Divilly-Lavelle v Siemens Mobility Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

EMPLOYMENT AND INDUSTRIAL LIST

S ECI 2020 02985

JOAN DIVILLY-LAVELLE	Plaintiff
v
SIEMENS MOBILITY PTY LTD (ACN 625 304 556)	Defendant

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JUDGE:	Richards J
WHERE HELD:	Melbourne
DATE OF HEARING:	2–4, 7–8 November 2022
DATE OF JUDGMENT:	8 February 2023
CASE MAY BE CITED AS:	Divilly-Lavelle v Siemens Mobility Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 28

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EMPLOYMENT LAW – Plaintiff employee of defendant company – Plaintiff distressed by negative feedback received from manager during performance review – Plaintiff complained about manager’s conduct – Whether manager’s conduct and defendant’s response to complaint were repudiatory breaches of employment contract – Whether defendant’s Business Conduct Guidelines incorporated into employment contract – Whether manager’s conduct and defendant’s response were in breach of Guidelines – Whether defendant failed to take reasonable care for plaintiff’s safety – Whether plaintiff elected to affirm contract – Whether defendant entitled to terminate plaintiff’s employment – No breach of employment contract – Guidelines not incorporated into employment contract – Complete breakdown of employment relationship – Company entitled to terminate plaintiff’s employment – Proceeding dismissed – Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120 – Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M O’Connor	Cranston McEachern Lawyers
For the Defendant	Ms R Sweet SC	Baker McKenzie

TABLE OF CONTENTS

Introduction................................................................................................................................... 1
Terms of the contract of employment........................................................................................ 5
Business Conduct Guidelines 2019................................................................................... 9
Plaintiff’s submissions...................................................................................................... 14
Defendant’s submissions.................................................................................................. 15
Consideration..................................................................................................................... 17

What occurred at the 31 July meeting?.................................................................................... 22
Ms Divilly-Lavelle’s evidence.......................................................................................... 24
Mr Nandi’s evidence......................................................................................................... 30
Findings............................................................................................................................... 35
Boardman report................................................................................................................ 39

What complaints did the plaintiff make about the 31 July meeting?.................................. 44
Meeting with Ms Barnard on 1 August 2019................................................................. 45
Letter to Ms Ruzicka dated 18 August 2019.................................................................. 45
Meeting with Mr Connolly on 21 August 2019............................................................. 47
Letter to Mr Connolly and Mr Zhuang and meeting of 25 September 2019............. 47
Letter to Mr Connolly and Mr Zhuang and meeting of 11 October 2019................. 50
Conclusion in relation to complaints.............................................................................. 51

Did Mr Nandi’s conduct towards the plaintiff during the 31 July meeting breach the plaintiff’s contract of employment?.................................................................................................. 52
Did the defendant’s response to the 31 July meeting and the complaints breach the plaintiff’s contract of employment?.................................................................................................. 53
Return to work in August 2019....................................................................................... 54
Response to complaints.................................................................................................... 55

Was any breach of contract repudiatory and did the plaintiff accept the repudiation?.. 58
Was the termination on 27 March 2020 in breach of the contract of employment?.......... 63
Damages....................................................................................................................................... 65
Disposition................................................................................................................................... 66

HER HONOUR:

Introduction

Siemens Mobility is a global business operation that designs, supplies, installs and maintains rail and light rail infrastructure. It is part of the broader Siemens Group, comprising Siemens AG, a multinational company listed and headquartered in Germany, and numerous subsidiaries and related companies worldwide. These include the Australian company Siemens Ltd, which carried on the Siemens Mobility business in Australia until mid-2018. In July 2018, the Australian Siemens Mobility business was carved out of Siemens Ltd. Since then the business has been carried on by a separate company, Siemens Mobility Pty Ltd, which is the defendant to this proceeding. I will refer to the defendant as Siemens or, where it is necessary to differentiate it from other companies in the Siemens Group, Siemens Mobility Australia.

Joan Divilly-Lavelle was employed by Siemens Mobility Australia between July 2018 and March 2020 in the role of Human Resources Manager. She had been previously employed by Siemens Ltd from October 2016 in the role of Human Resources Operations Consultant/Business Partner. With the carve out of Siemens Mobility’s Australian business in July 2018, Ms Divilly-Lavelle’s employment was assigned to Siemens Mobility Australia as its human resources manager. From that time, she was the most senior human resources manager in Australia for Siemens Mobility.

Initially, Ms Divilly-Lavelle’s functional manager within Siemens Mobility was Mr Shouvik Nandi, the Regional Head of Human Resources for the Asia Pacific Region. She also had a local, administrative reporting line to the in-country Chief Executive Officer for Siemens Mobility — first, Michel Obadia and then, from 1 August 2019, Raphaelle Guerineau.

On 31 July 2019, Ms Divilly-Lavelle had a scheduled telephone meeting with Mr Nandi for a performance discussion known as a ‘pre-PMP dialogue’ (31 July meeting).[1] During the 31 July meeting, Mr Nandi gave Ms Divilly-Lavelle some negative feedback about aspects of her performance.
[1]The PMP or Performance Management Process is described at [50]–[51] below.

Ms Divilly-Lavelle became distressed and left work immediately after the meeting ended. She was unable to work the following day and for some time afterwards, and took a period of personal leave. Subsequently, she made complaints about Mr Nandi’s conduct towards her during the 31 July meeting. From that time on, Ms Divilly-Lavelle was dissatisfied with both Mr Nandi’s conduct and the response by Siemens Mobility to her complaints about it. The employment relationship continued to sour after her return to work in late October 2019. On 27 March 2020, Siemens Mobility decided that the relationship had irretrievably broken down and terminated Ms Divilly-Lavelle’s employment, paying her in lieu of the four week contractual notice period.

While it is evident that Ms Divilly-Lavelle had an adverse psychological reaction to the 31 July meeting, she has made no claim for workers’ compensation or for damages in respect of an injury arising out of or in the course of her employment. She has not obtained a serious injury certificate under Pt 7 of the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) (WIRC Act).

Instead, Ms Divilly-Lavelle has brought this proceeding in which she seeks damages for breach of her employment contract. She contends that Siemens’ Business Conduct Guidelines (BCG) was incorporated into her contract, and that various statements in it had contractual effect. She claims that Mr Nandi’s conduct during the 31 July meeting and Siemens Mobility’s response to it were repudiatory breaches of contract, for which she is entitled to substantial damages, including exemplary damages. By reason of s 326 of the WIRC Act, those damages cannot include any damages in respect of a work-related injury.

The issues for determination in the proceeding, and a summary of my conclusions in relation to each issue, are as follows.

(1) Were there terms of the plaintiff’s contract of employment that the defendant:

(a) was required to manage its business in a manner that meets the highest levels of ethical, legal and behavioural standards;

(b) was required to conform to the requirements of the BCG; and

(c) would not condone any non-adherence to the BCG?

No. The BCG was not incorporated into Ms Divilly-Lavelle’s contract of employment, which expressly provided that Siemens’ policies operated independently from and were not incorporated into the contract.[2] Even if it had been, the parts of the BCG relied on by Ms Divilly-Lavelle were, with one possible exception, aspirational rather than promissory. The possible exception was Siemens’ commitments to examine and take appropriate measures in response to a report of a possible violation of the BCG.[3]
[2]See [34]–[42] below.
[3]See [43]–[48] below.

(2) What occurred at the 31 July meeting?

Where there are differences between Ms Divilly-Lavelle’s and Mr Nandi’s evidence of what transpired during the 31 July meeting, I prefer Mr Nandi’s evidence.[4] Throughout the 31 July meeting, Mr Nandi’s behaviour towards Ms Divilly-Lavelle was respectful, courteous, and professional. He did not bully, demean, denigrate, humiliate or harass her. He conscientiously attempted to have a difficult conversation with Ms Divilly-Lavelle about her performance, which was his duty as her manager. There were genuinely held concerns about her performance, including by Mr Nandi and Mr Obadia. The scheduled pre-PMP dialogue was the appropriate occasion on which to bring these concerns to Ms Divilly-Lavelle’s attention, and an opportunity for her to provide her perspective in response. It was not an ambush or an attempt to remove Ms Divilly-Lavelle from her employment.[5]
[4]For the reasons given at [71]–[76] below.
[5]My complete findings are set out at [77] below.

(3) What complaints did the plaintiff make to the defendant about Mr Nandi’s conduct at the 31 July meeting?

Ms Divilly-Lavelle confirmed for the first time on 11 October 2019 that she wanted Siemens to investigate her complaint against Mr Nandi. It was not until 28 October 2019 that the investigator was able to obtain from her the details of her complaint. Previously she had provided these only on a confidential basis.

(4) Did Mr Nandi’s conduct towards the plaintiff during the 31 July meeting breach the plaintiff’s contract of employment?

Mr Nandi’s conduct towards Ms Divilly-Lavelle during the 31 July meeting did not breach her contract of employment.

(5) Did the defendant, by its actions or omissions in response to the 31 July meeting and complaints (in the period from 31 July 2019 to 27 March 2020) breach the plaintiff’s contract of employment?

No. The statements in the BCG relied on by Ms Divilly-Lavelle did not have contractual effect. Further, Siemens did not fail to take reasonable care for her safety when she briefly returned to work in August 2019, and examined and took appropriate measures in response to her complaint against Mr Nandi.

(6) If the defendant breached the plaintiff’s contract of employment between 31 July 2019 and 27 March 2020, was the breach repudiatory? If so, did the plaintiff accept the repudiation?

Siemens did not breach Ms Divilly-Lavelle’s contract, and so this question does not arise. Even if Mr Nandi’s conduct during the 31 July meeting had been a repudiatory breach — which it was not — Ms Divilly-Lavelle elected to affirm her contract of employment when she returned to work on an ongoing basis on 28 October 2019. The later alleged breaches of contract were not made out.

(7) Was the termination of the plaintiff’s employment on 27 March 2020 in breach of her contract of employment?

No. Siemens Mobility was entitled to terminate Ms Divilly-Lavelle’s employment by giving her four weeks payment in lieu of notice, as it did on 27 March 2020. In any event, the employment relationship had irretrievably broken down by that time.

(8) In respect of any breach of contract made out by the plaintiff, what damages is she entitled to for that breach?

Ms Divilly-Lavelle has not made out any of the claimed breaches of her employment contract, and is not entitled to damages for breach of contract.

My reasons for those conclusions follow.

Terms of the contract of employment

Ms Divilly-Lavelle was first employed by Siemens Ltd within its Human Resources division at Bayswater, on a short term contract that started on 10 October 2016 and ended on 28 April 2017. She signed an employment contract before commencing in her initial role as a Human Resources Operations Consultant. On 17 March 2017, Siemens Ltd offered Ms Divilly-Lavelle permanent employment as a Human Resources Business Partner, on the same terms as in her original employment contract.

