a vacant position. At this point, it is appropriate to note that, on 19 August, Mr Schipp had written to Mr Banas advising that, if he attended work on Monday, 31 August 1998, the Department would consider such action as a breach of the offer and acceptance of redundancy. This was followed by a further letter dated 27 August 1998 by Mr Schipp pointing out that no reply had been received from Mr Banas and informing him that. if he did not proceed on Job Search Leave as agreed the Department would consider such actions to be in breach of the offer and acceptance of voluntary redundancy. Following advice of Corporate Counsel, the Department would withdraw the offer of redundancy following Mr Banas' breach and benefits already provided, including payment for expenses and salary whilst on retraining, would be recovered. It was stated in this letter that the Department would endeavour to place Mr Banas into a position equivalent to his current salary and if that was not possible he would be placed at a lower grade with 12 months' salary maintenance. Such a placement may not be in his current location and, if not, the provisions of the Transferred Officers' Award would be applicable.

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112 Mr Banas had written to the Director-General of the Premier's Department on 28 August 1998. He referred to complaints of misconduct in administration involving the Department of Corrective Services, the Railway Services Authority, the Roads and Traffic Authority and the Workforce Management Centre. He complained that he had heard nothing about his complaints but, since 15 July 1998, he had been receiving intimidating and threatening letters from the Department of Corrective Services which had attempted to pressure him to resign from the Service and discontinue his duties on 28 August 1998. The Department had advised him of the necessity of taking the redundancy package despite the Government's commitment to there being no forced redundancies. When he agreed to accept the offer of redundancy a deadline was imposed by the Department. In addition, the issue of compensation was being dealt with separately but had been delayed by the application of "unfair delay tactics". Mr Banas had been advised that no guarantee could be given as to the time that the investigation procedure would take in relation to the compensation issue. Mr Banas stated: The issue of compensation is the most important condition of my departure from the Service. As you know, my career had been destroyed by my forced re-deployment and I am now practically unemployable in the private sector. Therefore, I have decided not to terminate my employment with the New South Wales Government until the issue of compensation has been addressed. I understand that under the policy, a displaced employee accepting an offer of voluntary redundancy does not have to terminate employment within the time specified by his/her employer. The policy provides only that in case of compliance with the employer's terms, the employee is entitled to additional payments of 2 to 8 weeks' pay depending on the years of services. The DCS is not respecting my rights to remain in the Service and is pressuring me to resign under duress. As you will see from the enclosed correspondence, they have been threatening to withdraw the offer of a redundancy package, and deny me the training assistance (previously agreed upon) to which I am entitled under the policy. They have also threatened me with forceful redeployment to some position of lower classification in a remote location.

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123 Mr Banas' claim for weekly payments of compensation was denied and, on 22 February 1999, Ms Lord arranged for him to be assessed to determine his fitness to continue employment in the public sector. Ms Lord's letter to the Director of the Medical Examination Centre set out the employment history of Mr Banas and the fact that he was a displaced person and that efforts had been made to place him in another position. The letter noted that voluntary redundancy was offered but had been declined and that Mr Banas had been placed in the position of Business Manager at the Corrective Services Academy. It was also noted that Mr Banas was to enter on duty in that position on 28 September 1998, but proceeded on sick leave. The letter continued: As the Department has concerns regarding Mr Banas' fitness it is requested that a medical examination be organised as soon as possible to determine Mr Banas' fitness while he continues in employment. This letter does not acknowledge that Mr Banas had subsequently been offered voluntary redundancy and had accepted it but that its terms could not be implemented because of the outstanding workers compensation claim. 124 On 27 April 1999, the New South Wales Government Medical Officer provided the Department with a report on Mr Banas' health. On examination, it was recorded that Mr Banas was found to have labile hypertension, treated hyperlipidaemia and atypical chest pain. However, none of these conditions was said to preclude his returning to work with the Department of Corrective Services. Mr Banas also underwent a psychological assessment. The report concluded with a diagnosis that Mr Banas was suffering from an adjustment disorder and that the condition was likely to be exacerbated if he returned to work in the previous work environment, a view which was supported by Mr Banas' treating doctors. The view was expressed that his symptoms were not, however, of sufficient severity to preclude a return to his usual duties in another department. The report concluded with the following recommendation: It is advised that Mr Banas not return to work with the Department of Corrective Services due to the risk of exacerbating his condition. At present, however, his symptoms are relatively mild and would not preclude administrative work elsewhere. Redeployment is advised as he remains fit for his substantive duties outside the Department of Corrective Services. 125 Following receipt of this medical report, Ms Lord, on 3 May 1999, wrote to the Director-General of the Public Sector Management office. In this letter, Mr Banas' employment history and the offers of voluntary redundancy, the withdrawal of the offer, the placement of Mr Banas in the position at the Academy and the reinstitution of the offer of voluntary redundancy were set out, as was his claim for workers compensation, its rejection and conciliation proceedings in relation to that claim. The letter noted that Mr Banas' current position was that he had been substantively appointed to the position of Business Manager at the Corrective Services Academy. He had exhausted all leave credits and had been taken off the payroll and had not supplied any leave requests since 24 February 1999, but rather was shown as being on unauthorised leave pending the supply of further medical certificates and leave forms. In light of the recommendation made by the Government Medical Officer, assistance was sought in arranging redeployment to a department other than the Department of Corrective Services.

