New South Wales Nurses' Association (on behalf of Yoyet Standen) v Principal Health Care Finance No 3 Pty Ltd t-as Principal Aged Care

New South Wales Nurses' Association (on behalf of Yoyet Standen) v Principal Health Care Finance No 3 Pty Ltd t-as Principal Aged Care - [2009] NSWIRComm 1014 - NSWIRComm 2009 case summary — Zoe

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the Association notified an industrial dispute concerning Ms Standen's employment pursuant to s130 of the Industrial Relations Act 1996 (NSW) ("the Industrial Relations Act ") before filing this application. 12 Ms Winklemann submitted Principal continued to provide suitable duties to Ms Standen for so long as it was able and, consistently with its statutory obligation under the Workplace Injury Management and Workers' Compensation Act (1998) (NSW), for as long as it was reasonably practicable to do so. However, Principal's staff came to the view it was no longer operationally viable to continue to provide suitable duties after 8 October 2008 to an employee who had, by then, been performing only selected duties for some three and a half years. Principal had never given a commitment to Ms Standen it would provide indefinitely suitable duties, although, as Ms Winklemann fairly acknowledged, there was not an "abundance" of evidence as to why Principal determined it no longer had the capacity to continue to employ Ms Standen on suitable duties. In any event, Ms Winklemann submitted, the Association bore the onus of establishing it was operationally viable for Principal to continue to provide suitable duties after 8 October 2008. 13 Ms Winklemann submitted that as no work was being performed by Ms Standen from 8 October 2008, there was no obligation for Principal to pay wages where she was unfit to perform all her contracted duties. In so submitting, Ms Winklemann relied on two main matters. First, reliance was placed on comments by Dixon J in Automatic Fire Sprinklers Proprietary Limited and Another v Watson (1946); 72 CLR 435 at 463; and, second, the provisions of ss182-183 Workplace Relations Act 1996 (Cth). Ms Winklemann submitted there could be no common law duty for Principal to pay wages to Ms Standen unless service was actually performed and "absent suitable duties, there is no entitlement for Ms Standen to be paid wages". As such, Ms Winklemann continued, Principal's failure to pay wages to Ms Standen could not, contrary to the Association's submissions, constitute a repudiatory breach giving rise to a termination of employment. 14 In elaborating these submissions, Ms Winklemann contended that any entitlement to payment which otherwise may have arisen to payment under NSW industrial laws or industrial instruments had been displaced since the enactment of s16 (Acts excludes some State and Territory laws), coupled with the operation of ss182-183, of the Workplace Relations Act. Ms Winklemann submitted the Workpace Relations Act requires an employer to pay an employee only the basic periodic rate of pay for each of the employee's guaranteed hours. However, given Ms Standen had not worked for Principal since 8 October 2008, there was no entitlement to payment pursuant to ss182-183 of the Workplace Relations Act. That is, Ms Standen was on leave and, therefore, the deductible authorised leave provisions of s183(6) came into play. Ms Winklemann submitted, given the operation of the Workplace Relations Act, Ms Standen did not, therefore, have any entitlement to payment - irrespective of any rights that otherwise may have arisen if her employment entitlements had remained within the framework of NSW industrial instruments and legislation. Ms Winklemann submitted the payment provisions that previously applied to Ms Standen were undoubtedly removed and could not be regarded as having enforceability; and the Nursing Homes &c Nurses' (State) Award is no longer a complete code providing for payment to Ms Standen: Mallinson v The Scottish Australian Investment Company Limited (1920) 28 CLR 66. Ms Winklemann noted that although Principal was not itself paying wages directly to Ms Standen, its workers' compensation insurer had, nonetheless, relevantly assumed responsibility for the payment of workers' compensation benefits. 15 Ms Winklemann also drew attention to the decision in Patricia Viapiana v Woolworths Limited (Workers' Compensation Commission; Matter No 001095/08; 19 June 2008). In that case, an Arbitrator of the Workers' Compensation Commission, Mr R Bell, concluded the Workers' Compensation Commission had jurisdiction to determine a dispute about work injury management and relevantly confirmed, through orders made under s310 of the Workplace Injury Management and Workers' Compensation Act, certain recommendations made by the Registrar of that tribunal concerning the provision of suitable duties to an employee (being an employee who had not been dismissed). Ms Winklemann submitted the decision in Viapiana v Woolworths was authority for the proposition the Workers' Compensation Commission has jurisdiction, indeed more relevantly appropriate jurisdiction than this Commission, to deal with a dispute about the provision of suitable duties to an injured employee such as Ms Standen.