When the Mobility Business of Siemens Ltd was carved out into Siemens Mobility in 2018, Ms Divilly-Lavelle’s employment contract was assigned to Siemens Mobility with effect from 1 July 2018. The terms and conditions of her employment remained unchanged. However, a remuneration review in November 2018 resulted in a substantial increase in Ms Divilly-Lavelle’s annual base salary, from $157,907 to $181,659, to bring her remuneration into line with market salaries. Ms Divilly-Lavelle also had access to a bonus of up to $36,332, if she achieved 100% of her set targets in 2019.

Clause 8 and Schedule 1 of the employment contract provided for Ms Divilly-Lavelle’s remuneration, comprising a base salary payable monthly, a bonus component, and a superannuation contribution. Remuneration was normally to be reviewed annually, with adjustments from 1 October each year. Ms Divilly-Lavelle’s hours of work were specified in cl 7 to be:

You must work the hours which are reasonably necessary to fulfil the requirements of your position, or as required by Siemens. Such hours are based on an average of 38 hours per week, plus reasonable additional hours, over a 26 week period. Your remuneration includes compensation for all hours you work.

Ms Divilly-Lavelle’s responsibilities were set out in cl 5 as follows:

5. YOUR RESPONSIBILITIES
During your employment you must:
(a) diligently perform the duties and responsibilities that Siemens assigns to you (Siemens may vary these duties and responsibilities at any time);
(b) devote your whole time, attention and ability to the business of Siemens;
(c) as required by Siemens, perform work for any other member of the [Siemens] Group;
(d) report directly to your Manager, or any other person as nominated by Siemens from time to time;
(e) comply with all lawful orders and instructions given by Siemens; and
(f) comply with all Siemens’ policies as varied from time to time and available on Siemens’ intranet site or from your Manager (although such policies operate independently of this Employment Contract and are not incorporated into this Employment Contract).

Clause 6 concerned the Siemens Group’s BCG, in the following terms:

6. BUSINESS CONDUCT GUIDELINES (’BCG’)
(a) Siemens requires that its business is managed in a manner that meets the highest levels of ethical, legal and behavioural standards and conforms to the corporate requirements of the BCG. Siemens does not condone any violation of the law or non-adherence to the BCG. In cases of violations, regardless of the sanctions provided by the law, Siemens may take disciplinary measures including termination.
(b) Due to the importance placed by Siemens on compliance with the law and the BCG, you will be required to read and sign a copy of the BCG in (Schedule 4) upon commencement and may be required to undergo specific training.

Schedule 4 to the employment contract was a copy of Siemens Group’s Business Conduct Guidelines 2009 (2009 BCG). A foreword from the President and Chief Executive Officer of Siemens AG explained that the 2009 BCG ‘contain the fundamental principles governing the way we act within our company and in relation to our partners and the general public’ and ‘form the framework within which we make decisions, both as a company and as individual employees’. The foreword continued:

Every Siemens employee must therefore be familiar with these principles and rules and observe them as binding provisions on a worldwide basis. All managers have a duty to ensure their observance, and to serve as role models in adhering to the Business Conduct Guidelines. To this end they must know the Business Conduct Guidelines, communicate them to their employees and set a good example.
…

The contents of the 2009 BCG covered:

(a) Basic behavioural requirements;

(b) Treatment of business partners and third parties;

(c) Avoiding conflicts of interest;

(d) Handling of company property;

(e) Handling of information;

(f) Environment, safety and health;

(g) Complaints and comments; and

(h) Compliance implementation and monitoring.

On the same day that she signed her employment contract, Ms Divilly-Lavelle signed a document headed ‘Duty to Abide by the Law and the Business Conduct Guidelines’, which said:

I, JOAN DIVILLY-LAVELLE (full name)
HR OPERATIONS CONSULTANT (position)
HUMAN RESOURCES (Department)
hereby confirm that I have been familiarised with the duty to abide by the law in performing my professional duties.
I am aware that Corporate Management disapproves of violating the law and that, in case of violations, regardless of the sanctions provided by law, I would be liable to disciplinary measures and consequences to the employment relationship.
I will further respect the provisions of the Business Conduct Guidelines. I have been familiarised with the supplementary rules thereto.
The Business Conduct Guidelines and related information can be viewed at the Compliance Intranet Page.

Returning to the employment contract, cl 10 provided for standard Australian leave entitlements, including four weeks of annual leave and ten days paid personal/carer’s leave each year.

Clause 15 of the employment contract provided for termination of employment, relevantly:

(a)Your employment will end on the date set out under paragraph 2 above, unless terminated earlier or extended by agreement in writing.
(b) Siemens may terminate your employment earlier by giving you four weeks’ written notice or payment in lieu of notice, or a combination of notice and payment in lieu of notice. If you are over 45 years old at the time of termination and have completed at least two years’ continuous service with Siemens, the notice period is 6 weeks.
(c) Siemens may immediately terminate your employment without notice or payment in lieu of notice if you engage in any misconduct or commit any other act which at common law or under this Employment Contract would entitle Siemens to terminate your employment immediately. If Siemens terminates your employment immediately, Siemens will pay you up to the date of termination only.

(d) You may resign from your employment by giving Siemens four weeks written notice. If you resign:
(i)Siemens may choose not to retain your services for some or all of the notice period, and may make a payment in lieu of notice for the part of the notice period for which you are not retained and
(ii) you must pay to Siemens (and Siemens may deduct from your final pay) any amounts that Siemens paid to support you (such as relocation assistance) on the basis that you would stay with the Company for a certain period of time and as per agreement with you.

If you fall to give the required notice, Siemens may withhold from any moneys otherwise due to you on termination, an amount equivalent to the pay applicable to the shortfall in notice provided.
(e)A payment in lieu of notice made under this paragraph constitutes satisfaction of Siemens’ obligations to employ you during the notice period or to make any payment to you in respect of the notice period.
…

Clause 20 provided for general matters, including:

(c)In this Employment Contract, a reference to:
(i) legislation is to that legislation as amended, re-enacted or replaced, and includes any subordinate legislation issued under it;
(ii) a policy or other document is to that policy or document as amended, supplemented, replaced or novated;
(iii) Group includes any member of the Group.

(d)This Employment Contract and the rights and benefits of Siemens may, at Siemens’ discretion be assigned to any related body corporate in which case Siemens will give written notice of any such assignment to you.
(e)This Employment Contract contains the entire agreement between the parties about the subject matter. Any previous understanding, agreement, representation or warranty relating to that subject matter is replaced by this Employment Contract and has no further effect.

Business Conduct Guidelines 2019

By the time of the events that are the subject of this proceeding, the 2009 BCG that was annexed to Ms Divilly-Lavelle’s employment contract had been replaced by the 2019 edition of the Business Conduct Guidelines (2019 BCG).[6]
[6]By operation of cl 20(c)(ii) of the employment contract, the references to the 2009 BCG became references to the 2019 BCG.

Ms Divilly-Lavelle contended that the 2019 BCG was incorporated into her employment contract by cl 6, and created mutual obligations between her and her employer. She relied in particular on part of the President and Chief Executive Officer’s preface, which is worth reproducing in full:

Dear Colleagues,
We at Siemens aspire to be role models. With this in mind, we must act accordingly at all times and always in the interest of the company. This encompasses customers, employees, shareholders, and social responsibility.
Companies are an integral part of and bear special responsibility for society. Because the way in which a company’s employees conduct themselves has a major influence on how the company is perceived and accepted, it is more important than ever before for us to stand by our social responsibility, assume it consciously, and act sustainably to bring about a benefit to society. It is not just economic strength that matters to us; the way in which we achieve it is equally important. We at Siemens adhere to the highest ethical and moral standards as we go about our business. This conduct has earned us great respect among all our stakeholders. They all rightly trust us to uphold these standards in everything we do. And this is a duty that falls to us all at Siemens - no matter what our job is. After all, we represent the company in all its manifestations, at all times, and wherever we happen to be.
This calls for responsibilities to be defined clearly, and for each individual to bear responsibility for his or her actions. We call this Ownership Culture. Within it, we are guided by our values: ‘responsible, innovative, excellent’. This is how we make real what matters.
Our Vision 2020+ strategy program, announced in August 2018, will give the individual Siemens businesses greater entrepreneurial freedom and flexibility. More freedom always goes hand in hand with greater obligation. In one critical respect, there will be neither compromise nor change: compliance with the rules of legal and ethically correct business conduct. Siemens business is always synonymous with clean business, wherever it is conducted. And that will never be negotiable.
With our Business Conduct Guidelines, you hold the binding code of conduct in your hands. Its contents are built from our values and are mandatory for all of us at Siemens - employees, managers, and the Managing Board. The Business Conduct Guidelines set out the fundamental principles and rules governing how we act within our company and in relation to our customers, external partners and the general public. At the same time, they also offer valuable guidance and answers to important questions.
We have a highly competent and robust Compliance department. Please do not hesitate to turn to it for advice and support if you are ever in doubt about what to do. I ask you to read through the Business Conduct Guidelines carefully and to act at all times as if Siemens were your own company.

The 2019 BCG was arranged differently from the 2009 version that accompanied Ms Divilly-Lavelle’s employment contract, although they covered similar subject matter. After the preface, the contents of the 2019 BCG were arranged under the following relevant headings:

We make real what matters
Our motivation and common values

Our basic principles
A We behave correctly
B We respect each other
C We create trust
D We protect our company
E As managers, we have a special responsibility

Our responsibility
F We look after each other and ourselves
F1 Basic working conditions
F2 Health, occupational safety, and personal security

…

Our reporting principles
What to do if there are signs of possible misconduct

Ms Divilly-Lavelle contended that certain statements made in the 2019 BCG were terms of her contract of employment. She relied on some parts of the outline of ‘Our basic principles’, as follows:

B We respect each other
We respect the personal dignity, privacy, and rights of each individual. We believe diversity enriches our workplace. We work together without regard to ethnic origin, culture, religion, age, disability, skin color, gender, sexual identity and orientation, or worldview.
We do not tolerate discrimination, sexual or any other form of harassment, or inappropriate behavior toward individuals or groups.
We apply these principles of respect to each other and third-parties with whom we interact, including our suppliers, customers, and business partners.
…
C We create trust
We are open and honest. We take our responsibility seriously, we are reliable, and we only make promises we can keep.
We are sincere. We help clarify and eliminate potential deficiencies, problems, and misunderstandings. We do everything to fulfill the trust placed in us by our customers and the users of our products, services, and industry solutions.
? What do we do when we make a mistake?
We all make mistakes at work. We foster a culture where we learn from our mistakes. We deal openly with them to prevent them from recurring. This is the only way to learn from mistakes and help prevent them from recurring. While most mistakes are minor, others could have serious consequences and should be reported.
…
E As managers, we have a special responsibility
As managers, we bear a special responsibility and we take seriously our duty of care for the employees entrusted to us.
We create a trusting working environment and are always available to discuss with our employees uncertainties, compliance with legal requirements, questions, or professional and personal concerns with our employees.
We set a good example and ensure our teams understand the importance of acting in accordance with the Business Conduct Guidelines.
We take every indication of possible misconduct seriously and report it to Legal and Compliance. We protect the identity of employees who report potential misconduct and protect them from retaliation or other negative impact.
We fulfill our organizational and supervisory duties.
…

