APPEAL AGAINST THE DECISION TO TERMINATE EMPLOYMENT ON 21 DECEMBER 2020

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2021 WAIRC 00152

DELIVERED : FRIday, 4 JUNE 2021

FILE NO. : PSAB 1 OF 2021

Appellant

AND

Chief Executive, North Metropolitan Health Service

Respondent

CatchWords : Public Service Appeal Board – Discovery – Documents not relevant to what is in issue – Documents not necessary for the fair disposal of the case

Legislation : Industrial Relations Act 1979 (WA): s 27(1)(o)     

Result : Discovery application dismissed

Representation:

Appellant : Ms F Stanton (of counsel)

Respondent : Mr J Carroll (of counsel)

Cases referred to in reasons:

Australian Liquor, Hospitality and Miscellaneous Workers Union, Miscellaneous Workers Division, Western Australian Branch v The Western Australian Hotels and Hospitality Association Incorporated and Burswood Resort Hotel & others (1995) 75 WAIG 1801

Calvert v PathWest Laboratory Medicine WA [2019] WAIRC 00792

Civil Service Association of Western Australia Incorporated v Director General, Education Department of WA [2001] WAIRC 03773

Ellis v The Grand Lodge of WA of Antient Free and Accepted Masons Incorporated & others (1998) 79 WAIG 1736

Mollinger v National Jet Systems Pty Ltd (C no 5 of 1998, unreported, Dec 279/99 M Print R3130)

Sexton v Pacific National (ACT) Pty Ltd (U2002/5282, unreported, PR931440)

Reasons for Decision

1         These are the unanimous reasons of the Public Service Appeal Board (Board).

2         Professor Millward was employed by North Metropolitan Health Service (Health Service) as a clinical academic at Sir Charles Gairdner Hospital (SCGH) from about August 2003. He was dismissed on 21 December 2020 for breaches of discipline related to the overtime taken by and engagement as a contractor of another Health Service employee. Professor Millward has appealed this decision to the Board.

3         On 29 March 2021, Professor Millward filed an application for discovery, which he later amended. He now asks the Board to order that:

By 7 May 2021, the Respondent must discover and produce to the appellant any documents within the Respondent's possession, custody or control in relation to suspicions or allegations about the veracity or validity of Ms Judith Innes‑Rowe's overtime claims which were at any time between 26 November 2014 and 7 March 2019 created, received or in the possession of:

i. any employee or member of the Integrity and Ethics Unit of North Metropolitan Health Service NMHS (NMHS);

ii. any employee or member of the Executive of NMHS, including but not limited [to] Dr Robyn Lawrence when Chief Executive, or of the Executive of Sir Charles Gardiner Hospital (SCGH);

iii. all Co-Directors and all Deputy Co-directors of the Medical Specialties Division of SCGH; and

iv. all persons who had responsibilities or performed work in relation to human resource management or industrial relations at or for NMHS or SCGH.

4         Professor Millward argues that ‘the documents sought are relevant to the degree to which the Appellant should be held liable for any alleged misconduct and to matters in mitigation’. Professor Millward says the documents may demonstrate differential treatment of other employees guilty of like misconduct.

5         The Health Service says that the applicable principles in relation to discovery at the Commission are well settled and relies on Civil Service Association of Western Australia Incorporated v Director General, Education Department of WA [2001] WAIRC 03773 at [6] where Kenner C (as he was then) applied Ellis v The Grand Lodge of WA of Antient Free and Accepted Masons Incorporated & others (1998) 79 WAIG 1736, 1736-37, which applied Australian Liquor, Hospitality and Miscellaneous Workers Union, Miscellaneous Workers Division, Western Australian Branch v The Western Australian Hotels and Hospitality Association Incorporated and Burswood Resort Hotel & others (1995) 75 WAIG 1801.

6         The Health Service says the Board should dismiss the discovery application because the documents sought are not relevant to the issues to be decided. Further, even if the Board considers that the documents are relevant, any relevance is tangential at best and is outweighed by the oppressive nature of the discovery request.

Relevant principles

7         Discovery is confined to what is in issue on the pleadings.  The Board can only make an order for discovery under s 27(1)(o) of the Industrial Relations Act 1979 (WA) if it is just to do so and necessary for the fair disposal of the case.  ‘Just’ means ‘right and fair, having reasonable and adequate grounds to support it, well-founded and conformable to a standard of what is proper and right’: Australian Liquor, Hospitality and Miscellaneous Workers Union, Miscellaneous Workers Division, Western Australian Branch v The Western Australian Hotels and Hospitality Association Incorporated and Burswood Resort Hotel & others at 1805.