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16 Ms Winklemann submitted, in the alternative, if the Commission concluded there was a termination of employment, it was not brought about by Principal's conduct or behaviour - as Principal could not be regarded properly as the real and effective initiator of any such termination. Ms Winklemann submitted an examination of principles of employment law, applied to the facts of this case, would not support a conclusion there had been a constructive dismissal, because the evidence did not support the proposition Principal held a desire for Ms Standen to resign. In so submitting, Ms Winklemann adverted to Shankar v Neomo Packaging Systems Pty Ltd [2000] NSWIRComm 227 at [69] and Allison v Bega Valley Council (1995) 63 IR 68. Against the background of Principal's desire to retain Ms Standen as an employee, rather than attempting to force a resignation, any conduct by Ms Standen constituting a resignation or an intention not to be bound by the contract of employment did not give rise to a constructive dismissal. 17 Ms Winklemann submitted the question of whether there had been a dismissal needed to be viewed in the context of events on 8 October 2008; and Ms Standen was regarded by Principal's witnesses as being supernumerary at that point in time. Ms Winklemann submitted that a number of cases relied on by the Association were not properly relevant, such as Riley v WorkCover Authority (NSW) [2006] NSWIRComm 108; (2006) 151 IR 396. She further submitted the cases referred to by Mr Dawson concerning the implied duty within the employment contract of good faith, mutual trust and confidence did not relevantly arise, as there had been no breach of any such implied duty; and that other cases concerning stand-downs and payment of wages were irrelevant given the provisions of s182-183 of the Workplace Relations Act. Moreover, there was no obligation on Principal to provide work to Ms Standen: Ramsay Butchering Services Pty Limited v Blackadder [2003] FCAFC 20; (2003) 127 FCR 381. There simply was no obligation to pay wages, Ms Winklemann submitted, if no work was performed; and nor was Principal obliged to provide work to Ms Standen. Despite the approach advocated by the Association, Ms Winklemann contended, there could be no proper basis for finding Ms Standen was constructively dismissed by Principal, for there could be no finding of a fundamental breach entitling Ms Standen to regard the employment relationship as at an end. 18 Ms Winklemann submitted also that the Workers' Compensation Act and the Workplace Injury Management and Workers' Compensation Act are quite separate and distinct pieces of legislation; it was inappropriate to make reference to one in relation to the other. That is, the Workers' Compensation Act is relevantly concerned with reinstatement of dismissed employees, whereas the Workplace Injury Management and Workers' Compensation Act is relevantly concerned with the practicability to continue to provide suitable duties to current employees. The appropriate question for determination, Ms Winklemann submitted, was whether there had been a dismissal. Here, there had been no dismissal as Principal had left open the possibility Ms Standen could return to work. 19 In closing, Ms Winklemann submitted that even though the argument advanced by Principal might be novel, there was now no requirement to provide work and pay wages to Ms Standen under what formed her "basic contractual framework". She submitted it may not be a "pleasing framework from the perspective of an employee", but one which now operated, post-Work Choices, under arrangements that clearly have "tilted in favour of employers". Ms Winklemann submitted the reinstatement application should be dismissed for want of jurisdiction, with costs. She submitted it is not appropriate for Ms Standen to seek to enliven the provisions of s242 of the Workers' Compensation Act. Following from the approach in Viapiana v Woolworths, Ms Winklemann submitted the appropriate jurisdictional avenue would be to refer the question of suitable duties to the Workers' Compensation Commission, if the Association wishes to further agitate the dispute about Principal's decision. It was inappropriate to "dress up" a withdrawal of suitable duties as a dismissal and to seek an order for reinstatement through the Industrial Relations Commission pursuant to s242 of the Workers' Compensation Act.

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22 Mr Dawson submitted "work and wages" stand together. He asked rhetorically: If Ms Standen had not been dismissed by Principal, then what was her employment status after 8 October 2008? A proper examination of the provisions of the Workplace Relations Act relied on by Ms Winklemann and a consideration of the relevant industrial instrument did not, Mr Dawson submitted, lead to the view Ms Standen was on any form of leave for which she had made application. He submitted the attendance at the training course needed to be viewed in the context that Ms Standen was fighting to return to work and did not want Principal to have any reasons other than her medical status, such as non-compliance in her training, for denying that return. 23 Mr Dawson submitted Principal had not shown it was not reasonably practicable, within the meaning of s49(3)(a) of the Workplace Injury Management and Workers' Compensation Act, to provide suitable employment. In this respect, Mr Dawson submitted the evidence made it clear staff within Principal simply made a choice not to continue to make suitable duties available for Ms Standen, rather than the duties not being available after 8 October 2008. Mr Dawson submitted s49(2) of the Workplace Injury Management and Workers' Compensation Act was directly relevant to Ms Standen's circumstances, more particularly when considered in the context of comments of the Full Bench in Riley v WorkCover Authority as to fairness prevailing in relation to an injured worker concerning employment options. 24 In Ms Standen's case, Mr Dawson submitted, the suitable duties she had been performing remained available within the aged care facility, but Principal had decided to withdraw those duties on 8 October 2008 for policy-based reasons going to staff rotation and multi-skilling. While staff rotation and multi-skilling are commendable in a general sense, Mr Dawson submitted, the policy rationale, as applied to Ms Standen, failed properly to take into account the obligations set out at s49(2) of the Workplace Injury Management and Workers' Compensation Act. Moreover, if an employer fails to meet its obligations concerning the provision of suitable duties, difficulties are presented because, Mr Dawson submitted, the Workers' Compensation Commission would be effectively powerless to force an employer to provide suitable duties to an employee who, as in Ms Standen's case, already had been dismissed. Mr Dawson submitted the evidence demonstrated Principal ignored statutory rehabilitation obligations in relation to Ms Standen and otherwise was generally derelict in relation to endeavouring fairly to accommodate Ms Standen as an injured employee from 8 October 2008, in the sense considered in Riley v WorkCover Authority. The distinction drawn in Principal's case between "ongoing" duties and "permanent" duties was mere linguistics. Here, Mr Dawson submitted, Ms Standen had suitable duties to perform on an ongoing basis, pursuant to a rehabilitation programme, but Principal determined that she should no longer be permitted to perform those duties.