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196 It was submitted that the relevant statutory provisions were ss 50, 51, 52, 53 and 55 of the PSM Act. Section 50 permitted the department head to transfer within a department or between departments at existing salary provided the officer possessed the qualifications required. Section 51 dealt with excessive staff and where the appropriate department head was satisfied that there were employees in excess of that necessary for the effective efficient and economical management of departmental functions and activities. The department head was to take such steps as were practicable to secure the transfer of excess persons to vacant positions in other departments at their existing salaries. If they could not be so placed the Governor may, on the recommendation of the appropriate department head, made with the approval of the Public Employment Office, dispense with the person's services. Section 52 dealt with excessive salaries and focussed on the work performed by an officer. Where an officer could not be assigned sufficient work of the class appropriate to that officer's salary, the appropriate department head was to take such steps as were practicable to secure the officer's transfer to a vacant position in any other department at the officer's existing salary. If no such transfer could take place the department head with the approval of the Public Employment Office was to reduce the officer's salary to the maximum determined by the department to be appropriate to the work performed by the officer and was to take such steps as were practicable to secure the officer's transfer to a vacant position in the department or any other department at that salary. Section 53 dealt with an officer refusing a transfer under ss 50, 51 and 52. The Governor, on the recommendation of the appropriate department head made with the approval of the Public Employment Office, could dismiss the officer from the Public Service but only if the department head had certified that the officer had no valid reason for refusing. If it was determined by the department head that there was a valid reason to refuse the transfer the department head could allow the officer to decline the transfer without prejudice to any rights that the officer would have had to any future promotion or appointment had the transfer not been declined. Section 55 provided that an officer, except as provided by the PSM Act or any other Act, was not entitled to compensation as a result of the officer's services being dispensed with or the officer's salary being reduced.

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219 The respondent noted the terms of Mr Rave's memorandum of 14 March 1997 which contained the following passage: Mr Banas is well qualified for the position. However his expertise and experience is in financial management and although the position has some financial management responsibilities it involves management of all support functions at the Academy. These include administrative support, accommodation, ground and building maintenance, store and vehicle. Mr Banas' experience does not extend to these other functions of the position although I am confident that he is capable of performing well if appointed to the position. [He] has a negative attitude to the position at the Academy and does not want to be allocated to it. He regards it as a demotion when comparing the financial responsibilities of his previous position with those of this position. He has focused on the financial management aspects of the position rather than the diverse range of responsibilities which it involves. Given this attitude and the importance of the position to the effective operation of the Academy it is my recommendation that he not be appointed to the position at this time. The respondent relied upon this as evidence of the reasonableness of the request to ask Mr Banas to take up this position and to confirm his general suitability for the position. 220 Mr Banas was also given the opportunity to take up the position of Finance and Administrative Manager, Security and Investigations Branch at Windsor, which was a position to be created and thought to be likely to be graded at the same grade as his previous position, Grade 9/10. This position was canvassed with him at the February 1997 meeting which he attended with the Assistant Commissioner and Mr Batty. It was also discussed with him again in June 1997 by Mr Peters. In July 1997, Mr Peters met the applicant to discuss his redeloyment and the Windsor position was again suggested as being suitable for him. Mr Banas, in a letter, stated that he was not prepared to consider the Windsor position until other outstanding issues raised in an earlier letter had been addressed.

