Dorsch v HEAD Oceania Pty Ltd
[2024] FCA 162
•29 February 2024
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) [2015] FCA 17
General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605
Hansen v Mt Martha Community Learning Centre Inc [2015] FCA 1099; 254 IR 1
Housden v Boral Australian Gypsum Ltd [2015] VSCA 162
Howard v Wilson (1832) 162 ER 1387
Jones v Dunkel (1959) 101 CLR 298
Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355; 31 VR 46
Lamontv University of Queensland (No 2) [2020] FCA 720
Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899; 93 FCR 34
Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; 229 FCR 221
Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19
Monash Health v Singh [2023] FCAFC 166
Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; 71 NSWLR 471
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 ALR 449
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; 195 CLR 1
Phillips v Foxall (1872) LR 7 QB 666
PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; 274 FCR 225
Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63; 202 FCR 244
Qantas Airways Ltd v Transport Workers Union of Australia [2023] HCA 27; 97 ALJR 711
Rankin v Marine Power International Pty Ltd [2001] VSC 150; 107 IR 117
Roberts v General Motors-Holden’s Employees’ Canteen Society (1975) 172 CAR 1073
Roberts-Smith v Fairfax Media Publications Pty Ltd (No 41) [2023] FCA 555
Sabapathy v Jetstar Airways [2021] FCAFC 25; 283 FCR 348
Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 314 ALR 346
Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359
Transport Workers Union of Australia v Premier Motor Service Pty Ltd [2015] FCA 650
White v Mrs Murphy’s Country Fried Chicken (1984) AR (NSW) 794
Willett v Boote (1860) 6H & N 26
Wong v National Australia Bank [2022] FCAFC 155; 318 IR 148
ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; 275 CLR 254
Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 458 Dates of hearing: 14–16, 19, 22 June 2023, 24 July 2023, 13, 16, 25 October 2023 Counsel for the Applicant: Mr A Britt Solicitors for the Applicant: Harmers Workplace Lawyers Counsel for the Respondent: Mr S Meehan SC Solicitors for the Respondent: Hall & Wilcox ORDERS
NSD 271 of 2022 BETWEEN: MATTHIAS DORSCH
Applicant
AND: HEAD OCEANIA PTY LTD
Respondent
ORDER MADE BY:
RAPER J
DATE OF ORDER:
29 FEBRUARY 2024
THE COURT ORDERS THAT:
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.
REASONS FOR JUDGMENT
RAPER J:
Introduction
Mr Dorsch has worked the majority of his adult life, from apprenticeship in 1996 until 2021 (with a break between 2000 and 2008) for various entities within the HEAD Group. Initially he worked in Germany until 2000. Mr Dorsch was approached 8 years later by Mr Stefan Michl and Mr Gerald Skrobanek, about undertaking a role for MARES Asia Pacific (Mares AP), the HEAD Group’s Hong Kong subsidiary. Mr Dorsch relocated to Hong Kong in around May 2008. In 2010 Mr Dorsch relocated to Queensland to work in the Australian subsidiary. Since then, Mr Dorsch has resided and worked primarily in Australia. However, importantly, Mr Dorsch did not become employed by the respondent (HEAD Oceania) until 2018. Also critically, he remained employed simultaneously by Mares AP, undertook Hong Kong-related work and derived a separate income from that entity.
Mr Dorsch’s employment with both entities was terminated on 10 December 2021, on the basis of his inappropriate conduct towards his subordinates (which had led to a number of them making complaints about him and/or resigning from their positions). However, Mr Dorsch only brought proceedings against HEAD Oceania and not Mares AP.
In this proceeding, Mr Dorsch maintains that he was in fact dismissed because of a number of exercises of his “workplace rights” within the meaning of s 341 of the Fair Work Act 2009 (Cth). Those purported exercises included the making of complaints, asking for salary increases and asserting and querying his bonus and annual leave entitlements. Mr Dorsch also claimed that HEAD Oceania breached s 62 by requesting or requiring him to work more than 38 hours a week where the additional hours were not reasonable and s 90(2) by failing to pay him his accrued annual leave when the employment ended. Mr Dorsch also claims numerous breaches of his employment contract, including failing to pay his annual leave entitlements upon termination, dismissing him summarily and not providing him with 12 weeks’ notice or payment in lieu of notice and breaching a term of the 2017 employment contract and the 2018 employment contract by failing to “take reasonably practicable steps” to protect the applicant from a risk to his health and safety at the workplace. Mr Dorsch no longer presses his claim regarding the failure to pay a redundancy payment under the 15 October 2018 employment contract (2018 Employment Contract).
At this stage in the proceeding, the question of liability and damages are the only issues to be determined, and not the question as to penalty.
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.
HEAD Oceania was not created until 2017 (when it was initially known as Mares Oceania Pty Ltd). Its corporate origins arise from a group of companies, with the parent being HEAD International Holding GmbH in Germany (HEAD International). The HEAD Group is a global provider of high-performance sports equipment and apparel. The business operates under five separate divisions: Winter Sports, Racquet Sports, Water Sports, Sportswear and Licensing.
