APPEAL AGAINST A DECISION OF THE COMMISSION IN MATTER NO. CR 15/2018

GIVEN ON 30 AUGUST 2018

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

  CITATION : 2019 WAIRC 00175

  DELIVERED   : TUESDAY, 2 APRIL 2019

  FILE NO.   : FBA 11 OF 2018

Appellant

AND

Director-General, Department of Education;

The State School Teachers' Union of WA (Incorporated)

Respondent

  FILE NO.   : FBA 12 OF 2018

Appellant

AND

The State School Teachers' Union of W.A. (Incorporated);

Director General, Department of Education

Respondent

ON APPEAL FROM :

JURISDICTION        : THE WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CORAM                     : COMMISSIONER D J MATTHEWS

CITATION                : 2018 WAIRC 00724; (2019) 98 WAIG 1162

FILE NO.    :          CR 15 OF 2018                                                                                        

_______________________________________________________________________________

CatchWords : Industrial law (WA) – Appeal against a decision of the Commission – Extension of time in which to file appeal – Claim of harsh, oppressive or unfair dismissal – Decision to dismiss or retire a teacher on the grounds of ill health – Conflicting medical evidence – Reason for not working – Mistake of fact – Whether reinstatement or re-employment is practicable – Scope of Memorandum of matters referred for hearing and determination – Calculation of compensation – Matter remitted to the Commission – FBA 11 of 2018 appeal allowed, case remitted for further hearing and determination – FBA 12 of 2018 appeal dismissed

Legislation : Industrial Relations Act 1979 (WA): s 23A; s 29(1)(b)(i); s 44; s 44(9); s 49; s 49(5)(b) and (6a)     

Result : FBA 11 of 2018 appeal allowed.  Case remitted for further hearing and determination.

  FBA 12 of 2018 appeal dismissed.

_______________________________________________________________________________

Representation:

FBA 11 of 2018:

Counsel:

Appellant : Ms R Cosentino of counsel for the State School Teachers’ Union of W.A. (Incorporated)

Respondent : Mr J Carroll of counsel for the Director General, Department of Education

FBA 12 of 2018:

Counsel:

Appellant : Mr J Carroll of counsel for the Director General, Department of Education

Respondent : Ms R Cosentino of counsel for the State School Teachers’ Union of W.A. (Incorporated)

_______________________________________________________________________________________________

Cases referred to in reasons:

BHP Billiton Iron Ore Pty Ltd v The Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch [2006] WAIRC 03908; (2006) 86 WAIG 642

Coal and Allied Operations Pty Limited (2000) 203 CLR 194

Director General of Education v United Voice [2015] WASCA 195 [17]

House v The King (1936) 55 CLR 499

Jacob Gilmore v Cecil Bros, FDR Pty Ltd (1996) 76 WAIG 4434

John Lane v Aussie Online Limited (ACN 004 160 929) (2002) 82 WAIG 430

Michael v Director General, Department of Education and Training [2009] WAIRC 01180; (2009) 89 WAIG 2266

Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186

Public Transport Authority of Western Australia v The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch [2017] WAIRC 00452; (2017) 97 WAIG 1329

Scicluna v Mr William Paul Brooks T/as Bayview Motel Esperance, WA [2016] WAIRC 00862; (2016) 96 WAIG 1475

The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch v Public Transport Authority of Western Australia [2017] WASCA 86

Reasons for Decision

The Full Bench:

Introduction

1         These are appeals to the Full Bench pursuant to s 49 of the Industrial Relations Act 1979 (WA) (the Act) against a decision of the Commission delivered on 30 August 2018.  That decision granted in part orders sought in a matter referred for hearing and determination pursuant to s 44 of the Act.  It ordered the Director General, Department of Education (the Director General) to pay to a member of the State School Teachers’ Union of Western Australia (Incorporated) (the SSTU), Mr William Kilner, a sum equating to 20 weeks of his salary as compensation for having unfairly dismissed Mr Kilner on the grounds of ill health.

Background

2         Mr Kilner was employed by the Director General as a teacher for 36 years, the last 28 of which were at Busselton Senior High School (SHS).  In early 2018, the Director General terminated Mr Kilner’s employment due to ill health.  

3         On 30 April 2018, the SSTU applied to the Commission for a conference pursuant to s 44 of the the Act, alleging Mr Kilner’s dismissal was harsh, oppressive or unfair.  It sought orders for his reinstatement and for remuneration lost.

4         The matter was the subject of conciliation which did not resolve the dispute and it was referred for hearing and determination pursuant to s 44(9).

The scope of the dispute

5         The terms of the Schedule to the Memorandum of matters (the Memorandum) referred for hearing and determination are as follows:

THE parties agree that the matters for hearing and determination are:

1. Whether the Respondent’s decision to dismiss William Kilner pursuant to cl 41(5) of the Teachers (Public Sector Primary and Secondary Education) Award 1993 (Award) effective 3 April 2018 was harsh, oppressive or unfair, having regard to:

1. Mr Kilner’s absence from the workplace in circumstances where he was on approved sick leave and had outstanding sick leave credits;

2. The evidence available to the Respondent; and

3. The Respondent’s failure to offer Mr Kilner alternative work, namely redeployment as a teacher at a different school (included within this issue is whether it was necessary for the Respondent to consider alternative work options at all).

2. Whether, notwithstanding cl 41(5) of the Award, the dismissal of Mr Kilner was neither harsh, oppressive nor unfair because, on the evidence available to the Respondent, Mr Kilner was not fit to fulfil the inherent requirements of his employment for the foreseeable future.

3. If the Applicant is successful in establishing that Mr Kilner’s dismissal was harsh, oppressive or unfair, the practicability of Mr Kilner’s reinstatement or re-employment as a teacher at a different school.

4. The Applicant seeks the following orders:

1. A declaration that the dismissal of Mr Kilner by the Respondent on 3 April 2018 was harsh, oppressive or unfair.

2. An order that the Respondent forthwith reinstate Mr Kilner as a Senior Teacher in accordance with the School Education Act Employees’ (Teachers and Administrators) General Agreement 2014 (Agreement).

3. An order that the Respondent redeploy Mr Kilner to a school other than Busselton Senior High School in consultation with the Applicant and Mr Kilner.

4. An order that Mr Kilner be paid an amount in respect of remuneration lost from the date of his dismissal to the date of his reinstatement in accordance with the rate of pay, entitlement and benefits applicable to Mr Kilner in accordance with the Agreement.

5. An order that Mr Kilner’s service with the Respondent otherwise be deemed continuous for all benefit purposes.

5. The Respondent seeks the following orders:

1. An order that the matter be dismissed.

The applicant’s case at first instance

6         In its Outline of Submission, the SSTU said that Mr Kilner’s dismissal was harsh, oppressive or unfair having regard to the issues raised in paragraph 1 of the Memorandum.

7         The SSTU said that cl 41(5) of the Award covers the field in terms of the requirements on the employer to enable retirement on the grounds of ill health.  The Director General did not comply with that clause.

8         The decision-maker is also said to have misconstrued the medical evidence said to justify retirement on the grounds of ill health.  The written submission expresses in the double negative that the medical evidence ‘does not indicate that Mr Kilner is not fit to perform the duties and responsibilities of his position as a teacher’.

9         It also said that Mr Kilner had sufficient sick leave and therefore the contract of employment was not frustrated.  The SSTU also questioned whether the medical report by Dr Lai is independent evidence for the purposes of cl 41(5) of the Award.

10      There is then an issue of whether the Director General’s consideration of whether Mr Kilner could perform as a teacher in his substantive position, that is at Busselton SHS, as opposed to as a teacher more generally, and whether the Director General ought to have considered alternative work options including redeployment to another location.

11      The SSTU said that the Director General did not comply with the Award and therefore the retirement was unlawful.  From that is said to flow unfairness in the dismissal.  It sought Mr Kilner’s reinstatement, to a school other than Busselton SHS.

Mr Kilner’s evidence

12      Mr Kilner gave evidence through a witness statement.  In it, he recited his history as a teacher, commencing with the Department in about May 1982.  He transferred to Busselton SHS in 1990.

