De Blasio v Melba Support Services INC.

[2014] FCCA 1893

FEDERAL CIRCUIT COURT OF AUSTRALIA

DE BLASIO v MELBA SUPPORT SERVICES INC. [2014] FCCA 1893

Catchwords:
INDUSTRIAL LAW – Workplace right – adverse action – application dismissed.

Legislation:  

Fair Work Act 2009, s.361

Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32

Applicant: DORA DE BLASIO

Respondent: MELBA SUPPORT SERVICES INC.

File Number: MLG 423 of 2013

Judgment of: Judge Riethmuller

Hearing dates: 29 & 30 October 2013 and 28 November 2013

Date of Last Submission: 28 November 2013

Delivered at: Melbourne

Delivered on: 22 August 2014

REPRESENTATION

Counsel for the Applicant: Mr Miller

Solicitors for the Applicant: Marshalls & Dent Lawyers

Counsel for the Respondent: Ms Richards SC

Solicitors for the Respondent: Beaumont Lawyers

ORDERS

1. The Application filed 3 April 2013 be dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT MELBOURNE

MLG 423 of 2013

DORA DE BLASIO

Applicant

And

MELBA SUPPORT SERVICES INC.

Respondent

REASONS FOR JUDGMENT

1. The applicant was employed by the respondent as its Human Resources Manager on 28 June 2011 on a part time basis. 

2. On 15 November 2012 the respondent terminated the applicant’s employment paying her two weeks wages in lieu of notice, and her accrued annual leave.

3. The applicant seeks compensation by way of reinstatement and the imposition of a penalty upon the respondent under ss.545 and 546 of the Fair Work Act2009. The applicant’s claim rests upon an allegation that the respondent took adverse action against the applicant for a prohibited reason in breach of s.340 of the Fair Work Act. 

4. In this case, the dismissal is relied upon as the adverse action. There is no dispute that a dismissal comes within the definition of adverse action: see s.342. 

5. The applicant alleges a substantial and operative factor in the decision that she be dismissed, was that she exercised a workplace right when making a complaint against her manager of bullying. There is no dispute that she made a bullying complaint, nor that the making of a complaint of bullying is a workplace right.

6. In her amended statement of claim the applicant alleged two reasons for the adverse action, the fact that she exercised her workplace rights by making a complaint and that she exercised her workplace rights by taking personal leave. 

7. Section 361 of the Fair Work Act provides for a presumption that:

   Reason for action to be presumed unless proved otherwise

   (1) If:

   (a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

   (b) taking that action for that reason or with that intent would constitute a contravention of this Part;

   it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

   (2) Subsection (1) does not apply in relation to orders for an interim injunction.

8. The respondent says that the applicant was dismissed as a result of serious misconduct in the workplace, and not because of her bullying complaint against her manager.

9. In written submissions at the end of the trial the applicant focused upon the complaint of bullying as the relevant workplace right, rather than the sick leave but did not abandon the sick leave claim.

10. It is therefore necessary to determine whether or not the respondent has rebutted the presumption that the complaint with respect to bullying and/or the sick leave were substantial or operative factors in the decision to terminate the applicant.

Background

1. The applicant commenced working with the respondent as its Human Resources Manager on 28 June 2011, working for three days per week.  Her hours of work increased to four days per week from 7 November 2011, but reverted back to three days per week from 30 July 2012.  Initially, the applicant was reporting to Ms Kendall, the acting CEO of the respondent, until the new CEO, Mr Foard, was appointed on 16 January 2012.

2. On 8 August 2012, the applicant made a complaint against Mr Foard for bullying, at which point it was arranged for Ms Kendall to resume supervising the applicant in the workplace and managing all of the matters relating to her employment until such time as the complaint could be investigated. 

3. On 6 August 2012, the applicant lodged a WorkCover claim, stating that she had suffered psychological injury as a result of stress on 23 July 2012, (being the last day she had a supervision meeting with Mr Foard). The WorkCover claim was rejected on 12 September 2012.  A conciliation conference was held at the Accident Compensation Conciliation Service on 31 October 2012 but was unsuccessful in resolving the dispute, which is now the subject of proceedings in the Magistrates’ Court of Victoria.

