Charles Heydon v The Highgate Group Pty Limited

[2018] FWC 956

[2018] FWC 956

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Charles Heydon
v
The Highgate Group Pty Limited
(U2017/6816)

DEPUTY PRESIDENT BOOTH SYDNEY, 9 APRIL 2018

s.394 application for an unfair dismissal remedy – Small Business Fair Dismissal Code – summary dismissal – application dismissed.

[1] Mr Charles Heydon was the Operations Manager for The Highgate Group Pty Limited (Highgate) from 22 June 2015 to 6 June 2017, when he was summarily dismissed.

[2] On 26 June 2017 Mr Heydon made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy.

[3] On 22 December 2017 I found that Highgate was a small business employer at the time of Mr Heydon’s dismissal. 1

[4] Following this decision I issued directions for the parties to file and serve any additional material in relation to Highgate’s contention that Mr Heydon’s dismissal was consistent with the Small Business Fair Dismissal Code. I listed the matter for hearing on 21 February 2018, later rescheduled to 6 March 2018 at the request, and by consent, of both parties due to respective travel arrangements.

[5] By permission of the Commission, given at the first hearing, and continued for this hearing, Highgate was represented by Mr Hassall, Solicitor. Evidence was given by Highgate’s Managing Director Mr Hope. Mr Heydon represented himself and gave evidence on his own behalf.

[6] Highgate submits that Mr Heydon’s dismissal was consistent with the Small Business Fair Dismissal Code and accordingly, Mr Heydon was not unfairly dismissed. Mr Heydon disputes this.

[7] For the reasons set out below I have decided that Mr Heydon’s dismissal was consistent with the Small Business Fair Dismissal Code and Mr Heydon was not unfairly dismissed. Mr Heydon’s application is dismissed.

Factual circumstances

[8] Mr Heydon commenced employment with Highgate on 22 June 2015 in the role of Estimator and Procurement reporting to the Construction Project Manager. By way of a ‘Letter of Promotion’ 2 dated 17 September 2015 he was appointed to the role of Construction Project Manager. This role was later retitled ‘Operations Manager’.

[9] Mr Heydon reported to Niki Tranfield, General Manager of Highgate. Ms Tranfield reported to Mr Richard Hope, Chief Executive Officer of Highgate.

[10] Highgate’s services involve the design, construction, inspection and servicing of adventure play and training facilities. Highgate’s clients include corporate, education, government, family entertainment centres, gyms and the Australian Defence Force.

[11] Highgate employs both ongoing and casual staff and engages contractors and labour hire workers to provide its services to its clients.

[12] The job description for Mr Heydon’s role of Operations Manager included:

“The Operational Manager is responsible for planning and implementing the company’s construction, inspection and remedial work. This includes overseeing their progress along the way, in a timely and cost-effective manner, with responsibility for the budgeting, organisation and scheduling of these projects. ” 3

[13] On 14 March 2017 Mr Heydon wrote to Mr Hope and Ms Tranfield outlining concerns about Highgate’s compliance with its obligations under the Workplace Health and Safety Act 2011 (NSW).

[14] On 15 March Ms Tranfield replied to Mr Heydon acknowledging the letter and indicating that “We are looking into your concerns and how best to address them.” 4

[15] Mr Heydon was not satisfied with Highgate’s response to this and other complaints, as was evident from the exchange of emails between Mr Heydon and Ms Tranfield on the following day. 5

[16] Mr Hope’s evidence in relation to this was:

“THE DEPUTY PRESIDENT:  Might I, again - I'm sorry, things arise iteratively, but I'm still not very clear about this, any consequent actions following the letter of 14 March.  So do you recall receiving that letter of 14 March?---I do recall Nicki bringing it to my attention and we discussed with Employsure and there was a general protection order being taken out at some stage around that time.  I can't recall when it was.  But at the time we were dealing with a number of other issues as well with running a business.  And I was consulting with engineers, with clients, in regards to matters of safety that had been brought up to see if there were genuine concerns or was this just another.  In the general sort of day to day running of our business, we were always coming up with different things that need to be addressed obviously.

