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Smith v State of Queensland (Queensland Health) (No 2)[2024] QIRC 21

Smith v State of Queensland (Queensland Health) (No 2)[2024] QIRC 21

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION:

Smith v State of Queensland (Queensland Health) (No 2) [2024] QIRC 21

PARTIES:

Smith, Paul

(Applicant)

v

State of Queensland (Queensland Health)

(Respondent)

CASE NO.:

TD/2021/98

PROCEEDING:

Application for reinstatement

HEARING DATE:

On the papers

DELIVERED ON:

7 February 2024

DATES OF WRITTEN SUBMISSIONS:

Applicant's written submissions filed on 7 December 2023 and on 11 January 2024

Respondent's written submissions filed on 21 December 2023

MEMBER:

Merrell DP

HEARD AT:

Brisbane

ORDER:

The order contained in paragraph [88] of these reasons for decision.

CATCHWORDS:

INDUSTRIAL LAW – QUEENSLAND – DISMISSAL – UNFAIR DISMISSAL – REMEDIES – decision made that the Applicant's dismissal was unfair – Applicant's reinstatement and re-employment impracticable – whether an order should be made that the Respondent pay the Applicant an amount of compensation pursuant to s 322 of the Industrial Relations Act 2016 – consideration of principles regarding orders made for payment of compensation pursuant to s 322 of the Industrial Relations Act 2016 – order for compensation, pursuant to s 322(1) of the Industrial Relations Act 2016, made – other claim made by the Applicant for an order for lost remuneration dismissed – Applicant's application for costs dismissed

LEGISLATION:

Fair Work Act 2009, s 333, s 392, s 570 and s 611

Industrial Relations Act 1999, s 79

Industrial Relations Act 2016, s 321 s 322 and s 545

Queensland Health Sector Certified Agreement (No. 10) 2019, cl 6.1

CASES:

Algahamdi v State of Queensland (Queensland Health) (No 2) [2022] ICQ 019

Baker v Salva Resources Pty Ltd [2011] FWAFB 4014

Barsha v Motor Finance Wizard (Sales) Pty Ltd [2002] QIRC 150; (2002) 171 QGIG 139

British Westinghouse Electric and Manufacturing Company Ltd. v Underground Electric Railways Company of London Limited [1912] AC 673

Calderbank v Calderbank [1975] 3 All ER 333

Dorman v State of Queensland (Queensland Health) [2023] QIRC 335

Gleeson v State of Queensland (Department of Justice  and Attorney-General) [2015] QIRC 148

Griggs v Health Equipment Hire and Supplies (1995) 149 QGIG 131

Gull v Saunders [1913] HCA 55; (1913) 17 CLR 82

Kelsey v Logan City Council and Ors [2021] ICQ 11

Messenger v Commonwealth of Australia (Represented by the Department of Finance) (No 2) [2023] FCA 20

Payzu Ltd v Saunders [1919] 2 KB 581

Smith v State of Queensland (Queensland Health) [2023] QIRC 296

Staff Services Training and Services Pty Ltd v Adeliza P. Zulueta [2005] ICQ 19; (2005) 179 QGIG 1

Stewart v Creekgold Pty Ltd [2003] ICQ 39; (2003) 174 QGIG 105

Wardle v Castlemaine Perkins Ltd (1993) 143 QGIG 442

Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668

Reasons for Decision

Introduction

  1. [1]
    By my decision in Smith v State of Queensland (Queensland Health),[1] ('Smith No. 1'), I found that the dismissal of Mr Paul Smith, effective 25 October 2021, from his position of Service and Data Manager, classification AO5 ('the position'), at the Gold Coast Hospital and Health Service ('the Health Service') through his employment by the State of Queensland in Queensland Health ('the Department') was unfair.[2]
  1. [2]
    I also found that Mr Smith's reinstatement to that position was impracticable because the position had been abolished[3] and that Mr Smith's re-employment to another position that the Department had available, and that the Commission considered suitable, was not impracticable.[4]
  1. [3]
    I had issued directions for the determination of whether I should make an order that the Department re-employ Mr Smith.[5]
  1. [4]
    However, from further submissions made by Mr Smith at a hearing of this matter on 9 November 2023, Mr Smith made it clear that he no longer wanted to pursue re-employment as a remedy, and that he now wanted to pursue the remedy of compensation pursuant to s 322(1) of the Industrial Relations Act 2016 ('the Act').[6] As a consequence, the potential remedy of Mr Smith's re-employment is also impracticable.
  1. [5]
    On 9 November 2023 I made directions ordering the filing and serving of affidavit material and submissions for the purposes of determining if I should make an order that the Department pay Mr Smith an amount of compensation decided by me. I also ordered that unless otherwise determined, I would determine the issue of whether I would make an order pursuant to s 322(1) of the Act on the papers.
  1. [6]
    This is my decision about whether or not I will make an order that the Department pay Mr Smith an amount of compensation. This decision assumes familiarity with the reasons for decision in Smith No. 1. Unless otherwise stated, I will, in these reasons, use the terms as defined in Smith No. 1.
  1. [7]
    For the reasons that follow, I will order that, pursuant to s 322(1) of the Act, the Department pay Mr Smith the amount of $47,582.97 as compensation.
  1. [8]
    Mr Smith also sought a further order, pursuant to s 321 of the Act, that the Department pay him an additional amount of compensation.  In addition, Mr Smith sought an order, pursuant to s 545 of the Act, that the Department be ordered to pay his costs on the indemnity basis.
  1. [9]
    For the reasons that follow, both of these claims are dismissed.

