Lahner v Health Secretary on behalf of Western Sydney Local Health District

Factual Context

1. The factual background to the matter was set out in an unchallenged affidavit sworn by the Applicant on 6 June 2023 and an unchallenged statement of Julee Banks-Mackenzie, Manager, Investigations and Professional Standards, made on 7 June 2023.
2. As I have already recorded, the Applicant has not worked since 25 March 2020 due to a work-related injury and has been in receipt of workers compensation since that time. The Applicant deposed: "I have had no capacity for any work from 25 March 2020."
3. On 6 April 2023 the Applicant received a letter from Ms Carmen Rechbauer, Chief Executive of HealthShare NSW, dated 29 March 2023. The letter relevantly read as follows: Dear Mr Lahner, I am the Chief Executive of HealthShare NSW. I have been designated, by the health Secretary, the employer functions of Western Sydney Local Health District in relation to your employment. I have been asked to decide about your ongoing employment in light of the matters set out below. Before I do, I wish to give you the opportunity to make any submissions to me about that decision. Matters being considered You are employed at Western Sydney Local Health District as a Nursing Unit Manager. I understand that: ● You have not attended work since 25 March 2020. ● You had previously been asked to show cause why your employment should not be terminated on 12 March 2021 due to your inability to perform your role. ● On 2 May 2021, the District requested a more detailed report from your doctor. A copy of that letter is attached. ● Dr Teoh, by his report dated 20 June 2021, said you are "not fit to carry out the requirements and demands of his role now, or in the foreseeable future" and are not "able to work as a mental health nurse". Dr Teoh also said, "The workplace factors, particularly his role as a mental health nurse, are likely to pose a risk to his recovery, and cause a recurrence of his current medical symptoms." I enclose a copy of that report. ● You have remained absent from work, with monthly medical certificates indicating no capacity for work now or in the future. Your condition is described as "ongoing" requiring "frequent reviews". We enclose a sample of those certificates, for June to September 2022. ● You are suffering from Major Depressive Disorder. There is an absence of any evidence of any improvement in your condition. ● You have commenced work injury damages proceedings, relying on a whole person impairment of 22%. ● You remain totally unfit to return to your employment now or in the foreseeable future. The District cannot keep your role open indefinitely. The absence of a permanent person filling your role provides instability and uncertainty to the team. The role of Nursing Unit Manager is an important role. On the basis that a return to your role is not likely at all, either now or in the future, I am considering termination of your employment. Before I make that decision, I invite you to provide any response and further information, including any medical reports, in relation to the proposed decision. Please provide your response with fourteen (14) days of the date of this letter. Please let me know if you need more time and any such request will be considered if supported by evidence or reason requiring the extension. … Carmen Rechbauer Chief Executive
4. Also on 6 April 2023, the Applicant received a letter from Ms Julee Banks-McKenzie dated 31 March 2023 which relevantly stated: "My role is to assist to coordinate any response you may like to provide to Ms Rechbauer. Please provide your response within fourteen (14) days of the date of this letter. Please let me know if you need more time and any such request will be considered if supported by evidence or reason requiring the extension."
5. On 9 April 2023 the Applicant wrote to Ms Banks-Mackenzie requesting an extension of 8 weeks in which to provide his response. The Applicant's letter to Ms Banks-Mackenzie was six pages long and raised issues which I understand the Applicant contends gave rise or are related to, his work injury, including allegations of bullying, harassment and disclosure of confidential information. These issues were not raised in the Application for Relief in Relation to Unfair Dismissal as a basis upon which the threatened dismissal was unfair and accordingly those issues are not relevant to the present application. The Applicant indicated in the letter that he needed the extension of time because: "It is impossible to obtain medical appointments, legal advice, industrial support, notify statutory authorities and access to political intervention within your timeframe."
6. Ms Banks-Mackenzie wrote to the Applicant on 11 April 2023 advising that an extension of time for his formal response had been granted until 11 May 2023.