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25 As an alternative submission, Mr Dawson contended that if Principal's actions did not of themselves constitute a dismissal simpliciter, then it was clear there was a constructive dismissal: Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200; Allison v Bega Valley Council; Siagan v Sanel (1994) 1 IRCR at 19, 54 IR 185 at 192; Western Excavations v Colin John Sharp [1977] EWCA Civ 165; [1978] QB 761. In support of the Association's contention that Ms Standen had been constructively dismissed on 8 October 2008, Mr Dawson referred to a number of cases, including Australian Bank Employees' Union v National Australia Bank (1989) 31 IR 436 at 446, to support the proposition an employer may not, in the absence of an express term permitting suspension, suspend employment obligations to the other party. In this respect, Mr Dawson contended the contract of employment was terminated by Ms Standen's acceptance of Principal's repudiation. 26 Mr Dawson submitted the repudiatory breach by Principal was the withdrawal of both work and wages; and the breach should not be obfuscated by the payment of workers' compensation benefits to Ms Standen from 8 October 2008 and the prospect held-out by Principal of a future return to work if Ms Standen became capable of undertaking the full range of pre-injury duties. 27 By way of further submissions on the topic of repudiation, Mr Dawson adverted also to principles associated with the implied term of good faith, mutual trust and confidence within the employment contract, in contending there was repudiation in Principal's failure to continue to provide suitable duties, despite its statutory obligations thereto under the Workplace Injury Management and Workers' Compensation Act: Russell v the Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217; 176 IR 82 at [33] and [73] and Carrigan v Darwin City Council [1997] IRCA 88. In elaborating his submissions that Principal's conduct amounted to a breach of the implied term of good faith, mutual trust and confidence, Mr Dawson submitted Principal worked to construct an arrangement such that Ms Standen might not be able to consider herself to be dismissed. Mr Dawson submitted Principal knew exactly what it was doing and should not be able to "get away" with that approach. 28 Mr Dawson submitted Principal's actions amounted to a basic repudiation of the contract of employment and Ms Standen was entitled to accept that repudiation as terminating the employment contract. Mr Dawson submitted that unless Principal "suddenly had a change of heart and found suitable duties", Principal would have left Ms Standen languishing for years so long as she was unfit for pre-injury work - but nonetheless "un-dismissed". In reply to a number of miscellaneous matters relied on by Ms Winklemann in support of the contention there was no dismissal, constructive or otherwise, Mr Dawson submitted it was simply incorrect at law to suggest a dismissal had not occurred because termination monies had not been paid and a letter of termination of employment had not been issued by Principal to Ms Standen. Those matters do not relevantly go to the issue of repudiation, he submitted, where Principal withdrew suitable duties and sent Ms Standen home without wages, in the absence of any proper entitlement to do so. In short, Mr Dawson contended there were ample bases on which to conclude there was a dismissal or, failing that, constructive dismissal. Consideration

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29 In my opinion, Principal's contentions cannot succeed concerning the purported lack of jurisdiction on the basis there has been no dismissal. As elaborated in more detail below, I am satisfied, as the Association submitted, there was either a simple dismissal or, in the alternative, a constructive dismissal brought about by a repudiation of the contract of employment. 30 Simple dismissal: Between January 2002 and October 2008, Ms Standen was employed by Principal. On 8 October 2008, Principal dispensed with Ms Standen's services; she was not, thereafter, permitted to work or earn wages as an employee of Principal. From 8 October 2008 onwards, Ms Standen was, in a real and practical sense, unemployed. Principal determined, quite literally, to send Ms Standen home - without any prospect of returning to Principal's employ unless she met the prerequisite of resuming pre-injury duties. The sole or principal reason for the decision to dispense with Ms Standen's services was because she was not fit for pre-injury duties, being an injury sustained in the course of her employment. The decision was made against the background of the proposition it was no longer feasible for Principal to continue to provide suitable duties from 8 October 2008. 31 I am satisfied, in these circumstances, there was a simple dismissal on 8 October 2008. The unvarnished fact is Ms Standen no longer has remunerated work with Principal. The decision to dispense with Ms Standen's services, to withdraw from her the capacity to work and earn wages as an employee, was at the unilateral initiative of the employer. Plainly, Ms Standen did not, at any stage, consent to Principal's actions. In Smith v Director-General of School Education (1993) 31 NSWLR 349, [1993] NSWIRComm 134, a case involving the question of whether the annulment of the appointment of a probationer amounted to a dismissal for the purposes of access to unfair dismissal remedies under the Industrial Relations Act 1991 (NSW), the Industrial Court considered the meaning of the word "dismissal". The Court concluded the word must be given its "ordinary and natural meaning in the context in which it lies and that in current usage it appears in many contexts". Although the Workers' Compensation Act does not define the word "dismissed", the approach adopted by the Industrial Court in Smith v Director-General of School Education as to its meaning commends itself as an appropriate approach in construing s241(1) of the Workers' Compensation Act.

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32 In concluding there was a simple dismissal, I have considered the matters to which Ms Winklemann adverted in contending there was no dismissal. However, the fact Principal did not issue a letter of termination of employment or arrange for the payment of termination monies is, really, neither here nor there. Day-to-day experience in industrial matters indicates employers do not necessarily always attend to such matters in connection with terminations of employment, even where they do not have some of the complications of this case. Similarly, the fact various comments were made to Ms Standen by Principal's staff suggesting she had not been dismissed do not, in my view, withstand scrutiny in terms of ordinarily-understood employment principles - albeit I say this without criticism of the evidence of the senior nursing staff who made such comments, for they appear to have proceeded on the basis of a belief, albeit erroneous, that Principal's actions did not constitute a dismissal. 33 I have given particular consideration to two matters raised by Ms Winklemann relevant to the question of whether the employment relationship was still on foot following 8 October 2008. The first is correspondence Principal sent to Ms Standen concerning confidentiality and training matters. I consider the correspondence essentially may be viewed in the same context as the assertions from staff members to Ms Standen that there had been no dismissal, which proceeded on the basis of mistaken assumptions about the actual effect on the employment relationship of the events on 8 October 2008. Second, the fact Ms Standen attended a mandatory training course organised by Principal and was paid for such attendance would, absent other considerations, tend to militate against concluding the employment relationship had terminated on 8 October 2008. However, attendance at the course may be viewed, as Mr Dawson noted, in the context of Ms Standen's desire to be properly credentialed for the return to work she has, by one means or another, been seeking since 8 October 2008; and where Ms Standen thought it prudent to attend, so as not to jeopardise a return to work in circumstances where senior staff were asserting she had not been dismissed. Third, attendance at the course may be viewed in the context of the dispute concerning the status of the employment relationship in the period after 8 October 2008 - dispute which is still unresolved between the parties themselves and which the Commission ultimately has been called upon to determine, involving, as it does, a consideration of mixed questions of fact and law. Last, it is not unusual for claims of constructive dismissal by repudiation to arise only after an employee has had the benefit of legal advice.