Ms Divilly-Lavelle also relied on statements made under the section F heading ‘We look after each other and ourselves’, specifically:

Siemens protects our fundamental rights as employees, our health, our personal security, and occupational safety at all locations throughout the world and when we are on business travel.
F1 Basic working conditions
Siemens fosters fair cooperation among management, employees, and employee representatives, and protects the fundamental rights of its employees.
No discrimination or intimidation
The principles of equal opportunity and equal treatment are guaranteed without regard to skin color, ethnic or social origin, religion, age, disability, sexual identity, worldview, or gender. In accordance with the labor laws of the countries in which Siemens operates, discrimination based on these characteristics, sexual harassment, or other inappropriate behavior toward individuals or groups will not be tolerated.
…
F2 Health, occupational safety, and personal security
Siemens cares about us as part of its corporate responsibility.
Our health
Siemens protects and promotes our health and well-being, guards against the risk of work-related accidents, and offers a wide-range of support to maintain and promote our physical and mental health.
Our occupational safety
Siemens provides a safe work environment to ensure employees return home healthy and unharmed at the end of the working day. We ourselves contribute to this:
! This is what we do:
• We observe the safety regulations at our workplace.
• We avoid risky behaviour.
• When we recognize dangerous situations, we take appropriate action.
We set a good example.
…
‘Our employees are our most valuable asset. Your health and safety are our top priority.’ – Janina Kugel, Member of the Managing Board of Siemens AG

The final part of the 2019 BCG relied on by Ms Divilly-Lavelle was the section outlining reporting procedures for possible misconduct:

Siemens expects us to report possible violations of the Business Conduct Guidelines. In so doing, we help to identify and eliminate misconduct and grievances and protect ourselves and the company against risks or damages that may result.
We may report circumstances that indicate a violation of the Business Conduct Guidelines to the following persons or entities:
• Managers;
• Chief Compliance Officer;
• Compliance department and Legal department;
• Human Resources personnel;
• ‘Tell Us’ Hotline;
• Siemens ombudsman; or
• Employee representatives.
Information on possible violations of the Business Conduct Guidelines can be provided confidentially and anonymously as needed. Siemens will examine all reports and take appropriate measures. Siemens does not tolerate any retaliation against complainants or whistleblowers.
Violations of this prohibition will be punished as compliance violations.
All allegations of possible violations of the Business Conduct Guidelines are responded to in accordance with formal company-wide processes. These processes take into account the presumption of innocence and the participation rights of employee representatives where required by local policy. Siemens will take appropriate disciplinary action in the event of demonstrable violations.
Siemens will apply the same principles to allegations of wrongdoing brought by third-parties.

Plaintiff’s submissions

Ms Divilly-Lavelle submitted that the effect of cl 6 of her employment contract was to specifically incorporate the BCG into the contract. She relied on cl 6 and the parts of the 2019 BCG set out above, to contend that it was a term of her contract of employment that Siemens’ business would be managed in a manner that met the highest levels of ethical, legal, and behavioural standards, and conformed to the corporate requirements of the BCG, including:

(a) an obligation of respecting her personal dignity;

(b) an obligation not to discriminate against her;

(c) an obligation of trust;

(d) an obligation to create a trusting working environment for her;

(e) an obligation to openly deal with mistakes when they arose in the workplace;[7]
[7]The obligations in (a)–(e) were said to arise from the parts of the 2019 BCG set out at [24] above.

(f) an obligation to protect her health, personal security and occupational safety;

(g) an obligation not to intimidate her in the workplace;

(h) providing her with a safe work environment, protecting her personal security and prioritising her health and safety in the workplace;[8]

(i) with respect to all reports of possible violations of the BCG, examining, taking appropriate measures, and responding in accord with company-wide processes; and

(j) not tolerating any retaliation against complainants or whistleblowers.[9]

[8]The obligations at (f)–(h) were said to arise from the parts of the 2019 BCG set out at [25] above.

[9]The obligations at (i) and (j) were said to arise from the parts of the 2019 BCG set out at [26] above.

Ms Divilly-Lavelle referred to Goldman Sachs JBWere Services Pty Ltd v Nikolich[10] and Riverwood International Australia Pty Ltd v McCormick,[11] in which employer policies were found to have been incorporated into the employee’s contract of employment. She said that the same conclusion should be reached in this case, because of the express words of cl 6 of her employment contract, which she said clearly created mutual obligations. She also relied on the fact that — as in Nikolich — she had been required to sign the 2009 BCG, which formed part of the contract documentation. She emphasised that the BCG was fundamental to the way that the Siemens Group conducts its business, and referred to the statement in the preface to the BCG that it was a ‘binding code of conduct’.
[10][2007] FCAFC 120 (Nikolich).
[11](2000) 177 ALR 193 (Riverwood).

As to the construction of the employment contract, Ms Divilly-Lavelle drew attention to the differences between cll 5 and 6. She pointed out that cl 5(f) mandated compliance with ‘all Siemens’ policies as varied from time to time’, which were said to operate independently of and not be incorporated into the employment contract. This was to be contrasted with cl 6, which dealt specifically with the BCG, and gave it contractual force. She relied on the principle of construction that the specific overrides the general to submit that the specific provision in cl 6 about the BCG prevailed over the general statement in cl 5(f) about Siemens’ policies.

Defendant’s submissions

Siemens submitted that it was not contractually obliged to comply with the BCG because it was not incorporated into Ms Divilly-Lavelle’s employment contract. Alternatively, Siemens said that if the BCG was so incorporated, the terms on which Ms Divilly-Lavelle relied were vague, uncertain and aspirational, and therefore not contractual in nature.

Siemens said that whether a policy is incorporated into a contract of employment in any particular instance will turn on the facts of the case. It summarised the key factors to be considered in determining whether a policy or other document is incorporated as follows:

(a) the parties’ intentions as objectively ascertained, having regard to the specific facts and circumstances surrounding the formation of the contract;

(b) the terms of the document allegedly incorporated, and in particular the language of the document (contractual vs advisory/aspirational);

(c) the extent to which the document alleged to be incorporated contains provisions that are only beneficial to employees;

(d) if and when the document allegedly incorporated was given or made accessible to the employee; and

(e) whether the employee was required to sign the document allegedly incorporated, or any parts of it.[12]

[12]Referring to Southern Migrant and Refugee Centre Inc v Shum (No 3) [2022] FCA 481, [153]; Zafiriou v Saint-Gobain Administration Pty Ltd [2014] VSCA 331, [80]–[140] (Osborn JA, Whelan JA and Ginnane AJA agreeing); Dafallah v Fair Work Commission (2014) 225 FCR 559.

Applying the above considerations:

(a) First, Siemens pointed to cl 5(f) of the contract, which states that company policies are not incorporated into the contract. Siemens argued that the terms of the employment contract should be given primacy, consistent with recent High Court authority.[13]
[13]Referring to WorkPac Pty Ltd v Rossato (2021) 271 CLR 456; ZG Operations Australia Pty Ltd v Jamsek (2022) 398 ALR 603; Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) v Personnel Contracting Pty Ltd (2022) 398 ALR 404.

(b) Second, Siemens argued that the terms of cll 5 and 6 of the contract require the employee, not the employer, to comply with the employer’s policies. Any contractual obligation on the employer must flow solely from the language of the BCG as a result of their incorporation into the contract.[14]
[14]Zafiriou, [82].

(c) Third, Siemens said that the BCG only purports — as the title suggests — to be ‘guidelines’ to employees. According to Siemens, the document articulates a set of general principles, designed to guide employees as to the behavioural expectations of Siemens and to communicate ‘the standard of conduct’ within Siemens.[15]
[15]Southern Migrant and Refugee Centre, [156].

(d) Fourth, Siemens relied on the language of the BCG, which it said is ‘largely aspirational’. It argued that the BCG is not written in ‘the language of obligation’, nor is it ‘apt to be treated as expressing mutually enforceable obligations’.[16] Siemens said that, to the extent that there is language expressed in more certain terms, that language does not rise to the level of mutually enforceable obligations.

(e) Fifth, Siemens pointed out that the BCG does not purport to provide or confer benefits or entitlements on employees. It is a conduct guide.

(f) Finally, Siemens contended that although the BCG was provided to Ms Divilly-Lavelle at the time she signed the contract, this was done with the objective intent of providing her with information about the standards of behaviour that she was required to adhere to, as outlined in cl 6 of the contract, and not for a purpose that is properly construed as indicating an intent towards incorporation.

[16]Referring to Southern Migrant and Refugee Centre, [158].

Having regard to the above considerations, Siemens contended that, in this case, the parties did not objectively intend for the BCG to be incorporated into the contract.

Consideration

It is a question of fact whether an employer’s policies, procedures or — as in this case — guidelines are incorporated into an employee’s contract of employment. The question is to be answered by ascertaining the objective intention of the parties, an exercise that begins with the language of their contract. The words used are to be understood in the context of the circumstances surrounding the contract, as well as its purpose and objects.[17] The surrounding circumstances that are relevant may include the content of the policy document itself.[18] Each case turns on its own facts.
[17]Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, [40]–[41]; Romero v Farstad Shipping (Indian Pacific) Pty Ltd (2014) 231 FCR 403, [34]–[36]; Zafiriou, [87] (Osborn JA, Whelan JA and Ginnane AJA agreeing); Southern Migrant and Refugee Centre, [153]; Elisha v Vision Australia Ltd [2022] VSC 754, [356].
[18]Riverwood, [89] (North J), [146]–[149] (Mansfield J).

The meaning of each clause of a contract is to be determined by reference to the language of the entire contract, on the basis that the terms of the contract are intended to operate together to give effect to its purpose and objects.[19] Any apparent conflict between clauses should be alleviated by reading the competing provisions so as to give each an operation that is consistent with the contract’s overall purpose and achieves a workable result.[20]
[19]Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, [46] (French CJ, Nettle and Gordon JJ). See also Perry Herzfeld and Thomas Prince, Interpretation (Thomson Reuters, 2^nd ed, 2020), 484–5 [22.30] (Herzfeld and Prince).
[20]Mount Bruce, [51]; Zafiriou, [92] (Osborn JA, Whelan JA and Ginnane AJA agreeing). See also Herzfeld and Prince, 488–9 [22.90].