Section 322 of the Industrial Relations Act 2016

  1. [10]
    Section 322 of the Act provides:

322Remedies – compensation

  1. If, and only if, the commission considers reinstatement or re-employment would be impracticable, the commission may order the employer to pay the employee an amount of compensation decided by the commission.
  1. The commission must not award an amount of compensation that is more than–
  1. if the employee was employed under an industrial instrument–the wages the employer would have been liable to pay the employee for the 6 months immediately after the dismissal, paid at the rate the employee received immediately before the dismissal; or
  1. if the employee was not employed under an industrial instrument–the lesser of the wages under paragraph (a) and an amount equal to half the amount of the high income threshold under the Fair Work Act 2009 (Cwlth), section 333.[7]
  1. The commission must take into account any amount paid to the employee by the employer on the dismissal.
  1. This section does not limit the commission’s power to make an interim or interlocutory order.
  1. [11]
    It is obvious, from the terms of s 322 of the Act, that the provision contemplates the making of two discretionary decisions.
  1. [12]
    The first is, where the Commission considers that the unfairly dismissed employee's reinstatement or re-employment is impracticable, whether in light of all the relevant circumstances of the case, the Commission should exercise discretion to make an order that the employer pay the employee an amount of compensation decided by the Commission.
  1. [13]
    The second discretionary decision is, subject to the matters contained in s 322(2) and s 322(3) of the Act, the determination of the amount of compensation.

Should an order be made that the Department pay Mr Smith an amount of compensation?

  1. [14]
    The Department's approach is that an order should be made by the Commission directing it to pay Mr Smith an amount of compensation decided by the Commission.
  1. [15]
    Mr Smith asserted that such an order should be made.
  1. [16]
    In my opinion, in the circumstances of the present case, the approach of the Department, that a compensation order should be made, is the proper position for the Department to take.
  1. [17]
    Mr Smith was found to have been unfairly dismissed. There is no evidence that may lead to a conclusion that Mr Smith should be denied the remedy of having a compensation order made in his favour.
  1. [18]
    For these reasons, I will exercise my discretion to make an order, pursuant to s 322(1) of the Act, that the Department pay Mr Smith an amount of compensation.

What should be the amount of compensation?

The parties' submissions

  1. [19]
    In terms of the assessment or calculation of such an amount under s 322(1) of the Act, the Department submitted:[8]
  1. The Commission has, in previous unfair dismissal cases under the earlier iteration of the IR Act, formulated compensation according to the following factors:
    1. the nature of the employment;
    2. the qualifications required for the position held by the dismissed employee and the qualifications actually held;
    3. the dismissed employee's salary with the respondent;
    4. the dismissed employee's age;
    5. the normal retiring age for a person holding the position in question;
    6. the salary scale (if any) attached to the position;
    7. notwithstanding the actual term of the contract, what reasonable expectation might the dismissed employee have had for future job security;
    1. the loss by the dismissed employee of a reasonable chance to qualify for long service or other leave of absence;
    2. the loss by the dismissed employee of the chance to qualify for superannuation or other similar benefits;
    3. the loss by the dismissed employee of sick leave credits;
    4. the length of time that will probably elapse before the dismissed employee is likely to obtain equivalent or other suitable employment and at what likely remuneration. Consideration must be given to evidence upon which a conclusion may be derived as to the availability of similar employment and the likely effect of the perception by prospective employers of the reasons for the dismissal; and
    5. what non-refundable remuneration (if any) the dismissed employee has received from any other source (other than interest from investments) between the date of the dismissal and the date of the assessment.[9]
  1. Additional factors for consideration also include:
    1. the remoteness of the loss on the basis that compensation should not be recovered if the loss is too remote;
    2. assessment of future loss should include contingencies such as whether the employee would have left the job voluntarily or would have been forced to retire early; and
    3. the requirement for the employee to take reasonable steps to mitigate their loss.[10]
  2. These factors are applied on a global basis, considering those that are most relevant to the circumstances of each case, to determine compensation. It has also been held that the legislative cap on compensation is simply an arbitrary one and does not operate as a maximum amount to be awarded only in the most serious cases.[11]
  1. [20]
    Mr Smith made no submissions about what principles may guide the calculation of the amount of compensation to be decided by the Commission.
  1. [21]
    There has been little recent authority on the appropriate factors that may guide the exercise of the Commission's discretion, subject to the matters contained in s 322(2) and s 322(3) of the Act, in determining the amount of compensation that an employer may be ordered to pay an unfairly dismissed employee pursuant to s 322(1) of the Act.[12]
  1. [22]
    Mr Smith, while represented by lawyers in the hearing to determine whether or not his dismissal was harsh unjust or unreasonable, is now representing himself in relation to the question of the remedy of compensation. As referred to earlier, Mr Smith has not addressed the issue of what factors may guide the Commission in exercising discretion to decide the amount of compensation to be the subject of an order pursuant to s 322(1) of the Act.
  1. [23]
    For this reason, this is not an appropriate case to review the authorities cited by the Department.
  1. [24]
    In any event, for the reasons I give below, I can decide the amount of compensation to be the subject of such an order without the need for such a review.
  1. [25]
    Some matters, regarding the application of s 322(1) of the Act, are well established.
  2. [26]
    First,  the object of compensation is to restore an unfairly dismissed employee, as far as practicable, to the financial position they would have been in but for the unfair dismissal.[13] The starting point is to identify that which the unfairly dismissed employee has lost.[14] As a consequence, it is clear that the object of such an order is not to punish an employer who has unfairly dismissed an employee. Further, because s 322(2) of the Act, in terms of the calculation of the statutory cap, refers to 'wages' as opposed to 'remuneration', it seems clear that the compensation to be assessed is in respect of an employee's lost wages as defined in sch 5 of the Act, which excludes superannuation.
  3. [27]
    Secondly, the assessment of compensation is not a process of ungoverned intuition, but that, in measuring what might have happened (so as to fix the loss suffered by the employee), the Commission is not engaged in a precise mathematical calculation and the exercise is concerned as much with judgment as with reasoned inference.[15]
  4. [28]
    Thirdly, and consistently with the Department's submissions, the legislative cap on compensation, contained in s 322(2) of the Act, is an arbitrary one and does not operate as a maximum to be awarded in only the most serious or grievous cases.[16]
  5. [29]
    Mr Smith relevantly submitted:[17]
  • he unsuccessfully applied for numerous positions in the Queensland and Federal public services, and in the private sector, since his dismissal;
  • on each application he was required to disclose that he was terminated from the Department;
  • he estimates he applied for over 100 positions, for most of which he was well overqualified, and even now he continues to apply for positions for which he is qualified and for which he is overqualified, but with no success;
  • he has been unable to obtain appropriate employment, based on his qualifications and experience, and the Department is directly responsible for him being in that position;
  • he is currently employed as a Backend Operator '… with Visy' and also as a               part-time shop assistant with Dan Murphy's;
  • he is going to require retraining in order to obtain a position comparable to the position he had in the Department and he remains employed in a position that will never financially represent his qualifications and experience;
  • he is seeking an order '… ensuring continuity of service whereby backpay of wages and entitlements including Superannuation is awarded in addition to the maximum compensation (6 months wages)'; and
  • the compensation he claims is six months gross wages in the amount of $50,724.00.[18]
  1. [30]
    The Department submitted that Mr Smith:
  • has not filed any updated evidence of his attempts to find other employment to mitigate his loss or his earnings since his dismissal and that the only evidence before the Commission is the limited evidence given by Mr Smith approximately 10 months ago, during his cross-examination, and in his affidavit of 3 March 2023;[19] and
  • has provided no sworn evidence to support his submission that he has been deprived of a career in the public service and that, on the evidence led by the Department, between the date of his dismissal to 1 November 2023, he had not applied for any roles in the Health Service despite the Health Service advertising 49 permanent AO5 positions.[20]
  1. [31]
    The Department then submitted:[21]
  1. Within approximately five months of dismissal, Mr Smith obtained employment with the Gold Coast City Council in a position with an annual salary of $117,035.74 (Council Position).  For the 2021/2022 financial year, Mr Smith earned approximately $19,000 gross income in the Council Position.  Mr Smith therefore had the ability to obtain similar employment earning an income commensurate with the Service and Data Manager position shortly after his dismissal. Mr Smith does not address when that employment ended or why.
  1. Mr Smith also obtained employment with Visy Packaging Pty Ltd, for which he earned approximately $35,656 gross income in the 2021/2022 financial year. Under cross-examination Mr Smith gave evidence of being employed by Dan Murphy's, but did not include this in his affidavit five days later. Despite Mr Smith referring to being currently employed in these two positions in his submissions, Mr Smith has not given any sworn evidence of his current employment or his earnings in these positions since 3 March 2023. It is submitted that given there is evidence of Mr Smith earning some income since his dismissal, this ought to reduce the amount of compensation awarded.