13      He referred to student behaviour problems at the school, abuse he has been subjected to and the failure of local management to deal with it.  He referred to the Department’s Expert Review Group’s review of the school from 2011 to 2014 and says that it ‘found that challenging student behaviours were a problem at BSHS along with limited support for staff’.

14      He said that ‘while the problems have usually only been caused by a small number of students, the behaviour can be very disruptive’.

15      Mr Kilner said he had been abused and threatened by students on a number of occasions and he recited some of that abuse.  He said that he had made complaints to the Department and to politicians about student behaviour and the failure of local management to deal with it.

16      Mr Kilner then set out circumstances of the behaviour, abuse and threats he received from a particular student on 16 March 2017.  Mr Kilner said he briefly restrained the student.  He met with the Principal, Mr Dainon Couzic, and Mr Couzic reported it to the Department.

17      Mr Kilner also set out circumstances of 28 March 2017, when he was abused by another student.  He said that by this time, he was feeling extremely anxious and unwell.  His general practitioner provided a medical certificate, and Mr Kilner took sick leave from 3 to 5 April 2017.  Mr Kilner said his health did not improve, his feelings of unwellness and anxiety seemed to be getting worse and he started to have suicidal thoughts.

18      On 13 April 2017, Dr Buckeridge, Mr Kilner’s general practitioner, diagnosed him as having post traumatic stress disorder, gave him a medical certificate and put him on a mental health plan.  This describes ‘Problem Number 1’ as ‘PTSD’.

19      On 17 April 2017, Mr Kilner informed Busselton SHS that he would not be returning to school in Term 2 and provided a medical certificate.  On 14 June 2017, he provided a medical certificate certifying him as being unfit for work for the period 8 June to 8 September 2017.

20      On or about 15 June 2017, Mr Couzic informed Mr Kilner that he would be referred to the Department’s doctor. 

First review by Dr Lai

21      Mr Kilner was referred to Dr Lai, the Department’s Occupational Physician, for a medical review of his fitness for work.  The referral, dated 15 June 2017 and completed by Mr Couzic, set out a chronology of events and then provided reasons for the referral as being:

• I have genuine concerns and I am worried for Bill’s mental health.
• The medical certificates I have received are not sufficiently specific enough to ensure duty of care.
• I would also like some more information on the expected length of absence from the workplace.

22      The referral asked a number of questions of Dr Lai.

23      Mr Kilner attended the appointment with a representative of the SSTU on 5 September 2017.  Amongst other things, they discussed that Mr Kilner had 321 days of sick leave.  Mr Kilner says Dr Lai said that he should use that leave to get better. 

24      Dr Lai’s report dated 5 September 2017 records, under the heading of ‘Summary’, that towards the end of Term 1 2017, Mr Kilner felt overwhelmed and unable to cope due to:

 ‘a combination of non-work stressors and work stressors (difficult student behaviours).  Since stopping work he has undertaken regular psychological therapy and has gradually improved.  He still feels quite anxious in relation to work.  If he sees the difficult students in the community, he deliberately avoids them (left a function at a local cinema).

At this time, he cannot see himself ever returning to work at Busselton SHS, mainly in relation to difficult student behaviours and feeling unsupported in the management of such behaviour.  He has 321 days of sick leave.

Findings

Mr Kilner presented as mildly anxious.  He became very emotional when discussing his anxiety and difficulties faced.  When discussing less sensitive topics he presented reasonably well.’ 

25      Dr Lai went on to answer the specific questions posed by the Department:

• that Mr Kilner’s condition that may be affecting his ability to work is an anxiety disorder;
• that he was substantially improved from three months ago and continued to improve, and was receiving appropriate treatment and support;
• that his ability to undertake his role at his substantive site safely and effectively, including attending work regularly and working up to standard, without risk to self and others was that ‘[h]e is currently medically unfit for teaching due to anxiety.  He is still triggered when seeing certain students.  The anxiety would interfere with the effective performance of his teaching duties inclusive of behaviour management.’

26      His prognosis was that Mr Kilner had ‘previously recovered from similar episodes of anxiety in the past (2007, 2012) and successfully resumed duties at Busselton…  He stated today that he does not want to ever return to work at Busselton Senior High School – this is obviously a negative prognostic indicator.  Nevertheless, this view may change as the anxiety resolves as I expect it will over the next few months.’

27      As to the timeframes for recovery, Dr Lai considered that Mr Kilner would regain fitness for substantive teaching before the end of that year, that is, 2017.  Dr Lai suggested a review in December 2017, which would have been in three months, and an appointment was made for 6 December 2017.

Standards and Integrity Investigation

28      On 18 May 2017, Mr Paul Milward, Acting Manager Investigative Services, Standards and Integrity for the Department, wrote to Mr Kilner.  The letter advised Mr Kilner of an allegation that Mr Kilner had made physical contact with a student on 16 March 2017.  The allegation was to be investigated.

29      Mr Kilner says he was not informed of the letter until 6 September when Mr Couzic called him.  He says that Mr Couzic told him he had waited five months to tell him about the letter because he was worried about Mr Kilner’s health.

30      The letter advised Mr Kilner of the possible actions in the event of a finding that he had breached discipline, advised him that he now had an opportunity to respond to the allegation and he was given 10 working days to do so.

31      On 13 November 2017, the Director General wrote to Mr Kilner saying that it was open to her to form the view that Mr Kilner had committed a breach of discipline and indicating that she had formed a preliminary view that he had breached discipline.  The letter set out the proposed action against him should she make that preliminary view final.  Mr Kilner had 10 working days to respond.

Second review by Dr Lai

32      Mr Kilner said that at this appointment, he told Dr Lai that being found guilty of a breach of discipline had taken him back to where he had been in March.  He said he was very agitated and angry during the appointment.

33      Dr Lai provided a report to Mr Couzic about the review on 6 December 2017.  He recorded that:

• Mr Kilner continued to improve since the last review.  He is not prescribed nor taking any medication;
• Mr Kilner had spoken for over an hour to the parliamentary committee inquiry on school violence on 10 October 2017;
• Mr Kilner had had ‘an enjoyable active New Zealand holiday’;
• The Standards and Integrity investigation outcome made Mr Kilner angry and that Mr Kilner was in the process of appealing the decision;
• Mr Kilner had said that his psychologist and doctor had advised him not to return to work and that he did not see himself returning to work until satisfactory resolution of that process.  Mr Kilner ‘did not rule out an eventual return to work at an undefined point in the future’.
• Mr Kilner ‘presented well, in a good mood, cheerful and we had a normal conversation with good rapport, ie, normal mental state.  He became a little agitated when talking about the Standards and Integrity process but it was confined to that discussion.  We started well and ended well.’

34      In response to the questions posed for the review, Dr Lai answered ‘no’ to whether Mr Kilner had a medical condition that may be affecting his ability to work.  He added, ‘not working for reasons unrelated to medical condition.  He recently received the outcome of the Standards and Integrity investigation and he is angry about it.’

35      In response to a question about the ‘status and control of [his] current condition’, Dr Lai said:

He has been angry over the last week since receiving the Standards and Integrity outcome and now working through the appeals process.  At [sic] it is a recent event his current reaction falls within ‘a normal response’ and I consider not warranting any medical diagnoses at this time.

Reviewing previous psychiatrist reports that Mr Kilner previously provided (2007, 2013), his current presentation is similar to that described in the reports when it was deemed he had no active medical condition.  His concerns about student behaviour are very longstanding, going back over a decade.

36      In response to a question about Mr Kilner’s ‘medical capacity to undertake the inherent requirements of [his] substantive position, including regular attendance, ability to work safely and ability to undergo normal performance management’, or, ‘[i]f not fully fit, what is the impact of the condition as it relates to work tasks’, Dr Lai reported:

Has identified non-medical matters that they believe impact upon their ability to perform their duties in their current workplace.

He is appealing the S&I process and understandably not in a good frame of mind (angry) to teach independently and effectively.  I recommend a period of absence until the S&I process is finalised.