7. On 26 April 2023 (20 days after receiving the show cause letters) the Applicant contacted the New South Wales Nurses and Midwives' Association (NSWNMWA) to obtain advice "regarding the process and the delegation of employment powers to Ms Rechbauer."
8. On 8 May 2023, Mr Rodrigueuz, an industrial officer of the NSWNMWA, wrote to Ms Banks-Mackenzie to make inquiries regarding the delegation of the employer's functions to Ms Rechbauer and to ask for clarification as to "who will pay for any medical reports necessary for Mr Lahner to respond to the show cause." Mr Rodriguez also requested a further extension of time to respond, "sufficient to review and assess the requested delegation communication and obtain updated and comprehensive medical advice regarding his present condition."
9. Ms Banks-Mackenzie responded to Mr Rodriguez by email on 9 May 2023. Her response explained that as the Applicant had asserted that Mr Loy, the Chief Executive of Western Sydney Local Health District, had a conflict of interest, the Secretary had delegated the employer function to Ms Rechbauer. The email also included the following: "If Mr Lahner wishes to obtain a medical report in reply to the letter of 29 March 2023, that is a matter for him. Neither HealthShare NSW nor the District will be paying for any such report." … If Mr Lahner wishes to provide a response he should do so promptly."
10. Following receipt of that email, the Applicant sought to bring forward a routine appointment with his treating psychiatrist, Dr Teoh, which had been scheduled for 22 May 2023. The appointment was changed to 18 May 2023.
11. As noted above, the Applicant filed his Application for Relief for Unfair Dismissal on 11 May 2023 and the matter came before me for conciliation on 12 May 2023. On that day the Respondent agreed to take no steps to end the employment of the Applicant before 3:30pm on 16 May 2023, when the matter was to come back before me for further conciliation.
12. On 15 May 2023 Mr Rodriguez wrote to the solicitor for the Respondent further requesting an extension of time for the Applicant to provide his show cause response so that "medical advice can be obtained and so that this does not then later become an issue of procedural fairness." Importantly, Mr Rodriguez indicated that the "medical advice" to be obtained, was anticipated by the Applicant to be a report that would likely "indicate that it is not in the interests of his recovery to have his employment terminated until the matters involved in the breach of the protected disclosure by Mr Minns and Mr Loy are investigated and concluded."
13. The matter came before me for further conciliation on 16 May 2023. On that day the Respondent agreed to one last extension for the Applicant's response to 24 May 2023, to allow the Applicant to attend the appointment with Dr Teoh on 22 May 2023 and committed to giving notice if any steps were to be taken in respect of the Applicant's employment prior to a report back on 30 May 2023.
14. When the Applicant saw Dr Teoh on 22 May 2023 the Applicant informed him that he needed "a fitness for duty assessment". Mr Teoh told the Applicant he would need a longer appointment to do the assessment and an appointment for such an assessment was arranged for 4 July 2023. Mr Rodriguez sent an email to the solicitor for the Respondent on 22 May 2023, advising that another appointment was required to obtain a fitness report, that such appointment had been arranged and inquiring whether the respondent had "any issues with waiting until at least 4 July 2023 (and possibly a reasonable amount of time after this so as to provide Dr Teoh with time to complete the report) …" Dr Rodriguez attached to his email a letter from Dr Teoh dated 18 May 2023 which read as follows: Mr Lahner consulted me today for a review of his depression. He has a history consistent with a diagnosis of Chronic Adjustment Disorder with Mixed Anxious and Depressed Mood (DSM 5 Diagnostic Criteria). He informed me that he requires an assessment for fitness to work. I have given him an appointment in July, for an assessment of his fitness to work.
15. On 26 May 2023, the solicitor for the Respondent wrote to Mr Rodriguez refusing a further extension of time for the Applicant to respond to the show cause letter but advised that as the Chief Executive would be on leave, the Applicant would have until 20 June 2023 to provide any further response or material he wished to place before the decision-maker.
16. The matter came before me for report back on 30 May 2023, on which day the matter was timetabled for a hearing on 15 June 2023.
17. It is not in dispute that the Respondent has threatened to terminate the Applicant's employment. It is also not in dispute that the Applicant will retain his workers compensation payments of $2,240 a fortnight even if his employment is terminated.