The allegations

8         The Board understands the two relevant allegations in question are set out in letters from the Health Service to Professor Millward dated 15 November 2019, 3 April 2020 and 6 November 2020.

Allegation One:

Between 30 April 2011 and 18 December 2018 at Perth you committed a breach of discipline contrary to section 161(d) of the Health Services Act 2016 by being negligent or careless in the performance of your functions.

Particulars

a. You are employed as a Consultant Medical Oncologist at Sir Charles Gairdner Hospital (SCGH) in Nedlands.

b.  Between 30 April 2011 and 18 December 2018, Ms Judith Innes‑Rowe was employed as a Clinical Trials Manager at the Clinical Trials Area with the Oncology Department, SCGH.

c. Ms Innes-Rowe reported to you while she was working at SCGH.

d. Between 1 July 2011 and 18 December 2018, Ms Innes‑Rowe claimed and was paid $593,614.00 in overtime.

e. Ms Innes‑Rowe was not entitled to claim overtime.

f. You received a copy of Ms Innes-Rowe’s overtime claims which was inconsistent with the approval process.

g.  You failed to apply an appropriate level of oversight by not scrutinising the overtime forms submitted by Ms Innes‑Rowe resulting in additional and unnecessary costs to the Clinical Trials Unit.

h. You failed to apply an appropriate level of oversight by not scrutinising the Payroll Certification Statements in relation to the overtime claimed by Ms Innes‑Rowe resulting in additional and unnecessary costs to the Clinical Trials Unit.

Allegation Two:

Between around 19 December 2018 and 3 June 2019 at Perth you committed a breach of discipline contrary to section 161(c) of the Health Services Act 2016 by committing an act of misconduct.

Particulars

a. You are employed as a Consultant Medical Oncologist at Sir Charles Gairdner Hospital (SCGH) in Nedlands.

b. On 19 December 2018, you approved Ms Judith Innes‑Rowe to be engaged on a contract for service through Hays Specialist Recruitment (Australia) Pty Ltd (Hays) to work at the Clinical Trials Area with the Oncology Department, SCGH.

c. Between 19 December 2018 and 2 June 2019, Ms Judith Innes‑Rowe continued to be engaged on a contract for service through Hays to work at the Clinical Trials Area with the Oncology Department, SCGH.

d. Ms Innes‑Rowe reported to you while she was working at SCGH.

e.  Prior to Ms Innes‑Rowe commencing on the Hays contract, she had been employed to work at the Clinical Trials Area with the Oncology Department, SCGH, since 12 October 1995, and performing the duties of Clinical Trials Manager at Level G-9 since 30 April 2011 under various WA Health System – HSUWA – Pacts Industrial Agreements.

f. You were aware that Ms Innes-Rowe was not entitled to claim overtime while employed at Level G-9 under the WA Health System – HSUWA – Pacts Industrial Agreements.

g. You approved pay and conditions while Ms Innes-Rowe was employed on the Hays contract that were not in accordance with the WA Health Industrial Agreement pay and conditions, which were more favourable than Ms Innes-Rowe could have achieved as an employee of North Metropolitan Health Service (NMHS), and were more detrimental to NMHS than if Ms Innes-Rowe (or any other person engaged in her role) was engaged as an employee of NMHS. By way of example, you approved Ms Innes‑Rowe to work hours of her own choosing, and you agreed that hours worked after 5:00pm would be paid at overtime rates, irrespective of what time she commenced work that day.

h. In an email dated 28 November 2017 from Ms Rebecca Wilson, Senior Payroll Officer, Health Support Services, you were made aware that as of 20 November 2017 the NMHS Authorisation Schedule had changed. From that date, overtime required approval by a Tier 3 Officer. You are not a Tier 3 Officer and, therefore, you were aware that you could not approve overtime.

i. You approved payment by NMHS to Hays, including overtime, for the services provided by Ms Innes‑Rowe, the last being on 3 June 2019 for the week ending 2 June 2019.

j.  By approving Ms Innes-Rowe’s employment through a Hays contract, you facilitated Ms Innes‑Rowe receiving overtime payments that you knew she was otherwise not entitled to claim or be paid if she continued to be employed through a WA Health System – HSUWA – Pacts Industrial Agreement.

