Shaw v University of Queensland [1999] IRCA 5 | Case summary

REASONS FOR JUDGMENT 1 WILCOX CJ and MARSHALL J: This is an appeal by Dr Roslyn Shaw from a judgment of Ryan J dismissing an application made pursuant to s170EA of the Industrial Relations Act 1988 (Cth) ("the Act"). His Honour rejected Dr Shaw's contentions that ss170DC and 170DE of the Act had been breached by the respondent, University of Queensland ("the University"). The facts are fully set out in the primary judge's reasons for judgment. They need not be repeated. 2 At the hearing before Ryan J the parties focused on a particular clause in the relevant award and the question as to whether the University had complied with it in terminating Dr Shaw's employment. It is important to observe that mere compliance with an award provision does not guarantee against contravention of s170DC or s170DE of the Act. The converse is also true. There may be cases where there is a contravention of an award provision, for example, one relating to procedure, without there being a contravention of the Act. However in this case the parties were content to litigate the statutory issues by reference to the question of whether or not the University had complied with the award. 3 Ryan J held that the appellant's employment had been terminated for a valid reason based on her incapacity to perform her duties as a lecturer in the Department of Dentistry. His Honour's ultimate conclusion on this issue was expressed as follows: "In my view, therefore, the University had, in the absence of any explanation by the applicant, evidence from which it could reasonably apprehend that the applicant's capacity to perform her duties had been significantly diminished." 4 We agree with Ryan J in these conclusions, especially having regard to the appellant's failure to attend a medical examination as required by the University in reliance upon the relevant award provision. That examination had been required by the Vice Chancellor after consideration of reports of Dr Shaw's disruptive behaviour and after receiving advice from two members of the University staff with psychiatric qualifications. As Ryan J found, the material before the Vice Chancellor was such as to make it open to him to form a doubt as to Dr Shaw's capacity to perform her duties. 5 We have one reservation about the reasoning process engaged in by his Honour in coming to that conclusion. At pars 42 and 43 he said: "In my view a valid reason for termination of employment 'connected with the employee's capacity' is established if the employer can show a reasonably held belief upon the evidence available at the time of the termination of employment, that the employee's capacity to perform the duties required pursuant to the contract of employment had been diminished to such an extent that the employee was no longer able to perform those duties required of him or her pursuant to the contract of employment. The expression 'employee's capacity' as used in s170DE(1) comprehends the employee's capacity to perform, in the future, the duties required pursuant to the contract of employment. If an employer has a reasonably held view that an employee's state of health has significantly diminished that employee's capacity to perform his or her duties pursuant to the contract of employment, then the employer has a valid reason for termination under s170DE(1) of the Act." This analysis seems to conflict with what a Full Court of this Court said in Murdoch University v Mainsbridge (1998) 155 ALR 357 at 366: "… it is not possible to conclude that the employer will establish a valid reason solely by reference to the employer's honest belief on reasonable grounds formed after sufficient inquiry that the employee was guilty of misconduct. The court must balance that factor in the scales with all the other circumstances of the case. In some cases, the employer's belief will, when placed in the balance, prove influential in establishing a valid reason. In others, it will not. Of course, minds will differ as to the importance of the relative significance of the inquiry made by the employer as against the innocence of the employee in a particular case. In the light of our construction of s170DE(1), it would be wrong to lay down a rule to be applied by the court, in every case, that an honest belief held by an employer based on reasonable grounds after sufficient inquiry will or will not constitute a valid reason for termination. As we have said, the answer to that question is a matter of broad judgment in each case." However, it is clear from his subsequent reasoning that Ryan J's approach did not affect his ultimate conclusion concerning s170DE(1) of the Act. 6 On the issue of compliance with s170DC of the Act, we agree for the reasons expressed by Ryan J that no breach of that section has been established. Dr Shaw knew for almost four months that there was a concern held by the University in relation to her capacity to adequately perform her duties due to possible mental illness and the effects of her disruptive behaviour on other staff members. She failed to attend an appointment made with an independent psychiatrist and failed to make a further appointment when so requested. At no time did Dr Shaw give an explanation to the University for those omissions. In this situation, we agree with Ryan J that it was open to the Vice-Chancellor of the University, in the absence of any material to the contrary, to act as he did. Contrary to submissions advanced on behalf of Dr Shaw on the appeal, it was not incumbent upon the Vice-Chancellor to allow her further time to obtain her own psychiatric report. 7 To the extent that the Vice-Chancellor took into account disruption caused by the appellant in the Dentistry Faculty of the University, we are satisfied that the University effectively brought that matter to Dr Shaw's attention and gave her an opportunity to be heard about it. It had been made clear in correspondence to Dr Shaw from the University on 23 August 1995 that continued disruption would put her job at risk. The disruption referred to was in the context of the allegation that she suffered from mental illness putting her capacity to perform her tasks in question. 8 Reference was made in argument to the evidence of the Vice-Chancellor and Mr Feeney regarding the reasons for the termination. They both denied having formed an opinion that Dr Shaw was suffering from mental illness but relied on the presumption included in sub-cl 14(i) of the relevant award which provided that: "(i) A Chief Executive Officer may construe a failure by a staff member to undergo a medical examination in accordance with these procedures within 3 months of a written notification to do so as prima facie evidence that such a medical examination would have found that the staff member is unable to perform his or her duties and is unlikely to be able to resume them within 12 months, and may act accordingly; provided that such a refusal by a staff member in these circumstances shall not constitute misconduct nor lead to any greater penalty or loss of entitlements than would have resulted from an adverse medical report." 9 Contrary to the submissions of counsel for Dr Shaw we are not of the view that the Vice-Chancellor made his decision to terminate the appellant's employment because of Dr Shaw's disruptive behaviour. Rather we consider that this was a factor influencing the exercise of his discretion as to whether he would act on the basis of the presumption provided by cl 14(i) of the award. 10 We think the appeal should be dismissed. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Wilcox and Justice Marshall.