[212]

· a key feature was said to be the details of the services to be provided to all displaced employees - services including counselling and training; · there would be no forced redundancies and "every effort" would be made to redeploy those who were displaced; · voluntary redundancy may be offered where redeployment is considered not viable "in a reasonable period of time"; · voluntary redundancy would be contemplated where the organisation, the WMC and relevant unions consider it impractical to retain the displaced person for redeployment and that person's knowledge and skills were not in demand by public organisations; · voluntary redundancy would apply where the parties agree that redeployment was not likely to be viable in a "reasonable period time"; · for voluntary redundancy to be available, the WMC was to advise on potential redeployment in the public sector in a reasonable period of time; · displaced persons were to have access to professional vocational and personal counselling; · in applying the policy, there was to be a balance and fairness to the customers, public employees and the community; · redeployment was to be made to a "suitable position/job" elsewhere in the public sector wherever suitable and sufficient vacancies existed "in a reasonable period of time"; (emphasis added) · displaced employees were to be kept fully informed of redeployment opportunities; · outcomes under the policy were to be fair and management of people involved was to be sensitive to the pressure of change on public employees and their families; · displaced employees could be placed in any suitable vacancy without advertising; · displaced employees who were excess were to be considered before other applicants for advertised vacancies if they met the essential requirements for the position or could perform the duties adequately and in a reasonable period of time given access to appropriate training; · displaced employees who were not yet declared excess to the needs of the Department, pending consideration of suitable placements within the Department, may be given priority consideration for a vacancy where no excess employee has sought redeployment in the position. · it was the responsibility of the employee to participate fully in the redeployment process; · all chief executives and the WMC were to co-operate in redeploying employees as quickly as possible within and across departments; · there was no prescribed maximum period for redeployment although it was recognised that this had previously been set at 6 months - employees would need to consider their circumstances in the context of the availability of work and the availability of voluntary redundancy; · displaced employees were to be given access to stress management counselling; · individuals were responsible for undertaking a pro-active job search; · the WMC was to facilitate redeployment between the departments; · employees were not to be relocated if they had a valid reason for refusing a transfer. (emphasis added)

[260]

282 The position taken by the Department in relation to this reinstated offer of voluntary redundancy was, again, not in accordance with the displaced persons policy. The policy, dealing with the voluntary redundancy package, contained a provision under the subheading "Eligibility", which said: Where approved, displaced employees are eligible for an offer of a voluntary redundancy by the organisation except the following: … Employees on workers' compensation whose claim is based on compensation for termination (unless the agreement of their workers' compensation insurer is obtained to any separation payment being made) or others awaiting determination of claims against the employer for termination of services; and employees in relation to whom action is in train to terminate their services. 283 Two things are obvious. Firstly, Mr Banas was not "on" workers compensation - his claim has been rejected by the insurer and, although he seems to have proceeded to the conciliation stage, no claim for workers compensation was ever pursued in the Compensation Court. Secondly, his compensation claim relating to stress was not a claim "based on compensation for termination" nor was it otherwise related to termination of services. Mr Banas was still employed by the Department and was under no notice of termination. There is no reason at this stage why the reinstated offer of voluntary redundancy could not have been finalised. The Department either misapplied the policy or determined to apply maximum pressure to Mr Banas by again withholding voluntary redundancy if he pursued a workers compensation claim. As Ms Lord noted, she had not heard from Mr Banas' solicitors that the claim would be dropped. This approach does not fit with a professed approach that officers were entitled to pursue workers compensation claims: a new approach was adopted by the Department in which voluntary redundancy could not be finalised or granted until the workers compensation claim was finalised.