Between 1996 and 1998, Mr Dorsch completed an apprenticeship with HEAD International. Within the HEAD Group, there was a Mares Division. Mares is an Italian brand specialising in the development, manufacture and distribution of scuba diving, snorkelling, swimming and spearfishing equipment. Upon Mr Dorsch’s completion of his apprenticeship, he worked initially as a Sales Promoter for the Mares Division, then as Product Manager until he resigned in November 2000.
In 2008, Mr Dorsch commenced employment with Mares AP as Sales and Marketing Manager based in Hong Kong. Thereafter Mr Dorsch became involved in Mares’ operations in Australia and relocated to Queensland, Australia in August 2010. Mr Dorsch became a director of Mares AP in March 2010.
The relevant contractual history commences in 2016.
On 21 March 2016, Mr Dorsch entered into a contract with Mares AP, which contained the following relevant terms:
(a)The position was entitled Sales & Marketing Manager MARES AUSTRALIA.
(b)Mr Dorsch reported to the Director of Mares AP and CEO of Mares Italy.
(c)The remuneration comprised an annual base salary of AUD 82,000.
(d)Mr Dorsch was entitled to four weeks’ annual leave per year with no loading.
(e)The employment could be terminated in the following way (the relevant term is extracted):
TERMINATION ON NOTICE
Other than as provided for in the Probationary Period Mares may terminate your employment by giving you 3 month’s written notice or paying you in lieu. Mares may also direct that you perform lesser or no duties during the notice period. In the event of termination, Mares will only be obliged to pay you for any outstanding wages or accrued but unused annual leave. You will not be entitled to any other payment from the company.
If you wish to resign from your employment you must give 3 month’s written notice to Mares.
TERMINATION WITHOUT NOTICE FOR SERIOUS MISCONDUCT
Mares may terminate your employment immediately and without notice if you commit an act of serious misconduct. Serious misconduct may include:
(a) not following a reasonable and lawful direction given to you by Mares;
(b) wilfully or deliberately doing something that is inconsistent with your terms and conditions of employment or inconsistent with your ongoing employment; or
(c) conduct that causes imminent and serious risk to the health and safety of a person, or the reputation, viability or profitability of Mares.
Other examples of serious misconduct Include theft, fraud, assault, intoxication while at work or performing work duties and the commission of a crime in the course of your employment.
On 18 May 2016, Mr Dorsch instructed, in an email to Mr Prete, the manner in which his Australian salary would be split from his Hong Kong salary:
Hi Fabrizio,
Please arrange that the 82k AUD /12 (6.833,33) will paid [sic] with either monthly or by fortnightly payroll to my Australian bank account. The equivalent amount in EUR should be deducted from my HK salary.
The Australian super should be borne by the company as this [sic] are employers costs.
We should start with 1 July.
With best regards
Matthias Dorsch
From July 2016, Mr Dorsch received payments from Mares AP in Australian dollars to his Australian bank account and payments in Euros to his Hong Kong bank account. It was Mr Dorsch’s evidence that the payments received in Australian dollars to his Australian bank account satisfied the requirements of his Australian 457 working visa and that these payments were deducted from his total remuneration package administered by Mares AP in Hong Kong.
On 2 February 2017, it was agreed as between Mares AP and Mr Dorsch that Mr Dorsch’s Hong Kong income increase by €10,000.
On 7 June 2017, Mares Oceania Pty Ltd was incorporated and Mr Dorsch was appointed Director.
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 bonus
You 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.
Mares Oceania Pty Ltd changed its name to HEAD Oceania in 2020.
In the period between April 2018 and November 2021 a number of events occurred which form the basis for Mr Dorsch’s contractual, adverse action, and FW Act claims.
Assessment of witnesses
The parties both relied upon the expert medical evidence of Drs Samuels and Daniel. A joint expert report was filed and the experts have concurrent evidence. For the reasons which will become apparent, given their evidence related to the damages claims, and Mr Dorsch has been successful in one narrow respect, it is not necessary to provide any detailed assessment of their evidence.
Drs Samuels and Daniel prepared separate reports and then a joint report. No submission was raised against either of them on the issue of credit. To the extent that there was reliance on their evidence, it was on the basis of their joint report. Given the same, there is no need to separately assess their evidence.
The applicant’s evidence
It is only necessary to refer to the evidence of Mr Dorsch and Ms Terry. Ms Caldwell and Mr Hegarty were not required for cross-examination and neither party relied upon their evidence in their closing submissions. Mr Katehos’ evidence was read, on a redacted basis, by agreement and without cross-examination being required.
Mr Dorsch’s evidence
Mr Dorsch had devoted the most significant portion of his adult working life to HEAD Oceania and other companies within the HEAD Group. He is a person that had worked exceedingly hard, and to be terminated without warning by telephone has caused him significant distress and anguish.