In relation to the possibility of a work trial at other schools he felt he had burnt his bridges at all the schools within the local region with the exception of Bunbury.

37      In the report, the next question for Dr Lai to answer was whether there were any ‘restrictions, adjustments or modifications required to allow Mr William Kilner to work safely and effectively at their substantive site’.  Dr Lai answered, ‘Not applicable.’

38      As to the prognosis, Dr Lai wrote ‘[t]he prospect of a successful return to work at Busselton SHS appears poor at this time and I do not anticipate that he will willingly return to work term 1, 2018.’

39      Dr Lai then wrote that he had written to Mr Kilner’s doctor and psychologist asking their opinions on his return to work prognosis – whether Mr Kilner is likely to return to his substantive site in the foreseeable future, and would provide an update once these were received.

40      On 20 December 2017, Dr Lai again wrote a report to Mr Couzic, headed ‘FITNESS FOR WORK ASSESSMENT UPDATE’.  He provided information he had received from Mr Kilner’s treating health professionals.  He reported that:

• Dr Mowat, psychologist, in a letter of 8 December 2017, said ‘I do not think he is likely to regain medical capacity to return to Busselton Senior High School in the foreseeable future.’ 
• Dr Buckeridge, general practitioner, in a letter of 15 December 2017, said:

This is to certify that Bill Kilner will be unable to attend work from 15 December 2017 to 1 July 2018 inclusive due to a medical condition.

At this stage, I do not know whether Bill is likely to regain capacity.  I will assess this midway th(r)ough next year.

41      Dr Lai went on to state:

In my opinion, it is unlikely that Mr Kilner will be able to return to work at Busselton SHS without significant risk of further stress leave for the foreseeable future, ie, permanent incapacity for his substantive position.  This is based on the long history of his unresolved concerns with student behaviours, the lack of change following an extended period of time off work, the ongoing S&I process and the prognostic information from his treatment providers.

42      Mr Kilner said that on 22 January 2018, he received a letter from Mr John O’Brien, Manager, Labour Relations for the Department, informing him that he would be recommending that Mr Kilner be retired on the grounds of ill health pursuant to cl 41(5) of the Award.  Mr O’Brien wrote that if Mr Kilner had ‘medical specialist information that indicates that you are likely to be able to safely fulfil the inherent requirements and responsibilities of your substantive position in the foreseeable future’, he could provide it.

43      On 29 January 2018, Mr Kilner sent the following email to Mr O’Brien:

My health continues to improve under the care plan developed by Dr Mowat and Mr Buckeridge.  I do see myself returning to the workplace after the charges I face are dealt with in the Industrial Commission and I am enabled to process the consequences of this unfair action.

My progress to recovery has been severely hampered by the Standards Integrity charge.

My doctors are aware of the agitation this has created for me and consequently, have suggested that I continue with my care plan until the 1st of July 2018 when my fitness for work will be reviewed.  I am extremely confident that my prognosis would be much better then, as was Dr Lai.

I shall not be availing myself of an early pathway to retirement on the grounds of ill health.  However, I thank you for your correspondence.

44      On 22 February 2018, Mr Kilner received a letter, dated that day, from Mr Damien Stewart, Executive Director, Workforce for the Department.  Mr Stewart noted the preliminary view referred to above, that Mr Kilner’s ‘incapacity precludes the continuation of [his] employment.’  He referred to Dr Lai’s report of 20 December 2017.  He said that, in effect, Mr Kilner had not provided any additional medical information and accordingly, his employment would now come to an end effective in five weeks’ time.

45      Mr Kilner’s witness statement of 2 June 2018 concludes by saying that:

1. He had 170 days of sick leave remaining at the time of termination of his employment;
2. He saw and continued to see Dr Buckeridge and Dr Mowat on a regular basis;
3. He felt he had made significant progress over the past year.  While he found the investigation process difficult, Mr Kilner said he had recovered from that setback and would like to return to work in the future.  He expected to be able to return in September 2018 or, at the latest, by the end of Term 4.

46      The Director General did not cross-examine Mr Kilner.

Preparedness to return to work

47      At the commencement of the hearing before the Commission on 25 July 2018, the learned Commissioner asked the SSTU’s counsel, in turning to the question of remedy, should they be successful in the claim that the retirement was unfair, whether Mr Kilner was now able to go back to work.  In response, counsel indicated that the annoyance Mr Kilner had experienced at the disciplinary process ‘is not a medical condition or not of such gravity that it would affect the practicability of reinstatement or redeployment’ (ts 3).  Counsel later said that ‘the upset with Standards and Integrity process’ might be why Mr Kilner does not want to return to Busselton SHS at this time but that ‘is not a reflection upon medical evidence of his fitness to return to work’ (ts 38).  When the learned Commissioner put to counsel that Mr Kilner’s evidence was that he would not return to work until ‘… September, at the latest by the end of Term 4 and you’re saying it’s not medically related so all I can interpret from that is he’s refusing to return to work because he’s annoyed about the Standards and Integrity process’, counsel replied ‘And that may be the case’ (ts 39).  Counsel later withdrew his submissions in relation to the Standards and Integrity process, saying he ‘exceeded [his] remit to some extent’ (ts 63).  In his witness statement, Mr Kilner says he expects he will be able to return to work in September 2018 or, at the latest, by the end of Term 4.  However, the SSTU did not at that time have a medical assessment.

Appellant’s submissions at first instance

48      The SSTU submitted that there are three broad areas of deficiency in the process applied by the Department:

1.    Sick leave

(a) That cl 41(5) of the Award, dealing with ‘Ill Health Retirement’ could not properly have been activated at the time;

(b) While Mr Kilner had sick leave available, he could access that leave to become fit for work.

2.    The medical evidence

(a) The medical evidence conclusively showed that Mr Kilner was not suffering from a medical condition at the time he was retired on the grounds of ill health.

(b) Furthermore, Dr Lai gave no opinion about retirement on the grounds of ill health.

(c)  The Department progressively misconstrued the evidence in order to reconstruct it to support retirement on the grounds of ill health.

(d) Whether Dr Lai’s medical advice was independent medical advice for the purposes of cl 45.

3. Alternative work

a)      The Department erroneously assessed Mr Kilner against his substantive position in his location at Busselton SHS, whereas the test ought to have been against his position generally as a teacher.

b)     The Department ought to have considered alternative work options and, specifically, redeployment to another location.

49      The SSTU said that cl 41(5) of the Award is comprehensive, it covers the field.  Therefore, non‑compliance with the provision renders the retirement unlawful.  Even if it was lawful, the retirement was unfair.

The respondent’s case at first instance

50      The Director General submitted that Mr Kilner was not fit to perform his duties and would not become so for the foreseeable future.

51      The respondent called evidence from Belinda Claire Airey.  Ms Airey’s evidence-in-chief consisted of a recitation of the documentary history of Mr Kilner’s employment and the retirement on the grounds of ill health process.  Ms Airey had had no involvement in the process or the decision regarding the termination of Mr Kilner’s employment.  She seems simply to have collated the documents.

52      In addition to the documents attached to Ms Airey’s witness statement is Exhibit 3.  This is a memorandum or briefing note, dated 14 February 2018 from John Heyward, Principal Consultant Injury Management, Employee Support Bureau of the Department to the decision-maker in the decision to retire Mr Kilner, Mr Damien Stewart.  According to Ms Airey, and consistently with references in the briefing note to two attachments, the only material before Mr Stewart was this briefing note, Dr Lai’s ‘Update’ report of 20 December 2017 and Mr Kilner’s email response to Mr Stewart dated 29 January 2018.  It did not attach either of Dr Lai’s reports of 5 September or 6 December 2017.

53      Mr Heyward’s briefing note says:

‘MR WILLIAM JOHN KILNER (E0355996) RETIREMENT ON THE GROUNDS OF ILL HEALTH

RECOMMENDATION

Based on the below information, it is recommended that you terminate Mr William Kilner’s employment with the Department on the grounds of ill health.

BACKGROUND

Mr William John Kilner is a Mathematics Teacher at Busselton Senior High School (Busselton SHS) where he has worked for the last 30 years.