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287 The next issue to be considered concerns the nature of Mr Banas' medical condition. On 15 December 1998, Dr Napper, consultant psychiatrist, certified that the applicant had been under his care since 13 October 1998 and had attended for three consultations. He considered him to be suffering from an adjustment disorder, depression and anxiety, and that he was medically unfit for work from 22 September 1998 to 22 March 1999. He expressed the opinion that Mr Banas' employment had been a substantial contributing cause of his current illness. Dr Napper and Mr Banas' treating general practitioner had advised him to lodge the workers compensation claim, which they were supporting. 288 Dr Napper recorded the history given to him by the applicant. He was told that, for at least two years, Mr Banas had suffered recurrent anxiety, depression, insomnia, headaches, sweating episodes and hypertension. Those symptoms had arisen directly from the stresses experienced from Mr Banas' working conditions. Reference was made to his redeployment and how his responsibilities had been significantly downgraded. Mr Banas' job had been taken away from him and replaced with mundane, menial duties: he frequently would turn up for work and find there was little work for him to do. Reference was made to his attempts to find alternative employment and how they had been hindered. He had complained that his Department had expected him to turn up at work on many occasions to do virtually nothing when he was used to performing at higher levels. The Department had essentially refused to do anything about his situation. Dr Napper then stated: The stress of this unresolved matter has been the main contributor to Mr Banas' current illness. Mr Banas remains unfit to return to work as the work conditions that have caused his illness are still present and remain unchanged. 289 In his oral evidence, Dr Napper said that he had in the order of 20 sessions with Mr Banas, which were necessary because he suffered from a particularly severe adjustment disorder which was difficult to treat. He said the only real improvement in his condition appeared when he started a new job in approximately February 2000. He had seen the report of Dr Lucire tendered by the respondent in the present proceedings, but could not support the opinions expressed in that report.

[269]

It was noted that Dr Napper believed that his patient was suffering from a Chronic Adjustment Disorder with anxiety and depression. Dr Napper considered that his patient was possibly an obstinate man who was aware of his rights and pursued them like a bulldog with a bone. In the course of her report Dr Fischer made the following points: · Mr Banas struggled with the notion of what he saw as dishonesty and manipulation from others when all he desired was security, a position utilising his skills and job satisfaction; · Mr Banas' strong need for guaranteed job security may well be fuelled by the insecurity many migrants experience in finding their identity, stability and place in a new country; · History taking did not reveal any contributory non-work related stresses or maladaptive personality traits which would account for his current psychiatric condition; · by February 1998 Mr Banas' psychological health had deteriorated significantly and by the time he left work in September 1998 he was far from rational in his decision making and set on being compensated for his mismanagement by the Department. 294 Dr Fischer concluded that, at interview, Mr Banas impressed as a strong-minded individual with high personal and professional standards and as someone whose self-perception and self-esteem stemmed in large part from his career and work achievements. His manner was somewhat intense, his personality quite rigid and his standards and expectations for himself and others high. His supervisors might well have labelled him as a difficult and problematic employee due to his personality style. Dr Fischer concluded: Taking the claimant interview, clinical assessment, workplace assessment and liaison with Mr Banas' treating psychiatrist into consideration, it would appear that the inconsistent and confusing management of Mr Banas' case by the employer has acted directly to cause his present psychiatric condition. Therefore it is my assessment that the workplace should be liable for his current claim. Dr Fischer made three recommendations, the third of which was in the following terms: The Department review its current guidelines for the management and support of its supernumerary and displaced staff. 295 It will be recalled that, during his absence from work in April 1999, the Department decided to have Mr Banas medically examined to determine whether he was fit to resume duties. He was referred to HealthQuest and a report was provided by Dr Gapper dated 27 April 1999. In this report, Dr Gapper advised Mr Banas not to return to work at the Corrective Services Department due to the risk of exacerbating his condition. It was noted that, at present, while his symptoms were relatively mild, they did not preclude performing administrative work elsewhere. Redeployment outside the Corrective Services Department was advised.