Turning to the language of Ms Divilly-Lavelle’s employment contract, the key terms were cl 5, which set out Ms Divilly-Lavelle’s responsibilities as an employee, and cl 6, which concerned the BCG. These two terms should be read together, on the basis that they are intended to operate harmoniously but that each has separate work to do.

Clause 5 was prefaced by the words ‘During your employment you must’. It imposed obligations on Ms Divilly-Lavelle alone; there were no corresponding or mutual obligations placed on Siemens. Six categories of employee responsibility were listed in cl 5, the last of which, in cl 5(f), was to ‘comply with all Siemens’ policies as varied from time to time and available on Siemens’ intranet site’.[21] The words in parentheses at the end of cl 5(f) — ‘(although such policies operate independently of this Employment Contract and are not incorporated into this Employment Contract)’ — clearly expressed an objective intention that Siemens’ policies would not form part of the contract.
[21]Clause 5 is reproduced in full at [13] above.

Clause 6 then dealt specifically with the BCG. Clause 6(a) paraphrased some of the foreword and principles from the 2009 Guidelines, which applied at that time, and cl 6(b) emphasised ‘the importance placed by Siemens on compliance with the law and the BCG’. It was not, in terms, a promise by Siemens to be bound by the BCG.

It is significant, in my view, that cl 6 immediately followed cl 5(f) in the employment contract. Their sequential location indicates that the BCG was one of the policies referred to in cl 5(f), but was expressly referred to in a separate clause because of its importance for Siemens’ business. Clause 6 did additional work to cl 5(f) — it drew specific attention to consequences of not complying with the BCG and obliged Ms Divilly-Lavelle to read and sign a copy.

I read cl 6 as enlarging upon, rather than conflicting with, cl 5(f). The two clauses sit comfortably together, and so there is no scope to apply the principle of interpretation that, where there is a conflict between general and specific provisions, the specific provision prevails. That principle applies only where there is some inconsistency or repugnancy that cannot be reconciled through ordinary principles of interpretation.[22]
[22]Purcell v Electricity Commission of New South Wales (1985) 60 ALR 652, 657 (Mason ACJ, Wilson, Brennan and Dawson JJ). See also Herzfeld and Prince, 490 [22.110], 507–8 [24.40].

It follows that cl 6 of Ms Divilly-Lavelle’s employment contract did not have the effect of incorporating the BCG into the contract. The parties expressly agreed that Siemens’ policies operated independently from and were not incorporated into the employment contract. The BCG was plainly one of Siemens’ policies, albeit one of particular importance to its business operations.

It is the case that the 2009 BCG was annexed to the employment contract, and that Ms Divilly-Lavelle was required to sign an acknowledgment that she had read and understood it. This might have supported a conclusion that it formed part of the contract, had the parties not expressly agreed that it did not. In this respect, Ms Divilly-Lavelle’s employment contract differed from those considered in Nikolich and Romero v Farstad Shipping (Indian Pacific) Pty Ltd.[23]
[23](2014) 231 FCR 403.

Even if, contrary to my conclusion, the BCG was incorporated into Ms Divilly-Lavelle’s contract, it does not follow that the relevant parts of the 2019 BCG had contractual force. The 2019 BCG was a quite different document from the human resources policies and procedures manual in Riverwood, and the workplace harassment and discrimination policy in Romero. It did not contain statements of what Siemens would do in particular circumstances — such as the payments it would make to a redundant employee, or how it would handle a complaint of discrimination by an employee.[24] Rather, it was a set of conduct guidelines that defined the standards of behaviour that Siemens expected of its employees at all levels of the business, wherever it was conducted worldwide.
[24]Cf Riverwood, [78]–[79], [106]–[108] (North J), [142]–[144], [150]–[151] (Mansfield J); Romero, [27]–[33], [55]–[58].

The 2019 BCG was more like the ‘Working With Us’ document (WWU) in Nikolich, where an issue on appeal was whether the portions of WWU relied on by the employee were contractual in character, as distinct from mere representations of the employer’s aspirations. The trial judge had found that a statement in WWU that the employer would ‘take every practicable step to provide and maintain a safe and healthy work environment for all people’ had contractual effect. The Full Court of the Federal Court upheld this finding.[25] Whether the statement was contractual, as distinct from informational or aspirational, was to be determined objectively, by asking what the language used, in context, would have led a reasonable person in the position of the employee to understand.[26]
[25]Nikolich, [29]–[31] (Black CJ), [132]–[134] (Marshall J), [324]–[329] (Jessup J). Only Marshall J held that other parts of WWU dealing with harassment and grievance procedures were contractual; cf Black CJ, [37]–[38], [41]–[42] and Jessup J [298]–[302], [306]–[314]. Justice Jessup dissented in the result, on the basis that the employee had not established a breach of the employer’s obligation to take every practicable step to provide and maintain a safe and healthy environment for him.
[26]Nikolich, [29] (Black CJ), see also [23].

There were two particular features of the WWU health and safety statement that marked it as contractual. The first was the ‘ostensibly promissory nature’ of the language used, including statements that the employer ‘will take every practicable step’, ‘has a duty to provide and maintain’, and ‘will ensure the effective implementation of health and safety procedures’.[27] In the context of WWU as a whole, the language used pointed to a statement embodying a contractual obligation.[28] The second was the correspondence between the health and safety statement in WWU and the duties that every employer has in tort, contract and under statute to provide a safe system of work.[29]
[27]Nikolich, [328]–[329] (Jessup J).
[28]Nikolich, [30] (Black CJ).
[29]Nikolich, [31] (Black CJ), [324]–[326] (Jessup J).

Similarly, in Zafiriou v Saint-Gobain Administration Pty Ltd,[30] the Court of Appeal held that some statements in the employer’s termination and disciplinary policies were contractual, while others were not. A statement of policy that employees would ‘be treated with respect, in a courteous and professional manner and in accordance with the principles of natural justice’ was held to be merely aspirational.[31] This contrasted with a later statement of procedures, which were ‘in language which is appropriate to convey contractual obligations’.[32]
[30][2014] VSCA 331.
[31]Zafiriou, [99]–[101] (Osborn JA, Whelan JA and Ginnane AJA agreeing).
[32]Zafiriou, [110] (Osborn JA, Whelan JA and Ginnane AJA agreeing).

In this case, the relevant parts of the 2019 BCG are extracted at [24] to [26] above. With one possible exception, the language used was not promissory and did not convey contractual obligations. The sections of the 2019 BCG under the headings ‘Our basic principles’ and ‘We look after each other and ourselves’ contained statements of general principle and exhortations to employees behave in accordance with the law, honestly, safely, and with respect and care for each other. To illustrate, the quote from a Siemens board member that ‘Your health and safety are our top priority’ was not, objectively viewed, a promise by Siemens to prioritise employees’ health and safety in the workplace. It was plainly designed to encourage the Siemens workforce to give priority to health and safety. Similarly, the section on reporting procedures was primarily directed to encouraging employees to report possible violations of the BCG and informing them how that could be done.

The possible exception was the statements of what Siemens would do in response to reports of possible violations of the BCG — in particular, ‘Siemens will examine all reports and take appropriate measures’ and ‘Siemens will take appropriate disciplinary action in the event of demonstrable violations’. The language used in this section is more apt to convey a contractual obligation on the part of Siemens than other parts of the BCG.

In conclusion on this issue, I find that the BCG was not part of Ms Divilly-Lavelle’s employment contract, because it expressly provided that Siemens’ policies operated independently from and were not incorporated into the contract. Even if it was, the parts of the 2019 BCG relied on by Ms Divilly-Lavelle were almost all aspirational rather than promissory, with the possible exception of Siemens’ commitments to examine and take appropriate measures in response to a report of a possible violation of the BCG.

What occurred at the 31 July meeting?

As mentioned, the 31 July meeting was a pre-PMP dialogue between Ms Divilly-Lavelle and her manager, Mr Nandi. PMP is an acronym for ‘Performance Management Process’, which was the annual performance and remuneration review process at Siemens at that time. It involved the employee first providing a self-evaluation of their performance against their ‘what’ targets, ‘how’ expectations, and overall contribution. This formed the basis for a pre-PMP dialogue between the employee and their manager, which typically took place in the middle of the calendar year, and was an opportunity for the manager to provide feedback on the employee’s performance in the year to date. No rating was given at that stage.

Towards the end of the calendar year, the manager rated the employee on a scale of 1 to 5 against their key performance indicators. This rating was then calibrated through discussion with other relevant managers. Ratings were given for both the ‘what’ and the ‘how’ of the employee’s performance. A rating of 3 meant that the employee was meeting expectations. An employee rated at 4 or 5 was exceeding expectations, and rating of 1 or 2 meant the employee’s performance was in need of improvement. The annual process concluded with a PMP meeting between the manager and the employee, at which the employee was provided with their final rating for the year.

Ahead of the 31 July meeting, Ms Divilly-Lavelle completed a self-evaluation form. She identified her ‘what’ targets and her ‘how’ expectations, and made some overall comments:

Reflection
I feel I have gone a long way towards achieving all I possibly could this year thus far. With the added responsibility of the integration of MRX in the past 2 years this has certainly broadened my role and indeed my knowledge. I have invested a lot of time and effort into this integration to ensure success and a smooth transition for staff. The carve out last year meant a lot of time spent on those activities the preceding 12 months so all in all with the three times were indeed interesting.
I have thoroughly enjoyed managing a team this year and the complexities this brings. Also the fact I report internationally now has given me another level of exposure to global HR and the expectation this brings.
My role in Mobility is both demanding but rewarding and as I have stated before my personal situation means I can invest the required time in my career.
Areas of improvement
I have areas of improvement which I will work on for example public speaking and getting the message across succinctly which I will improve on by running effective workplace behaviours training sessions until Dec 2019. I will seek more feedback also which is necessary to address and develop. Furthermore I will seek out more situations to address that sit outside my comfort zone such as having those tough conversations with staff and Managers.
My future
I have enjoyed the opportunities I have had so far in the company and it is my desire to continue to work for Siemens and achieve even more.
Given my personal situation it is my desire to move internationally to Europe or the US when the right opportunity presents itself. I am prepared to move sideways for the right opportunity or of course up into a more challenging role.
My plan this year is to have a better work/life balance as the propensity to work 60 - 70 hour weeks is prevalent and has been for the past almost 3 years. I intend to take up a sport and am also considering taking up another language for both personal and professional development.

The 31 July meeting was scheduled to occur over ‘Circuit’ — the internal communication platform used by Siemens. Mr Nandi sent a meeting invitation to Ms Divilly-Lavelle allocating one hour for the meeting, although he said that the standard pre-PMP dialogue usually took 30 to 45 minutes. There was an issue with Circuit on the day of the meeting, so it took place by telephone. Ms Divilly-Lavelle and Mr Nandi were located in their respective offices, in Australia and India.