So your evidence is that whilst you're not giving me any particulars about the three items raised here, you were in discussion with engineers and safety specialists?---Yes, and Niki Tranfield was working with WorkSafe.  She had a mentoring program going on with WorkSafe and we looked at the designs of what we were doing.  We talked with our client.  We talked with - I think, one of the issues was in Cooks Hill, the Ninja Warrior course.  We talked with a Ninja Warrior instructor up there with the client who had been and seen the facility, discussed it with our engineer.  Nicki and I both went up to the site and visited the site.  We did take some action because we're always evolving with things.  However, it was not that nothing happened.  Things were always - it's a fairly organic process.” 6

[17] On 9 May 2017 Mr Heydon sent an email to Mr Hope, 7 copied to Ms Tranfield. The email was in the following terms:

“Dear Richard,

Yesterday I filed a General Protections application in the Fair Work Commission in relation to recent action you and Niki Tranfield have taken against me in breach of sections 340 (workplace rights) and 343 (coercion) of the Fair Work Act.

That claim is for cessation of adverse action and compensation.

Further to my letter of 14^th March, I will file a Safe Work Prosecution Application on the morning of 11^th May. That application will be in relation to breach of the Act by you, Niki Tranfield and the Highgate clients at various client premises.

I am prepared to engage in without prejudice discussions to negotiate a mutual separation prior to lodging that Safe Work application. If we can reach an agreement prior to 10am on 11 May 2017, I will not lodge the Safe Work Protection Application and I will discontinue the application currently on foot with the Fair Work Commission.

I look forward to your reply on whether you are willing to engage in those discussions.

Regards,

Charles Heydon

Operations Manager”

[18] On 9 May 2017 Ms Tranfield replied to that email as follows: 8

“Without prejudice

As per your request for this in writing can you furnish me with your proposal.

Niki Tranfield

General Manager”

[19] On the same day, 9 May 2017 Mr Heydon handed a single sheet of paper to Ms Tranfield. On that sheet of paper were the following words: 9

“Terms

•  A Months pay in lieu of notice

•  A gross sum of $69,000 equivalent to 6 months’ salary as an employment termination payment

•  A gross sum of $10,000 in respect of annual bonus due

•  A gross sum of $6,000 in respect of legal fees

•  All superannuation entitlements and accrued but unpaid statutory leave, accumulated time in lieu

•  A signed deed of release on mutual terms

[20] Ms Tranfield wrote on this document after her meeting with Mr Heydon that he had said something along the lines of “we wouldn’t want a Trojan horse in our business”.

[21] Mr Heydon gave evidence under cross-examination as follows:

“I don’t know - at some stage I suspect I did say Trojan Horse, but in that context, certainly not”. 10

[22] On 11 May 2017 Ms Tranfield emailed Mr Heydon rejecting this proposal. 11

[23] On 15 May Mr Heydon sent an email to Mr Hope, 12 copied to Ms Tranfield. The email was in the following terms:

“HI (sic) Niki,

Thanks for your note .

As indicated in my e-mail of the (sic) I have filed a request for prosecution application with Safe Work NSW in relation to the matters discussed below.

Regards,

Charles Heydon

Operations Manager

[24] Mr Heydon submitted an “application for prosecution” to SafeWork NSW on 15 May 2017 and his application was acknowledged by SafeWork NSW on the same day and given the reference number 1-374592. 13 SafeWork’s response to this application was not known to Mr Hope at the time of Mr Heydon’s dismissal. The file was closed by SafeWork NSW on 27 June 2017 with no action taken.

[25] On 26 May 2017 Mr Hope attended a client site at a converted factory in Williamstown, Victoria where Highgate was installing a children’s climbing facility called Clip ‘n Climb. Highgate personnel on site that day were Mr Heydon, Mr Gilbert Meunier, Installation Manager, Mr Mic Roffe Assistant Installer and a labour hire worker.

[26] There had been a near miss incident at this site on another day when a container was being unloaded. No problems were raised with Mr Hope during his visit on 26 May.

[27] Later that day Ms Tranfield telephoned Mr Hope to alert him to an email sent to Mr Hope and Ms Tranfield by Mr Heydon.

[28] The email was in the following terms:

“Richard,

I note you were on site at Williams town today however you would not consult with me , acknowledge me or discuss anything with me

I have just conducted an audit of the WHS documentation and arrangements at the construction work site at Williamstown and have found that the documents and other arrangements on the Williamstown site do not meet the requirements of the relevant state legislation.

You as the employer have a duty to meet the requirements of the legislation. There are penalties in relation to the above breaches.

The remedy in the legislation is to stand work on the site down until such time as the legislative requirements can be met in full.