[276]

302 It may well have been the manner in which the applicant approached the calculation of money orders that may have excited the interest and attention of the respondent. The Full Court in Westfield Holdings v Adams made it abundantly clear however that approaches from other areas of the law including concepts of common law damages and mitigation may have a role to play in the way in which the relief is fashioned. Those approaches alone will not convert a case brought under s 106 into a common law claim for damages or proceedings in tort. As was held by the Full Bench in Harcourt Brace & Co (Australia) Pty Ltd v Cory (1997) 81 IR 321 at 337 (in relation to s 275 of the previous Act) in determining what is just in all the circumstances under these statutory provisions, involved the exercise of a jurisdiction wider than available under the common law principles as to damages. I have addressed this issue at this point and a little out of order in order to emphasise the nature of the proposed orders. I return to this subject matter at paragraph 287 and following. 303 On the evidence, when Mr Banas took sick leave in September 1998 following his compulsory appointment to the Academy position, the Department applied the outstanding sick leave, then annual leave and, finally, extended leave available to him. He was apparently considered on unauthorised leave from February 1999 until voluntary redundancy was paid to him in December 1999. In view of the findings I have made in relation to the unfairness arising from the Department's conduct, Mr Banas should be paid a further sum being the equivalent of nine months' salary calculated by reference to his annual salary. In reaching this conclusion, I have given general rather than precise consideration to the various periods of leave available to Mr Banas and thereby discounted the full claim. 304 By reference to the further amended summons for relief it may be seen that orders for different times and in different amounts have been made in relation to the general subject matter raised in Clause 3 and Clause 4. As noted earlier, the relief claimed in Clause 5 was not pressed. I am not prepared to make orders contemplated in Clause 6 and, in the alternative, Clause 7, which seek compensation for economic loss incurred as a result of Mr Banas' diminished earning capacity. While the evidence did indicate that his salary in the public service was approximately $60,000 per annum, (there was evidence of his hourly rate only} the position he obtained with the Australian Tax Office ultimately resulted in a very much lower salary of approximately $49,000 per annum. The applicant has already been paid redundancy under the voluntary redundancy scheme and no additional amount is proposed in relation to redundancy. It is frequently the case that a person who loses their employment because of redundancy is unable to obtain a position of the same status or salary, but the redundancy payment does not alter between those who successfully obtain employment at the same or similar level or even at a superior level. There is nothing in the circumstances of this case that justifies an order referable to the amount of lost salary due to Mr Banas' inability to obtain a position at an equivalent rate of pay. There was no direct evidence of lost opportunity outside the public service which would justify such an approach. I deal with consequential orders at the conclusion of the judgment.

[278]

306 Although not stated in so many words, the thrust of the respondent's submission was that the provisions of ss 50, 51, 52, 53 and 55 of the Public Sector Management Act acted as a code and that there was no room under s 106 of the Industrial Relations Act to deal with those matters exclusively covered by the PSM Act. While no direct reference was made to it, a similar proposition in relation to the Public Service Act 1979 dealing with equivalent provisions was dealt with by the Court of Appeal in Public Service Association of New South Wales and anor v Industrial Commission of New South Wales and anor (1985) 1 NSWLR 627. In that case, the Public Service Association had sought a redundancy award, but the sections of the Public Service Act dealing with excess staff and excessive salaries were raised as excluding the award-making power of the Commission. The Court of Appeal held that, because the wording of the Public Service Act in ss 113 and 114, dealing with aspects of "industrial matters" (as defined in the Industrial Arbitration Act, namely, excess staff and excessive salaries), indicated by way of negative implication that the functions and powers these sections created were to be exercised under that Act only by the persons mentioned in them, and could not be saved by s 8 of the Public Service Act which stated that "unless otherwise expressly provided, nothing in this Act affects the Industrial Arbitration Act, 1940". Accordingly, the Industrial Commission's jurisdiction relating to excess staff or excessive salaries in the public service was withdrawn in respect of matters provided for in the Public Service Act ss 113 and 114. However, the Commission still retained jurisdiction to flesh out or complement the scheme set up by those sections provided any award made by it was not inconsistent with or contradictory of the specific provisions of those sections. There was no indication of an intention by the legislature to preclude the Commission from entering that part of the field. Indeed, it was submitted for the respondent that the displaced persons' policy supplemented the statutory scheme dealing with these matters under the Public Sector Management Act.