Mr Smith's conduct

  1. Importantly, the Commission found Mr Smith had engaged in conduct in breach of the Code of Conduct at the Golden Gala, which was sufficiently serious to warrant disciplinary action pursuant to section 187(1)(g) of the PS Act. Therefore, the Respondent submits that Mr Smith was not without fault in terms of the position he found himself in regarding his employment with the Health Service. Any adverse effect of the reason for Mr Smith's dismissal on his ability to find further employment should therefore not be taken into account in relation to assessing compensation.

Tenability of employment with Health Service or in health industry

  1. In terms of contingencies and whether Mr Smith had a reasonable expectation of future job security with the Health Service, the Respondent submits that, given Mr Smith's previous work experience, he is capable of obtaining employment of a similar wage level in other sectors, outside the health industry. Mr Smith's experience and skills are not health industry specific. Mr Smith's future employment is therefore not dependent upon a [sic] maintaining a job with the Health Service. This is demonstrated by Mr Smith obtaining the well-paying Council Position within five months of his dismissal.
  1. Relevantly, at the time Mr Smith applied for and commenced employment with the Health Service, he knew his ex-wife was already a long-standing employee of the Health Service. Mr Smith was at that time subject to mutual undertakings pursuant to the Domestic and Family Violence Protection Act 2012 (Qld), prohibiting the parties from having contact with, and not being within 100 metres of, each other. Mr Smith knew that the exceptions to these undertakings did not include the workplace. There was as a result the possibility of issues arising between Mr Smith and his ex-wife, as was borne out on the evidence before the Commission. In these circumstances, it is possible that Mr Smith's employment with the Health Service may have been untenable long term.
  2. Mr Smith had also been subject to earlier management action in November 2020 (within five months of commencing employment) concerning three separate complaints about his behaviour towards subordinate employees. The Respondent submits this suggests Mr Smith's employment was possibly not suitable for the long-term.
  1. [32]
    By way of conclusion, the Department submitted that:
  • having regard to s 322(2) of the Act, the Commission cannot award an amount of compensation that is more than $47,582.97 which represents six months of Mr Smith's salary; and
  • weighing up the factors, and for the reasons set out in its written submissions, the amount of compensation that the Commission should order it pay Mr Smith '… ought not exceed an amount of $23,791.50 (representing three months of Mr Smith's salary of $7,930.50 per month).'[22]
  1. [33]
    The Department does not clearly articulate why, weighing up the factors and the reasons set out in its written submissions, the amount of compensation that the Commission may order it pay Mr Smith ought not exceed three months of Mr Smith's salary.  

My decision on the amount of compensation

  1. [34]
    At the date of his dismissal, Mr Smith was employed under an industrial instrument, namely, the Queensland Public Health Sector Certified Agreement (No. 10) 2019 ('the 2019 certified agreement').[23]
  1. [35]
    On the undisputed evidence before me, the annual salary for the classification of Mr Smith's position, at the pay-point he had reached at the time of his dismissal (classification AO5, pay-point 2), as determined by the 2019 certified agreement, was $95,165.94 (exclusive of superannuation).[24]
  1. [36]
    On his dismissal, Mr Smith was paid two weeks in lieu of notice, in the gross amount of $3,647.70.[25]
  1. [37]
    In terms of the issues of mitigation raised by the Department, the following propositions may be stated with some confidence:
  • the principle of mitigation operates pro tanto as a conditional bar on the recovery of damages;[26] and
  • the question of what steps were reasonable in the mitigation of loss is a question of fact to be determined having regard to the particular circumstances.[27]
  1. [38]
    Despite the absence of an express requirement in s 322 of the Act, I can see no reason not to consider the principle of mitigation in deciding the amount of compensation under s 322(1) of the Act.[28]
  1. [39]
    At common law, a plaintiff is expected to take reasonable steps to minimise the effect of a breach of contract. In British Westinghouse Electric and Manufacturing Company Ltd. v Underground Electric Railways Company of London Limited,[29] Viscount Haldane relevantly stated:

Subject to these observations I think that there are certain broad principles which are quite well settled. The first is that, as far as possible, he who has proved a breach of a bargain to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed.