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34 Ms Winklemann's written submissions adverted also to Ms Standen's receipt of workers' compensation benefits and the earlier filing of a dispute notification in the Commission in Matter No IRC08/2002 as being apposite to determining the question of whether there was a dismissal. However, the significance of those matters to the issue of whether there was a dismissal was not elaborated in a way such as would lead me to conclude the employment relationship continued after 8 October 2008. 35 Taking the circumstances described in the evidence and submissions as a whole, I consider Ms Standen was, in a real and practical sense, dismissed by Principal on 8 October 2008. In some ways, there are comparisons, albeit imperfect comparisons, between Ms Standen's circumstances and those where an employer determines not to provide a casual employee with further work, while asserting a dismissal has not occurred. In another comparison, again imperfect, Ms Standen's circumstances may be seen as analogous to situations where an employment agency claims there has been no dismissal of an employee, but, on the other hand, no longer provides work for the employee with host employers. In cases of this type, employers often assert a dismissal has not occurred, despite all contrary indicators - sometimes with the aim of denying the employee access to statutory remedies which otherwise may arise. Industrial tribunals, State and federal, have, for years now, taken a broad approach to the question of what constitutes a "dismissal" and examined the practical circumstances in determining whether there has been a dismissal. In the case of casuals, see, for instance, Ryde-Eastwood Leagues Club Ltd v Taylor [1994] NSWIRComm 112; (1994) 56 IR 385. That decision considered the unfair dismissal provisions that preceded those now contained in the Industrial Relations Act. The Full Commission said the following: Here, the conciliation commissioner in ordering the amount of $5,200 be paid by the appellant as compensation found reinstatement to be impracticable. It was jurisdictionally open, in our view, for the conciliation commissioner to do so, provided the appellant had in fact "dismissed" the respondent according to the true meaning of that word in s245(1).

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The Full Court (Fisher CJ, Bauer and Hungerford JJ) considered the meaning of the word and said in Smith v Director-General of School Education [(1993) 51 IR 204] at (219): "It is to the ordinary meaning of 'dismiss' that assistance may be obtained; the Oxford English Dictionary , 2nd ed (1989) defines the word in appropriate respects as follows: '2.a ... To send away (a person); to give permission to go; to bid depart. b ... 3. a ... To send away or remove from office, employment or position; to discharge, discard, expel. 4. To deprive of disappoint of or from some advantage. We apprehend no real issue may be taken with the ordinary meaning of the word 'dismissal' as so applied to s245, and, indeed, it seems to us that it is in that defined sense of an employee being sent away from employment that unfair dismissal cases in industrial jurisprudence have been concerned. The terms of s245 of the Industrial Relations Act would suggest no latent limitation in that respect. Therefore, we find no difficulty in accepting the ordinary meaning of 'dismissal' suggested by Brereton J in Ex Parte Wurth; Re Tully ((1954) 55 SR (NSW) 47) as being 'the termination of services by the employer without the employee's consent'; we would add that where an employee does not freely consent to the termination, understood in a broad sense, then the circumstances may still amount to a dismissal by the employer as a constructive dismissal: see Willis v Director General of Education ([1977] 1 NSWLR 134 at 136, 137); Ex parte Wurth (at 59, 60), Re Michaelis Bayley Trading Co and New South Wales Sales Representatives and Commercial Travellers Guild Re Dismissal ([1979] AR (NSW) 392 at 393); and Western Excavating (ECC) Ltd v Sharp ([1978] ICR 221 at 225, 226)." As was submitted in the present case, the respondent had completed a period of casual engagement according to the roster and so could not have been dismissed in any relevant sense because the employment had come to an end, even though there was a deliberate decision by the employer not to offer him employment in the future and work was available; the appellant's decision, without the respondent's concurrence, was made due to alleged misconduct by the respondent. But, applying the reasoning of the Full Court in Smith v Director-General of School Education , it appears to us, prima facie at least, open to conclude that what occurred to the respondent involved him in being sent away or discarded from employment or even, perhaps, deprived or disappointed of or from some employment advantage. Such a finding, supported by the reasoning in Smith v Director-General of School Education by applying the ordinary meaning of "dismissal", seems to us logically available.

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The Act nowhere defines "dismissal", and so, in our view, it is to the ordinary use of the word attention must be directed. We emphasise the broadness of the concept by reference to the decision of the Full Industrial Commission of South Australia in Nassar v Public Service Board (1986) 16 IR 394; 53 SAIR 408 at 395; 410-411 where it was held that the words "dismisses" and "dismissal" were of general import and "wide enough to cover a dispensing with services". A casual employee deprived of employment from time-to-time according to a regular roster arrangement may well, in our view, reasonably be said to have had his services dispensed with - that constitutes a dismissal. 36 To similar effect, in Nguyen v A-N-T Contract Packers Pty Ltd trading as A-N-T Personnel & Theiss Services Pty Ltd Pty Ltd trading as Theiss Services (2003) 128 IR 24; [2003] NSWIRComm 1006, I concluded that the withdrawal of work with a host employer from an agency casual employee amounted to a dismissal, even though the applicant in that matter was still nominally employed by the employment agency: The applicant was moved from her usual duties at Chullora by [the host employer] Thiess; the applicant was directed by Thiess to attend a medical examination with a doctor specified by Thiess. The applicant was stood-down from a shift by Thiess, with pay; thereafter, the applicant was not permitted to work again for Thiess at Chullora on the grounds of unfitness, contrary to her stated wishes to continue working. I am satisfied that the cessation of ongoing work for the applicant at Chullora amounted to a "dismissal" within its ordinary meaning, as contemplated in Ryde-Eastwood Leagues Club and in Smith v Director-General of School Education (1993) 51 IR 204. After the applicant's work at Chullora ceased at Thiess's initiative, all that was left was the empty husk of a relationship with ANT; that is, the applicant remained "on the books" with [the labour hire agency] ANT as a labour hire casual but was not offered any further work (that is, until after the commencement of these proceedings).