[283]

312 Even on the respondent's argument, if Mr Banas failed to convince the Department Head of the existence of such a valid reason, the certification of a valid reason was open to challenge and public law remedies were available. Such Public Law remedies may include administrative law remedies and statutory rights available to public sector employees. The respondent argues that while these remedies and rights are available, they are not "justiciable" under s 106 of the Act. The submission, however, overlooks the capacity of the Court to make a declaration (see s 154) and there is no reason why a declaration concerning the operation of s 53 of the Public Sector Employment Act could not be made in conjunction with proceedings brought under s 106: it is unnecessary to do so in the present proceedings. In fact, Mr Banas was not invited to address the unsuitability of the positions - he was simply given a choice between two positions he regarded as unsuitable. Quite apart from that consideration, there is nothing in the proposed orders which would conflict with the provisions of s 53. 313 Section 55 of the PSM Act provides that an officer is not, except as provided by the PSM Act or any other Act, entitled to any compensation as a result of the officer's services being dispensed with or the officer's salary being reduced. Putting to one side for a moment whether relief under s 106 of the Industrial Relations Act might fall within the term "or any other Act", Mr Banas' services were not dispensed with. In this regard, I agree with the approach adopted by Peterson J to similar provisions under the Teaching Service Act (s 97(2)): the words "being dispensed with" bear the ordinary meaning of being terminated at the behest of the employer and are quite inappropriate to identify a situation where an employee voluntary terminates or where an employer and an employee mutually agree to a termination (see Clark & Doherty v State of New South Wales [2000] NSWIRComm 274). 314 The findings of unfairness revolve previously around conduct whereby the respondent misapplied, or did not make fully available to the benefit of the applicant as a displaced person, the provisions of the displaced persons policy. That document, negotiated by public sector unions under the auspices of the Labor Council, has at least the status of an arrangement operating alongside the contract of employment. The orders proposed are not inconsistent with or contradictory of the nominated provisions of the PSM Act.

[285]

316 In addition, the applicant's submission drew attention to the judgment in Totalisator Agency Board v TAB Agents Association of NSW and ors (1995) 36 NSWLR 594 where the Full Industrial Court found that a statutory provision which contained the phrase "… subject to the direction and control of the Minister" did not preclude the operation of s 275 of the Industrial Relations Act 1991. Hungerford J (with whom Cahill Dep CJ agreed) stated: … the short answer to the appellant's submission is that the respondent's claim does not in fact seek a review of the ministerial directions but rather that the contracts or arrangements made with the appellant be avoided or varied under s 275. I think the distinction to be not unimportant and it may not be said the appellant is thereby rendered unable to comply with the ministerial directions - the appellant has complied with those directions but it is the Court, on the application of the respondents, which is asked to avoid or vary the contract or arrangements on the necessary grounds being established. Section 5(1) of the TAB Act constitutes the appellant as a body corporate and makes it liable to sue or be sued in its corporate name and of doing and suffering all such acts and things as bodies corporate may by law do and suffer; I have no doubt that that evinces a legislative intent to make the appellant subject to law, such as s 275 of the Industrial Relations Act, in the absence of an express provision to the contrary. 317 There are significant differences between the Public Service Act 1979 and the Public Sector Management Act. Unlike the Public Service Act, the PSM Act does not contain an equivalent to s 8 stating that, unless otherwise expressly provided, nothing in this Act affects the Industrial Arbitration Act 1940, but in a number of places the PSM Act specifies that the Industrial Relations Act is not to apply (eg s 27, excluding the appointment or failure to appoint persons to a vacant position in the public service: s 38E, excluding industrial arbitration or legal proceedings in relation to special temporary employees; s 42J, excluding industrial arbitration or legal proceedings in relation to executive officers: s 42S, providing for compensation to an executive officer who has no right to return to the public sector being determined by the Statutory and Other Officers Remuneration Tribunal). In this context the provisions of s 404 of the Industrial Relations Act 1996 is relevant providing that the Act binds the Crown in the Right of New South Wales and so far as the legislative power of Parliament permits, the Crown in all its other capacities. This provision has relevance in light of the approach adopted by Hungerford J to the later enactment of s 275 and its effect in the TAB Agents case. Considering all of the matters raised by the respondent Department, I am unable to accept the submissions made as to the PSM Act operating so as to exclude the relief proposed in the present case.