The fundamental basis is thus compensation for pecuniary loss naturally flowing from the breach; but this first principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps.[30]

  1. [40]
    It would not be a just outcome if, in assessing the amount of compensation, the failure of an unfairly dismissed employee to take reasonable steps to, for example, obtain other employment, was not taken into account in that assessment of compensation. The Commission, in previous decisions, has taken the principle of mitigation into account.[31]
  1. [41]
    I cannot accept the submissions made by the Department, that by Mr Smith not filing updated evidence of his attempts to find other employment to mitigate his loss since his dismissal, the conclusion to be reached is that Mr Smith has failed to take reasonable steps to mitigate his loss, such that the amount of compensation to be awarded to him should be reduced.
  1. [42]
    The Department's submissions fairly summarise the evidence given by Mr Smith about the other employment he obtained following his dismissal by the Department.
  1. [43]
    Mr Smith's evidence in cross-examination was that:
  • he found it extremely difficult to find employment given that he had to '… declare any misconduct';[32] and
  • in March 2022, he commenced employment in an administrative role with the Gold Coast City Council for a short time, and then in August 2022 he commenced permanent employment with Visy performing a labouring role (earning approximately $55,000 per annum) as well as performing part-time retail work for Dan Murphy's.[33]
  1. [44]
    On any reasonable consideration of this evidence, Mr Smith did take reasonable steps to mitigate his loss following his dismissal by the Department. In my view, the fact that Mr Smith has failed to provide any further evidence about his employment following on from the hearing of the question of whether or not his dismissal was unfair, does not detract from this evidence.
  1. [45]
    Further, I do not accept the Department's submissions that Mr Smith's employment in the Health Service would not have been long-term.
  1. [46]
    Mr Smith:
  • was employed in the position, in the Health Service, from 29 June 2020 until 25 October 2021,[34] a period of 16 months; and
  • over his period of employment in the Health Service:
  1. -
    had not been the subject of any disciplinary process or disciplinary action concerning the performance of his duties and discharge of his responsibilities in the position;
  1. -
    had not been suspended from duty;[35]
  1. -
    in November 2020, had his Professional Development Plan, regarding his communication style to his subordinate employees, reviewed but in respect of which there was no further complaint about his communication style between that date and the date of his dismissal;[36] and
  1. -
    in respect of his former wife, who also worked in the Health Service, had not been the subject of any allegations or disciplinary process or disciplinary action concerning his non-compliance with:
  • the second mutual undertaking;
  • the 2021 consent Protection Orders;
  • the Code;
  • the PS Act;
  • any applicable Health Service policy;
  • his 2021 safety plan; and
  • the expectations of him as set out in Ms Castles' letter to him dated 16 June 2021.[37]
  1. [47]
    Furthermore, for the reasons I set out in Smith No. 1, in respect of considering whether or not Mr Smith's re-employment was impracticable, while it was certainly the case that Mr Smith should have been disciplined for his contraventions of the Code at the Gala in which he did engage, Mr Smith did express some measure of insight and remorse for his conduct at the Gala.[38] In addition, as I also stated in Smith No. 1, what was telling on the evidence was that Mr Smith worked successfully in the Health Service, and without any other allegation or detrimental finding being made about his conduct, between the date after the Gala and the date of his dismissal.[39]
  1. [48]
    For the reasons I have given immediately above, the judgment I make is that but for Mr Smith's unfair dismissal, he would have continued in the position until it was made redundant by the Health Service, due to the restructure of administrative roles in the Health Service, in about July 2022 ('the administrative restructure').[40]
  1. [49]
    Further, the evidence before me was that a closed merit selection process was to be undertaken for the staff who had their positions abolished as a result of the administrative restructure, and any staff member who was unsuccessful in obtaining a  role would be '… deemed [a] surplus employee requiring placement.'[41] The reasonable inference to draw from this evidence is that if Mr Smith had been unsuccessful in obtaining another position by way of the closed merit selection process, then it was probable he would have been re-deployed to a position, somewhere in the Department, as a surplus employee. My view about this is fortified when regard is had to cl 6.1 (Employment security) of the 2019 certified agreement, in particular, sub-cl 6.1.3.
  1. [50]
    Overall, my assessment is that Mr Smith would have remained employed in the Health Service for at least another two years after his dismissal, given:
  • the length of his service to the date of his dismissal, being 16 months, which while not overly long, is not fleeting, and which points to Mr Smith probably staying in the position for some reasonable time if he was not dismissed;
  • his otherwise acceptable work performance and workplace conduct as I have set out above; and
  • the probability that he would have maintained employment in the Department as a surplus employee following the abolition of his substantive position, assuming he was unsuccessful in the closed merit selection process following the administrative restructure.
  1. [51]
    In making this assessment, I take into account Mr Smith's relatively young working age at the date of his dismissal (38 years)[42] and the contingency that he may well have taken up other employment outside of the Department at some point.
  1. [52]
    On the evidence before me, at the date of his dismissal, Mr Smith's gross annual wage under the 2019 certified agreement was $95,165.94 exclusive of superannuation. Therefore, Mr Smith's gross loss would have been $190,331.88.
  1. [53]
    Mr Smith's unchallenged evidence[43] was that between the date of his dismissal (25 October 2021) and the date of his third affidavit being 3 March 2023, a period of approximately 16 months, he earned the gross amount of approximately $59,217.73[44] from other employment, or approximately $3,701.10 gross per month.[45] It is reasonable to assume that Mr Smith would have continued to earn wages, at least at about the same rate, in the two years after his dismissal. On that assumption then, over two years from the date of his dismissal, Mr Smith would be likely to have earned wages in the gross amount of $88,826.40.[46]
  1. [54]
    On this basis, Mr Smith's gross loss is $101,505.48.[47]
  1. [55]
    While s 322(3) of the Act provides that the Commission must take into account any amount paid by the Department to Mr Smith on his dismissal, it does not expressly provide that such an amount must be deducted from any amount of compensation so decided. However, that amount must be taken into account. In assessing Mr Smith's loss, my view is that because that fortnight's gross salary ($3,647.70) was paid to Mr Smith on his dismissal, then that amount should be deducted from my assessment of his loss. Deducting that amount from Mr Smith's assessed gross loss, then his actual gross loss is $97,857.78.[48]
  2. [56]
    The Department submits that the statutory cap to be applied by the Commission in the present case is that provided for in s 322(2)(a) of the Act, namely the wages the Department would have been liable to pay Mr Smith for the six months immediately after the dismissal, paid at the rate he received immediately before the dismissal under the 2019 certified agreement. That submission is clearly correct as Mr Smith was employed under an industrial instrument, namely, the 2019 certified agreement.
  1. [57]
    The Department submits the statutory cap is $47,582.97.[49] I accept that to be the correct amount. That amount is less than Mr Smith's loss as I have assessed it on the evidence before me.
  1. [58]
    Applying the statutory cap to Mr Smith's loss, as I have assessed it, the amount of compensation to be paid to Mr Smith is $47,582.97.
  1. [59]
    In accordance with established principle,[50] the order will reflect the pre-tax or gross amount to be paid to Mr Smith.
  1. [60]
    I will order that, pursuant to s 322(1) of the Act, the Department pays Mr Smith compensation in the gross amount of $47,582.97.