Are the documents necessary to resolve the issues in dispute?

9         The Board understands that the two key issues we must decide in this appeal are:

1.  whether Professor Millward engaged in breaches of discipline by (broadly):

a. failing to apply appropriate oversight by failing to scrutinise overtime forms submitted by Ms Innes-Rowe and Payroll Certification Statements in relation to overtime claimed by Ms Innes-Rowe; and

b. engaging Ms Innes-Rowe as a contractor through a recruitment agency, thereby facilitating overtime payments for hours worked by Ms Innes-Rowe to which she would not have been entitled, and Professor Millward could not have approved, if Ms Innes-Rowe had been employed by the WA Health System.

2. if so, whether dismissal is a proportionate response to the conduct. The Board will need to consider whether the Health Service’s lawful right to dismiss was exercised so harshly or oppressively against Professor Millward as to amount to an abuse of that right: Calvert v PathWest Laboratory Medicine WA [2019] WAIRC 00792, [50].

10      Professor Millward must therefore persuade the Board that the documents he seeks are necessary to resolve the matters set out at [9].

Professor Millward’s submissions

11      At the heart of Professor Millward’s discovery application is the argument that the conduct of others is relevant to the question of whether his dismissal was harsh or oppressive.

Lack of knowledge about fraudulent conduct

12      Professor Millward points to his lack of knowledge of any fraudulent conduct by Ms Innes‑Rowe at the time of her resignation in late 2018.  He says that as early as November 2014, officers or employees of Health Support Services (HSS) and the Health Service knew about matters that suggested that Ms Innes‑Rowe may be making false overtime claims.  Those matters were not brought to Professor Millward’s attention. 

13      In particular, Professor Millward points to HSS’s email to Ms Innes‑Rowe on 26 November 2014 and two internal reports that recommend disciplinary action be taken against Ms Innes‑Rowe.  The first is the Preliminary Assessment dated 23 May 2018, which refers to queries about Ms Innes‑Rowe’s pay being reported to the Health Service’s Area Director, Human Resources and the Health Service’s Director of HR at Sir Charles Gairdner Hospital in March 2018.  The second is the Preliminary Assessment Decision dated 22 June 2018. Professor Millward says, and the Health Service does not dispute, that he was unaware of those reports and their content.

14      Professor Millward argues that if suspicions about the veracity of Ms Innes‑Rowe’s overtime claims as at August 2018 had been brought to his attention, he would not have engaged her any further, such that the second allegation, about Professor Millward engaging Ms Innes‑Rowe as a contractor through a recruitment agency, would not have occurred.

15      Professor Millward also points to the Further Preliminary Assessment that led to the Further Preliminary Assessment Decision by the Health Service’s Chief Executive on 18 January 2019. Professor Millward says that while Ms Innes‑Rowe was engaged as a contractor, he was unaware of any suspicions held by any HSS or Health Service staff of dishonest or fraudulent conduct by Ms Innes‑Rowe. Professor Millward argues that others could have terminated Ms Innes‑Rowe’s engagement as a contractor, including members of the Health Service Executive team or hospital executives.  They did not.

Significance of documents sought – comparable conduct and differential treatment

16      Professor Millward says that HSS employees are experts in human resources.  They had information to suggest there were issues with Ms Innes‑Rowe’s honesty.  HSS employees took no action to bring that information to Professor Millward’s attention. Further, the Health Service human resources employees had concerns about Ms Innes‑Rowe by June 2018.  The Health Service could have suspended Ms Innes‑Rowe and investigated her.  It did not. That gives rise to a question about whether it was fair to dismiss Professor Millward in circumstances where other HSS and Health Service employees (who were better (relevantly) qualified than Professor Millward and better informed about Ms Innes‑Rowe’s conduct than Professor Millward) failed to act to protect the monies paid from the Special Purpose Accounts (SPA).

17      Professor Millward argues those facts are analogous to Mollinger v National Jet Systems Pty Ltd (C no 5 of 1998, unreported, Dec 279/99 M Print R3130) (National Jet Systems), with the Health Service Integrity & Ethics and Health Service Executive being the captain of the plane, and with Professor Millward being the first officer.  Allegation One involves managerial ability. At the hearing Professor Millward argued that he is the co-pilot who is basically untrained and others are the captains – they are qualified, informed and skilled in human resources. While Professor Millward had responsibility in terms of oversight, HSS employees are equipped to process, scrutinise and check overtime claims against the industrial agreement. Professor Millward is not.