It was common ground that the meeting commenced with greetings and an exchange of pleasantries, and that Mr Nandi invited Ms Divilly-Lavelle to outline her achievements against her goals. Ms Divilly-Lavelle then spoke for 20 to 25 minutes, about her targets and what she had achieved and hoped to achieve in the coming months. Mr Nandi then provided Ms Divilly-Lavelle with feedback on her performance. Otherwise, their evidence about what was said during the meeting differed in important respects.

Ms Divilly-Lavelle’s evidence

Ms Divilly-Lavelle’s evidence in chief at trial was that when Mr Nandi asked her to speak about her achievements, she got the sense that he did not want a lot of detail. She acknowledged that she does tend to talk a little bit about achievement, and said that Mr Nandi had just asked her to talk to him ‘at a high level about the different areas’. She therefore peeled back on her ‘potentially long-winded explanation’ to more different points about what she had achieved and was going to achieve later in the year. At that point, Mr Nandi interjected and told her he was not interested in the back end of the year and that he was more interested in her achievements to date. On that basis, she ‘put away’ what she was going to say about that and talked about different areas in the business. She identified three main topics: a big issue with attrition, particularly in engineering, and trying to come up with a retention plan; issues related to becoming a standalone organisation without the reliance on Siemens Ltd; and the acquisition of the MRX business in Perth, which was taking quite a bit of work. She said she also spoke of some ancillary topics, such as recruitment across the business and a ‘legal issue’ that she had been working on.

According to Ms Divilly-Lavelle, when she had finished talking about what she had achieved, and what she hoped to do, Mr Nandi said to her, ‘Well, I see big gaps in your performance’. She said that she was quite taken aback by that because she had not been given any indication of ‘big gaps’ before that conversation. She said that Mr Nandi then told her that she should look for a role outside of the organisation. She was so shocked that she did not respond. Mr Nandi next told Ms Divilly-Lavelle that it would be detrimental for her career if she stayed in the organisation and that it would reflect badly on him as her manager. Mr Nandi then ‘sort of said’, in an exasperated way, ‘I’m surprised you haven’t taken the hint’. Ms Divilly-Lavelle described feeling increasingly perplexed and distressed as Mr Nandi spoke to her.

Ms Divilly-Lavelle said that Mr Nandi then raised three particular examples of Ms Divilly-Lavelle’s unsatisfactory performance and said that Ms Divilly-Lavelle was not seen as a strategic HR Business Partner in the business. The three examples were: hiring a HR Business Partner for the new acquisition in Perth without his sanction; a legal issue in relation to a termination payment where he said she had not given good advice; and her work on a retention strategy to address the high attrition rate within Siemens Mobility Australia, particularly the engineering community. The raising of these examples took Ms Divilly-Lavelle by surprise, although she responded to Mr Nandi’s criticisms.

After she was given those examples, Ms Divilly-Lavelle said she was very upset and asked to end the call. She was crying, and feeling shocked at what Mr Nandi had said to her. She hung up, told a colleague that she was leaving the office, and went home.

Ms Divilly-Lavelle made notes of the 31 July meeting the following day, which she tendered in evidence. Those notes recorded the conversation as follows:

The following transcript details my account of the call with Mr Nandi and I on the above date. This was listed, in my calendar as a Pre PMP Dialogue.
When I dialled in Mr Nandi seemed impatient from the outset so I felt I needed to rush through what he asked of me.
Joan, this is a pre PMP discussion so I want you to take me through your goals at a high level. (SN)
I started to go through the goals as per how they were laid out in what and how.
When I spoke of one of the goals which regarded Raphaelle I spoke of engaging with comms etc in the background and then what we would be doing with Raphaelle going forward. At this Shouvik became impatient and said;-
I asked what you have done not what you will do. (SN)
At this point I interjected and said that it is future related as she had not been appointed to the role yet but when she was in the role this was the intent moving forward.
I continued for another few minutes to talk of the goals until approx 25 minutes into the call. When I finished my rushed version of my goals, Mr Nandi said the following;-
Well Joan I see many gaps in your performance (SN)
He then alluded to 3 different examples of where he saw me as not strategic. One was with regards the retention list, I could have advised better for the legal situation and I should have involved him in the hiring of [Ms B]. Please see appendix A with regards commentary on these matters.
He then continued-
I see many big gaps and also you not seen as a strategic HR Business Partner in the business. (SN)
It would be detrimental to your career and reflect badly on me for you to continue in your current role. You have said that you want to look at opportunities overseas. Do you want me to talk to both Connie and Sabine? (SN)
I did not answer as I was in a state of shock.
He continued -
I will go to Connie and Sabine but it cannot be that I talk to them about a role for you and you do not take up that role. (SN)
Not a role at this level. (SN)
You have done recruitment in the past; perhaps you go back to that. (SN)
You should start to look for something else ... (SN)
Joan I am surprised you have not taken the hint ... (SN)
At this point Mr Nandi stopped talking.
He then said;-
Joan, have you got anything else to say? (SN)
I said no as at this point I was crying and shocked and I told him I was too upset to continue on the call.
He finished the call by saying-
Okay, well we will have another call (or something such as this and then hung up) (SN)
I exited the call on Circuit and then sat there and cried. I then logged out and asked my colleague to take me home as I was too upset to continue.

Ms Divilly-Lavelle was cross-examined about her account of the 31 July meeting. The following matters emerged from her answers to the questions put to her during cross-examination.

(a) It was correct to characterise the meeting as a dialogue between her and Mr Nandi. No rating was decided at the meeting.

(b) Before the 31 July meeting, she had indicated that she wanted to move to a different role globally at some point. She had raised this a number of times with the company, including in the self-evaluation form that she completed for the purpose of the pre-PMP dialogue.

(c) Between approximately November 2018 and July 2019, Mr Nandi had discussions with Ms Divilly-Lavelle regarding her work on at least a monthly basis. In those discussions she also talked about her career goals and aspirations. They had several of these discussions in March 2019, when Mr Nandi travelled to Australia. By 31 July 2019, she had raised with Mr Nandi, both in person and on her self-evaluation form, her aspiration to relocate to a role overseas.

(d) Before the 31 July meeting, Mr Nandi had raised with Ms Divilly-Lavelle that he was unhappy about the process she had undertaken for hiring an HR manager in Perth, Ms B. He expressed disappointment that he had been left out of the latter part of that process, when he had asked her to keep him informed. Ms Divilly-Lavelle wrote an email to him apologising for not including him in the process. This was a performance related concern, about which Mr Nandi had given her negative feedback.

(e) Mr Nandi had also provided feedback to Ms Divilly-Lavelle that he was not satisfied with the content of her advice to the business about providing a severance payment to a particular employee, Mr M. She received an email from Mr Nandi telling her to cease work on that matter, and understood from that email that both Mr Nandi and Mr Obadia were dissatisfied with her performance. Mr Nandi had sent Ms Divilly-Lavelle an email on 16 April 2019, expressing concern that she had not kept him briefed on this critical topic.

(f) Before 31 July 2019, Ms Divilly-Lavelle had also been provided with feedback that Mr Nandi and Mr Obadia were not happy about the way that the retention scheme was being progressed towards implementation.

(g) The pre-PMP dialogue was for Ms Divilly-Lavelle to provide a retrospective assessment of her performance to date in 2019, by evaluating her performance against her goals and KPIs. It also involved a discussion about career aspirations and next steps, which was why she said in her self-evaluation form that she was looking for another opportunity overseas. She was prepared for her desire to obtain an overseas role to be discussed during the 31 July meeting, and agreed that this discussion usually occurs at the end of a pre-PMP dialogue.

(h) At the start of the meeting, there were three or four minutes during which she and Mr Nandi exchanged pleasantries. It was a cordial exchange.

(i) Mr Nandi asked Ms Divilly-Lavelle to take him through her goals at a high level, providing her perspective on what she had achieved in relation to her KPIs. Ms Divilly-Lavelle then spent the next 20 to 25 minutes speaking about her achievements, using her self-evaluation form as a guide.

(j) At one point Ms Divilly-Lavelle started talking about what she was hoping to achieve in the second half of the year with the new CEO, who was to start the next day. Mr Nandi redirected her by saying ‘Let’s focus on what you have done and not what you are going to do’. It was a gentle redirection to get her to focus back on the previous six months.

(k) Ms Divilly-Lavelle spoke about her achievements with the retention plan, the acquisition of MRX, and recruitment across the business, including in her team. She spoke about the hiring of Ms B in Perth and about the legal issues concerning Mr M. She had ample time to succinctly summarise what she considered she had achieved in respect of her goals.

(l) Mr Nandi then provided his feedback in response to Ms Divilly-Lavelle’s outline of her achievements. She did not remember whether he provided positive feedback on the MRZ acquisition or the HR dashboard project. He provided negative feedback about her involvement in giving advice about Mr M’s exit, the hiring of Ms B in Perth, and the retention scheme. Ms Divilly-Lavelle was aware that she was not on track in implementing the retention scheme and so was not surprised that there was criticism about that. All of this feedback concerned Ms Divilly-Lavelle’s ‘what’ goals.

(m) In relation to her ‘how’ goals, Mr Nandi gave feedback to the effect that she was not seen as a strategic partner by the business, and that was also his observation.

(n) On a number of occasions Ms Divilly-Lavelle rebutted the negative feedback with context.

(o) The discussion of a different role for Ms Divilly-Lavelle occurred after the feedback about ‘what’ goals and ‘how’ goals had been completed. During that discussion, Mr Nandi noted that she had been to Germany and spoken to some senior Siemens people there about finding a role overseas. He may also have offered to assist her in that process.

(p) At the end of the call, Ms Divilly-Lavelle did not tell Mr Nandi specifically that she would be leaving work because she was upset. She did tell her colleague Nicolette Barnard,[33] who in fact accompanied her home.

(q) Ms Divilly-Lavelle did not remember all aspects of the conversation, exactly what was said, or the layout of the conversation. She was so upset by the end of the conversation that she did not have a great memory of what was said at that point. Three and a half years later, the aspects of the conversation that she remembered most distinctly were the negative aspects. She agreed it was possible that there were positive aspects that she did not recall.

[33]Ms Barnard was the Head of HR for Siemens Ltd, and had been Ms Divilly-Lavelle’s manager when she worked for that company, before she moved to Siemens Mobility Australia.

Mr Nandi’s evidence

In his evidence at trial, Mr Nandi said that, after they had exchanged pleasantries and he had given a quick summary of the purpose and objective of the meeting, they started with the conversation on the targets assigned to Ms Divilly-Lavelle and the progress for each of the targets. He had studied her self-evaluation document beforehand, and had it for reference during the discussion. Ms Divilly-Lavelle went into all of the targets and what she had achieved against them, mostly focussing on the things that were not being done, the justification for why they had not been done, and what she would be doing about it in the coming months.