The other compensation amount sought by Mr Smith

  1. [61]
    Mr Smith also seeks an order that the Department pay him the amount of $231,196.03.
  1. [62]
    Mr Smith submits that the power for me to order this amount is found in s 321 of the Act.
  1. [63]
    As I understand Mr Smith's submissions, the basis upon which he seeks this amount is his contentions that:
  • the Department did not act as a model litigant because it resisted his claim that his dismissal was unfair and that, ultimately, his dismissal was found to be unfair; and
  • the Department failed to offer suitable positions for his re-employment.
  1. [64]
    Mr Smith's claim is misconceived. There is no power for me to make an order of the kind sought by Mr Smith.
  1. [65]
    The discretionary power for the Commission, pursuant to s 321(4)(c) of the Act, to make an order about remuneration lost or likely to have been lost by the employee because of the dismissal, may only be exercised when an unfairly dismissed employee is, by order of the Commission, reinstated or re-employed.
  1. [66]
    For the reasons given in Smith No. 1, Mr Smith's reinstatement was impracticable. Further, given Mr Smith's submissions made to the Commission on 9 November 2023, namely, that he did not want to be re-employed, then Mr Smith's re-employment was also impracticable.
  1. [67]
    For these reasons, I dismiss Mr Smith's further claim for compensation.

Costs

  1. [68]
    Mr Smith also stated in his written submissions that, pursuant to s 545 of the Act, he was formally making an application for his costs to be paid on the indemnity basis.
  1. [69]
    Despite no formal application being made by Mr Smith for costs, the Department has responded to those submissions and has also put on some affidavit material in relation to the issues referred to by Mr Smith about his application for indemnity costs.
  1. [70]
    On 11 January 2024, Mr Smith filed submissions in reply to the Department's submissions, but filed no affidavit material. Mr Smith's principal complaints in his submissions in reply are that the Department filed and served submissions beyond the five page limit I set in the Directions Order I made on 9 November 2023; and that the Department filed and served affidavit material without leave. There is no substance to these complaints.
  1. [71]
    The Directions Order I made on 9 November 2023 concerned the question of an order for compensation I may make under s 322 of the Act. I directed that the parties file and serve written submissions about whether the Department should be ordered to pay Mr Smith an amount of compensation pursuant to s 322 of the Act, together with any relevant affidavit material. The Department complied with the five page limit in relation to that matter. Mr Smith, of his own volition, made additional submissions about compensation under s 321 of the Act and about costs.
  1. [72]
    The Department cannot be criticised for making submissions beyond the five page limit about a matter that was addressed by Mr Smith in his submissions, but which was beyond the subject matter of the Directions Order that was made. Furthermore, it was reasonable for the Department to put on affidavit material in relation to Mr Smith's application for costs having regard to the basis upon which he claims indemnity costs.
  1. [73]
    Indeed, by the Department filing and serving its submissions about costs and filing and serving affidavit material that supports its resistance to Mr Smith's application for costs, time and cost have been saved. I will waive the irregularity of Mr Smith not filing a formal application for costs.
  1. [74]
    Mr Smith relevantly submits that an order should be made that his costs are paid on the indemnity basis because:
  • the Department '… inappropriately maintained to deny any fault even after the evidence of their own employees confirmed a finding of unfair dismissal. The closing submission on behalf of Qld Health is indicative of their unreasonable attitude.';
  • the Department failed to respond to an offer of settlement made by him, made '… in accordance with the principles of Calderbank v Calderbank [1975] 3 All ER 333' which contained two offers of settlement;
  • the first offer of settlement was the payment of 12 months wages, the payment of his legal fees to date, and the findings, investigation and disciplinary process that led to his dismissal being '… expunged from the Applicant's employment records'; and the second offer of settlement was his reinstatement or re-employment in a position classified at the AO5 level within the Health Service or another Health Service, with the location to be agreed between the parties, the payment of six months wages, the payment of his legal fees to date and the findings and investigations in the matter to be expunged from his records (collectively 'Mr Smith's offer');
  • the Department failed to respond to Mr Smith's offer which was fair and reasonable; and
  • on 9 February 2023 the Department made an offer of settlement on a without prejudice basis, namely, that Mr Smith be employed in a permanent position classified at the AO5 level in the West Moreton Hospital and Health Service, based in the Ipswich campus, on an agreed start date and conditional upon the parties executing a deed of release, being an offer Mr Smith stated he could not accept because he had no vehicle to be able to travel from the Gold Coast to Ipswich and his daughters attended school at the Gold Coast.[51]
  1. [75]
    In making his submissions, Mr Smith did not, having regard to s 545(2)(a) of the Act, specify the basis upon which he claimed the Commission's discretion to make a costs order in his favour is enlivened.
  1. [76]
    The Department relevantly submitted:
  1. The Respondent submits that its response to the Application was not vexatious nor without reasonable cause where:
    1. there was evidence available that was capable of proving that Mr Smith had engaged in conduct which was in breach of the Code of Conduct at a work-related event;
    2. that conduct was sufficiently serious to warrant disciplinary action pursuant to section 187(1)(g) of the PS Act;
    3. Mr Smith was notified of the reasons for dismissal and was given opportunities to respond to the alleged conduct as part of the disciplinary process. During the  disciplinary process, Mr Smith made admissions to the conduct and had failed to take responsibility for his behaviour;
    4. the Commission found that Mr Smith had engaged in conduct in breach of the Code of Conduct, which was serious enough to warrant disciplinary action and Mr Smith had been afforded procedural fairness during the disciplinary process.
  2. The question ultimately resolved in Mr Smith's favour was whether termination was the appropriate disciplinary action. This is a matter which involves balancing different factors and upon which reasonable minds may differ. Upon consideration of Ron Calvert's evidence of the reasons his decision to terminate Mr Smith, it could not be said that the Respondent's  response to the Application was vexatious or without reasonable cause. Furthermore, any suggestion that the Respondent has failed to act in accordance with the model litigant principles is rejected.
  3. The Respondent further submits that there is no evidence before the Commission upon which it could be concluded that it would have been reasonably apparent to the Respondent that the Application had no reasonable prospects of success. This is in circumstances where, after hearing evidence from the witnesses, the Commission concluded that Mr Smith had engaged in conduct that was in breach of the Code of Conduct and that was sufficiently serious to warrant disciplinary action. The decision as to what disciplinary action was warranted was a discretionary one exercised reasonably. Simply because the Commission came to a different conclusion as to how that discretion ought to be exercised does not mean that the Respondent has no reasonable prospects of success in defending the matter.
  1. [77]
    Section 545 of the Act relevantly provides:

545General power to award costs

  1. A person must bear the person’s own costs in relation to a proceeding before the court or commission.
  1. However, the court or commission may, on application by a party to the proceeding, order –
  1. a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied –
  1. the party made the application or responded to the application vexatiously or without reasonable cause; or
  1. it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success;
  1. [78]
    As to whether the Department responded to Mr Smith's application for reinstatement vexatiously, Snaden J in Messenger v Commonwealth of Australia (Represented by the Department of Finance) (No 2)[52] stated of s 570(2)(a) of the Fair Work Act 2009,[53] which is in similar terms to s 545(2)(a)(i) of the IR Act:
  1. 13
    The policy underpinning s 570 of the FW Act recognises that an applicant might fairly (and without costs consequences) prosecute “…a weak case as long as it is not utterly hopeless”:  Nilsen v Loyal Orange Trust (1997) 76 IR 180, 181 (“Nilsen”; North J).
  1. 14
    A respondent who submits that a proceeding arising under the FW Act was brought vexatiously must demonstrate that the applicant’s predominant purpose in instituting it was to harass or embarrass, or to gain a collateral advantage unrelated to the vindication of the rights, privileges or immunities in respect of which it was instituted:  Nilsen, 181 (North J).  The onus is “a heavy one”:  Goldsmith v Sperrings Ltd [1977] 1 WLR 478, 498 (Scarman  LJ).  If a proceeding is instituted by an applicant who does not intend to prosecute it to conclusion; but instead seeks to use it as a means of obtaining some advantage for which it was not designed or some collateral advantage that is beyond what the law offers, then it might be said to have been instituted vexatiously:  Williams v Spautz (1992) 174 CLR 509, 526-527 (Mason CJ, Dawson, Toohey and McHugh JJ).
  1. [79]
    In Kelsey v Logan City Council and Ors,[54] Davis J, President relevantly stated:

[25]Section 545 and provisions like it have been the subject of analysis in various decisions. The following principles can be identified:

  1. The starting point is that each party bears their own costs.
  1. A discretion to depart from that point only arises, relevantly here, if one of the jurisdictional facts identified in s 545(2)(a)(i) or s 545(2)(a)(ii) are established.
  1. The assessment of “reasonable cause” in s 545(2)(a)(i) is:
  1. an objective assessment; and
  1. made considering the facts existing as at the time of the institution of the proceedings, here the appeal.
  1. Section 545(2)(a)(ii) prescribes a separate and distinct jurisdictional fact giving rise to a discretion to award costs. In consideration of whether s 545(2)(a)(ii) is engaged, facts which arise after the commencement of the proceedings may be relevant.[55]
  1. [80]
    In Algahamdi v State of Queensland (Queensland Health) (No 2),[56] Davis, J, President further stated:

[8]The term “without reasonable cause” was the subject of consideration in Kanan v Australian Postal and Telecommunications Union:

“It seems to me that one way of testing whether a proceeding is instituted without reasonable cause is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceedings, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being ‘without reasonable cause’. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks reasonable cause.”[57]

  1. [81]
    In my view, the Commission's discretion to make an order that the Department pay Mr Smith's costs is not enlivened.
  1. [82]
    First, in respect of s 545(2)(a)(i) of the Act, there is no evidence upon which I can form the conclusion that the Department's response to Mr Smith's application for reinstatement was vexatious. That is to say, whilst I found Mr Smith's dismissal to be unfair because it was unreasonable, in that his dismissal was disproportionate to his conduct in contravening the Code, it cannot be said that the Department's response – that Mr Smith's dismissal was not harsh, unjust or unreasonable – was for some other reason not related to the merits of its claims against Mr Smith.
  1. [83]
    Secondly, I cannot accept that the Department's response to Mr Smith's application for reinstatement was without reasonable cause. Viewed objectively, on the Department's view of the material facts – namely, the three allegations it found were proven and upon which it relied to dismiss Mr Smith – at the time it filed its response to Mr Smith's application for reinstatement, it cannot be said that the Department's response was without reasonable cause. This is because, at that time, namely, before any evidence was heard, it could not be said that its response must fail. The decision to dismiss Mr Smith was taken after an investigation was undertaken by a third party and after a fair disciplinary process.
  1. [84]
    Thirdly, in respect of s 545(2)(a)(ii) of the Act, as to whether it would have been reasonably apparent to the Department that its response had no reasonable prospect of success, such a conclusion should only be reached with extreme caution in circumstances where the response is manifestly untenable or groundless, or so lacking in merit or substance, as to be not reasonably arguable.[58]  After hearing all the evidence, I cannot form the view that the Department's response to Mr Smith's application for reinstatement meets any of these descriptions. The Department's response about the three allegations it found were made out about Mr Smith, and about the fairness of the disciplinary process and the disciplinary decision it made, were reasonably arguable.
  1. [85]
    Further, simply because, on all the evidence, I came to a conclusion that Mr Smith's dismissal was not proportionate to his conduct in contravening the Code at the Gala, then that does not mean that the Department's response was groundless. The Department's position about the issue of proportionality was arguable.
  1. [86]
    For all these reasons,  I am not satisfied that my discretion to make a costs order in Mr Smith's favour is enlivened.