18      Professor Millward argues suspicion of fraud is ‘absolutely material’ to the allegation about Ms Innes‑Rowe’s engagement as a contractor and the Board must judge that allegation against the backdrop of Professor Millward’s lack of knowledge of any reason to be suspicious of Ms Innes‑Rowe.

19      The documents showing others’ knowledge of Ms Innes‑Rowe’s dishonest overtime claims are relevant because differential treatment of employees guilty of like misconduct is relevant to the determination of whether dismissal was harsh, unjust or unreasonable.

20      Professor Millward says the conduct of others is comparable because:

1. in relation to the allegation about oversight, HSS staff engaged in comparable conduct.  The Board should ask what did they do after raising the query about overtime with Ms Innes‑Rowe in November 2014?  If they did nothing, then that is comparable conduct. If concerns about Ms Innes‑Rowe’s overtime claims had been communicated to Health Service staff and they did nothing, then that is comparable conduct too; and
2. in relation to the allegation about engagement as a contractor, the issue is Ms Innes‑Rowe’s continued engagement. It was within the power of others to end the contractor engagement. They did not ask Professor Millward to bring the engagement to an end and they did not end it.

21      The thrust of Professor Millward’s submission is that others knew about Ms Innes‑Rowe’s fraudulent conduct and could have acted to protect SPA monies.  If they did not, that amounts to comparable conduct.

Oppression

22      Professor Millward says that there is no evidence of oppression and it is not apparent why it would take so much time to search for relevant documents.

Is the differential treatment an issue in dispute?

23      In his written submissions and at first during the hearing, Professor Millward argued that the issue of differential treatment on the basis of comparable conduct is in issue in this matter because it is raised in the pleadings at [39](c) of Professor Millward’s Notice of Appeal.

24      That paragraph says:

Senior officers of the Respondent, including the Investigator, had serious concerns about the validity of Ms Innes-Rowe’s overtime claims on and from 23 May 2018 which were not conveyed to the Appellant at any time.

25      When at the hearing the Board pointed out that [39](c) of the Notice of Appeal goes to concerns others may have had but says nothing about a lack of consequences for others, Professor Millward’s representative said at TS 15: ‘It doesn’t, it doesn’t speak of differential treatment, you’re quite right.’ Professor Millward’s representative confirmed this again at TS 17.

Health Service’s submissions

26      In essence, the Health Service says the documents sought are not discoverable because they are not relevant to what is in issue.  Even if they were, they are tangential at best and of limited relevance.  Further, the request is oppressive.

27      The Health Service says the Board must closely assess whether cases are comparable at all before turning to any differential treatment and its effect.

Comparable conduct and differential treatment

28      The Health Service says the allegations do not raise the issue of fraud or knowledge of fraudulent conduct.

29      In relation to Allegation One, the Health Service says its case is:

1. Professor Millward had relevant managerial oversight over Ms Innes‑Rowe;
2. Professor Millward signed certification statements for the Clinical Trials Unit certifying pay for staff;
3. between December 2014 and November 2017, Ms Innes‑Rowe copied Professor Millward into emails she sent to HSS/HCN with her overtime claims.  The claim forms identified Professor Millward as the manager to approve overtime; and
4. the overtime claimed by Ms Innes‑Rowe was patently excessive.  Any reasonable person in Professor Millward’s position would have been put on notice to investigate further whether the overtime claims were legitimate.

30      The Health Service distinguishes this case from National Jet Systems.  It says HSS employees would have no idea what goes on in the Clinical Trials Unit. Further, the Health Service says Sexton v Pacific National (ACT) Pty Ltd (U2002/5282, unreported, PR931440) involved comparable conduct between two people involved in the same incident.  Those two people had different functions so it was not possible to compare their conduct.  Here, the comparator would need to be someone receiving the overtime forms, who had factual managerial oversight of Ms Innes‑Rowe and knowledge of what she was doing in the Clinical Trials Unit.  HSS employees had neither.

31      The Health Service argues that there is nothing to suggest that any of the people set out at [3] above had any relevant managerial oversight of Ms Innes‑Rowe or the same or similar understanding of Ms Innes‑Rowe’s role or duties as Professor Millward in order to understand the appropriateness of her hours of work. The cases are not comparable and there is no need to consider differential treatment.