Mr Kilner was referred to the Occupational Physician in June 2016 due to concerns surrounding his mental health and wellbeing.  Mr Kilner has been absent from work due to illness since 24 April 2017.  Mr Kilner has a history with the Employee Support Bureau including a declined claim for alleged stress in 2013 and long standing difficulty managing student behaviour.  Prior to the commencement of his sick leave in Term One, 2017 there had been an incident reported to Standards & Integrity involving violent behaviour towards a student.

Mr Kilner attended an initial appointment with Dr Roger Lai, Occupational Physician on 5 September 2017.  Mr Kilner reported he had taken time off work due to a combination of work (difficult student behaviour) and non-work factors and at that time could not ever see himself returning to Busselton SSH.  He had 321 days of personal leave accrued.  Dr Lai noted a diagnosis of Anxiety Disorder, confirmed he was receiving adequate treatment and support and was medically unfit for teaching.

Mr Kilner was delivered the allegation letter from Standards & Integrity (with medical endorsement) on 8 September 2017 and later in the year the finding and penalty which he is reportedly in the process of appealing.  The penalty was the deduction of two days’ pay and the requirement to attend Professional Development on appropriate restraints for students.

A further fitness for work assessment was attended on 6 December 2017 at which time Dr Lai reported Mr Kilner’s treating Psychologist and General Practitioner advised him not to return to work for mental health reasons relating to receiving the outcome of the Standards & Integrity investigation.  Dr Lai deemed it to be for non-medical reasons that Mr Kilner was not at work and commented he was not in a good frame of mine to teach independently and effectively.  It was recommended he remain off work until the Standards & Integrity process was finalised and correspondence sent to his treating doctors seeking advice on future return to work prognosis.

Dr Lai issued a Supplementary Report on 20 December 2017 after receiving return correspondence from Mr Kilner’s treating Clinical Psychologist and treating General Practitioner.  Dr Lai’s medical opinion was that Mr Kilner was unlikely to return to work at Busselton SSH and had a permanent incapacity for his substantive position (Attachment 1).

The attached letter was sent to Mr Kilner on 22 January 2017 advising him of the recommendation for retirement on the grounds of ill health.  Mr Kilner responded to this letter via email on 31 January 2018, advising that he did not intend to voluntarily retire.  Mr Kilner did not provide any further medical information (letter and response enclosed herewith and marked as (Attachment 2).

EMPLOYEE SUPPORT BUREAU COMMENT

Mr Kilner has been deemed medically unfit for his substantive role at Busselton SHS and medical retirement is recommended.’

Commissioner’s Reasons for decision

54      The Reasons for decision set out that Mr Stewart’s letter of 22 February 2018 informed Mr Kilner that his employment would be coming to an end because ‘your current medical condition [means] you are unable to fulfil the duties and responsibilities associated with your substantive position as a teacher and there is no prospect of you regaining fitness to work as a teacher for the foreseeable future.’

55      The Commissioner noted that Mr Stewart was acting upon a recommendation contained in a briefing note dated 14 February 2018, set out above. 

56      The learned Commissioner then quoted from the briefing note that ‘Mr Kilner has been deemed medically unfit for his substantive role at Busselton Senior High School and medical retirement is recommended.’  The Commissioner then noted that ‘[t]he key document before the decision‑maker was the ‘supplementary’ report of Dr Lai dated 20 December 2017’, and the terms of the letter are produced in full.

57      The learned Commissioner then noted that ‘the key opinion expressed by Dr Lai in this report is that if the applicant’s member returned to work at Busselton Senior High School there is a risk of further stress leave and that this was likely to be the situation for the foreseeable future.’

58      He said that ‘Dr Lai seems to then say by the use of the ‘ie’, that this sentence may be accurately rephrased as ‘Mr Kilner has permanent incapacity for his substantive position’.

59      The learned Commissioner then set out a series of responses that, in his view, a reasonable person or reasonable reader would make.  He also referred to this reasonable reader as being in particular a reader with the heavy responsibility of deciding a person’s employment future.  This reasonable reader would:

• wonder how a ‘significant risk of further stress leave for the foreseeable future’ if a person resumes working in a position may be accurately rephrased as a ‘permanent incapacity’ to work in that position;
• want more information on what Dr Lai means when he says that one equals the other.

60      The desire of the reasonable reader for that explanation would, in his view, be added to by what follows in Dr Lai’s report.  The learned Commissioner then noted that Dr Lai set out the bases for the opinion and says that he ‘would expect that this would squarely address the issue of “permanent incapacity” in the medical context.’  He then recorded the bases Dr Lai wrote as grounding his belief:

1. the long history of the applicant’s member’s unresolved concerns with student behaviour;
2. the lack of change following the applicant’s member having had an extended period of time off work;
3. the ongoing S&I process; and
4. the prognostic information from his treatment providers, which he described as ‘pretty short and lacking in essential detail’.

61      The learned Commissioner then set out four thoughts he believed a reasonable reader would have had in their mind on reading Dr Lai’s comments.  Each was a question requiring further information.  He noted that the reasonable reader would have noted that in the other material provided with the briefing note was Mr Kilner’s email received on 31 January 2018 in which he wrote that he did not see himself returning to work until his challenge to the disciplinary process had been completed and that his ‘progress to recovery has been severely hampered by the Standards Integrity charge’.

62      The learned Commissioner then postulated that the reasonable reader would have wondered, especially given Dr Lai’s report, whether there were medical reasons for Mr Kilner not having ‘capacity’ to work or whether something else was going on, whether Mr Kilner’s ‘permanent incapacity’ to return to work was a medical incapacity or not.  He then said that in such circumstances, the briefing note and its attachments would have raised more questions than given answers, and the reasonable reader would have sought more comprehensive information.  He said that ‘the reasonable decision-maker would have insisted on reading the other medical reports by Dr Lai.  If he had done so, he would have noted that Dr Lai’s report of 5 September 2017 had been overtaken, noting that the summary of the report in the briefing note is a poor one.

63      In particular, the learned Commissioner noted, ‘the summary’s conclusion that the report was to the effect that [Mr Kilner] “was medically unfit for teaching” ignores that was the “current” opinion of Dr Lai expressed some months before and that, by way of much better context, Dr Lai had said [Mr Kilner] was “substantially improved from three months ago and continues to improve”, and that he was only “mildly anxious” and that his anxiety, which related only to “certain students” was expected to “resolve”.  It also omits the key note that ‘Mr Kilner has previously recovered from similar episodes of anxiety’.

64      The learned Commissioner then noted that the reasonable reader would wonder about whether Mr Kilner had continued to improve as predicted and what his current status was, and its impact on his work. 

65      He then summarised the 6 December 2017 report’s substance, including that Dr Lai expressed ‘the opinion that there was no medical reason why [Mr Kilner] could not return to work’.

66      He notes that properly read and understood, the report would have lead the decision-maker to realise that the materials ‘fell well short of what is required to bring a person’s employment to an end on medical grounds’ (emphasis in the original decision), and that they clearly raise the possibility that non-medical issues were significant.

67      The learned Commissioner concluded that had all the materials been provided, the reasonable decision-maker ‘could not possibly have come to the conclusion that Mr Kilner was unable to work due to ill health’.

68      He also said that no store ought to have been placed on Mr Kilner’s email of 31 January 2018, that it was a self-assessment of his health, and was ‘neither reliable nor relevant’.

69      The learned Commissioner found that it was not necessary to deal with the issue of an alleged breach of the Award.  He found the dismissal on the grounds of ill health was unfair.

Remedy

70      The learned Commissioner considered that reinstatement was not practicable, taking account of Mr Kilner’s wish not to return to Busselton SHS and of the respondent not wishing him to return there.  He said it would be a rare case where the Commission would disagree with both parties where they say it is impracticable to reinstate and said that this was not that rare case.

71      He then turned to the issue of an order that Mr Kilner be employed in an available and suitable alternative position and found that ‘such a placement would be impracticable’.