Conclusion

  1. [87]
    For the reasons I have given, pursuant to s 322(1) of the Act, I will order that the Department pay Mr Smith compensation in the amount of $47,582.97 to be taxed according to law. Mr Smith's other claim for compensation, and his application for costs, are dismissed.

Orders

  1. [88]
    I make the following Orders:
  1. Pursuant to s 322(1) of the Industrial Relations Act 2016, the Respondent pays the Applicant compensation in the amount of $47,582.97 to be taxed according to law.
  1. The Applicant's claim for further compensation, made pursuant to s  321 of the Industrial Relations Act 2016, is dismissed.
  1. The Applicant's application for costs, made pursuant to s 545 of the Industrial Relations Act 2016, is dismissed.

Footnotes

[1] [2023] QIRC 296 ('Smith No. 1').

[2] Ibid [347].

[3] Ibid [352].

[4] Ibid [395].

[5] Ibid [400].

[6] Transcript, 9 November 2023, 1-7, ll 8-45.

[7] Presently, pursuant to s 333 of the Fair Work Act 2009 (Cth), the high income threshold, is $167,500.00.

[8] Citations omitted.

[9] Citing Barsha v Motor Finance Wizard (Sales) Pty Ltd [2002] QIRC 150; (2002) 171 QGIG 139 ('Barsha'), 146 (Commissioner Asbury).

[10] Citing Griggs v Health Equipment Hire and Supplies (1995) 149 QGIG 131, 134 (Commissioner Bougoure).

[11] Citing Barsha (n 9), 146.

[12] In respect of the equivalent provision in the Industrial Relations Act 1999, s 79 see Gleeson v State of Queensland (Department of Justice and Attorney-General) [2015] QIRC 148, [114]-[119] (Commissioner Fisher).

[13] Stewart v Creekgold Pty Ltd [2003] ICQ 39; (2003) 174 QGIG 104 ('Creekgold'), 105 (President Hall).

[14] Ibid.

[15] Staff Services Training and Services Pty Ltd v Adeliza P. Zulueta [2005] ICQ 19; (2005) 179 QGIG 1, 3 (President Hall).

[16] Creekgold (n 13), 104.

[17] Mr Smith's submissions filed on 7 December 2023, paras. 3-19 ('Mr Smith's submissions').

[18] However, this amount is derived from the annual wages payable, as from 1 September 2022, for an employee employed under the Hospital and Health Service General Employees (Queensland Health) Award – State 2015, whose position was classified at level AO5 and where the incumbent is paid at pay-point 2, as provided for in pt 2.1 and sch 1 of the Queensland Public Health Sector Certified Agreement (No. 11) 2022. For this reason, this is not the wage to apply for the purposes of s 322(2)(a) of the Industrial Relations Act 2016.

[19] Exhibit 25.

[20] The submissions of the State of Queensland (Queensland Health) filed on 21 December 2023 ('the Department's submissions'), paras. 15-17.

[21] Footnotes omitted.

[22] The Department's submissions, paras. 25-25.

[23] The affidavit of Mr Grant Brown filed on 21 December 2023 ('Mr Brown's affidavit'), para. 6.

[24] Mr Brown's affidavit, paras. 4(b) and 6.

[25] Mr Brown's affidavit, para. 7.

[26]Whittaker v Unisys Australia Pty Ltd [2010] VSC 9; (2010) 26 VR 668, [171] (Ross J).

[27] Gull v Saunders [1913] HCA 55; (1913) 17 CLR 82, 89 (Barton ACJ, Gavan Duffy and Rich JJ) and Payzu Ltd v Saunders [1919] 2 KB 581, 586 (McCardie J).

[28] Cf Fair Work Act 2009, s 392(2)(d).

[29] [1912] AC 673.

[30] Ibid 689.

[31] See e.g. Gleeson (n 12), [118].

[32] T 1-57, ll 38-44.

[33] T 1-58, l 10 to T 1-59, l 1.

[34] Smith No. 1 (n 1), [1]-[2].

[35] Ibid [63].

[36] Ibid [50]-[51] and [379]-[383].

[37] Smith No. 1 (n 1), [377]-[378].

[38] Ibid [391]-[393].

[39] Ibid [394].

[40] Exhibit 21, para. 70.

[41] Exhibit 21, paras. 70-71.

[42] Mr Brown's affidavit, para. 9.

[43] T 5-52, ll 12-13.

[44] Exhibit 25, para. 3.

[45] $59,217.73 gross divided by 16 = $3,701.10 gross per month.

[46] $3701.10 gross per month multiplied by 24 months = $88,826.40 gross.

[47] $190, 331.88 gross less $88,826.40 gross = $101,505.48 gross.

[48] $101,505.48 gross less $3,647.70 gross = $97,857.78 gross.

[49] The Department's submissions, para. 24.

[50] Wardle v Castlemaine Perkins Ltd (1993) 143 QGIG 442, 445 (Chief Commissioner Hall).

[51] Mr Smith's submissions, paras. 37-46.

[52] [2023] FCA 20.

[53] Section 570 of the Fair Work Act 2009, relevantly provides:

570Costs only if proceedings instituted vexatiously etc.