4. The complaint that the applicant made about Mr Foard is contained in an email sent by her on 8 August 2012.  The respondent, quite properly, engaged an independent investigator, Ms Jury, to investigate the complaint. A detailed investigation was carried out and a written report prepared, finding that the complaint was not substantiated.  This report was provided to the President of the board who subsequently advised the applicant and Mr Foard of the outcome of the investigation on 19 October 2012.

5. During the course of the investigations, the President contacted the information technology providers of the organisation and asked them to grant him access to the workplace email accounts of both the applicant and Mr Foard to enable him to peruse the emails, having regard to the nature of the complaints that had been made. Emails were subsequently discovered which indicated that the applicant had been carrying out work for another organisation, utilising documents that had been prepared for the applicant. The respondent subsequently relied upon these matters to terminate the applicant’s employment.

6. The key issues in this matter are identified by paragraphs 10 and 11 of the Amended Statement of Claim where the applicant pleads:

   10. In breach of section 340(1) of the Act, the adverse action referred to in paragraph 8 was taken because:

   (a) the Applicant exercised her workplace rights by the making of the Complaint; and/or

   (b) the Applicant exercised her workplace rights by taking personal leave, as alleged at paragraph 9 above;

   or for reasons that included those reasons pursuant to section 360 of the Act.

   11. Further and in the alternative, in breach of section 352 of the Act, the dismissal referred to in paragraph 9 was taken because the Applicant was temporarily absent from work because of illness or injury, or for reasons that included that reason pursuant to section 360 of the Act.

7. As a result of the operation of the statutory provisions the onus is upon the respondent to show that the adverse action was not taken because of one of the reasons alleged in the Statement of Claim. In order to make this determination it is appropriate for me to turn to the question of why the adverse action was taken against the applicant (that is her termination as pleaded at paragraph 9), and whether or not the prescribed reasons (as pleaded at paragraphs 10 and 11of the Statement of Claim) was a substantial and operative factor in the decision: See Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 at 127.

8. Fortunately, in this case, the relevant people involved in the dispute and decision making have all been called as witnesses, including the person responsible for the ultimate decision.

9. The respondent’s case is that the applicant was dismissed because she had engaged in misconduct and neither her complaint nor her absence due to her illness were a substantial or operative reason for her dismissal.

The Applicant’s Evidence

1. The applicant gave evidence and was cross-examined. She presented as a little nervous at giving evidence, but no more nervous than is common for witnesses who do not regularly give evidence before the court. In general I found that she appeared to have a tendency to minimise matters that did not reflect well upon her. Importantly, there were matters which have led me to have real doubts as to her credibility.

2. The applicant obtained her employment relying upon a CV that included a claim to hold a Bachelor of Arts degree with Honours. It transpires that she does not hold an Honours degree, however she sought to explain that false claim by stating that she took a fourth year of study (part of the Honours program) but simply did not obtain an Honours degree (T40). I find this remarkable given that she was employed in a position as a human resources manager.

3. In January 2012 the applicant applied for at least one, perhaps two positions at her local authority. Initially she had said that she applied for a position at the local authority because of the conduct of Mr Foard (the CEO) criticising her at a “Nightlife committee management meeting”. It transpired that the letter the applicant had first written to the authority to apply for a position was sent prior to the commencement of Mr Foard’s employment with the respondent, it therefore could not have been prompted by any conduct of Mr Foard. This appears inconsistent with the in the applicant’s first affidavit at paragraph 24 where she says:

   24. I was very distressed by Mr Foard’s unprofessional behaviour. I started looking for another job. In late January 2012 I applied for a position at Knox City Council but I did not proceed with the application. I was very upset because I did not want to leave Melba, I was very happy at Melba.

4. In cross-examination she sought to explain this on the basis that she had applied for two positions at the local authority because it was close to her home, the applications being a month apart.

5. In an email that the applicant had sent to Caroline Liuzzi at “The Art Cabriolet” on 27 February 2012 concerning work that the applicant was undertaking with that organisation in preparing a volunteer manual and set of human resources policies and procedures she said that she was working full time, when in fact at that stage she was only working part time for the respondent. She sought to explain this on the basis that she was doing some contracting work and looking after her mother, although the context of the statement in the email does not appear to me to give that impression on a fair reading, as the letter said “My 85yr old Mother is unwell and I am looking after her as well as my own place and working full-time.”