72      He noted that the SSTU had been successful in its case that there was no proper basis for the respondent to have concluded that Mr Kilner could not return to work due to ill health because there was no evidence that at the time he was suffering from ill health. 

73      He concluded that Mr Kilner’s reason for not going to work was unrelated to his health and that this was because of a reaction to the disciplinary process.  This was not a medical reaction but an emotional one, ‘perhaps exacerbated by the long history of [Mr Kilner] raising concerns about student behaviour’ at the school.   He noted that it must have been galling to Mr Kilner that he was being disciplined for his conduct towards students when he had been raising concerns about their conduct.

74      The learned Commissioner also noted that in his evidence, Mr Kilner said he had ‘recovered’ from whatever effect the disciplinary process had on him but he could still not return to work.  He concluded that Mr Kilner had ‘a dramatic, exaggerated and long-term, but non-medical, reaction to the disciplinary proceedings’, and that this was the ‘most significant reason’ for Mr Kilner ‘not working for an extended period, and for not, even today, being ready to return to work’.  This is at the time of the hearing on 25 July 2018.

75      The learned Commissioner said he was ‘left with the inescapable conclusion’ that Mr Kilner ‘reacted in an abnormal way to the start of the disciplinary process and that the abnormal reaction was dramatic and sustained.  No employer ought to be ordered to re-employ someone whose reaction to a disciplinary process is so dramatic and sustained’.  He said that it was impracticable for any employment relationship to be re-established by the Commission against such a background.  He then proceeded to consider compensation.

Compensation

76      The Commissioner concluded that there was no safe basis to assume other than that Mr Kilner would have continued in employment beyond six months from the date of termination of employment, and that ‘he ought to be awarded six months of compensation’.  However, he noted that Mr Kilner had not attempted to mitigate his loss.  Acknowledging that it involved some speculation on his part, the Commissioner then considered that had an attempt been made by Mr Kilner to find work, or obtain money through, for example, Newstart, he would have earned or received money equivalent to one month of his remuneration in the six months following his dismissal.  He ordered the respondent to pay Mr Kilner 20 weeks’ salary.

Appeal FBA 11 of 2018

77      The SSTU abandoned grounds 2 and 3 of its appeal.  This leaves grounds 1, 4 and 5.  They are:  

Ground 1

1. The learned Commissioner erred in fact and law in concluding at paragraphs [59] to [65] of the reasons for decision that:

1. it was open for him to conclude that Mr Kilner was not going to work for reasons unrelated to his health;

2. Mr Kilner was not going to work for reasons unrelated to his health;

by either mistaking the facts or failing to consider the evidence as to the reasons why Mr Kilner was not attending work.

Particulars

1.1               The learned Commissioner was correct to find at paragraph [13] of the reasons for decision that the significant risk of Mr Kilner taking stress leave in the future, as raised in Dr Lai’s 20 December 2017 report, did not necessarily mean that Mr Kilner had a permanent incapacity to perform his substantive role.  It does not follow, however, that Mr Kilner was absent from work for reasons that were not associated with his health.

1.2               Dr Lai’s report dated 20 December 2017 made it plain that the reason why Mr Kilner had not returned to work was because he was stressed.  Stress was clearly a matter related to Mr Kilner’s health.

1.3               The evidence was that Mr Kilner was medically certified unfit to work as a teacher at Busselton Senior High School but may be fit to work at an alternative school or location.

1.4               There was no evidence that the employer had considered whether there existed opportunities for Mr Kilner to work at an alternative school or location, nor that it had offered Mr Kilner such option.

Ground 4

4. The learned Commissioner erred in law in finding at paragraph [66] of the Reasons for Decision that Mr Kilner’s re-employment was impracticable by having regard at [60] to [65] of the reasons for decision to irrelevant considerations, namely, Mr Kilner’s reaction to a separate Standards and Integrity process.

Ground 5

5. The learned Commissioner erred in law and fact, specifically by mistaking the facts or failing to consider a relevant consideration, in finding at paragraph [65] of the reasons for decision that Mr Kilner’s reaction to the disciplinary process was abnormal.

Particulars

5.1               Mr Kilner’s unchallenged evidence was:

• On 16 March 2017, Mr Kilner was involved in an incident at Busselton Senior High School where he had to physically restrain a student.

• On 29 March 2017, Mr Kilner was involved in another incident where had been verbally abused and threatened by a different student.

• Between 3 April 2017 and 5 April 2017, Mr Kilner was off on sick leave due to feeling anxious and unwell.

• On 6 April 2018, Mr Kilner returned to work, but continued to feel anxious and unwell.

• On or around 13 April 2017, Dr Buckeridge diagnosed Mr Kilner as having Post Traumatic Stress Disorder.

• On or around 15 April 2017, Mr Kilner went off on sick leave due to his mental health issues.  He had been certified as unfit for work by his doctor.  Mr Kilner remained off work for the remained of his employment.

• On 6 September 2018, Busselton Senior High School Principal, Mr Dainon Couzic informed Mr Kilner that Mr Couzic had received a discipline letter from the Department in relation to the 16 March 2017 incident, and that he had waited 5 months to tell Mr Kilner about that letter because he was worried about Mr Kilner’s mental health.

5.2               Given that unchallenged evidence, it was not open for the learned Commissioner to find that Mr Kilner had reacted in an abnormal way to the start of the disciplinary process.  Mr Kilner did not become aware of the start of the disciplinary process until some 5 months after it had started (during which time, Mr Kilner was already off on sick leave).

5.3                In relation to the outcome of the disciplinary outcome, Dr Lai’s medical opinion dated 6 December 2017 stated that Mr Kilner’s reaction to the S&I outcome fell within a normal response to that kind of event, and that it was understandable that Mr Kilner was not in a good frame of mind to teach independently and effectively.

Appeal FBA 12 of 2018

Extension of time for FBA 12 of 2018

78      An appeal to the Full Bench is to be instituted within 21 days of the date of the decision appealed against.  To be within time, any appeal was to have been lodged by Thursday, 20 September 2018.  The appeal in FBA 11 of 2018 was lodged on the last day, 20 September 2018.  The appeal in FBA 12 of 2018 was lodged 12 days after the due date.

79      The SSTU does not object to FBA 12 of 2018 being received out of time.

80      The Director General does not press ground 1.  In respect of ground 2, the Director General asserts that the learned Commissioner erred in fact and law in finding that Mr Kilner suffered compensable loss or injury.  This ground is:

Ground 2

2. The learned Commissioner erred in fact and law in finding that Mr Kilner suffered compensable loss or injury.

Particulars

(a)    The Commission can only order compensation for injury or loss:  Industrial Relations Act 1979 (WA), s 23A(6).

(b)    The applicant provided no evidence of Mr Kilner having suffered any injury as a result of the dismissal.

(c)    The only loss that Mr Kilner could have suffered was the economic loss of being deprived of salary or entitlements if he had remained employed with the appellant.

(d)    The learned Commissioner found that, at the time of his dismissal, Mr Kilner was not going to work for reasons unrelated to his health.

(e)    Given Mr Kilner was not going to work for reasons unrelated to his health, he was not entitled to access paid sick leave.

(f)     Given that Mr Kilner was not ready, willing, and able, to work at the time of his dismissal, and he otherwise could not lawfully access paid sick leave, Mr Kilner was not entitled to any salary or benefits if he had not been dismissed.

(g)    The applicant was therefore unable to substantiate that Mr Kilner suffered any economic loss caused by the dismissal.

81      The Full Bench has power to grant an extension of time (Director General of Education v United Voice [2015] WASCA 195 [17]).   The principles applicable are set out in John Lane v Aussie Online Limited (ACN 004 160 929) (2002) 82 WAIG 430 at [9] per Sharkey P, with whom Coleman CC and Gregor C agreed.

82      In this case, as in Jacob Gilmore v Cecil Bros, FDR Pty Ltd (1996) 76 WAIG 4434, the SSTU filed its appeal, FBA 11 of 2018, on the last day, and this provided an explanation of why a cross appeal was then filed out of time.