The Parties' Submissions

1. Both parties approached the matter as if the relief sought was interlocutory or interim in nature and accordingly, that the test to be applied by me in determining whether to grant the relief sought was that referred to in Public Service Association and Professional Officers Association Amalgamated Union of New South Wales on behalf of Pearcey, Barnett and Woelfl v Department of Attorney General and Justice - Corrective Services NSW [2012] NSWIRComm 33 at [34], namely: 1. whether the Applicant's claim had a sufficient likelihood of success so as to justify the preservation of the status quo (i.e. maintenance of employment) pending the final hearing; and 2. whether the inconvenience or injury which the Applicant would be likely to suffer if the status quo was not maintained, outweighs or is outweighed by the injury which the respondent would suffer if the applications were granted, (the so called 'balance of convenience' test).
2. However, as I had pointed out to the parties on 30 May 2023, the only relief sought by the Applicant in his Application was an order to delay any dismissal until such time as the Applicant has had the opportunity to obtain a medical report from a suitably qualified specialist. Such relief was sought, as I clarified with Mr Rodriguez during the hearing, on the basis that if the Applicant was not permitted to obtain and submit an up-to-date medical report any subsequent dismissal would be unfair on the basis that the Applicant would have been denied procedural fairness.
3. Attached to the Application was a document headed "Reasons Why Threatened Dismissal is Unfair". It included the following: "The Applicant's medical situation is such that a mere statement from his nominated treating doctor about his present condition is unlikely to be sufficient to allow the Applicant the opportunity to show cause as to why his employment should not be terminated. In the interests of procedural fairness, the Applicant should be given sufficient time to explore the possibility of obtaining a report form a suitably qualified specialist about his present fitness or otherwise."
4. It is typically the case that an order pursuant to s 89(7) of the Industrial Relations Act will be sought on an interim or interlocutory basis, often by way of a notice of motion, pending the consideration and determination of the matters the Applicant contends will result in their dismissal being unfair. For instance, in Woelfl allegations of misconduct against three correctional officers had been found proven by the employer and the employer was considering dismissing the officers. The officers disputed the findings made, and that therefore any dismissal of them based on those findings, alone or together with other matters, would be unfair. The officers, by an interlocutory application, sought (and obtained) orders that their employment not be terminated pending the hearing and determination of their claim that the threatened dismissal was unfair.
5. In this case, the Applicant asserted that his threated dismissal was unfair for only two reasons which I set out in paragraph [3]: the first was abandoned; the second was because he asserted he would be denied procedural fairness if he was not permitted time to obtain and submit an updated fitness assessment. The relief sought was directed solely to remedying the asserted denial of procedural fairness. In other words, if I were to grant the relief, there be no remaining basis to assert that the threatened dismissal was unfair. At the risk of labouring the point, the Applicant did not contend, in his present application, that his dismissal would be unfair in circumstances where his condition was caused or his recovery was impeded, by the matters he alleges against Mr Minns and Mr Loy.
6. This being the case, my determination of the matter is not governed by the two stage test discussed in Woelfl. Rather, I am required to determine, on a final basis, whether, if the Applicant is not afforded time to obtain a medical report from a suitably qualified specialist, this would constitute a denial of procedural fairness and consequently any subsequent decision to dismiss him would be unfair, by reference to the matters listed in s 88 of the Industrial Relations Act.
7. The Applicant submitted that (with emphasis added): "For the Applicant to have any chance of persuading Ms Rechbauer that he is able to return to his role he is likely to require comprehensive medical advice sufficient to convince Ms Rechbauer that he is fit to return to his role. The earliest possible opportunity for the Applicant to provide this information would be no earlier than 4 July 2023. Until the Applicant has had the opportunity to put that evidence to Ms Rechbauer he cannot be said to have been given a meaningful opportunity to show cause as to why his employment should not be terminated."