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38 Ms Standen was informed at a meeting on 8 October 2008, in connection with the unilateral withdrawal of work and wages, that she should "go home". However, this is not a case where Ms Standen had herself applied for paid or unpaid leave; this is not a case involving evidence of Ms Standen giving express or implied consent to being sent home by Principal; this is not a case where there was evidence of Principal having an entitlement to place Ms Standen on a directed absence from work; this is not a case where there had been anything of substance concerning a change in, for example, operational requirements such that the work Ms Standen had been performing was no longer available; this is not a case where there had been a recent change in Ms Standen's medical status affecting her ability to perform the selected duties she had been undertaking; this is not a case where there was evidence of stand-down provisions having been invoked by Principal pursuant to entitlements under an industrial instrument, statute or contract of employment; and this is not a case where there was evidence of some other provision in an industrial instrument, statute or contract of employment otherwise permitting the course of action taken by Principal. 39 As I have noted earlier, Ms Winklemann adverted to common law principles concerning the rights and obligations of parties to an employment contract in relation to the provision of work and the payment of remuneration, and the way in which those principles were said now to interact with federal legislation. Ms Winklemann submitted as no work was performed by Ms Standen after 8 October 2008, there was no obligation for Principal to pay wages where she had not performed her contracted duties; and, concomitantly, Principal was under no obligation to provide work to Ms Standen. In the circumstances, Ms Winklemann submitted, there could be no finding of any repudiatory conduct which Ms Standen could elect to treat as terminating the employment contract. In so submitting, Ms Winklemann relied on three main matters in support of Principal's contentions. First, as to the payment of wages, Ms Winklemann referred to the decision in Automatic Fire Sprinklers v Watson, where Dixon J said this (at p465): A contract for the establishment of the relation or master and servant falls into the same general category of agreements to pay in respect of the consideration when and so often it is executed, and is, therefore, commonly understood as involving no liability for wages or salary unless earned by service, even though the failure to serve is a consequence of the master's wrongful act. 40 Second, as to Principal's contention there was no obligation on an employer to provide work to an employee, Ms Winklemann referred to the decision of the Full Court of the Federal Court in Ramsay Butchering Services Pty Limited v Blackadder. Third, Ms Winklemann submitted s16 of the Workplace Relations Act displaced the code of entitlements that formerly applied to Ms Standen's employment under a State industrial instrument. She submitted Ms Standen did not otherwise have a default entitlement to payment under s182-183 of the Workplace Relations Act given the provisions concerning deductible, authorised leave, because Ms Standen was on authorised leave from 8 October 2008. 41 Principal's submissions as to why there could have been no repudiatory conduct ought not, in my view, be accepted. It is true there are many cases, some of which were relied on by Ms Winklemann, which have discussed circumstances where an employer does not have to provide work or pay wages, or both. In this case, however, Principal could not point to any proper basis on which its staff could purport, in terms of express or implied entitlements pursuant to an industrial instrument, statute or contract of employment, to withdraw from a permanent, part-time employee the most fundamental of incidents of the contractual "bargain" lying at the heart of the employment relationship, namely both work and wages. Moreover, even if Ms Winklemann's submissions were correct concerning the dearth of enforceable employment rights and entitlements under the Nursing Homes &c Nurses' (State) Award (which is now, by operation of the Workplace Relations Act, characterised as a notional agreement preserving a State award) and the operation of s182-183 of that statute, Ms Standen was not on any category of leave contemplated within the employment relationship under the relevant industrial instrument or any discrete contract of employment which relevantly specified other forms of leave or rights to stand-down or suspend without pay. 42 On the evidence, Principal's senior staff considered Ms Standen's employment status from 8 October 2008 to be that of being on some amorphous, undefined class of unpaid leave so long as she remained unfit to resume pre-injury duties. However, I would not regard Ms Standen as having been on leave from 8 October 2008. That is, Ms Standen was not on annual leave (cl22), sick leave (cl24), long service leave (cl25), compassionate leave (cl26), parental leave (cl26A) or personal/carer's leave (cl27). The Nursing Homes &c Nurses' (State) Award does not specify any other forms of leave that could be accessed either on application or by direction. Ms Standen was not on any other form of leave recognised at common law, e.g., an absence from work that has come into the industrial lexicon as "gardening" leave (in which an employee is, metaphorically, contractually confined at home to garden duties: BearingPoint v Hillard [2008] VSC 115). This was not a "no work (as directed), no pay" case, which, typically, involves questions of entitlement to payment where work has been substantially performed, while nonetheless being the subject of some form of selected industrial ban or industrial limitation: see, for example, United Firefighters Union of Australia v Metropolitan Fire Brigades Board (1998) 86 IR 340. Here, considerations of the type usually arising in the "no work, no pay" cases do not relevantly arise, or must be tempered, because Ms Standen had sustained a work-related injury. As such, although Ms Standen was unable to perform all her contracted duties as an Assistant in Nursing, Principal nonetheless also had positive statutory obligations concerning the provision of suitable duties to Ms Standen.