6. The applicant alleged that Mr Foard had bullied her at a meeting on the 28^th of May over mistakes that she had made and already apologised for, although it appears that the 2 letters that the applicant was referring to were not in fact sent until 2 or 3 days after the meeting that she referred to, which she ultimately admitted in cross-examination (see T60). She had also said in another statement that there was nothing about Mr Foard’s behaviour that disturbed her in senior management meetings. The applicant also said in her statement with respect to the bullying complaint that she “cannot say that [Mr Foard] treats me differently to others”, although suggested in her affidavit (paragraph 86) that Mr Foard made comments regarding her Italian background, which she explained by saying that it was only some time later upon reflection that she came to the view that her ethnic background was an issue.

7. In the week before a conciliation conference with respect to the applicant’s work cover claim she received a letter from Ms Kendall of the applicants dated 24^th October raising serious concerns about her conduct as an employee, but sought to have that re-scheduled because of illness, although she proceeded with the work cover conciliation conference.

8. The evidence before me concerning supervision of the applicant’s performance by Mr Foard of the applicant in the workplace indicates a careful process was undertaken of identifying matters in advance by email, and following up the supervision sessions with comments. This also included Mr Foard highlighting some matters in bold type in the comments that should be treated as the priority matters if the applicant were not able to attend to all of the work items within the time reasonably available to her. Again, this seemed inconsistent with her claim in her affidavit that she did not get assistance in prioritising action items. Rather, on the material produced it appears to me that careful and detailed supervision instructions were given by Mr Foard, in a way that was also carefully documented and quite transparent. I could not help but form the impression that the level of accountability that resulted from such supervision may have been subjectively perceived by the applicant as bullying, particularly if she had not been required to be so accountable in the past.

9. A core issue in the case was whether or not the applicant was undertaking work for the Art Cabriolet organisation (or one of its benefactors) on a basis that was “very open and up front with everyone” as she alleges. Remarkably she did not mention it in any email, nor did any of the witnesses for the respondent admit to having any knowledge of it. It is also clear that substantial parts of the documents prepared for Art Cabriolet were copied from documents of the respondent.

10. Counsel for the applicant sought to minimise this apparent misuse of the applicant’s resources (in apparent breach of the respondent’s copyright) with the argument that both organisations are non-profit organisations working with their local communities and that this in some way should be treated differently to commercial organisations.

11. The cost to community organisations for the preparation of policies and procedures manuals is significant, and often forms a significant part of their administrative expenses in conducting the work that they perform. Environments in which organisations tender for government funding are now highly competitive. Whilst such organisations may from time to time agree to provide such information or materials for use of other similarly minded organisations, that does not detract from the basic proposition that the intellectual property in this material was that of the respondents, and that it was wholly inappropriate to utilise that for the benefit of another organisation without the respondent’s permission. In this case it was not only for the benefit of another organisation but also to allow the applicant to profit from the material. I was not persuaded by the applicant’s evidence that she had in fact told members of the respondent organisation of her work, nor that she had any actual or implied consent to use the resources.

12. The conduct of the applicant in sending details of her bullying complaint to one of the witnesses she nominated prior to them being interviewed by the external person engaged to consider the complaint of bullying was clearly inappropriate, which must have been apparent to the applicant given her role in human resources. In addition she disclosed details of the ongoing issues to an external organisation, which was clearly inappropriate in the circumstances of this case.   

13. There was also some limited evidence of emails concerning the Art Cabriolet contract being accessed through the work computer, although it appears that this was minimal.

14. On the material as a whole I did not find the applicant a credible witness.

Mr Foard’s Evidence

1. In this case the CEO of the Respondent, Mr Foard gave evidence in accordance with his affidavit. I found him a careful and measured witness, with considerable attention to detail. His evidence was largely consistent with his affidavit material. The area in which his evidence concerned the events involved with the President of the organisation did Mr Foard after the President obtained email access to the applicant’s work email box I discuss below.       