32      Allegation Two alleges misconduct when entering into a contractual arrangement with a recruiter for Ms Innes‑Rowe because of the nature and terms of that arrangement. That Ms Innes‑Rowe’s historical overtime claims lacked veracity or validity is not relied on by the Health Service. Knowledge of fraud is not in issue. It is the nature of the contractor arrangement where Professor Millward knew he did not have authority to approve overtime for Ms Innes‑Rowe and that a person in her position did not have the ability to obtain overtime as an employee. The Health Service says it does not allege Professor Millward approved overtime for Ms Innes‑Rowe while she was a contractor.

33      There is nothing to suggest that the people set out at [3] above negotiated with Ms Innes‑Rowe or the recruiter in relation to the terms and conditions of the contractor arrangement, nor that Professor Millward consulted with any of those people in relation to whether to engage Ms Innes‑Rowe on the contractor arrangement. The people copied into Professor Millward’s email stating he had engaged Ms Innes‑Rowe as a contractor did not know the terms of the contractor engagement or what Professor Millward knew about his lack of ability to approve overtime.  Knowledge of fraud is irrelevant because it is not the issue the Health Service has with Professor Millward’s conduct. The cases are not comparable.  The documents sought would not and could not lead to an argument of differential treatment of comparable cases of misconduct.

34      For completeness, the Health Service notes that HSS and the Health Service are separate entities.  HSS was not Professor Millward’s employer. Further, the Health Service says that it is not relevant what would have happened if Professor Millward had been aware of Ms Innes‑Rowe’s fraudulent conduct.

Is the differential treatment an issue in dispute?

35      The Health Service says Professor Millward does not identify differential treatment of employees guilty of like misconduct as a basis for the dismissal being harsh.

Oppression

36      The Health Services says if the Board orders discovery in the terms sought, to comply it would be necessary to search the emails, correspondence and documents of around 136 people.  That would take weeks if not months.

Consideration

37      The Board does not consider that the documents sought are necessary for the fair disposal of the case.  This is because they are not relevant to what is in issue on the pleadings.

38      Knowledge about fraudulent conduct by Ms Innes-Rowe is not part of the allegations.  It is not in issue in the proceedings. To the extent that the documents sought relate to knowledge of fraudulent overtime claims by Ms Innes-Rowe, the documents are not relevant or necessary for the fair disposal of the case.

39      While Professor Millward relied on paragraph 39(c) of the Notice of Appeal as putting in issue differential treatment based on comparable conduct, at the hearing his representative rightly conceded that that paragraph does not raise differential treatment.  In our view, differential treatment based on comparable conduct is not in issue.

40      We consider that even if the pleadings did raise the issue of differential treatment, it is unlikely that the documents sought would be necessary for the fair disposal of the case.  This is because on what is currently before the Board, it does not appear that those people set out in [3] above (being the comparators pointed to by Professor Millward) are comparable.  There is nothing before the Board to suggest that those comparators had the same or similar managerial responsibilities or knowledge of Ms Innes-Rowe’s work and hours as Professor Millward, such that they could have engaged in the same alleged breaches of discipline or be considered comparable in the same incident.

41      Allegation One and Allegation Two are not general.  Detailed particulars of the allegations have been set out.  Given the very specific nature of the allegations,  it is difficult to see how the Board could conclude that the comparators could be seen to have engaged in comparable conduct in the relevant incident.  For example, in relation to Allegation One, it is not apparent to the Board that any of the comparators had relevant managerial oversight of Ms Innes-Rowe, were copied in to her overtime claims and noted as the manager approving her overtime. In relation to Allegation Two, on what is before the Board at this stage of proceedings, it does not appear to the Board that the issue in Allegation Two is Ms Innes-Rowe’s continued engagement or knowledge of her fraudulent conduct.  The issue is engaging Ms Innes-Rowe as a contractor on terms and conditions that allowed her to choose her hours of work in a way that could result in payments equivalent to overtime being payable.

42      It is not apparent to the Board that any of the comparators knew Ms Innes-Rowe was not authorised to claim overtime, had been told they were not authorised to approve her overtime and then approved Ms Innes-Rowe’s engagement as a contractor on terms and conditions that allowed Ms Innes-Rowe to choose her hours of work and overtime rates being payable to the recruiter as a result.

43      For these reasons, the Board considers that the documents sought are not relevant.  They are not necessary for the fair disposal of the case. It would not be just to make the order sought. 

44      The application for discovery is dismissed.