It was my impression that over time he had become increasingly worn down by work. It was his perception that the employees were not working to the standard needed to be performed in order to ensure that the Australian entity performed at the level required of the German demands. The workplace at Yatala, Queensland was a robust one. It was my observation that he did not enjoy the respect of employees and similarly he did not respect the employees who worked for him.
Ultimately, for the reasons set out below, and where I give specific examples of why his evidence should not be accepted, I did not find him to be a reliable historian. These reasons will reveal that Mr Dorsch’s evidence responsive to the claims of numerous employees regarding his conduct is perplexing. It was the evidence of his subordinates that Mr Dorsch routinely swore at them, was a hard task-master, would bang his fist on the table when dealing with them, and was critical and insensitive to their personal concerns. A difficulty with his evidence is that he routinely recollects his conduct in a sanitised, as Mr Montgomery described it “PG”, (meaning in a less explicit, palatable for a young audience), way. I acknowledge his concessions that he swore, on occasion, but he led evidence to the effect or submitted that swearing was not directed at employees themselves, but rather at the situation. I found his evidence entirely unreliable in the face of the evidence of the employees. His persistent denial suggested to me (at best) a remarkable lack of insight and self-awareness on his part as to how he behaved for which he was not a reliable historian.
In addition, he lacked insight as to the effect his behaviour had on others: Mr Dorsch is an imposing figure. He is extremely tall and wiry. He speaks directly. Employees appealed directly to him regarding his conduct; however, he did not take such appeals on board.
By way of illustration, numerous employees recounted that Mr Dorsch would bang his fists on the table when he was agitated and angry whilst speaking to them. Mr Dorsch denied the same. During Mr Dorsch’s cross-examination on 16 October 2023, Mr Dorsch was questioned regarding HEAD Oceania’s allegation that he had not been honest with the Australian Taxation Office (ATO) regarding his income. On two occasions during this cross-examination, the sound of him thumping the desk in front of him with his hand when he became agitated was audible. It was my observation that such conduct was entirely consistent with what the employees observed.
I accept HEAD Oceania’s submission that the fact of Mr Dorsch’s dishonesty to the ATO has bearing on his credibility. However, for the reasons which will be apparent from the above and below, it is my view that Mr Dorsch was an unreliable witness. First, the evidence regarding his conduct towards his staff reveals that his perception of events and his behaviour was entirely different from a number of current and former employees, for whom their evidence cannot be impugned and where their evidence was consistent. Specific examples of why his evidence should not be accepted are set out below. Secondly, Mr Dorsch’s own evidence regarding his perception of his outstanding entitlement to annual leave suggests that he shoots from the hip (having not undertaken the requisite due diligence) when he considers he is being treated unfairly and confirms he is an inaccurate historian. Specific examples of this are evident from my findings below regarding Mr Dorsch’s inflated, incorrect and ultimately unsupported claims regarding his accrued annual leave entitlements in 2018. Thirdly, it is my view that he is consumed by his perceived unfairness of treatment and, in those circumstances, is not objective in his description of past events and his role within them.
For these reasons, I have significant reservations about the reliability of his evidence in respect of any controversial factual matter for which there is no supporting contemporaneous documentation or corroboration from a reliable witness.
Ms Terry’s evidence
Ms Terry had worked for Mares AP between approximately May 2015 and July 2017, and then for a two-month period for the respondent in 2020. Her evidence concerned, primarily, the effect that the termination had had on Mr Dorsch. Ms Terry had been Mr Dorsch’s partner and resided with him. However, at the time of cross-examination, she was no longer in a relationship with Mr Dorsch, and no longer lived with him. She gave her evidence from New Zealand remotely. However, her evidence palpably described, without challenge, the extent of the pressures arising from the termination had had on Mr Dorsch. She described his demeanour as being “broken”, and that he had sacrificed fifteen years of his life to the company, for all of that to be taken away in a phone call. She was visibly upset whilst giving her evidence as to the effect that the termination and the proceedings had had on him and their relationship. It was my observation that she was a witness of truth.
HEAD Oceania’s witnesses
Neither party relied upon the evidence of Mr Wilson in their closing submissions and as such there is no need to consider his evidence.
Mr Skrobanek
Mr Skrobanek is director of approximately 20 HEAD Group entities globally, including HEAD International. By reason of this role, it was his evidence that he oversees the operations of Mares AP and also HEAD Oceania.
Mr Skrobanek’s evidence was given in two parts. He first gave evidence on 16 June 2023 (via video-link from Austria) and then on 13 October 2023 in person.
It was my impression, from his evidence, that Mr Skrobanek is personable, but direct and efficient in his verbal and written communications with others, seeking to achieve the best outcomes for the corporate entities for which he is responsible.
When giving his evidence, he gave his evidence in forthright manner. He was only prone to agitation when questioned about the issue of his authority with respect to HEAD Oceania and Mares AP. The agitation appeared to arise from frustration as to the non-acceptance of his authority rather than any question of unreliability.
Mr Skrobanek has had a long professional and personal relationship with Mr Dorsch. I observed him become quite crestfallen and melancholic when he was questioned about his decision to terminate Mr Dorsch’s employment. This is a matter to which I will return.