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44 It is difficult, in some ways, to neatly industrially compartmentalise the events of 8 October 2008, but, if Principal's actions did not amount to a simple dismissal, as I have primarily concluded, I think the next-best characterisation would be that there was some form of wrongful exclusion, such as an unauthorised, unpaid stand-down or suspension. There are numerous examples of industrial instruments containing clauses entitling an employer, in defined situations, to temporarily withdraw work or wages, or both, by way of a suspension or stand-down, e.g., see BlueScope (AIS) Pty Ltd - Port Kembla Steelworks Employees Award. Similarly, public sector employers ordinarily have specific entitlements, again in defined situations, to effect paid or unpaid suspensions, often when disciplinary issues have arisen. See also s126 of the Industrial Relations Act as an example of a statute-based provision concerning situations where an employer may make an application to the Commission for stand-down orders. However, the Nursing Homes &c Nurses' (State) Award does not contain any provision relevant to unpaid stand-down or suspension. In the absence of clear authority or consent, an employer may not properly effect an unpaid suspension or stand-down of an employee from his or her employment. For example, in a case referred to by Mr Dawson, Australian Bank Employees' Union v National Australia Bank, Grey J commented (at 446): It is an established principle of the law of contract that, in the absence of an express term permitting suspension, one party may not suspend his, her obligations to the other party This principle was applied in relation to contracts of employment in Re Application by Building Workers' Industrial Union of Australia (1979) 41 FLR 192 at 194, and in Gregory v Phillip Morris Ltd (1988) 24 IR at 414; 80 ALR at 472, in the judgment of Wilcox and Ryan JJ. Where employment is governed by an award, an employer cannot deprive an employee of the entitlement to wages by declining to provide that employee with work. See Seymour v Stawell Timber Industries Pty Ltd (1985) 13 IR 289; 9 FCR 241. In a case in which the obligations to perform duties and to make payments were concurrent, and subject to the doctrine of substantial performance, it might be possible for an employer to decline to accept less than total performance of an employee's obligations under contract. In a case such as the present in which those obligations are not interdependent, any right which the employer may have to decline performance which is less than complete can have no effect on the employer's obligation to make payment. 45 In support of the contentions concerning repudiation, Mr Dawson referred also to Western Excavations v Sharp, where this was said: If the employer is guilty of conduct which is a significant breach going to the root of the contract of employment; or one which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract then the employee is entitled to treat himself as discharged from any further performance. If he does so, then he terminates the contract by reason of the employer's conduct. He is constructively dismissed. 46 In Tullett Prebon (Australia) Pty Ltd v Simon Purcell [2008] NSWSC 852, Brereton J recently noted that, "employment contracts have unique characteristics, including that the relationship of employer and employee may be brought to an end by a unilateral repudiation, even though the repudiation is not accepted and the contract itself is not terminated". His Honour elaborated the matter in this way: 30 Rejection of the doctrine of "automatic termination" - to accommodate the application, to the idiosyncrasies of the contract of employment, of the conventional rules of contract law in respect of repudiation - had to also accommodate acceptance of the rule that, where the consideration for wages is the performance of work, and the employee is unwilling to perform or the employer refuses to permit performance of work, no claim for wages can be brought and the parties are left to remedies for unliquidated damages (with concomitant obligations to mitigate), even though the innocent party elects to affirm the contract and does not accept the repudiation [ Automatic Fire Sprinklers v Watson , 450-2, 461-2, 465, 476; Gunton v Richmond-on-Thames , 467-9 (Buckley LJ), 474-5 (Brightman LJ); Turner v Australian Coal and Shale Employees' Federation , 192]. In endeavouring to explain this anomaly, the cases have drawn a distinction between the contract of employment on the one hand, and the relationship of employer and employee on the other, so that although the contract survives repudiation unless and until accepted or otherwise terminated, the relationship of employer and employee - which for convenience I shall call the "actual employment" - does not, because the substratum of trust and confidence inherent in that relationship no longer exists, and the obligation to render services will not be specifically enforced [ Automatic Fire Sprinklers v Watson , 450-2, 456-7 (Latham CJ), 463 (Starke J), 469 (Dixon J), 476-7 (Williams J); Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339, 364-5; Hill v C A Parson & Co Ltd [1972] Ch 305, 313-4 (Lord Denning MR: notice by an employer not in accordance with the contract is ineffective to terminate it unless accepted, but the relationship of employer and employee is ordinarily at an end because it is inconsistent with the confidential nature of the relationship that it should continue contrary to the will of one of the parties); Gunton v Richmond-on-Thames , 467-9 (Buckley LJ), 474-5 (Brightman LJ); see also Re Associated Dominions Assurance Society Pty Ltd (1962) 109 CLR 516, 518-9 (a winding up operates as a wrongful dismissal of the company's employees, but does not terminate the contract of employment, which remains on foot for certain purposes)]. 47 It is settled law that repudiation results in termination of an employment contract only if the "innocent" party accepts the repudiation as terminating conduct, in the sense considered in Western Excavations v Sharp. Strictly speaking, it is the "innocent" party who puts an end to the employment relationship by electing to accept the repudiation as terminating the employment relationship. Accordingly, Ms Standen was entitled to accept Principal's repudiation and terminate the employment relationship, but she was not bound to do so. It may be noted, also, not every breach within an employment relationship will give grounds for claiming there has been a repudiation. Repudiation is not lightly inferred. Drawing from the approach in Western Excavations v Sharp, Australian Bank Employees' Union v National Australia Bank and Tullett Prebon v Purcell, I am, however, well- satisfied that Principal's actions in withdrawing from Ms Standen the ability to work and earn wages on 8 October 2008 amounted to a significant repudiation by Principal, which Ms Standen was entitled to accept as terminating the employment relationship. Here, it is clear Ms Standen did not accept the action taken by Principal, as manifested by the concerns outlined in her evidence, as well as the earlier dispute proceedings initiated by the Association under s130 of the Industrial Relations Act. As such, I am satisfied that if there was not a simple dismissal, the Association's alternative submissions as to constructive dismissal by repudiation may be accepted. 48 Good faith, mutual trust and confidence: Mr Dawson drew attention to s49 of the Workplace Injury Management and Workers' Compensation Act, which imposes certain obligations on employers in relation to the provision of suitable work for injured employees That section provides as follows: 49 Employer must provide suitable work

