Dorsch v HEAD Oceania Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Dorsch v HEAD Oceania Pty Ltd [2024] FCA 162

File number: NSD 271 of 2022
Judgment of: RAPER J
Date of judgment: 29 February 2024
Catchwords:

INDUSTRIAL LAW – employment – adverse action – whether the applicant was subjected to adverse action in contravention of s 340 of the Fair Work Act 2009 (Cth) (FW Act) – applicant dismissed from his employment purportedly by reason of complaints received from other employees about his conduct – whether applicant made complaints or enquiries amounting to the exercise of “workplace rights” pursuant to s 341 of the FW Act – whether adverse action was taken because the applicant had exercised a workplace right – operation of the statutory presumption in s 361 of the FW Act – whether the person who took the adverse action did so on behalf of the respondent – whether the relevant decision-maker was actuated by the applicant’s exercise of workplace rights – whether the respondent breached s 90(2) of the FW Act by failing to pay annual leave in full on termination – whether the respondent breached s 62 of the FW Act – whether the respondent wrongfully terminated the employment contract – misconduct - application allowed in part

CONTRACT LAW – summary dismissal – whether the respondent may rely on after acquired knowledge to justify the termination – whether there was condonation or waiver – whether the respondent failed to pay contractual notice and annual leave entitlements upon termination – whether the respondent breached its contractual obligation to take reasonably practicable steps to protect the applicant from a risk to his health and safety in the workplace – application allowed in part

Legislation:

Fair Work Act 2009 (Cth) ss 22, 22(5), 22(7), 22(7)(a), 22(7)(b), 22(8)(b), 44, 62, 62(1), 62(1)(a), 62(1)(b), 62(3), 64, 90, 90(2), 340, 340(1)(a), 341, 341(1)(a), 341(1)(b), 341(1)(c), 342, 342(1) 361, 539, 545(2)(b), 550, 789FD, 793

Work Health and Safety Act 2011 (Cth) s 19(2)

Cases cited:

Alam v National Australia Bank Ltd [2021] FCAFC 178; 288 FCR 301

Blyth Chemicals Ltd v Bushnell [1933] HCA 8; 49 CLR 66

Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500

Briginshaw v Briginshaw (1938) 60 CLR 336

Carter v Dennis Family Corporation [2010] VSC 406

CCIG Investments Pty Ltd v Schokman [2023] HCA 21; 410 ALR 479

Commonwealth v Verwayen (1990) 170 CLR 394

Concut Pty Ltd v Worrell [2000] HCA 64; 75 ALJR 312

Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 275 CLR 165

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; 253 CLR 243

Cummins South Pacific Pty Ltd v Keenan [2020] FCAFC 204; 281 FCR 421

Eldrige v Wagga Wagga City Council [2021] NSWSC 312

Elliott v Kodak Australasia Pty Ltd [2001] FCA 1804; 129 IR 251

Ermel v Duluxgroup (Australia) Pty Ltd (No 2)

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Details
Case
[2024] FCA 162
Decision Date

CaseChat Overview and Summary

In Dorsch v HEAD Oceania Pty Ltd, the applicant, Mr Dorsch, sought relief under the Fair Work Act 2009 (Cth) and the common law for various alleged breaches of his employment contract by his former employer, HEAD Oceania. The primary issues for determination were whether Mr Dorsch had been subjected to adverse action contrary to the Fair Work Act, whether HEAD Oceania had failed to pay his annual leave entitlements upon termination, and whether the termination itself was lawful. The Court was also required to determine the appropriate quantum of damages, if any, for the breaches identified. Mr Dorsch's claims were multifaceted, involving allegations of unlawful conduct during his employment and wrongful termination. The Court examined the evidence presented by both parties, including affidavits and witness testimonies, and made specific findings on the disputed facts. The Court found that HEAD Oceania had failed to pay Mr Dorsch his accrued annual leave upon termination, as required by section 90(2) of the Fair Work Act, and awarded him $10,000 in general damages for this breach. All other claims, including those related to adverse action and wrongful termination, were dismissed. The Court concluded that it was impractical to assess the potential compensation Mr Dorsch might have received had his other claims been successful due to the complexity and intertwining nature of the allegations. The Court ordered the parties to confer on the form of orders to be made and set a deadline for the submission of proposed orders, with a subsequent hearing scheduled to address any remaining issues.

Orders

Orders of the court

1. The parties confer with a view to agreeing upon the form of the orders to be made by the Court to give effect to the reasons published today, and in the event of agreement, submit the orders to the Court, by 7 March 2024, where they will be made in their absence.

2. In the absence of agreement on the form of the appropriate orders by 7 March 2024:

(a) the applicant file and serve by 4:00 pm on 7 March 2024 the form of orders it proposes to give effect to the Court’s judgment today;

(b) the respondent file and serve by 4:00 pm on 7 March 2024 the form of orders it proposes to give effect to the Court’s judgment today.

3. The matter be adjourned until 13 March 2024 at 9:30 am for consideration of the orders to be made (if there is no agreement) and the subsequent timetabling of the remainder of the matter.