Mr Dorsch challenged Mr Skrobanek’s credibility, largely by either bald assertion without reference to the evidence or, to the extent that any evidence was referred to, without deigning to descend to provide specific evidence or transcript references, with which no engagement with is necessary.
To the extent that Mr Dorsch provided specific evidentiary references, I will deal with them as follows. Mr Dorsch submitted that there was an inconsistency between Mr Skrobanek stating in early June 2018 that Mr Dorsch showed no signs of stress and the fact that Mr Dorsch had sent him an email on 5 June 2018. However, as is set out below, the evidence revealed that the email was not addressed to Mr Skrobanek but rather he was copied to the communication. It was Mr Skrobanek’s evidence that this email was sent some weeks after they had finished a holiday together in the Philippines where he had showed no sign of stress and that Mr Dorsch had the ability to take leave when he needed it. Mr Dorsch’s submission is rejected, it is contrary to my impression of Mr Skrobanek.
Mr Dorsch submitted that Mr Skrobanek’s credit ought be impugned by reason of Mr Skrobanek conceding he would have liked to have offered Mr Dorsch an alternative position elsewhere in the HEAD Group. For the reasons set out below I accept Mr Skrobanek’s evidence and am of the opposite view: This evidence was compelling and was illustrative of why Mr Skrobanek’s evidence should be accepted.
It was my impression that Mr Skrobanek was a credible and reliable witness.
Mr Michl
Mr Michl was composed and direct during his testimony. When one looks at his emails to Mr Dorsch, they were often very direct.
Contrary to Mr Dorsch’s submission, I found him to be a reliable witness. Mr Dorsch’s contention was based largely on unsubstantiated assertions with respect to Mr Michl’s evidence. To the extent that there was disagreement about whether he “supervised” Mr Dorsch, ultimately it is my view it was a question of semantics. There was no true exploration of what he understood supervision to be. Mr Dorsch also asserted that there was an inconsistency regarding whether Mr Michl was asked by Mr Skrobanek or it was his decision to look at Mr Dorsch’s personal experiences. However, a review of the evidence reveals an evolution of his evidence about this issue, based on recall. Mr Michl firstly speculated “it would have been” Mr Skrobanek’s decision, and then, when asked about whether Mr Skrobanek told him to do it, he could not recall. Mr Michl’s evidence was then persuasive. He then reflected that given the issue arose in the context of him looking at the annual leave issue, travel expenses are a related reference point and therefore he said he thought the decision was his. I accept that the evidence reveals that they had robust discussions and did not always get on. However, it was my impression that Mr Michl gave forthright, plausible explanations, consistent with the contemporaneous records.
Mr Prete
It was my impression of Mr Prete that he largely attempted to be truthful in his testimony. Mr Prete’s first language is Italian. His proficiency in English is greater in written rather than oral form. He was assisted by, and appeared to need, an interpreter during his evidence. Care needs to be taken about the extent to which a literal interpretation is taken with respect to certain of the things that he wrote and said in English. However, ultimately, nothing appears to turn on this. Ultimately, it is my view that his evidence should be accepted over Mr Dorsch, for the reasons set out below.
It was my observation that Mr Prete did spend longer than would ordinarily be expected for a witness to read his, and the communications of others, in English, where those documents were within his knowledge. That suggested to me that it could be inferred that he would take longer when dealing with correspondence in English that another person wrote purely by virtue of English not being his first language. Further, in his evidence he did often say that his primary communications (for example with employees within Australia), and even with his superiors (for example, with Mr Skrobanek) were often by email. Where such a course might appear to be surprising in other circumstances from which a negative inference might be drawn, it appeared, by virtue of the fact that he was based in Hong Kong, that his primary responsibilities were with respect to accounting tasks; where he was a person who sought to avoid confrontation which he described in the following way: “Generally, I don’t like to create the controversies between the staff”; and where it appears from his demeanour that he is a person that would be loath to become involved in an argument; and by reason of his lack of confidence when conversing in English, I will infer that his preferred mode of communication was in written form by reason of language skill, general preference and his personality.
Ms Borden
Ms Borden commenced employment with Mares AP in or around April 2017. Her employment was transferred to HEAD Oceania thereafter and she worked with HEAD Oceania in the position of Financial Accountant until the cessation of her employment in February 2020.
Ms Borden came across as a highly articulate and capable woman with distinct recollections of Mr Dorsch’s behaviour. There was no serious challenge to her evidence in that respect, and I accept it. I accept that she was very friendly with and maintains a friendship with Mr Butler and Ms Andersen, but I do not accept that their past and continued friendship was such that her evidence would not otherwise be truthful.
Mr Bramich
Mr Bramich gave his evidence under subpoena and has not been employed by HEAD Oceania since mid-September 2022. There was no suggestion by Mr Dorsch that he had any motivation to give the evidence that he gave other than truthfully. It was my impression that he did not seek to embellish his evidence, nor appeared to be in any way partisan.