After 20 to 25 minutes of hearing from Ms Divilly-Lavelle, Mr Nandi confirmed that she did not have anything further to say, and then took 12 to 15 minutes to go over the ‘what’ targets and ‘how’ expectations on Ms Divilly-Lavelle’s self-evaluation form. He said he went objectively through each target, to see where it stood — whether the target was achieved, partially achieved, or not achieved, with an example given from his side.

Mr Nandi said that he gave Ms Divilly-Lavelle both positive and constructive feedback. He spoke about the MRX integration in Perth, which went well and within timelines, and he said ‘job well done’. He gave Ms Divilly-Lavelle constructive feedback — that is, feedback that was critical of her performance — about a number of her targets, each with a clear tangible example of why the feedback was being given. There were a few basic operational activities, like timely submission of HR reports, which had not been done, multiple times. He also spoke of a redundancy case where the calculation had been done incorrectly, and the fact that she had not kept him involved in the recruitment of the Perth-based HR Business Partner, as he had requested.

In relation to her ‘how’ goals, which were about conduct and behaviour, he asked her to continue to do things the way she had been doing them. There had been multiple occasions of negative feedback from different stakeholders within the business, which Mr Nandi provided to Ms Divilly-Lavelle. He added that he had not waited for the mid-year discussion to share that input — he had passed on feedback, positive or critical, whenever it came in.

Mr Nandi said that after he had provided his input, the next topic was career aspiration. Ms Divilly-Lavelle had already discussed that she wanted to take up roles outside Australia if possible, as a future step, and had also mentioned that in her self-evaluation. In conjunction with the previous discussion, where he had talked about gaps between her performance and the targets set, Mr Nandi asked Ms Divilly-Lavelle if she would mind considering certain positions ‘outside’ as well, ‘if the stress level is going up’. Ms Divilly-Lavelle did not respond to this question. Instead, there was a big silence and then Ms Divilly-Lavelle excused herself, stating that she was not in a position to take the discussion forward and would like to end the meeting.

Mr Nandi did not take notes during or immediately after the meeting. On 14 November 2019, he was interviewed by John Boardman of iHR Australia, which had been engaged by Siemens to investigate Ms Divilly-Lavelle’s complaint about Mr Nandi’s conduct during the 31 July meeting.[34] Mr Boardman prepared a summary of what Mr Nandi told him, which Mr Nandi agreed was accurate. The parts of that summary concerning what was said during the meeting follow:[35]
[34]Mr Boardman’s report and findings are discussed at [78]–[84] below.
[35]The six numbered allegations investigated by Mr Boardman are set out at [79] below.

JB: The telephone meeting held on 31 July 2019, had that been prescheduled?
SN: Yes, it was not rushed, and I was not in a hurry, I do not accept that. I had allowed one hour for the meeting, which is shown in the meeting invitation. The pre-PMP dialogues normally take about 45 minutes but I had scheduled one hour with Joan. We started and spent about 3-4 minutes discussing pleasantries. I was patient and attentive with Joan and I let her talk for about 25 minutes without interruption. I then gave her my feedback, which took about 10-12 minutes. I went through specific assigned targets, factoring in both her comments and the feedback I had received from the business on her performance. We then discussed for 4-5 mins on her the next steps and personal development Joan said that she wanted to stop the meeting at that stage, but I could have continued for a further 15 minutes or she could have requested a follow up meeting. I reject the allegation that I was pushing it through impatiently. The meeting finished after about 45 minutes but was finished at Joan’s request. There was no request for follow up meeting or clarifications.
JB: So, in relation to Allegation 1, you say that is not true?
SN: Yes.
In the context of a discussed, I did tell Joan, ‘lets focus on: What have you done, not what are you going to do’ that is true. The purpose of the PMP is to review the past performance, not plan what you are going to do in the future. It is performance feedback. I did listen to her future plans but I said that they cannot be considered for the purposes of the review. I needed to stick to the purpose of the discussion.
In relation to the matters set out in Allegation 4, they were not examples, they were goals and targets. Like: People Strategy, R&R, Functional Organization, HR Digitalization etc.) There were many more than those three raised. I can provide her PMP form which sets her goals out.
I did mention that there were gaps in performance based on what she presented on her goals and factual position. I have regular structured catchup meetings with my staff, including Joan, where I provide feedback on what has gone well and what has not gone well. My feedback was consistent. It is my responsibility to provide honest feedback and that is based on my observations and experience, and also the feedback from the business, including the CEO of the Region.
In relation to the ‘legal issue’ (4b refers), I had to ask Joan to step aside from handling the matter. My feedback from the business was to take Joan out of it. There was a gap in terms of what we needed. On the other hand, not all of her feedback was negative, I congratulated her on a job well done in relation to the MRX Integration during this Pre-dialogue.
I also talked to Joan about the matters set out in 4b and 4c. Joan was apologetic about [Ms B’s] appointment and said that was because of pressure from the business to quickly fill the position. Joan confirmed that she skipped informing me on the selection and appointment - which is a process is a non-conformance.
JB: Did you say that she lacked strategic focus?
SN: Yes, I told her that the business feedback was that she lacked strategic focus. I commented there are gaps as strategic HR BP and that there is a gap between what she has presented on their goals achievement and what has actually happened.
JB: Did you put it to her as your opinion or as feedback from the business?
SN: Both, business feedback and my assessment against her targets and her actual performance. There were observations against the targets and the feedback received from Business, especially APAC CEO, and it’s my duty to convey the same to her, obtain her feedback and get her side of the story.
JB: Allegation 5, did you raise the issue of alternative employment.
SN: Joan had said that she wanted to move overseas (US/ UK) for personal reasons, she had put that in writing (PMP FY 19 Form) I wanted to understand when she wanted to leave as I would need a seamless transition as far as the job was concerned. Joan had discussed the matter with some people in Germany. I offered to assist her in the process. As a manager, it’s my responsibility to support my teammate with chosen career paths as well as I am under a duty to plan in advance so that business is not impacted.
JB: Allegation 5a, did you say that to Joan?
SN: I don’t remember exact words or statements what I said, it is three months ago, and I have had a lot of conversations over that period. The conversation, as expressed in the complaint, is negative, but my intent was positive. My heart and intention were pure. Unfortunately, she has misconstrued my intent. I did suggest that she could consider recruitment, as an example, as she has worked in that area before and in other HR areas.
JB: Did you say that she should start looking for something else?
SN: No.
JB: Were you attempting to push Joan out?
SN: No. This meeting was fully focused on a pre-PMP dialogue and conducted as per Siemens processes.
With regards to discussions around opportunities in Siemens oversees, i.e. a move to the UK or US, I wanted to match what she wanted and what organisation can offer, she had requested a move to the UK or US. I don’t recollect that I mentioned anything about a lower position. I had spent a lot of effort advocating for her career development, which is surprisingly excluded in the Complaint. The feedback from the business was quite strong and it appeared that she is facing challenges in her present role. My formal evaluation had not been set, Joan had the opportunity to challenge the feedback and assessment if it was wrong.
JB: Did you say, ‘I’m surprised you have not taken the hint’?
SN: I don’t recall making that comment.
JB: Allegation 6 is that Joan was distressed and that she was too distressed to continue the phone call, what do you recall of that?
SN: It was a phone call not a videoconference. I can’t comment if she was crying. If so, I was not aware of it, I had no idea and cannot comment on her personal situation either, I can appreciate that negative feedback is never pleasant to receive but I stuck to my duty to give honest feedback.

During cross-examination, Mr Nandi agreed that he had told Ms Divilly-Lavelle that there were big gaps in her performance. However, he disagreed that he had said Ms Divilly-Lavelle should look for a role outside the organisation, recalling that he had said ‘outside the country’, within Siemens. Mr Nandi firmly denied telling Ms Divilly-Lavelle that it would be detrimental for her career if she stayed in the organisation, or that it would reflect badly on him as her manager. He denied making the statement, ‘I’m surprised you haven’t taken the hint’.

Mr Nandi was also asked about an email exchange he had with Mr Obadia on 15 July 2019 headed ‘Please give a plan to replace HR’. In the first email, Mr Obadia wrote:

So many complain[t]s from all exec team
We do not give a favour to Joan and the business
What, who and when?

Mr Nandi responded with a request that Mr Obadia share the complaints from the executive team. Mr Obadia responded:

Vijay just now
Raphaelle
Mike
Myself on content not any form[36]
.....
Forget the complain[t]s … she is not capable for such role/responsibility. It is quite a fact!

[36]Mr Obadia clarified that by this he meant ‘not content on performance’.

Mr Nandi’s evidence was that, after receiving this email, he had a long discussion with Mr Obadia to understand what was in his mind.

Ms Divilly-Lavelle submitted that Mr Obadia’s email of 15 July 2019 was an instruction to Mr Nandi to get rid of her, which Mr Nandi acted on. It was submitted for Ms Divilly-Lavelle that the email ‘charged Mr Nandi, and Mr Nandi believed as a result of that he had to do something about it, and he did’.[37] This was not put to Mr Nandi, and there is no evidence that he either took it as an instruction to remove Ms Divilly-Lavelle, or that he acted on such an instruction.
[37]Transcript, 8 November 2022, 455:12–14.

Findings

Where there are differences between Ms Divilly-Lavelle’s and Mr Nandi’s evidence of what transpired during the 31 July meeting, I prefer Mr Nandi’s evidence. There are several reasons for that preference.

The first reason is my assessment of both witnesses’ demeanour while giving evidence. Mr Nandi impressed me as a considered man, who thought before he spoke and chose his words with care. He was careful to relate his evidence to the objective circumstances surrounding the meeting, including previous communications that reflected on Ms Divilly-Lavelle’s performance, her self-evaluation, and the process he generally followed for having a pre-PMP dialogue. Ms Divilly-Lavelle, on the other hand, was less factual in her account of what was said at the meeting, and more inclined to describe her own emotional responses. At times she strayed into lengthy explanations of the context of the performance issues raised by Mr Nandi.

Second, Ms Divilly-Lavelle acknowledged that she had an imperfect recall of what was said during the meeting, having become upset after Mr Nandi had outlined his concerns about her performance. She did not remember exactly what was said or the layout of the conversation, remembered the negative aspects most distinctly and had less recall of the positive aspects.[38]
[38]See [60(q)] above.

Third, Ms Divilly-Lavelle’s initial account of the meeting was contradicted by other evidence. Most significantly, in her evidence in chief, Ms Divilly-Lavelle stated unequivocally that she had been given no indications of ‘big gaps in her performance’ prior to the 31 July meeting.[39] She confirmed that in cross-examination.[40] However, Ms Divilly-Lavelle later agreed that several of the performance concerns discussed had in fact been raised with her before 31 July 2019, by both Mr Nandi and Mr Obadia.[41] Further, Mr Nandi’s discussion of an alternative role did not come out of the blue. It was in response to Ms Divilly-Lavelle’s wish to move to a role overseas, which she had raised in her self-evaluation, and in previous discussions with Mr Nandi and other Siemens managers.
[39]Transcript, 2 November 2022, 57:16–18.
[40]Transcript, 2 November 2022, 74:8–16.
[41]See [60(d)]–[60(f)] above.