8. The Applicant also submitted, in the context of the balance of convenience test, that he would suffer irreparable financial harm if his employment were terminated before he is given the chance to obtain a medical report, namely the value of annual leave, long service leave, sick leave, FACS leave and employer superannuation contributions for the period between 21 June 2023 to 4 July 2023. The Applicant deposed that these benefits were worth $1,247.74. The Applicant also submitted that if he is terminated prior to 30 June 2023, he will be liable for $4,813 in tax that he otherwise would not be liable for, as a result of not being able to make a $27,500 pre-tax superannuation contribution on 1 July 2023 for the 2023/24 financial year. However, while the Applicant deposed to having received advice from his accountant as to how much tax he would save if he made such a contribution, he gave no evidence that he intended to make such a contribution or that he was ready, willing and able to make such a contribution.
9. Finally, the Applicant also submitted that if he is terminated, he will lose the ability to be priority assessed, as an injured worker, for any available positions under the Recruitment and Selection of Staff to the NSW Health Service PD2017_040.
10. The Respondent noted that s 88(b) of the Industrial Relations Act provides that the Commission may take into account "whether the applicant was given an opportunity to make out a defence or give an explanation for his or her behaviour or to justify his or her reinstatement or re-employment." The Respondent then submitted: "It is critical to note that s 88(b) of the IR Act talks of 'an opportunity' to respond for a particular purpose, namely to 'make out a defence or give an explanation' to the reasons for the dismissal. An affected worker need not be given infinite opportunities to respond but 'an opportunity'. Further, it is trite that it is a matter for the Applicant whether he avails himself of that opportunity in a proper and timely manner."
11. The Respondent also submitted that: 1. the Applicant has been unfit for work since March 2020; 2. the Applicant is presently pursuing a claim for work injury damages based on total incapacity for work; 3. the Applicant remains totally incapacitated for work; 4. this is not a case of misconduct or poor performance but one of incapacity to perform the role. ... there has been total incapacity since March 2020; 5. the Applicant was given an opportunity to respond to the show cause letter; 6. the Respondent granted the Applicant an extension of time to 11 May 2023; 7. the Applicant has also obtained additional time through the Commission's conciliation processes to provide a response to the show cause letter to 24 May 2023 (and effectively to about 20 June 2023); 8. the Applicant will have had about twelve (12) weeks to provide a response to the show cause letter of 29 March 2023; 9. there is, in these circumstances, no doubt that the Applicant has been given 'an opportunity' to respond to the show cause letter.
12. In respect of the harm the Applicant asserted he will suffer if he is dismissed before getting a medical report, the Respondent submitted , again in the context of `the balance of convenience test: 1. it is an ordinary and known outcome of a dismissal that an employee loses their wages, superannuation, the benefit of accruing leave entitlements and other employment benefits, and these matters alone cannot justify the making of an order to restrain an employee's dismissal; 2. the Applicant will retain his workers compensation payments of $4,240 a fortnight even if he is terminated, and if he is subsequently able to demonstrate that he is fit to return to his position he may have rights to seek reinstatement under Part 8 of the Workers Compensation Act 1987 (NSW), which mitigates any financial hardship: Davis v Industrial Relations Secretary on behalf of the NSW Rural Fire Service [2019] NSWIRComm 1064 at [41]; 3. the Applicant, upon his dismissal, may pursue an unfair dismissal claim and seek orders for reinstatement, reemployment and/or compensation under s 89 of the Industrial Relations Act, and if successful, he will be able to seek recovery of the losses to which he deposed.
13. The submission made by the Respondent that the Applicant may pursue an unfair dismissal claim and if successful, be able to seek recovery of the losses to which he deposed, was made in circumstances where the Respondent considered, wrongly as I pointed out to Mr Mattson, that the order sought was interim in nature and that this proceeding would continue to a final hearing. Nevertheless, as I explain below in paragraph [50], the submission is still apt given that the only matter being determined in this proceeding is whether the Applicant will be denied procedural fairness if he is not permitted to obtain and submit a medical report from Dr Teoh, such that his dismissal in those circumstances would be unfair.