Ms Andersen
Ms Andersen was employed by Mares AP in the position of Accounts Receivable Officer on a part time basis from 1 June 2016. She was thereafter employed by HEAD Oceania in 2018. She resigned on 27 August 2021. The most significant aspects of her testimony were corroborated by others. It was my impression that Ms Andersen was a truthful witness.
Ms Hawes
Ms Hawes was employed in the position of Graphic Design and Marketing Manager, initially by Mares AP from March 2014, and later HEAD Oceania until she resigned on 1 April 2019. At the time of her resignation, she gave a detailed account to Mr Michl.
It was my observation of her that she was a reliable and credible witness. Ms Hawes, unlike others, respected Mr Dorsch by and large. She described herself as having “a good working relationship with [him]…”. However, she recounted, vividly, certain of Mr Dorsch’s behaviours, and did not resile from her recollection, upon challenge.
Mr Butler
Mr Butler commenced his employment with Mares AP on or around 2 June 2014 in the role of Sales Manager Queensland/Manager Warranty, Technical Department, in which he was responsible for the Queensland and northern New South Wales sales territory. He resigned from his employment on 3 September 2021, and commenced employment on 5 October 2021 with a customer of the respondent, but returned to work for HEAD Oceania on 4 January 2022 and remains employed there.
He gave his evidence in a straightforward, logical manner. I found his evidence reliable and more credible than Mr Dorsch’s evidence.
Mr Butler described his relationship with Mr Dorsch as being one where he was routinely sworn at and berated over the phone. Ultimately, he resigned in September 2021 he says by reason of Mr Dorsch’s conduct. He describes speaking to Mr Davies before he did this in July and August 2021, but ultimately made the decision to resign. I preferred his account of the conversations as between himself and Mr Dorsch in July and August 2021 for the reasons set out below. I also accept that the reason why he resigned was because of Mr Dorsch’s conduct towards him. His resignation was in circumstances where he took another position at a HEAD Oceania client which paid $50,000 less per annum.
Mr Montgomery
Mr Montgomery commenced employment with HEAD Oceania in around April 2018 as a Customer Service Manager, and later became the Operations and Logistics Manager. Mr Montgomery remains employed by HEAD Oceania.
Mr Montgomery is a softly spoken individual who gave consistent testimony in the same manner. He struck me as a person who would hesitate before speaking and would not be a person who would easily call out behaviour of his superior, given his mild-mannered demeanour. Mr Montgomery came across as a reserved, quietly spoken person who stood up to his boss on two occasions where he spoke inappropriately to him, but had no ill will or animus toward him, nor did he want any formal complaint to be made.
Mr Davies
Mr Davies responded directly to questions asked of him without elaboration. It was my impression that he had a good recollection of the events that had occurred. The lack of elaboration is consistent with his personality, rather than attempting to avoid questions or not answer questions in a fulsome way. It was my impression of him that he found it difficult to work with Mr Dorsch. They had different business interests, different experience and different management styles.
Ms Fookes
Ms Fookes was employed by HEAD Oceania for a period of two years between June 2020 and June 2022 in the position of Financial Accountant. Ms Fookes had over 11 years’ experience as an accountant prior to leaving HEAD Oceania, and has been certified since 2009.
Ms Fookes gave her evidence in a forthright and direct manner. No challenge was made to her credibility. It was my impression that Ms Fookes, as did others during the pandemic, worked very hard in this small organisation and that the long hours took their toll on her. Having had previous experience, Ms Fookes sought to engage Mr Dorsch in discussions and initiatives to improve the efficiency of the organisation, her workload and the workload of others. Those discussions and initiatives included reducing the use of multiple systems, and engaging different (human resources) and additional staff.
Ms Fookes made a number of concessions in her evidence as to whether she was able to give direct evidence about other employees’ interactions with Mr Dorsch, the extent to which she knew whether Mr Dorsch was working on other matters outside the office when he was not there (for example taking conference calls, attending to emails or undertaking work involving New Zealand).
To the extent that HEAD Oceania sought to rely on Ms Fookes’ note which she prepared in anticipation of speaking to Mr Dorsch, the file note was provisionally allowed but where I invited the parties to make submissions about it in closing. Neither party did. For reasons which will be outlined below, I accepted Ms Fookes’ evidence as being truthful but I accept that there are limitations with respect her ability to give evidence as to events she did not witness and assumptions she made about Mr Dorsch’s workload. However, to the extent that she gives an account of a conversation which is different from the recollection of Mr Dorsch, I am inclined to accept her account.
Evidence regarding each of the claimed inquiries/complaints and forms of adverse action
The facts of Mr Dorsch making the inquiries or complaints and the conduct said to give rise to the different forms of adverse action are largely undisputed. I make the following findings.
30 April 2018 – the annual leave enquiry
Between April and May 2018, Mr Dorsch had a number of discussions and exchanged email correspondence with Mr Michl about his accrued annual leave.