2. The bullying complaint against Mr Foard was independently investigated by a person who is not an employee of the respondent. The result of the investigation was a finding that the complaint was dismissed. Nothing in evidence here would lead me to doubt the appropriateness of that finding. Whilst one would expect Mr Foard to be annoyed and upset by such allegations against him, his approach as given in evidence was measured and somewhat philosophical, certainly reflecting the community values of the organisation. I am persuaded that he treated the incident as simply one of the difficulties in managing staff that he had to work through. 

Mr Groves’ Evidence

1. Mr Groves is the voluntary President of the respondent community organisation. Mr Groves undertakes that role as a community service without being paid for his work. He runs his own business as an accountant in the suburbs. He presented as a forthright witness who was caught up in this dispute as a result of his role as President.

2. Mr Groves gave evidence that as a result of the allegations, so soon after the appointment of the new CEO, he took the step of having the organisation’s I.T. providers grant him access to the workplace email accounts of Mr Foard and the applicant so that he might review the emails himself.

3. Whilst an unusual approach, it certainly had a very practical flavour, allowing him the opportunity to review the emails between the protagonists to form at least a preliminary view about what had been going on. This was clearly a very serious matter from the perspective of the respondent organisation, of which he was the President, given that it was a dispute between the CEO and the human resources manager who were 2 of the key staff responsible for managing the other staff of the organisation.

The Emails Located in Ms De Blasio’s Work Email Account

1. As a result of having access to the applicant’s email account, Mr Groves discovered an email from the applicant to another organisation, “Nightlife”. The respondent and Nightlife were not on the best terms at that time. Not surprisingly, this worried Mr Groves. He asked Mr Foard to attend at his office, to discuss it.

2. Precisely who went through the emails thereafter (Mr Groves or Mr Foard) is somewhat unclear although this is how the work for “Art Cabriolet” was discovered.

3. Counsel for the applicant relies heavily on the detail of the evidence about who went through the emails. I am not persuaded it has the significance that Counsel attaches to it. The reality is that Mr Groves discovered a disconcerting email, he called Mr Foard to discuss and review the emails. Enquiries ensued. The material was found. There is no suggestion that the emails were not genuine. It does not appear to me to show that Mr Foard was pursuing a vendetta or seeking a basis for terminating the applicant’s employment, regardless of the detail of who of Mr Groves, Mr Foard (or both) that located the emails.

4. What is clear from Mr Groves’ evidence is that he was deeply concerned about the emails and felt they were a proper basis for terminating the applicant’s employment, a proposition Mr Foard agreed with. Advice was sought and the applicant’s employ terminated following a letter asking her to respond to the claims (to which she did not ultimately respond).

Ms Kendall’s Evidence

1. Ms Kendall was the applicant’s supervisor prior to Mr Foard starting. After the applicant’s bullying complaint, Ms Kendall supervised her again until the complaint was dealt with. Ms Kendall appears to have had a good relationship with the applicant and the applicant with her.

2. Ms Kendall presented well in the witness box and appeared open and forthright. Ms Kendall said she had no recollection of ever being told by the applicant of the use of the respondent’s policies and manuals. I accept Ms Kendall’s evidence.

Reasons for Termination

1. A letter of termination was sent to the applicant, dated 15 November 2012. Within that letter, 4 reasons are given for the applicant’s employment termination. Whether the grounds in the letter were genuine concerns of the respondent bears upon whether the respondent has discharged its onus.  The grounds are as follows:

Ground 1 – You have breached your contract with Melba by working for financial gain (without prior permission) for Art Cabriolet in assisting that organization to develop its HR policies in 2011 and 2012

1. Counsel for Ms De Blasio says:

   Ms De Blasio worked part time. It is unremarkable that she worked elsewhere, and Ms De Blasio was entirely open about the fact that she held another job. This is not a case where complete dedication to the employer can be expected, as in full time position of a type which carries with it a prohibition on outside employment. There is no basis for claiming that the modestly remunerated outside engagement of Ms De Blasio for another charitable organisation need have caused the Respondent any concern, let alone forming a reason to terminate her employment for serious misconduct.

2. It is not unreasonable that a part time employee would have other work. It is significant here that the applicant was a member of the senior management group and the work was of a similar nature. When reflecting upon this I find, there is some force in Counsel’s criticisms, however I do not accept that the failure to advise the respondent in these circumstances was without significance. I am not persuaded this was not a genuine concern of the respondent.   