4. There be liberty to the parties to apply.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

For the reasons which follow, Mr Dorsch has only been successful with respect to one undisputed aspect of his claim, namely that HEAD Oceania failed to pay his accrued annual leave when the employment ended, as required pursuant to s 90(2) of the FW Act. HEAD Oceania paid the entitlement three months after they were required to pay this entitlement. Accordingly, a consequential issue was what, if any, damages arose from this breach. For the reasons which follow, Mr Dorsch is entitled to $10,000 in general damages for this breach. In all other respects his claim fails. The evidence Mr Dorsch relied upon the following affidavit evidence in support of his application:(a)Matthias Florian Dorsch affirmed on 4 November 2022, 24 February, 3 May and 11 October 2023.(b)Patrick Thomas Peter Hegarty affirmed on 4 November 2022. (c)Michelle Marie Caldwell sworn on 4 November 2022.(d)Jeanny Vale Terry affirmed on 7 November 2022. (e)Dr Owen Samuels affirmed on 27 February 2023. (f)Chris Katehos affirmed on 28 February 2023. Only Mr Dorsch, his former partner Ms Terry and his psychiatric expert Dr Samuels were required for cross-examination. Mr Dorsch relied on no aspect of the evidence of Ms Caldwell or Mr Hegarty in his closing submissions. HEAD Oceania relied on the following affidavit evidence in support of its claim:(a)Robert Stephen Montgomery affirmed on 2 December 2022. (a)Karen Elizabeth Andersen affirmed on 5 December 2022. (b)Joanne Elizabeth Borden affirmed on 6 December 2022. (c)Rex Arthur Butler affirmed on 9 December 2022.(d)Mark Darren Wilson affirmed on 13 December 2022. (e)Penelope Jane Hawes affirmed on 15 December 2022. (f)Robert Davies sworn on 19 December 2022. (g)Siobhan Patricia Fookes affirmed on 19 December 2022. (h)Gerald Skrobanek affirmed on 21 December 2022. (i)Stefan Michl affirmed on 21 December 2022. (j)Fabrizio Prete affirmed on 21 December 2022. (k)Dr Hugh Daniel affirmed on 11 April 2023.(l)Susan Esther Haydon affirmed on 25 August 2023. All of the above deponents, save for Ms Haydon, were required for cross-examination. Structure of reasoning As will be evident, Mr Dorsch’s claims can be broadly described as relating to alleged unlawful conduct arising during his employment (from which both statutory and contractual claims arise) and upon termination (from which again statutory and contractual claims arise). Given the same, it is appropriate to consider the relevant evidence and make findings in the context of this temporal demarcation. Accordingly, the reasoning is structured such that consideration is first given the events between 2017 and 2021 as they relate to the claims during employment and, with some overlap thereafter, to the claims as they relate to the termination of Mr Dorsch’s employment. Chronology of Events Most of the relevant facts are not disputed. The following chronological history records my factual findings regarding the relevant facts. An assessment is undertaken of each of the relevant witnesses before I, thereafter, detail specific factual matters about which there was contest and which require resolution.

Decision

Reasons for decision

It is my view that the multifarious bases upon which Mr Dorsch’s claims have failed, the number and intertwining of those claims and the ultimate findings I have made that HEAD Oceania is not liable with respect to the adverse action claims render it not only artificial but impossible to make any determination of the nature and amount of compensation Mr Dorsch might have received if I had found the other way. This is particularly so given there were so many different permutations of his adverse action claims (based on numerous different purported exercises of workplace rights) and there was no corresponding identification in the pleading, evidence or submissions, as to how, if one or more combinations of those claims were successful, the damages claim could unfold. The number and complexity of the claims in this case is much greater than in Milardovic and I agree with Mortimer J that if I were to engage in the labyrinthine task of assessment it would be akin to fixing penalties in circumstances where no contraventions had been proven. Conclusion For these reasons, I am not satisfied that Mr Dorsch has proven any of his claims except the claim under s 90(2) of the FW Act and the associated contractual claim that he was not paid his annual leave in full when the employment ended for which I will award $10,000 of general compensation. I will need to make the necessary declaratory and compensatory orders. Neither party addressed me on costs. Further, the issue of civil penalty remains for which timetabling orders will be necessary. Accordingly, I order that the parties confer regarding the appropriate orders to be made by the Court giving effect to these reasons and the further timetabling of the outstanding issues.