On 30 April 2018, Mr Dorsch sent an email to Mr Michl, described in his pleading as the annual leave enquiry, in the following form, asserting an entitlement to 87 days’ accrued annual leave:
It’s about more than “just” my 2018 bonus agreement. There are 87 days of unused annual leave on my account and withheld bonus payments from the past years. We talking ~40k EUR, which cannot simply be ignored. There is also a legislation which also Mares must adhere to. I am aware that given the current business situation, this will be a rough topic, but I am concerned about my entitlements.
Hope we can find an agreement here without escalation.
30 April 2018 – notification that annual leave entitlements would expire (first adverse action)
Mr Michl responded on the same day in the following way (translated from German):
Bonus payments that you would have been entitled to according to your statement is certainly an issue and I also told you that I would support you there. Decision because in the past is final with Gerald.
In my view, the argument for holiday entitlement is not a basis for discussion in our job with an annual agreement. We all have complete freedom in our job and certainly work more than the “legal basis” both in daily business and over the annual working hours. Holiday entitlement expires by March 31st. of the following year. So, let’s get out of the discussion about vacation days, otherwise that only creates useless emotions with Gerald. You decide for yourself whether and when you take your leave.
This communication is the first pleaded form of adverse action (first adverse action).
Mr Dorsch’s email caused Mr Michl to review Mares AP’s annual leave records in order to determine whether Mr Dorsch’s claim about the number of untaken annual leave days was correct. Mr Michl did not review the annual leave records of HEAD Oceania.
1 May 2018 – the first complaint
On 1 May 2018, Mr Dorsch sent Mr Michl another email re-asserting the existence of this purported annual leave entitlement, pleaded as the first complaint, in the following form:
I see this differently and we certainly can’t simply ignore this. My contract does not regulate any forfeiture of holiday entitlement. I have a HK contract. You must be aware that as of today I have 6 months’ notice (both sides) against the 4.5 months of AL that I am entitled to by law and according to my contract. We certainly won’t sweep that under the table. Should either I or the Company resign, it would be rather damaging to the business, and we must resolve this situation in mutual interest and amicably. This is also about the relevant legal guidelines regarding Australia, which the company cannot ignore.
After a solution for the 87 days, I will certainly not make the mistake again of putting my self-interests on the back burner and will use all y [sic] AL accordingly. It should be clear that this is not possible with 87 days. That would not be in the interest of the company either.
Circa 5 May 2018 – the annual leave request and unreasonable work hours complaint
On or around 5 May 2018, Mr Dorsch had a dinner and meeting with Mr Michl in Italy. During that meeting Mr Dorsch claimed to have complained about the need to take annual leave due to stress-related symptoms including burnout, fatigue and anxiety, pleaded as comprising the annual leave request. Also at that dinner, on or around 5 May 2018, Mr Dorsch claims that he raised concerns regarding his “unreasonable hours of work” (unreasonable work hours complaint).
Mr Dorsch’s evidence of conversation was as follows:
During our dinner, I had a discussion with Mr Michl to the following effect:
Me:I am very disappointed and disagree with the decision to not recognise my accrued annual leave. I have worked very hard with very little support over many years. I have also worked very long work hours. This are my legit [legitimate] earned benefits. I do expect the company to honour its legal obligations. Since it won’t be realistic to consume so much annual leave, I suggest to payout a part and I use the other part, since I really need a break. I feel rundown, exhausted, burned-out, and tired. The last 8 years were very stressful and 2017/2018 was very demanding and exhausting. Particular 2017/2018 with the incorporation of HEAD Oceania. You know very well about the excessive workload also caused by the delays from Fabrizio Prete.
Stefan Michl: I am sorry to hear you are not feeling well, you may need to seek professional help. I will discuss your matter about annual leave with Gerald Skrobanek but have here in principle the same opinion as already explained by email. Like I wrote you, any unused annual leave will legally expire by March of the subsequent year. Also we don’t payout unused annual leave.
Me:Thank you but please understand that neither under Hong Kong nor Australian legislation, is unused annual leave subject to expiry. We need to find here an acceptable solution. Just waving 87 days of unused annual leave isn’t acceptable for me.
Stefan Michl: Let me speak to Gerald during the week and I’ll get back to you.
This conversation was in German. I have translated the conversation into English.
Mr Michl’s evidence of this conversation was as follows:
…I do not agree with the Applicant’s recount of our discussion at dinner in or around the beginning of May 2018. I do not recall the Applicant telling me that his workload working with the Respondent was ‘excessive’ or that he was working ‘very long’ hours. I also do not recall the Applicant crying or otherwise ‘breaking into tears’. I do recall that we discussed the Applicant’s annual leave accruals from previous years.
Mr Michl recalled under cross-examination that they “were discussing whether [Mr Dorsch] has a right on all these days that he was mentioning”, where Mr Dorsch asserted that he expected the company to honour its legal obligations. Mr Michl did not recall Mr Dorsch referring in that meeting to needing a break, being run-down, exhausted, burnt out and tired and that the last years were very stressful. It was his recollection that this meeting was about his leave days not otherwise. However, it is notable, in Mr Michl’s email of 18 May 2018 (described below) that he refers to Mr Dorsch’s claim of “burnout”.