I suggest in the strongest possible terms that you shut the site down immediately and stand the stand down at full pay whilst the company’s legislative duties are met in full.

Please let me and the staff on site know what you intend to do at your earliest

[29] Mr Hope’s evidence was: 14

“The Applicant’s flight from Melbourne to Sydney was approximately 4pm Friday, 26 May 2017. Due to the timing of the email and the flight I was aware that I would not be able to reach the Applicant. The Applicant was not due to return to work until Tuesday 30 May 2017, as he had been given the Monday off to attend the Fair Work Commission in relation to his General Protections application.

After receiving the email, I spoke with Gilbert Meunier and had a conversation to the following effect:

R: “Do you know of any reason the site should be shut down?”

G: “No.”

R: “Charles, hasn’t discussed any safety concerns or shutting the site with you?”

G: “No.”

I also contacted Employsure to seek advise (sic) regarding how to respond to the Applicant’s email noting that I considered that he had provided insufficient detail surrounding his WHS concerns and his recommendation to close the Williamstown site and that I had concerns he had done so deliberately to cause the business damage. I had these concerns initially because the Applicant:

(a) had not mentioned the WHS concerns to Gilbert Meunier

(b) did not detail what legislative requirements had not been met (or how this alleged failure had occurred)

(c) appeared not to have taken any steps to address the WHS concerns whilst on site and left staff onsite in an apparently unsafe work environment despite having the responsibility and authority to do so, and

(d) did not attempt to contact myself or Niki Tranfield via telephone to discuss the concerns or seek approval to close the site whilst he was there.

As a result of the Applicant’s email, the Williamstown site was shut down and remained shut for 1.5 working days.”

[30] Mr Heydon’s evidence was: 15

“Given the timing issues, and as was normal practice, I didn’t include a great deal of detail in this e-mail notification to management in the expectation that there would be discussions to understand and resolve the issue – but:

(a) I was available on my mobile before and after my flight and over the weekend. I was never contacted by the company;

(b) The staff at the site were aware of the near miss concerns I had. Richard was at site so presumably could easily talk to them and or review the near miss form.

(c) Niki rang the site following my email to find out what the issues were;

(d) I had been raising concerns about SMS for months and had in fact rewritten the SWMS for common work activities with Gil Meurnier (sic) – but the rewritten SWMS were not being used at the Melbourne site;

(e) Management was quickly and easily able to establish the issues and remedy them even without contacting me.

(f) High risk activities in the container had finished,”

[31] After closing the site on 26 May 2017 Highgate contacted Worksafe in Victoria. Highgate reopened the site on Monday 29 May 2017 after consulting Worksafe and remedied “paperwork that needed to be put into place and some signage which was undertaken as soon as it possibly could”. 16

[32] On 30 May 2017 Mr Hope provided Mr Heydon with a letter making two allegations against Mr Heydon, advising him that he was suspended with pay and requesting his attendance at a meeting on 2 June 2017. 17

[33] The two allegations contained in the letter were: 18

i. On 26 May 2017, it is alleged that you have wilfully and deliberately withheld information pertaining to a full report of the WHS documentation of the Williamstown site. Specifically, you have failed to meet your employment obligations withholding crucial details surrounding your WHS report leading to a 1 ½ day shutdown which could have been avoided. Such conduct is a fundamental breach of your contractual obligations and has the potential to irrevocably destroy the trust and confidence necessary to continue the employment relationship and has the potential to create a serious and imminent risk to the viability, profitability and productivity of the business; and

ii. On 9 May 2017, it is alleged that you attempted to extort money from the Company, by demanding payment whilst threatening your employment status to benefit from the Company’s finances. This is in breach of your employment obligations to act faithfully and honestly always and has the potential to irrevocably destroy the trust and confidence necessary to continue the employment relationship and has the potential to create a serious and imminent risk to the viability, profitability and productivity of the business.

[34] The anticipated meeting of 2 June was conducted and Mr Hope told Mr Heydon that his employment was terminated with immediate effect. This was confirmed in a letter dated 6 June 2017.

Legal framework

[35] A dismissal is not an unfair dismissal if the Commission is satisfied that the dismissal was consistent with the Small Business Fair Dismissal Code (the Code). 19

[36] To be consistent with the Code the employer must be a small business employer at the time of the dismissal and comply with the Code when dismissing the employee. 20

[37] An employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time. 21

[38] I have already decided that Highgate was a small business employer at the time of Mr Heydon’s dismissal.