83      The Director General filed FBA 12 of 2018 less than 14 days later, and well before the hearing was set down.  No significant additional resources or costs would be incurred by the SSTU in dealing with the cross appeal.

84      Taking account of the principles to be applied, and noting that the SSTU does not object to the appeal being received out of time, we would allow the necessary extension of time.

Consideration

85      In Michael v Director General, Department of Education and Training [2009] WAIRC 01180; (2009) 89 WAIG 2266 from [140] – [143], Ritter AP sets out the well-established principles which apply in the Full Bench considering an appeal against a discretionary decision by reference in particular to House v The King (1936) 55 CLR 499 and Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194:

‘The relevant principles were set out in the joint reasons of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505 as follows:

‘The manner in which an appeal against an exercise of discretion should be determined is governed by established principles.  It is not enough that the judges compositing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course.  It must appear that some error has been made in exercising the discretion.  If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.  It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.  In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.’

As there stated, an appeal against a discretionary decision cannot be allowed simply because the appellate court would not have made the same decision.  The reason why this is so was explained in the joint reasons of Gleeson CJ, Gaudron and Hayne JJ in Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19]-[21].  At [19] their Honours explained by reference to the reasons of Gaudron J in Jago v District Court (NSW) (1989) 168 CLR 23 at 76, that a discretionary decision results from a ‘decision-making process in which ‘no one [consideration] and no combination of [considerations] is necessarily determinative of the result’’.  Instead ‘the decision-maker is allowed some latitude as to the choice of the decision to be made’.  At [21] their Honours said that because ‘a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process’.  Their Honours then quoted part of the passage of House v King which I have quoted above.

Similarly, Kirby J in Coal and Allied at [72] said that in considering appeals against discretionary decisions, the appellate body is to proceed with ‘caution and restraint’.  His Honour said this is ‘because of the primary assignment of decision-making to a specific repository of the power and the fact that minds can so readily differ over most discretionary or similar questions.  It is rare that there will only be one admissible point of view’.  (See also Norbis v Norbis (1986) 161 CLR 513 per Mason and Deane JJ at 518 and Wilson and Dawson JJ at 535).

These principles of appellate restraint have particular significance when it is argued, as here, that a court at first instance placed insufficient weight on a particular consideration or particular evidence.  This was considered by Stephen J in Gronow v Gronow (1979) 144 CLR 513 at 519.  There, his Honour explained that although ‘error in the proper weight to be given to particular matters may justify reversal on appeal, … disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge’.  This is because, in considering an appeal against a discretionary decision it is ‘well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion’, and that when ‘no error of law or mistake of fact is present, to arrive a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight’.  (See also Aickin J at 534 and 537 and Monteleone v The Owners of the Old Soap Factory [2007] WASCA 79 at [36]).

86      It is important to note that the matter was inadequately argued before the Commission at first instance.  The SSTU’s position about Mr Kilner’s health and readiness to return to work was somewhat contradictory and incomplete.  The Director General’s case was less than ideal in that her only witness knew little of the process or the decision except for what was in the documents prepared for and by the Department.  To put forward a witness simply to produce documents, and not present evidence from a person who had some direct involvement in the decision, is unhelpful.  As to several important issues, which we refer to below, regrettably the evidence at first instance was riddled with ambiguity.  This was quite unhelpful in the disposition of the matter at first instance.

87      The SSTU’s grounds of appeal are interrelated so we will deal with them together, and then deal with the Director General’s ground of appeal.  It is not our intention to traverse the parties’ arguments about distinguishing between whether Mr Kilner was suffering from a medical condition or was unfit for work.  This is for reasons which will become apparent as we deal with the material before the decision-maker on behalf of the Director General.

88      Neither party argues that the learned Commissioner’s finding that the decision to dismiss or retire Mr Kilner on the grounds of ill health was unfair and was in error.  However, the issues on appeal arise from the conclusions about Mr Kilner’s state of health, the reason for Mr Kilner not returning to work and about the remedy for the unfairness.

89      The learned Commissioner based those findings and conclusions largely on Dr Lai’s reports.  In September 2017, Dr Lai’s prognosis included the preamble that Mr Kilner had ‘previously recovered from similar episodes of anxiety in the past (2007, 2012) and successfully resumed normal duties at Busselton …’.  He then noted ‘(h)e stated today that he does not want to ever return to work at Busselton SHS – this is obviously a negative prognostic indicator.  Nevertheless, this view may change as the anxiety resolves as I expect it will over the next few months.’

90      Dr Lai said he believed that Mr Kilner was unlikely to regain fitness for substantive teaching before the end of the year.  He was to review the situation in December 2017.

91      In his report of 6 December 2017, Dr Lai reported that Mr Kilner continued to improve since the last review.  However, he said:

1. Mr Kilner received the outcome of the Standards and Integrity investigation and ‘(t)his made him angry…’.
2. ‘He said his psychologist and doctor have advised him not to return to work for mental health reasons’.
3. During their discussion, Mr Kilner presented in ‘normal mental state’ but ‘became a little agitated when talking about the Standards and Integrity process but it was confined to that discussion.’
4. That Mr Kilner did not have a medical condition that may be affecting his ability to work.  He said ‘not working unrelated to medical condition’, that he had ‘recently received the outcome of the Standards and Integrity investigation and he is angry about it’.
5. He referred to ‘identified non-medical matters’.
6. In respect of a prognosis, Dr Lai says that ‘the prospect of a successful return to work at Busselton SHS appears poor at this time and I do not anticipate that he will willingly return to work Term 1, 2018’.

92      However, Dr Lai then said he was obtaining further medical information from treatment providers.  He did so and reported this to the respondent.  Both Dr Mowat, Mr Kilner’s psychologist, and Dr Buckeridge, his general practitioner, provided reports to Dr Lai which stated that Mr Kilner was unlikely ‘to regain medical capacity to return to Busselton Senior High School in the foreseeable future’ (Dr Mowat) and ‘that Bill Kilner will be unable to attend work from 15 December 2017 to 1 July 2017 (sic) inclusive due to a medical condition’ (Dr Buckeridge).

93      Dr Lai then provided a further report dated 20 December 2017, containing this information.  He concluded by saying that:

In my opinion, it is unlikely that Mr Kilner will be able to return to work at Busselton Senior High School without significant risk of further stress leave for the foreseeable future, ie, permanent incapacity for his substantive position.  This is based on the long history of his unresolved concerns with student behaviours, the lack of change following an extended period of time off work, the ongoing Standards and Integrity process and the prognostic information from his treatment providers.

94      Two things are clear.  Firstly, there is conflict as well as a lack of clarity in the medical opinions.  

95      Dr Lai raised the prospect of Mr Kilner being not prepared to return to Busselton SHS because he was angry about the Standards and Integrity process.  However, the main issue was about the prospect of future stress (leave).  He reported that both Dr Mowat and Dr Buckeridge reported Mr Kilner having a medical condition.

96      Secondly, in this context, the learned Commissioner was correct to conclude that the briefing note, which did not comprehensively report, nor did it attach all the necessary information, would have raised more questions than given answers, and fell well short of what is required for medical retirement.  However, the answer to that issue was for the decision-maker to have made further enquiries.  The finding of unfairness in the dismissal is, in our respectful view, correct.  However, what follows in the learned Commissioner’s reasoning in terms of the reason for Mr Kilner’s absence is erroneous and a perhaps premature conclusion about what was keeping Mr Kilner from returning to work.

97      We are of the view that the learned Commission erred in drawing his own conclusion that ‘had all the material been provided to a reasonable decision-maker, that decision-maker could not possibly have come to the conclusion that (Mr Kilner) was unable to work due to ill health’.  That conclusion ignores Dr Mowat’s and Dr Buckeridge’s, albeit brief, reports.

98      The learned Commissioner concluded that Mr Kilner’s reaction to the disciplinary process was abnormal, that it was dramatic and sustained.  It was clear from Dr Lai’s report that Mr Kilner was angry about the outcome of the Standards and Integrity process.  However, Mr Kilner told him that his ‘psychologist and doctor have advised him not to return to work for mental health reasons’.  While he described Mr Kilner as being ‘well presented, in a good mood, cheerful …  ie, normal mental state’, Dr Lai described Mr Kilner becoming a little agitated when talking about the Standards and Integrity process.  At point 2 under the heading of Medical opinion, after saying Mr Kilner had been ‘angry over the last week since receiving the S&I outcome and is now working through the appeal process’, he said that as this was a ‘recent event his current reaction falls within a “normal response”’.