[289]

320 The respondent's approach in the present matter may be compared with a similar approach dealt with by the Court of Appeal in Incitec Ltd and anor v Industrial Court of New South Wales and ors (1992) 45 IR 155. In that case staff employees sought relief under s 88f of the Industrial Arbitration Act in relation to redundancy which was met by a submission that relief in relation to that matter was excluded by the special provisions dealing with redundancy under the Employment Protection Act. Gleeson CJ at 157-158 dealt with the issue in the following way: The question is ultimately one of construction. Having regard to the presence of particular legislative provisions relating to employment protection and redundancy payments, should Parliament be taken to have evinced an intention that the general provisions of s 88F may not be invoked in order to obtain relief where the substance of an employee's complaint against an employer relates to a matter concerning entitlements on termination of a contract of employment? Both Hill J and the Full Court of the Industrial Court answered that question in the negative substantially for two reasons, both of which are, in my view, correct. In the first place, it is erroneous to treat s 88F, on the one hand, and the legislative provisions relating to employment protection on the other, as being, respectively, a general power subject to limitation and conditions, and a special power within the meaning of the principles stated above. They are, rather, two quite different powers, although in a practical sense there may be overlapping in their respective areas of potential operation. Section 88F is concerned with alleged unfairness or harshness or unconscionability of individual contracts of employment. The focus of attention is the contractual relationship between a particular employer and employee. The Employment Protection legislation, concerned, as it is, with the matter of awards and industrial agreements, directs attention to more general industrial issues. Hill J said, in his judgment at first instance (Barry v Incitec Ltd (1991) 45 IR at 146): On the other hand s 88F of the Act deals with the matter of what for present purposes may be briefly described as unfair contracts. It applies to a contract or arrangement between the particular persons who are party thereto. Unfairness may arise either from the terms of the contract itself, the surrounding circumstances, and /or from the manner of performance or operation of the contract. The section deals largely with private rights inter partes. Despite that a general and relevant industrial prescription governing benefits payable to employees in termination of employment situations may exist, unfairness in relation to a particular contract of employment may nevertheless arise in a situation of redundancy or termination of employment for reasons unrelated to or not relevant to the basis of award prescription of an objective and fair general standard of redundancy or severance benefits. It may arise simply in the special circumstances of and surrounding the particular contract. The fact that Parliament has, in employment protection legislation, dealt in a particular way with disputes about redundancy payments, arising in certain defined circumstances, and between certain classes of employer and employee, does not require or justify a construction of s 88F which treats the subject of termination entitlements as being outside the scope of the power which is given by that section to remedy contractual unfairness.

[301]

Under the heading "Policy on Managing Displaced Employees" was a policy statement. In the first paragraph the policy stated that where changes resulted in public employees becoming displaced "… the government is most conscious of its responsibilities as an employer and its wider social objectives in relation to the community". The policy statement continued: The government is committed to ensuring that public employees are well prepared for employment changes resulting from restructuring and other administrative priorities of public organisations. It values and recognises that employees possess skills, experience and attributes which may be used in many parts of the public sector. Decisions in relation to displaced employees are to be based on professional management practice, systematic restructuring processes as well as merit and equity principles. … Redeployment to a suitable position/job elsewhere in the public sector whenever suitable and sufficient vacancies exist, or are expected to exist in a reasonable period of time. This may involve placement in the position/job of different classification or grade with a slight differential in salary (as a guide 5 per cent or one grade) or a lower salary. Displaced employees who are excess and redeployed to a position with a lower salary are entitled to salary maintenance for a period of 12 months or such other period as approved by the Public Employment Office. Voluntary redundancy can only apply whenever it is not expected that displaced employee(s) can be redeployed. Voluntary redundancy must be a genuine choice of those employees accepting offers. … A choice for employees when redeploying or voluntary redundancy may be approved, by the relevant Minister and the Public Employment Office in circumstances where it is know that not all of the displaced employees are able to be placed in vacancies and some genuinely sect (sic) voluntary redundancy. … Displaced employees will be kept fully informed of redeployment opportunities, the likelihood of a reduction in salary after the period of salary maintenance and the possibility of an offer of voluntary redundancy.