Fourth, Ms Divilly-Lavelle’s initial account of the meeting including a number of matters that she perceived to be negative, and which she later conceded had been overstated or had not occurred. Her perception that Mr Nandi was impatient from the outset and rushed her in outlining her achievements was at odds with the time he had allocated for the meeting, and the evidence of both witnesses about how the meeting unfolded. They both described a cordial exchange of pleasantries over the first few minutes, followed by 20 to 25 minutes during which Ms Divilly-Lavelle was able to speak about her achievements against her goals while Mr Nandi listened. While she initially made much of his request that she focus on what she had done, not what she was going to do, in cross-examination she agreed this was a ‘gentle redirection’.

The evidence does not establish that Siemens failed to take reasonable care for Ms Divilly-Lavelle’s safety on her return to work in August 2019.

Her request for a change in her reporting line was under consideration when she resumed personal leave. It was reasonable for Siemens to take some time to work out how to respond to this request, which was ultimately acceded to.

In relation to other contact with Mr Nandi, it is significant that Mr Nandi’s conduct in the 31 July meeting was reasonable and appropriate, and did not amount to bullying or harassment of Ms Divilly-Lavelle. That aside, I accept that Ms Divilly-Lavelle had an adverse psychological reaction to the negative aspects of the performance feedback he provided during the pre-PMP dialogue. I also accept that her limited interactions with Mr Nandi were stressful for her, and that she wished to avoid or minimise future contact with him. However, Ms Divilly-Lavelle does not appear to have alerted Ms Guerineau or anyone else within Siemens of this wish, or the extent of her anxiety about Mr Nandi. In addition, she had returned to work without any medical restrictions. In those circumstances, reasonable care for Ms Divilly-Lavelle’s safety did not require Siemens to prevent all contact between Ms Divilly-Lavelle and Mr Nandi on her return to work. It follows that Siemens did not fail to take reasonable care for the safety of Ms Divilly-Lavelle when she returned to work in August 2019.

Response to complaints

By early October 2019, Siemens had engaged iHR to investigate Ms Divilly-Lavelle’s complaint about Mr Nandi. As I have found, she confirmed on 11 October 2019 that she wanted her complaint investigated, and met with Mr Boardman on 28 October 2019 to provide the details of her complaint.

When Ms Divilly-Lavelle returned to work on 28 October 2019, she was no longer reporting to Mr Nandi. Instead, she reported to Sabine Ristelhuber globally, with a local reporting line to Ms Barnard. Ms Ristelhuber was the Vice President of People and Organisation for Siemens Mobility, a role with both global and regional responsibilities for Siemens Mobility. These included being Head of People and Organisation for the North East Europe Region, which was an equivalent role to that performed by Mr Nandi in the Asia Pacific Region. Ms Ristelhuber was based in Germany. Ms Divilly-Lavelle was advised of this change in her reporting relationships in a letter from Ms Ruzicka dated 28 October 2019, which she acknowledged and agreed to in an email sent on 1 November 2019.

Mr Boardman completed his investigation during November 2019. His findings are set out at [79] above. He recommended to Siemens that it provide feedback to the parties about his findings, and discipline or counsel Mr Nandi for his breach of Siemens policy.

Ms Divilly-Lavelle was told in general terms of the outcome of Mr Boardman’s investigation at a meeting with Ms Barnard and Ms Ristelhuber on 29 November 2019. The meeting took place in Ms Barnard’s office at Bayswater, with Ms Ristelhuber participating by Circuit. Three topics were discussed, the third of which was the investigation. Ms Barnard told Ms Divilly-Lavelle that the report had been completed and that Mr Boardman had made a finding of harassment against Mr Nandi, which occurred on a single occasion and so did not amount to bullying. Ms Divilly-Lavelle asked for a copy of the full report, and Ms Barnard said Siemens did not usually provide a complete investigation report to the parties. Ms Divilly-Lavelle pressed her request, and Ms Barnard said that she would not be given the report, but would receive a letter summarising the findings of the report.

Ms Ristelhuber did send this letter to Ms Divilly-Lavelle, attached to an email dated 4 March 2020. The delay in sending the letter was not explained. Unfortunately, by that time Ms Divilly-Lavelle’s relationships with her new managers had deteriorated to the point that she was refusing to open emails from either Ms Barnard or Ms Ristelhuber. In addition, on 2 March 2020 Ms Divilly-Lavelle was certified unfit for work until 27 March 2020. Although the letter was sent, it appears that Ms Divilly-Lavelle did not open or read it.

Separately, in December 2019 Ms Ruzicka spoke with the Siemens’ Head of Human Resources in India, Shilpa Kabra Maheshwari, who was Mr Nandi’s in country manager. Ms Ruzicka told Ms Maheshwari about the iHR investigation and report, and said she would send her the report to determine whether the outcome should lead to any disciplinary action against Mr Nandi. On 18 December 2019, Ms Ruzicka sent the iHR report to Ms Maheshwari, and asked her to advise if there were any steps or consequences of the report from an Indian perspective. This was because Mr Nandi was employed in India by an Indian entity.

Ms Maheshwari responded by email on 20 December 2019, saying she had looked at the report, and the findings did not substantiate any dismissal or warning. She recommended that Mr Nandi be counselled on ‘how to handle such conversations going forward’ and, if possible, participate in training on cross-cultural sensitivities.

Ms Ruzicka subsequently called Mr Nandi to inform him of the outcome of the investigation. She told him that the report made some findings about the way he had spoken to Ms Divilly-Lavelle in the 31 July meeting. She said that Ms Maheshwari had confirmed there were no legal consequences but had recommended he undergo training on intercultural sensitivity. She commented that it was important for Mr Nandi to be aware of the language used when speaking to people in other countries, as his wording could be misunderstood, and he needed to be sensitive to that.

The recommended training was arranged and provided to Mr Nandi in 2020.

Mr Nandi confirmed that, before Christmas 2019, Ms Ruzicka had informed him in general terms of the outcome of the iHR investigation. He understood that the investigator found that he had behaved inappropriately during the pre-PMP dialogue. He was not provided with a copy of the report. In 2020, he underwent three hours of one-to-one training in cultural sensitivity and awareness orientation, delivered by an external consultant. He had not previously received any counselling or disciplinary action during more than 20 years of employment with Siemens.

From these findings it is apparent that Siemens properly examined and took appropriate measures in response to Ms Divilly-Lavelle’s complaint about Mr Nandi’s behaviour during the 31 July meeting, consistent with the commitments expressed in the 2019 BCG. It engaged an independent investigator, confirmed with Ms Divilly-Lavelle that she wanted the complaint investigated, and allowed her to provide particulars of her complaint directly to the investigator. It accepted the investigator’s findings and acted on his recommendations, including counselling Mr Nandi and requiring him to undergo training. It did not condone non-adherence to the BCG.

Ms Divilly-Lavelle clearly expected to be provided with a copy of the iHR report, and was unhappy that this did not occur. However, she had no entitlement to receive the full report. Indeed, the evidence suggests that it would not have been in accord with Siemens’ company-wide processes for the report to be provided to either Ms Divilly-Lavelle or Mr Nandi. It would have been preferable for the letter summarising the findings in the iHR report to have been sent to Ms Divilly-Lavelle more promptly, but the delay was not contrary to Siemens’ commitments to examine and take appropriate measures in response to a complaint.

Was any breach of contract repudiatory and did the plaintiff accept the repudiation?

No breach of contract has been established, either in relation to the 31 July meeting, or Siemens’ response to meeting and Ms Divilly-Lavelle’s complaint about it. It is therefore not necessary to determine this issue.

However, even if Mr Nandi’s behaviour during the 31 July meeting amounted to ‘constructive dismissal’ and ‘wrongful repudiation’, as Ms Divilly-Lavelle contended, she was faced with a choice to either accept the repudiation, or affirm the contract and remain in her employment.

It was Ms Divilly-Lavelle’s submission that she immediately objected to the repudiatory conduct, but did not make an election — that is, she did not affirm the contract or accept the repudiation. Rather, she took time off work and sought redress by Siemens. She said that she was entitled to have her complaint properly dealt with, and to remain in employment while that occurred, before making an election.

In oral submissions, Ms Divilly-Lavelle said that there were ‘then a spiralling number of incidents’ that flowed from the ‘original repudiation’. By this, I understood Ms Divilly-Lavelle to be referring to Siemens not giving Ms Divilly-Lavelle a copy of the Boardman report, not acting on the recommendations of the Boardman report to Ms Divilly-Lavelle’s satisfaction, and directing Ms Divilly-Lavelle to participate in a second investigation and an independent medical examination.[49] Ms Divilly-Lavelle said that, during this time, the repudiatory conduct on the part of the defendant was ongoing.
[49]Amended Second Statement of Claim, [14].

Ms Divilly-Lavelle relied on Western Excavating (ECC) Ltd v Sharp[50] and Crowe Horwath (Aust) Pty Ltd v Loone[51] in support of the proposition that an election need not be immediate, and that mere delay is inconsequential. Ms Divilly-Lavelle contended that she made it clear in written correspondence to Siemens staff that she was objecting to the repudiatory conduct, and was not affirming the contract.
[50][1978] QB 761.
[51][2017] VSC 163, [63]–[72] (Crowe Horwath).

Ultimately, it is a question of fact as to whether the conduct of an employee constitutes an affirmation of the employment contract.[52] In this case, it is clear that Ms Divilly-Lavelle made an election to affirm her contract and remain in her employment when she returned to work on 28 October 2019. Until then, I accept that she had neither affirmed nor accepted what she regarded as a repudiation of her contract.
[52]Crowe Horwath, [72].

That changed with Ms Divilly-Lavelle’s letter of 11 October 2019, in which she communicated her ‘express intention to return to the workplace and assume [her] role as the HR Lead for Siemens Mobility AUNZ as at 28^th October 2019’.[53] She intended to remain in the position for the short term only, while a suitable overseas position was found for her, but there was nothing conditional or tentative about her return to work on 28 October 2019. Ms Divilly-Lavelle provided a medical certificate dated 22 October 2019, clearing her to return to normal duties from 28 October 2019, with no restrictions. On 28 October 2019, she met with the independent investigator, Mr Boardman, and provided him with particulars of her complaint against Mr Nandi. By the end of the first week, she had agreed to the change in her reporting line. Even if there had been a repudiation of her employment contract before then — which there was not — Ms Divilly-Lavelle elected to affirm the contract and continue in her employment.
[53]The letter to Mr Connolly and Mr Zhuang is set out in full at [103] above.