[39] It remains for me to consider whether Highgate complied with the Code when dismissing the Mr Heydon.

[40] The Code provides as follows: 22

“Small Business Fair Dismissal Code

Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[41] The provisions of the Code that are relevant in this case are Summary Dismissal and Procedural Matters. This is because Mr Heydon was summarily dismissed by Highgate.

[42]  I must consider whether the decision maker, Mr Hope, believed on reasonable grounds that the Mr Heydon’s conduct was sufficiently serious to justify immediate dismissal.

[43] There are two parts to this consideration:

•  Firstly, did Mr Hope hold a belief that Mr Heydon had committed an act of serious misconduct?

•  Secondly, was Mr Hope’s belief based on reasonable grounds?  In this context the test of “reasonable grounds” is an objective one.

Did Mr Hope hold a belief that Mr Heydon’s conduct was sufficiently serious to justify immediate dismissal?

[44] Serious misconduct is defined in the Fair Work Regulations 2009 (Cth) as follows: 23

“Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”

[45] Mr Hope was cross examined by Mr Heydon as to his reason for summarily dismissing him. His evidence was:

“MR HEYDON:  Mr Hope, can you just explain to me the grounds for the summary dismissal please?---It was my belief that I was - that the company was being threatened to be taken to WorkSafe and reported to WorkSafe for matters which we were not aware of and that unless we were prepared to enter into financial negotiations that would occur and I felt that was blackmail.  I felt there was blackmail in the company by a company employee who was being paid by the company, to work within the company to do the best for the company, not to threaten the company.” 24

[46] In re-examination by Mr Hassall Mr Hope said: 25

“Mr Heydon asked you or asked you some questions about - we'll refer to it as the extortion letter - but you have described why you felt like you were being extorted because there was a threat to report the company to WorkCover - New South Wales WorkCover unless there was an agreed outcome that Mr Heydon was satisfied if that's the case, isn't it?

---Yes, it is.”

[47] I consider that Mr Hope believed that Mr Heydon sought to bring pressure to bear on Highgate to secure a separation agreement involving a large payment. I consider that Mr Hope believed that Mr Heydon meant to harm Highgate.

[48] Serious misconduct includes harm to the reputation of an employer, and I consider that Mr Hope believed that Highgate’s reputation was at risk, and that risk was materialised on 26 May 2018, when Mr Heydon’s actions caused the Williamstown site to be shut.

[49] In all the circumstances I consider that Mr Hope held a belief that Mr Heydon’s conduct was sufficiently serious to justify immediate dismissal.

Was Mr Hope’s belief based on reasonable grounds?

[50] Mr Heydon does not dispute that he foreshadowed, and then did make, a work health and safety complaint. He does not deny making an offer to resign if he received a separation payment. However he denies that there is a connection between the two.

[51] In Mr Heydon’s closing submissions he said:

“The applicant was an operations manager of Highgate and was forced by the respondent’s attitude to safety to become a whistleblower in order to address matters of safety and his own potential liability.”

[52] In effect, Mr Heydon denies that he sought to use work health and safety as leverage to obtain a favourable separation from Highgate. 26

[53] I have found that Mr Hope believed that Mr Heydon sought to bring pressure to bear on Mr Hope to encourage him to reach a favourable separation agreement and intended to harm Highgate.

[54] In considering whether this belief was reasonable I am not required to make a finding about whether the health and safety complaint was intended as leverage to obtain a favourable separation from Highgate or whether Mr Heydon did intend to harm Highgate. Rather I must consider whether the objective circumstances are such as to find that Mr Hope’s belief was reasonable.

[55] I consider that it is evident from the face of the emails sent by Mr Heydon and the sequence of events that Mr Hope’s belief was reasonable.

[56] On 9 May Mr Heydon said:

“I am prepared to engage in without prejudice discussions to negotiate a mutual separation prior to lodging that Safe Work application. If we can reach an agreement prior to 10am on 11 May 2017, I will not lodge the Safe Work Protection Application.”

[57] On 9 May Mr Heydon gave Ms Tranfield a proposal that included a payment of $85,000 (excluding statutory entitlements). 27

[58] Ms Tranfield rejected this proposal via email. 28

[59] I consider it is more likely than not that Mr Hayden referred to himself as a “Trojan Horse” in a conversation with Ms Tranfield.