Ratio Decidendi

Legal Principle Established

On 15 October 2018, Mr Dorsch and Mares Oceania entered into the 2018 Employment Contract, which contained the following terms: (a)Mr Dorsch’s position was of Sales & Marketing Manager. (b)The contract commenced on 1 November 2018. (c)The remuneration, paid monthly, comprised the following components:(i)An annual salary of $82,000;(ii)Car allowance of $19,800; and(iii)Superannuation of $7,790 per annum (9.5%); but was subject to cl 5, which provided:5. Remuneration(a)We will pay you the Remuneration as set out in item 6 of the Schedule. If your Status is indicated as Part Time, this will be pro-rated based on the hours you work.(b)We will deduct taxation instalments (including HECS/FEE-HELP if applicable) from your Remuneration as required by law.(c) Your net Remuneration will be deposited into your nominated bank account at the Pay Frequency set out in item 6 of the Schedule.(d) Your Remuneration will be reviewed in line with our annual performance and salary review process. 5.2Discretionary bonusYou may be eligible to receive a bonus for your services during your employment with us. Your eligibility to receive a bonus, any determination to award you such a bonus, and if awarded, the amount of the bonus and whether it is to be paid in a lump-sum or in instalments is at our absolute discretion. Any company policy effected in relation to bonuses is subject to this clause 5.2. (d)Hours of work were 8:30am to 4:30pm Monday to Friday with an hour lunch break to be taken between 12:00pm and 2:00pm where:4.3 Hours of work (a) You must attend at the Location (subject to clause 4.4) during the Hours and carry out the Duties as set out in Item 7, Item 8, and Item 9 of the Schedule (or as otherwise reasonably required by us from time to time).(b) You may request flexible working arrangements in accordance with the Act. We will consider your request and may grant or refuse the request on reasonable business grounds. (e)In addition, the contract required that Mr Dorsch also work, on occasion, reasonable additional hours, as contained in cl 7:7. Overtime (a)The nature of our business may on occasion require you to work reasonable additional hours in excess of your Hours set out in Item 7 of the Schedule. As a result, your Remuneration is calculated to incorporate payment for small amounts of daily overtime up to 60 minutes per day. Should you be required to work outside of these reasonable additional hours, you will be entitled to paid overtime, provided that the overtime has been approved in advance by your Employer Contact.(b)Overtime outside of reasonable additional hours will be paid at overtime rates in accordance with the Applicable Award.(c)You may elect, with our consent, to take time off instead of payment for overtime, at a time agreed to by us. (f)It contained the termination provision at cl 17.2 in the following form:17.2 Termination (a) Despite any shorter term provided for in the Applicable Award or Act, if you wish to terminate your employment with us, you must give us at least 12 weeks’ written notice.(b) Subject to the provisions of any applicable law, we may terminate this agreement at any time by giving you at least 12 weeks’ notice.(c)If you are over 45 years of age and have been employed by us for at least two years at the time of termination, we will give you an additional one week’s notice, or a longer period required by law.(d) After either party has given notice of termination (whether during or after the probationary period, and including notice due to redundancy under clause 17.3) we may terminate your employment at any time by paying you a sum equal to your full rate of payment in lieu of the remainder of the notice period.(e) If notice is given to terminate your employment (including redundancy under clause 17.3), then we may:(i) direct you not to perform any duties for part or all of the notice period;(ii) direct you to perform duties which are different to your Duties for part or all of the notice period, provided that you have the necessary skills and competencies to perform those duties;(iii) direct you to assist with the training of any new employee replacing you (including a complete handover);(iv) require you to remain away from our premises, the Location, or any other location we have directed you to under clause 4.4;(v) remove your access to our network or servers, and/or require you to log out and remain logged out of our network or servers;(vi) change your title.However, in these circumstances, you will remain an employee of ours until completion of the notice period.(f) During any period of notice (including a period of notice due to redundancy under clause 17.3):(i) you must continue to comply with all of your obligations under this agreement and you may not commence new employment or have any business relationships with a new employer prior to the termination of your employment;(ii)you may request to take any accrued annual leave in accordance with our ordinary policies, but we are under no obligation to approve the request if it is not reasonable in the circumstances; and (iii) you may request to take personal leave in accordance with our ordinary policies (expressly including our policy to provide sufficient evidence of the need to take such leave).(g) Your employment may be terminated by us at any time without notice if you: [Formatting error in original.](i) engage in wilful or deliberate behaviour which is inconsistent with the continuation of this agreement;(ii) engage in serious misconduct, including dishonesty, theft, or misrepresentation (whether or not connected with your employment with us);(iii) disobey without proper legal reason a lawful direction of ours;(iv) commit a serious breach of this agreement;(v) misrepresent your qualifications, employment history, or any other factor which led to your employment;(vi) materially fail to perform your Duties;(vii) knowingly or with reckless disregard engage in conduct which causes imminent or serious risk to the health and safety of a person;(viii)harass, discriminate against, assault or abuse another person (sexually or otherwise);(ix) seriously or persistently undermine our good standing, integrity, or reputation, or the good standing, integrity, or reputation of our clients;(x) are charged with a serious criminal offence.(h) If your employment is terminated for any reason (including redundancy under clause 17.3), then:(i) we may set off any amounts you owe us against any amounts we owe-you at the date of termination, except for amounts we are not entitled by law to set off; and (ii) you must return our property (including property leased by us), including any equipment or software provided to you under clause 11, all written or machine readable material, Confidential Information, software, computers, credit and charge cards, keys, security passes, mobile telephones, and sim cards. (g)Finally, the 2018 Contract contained an entire agreement clause at cl 19.4:19.4 Entire agreement This agreement contains the entire agreement between the parties and supersedes all previous negotiations or agreements, contracts, arrangements, and representations in relation to your employment.