Unfortunately, the employment relationship between Ms Divilly-Lavelle and Siemens Mobility Australia did not improve. There were fresh concerns about Ms Divilly-Lavelle’s performance, which were communicated by Ms Ristelhuber in the meeting on 29 November 2019. Ms Divilly-Lavelle was aggrieved that Ms Ristelhuber did not agree to her request to work remotely from Ireland during December 2019 until at least 6 January 2020, while her mother underwent and recovered from surgery. At a further meeting on 2 December 2019, Ms Barnard told Ms Divilly-Lavelle that her performance rating for 2019 was ‘2, 3’ — that is, a rating of 2 for her ‘what’ goals and 3 for her ‘how’ goals — and that she would be placed on a performance improvement plan. Ms Divilly-Lavelle’s surprise and distress at this outcome of the PMP process was compounded by the fact that the meeting took place in a hotel restaurant. This was an attempt to accommodate Ms Divilly-Lavelle’s reluctance to meet at Siemens’ Bayswater office but, as Siemens later acknowledged, the meeting should not have been held in a public place.

The relationship deteriorated further in December 2019 and early 2020. Over this period, Ms Divilly-Lavelle and Mr Lavelle wrote several emotional and accusatory letters of complaint to Mr Connolly and others within the Siemens Group. These included complaints that Ms Barnard and Ms Ristelhuber had bullied and harassed Ms Divilly-Lavelle in the meetings on 29 November and 2 December 2019. Mr Lavelle wrote a long letter to Mr Connolly on 12 January 2020, which included a suggestion that he ‘give deep consideration to a serious financial settlement for Joan, which must include an insurance component against long term psychological damage occurring in the future, preventing her from gainful employment’.

In January 2020, Siemens asked the Head of Labour Law for Siemens Mobility, Cornelia Brutscher, to conduct a second investigation of the complaints against Ms Barnard and Ms Ristelhuber. Ms Divilly-Lavelle ultimately refused to meet with Ms Brutscher, or engage with her investigation, due to a perceived lack of independence. Ms Brutscher completed her investigation without being able to speak with Ms Divilly-Lavelle. She concluded that Ms Barnard and Ms Ristelhuber’s conduct was reasonable management action, but that the meeting of 2 December 2019 should not have been held in a public place. Despite this, Ms Brutscher concluded that holding the meeting in a hotel restaurant did not amount to bullying or harassment, because the purpose was to meet outside the workplace, as requested by Ms Divilly-Lavelle.

Ms Divilly-Lavelle had travelled to Ireland to see her family over the Christmas period, but her return to Australia was delayed by a chest infection. She was able to fly home from Ireland in the second week of January, but had to take further personal leave and was in and out of the office during the balance of that month.

On 3 February 2020, Ms Ristelhuber wrote to Ms Divilly-Lavelle requesting her to attend an independent medical assessment. She explained the reasons for the request in her letter:

Dear Joan
As you know, Siemens Mobility received a letter from your husband, Gabriel Lavelle, on 12 January 2020, which raises concerns regarding your health, particularly your psychological health.
Based on the comments made in this letter and given that you were absent from work for an extended period in 2019, and an additional period over the Christmas shutdown period, Siemens Mobility is concerned for your health, including your psychological health, and wishes to ensure you have appropriate medical care.
As you know, Siemens Mobility has obligations under occupational health and safety legislation to ensure your health and safety and the health and safety of other persons who work at Siemens Mobility's workplaces. It is important that we have sufficient up to date information regarding your health, including your psychological health, so we can ensure, so far as is reasonably practicable, that you are fit to attend work and perform your work duties, and otherwise meet the requirements of your position.
Taking these obligations into account we propose to arrange an appointment for you to attend an assessment with an independent medical specialist to assess whether you suffer from any medical condition which affects (or may affect) your capacity to attend work and perform your work duties and otherwise meet the requirements of your position, without putting you or other persons at risk.
Siemens will pay all costs associated with the appointment and assessment by the medical specialist. Siemens will also pay you for any time you need to take off work to attend the assessment.
We would be grateful if you could confirm that you agree to attending the appointment with a medical specialist to undertake the assessment as proposed. We will provide details of the appointment when appropriate arrangements have been made.
If you have any questions or would like to discuss this further, please do not hesitate to contact me.

Ms Divilly-Lavelle did not agree to this request, indicating that she preferred to arrange her own medical assessment. On 19 February 2020, Ms Ristelhuber wrote again, this time directing Ms Divilly-Lavelle to attend an independent medical assessment, to be arranged by Siemens. Siemens subsequently arranged appointments with an occupational physician, for 2 March 2020, and a psychiatrist, for 5 March 2020. Ms Ruzicka advised Ms Divilly-Lavelle of these appointments in a letter dated 27 February 2020, and reiterated that Siemens Mobility was directing Ms Divilly-Lavelle to the appointments, as ‘a lawful and reasonable direction from your employer’. Ms Divilly-Lavelle did not attend either appointment, communicating her refusal through her solicitors.

On 2 March 2020, Ms Divilly-Lavelle’s general practitioner certified that she was receiving medical treatment and would be unfit to continue her usual occupation from then until 27 March 2020.

In the meantime, Siemens Mobility Australia had been operating for some months with only intermittent input from its Human Resources Manager. Ms Divilly-Lavelle’s absences caused stress for others in the business, as less skilled and experienced people in her team had to step up to perform parts of her role, in addition to their own. Ms Barnard provided some support for Ms Divilly-Lavelle’s team, but this was on top of her existing, full-time role with Siemens Ltd. As Ms Ruzicka put it: ‘Trying to run the business without an in-country Head of HR is like trying to run a company without a CEO’.[54] Ms Guerineau needed a lead human resources person who could both manage business as usual and help her to manage a significant transformation of the business. She was not receiving that support from Ms Divilly-Lavelle.
[54]Witness statement of Cornelia Ruzicka dated 14 October 2022, [74].

It is regrettable that Ms Divilly-Lavelle’s return to work in late October 2019 was not the fresh start that she and others had hoped it would be. By 27 March 2020, the employment relationship had irretrievably broken down. This was one matter on which both parties had agreed by the end of the trial.

Neither the commencement of the second investigation, nor the direction to attend independent medical assessments, were breaches of Ms Divilly-Lavelle’s employment contract, let alone repudiatory breaches. The first was a reasonable and proportionate response by Siemens to Ms Divilly-Lavelle’s complaint about the meetings with Ms Barnard and Ms Ristelhuber on 29 November and 2 December 2019. The second was a reasonable and lawful direction to an employee who was clearly — and admittedly — in poor mental and physical health, and who was struggling to perform her role.

In conclusion on this issue, the claimed repudiatory breaches of Ms Divilly-Lavelle’s employment contract were not made out. Even if they had been, Ms Divilly-Lavelle affirmed the contract when she returned to work on 28 October 2019. Unfortunately, the employment relationship deteriorated until, by 27 March 2020, it had completely broken down.

Was the termination on 27 March 2020 in breach of the contract of employment?

On 27 March 2020, Siemens terminated Ms Divilly-Lavelle’s employment. It paid her four weeks salary in lieu of notice of termination, as well as her outstanding salary and accrued but unused annual leave. Under cl 15 of Ms Divilly-Lavelle’s employment contract, Siemens was entitled to terminate her employment by giving her four weeks of notice of termination, or payment in lieu of notice. There was no contractual requirement for Siemens to have a valid reason for the termination, or to explain its reasons to Ms Divilly-Lavelle.

However, Siemens did give reasons for its decision, in a letter from Ms Guerineau dated 27 March 2020. The letter said:

Dear Joan,
Following an extensive period of engaging with you on various matters regarding your employment, unfortunately Siemens Mobility Pty Ltd (Siemens Mobility) feels that it is now in a position where its relationship with you has irretrievably broken down.
Siemens Mobility has decided to terminate your employment, because you have failed to accept and/or comply with reasonable management actions and directions by Siemens Mobility in relation to your position and your employment.
In particular, you have:
1.Refused and /or failed to communicate with your in-country manager, Nicolette Barnard, and your functional line manager, Sabine Ristelhuber, in relation to various matters;
○In your letter to Jeff Connolly dated 24 February 2020, you stated that you ‘would not open any mail received from either’ (referring to Ms Barnard and Ms Ristelhuber).

2. Refused to communicate or confer with, or in any way assist, Cornelia Brutscher in respect of the investigations that were being conducted by Cornelia Brutscher in relation to various allegations which you raised. For example:
○Following her previous letter sent on 17 January 2020 regarding this investigation, Cornelia Brutscher rescheduled the meeting to be held on 3 February 2020 . You subsequently advised Ms Brutscher via email and letter dated 3 February 2020 that you would not participate in the investigation.
○[Ms] Brutscher subsequently contacted you via email on 10 February 2020 to explain her role and you responded via email on 12 February 2020 confirming that you would participate in the investigation, and proposed to meet in the week of 24 February 2020 based on the availability of your support person. Ms Brutscher contacted you via email on 19 February 2020 to request that the meeting be held on either 4 or 5 March 2020 as she was unavailable in the week of 24 February 2020. No response to this email was received. Ms Brutscher contacted you again by email on 2 March 2020 requesting your participation in the investigation and again no response was received. As a result Ms Brutscher was required to proceed with the investigation without your input.

3. Refused and/or failed to comply with reasonable directions made to you by Siemens Mobility to attend medical appointments which were reasonably arranged by Siemens Mobility.
○For example, you refused and/or failed to attend two medical appointments which were arranged by Siemens Mobility for 2 and 5 March 2020, despite directions being made for you to attend those appointments. You also failed to confirm you would comply with a further direction made to you in a letter to your solicitors dated 4 March 2020.

Siemens Mobility considers that it has grounds to summarily terminate your employment on the grounds of conduct by you which is destructive of the employment relationship.
However, Siemens Mobility has determined to terminate your employment immediately with pay in lieu of notice of termination in accordance with your employment contract of 17 March 2017, which incorporated the terms of the employment agreement dated 26 September 2016.
Your employment will end immediately, effective today Friday 27 March 2020 (Termination Date).

It is not necessary for me to determine whether Siemens’ reasons for terminating Ms Divilly-Lavelle’s employment were valid. However, I observe that each of the three reasons given was consistent with the evidence at trial, including Ms Divilly-Lavelle’s own evidence. Further, Ms Divilly-Lavelle agreed that the employment relationship had by this time completely broken down.

The termination of Ms Divilly-Lavelle’s employment on 27 March 2020 was not in breach of her contract.

Damages

Ms Divilly-Lavelle has not made out any of the claimed breaches of her employment contract, and is not entitled to damages for breach of contract.

Disposition

I will make orders dismissing the proceeding, after hearing from the parties on the issue of costs.

[2023] VSC 28

8 February 2023