[60] On 15 May Mr Heydon told Ms Tranfield that he had “filed a request for prosecution application with Safe Work NSW”.

[61] On 26 May he advised Ms Tranfield to “shut the site down immediately” without clearly describing the health and safety risk/s that warranted that advice.

[62] On the basis of this series of events it was reasonable for Mr Hope to believe that Mr Heydon sought to bring pressure to bear on Highgate to secure a separation agreement involving a large payment. It was also reasonable for Mr Hope to believe that Mr Heydon meant to harm Highgate.

[63] The interrelationship between the work health and safety complaint and the financially significant separation agreement was such that a reasonable person could form the view that Mr Hayden was using work health and safety as a pawn in a game. The safety of a workplace can be seriously undermined when work health and safety is high jacked for an ulterior purpose. I am not making a finding that this occurred but the conjunction of events could lead a person to this belief.

[64] In all the circumstances I consider that Mr Hope’s belief was based on reasonable grounds.

Were the procedural requirements of the Code met?

[65] In a case of summary dismissal the Code’s procedural requirements are confined to two requirements. Firstly, that the employee is permitted to have another person present to assist them in a discussion about the possibility of termination, although the other person cannot be a lawyer acting in a professional capacity. Secondly, that the employer must provide evidence of compliance with the Code, although a warning is not necessary in cases of summary dismissal.

[66] On 30 May 2017 Mr Heydon was requested to attend a meeting to be held on 2 June 2017. He was invited to bring a support person and did so.

[67] I consider that the procedural requirements of the Code have been met.

In dismissing Mr Hayden did Highgate comply with the Small Business Fair Dismissal Code?

[68] I have found that Highgate was a small business employer at the time of Mr Heydon’s dismissal. I have found that Mr Hope held a belief that Mr Heydon’s conduct was sufficiently serious to justify immediate dismissal. I have found that Mr Hope’s belief was based on reasonable grounds. I have found that Highgate met the procedural requirements of the Code.

[69] In all the circumstances I am satisfied that Highgate complied with the Small Business Fair Dismissal Code when it dismissed Mr Heydon. Accordingly the dismissal was consistent with the Small Business Fair Dismissal Code. Mr Heydon’s application is dismissed.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR600386>

 1   Charles Heydon v The Highgate Group Pty Limited [2017] FWC 615.

 2   Attachment C to Exhibit H 1 Statement of Richard Hope of 31 August 2017.

 3   Attachment D to Exhibit H1 Statement of Richard Hope of 31 August 2017.

 4   Exhibit RH6 Statement of Richard Hope of 22 September 2017.

 5   Exhibit RH6 Statement of Richard Hope of 22 September 2017.

 6   Transcript of 6 March 2018, PN2078-9.

 7   Attachment E to Exhibit H1 Statement of Richard Hope of 31 August 2017.

 8   Attachment F to Exhibit H1 Statement of Richard Hope of 31 August 2017.

 9   Attachment RH7 to Exhibit H2 Statement of Richard Hope of 22 September 2017.

 10   Transcript of 6 March 2018, PN2213.

 11   Attachment G to Exhibit H1 Statement of Richard Hope of 31 August 2017.

 12   Attachment G to Exhibit H1 Statement of Richard Hope of 31 August 2017.

 13   Exhibit H8, emails to and from SafeWork NSW.

 14   Exhibit H1 Statement of Richard Hope of 31 August 2017, paras 20-23.

 15   Exhibit CH5 Applicant’s Statement of 11 September 2017, para 146.

 16   Transcript of 6 March 2018, PN1974.

 17   Attachment H to Exhibit H1 Statement of Richard Hope 31 August 2017.

 18   Ibid.

 19   Fair Work Act 2009 (Cth), s 385.

 20   Fair Work Act 2009 (Cth), s 388.

 21   Fair Work Act 2009 (Cth), s 23.

 22   Fair Work Act 2009 (Cth), s 388; Legislative Instrument 24 June 2009.

 23   Fair Work Regulations 2009 (Cth), reg 1.07.

 24   Transcript of 6 March 2018 PN1884.

 25   Transcript of 6 March 2018 PN1986.

 26   Transcript of 6 March 2018 PN1999, 2181, 2268-9.

 27   Attachment K to Exhibit CH5 Applicant’s Statement of 11 September 2017.

 28   Attachment G to Exhibit H1 Statement of Richard Hope of 31 August 2017.