[320]

The contents of the voluntary redundancy package were set out as Appendix A to the Memorandum. Appendix A spoke of two packages designed to assist in managing displaced employees, being the coordinated redeployment package and the voluntary redundancy package. Under the coordinated redeployment package, where displaced employees are to be redeployed they are entitled to assist in seeking alternative employment or additional training to develop knowledge and skills which are required by public organisations. Under this heading, the following statement was made: Organisations must ensure that assistance provided as part of the co-ordinated redeployment package incorporates, as appropriate for each employee, the following: access to professional vocational counselling regarding career transition, training opportunities and occupational information; access to stress management counselling; placement in programmes to upgrade existing skills or acquire new skills, including payment of compulsory fees, training allowances, books and equipment; assistance with job placement; and assistance with trade/skills certification. … Primary responsibility for redeployment assistance rests with the employing organisation. The WMC facilitates redeployment between organisations. The individual is responsible for maintaining a pro-active job search." 7. Appendix A deals with the "Voluntary redundancy package", and under the heading "Eligibility" provides: Where approved, displaced employees are eligible for an offer of voluntary redundancy by the organisation except the following: … · employees on workers compensation whose claim is based on compensation for termination (unless the agreement of the workers compensation insurer is obtained to an separation payment being made) or others awaiting determination of claims against the employer for termination of services; and · employees in relation to whom action is in train to terminate their services. 8. Under the heading "Voluntary Redundancy Payments" the Appendix states that where employees accept voluntary redundancy they are entitled to payments that are set out which included the following:

[327]

Attachment 1, under the heading "Job Search Leave" provided follows: Job Search Leave is not part of the voluntary redundancy package. It is an option available to organisations, where appropriate, to assist those employees who have accepted an offer of voluntary redundancy to seek employment outside the NSW public sector during their remaining period of employment with their organisation. Up to 12 weeks' paid leave may be offered to these employees and during this period the employee would continue to receive their normal pay while they actively sought employment outside of the New South Wales public sector. Conditions applying to Job Search Leave: Job Search leave is available only to employees who have accepted an offer of voluntary redundancy and the day that their separation from the organisation has been agreed in writing. It is a concession only available to those employees who are actively seeking alternative employment outside the New South Wales public sector. The following conditions apply: · the period of job search leave is up to 12 weeks and can only be taken in one block; · the employee is still regarded as being in service and will continue to accrue annual leave and extended leave for the actual period of job search leave taken; · the leave is paid fortnightly, at the employer's substantive rate, excluding any overtime. … · if the employee obtains and commences another job during the period of job search leave, the employee should advise the organisation in writing and the period of leave shall cease from the date that the employee commences in the new job; · once job search leave has commenced, neither the organisation nor the employee can withdraw the offer or the acceptance of voluntary redundancy; · the employee, prior to proceeding on job search leave, is to sign an undertaking which sets out the conditions applying to job search leave, details and acceptance of the offer of voluntary redundancy, the last day of service and the commencement date of job search leave." 11. On 1 August 1998, the Premier issued Memorandum No 98-24 which was headed "Managing displaced employees - relocation of employees to available work". The memorandum, which was directed to all Ministers, stated that the Public Service Association and the Public Employment Office had recently negotiated a settlement for salary increases to staff covered by the Crown Employees (Public Sector - Salaries June 1997) Award. A number of initiatives were agreed to in a Memorandum of Understanding, one of which was directed to the relocation of employees to available work. It was stated that the agreed provisions had been developed to assist public sector agencies in the implementation of organisational change programmes and in the management of displaced employees. Provision had been made in this agreement for flexibility in placing employees, in particular displaced employees, in case of where work is no longer available at a particular metropolitan or rural location. It was stated that in some way the parties had agreed: effective service delivery required that work be located in areas to meet community demands; the employer can require an employee to relocate to available work, should work cease to be available at their current work location;

Jozef Banas v State of New South Wales

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Cases Cited (24)

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