Ground 2 – You completed some of the above work during your work hours with Melba, and some of the work undertaken for financial gain for Dia Ora Jewellers in 2011 during your work hours with Melba

1. On this ground the applicant’s Counsel said:

   The evidence was clear that Ms De Blasio conducted her work for Art Cabriolet and Dia Ora Jewellers in her own time. It is true that there was very occasional use of the Respondent’s e-mail, but the times of that use support Ms De Blasio’s evidence that she was performing any work for other parties outside of her work hours with the Respondent. There must be some reasonable give and take in the circumstances: Ms De Blasio’s evidence was clear that she often performed work for the Respondent outside of ordinary working hours, unpaid.

   It is hard to see that there was any misconduct involved, and any concerns of the employer could easily have been addressed through a discussion with Ms De Blasio rather than termination of employment.

2. Again, there is much force in these arguments. However, one must consider this at the relevant time. At the time there was some evidence of the applicant undertaking work for others during her work hours with the respondent. There was also some level of distrust in the relationship at this time. It was not unrealistic that this be raised with her, nor unrealistic to rely upon it in the absence of her responding to the letter about her employment.

3. I accept that this reflects a genuinely held concern, even if the evidence at trial showed it was ultimately not a significant amount of time. 

Ground 3 – You have utilized and accessed Melba’s intellectual property for your own financial gain (in the carrying out of work for Art Cabriolet), specifically utilizing Melba’s “Health and Safety Policy” and the “Dress and Presentation Policy” to (re)recreate such documents for Art Cabriolet.

1. The applicant’s Counsel submitted that:

   Policies of the type referred to are drawn by reference to common sources such as the legislation and governmental guidelines. Borrowing policies between organisations is commonplace – even Mr Foard suggested that Ms De Blasio “borrow an existing policy from another organisation” when drafting a mobile phone policy. That any similarity in policies exists is unsurprising, and hardly likely to provoke the response of termination of employment.

2. It is important to recognise that copying of these types of documents (euphemistically called ‘borrowing’) occurs regularly between not for profit organisations and commercial organisations. Many solicitors, for example, share precedent documents. However, such documents have a value and copyright is protected at law. The similarity in this case between the documents satisfies me on the balance of probabilities that they were substantially copied. This was without permission and for the applicant to profit from the process. Whether the respondent would choose to share the documents with another organisation is for the respondent’s CEO or board, not the applicant.

3. I am satisfied this was a genuine and significant concern of the President at the time, and a genuine reason for the termination. 

Ground 4 – You have breached Melba’s confidentiality policy, Melba’s code of conduct and the directions provided by the organization, and via s Jury of JBSA, regarding the confidentiality of JBSA’s investigations by discussing the allegations and the investigation with individuals employed by other disability service providers (namely, Nightlife Disability Services and Milparinka)

1. With respect to this ground the applicant’s Counsel submitted:

   The alleged breach of confidentiality was simply Ms De Blasio conferring with prospective witnesses concerning her WorkCover claim. Sending her statement was an understandable and unremarkable step in the circumstances. It was simply a part of the protection of her legitimate workplace rights, and involved no breach of confidentiality. She cannot be subjected to criticism for this action.

2. I do not accept this argument. The applicant well understood this was not appropriate and was employed in a position where she would have been expected to understand this. It was not the conduct of an employee unfamiliar with human resources issues. I accept that this was a genuinely held basis for the applicant’s termination.

The Presumption

1. I accept the evidence of the respondent’s witnesses that the termination of the applicant’s employment was not for one of the reasons she pleaded. I accept that the reasons she pleaded were not a substantial or operative part of the reasons for her dismissal. I accept that the most significant reason was that set out in Ground 3 of Ms Kendall’s letter coupled with the applicant’s failure to respond to that letter.

Conclusion

1. When looking at the evidence as a whole I am persuaded that none of the three people involved with the applicant’s termination, Mr Groves, Mr Foard or Ms Kendall took adverse action because the applicant exercised a workplace right.

2. I am not satisfied that the reasons alleged by the applicant were substantial or operative reasons for the termination.    

3. I am persuaded that the respondent has discharged its onus under the Act and therefore the application should be dismissed.

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller

Associate: 

Date:  22 August 2014