I prefer Mr Michl’s account and do not accept Mr Dorsch’s recollection of what occurred. It is my view that Mr Michl’s evidence is consistent with the contemporaneous record. At that time Mr Dorsch was agitating for inflated leave accruals. His focus was to obtain recognition for them. I do not accept that he cried or broke down. Such behaviour is at odds with the content of the contemporaneous communications as between them, how Mr Dorsch behaved generally and where Mr Michl had no such recollection, and given how out of character it would have been, it would be likely that he would have recalled it if it had occurred.
18 May 2018 – purported refusal to acknowledge accrued but untaken annual leave (third adverse action)
On 18 May 2018, Mr Dorsch claims that HEAD Oceania refused to acknowledge his accrued but untaken annual leave, and directed him to take annual leave before 31 December of that year and, in exceptional circumstances, before 31 March of the following year (third adverse action).
The pleaded adverse action was as contained in an email from Mr Michl, which I accept was sent and is set out as follows:
I’m back and therefore my feedback as promised. I exchanged ideas with Gerald as a mediator for our conversation, as requested.
In essence, Gerald’s opinion is like what we discussed earlier in the evening. This means the following:
Gerald sees no basis for holiday entitlement from previous years. As already discussed, the responsibility for taking or not taking the holiday rests entirely with you as the manager. We handle it to the same extent worldwide. This has Gerald already discussed it with you in the past (no idea what details). However, it should be handled in the same way in the future. What is not used until 31.12. of the year expires or can be taken in exceptional cases until 30.03. but expires then at the latest. I support this approach because, as already mentioned in the conversation, we handle it here in the same way.
The topic of bonuses from the past has now been communicated by you as no longer relevant. Equally regards Gerald as the correct course of action.
Since you, as an employee, always do a decent job for us and we want to promote it accordingly, we would be prepared to adjust the target for AU/NZ for the bonus for 2018 based on the previous calculation. (We must look together at what is still an achievable goal as REV and HQ Cont.) However, the base should not be set at 100% but at 80% (corresponds to a 10.4% bonus instead of 13%) of the maximum monetary value. I think it’s more than fair because the company earns less here. Of course, MAP Target remains unaffected.
On our evening you also mentioned that you think you need to distance yourself from the company at the moment and that you may be facing burnout. I therefore suggest that you might take a few days off your 2018 entitlement and seek medical/professional advice on how to avoid burnout at the same time. Let me know if we can help you with this somehow, professionally, or privately.
I would like to talk to you again on the phone about all points. Don’t know if it’s already too late for you, otherwise I'd be happy to do so tomorrow and then when it suits you best.
I accept Mr Michl’s evidence that his reference, in this communication, to being the “mediator”, being that he was “the mediator in the discussion between Mr Skrobanek and … Mr Dorsch”. Importantly, I find that Mr Michl understood this to be his role because Mr Dorsch had asked him to help him.
Further dialogue ensued between them.
From June 2018 – unfair scrutinisation and false allegations (sixth adverse action)
Mr Dorsch alleges from around June 2018, HEAD Oceania subjected Mr Dorsch to “repeated unfair scrutinisation and false allegations” (sixth adverse action).
On 5 June 2018, Mr Michl sent an email regarding their discussion the previous evening which was as follows:
Dear Matthias,
Thanks for the talk last night related to open vacation days from the past.
As expressed I have various doubts that vacation days for 2018 are correct [sic] calculated and registered. I have similar findings for travel expenses in the same period.
You mentioned in the call that you are not up-to-date with registering vacation days for 2018 and you have to file with Bruce still days for 2018. Former years had been according to you closed correctly. Please provide the missing days information 2018 till end of this week.
I had pointed out that I found an air travel receipt for your private vacation travel upcoming in June to Spain that got reimbursed from the company. You had doubts about it and wanted to check this with your documentation. Please provide your findings also till end of the week.
Check also your travel expenses related to the Tubbataha/PHP trip and provide details since this had been a fully private trip and there should not be any travel related cost for the company.
As first consequence of the above I will come up with some guidelines for the future on how to register vacation and to do travel expense reports in the next days. Please be aware that due to the findings so far I must have a doubt on the correctness of vacation days registration and travel expense reports from the past in principle. In order to check this further please provide your travel and vacation overview not only for the above but also for the last years back to 2011 (you mentioned this is simple to provide since you are preparing this for the AU authorities). Not sure whether this is still easy and simple to control from our side afterwards but given the findings so far makes it necessary to give this a try.
We also talked about your plans to take a longer period of vacation after the FCT09/BUD Meeting process. Please provide your plans as well since you are expecting also that this might go along with days of sick leave du [sic] to your health conditions.