99      Further, Mr Kilner had complained about student behaviour for some time, had been abused twice before taking an extensive period of leave for PTSD and anxiety disorder.  His response to being faced with a finding that he was at fault and had breached discipline in his conduct towards one of those students in that context was, in our view, and it would appear, Dr Lai’s view, a normal response.

100   The medical evidence leads inescapably to a conclusion that Mr Kilner had suffered a period of ill health due to anxiety and stress.  That stress arose from the circumstances he had encountered at Busselton SHS.  His condition had improved but he was still suffering from a medical condition and was unfit to return to the particular workplace where the cause of his medical condition arose.  The improvement had been compromised by the disciplinary finding.  It took him back to where he was in March.  

101   This finding related directly to the circumstances causing Mr Kilner’s ill health in the first place, his response to student behaviour, which behaviour was one of the causes of his stress.

102   At the time the respondent was considering and then decided to retire him on the grounds of ill health, Mr Kilner was improving, but the Standards and Integrity process hampered that.  His doctor said he should be away from work for another six months.  The medical evidence, contradictory as it is, makes clear that Mr Kilner ought not return to Busselton SHS.

103   Therefore, in our view, the Commissioner’s conclusion that it was open to him to find that Mr Kilner was not going to work for reasons unrelated to his health was in error. 

104   This leads on to grounds 4 and 5, and in our respectful view, an error in the conclusion that re‑employment was impracticable because of an abnormal response by Mr Kilner to the Standards and Integrity process.

105   The learned Commissioner found, based on his acceptance of Dr Lai’s report of 6 December 2017, that Mr Kilner was unable to work for some reason other than ill health.  He said that he was left with the inescapable conclusion that Mr Kilner reacted in an abnormal way to the start of the disciplinary process and that abnormal reaction was dramatic and sustained’.  He concluded that Mr Kilner’s reason for not working was unreasonable, an emotional one, not a medical one.  According to the learned Commissioner, it was ‘dramatic, exaggerated and long-term, but non-medical reaction to the disciplinary proceedings’.  This was not a conclusion open to the Commissioner on the evidence.  Dr Lai said in his report of 6 December 2017 that Mr Kilner’s reaction to the Standards and Integrity report fell within ‘a normal response’.  There was no other medical evidence before the Commission.

106   Dr Lai also reported that Mr Kilner told him that his psychologist and doctor had advised Mr Kilner not to return to work for mental health reasons.  This is consistent with Dr Buckeridge’s and Dr Mowat’s reports subsequently provided to Dr Lai that Mr Kilner was unlikely to regain medical capacity to return to Busselton SHS in the foreseeable future, and that he had a medical condition.  In that context, Mr Kilner did not see himself returning to work until there was a satisfactory resolution of the Standards and Integrity process.

107   Therefore, the evidence before the employer, while contradictory in some aspects, suggested strongly that Mr Kilner was suffering stress and anxiety.  This would be resolved or improved subject to the outcome of the Standards and Integrity process challenge; that Mr Kilner’s response was, in fact, normal.

108   In any event, we find that the conclusion that Mr Kilner was not suffering a medical condition but an emotional one is not supportable.  There was no medical evidence to enable a conclusion, nor any explanation in the reasons for decision, that an emotional response is unrelated to a medical or health issue.

109   In all of these circumstances, we conclude that grounds 1, 4 and 5 of FBA 11 of 2018, are made out.

110   The question then arises as to how the appeal ought to be disposed of.  Section 49(5)(b) of the Act provides for the Full Bench to vary the decision in such a manner as it considers appropriate.  This is subject to subsection (6a) which provides it is not to remit a case to the Commission under subsection (5)(b) unless it considers that it is unable to make its own decision on the merits of the case because of lack of evidence or for other good reason.

111   In our respectful view, the Full Bench is not able to make its own decision on the merits of the case because of the lack of evidence about Mr Kilner’s current state of health and the practicability of reinstatement or re-employment.  The matter ought to be remitted for further hearing and determination based on the issues we have dealt with above. 

112   The Memorandum required the Commission to consider ‘the practicability of Mr Kilner’s reinstatement or re-employment as a teacher at a different school’.  The orders sought by the SSTU included ‘[a]n order that the respondent redeploy Mr Kilner to a school other than Busselton Senior High School in consultation with the applicant and Mr Kilner’.  The SSTU made it clear in its submissions that it sought reinstatement or redeployment to a school other than Busselton SHS (ts 4, 40, 44 – 48 and 63).  It discussed this as being in some form of graduated return to work which the learned Commissioner noted would be ‘like a workers’ compensation order’ (ts 45).  The learned Commissioner said that the prospect of issuing an order requiring the respondent to reinstate Mr Kilner by transferring him to another school would not hold him up for long if he thought it was the appropriate order to make, noting that the Director General is ‘a massive employer’.  He expressed concern though at whether Mr Kilner was ready and willing to return to work.

113   The learned Commissioner and Mr Scaife for the SSTU had a brief discussion about an order in the nature of a graduated return to work and whether that was available to the Commission, and whether the Commission would be exercising ‘general unfair dismissal powers’ (ts 45).  Mr Scaife noted that an order requiring the parties to engage in a return to work or redeployment process may ‘not be an order that the Commission is used to making in these cases that is at least one of the reasons why this application was brought under section 44 … was to enable that to be done’ (ts 47), that such an order is ‘plainly’ within the Commission’s powers ‘under s 44 if that is what it takes to resolve the dispute in a fair and lawful manner’ (ts 45).

114   Therefore, the issue of the Director General not offering Mr Kilner alternative work, of redeploying him to teach at a school other than Busselton SHS, was squarely before the Commission.  

115   In BHP Billiton Iron Ore Pty Ltd v The Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch [2006] WAIRC 03908; (2006) 86 WAIG 642 (BHP v TWU), Ritter AP at [75] – [79] made obiter comment to the effect that an order relating to a claim of unfair dismissal determined under s 44(9) of the Act could be within jurisdiction if it grants relief or redress which is not of the type that could be made under s 23A of the Act.  This is because such an order was within the scope of, or explicitly part of, the dispute remaining for determining under s 44(9) following the conclusion of a conference.

116   In Public Transport Authority of Western Australia v The Australian Rail, Tram and Bus Industry Union of Employees, West Australia Branch (Merlo) [2017] WAIRC 00452; (2017) 97 WAIG 1329, Smith AP, with whom Scott CC agreed, examined a matter of a remedy sought which went beyond those in s 23A, of demotion upon re-employment of the dismissed employee.  Her Honour referred to Ritter AP’s observation in BHP v TWU.  She said:

143. ‘I reject the argument that it is not necessary or appropriate in this matter to determine whether some of those observations are correct.  The point, whilst not raised at first instance, is squarely raised by the PTA in ground 5 and both parties have filed comprehensive submissions addressing the point.  In my opinion, his Honour’s observations in the first sentence at [79] are clearly correct.’

…

148. ‘Having made a finding that dismissal was not a proportionate penalty (leaving aside the disposition of this appeal raised in ground 4 of the appeal), and then determining a demotion was a proportionate and appropriate penalty, these findings were findings that were squarely part of or put another way explicitly part of the industrial matter referred for hearing and determination pursuant to s 44(9) of the Act.  Consequently, by the power conferred in s 44(9) to hear and determine a dispute, it was open to the learned Acting Senior Commissioner to make the order reinstating Mr Merlo to a position of transit officer, level 3, and to make the order for loss of remuneration assessed at the rate of pay, entitlements and benefits applicable to the position of transit officer, level 3.’

117   Matthews C, the other member of the Full Bench in that matter, agreed that the Commission ‘may, within jurisdiction, make an order that was ‘explicitly part of the dispute remaining under s 44(9) of the Act’.