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(c) the employer terminated the worker's employment after the injury happened, other than for the reason that the worker was not fit for employment as a result of the injury. Note. See also Part 7 Chapter 2 of the Industrial Relations Act 1996 for provisions for protection of employment of injured workers. 49 Mr Dawson submitted Principal had an obligation to continue to provide suitable duties so long as it was reasonably practicable to provide employment in accordance the provisions of s49(3) of the Workplace Injury Management and Workers' Compensation Act. He submitted Principal had suitable duties for Ms Standen to perform in continued employment and the withdrawal of those duties, in the circumstances outlined in the evidence, was, among other matters, contrary to the implied term of good faith, mutual trust and confidence in the employment contract, as considered in Russell v the Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217; (2008) 176 IR 82 at [33] and [73]. As to the application of the principles of good faith, mutual trust and confidence to the particular context of an injured worker, Mr Dawson referred to Carrigan v Darwin City Council [1997] IRCA 88, where von Doussa J said: Whilst I have held that the rehabilitation provisions of the Work Health Act do not act as contractual provisions between the parties, I consider that Ms Carrigan is correct in her submission that a failure on the part of Council to fulfil its rehabilitation obligations under the Work Health Act could amount to conduct likely to destroy or seriously damage the relationship of confidence and trust between employer and employee … The conduct of the Council must be looked at as a whole and its cumulative impact assessed. 50 Ms Standen had been integrated into the workforce for three and a half years years on selected duties following her work-related injury. The evidence as to Principal's reasons for the peremptory withdrawal of suitable duties on 8 October 2008 was not particularly well-developed. That is, there was no evidence of any significantly-changed operational exigencies necessitating the decision to withdraw suitable duties that day. There was no evidence why it was considered, for example, time-critical to withdraw suitable duties on 8 October 2008, given that Ms Standen had been undertaking selected duties for a number of years following the injury. Ms Standen was no longer even "premium impacting", as one email described matters. Thus, financial considerations did not provide a reason for Principal's actions, being considerations of the type considered in Transport Workers' Union of New South Wales (on behalf of Thomas Lawson) v Lindsay Brothers Management Pty Limited [2008] NSWIRComm 157. In that case, Boland J, President, noted at [17] the motivation for dismissing the applicant employee seemed to have "more to do with the management of the respondent's insurance premiums than the availability of suitable employment".

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51 In my view, there can be no doubt about the import of the statutory directive contained in s49(3) of the Workplace Injury Management and Workers' Compensation Act as it concerned Ms Standen. The reasons for the decision to withdraw suitable duties from Ms Standen were not entirely clear on the evidence, perhaps other than when considered in terms of a position adopted by Principal that was adverse to the on-going provision of selected duties for injured employees. One way or the other, through the processes of administrative decision-making, Principal, through its human resources and senior nursing staff, determined to withdraw suitable duties and inform Ms Standen she would not be permitted to return to work unless she can resume the full range of her pre-injury duties as an Assistant in Nursing. On the evidence, there was no real medical likelihood of that eventuality; and the evidence indicated the relevant staff members were aware of that, or should have been aware. 52 The available evidence would not lead to a conclusion it was not reasonably practicable for Principal to continue to provide employment for Ms Standen in accordance with s49 of the Workplace Injury Management and Workers' Compensation Act. I consider there is substance to Mr Dawson's contention that Principal's actions ran counter to the implied term of good faith, mutual trust and confidence, given the lack of persuasive evidence as to the operational imperatives said by Principal to have rendered it necessary to withdraw suitable duties. I consider also that Principal's staff knew, or ought to have known, it was unlikely Ms Standen could return to pre-injury work, given her medical status. Having regard, particularly, to the observations of von Doussa J in Carrigan, coupled with the matters arising on the evidence concerning the withdrawal of suitable duties in tandem with assertions that Ms Standen could return to work only in the (medically improbable) event she could resume pre-injury duties, I consider there are grounds to conclude Principal's actions amounted to a breach of the implied term of good faith, mutual trust and confidence. I consider this breach would comprise a supplementary basis for concluding there was repudiatory conduct which Ms Standen was entitled to treat as terminating the employment relationship.

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53 General observations: I make the general observation that if the submissions for Principal were accepted concerning Ms Standen's situation, it would have the real potential - by extension to other employees in similar circumstances - to render nugatory the beneficial provisions enacted by the Parliament concerning employment protection for injured employees. That is, an employer, notionally at least, could elect to keep an injured employee "on the books", as it were, for years - while denying the employee any suitable work, any remuneration and any of the other ordinary incidents of employment on the basis there had been no termination of employment. 54 If the submissions by Principal were to be accepted, then, in such a scenario, an injured employee may be left indefinitely in an industrial stasis, deprived of access to a reinstatement application under s242 of the Workers' Compensation Act for as long as the employer determined notionally to retain the injured employee as an employee, although not actually entertaining any return to work unless the employee was fully fit to resume pre-injury duties. In my view, this would be a perverse approach to accept, and one which would be, manifestly, antithetical to the beneficial purpose and intent of legislation specifically designed to provide employment protection for employees who have been injured through work. It is a self-evident proposition that effective rehabilitation does not necessarily lie in a return to pre-injury duties. It is also clear some reasonable level of accommodation should be given to injured employees and, despite the assertions in Principal's letter dated 8 October 2008, not just as a short-term rehabilitation measure. For instance, the Supreme Court in State Rail Authority of New South Wales v The Honourable Justice Bauer and Others (1994) 55 IR 263 at 267 quoted with approval the following comments made by Bauer J at first instance: The aim of rehabilitation … must surely be to integrate injured workers into the workforce at a type of work they can perform and to be useful that integration requires the continuing provision of suitable employment. There is an obligation on the employers to assist and cooperate in such a purpose, an obligation contained not only in legislation but imposed on the employer by its position as a corporate citizen. If the employer terminated the employment of an employee who after a work related injury has been integrated into the workforce the subversion of the laudable aim of rehabilitation lies in the dismissal not the reinstatement. 55 In addition to being denied access to reinstatement remedies under the Workers' Compensation Act, an employee in Ms Standen's situation might also be denied access to other entitlements for so long as the artifice continued that there had been no dismissal. For example, an employer could deny an employee payment for untaken annual leave or long service leave that otherwise would fall due on termination of employment. By way of further example, superannuation schemes typically provide arrangements for early access to funds where the termination of employment is brought about for reasons of illness or injury, albeit usually of a more serious nature than the injury sustained by Ms Standen. If an employer maintained an injured employee was still notionally employed, then the employee may not be able to have early access to superannuation benefits that may be available in connection with a termination of employment for reasons of a work-related illness or injury. 56 Section 146(2) of the Industrial Relations Act provides the Commission must take into account the public interest in the exercise of its functions and, for that purpose, must have regard to the legislative objects specified in s3. I do not consider it would be "fair and just", within the meaning of s3(a) of the Industrial Relations Act to conclude there was no dismissal of an injured employee who had been, in the absence of clear lawful authority or consent, unilaterally deprived of work and wages such as to leave the employee without rights to access statutory reinstatement remedies; without entitlement to payment of untaken leave entitlements; and, potentially at least, without early access to superannuation benefits and the like. The acceptance of Principal's submissions would lead, on one construction of it, to the view employers effectively have untrammelled, inviolable rights to withdraw work and wages from injured employees such as Ms Standen and to assert the employment relationship still subsists in such a way as to deprive the employee of recourse to rights that otherwise would arise in connection with a dismissal. I am not persuaded by Principal's submissions generally suggesting this could be a correct or appropriate characterisation of the law. Orders 57 Having regard to the foregoing, I decline to make orders in the terms proposed by Principal in the amended notice of motion filed on 30 January 2009. The motion is dismissed. ____________________