13 The purpose of s 170DC has recently been considered by a Full Court in Shields v Carlton United Breweries Ltd [1998] FCA 377 in the following passage: As Moore J said in Perrin v Des Taylor Pty Ltd (1995) 58 IR 254 at 256-7: A second purpose of s170DC is that an employee with whom an allegation has been raised may be able to persuade the employer that, while the allegation is of substance, there are factors that should persuade the employer not to terminate the employment. They may be extenuating personal circumstances or they may involve undertakings about future conduct. The rights of an employee to be consulted before dismissal now embodied in s170DC are not novel: see Gregory v Philip Morris Ltd (1988) 24 IR 397 at 415; Wheeler v Philip Morris Ltd (1988) 32 IR 323 at 346; Bostik (Australia) Pty Ltd v Gorgevski (No 1) (1992) 36 FCR 20 at 35; 41 IR 452 at 466 and Byrne v Australian Airlines Ltd (1994) 47 FCR 300; 52 IR 10 and in the United Kingdom: see Spencer v Paragon Wallpapers [1976] IRLR 373; Williamson v Alcan (UK) Ltd [1978] ICR 104; W Weddel & Co Ltd v Tepper [1980] ICR 286. In Bostik, Gray J, when discussing a requirement of an award that a dismissal not be harsh, unjust or unreasonable said at 35; 466: 'Although the procedural requirements of the clause will vary according to the circumstances, they are intended to be real. An employer genuinely investigating an allegation of misconduct or neglect of duty, or some other act or omission which might provide a ground for dismissal, is required to carry out a proper investigation, and not merely to go through the motions. The employer is required to ascertain whether there are any mitigating factors, either associated with the alleged ground for dismissal, or arising from the employee's past record and future prospects. It is not intended that an employer should be able to substitute a court proceedings for its own investigation, ie, to overcome procedural deficiencies by the establishing to the satisfaction of the court that the dismissal concerned would not be harsh, unjust or unreasonable on substantive grounds.' See also Walton v Mermaid Dry Cleaners Pty Ltd (1996) 142 ALR 681. Although it is no longer open to an applicant under Part VIA of the Act to complain that the termination of his or her employment has been harsh, unjust or unreasonable, we consider that considerations of procedural fairness similar to those indicated by Gray J in Bostik inform the requirement in s170DC of the Act that the employee be given "the opportunity to defend himself or herself against the allegations made". This view was not shared by the learned primary judge as in his reasons, immediately after the passage last quoted, his Honour observed: The other response to my concern, which is perhaps more pertinent, is that s 170DC did not require an employer to give an employee an opportunity to argue the case against dismissal. What the employer must do was specifically stated. The employer must give the employee "the opportunity to defend himself against the allegations made"; that is, to meet those specific allegations. No doubt, when this occurs, employees often offer reasons why, even if the allegations are made out, they should not be dismissed. However, I do not think an employer's failure specifically to invite that type of submission amounts to a contravention of s 170DC. With respect to his Honour, whether or not it needs to be given by specific invitation, the opportunity of which s170DC speaks, as explained by Moore J in Perrin entails more than a chance to rebut the specific allegations of misconduct by the employer. It extends to an opportunity to put before the employer all those matters on which the employee may reasonably wish to rely as extenuating circumstances or as otherwise mitigating the consequences which might attach to the alleged misconduct if proved. So much, in our opinion, is comprehended by the word "defend". 14 The evidence of both Professor Wilson, the Vice Chancellor of the University of Queensland and Mr Feeney the Director of Personnel Services when giving evidence before the Judicial Registrar (which became the evidence before the learned primary judge) identified the reason for terminating Dr Shaw's employment. Professor Wilson said: Now [identified extracts from an affidavit of Dr Shaw] follow a reference to you making a decision electing to treat her failure to attend and be examined by a psychiatrist as such prima facie evidence that she was suffering from a psychiatric illness. Do you agree with the way that is described? -- No, not at all. That happens in three or four places through the text. The prima facie evidence is simply that she would be unable to perform her duties. It's the phrase from the award. I'm no expert to say whether there is a possible psychiatric illness or not. And you have said that it occurs in other places. Can I direct your attention to paragraph 6 which is on page 5. It says there in the 3rd and 4th lines: 'I was dismissed because the Vice-Chancellor determined that there was prima facie evidence that I was mentally ill.' Did you make such a determination? -- No. And a little later Professor Wilson said: Well, what factors did you take into account in determining to terminate? … Well, Professor, could you tell us what factors you took into account, if you can do that from the - from memory? - Well, I think that the - the most important element in it was the fact that Dr Shaw had indicated previously that she was happy to - to follow the direction to see the external psychiatrist. And I was really taken aback to learn at the beginning of November that she had not kept that appointment, and as you're aware, I wrote to her advising her that time was running out and extending the time in order that she would take seriously the implications, because, of course, the - the paragraph that is here was in - was in that letter. And my view was that if she - if I did not take this action, the University would be left in a - in a position where it - it could hardly resume the whole action again, and consequently the - the attempt to alleviate the distress within - within the department would fail, and really there was nowhere else to go. … That is the extent of what you took into account? … Well, as I said, that was the - that was the - the major - the major element, but I - I think I can - I can say that I took into account the fact that at no time did I have any evidence that Dr Shaw intended to reverse her - her tactics within the department and the best thing for - for all of us what to - was to separate. What I have attempted to do through the - through the meeting of solicitors was to see whether there was a way in which we could facilitate that separation other than simply six months notice and that be a matter that was on the record. I think that's all I can say. Mr Feeney said: Do you see [a paragraph in Dr Shaw's affidavit] says: 'I was dismissed from employment on 20 December 1995 by the university by giving six months notice following a decision by the Vice-Chancellor electing to treat my failure to attend and be examined by a psychiatrist as prima facie evidence that I was suffering from a psychiatric illness.' ? -- Yes. You were involved in the process at the university dealing with this termination. That is the case? -- Yes. Do you understand it, the reason advanced there, ie prima facie evidence that "I was suffering from a psychiatric illness was the -- ? -- No, that's not my understanding. I think the prima facie points me in the direction of a subclause of clause 16 of the award and that says that if the person does not undertake the examination within the stipulated period, the failure to do so will be taken as prima facie evidence that the person is not fit or capable of carrying out their duties. Yes? -- And there was no question, as I understood the process, that any judgment or determination had been made about any psychiatric illness. It was a matter that the procedures hadn't been followed under clause 16 and that subclause was being invoked to say that the failure to attend was a prima facie evidence of not being able to satisfactorily carry out the duties. 15 Clause 14 of the Universities and Post Compulsory Academic Conditions Award 1995 ("the Award") created a presumption of incapacity in certain circumstances which arose in the present case. That is, by failing to attend the two medical examinations, Dr Shaw could, for the purposes of clause 14, be treated as presumptively unable to perform her duties for at least twelve months and the Vice Chancellor could act accordingly. This included acting by terminating Dr Shaw's employment. By relying on that presumed state of affairs, Professor Wilson was able to terminate Dr Shaw's employment in a way provided for in the Award and not in breach of the Award. Had Professor Wilson not acted under clause 14 he would have been bound to give effect to other provisions concerning disciplinary procedures and termination. Without the Award operating to raise the presumption in this way Professor Wilson, by his own admission, was not in a position to conclude that Dr Shaw was mentally ill and, on that basis, terminate her employment. 16 The evidence earlier set out establishes, in my opinion, that the fundamental reason of Professor Wilson for the termination of Dr Shaw's employment was her prior disruptive conduct and the concern Professor Wilson had that it might continue. That is, he was concerned she lacked the capacity in the future to discharge her duties in a way that was not disruptive of the functioning of the Faculty of Dentistry. It is clear that the appellant had her attention drawn to this conduct in the letter to her from Professor Wilson of 23 August 1995. It read, in part: Following my review of your file and extended consultation with relevant officers of the University, I have reached the conclusion that your "capacity to perform the duties of [your] office is in doubt" (Clause 14(a)). Specifically, I am concerned that your continuing disruptive behaviour is evidence of disturbance in your mental state, of a kind that compromises the effective performance of your duties. I therefore require you, in accordance with Clause 14(b), to undertake a medical examination at the University's expense to assess whether you are able to perform your duties. Please contact Dr Tony Arklay at the University Health Service (extension 56212) in the first instance. Dr Arklay will refer you to the appropriate specialist(s) for consultation. Under the terms of the award I am required to give you two months' notice in relation to the date of this consultation. Dr Arklay will endeavour to arrange an initial appointment with the specialist two months from the date of this letter. The specialist(s) will make available to you, and to me, the resulting report(s) in accordance with Clause 14(d). I draw your attention to the options available to you under the Award. Clause 14(b) provides for you to apply to your superannuation fund for ill health retirement or temporary disability benefit. In this case SSAU will require a medical examination by specialists whom they nominate. I have confirmed that you are eligible to apply to SSAU for either ill health retirement or temporary disability benefit. In the circumstances, I believe it is in the best interests of your health and welfare for you to be relieved of your departmental duties until the necessary medical consultations have been completed. Accordingly, you are hereby relieved of the performance of your duties pending the outcome of the medical examinations. Your salary will continue to be paid as normal. (Emphasis added)

Shaw v University of Queensland

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