118   Further, s 23A provides for a number of remedies where reinstatement is impracticable.  Firstly, s 23A(3) empowers the Commission to order the employer to reinstate the employee to the employee’s former position on conditions at least as favourable as the conditions on which the employee was employed immediately before dismissal.  Alternatively, if such reinstatement would be impracticable, then s 23A(4) empowers the Commission to order re-employment in another position the Commission considers the employer has available and is suitable.  This involves a two-step process which would enable the Commission to consider the question of re‑employment of Mr Kilner at a school other than Busselton SHS.  If reinstatement or re‑employment would be impracticable, then the Commission may order compensation for loss or injury caused by the dismissal (s 23A(6)).

119   Therefore, the learned Commissioner, while not being restricted to the relief or redress set out in s 23A of the Act, is obliged to address and determine the issue of Mr Kilner being offered alternative work, that the respondent re-employ Mr Kilner at a school other than Busselton SHS.  As Kenneth Martin J said in The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch v Public Transport Authority of Western Australia [2017] WASCA 86; (2017) 97 WAIG 431 at [148], this will require consideration of all of the circumstances, a ‘bespoken factual evaluation’.  The issue of practicability requires a common-sense and objective assessment, not simply of the preferences of the parties or of inconvenience or difficulty.  The parties might each have their reasons for their respective preference, but these reasons require objective assessment, see also Perkins v Grace Worldwide (Aust) Pty Ltd (1997) 72 IR 186 at 189 – 191.

120   Therefore, in our view, the proper disposition of this matter requires that the decision be suspended and the matter remitted to the Commission to hear and determine according to law.  This requires consideration of Mr Kilner’s capacity to return to work, the practicability of being reinstated or alternatively re-employed at a school other than Busselton SHS.

FBA 12 of 2018

121   The Director General argues that the Commissioner erred in his reasoning in the calculation of compensation.  This ground only requires consideration if we are wrong in respect of the SSTU’s appeal.

122   The learned Commissioner noted that the respondent did not argue that employment could have fairly been brought to an end within six months, and ‘[m]y start point then is that the applicant ought to be awarded six months of remuneration by way of compensation’.

123   The Commissioner noted that Mr Kilner made no efforts to mitigate his loss.  He went on to say that ‘the respondent should not be made to fully fund that failure’.  The learned Commissioner then acknowledged that his next consideration is based on speculation, that if he had attempted to find work or other income, Mr Kilner would have earned the equivalent of one month’s remuneration.  He deducted this from six months’ pay and ordered that the respondent pay him 20 weeks’ pay. 

124   The Director General’s appeal is based on a submission that the learned Commissioner erred in assuming that if he had remained in employment, Mr Kilner would have been paid salary.

125   The Director General says that in light of the learned Commissioner’s finding that Mr Kilner was not working for reasons unrelated to his health, it was not open to find that he would have been entitled to salary or other entitlements.  If he was not working or properly on paid leave, Mr Kilner would not have been entitled to payment.  Therefore, he was not entitled to compensation for loss caused by the dismissal.

126   Compensation is for loss or injury caused by the dismissal.  In Scicluna v Mr William Paul Brooks T/as Bayview Motel Esperance, WA [2016] WAIRC 00862; (2016) 96 WAIG 1475, Smith AP and Scott CC, with whom Emmanuel C agreed, set out the principles to be applied in considering an order of compensation for loss or injury caused by dismissal.  This decision dealt with the Commission’s powers under s 23A of the Act, if the Commission determines that the dismissal of an employee was harsh, oppressive or unfair.  Such a determination may arise on a referral under s 29(1)(b)(i) or under s 44.  Those principles of particular relevance to this matter are set out in [61] as follows: 

…

(e) The first step is to assess the total amount of compensation that can be awarded; that is the amount of the remuneration of the employee that would be payable in a period not exceeding six months (see s 23A(8) and s 23A(9) of the Act).

(f) the employee is to establish his or her loss and/or injury on the balance of probabilities.  This involves a finding of fact or mixed law and fact, as to what is the loss and injury established on the evidence:  Bogunovich [No 2] (9) (Sharkey P), (13) (Kenner C).

(g) the onus of proof of failure to mitigate rests upon the employer.  If it is established that an employee has failed to mitigate his or her loss, then it may be that there has not been a loss of remuneration caused by the dismissal.  A finding that an employee has a duty or is required to mitigate his or her loss is a misstatement of the law:  see the discussion in Sealanes (1985) Pty Ltd v Foley [2006] WAIRC 04110; (2006) WAIG 1239 [99] – [104]; applied in Curtis v Ausdrill Ltd [2006] WAIRC 05656; (2006) 86 WAIG 3133 [35] – [38] (Ritter AP and Gregor SC).

(h) Regard is also to be had to any efforts of the employer to mitigate the loss suffered by the employee as a result of the dismissal (s 23A(7)(a)).

(i) The Commission must assess the proper amount of compensation for loss and/or injury in light of all the relevant circumstances, but disregarding the cap prescribed by s 23A(8).  If the amount is in excess of the cap, the amount to be awarded is the permissible maximum:  Bogunovich [No 2] (8) (Sharkey P).

(j) The assessment of compensation:

(i) is to be made in light of all relevant circumstances;

(ii) must not be arbitrary;

(iii) must have regard to whether the employee has taken reasonable steps to find alternative employment:  Curtis [36] – [38], [43] (Ritter AP and Gregor SC);

(iv) is a determination pursuant to s 26(1)(a) made according to equity, good conscience and the substantial merits of the case, without regard to technicalities and legal forms.  This legislative direction does not enable the Commission to determine the matter without resort to established legal principles, where those principles are established.  However, as Beech CC observed in Curtis, when considering an award of compensation made pursuant to s 23A [64]:

The Commission should be slow to fetter its own wide discretion under s 26(1) to produce an outcome which is just and equitable and not simply lawful.  It is not irrelevant to note that the power given to the Commission is to order compensation, not damages; what might be a correct outcome in a court of law may nevertheless be unacceptable according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.  There may well be good reason for the inclusion of s 23A(7)(c) if it thereby allows the Commission to have regard to any other matter believed to be crucial to achieving a fair go all round to be taken into account in the overall assessment of any compensation ordered in lieu of reinstatement (Sprigg v Paul’s Licensed Festival Supermarket (1998) 88 IR 21 at 31).

…

(m) When deciding questions of future loss, assistance can be derived from Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 in which it was held by Deane, Gaudron and McHugh JJ that a court must assess the degree of probability that an event would have occurred or might occur, and adjust its award to reflect the degree of probability.  Unless the chance is so low as to be regarded as speculative or so high as to be practically certain, the chance is to be taken into account in assessing compensation:  Bogunovich [No 2] (8) (Sharkey P).

(n) How long an employee would have remained employed by the employer is a matter that is relevant to an assessment of loss causally connected to an unfair dismissal.  In particular, it may be open to find on the evidence that an unfairly dismissed employee could have been fairly dismissed by the employer at a time post the dismissal:  Bogunovich [No 2] (13) (Kenner C).  it may also be open on the evidence that an employee may have left the employer’s employment voluntarily at some point in the future following the dismissal:  Bogunovich [No 2] (13) (Kenner C).  however, there would need to be evidence capable of characterisation as more than mere speculation and that there was a real prospect of the employment being terminated fairly at some point therefore (the dismissal):  Fisher & Paykel Australia Pty Ltd [79] (Kenner C), [2] (Ritter AP).

127   On the basis of the authorities referred to above, we respectfully agree with the Director General’s submission so far as it goes.  However, in light of the evidence of Dr Mowat and Dr Buckeridge, it would be open to conclude that Mr Kilner had an ongoing entitlement to sick leave.  The evidence is clear from Dr Mowat and Dr Buckeridge that Mr Kilner was not fit to work at Busselton SHS, whereas he may have been fit to work elsewhere.  This was not assessed.  With the respondent not putting him to work at another school, Mr Kilner may have been entitled to payment of sick leave.  We would dismiss this ground of appeal.