Parties

Applicant/Plaintiff:

New South Wales Nurses' Association (on behalf of Yoyet Standen)

Respondent/Defendant:

Principal Health Care Finance No 3 Pty Ltd t-as Principal Aged Care

Legislation Cited (5)

ACTS Industrial Relations Act 1991(NSW)

Workers' Compensation Act 1987(NSW)ss 241, 242, 243

Workplace Relations Act 1996(Cth)ss 16, 182, 183

Industrial Relations Act 1991(NSW)

Industrial Relations Act 1996(NSW)ss 3, 126, 130, 146(2)

Cases Cited (36)

Allison v Bega Valley Council (1995) 63 IR 68 Australian Bank Employees' Union v National Australia Bank (1989) 31 IR 436 Automatic Fire Sprinklers Proprietary Limited and Another v Watson (1946) 72 CLR 435 Blackadder v Ramsey Butchering Services Pty Ltd [2005] HCA 22; 221 CLR 539 Carrigan v Darwin City Council [1997] IRCA 88 Cole v Kenny [2007] NSWIRComm 1074 Counihan v Bearcat Tyres Pty Ltd [1996] IRCA 570 Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 Mallinson v The Scottish Australian Investment Company Limited (1920) 28 CLR 66 Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 Nguyen v A-N-T Contract Packers Pty Ltd trading as A-N-T Personnel & Theiss Services Pty Ltd Pty Ltd trading as Theiss Services (2003) 128 IR 24; [2003] NSWIRComm 1006 Norville v New South Wales Fire Brigades [2007] NSWIRComm 45 Ramsay Butchering Services Pty Limited v Blackadder [2003] FCAFC 20; (2003) 127 FCR 381 CASES CITED: Riley v WorkCover Authority (NSW) [2006] NSWIRComm 108; (2006) 151 IR 396 Russell v the Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217; 176 IR 82 Ryde-Eastwood Leagues Club Ltd v Taylor [1994] NSWIRComm 112; (1994) 56 IR 385 Siagan v Sanel (1994) 1 IRCR 19; 54 IR 185 Shankar v Neomo Packaging Systems Pty Ltd [2000] NSWIRComm 227 Smith v Director-General of School Education (1993) 31 NSWLR 349; [1993] NSWIRComm 134 Squires v Flight Stewards Assn of Australia (1982) 2 IR 155 State Rail Authority of New South Wales v The Honourable Justice Bauer and Others (1994) 55 IR 263 Tullett Prebon (Australia) Pty Ltd v Simon Purcell [2008] NSWSC 852 Transport Workers' Union of New South Wales (on behalf of Thomas Lawson) v Lindsay Brothers Management Pty Limited [2008] NSWIRComm 157 United Firefighters Union of Australia v Metropolitan Fire Brigades Board (1998) 86 IR 340 Unsworth v Tristar Steering and Suspension Australia Limited [2008] FCA 1224 Viapiana v Woolworths Limited (unrept; Workers' Compensation Commission; Matter No 001095/08; 19 June 2008) Western Excavations v Colin John Sharp [1977] EWCA Civ 165; [1978] QB 761

(1) If an injured worker is dismissed because he or she is not fit for employment as a result of the injury received, the worker may apply to the employer for reinstatement to employment of a kind specified in the application. (2) The kind of employment for which the worker applies for reinstatement cannot be more advantageous to the worker than that in which the worker was engaged when he or she first became unfit for employment because of the injury. (3) The worker must produce to the employer a certificate given by a medical practitioner to the effect that the worker is fit for employment of the kind for which the worker applies for reinstatement. [Underlining added] 5 Principal submitted the Association bore the onus of establishing there had been a dismissal. In so submitting, reference was made to the decisions in Cole v Kenny [2007] NSWIRComm 1074 and Counihan v Bearcat Tyres Pty Ltd [1996] IRCA 570.

[2003] NSWIRComm 1006

[1994] NSWIRComm 112

[1993] NSWIRComm 134

[2008] VSC 115

(1995) 63 IR 68

(1989) 31 IR 436

(1946) 72 CLR 435

(1920) 28 CLR 66

(1995) 62 IR 200

(2003) 128 IR 24

(2003) 127 FCR 381

(2006) 151 IR 396