Consideration

1. The evidence suggested that the most recent medical evidence upon which the Respondent, by her delegate, is considering dismissing the Applicant due to his being unfit to perform his duties, is a "Certificate of Capacity/Certificate of Fitness" completed by Dr George Hanna dated 25 August 2022 and which certifies that the Applicant has "no current capacity for any work" from 25 August 2022 to 24 September 2022. Almost nine months have passed since that certificate was issued. The report of Dr Teoh referred to in Ms Rechbauer's letter of 29 March 2023 is dated 20 June 2021. Exactly a year has passed since that report.
2. Given the age of the medical evidence I would have had no hesitation in finding that the Applicant would indeed be denied procedural fairness if he asserted that he considered himself fit to perform some or all of his duties and he was not provided a reasonable opportunity to present updated medical evidence to establish his fitness, before a final decision was to be taken in respect of his ongoing employment. For the Respondent to proceed in those circumstances would be unjust, particularly when such evidence is likely to be available within a relatively short period of time.
3. However, in the present matter the Applicant has not asserted that he is fit, either to the Respondent's delegate or in this proceeding. It would have been a simple thing for the Applicant to say, first to Ms Julee Banks-Mackenzie and then in his affidavit, that he believed his condition had improved and that he wanted the opportunity to provide medical evidence to prove that he was fit to perform some or all of his duties. He did not do this.
4. There is not a skerrick of evidence that there is even a possibility that the Applicant may be fit for any work, let alone work of the kind required to fulfil his role with the Respondent. All the evidence is to the contrary. The Applicant's own evidence is that he "has had no capacity for any work from 25 March 2020." There are a number of Certificates of Capacity/Certificate of Fitness in evidence all certifying that the Applicant has no capacity for any work. While those certificates are now somewhat dated, Ms Rechbauer's letter states and I accept, that the Applicant is continuing to provide such certificates on a monthly basis to his employer and/or workers compensation insurer, noting that he continues to be in receipt of workers compensation and has now apparently commenced work injury damages proceedings, relying on a whole person impairment of 22%.
5. Further, Mr Rodriguez's email to Mr Mattson dated 15 May 2023, which is referred to in paragraph [19] above, stated: "In summary, Mr Lahner anticipates that there is a likelihood that the report will indicate that it is not in the interests of his recovery to have his employment terminated until the matters involving the breach of the protected disclosure by Mr Minns and Mr Loy are investigated."
6. Self-evidently, a person must not be fit and well in order to engage in a 'recovery'.
7. Dr Teoh's letter of 18 May 2023 also gives no hint that that the Applicant's medical status may have changed, stating only that the Applicant "has a history consistent with a diagnosis of Chronic Adjustment Disorder with Mixed Anxious and Depressed Mood (DSM 5 Diagnostic Criteria)."
8. As Gleeson CJ said in Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex Parte Lam [2003] HCA 6; 214 CLR 1 at [37], "Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice." The Applicant's case is one of form over substance - he seeks to use the principle of procedural fairness to delay his dismissal in circumstances where there is no evidence that he will, in a practical sense, lose any opportunity to submit to the Respondent's delegate that he it fit for work.
9. The Applicant submitted that he was not a medical practitioner and so did not know whether he was fit. He submitted he needed to be assessed by a qualified practitioner to know whether he was fit or not. While I accept that such an assessment would be necessary in order for the Applicant to "have any chance of persuading Ms Rechbauer that he is … fit to return to his role", I do not accept that the Applicant would not know whether he at least believes he is fit. Only the Applicant can truly know himself. I certainly accept that it is possible that the Applicant could believe himself to be well, but upon assessment by a qualified medical practitioner, be disabused of that notion. However, in this case the Applicant has not once asserted that he believes himself to be fit for duties.
10. In the absence of any evidence that there is a possibility that the Applicant may be fit to perform his duties, the Applicant will not be denied procedural fairness if he is not allowed (further) time to obtain a medical report from a suitably qualified medical specialist and consequently the threatened dismissal of the Applicant is not unfair.
11. While that is sufficient to dispose of the matter, I note that there are additional matters which further support a finding that the threatened dismissal is not unfair.
12. First, the Applicant has had sufficient time to arrange a fitness assessment. The Applicant first requested a fitness assessment from Dr Teoh on 18 May 2023 at which time an appointment was arranged for 4 July 2023, a little under seven weeks later. Had the Applicant contacted Dr Teoh's rooms to make an appointment for an assessment on or about the day he received the show cause letters it seems likely he would have received an appointment for such an assessment on or about 25 May 2023, a month before the practical deadline now in place for the Applicant's response. In the circumstances, I consider that that the Applicant has had a reasonable opportunity to present and have considered medical evidence to persuade the Respondent's delegate that he is fit.
13. Secondly, there is no evidence that the Applicant will suffer any inconvenience or injury that would not otherwise be able to be recovered if the Applicant subsequently and successfully applies for reinstatement, reemployment and/or compensation under s 89 of the Industrial Relations Act, on any ground other than a denial of procedural fairness. Procedural fairness is the only issue raised on this application and it is the only issue I have determined. The Applicant is therefore not precluded from bringing an unfair dismissal claim on other grounds: c.f. Dietz v Health Secretary in respect of Nepean Blue Mountains Local Health District [2022] NSWIRComm 1107.
14. While it is possible that the Applicant will not be able to recoup any loss he suffers as a result of losing the benefit of being able to make pre-tax superannuation contributions (see Coghlan v Tweed Shire Women's Service Inc [2002] NSWIRComm 21 at [44] - [46]), as already noted there is no evidence that he was actually going to realise this loss.

Order

1. The Applicant has failed to establish that his threatened dismissal would be unfair on the basis that he will be denied procedural fairness if he is not allowed (further) time to obtain a medical report from a suitably qualified medical specialist.
2. I make the following order: 1. The Application comprising proceeding no. 2023/00151164 is dismissed. Janet McDonald Commissioner

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 June 2023