(1)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

…

(2)The party may be ordered to pay the costs only if:

(a)the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

(b)the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or…

[54] [2021] ICQ 11.

[55] Citations omitted.

[56] [2022] ICQ 019.

[57] Citations omitted.

[58] Baker v Salva Resources Pty Ltd [2011] FWAFB 4014, [10] (Senior Deputy President Watson, Senior Deputy President Watson and Commissioner Harrison) in respect of the equivalent provision in s 611(2)(b) of the Fair Work Act 2009 and Dorman v State of Queensland (Queensland Health) [2023] QIRC 335, [75] (Industrial Commissioner Dwyer).

Close

Editorial Notes

  • Published Case Name:

    Smith v State of Queensland (Queensland Health) (No 2)

  • Shortened Case Name:

    Smith v State of Queensland (Queensland Health) (No 2)

  • MNC:

    [2024] QIRC 21

  • Court:

    QIRC

  • Judge(s):

    Merrell DP

  • Date:

    07 Feb 2024

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Algahamdi v State of Queensland (Queensland Health) (No 2) [2022] ICQ 19
2 citations
Jump To
Cite 1 - [2022] ICQ 19
Cite 2 - [2022] ICQ 19
Baker v Salva Resources Pty Ltd [2011] FWAFB 4014
2 citations
Jump To
Cite 1 - [2011] FWAFB 4014
Cite 2 - [2011] FWAFB 4014
Barsha v Motor Finance Wizard (Sales) Pty Ltd [2002] QIRC 150
2 citations
Jump To
Cite 1 - [2002] QIRC 150
Cite 2 - [2002] QIRC 150
Barsha v Motor Finance Wizard (Sales) Pty Ltd (2002) 171 QGIG 139
2 citations
Jump To
Cite 1 - (2002) 171 QGIG 139
Cite 2 - (2002) 171 QGIG 139
British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd (1912) AC 673
2 citations
Jump To
Cite 1 - (1912) AC 673
Cite 2 - (1912) AC 673
Calderbank v Calderbank (1975) 3 All E.R. 333
2 citations
Jump To
Cite 1 - (1975) 3 All E.R. 333
Cite 2 - (1975) 3 All E.R. 333
Dorman v State of Queensland (Queensland Health) [2023] QIRC 335
2 citations
Jump To
Cite 1 - [2023] QIRC 335
Cite 2 - [2023] QIRC 335
Gleeson v State of Queensland (Department of Justice and Attorney-General) [2015] QIRC 148
2 citations
Jump To
Cite 1 - [2015] QIRC 148
Cite 2 - [2015] QIRC 148
Goldsmith v Sperrings Ltd (1977) 1 WLR 478
1 citation
Jump To
Cite 1 - (1977) 1 WLR 478
Griggs v Health Equipment Hire and Supplies (1995) 149 QGIG 131
2 citations
Jump To
Cite 1 - (1995) 149 QGIG 131
Cite 2 - (1995) 149 QGIG 131
Gull v Saunders (1913) 17 CLR 82
2 citations
Jump To
Cite 1 - (1913) 17 CLR 82
Cite 2 - (1913) 17 CLR 82
Gull v Saunders [1913] HCA 55
2 citations
Jump To
Cite 1 - [1913] HCA 55
Cite 2 - [1913] HCA 55
Kelsey v Logan City Council [2021] ICQ 11
2 citations
Jump To
Cite 1 - [2021] ICQ 11
Cite 2 - [2021] ICQ 11
Messenger v Commonwealth of Australia (Represented by the Department of Finance) (No 2) [2023] FCA 20
2 citations
Jump To
Cite 1 - [2023] FCA 20
Cite 2 - [2023] FCA 20
Nilsen v Loyal Orange Trust (1997) 76 IR 180
1 citation
Jump To
Cite 1 - (1997) 76 IR 180
Payzu Limited v Saunders (1919) 2 KB 581
2 citations
Jump To
Cite 1 - (1919) 2 KB 581
Cite 2 - (1919) 2 KB 581
Smith v State of Queensland (Queensland Health) [2023] QIRC 296
2 citations
Jump To
Cite 1 - [2023] QIRC 296
Cite 2 - [2023] QIRC 296
Staff Services Training and Services Pty Ltd v Adeliza P. Zulueta (2005) 179 QGIG 1
2 citations
Jump To
Cite 1 - (2005) 179 QGIG 1
Cite 2 - (2005) 179 QGIG 1
Staff Services Training and Services Pty Ltd v Zulueta [2005] ICQ 19
2 citations
Jump To
Cite 1 - [2005] ICQ 19
Cite 2 - [2005] ICQ 19
Stewart v Creek Gold (2003) 174 QGIG 105
1 citation
Jump To
Cite 1 - (2003) 174 QGIG 105
Stewart v Creekgold Pty Ltd [2003] ICQ 39
2 citations
Jump To
Cite 1 - [2003] ICQ 39
Cite 2 - [2003] ICQ 39
Stewart v Creekgold Pty Ltd (2003) 174 QGIG 104
1 citation
Jump To
Cite 1 - (2003) 174 QGIG 104
Wardle v Castlemaine Perkins Ltd (1993) 143 QGIG 442
2 citations
Jump To
Cite 1 - (1993) 143 QGIG 442
Cite 2 - (1993) 143 QGIG 442
Whittaker v Unisys Australia Pty Ltd [2010] VSC 9
2 citations
Jump To
Cite 1 - [2010] VSC 9
Cite 2 - [2010] VSC 9
Whittaker v Unisys Australia Pty Ltd (2010) 26 VR 668
2 citations
Jump To
Cite 1 - (2010) 26 VR 668
Cite 2 - (2010) 26 VR 668
Williams v Spautz (1992) 174 CLR 509
1 citation
Jump To
Cite 1 - (1992) 174 CLR 509

Cases Citing

Case NameFull CitationFrequency
Phillips v State of Queensland (Department of Transport and Main Roads) (No. 2) [2025] QIRC 282 citations
Smith v State of Queensland (Queensland Health) [2024] ICQ 197 citations
1

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