Thx and Br,
Stefan Michl
VP Mares Diving
As is apparent from the above, in part of this communication, Mr Michl raises his concern regarding Mr Dorsch claiming a personal flight as a business travel expense. I find that the evidence establishes that in or around June 2018, Mr Michl reviewed and scrutinised Mr Dorsch’s monthly expense reports and that the undisputed evidence was that Mr Michl ultimately did not press the issue.
June 2018 – the second complaint
In response to that email, on the same day, 5 June 2018, Mr Dorsch complained about HEAD Oceania’s failure to recognise his untaken leave and his need to take some time off, in an email to Mr Michl (the second complaint). The relevant email comprised the following:
Hi Stefan,
Well noted on below and requested information’s. Due to being on sales tour and customer meetings this week, I will try to collate and provide details hopefully by end of next week. There is quite a bit of work involved to go through all emails. Will get to the bottom of it and be able to trace back leave days, at least based on my travel/flight schedules from OUTLOOK calendar (back to around mid/late 2011, +/- 1 or 2 days). This I am in the process and have the pleasure to prepare also for VISA purposes. As you can imagine, detailing ALL travels for the last 10Y is not a completely trivial task, particular when ~4Y of calendar history has disappeared from OUTLOOK. Related expenses would have to be provided by Fabrizio/Bruce, as I don’t have copies of single receipts.
Please also and as per our today telephone call, could I get an official statement about that MARES doesn’t consider my unused annual leave any longer valid, neither for pay in lieu nor for consumption. If I understood this correct from today’s phone call.
I like to highlight, that I have hopped and still wish to find an amicable solution that is acceptable for both MARES and myself. There is too much passion for our business and the company, that I don’t like to see this issue causing an irreversible damage. This probably requires some compromise from both sides. You surely can recall that already during our Rapallo meeting, I was agreeing to wave 10+ days.
As discussed during the various phone calls, there was/is obviously a different understanding and interpretation of my leave agreement (ref my work contract) that lead us, to this rather unpleasant argument and discussion. Whilst I understood on 2 different occasion in the past, MARES won’t consider pay out in lieu, I was at no stage aware about that my leave days would expire if not used by March of the subsequent year. This truly came at a surprise as this is neither regulated in my HK work contract and as far as I am aware also Fabrizio leave days are not subject to expiry. As a logic consequence of having this part not differently agreed upon in my HK employment contract, I was/am believing in that the local legislation would be relevant, respectively that unused leave days wouldn’t expire at any time. Simply deleting and not honoring all unused leave from the past, is not what I’d consider a satisfying and amicable forward solution. However, I agree that this should have been clarified in much earlier discussions about annual leave. But it wasn’t!
I do appreciate and respect the strict take on “no pay out in lieu”. I did propose this solution in the best believe and in-order to reduce the unused leave and to bring us to a close to ZERO situation from which forward, we could have agreed on a new contractual regulation as per HQ standards. Certainly this was based on my understanding and believe that my unused leave doesn’t expire as per my work contract and that consuming the high number of unused days wasn’t even remotely possible nor in the best interest of the business. Besides and as per previous discussion, the plan was to consume a reasonable amount of leave within the 2nd half of 2018 for the named reasons.
Fully understand you, challenging some details of registered leave days and travel expenses which I’ll fully clarify and should there be any mistake/wrong doing happened (both ways) certainly rectify. However, I truly wish we are not mixing up the 2 different topics and rather try to find together a reasonable solution that lead to a healthy and motivating future. Keeping in mind that all of this is a result of me taking my responsibilities for the company, my duties and our business performance and results very serious and personal, to an extend that has reached its limits and has taken its toll on me.
Rest assured, that I stay fully committed and loyal to my duties and the company, although there is the strong need of some serious recovery/recharge/reboot/rewiring time. This simply is as a consequence of my last year’s 24/7 commitment and certainly a year 2017 that besides the ”standard” business, held a lot of surprises, stress and extra workload. I will schedule this certainly in a sensitive way, trying to keep negative business impacts as little as possible. Until today morning, I was believing to have enough leave days accrued, which I could have partially used. Obviously this has changed and I am afraid that my 2018 regular annual leave days only, won’t be sufficient for the needed break. Please understand that I do need some real time “off”, which we can probably discuss also in detail during the Elba meeting. And I hope to experience the company support and commitment to me, same as I have committed myself to the company.
Like shared with you very openly during our evening meeting in Rapallo, I had to realize that this has become a MUST for my personal health and wellbeing and is also needed to remain an long term asset for the company, being able to continue to perform to the levels I used to and that are back up to my own expectations.
Best
Matthias
I find that Mr Michl responded to that portion of this correspondence where Mr Dorsch said he needed time off, in the way he testified, as follows:
And having been told that he needs this time off as a result of his workload and stresses, what did you do?---I think I recommended – don’t know whether I did it here – but I recall that I recommend him to take some days off, like I said already, half an hour ago, that he should seek for some – some days off, and, you know, medical help, in case he is stressed out and – and needs some help. That’s all what I can say. He’s not reporting to me. I’m just giving him, you know, kind of an advice what he should do.
He told you, “I need some real time off,” didn’t he?---That’s what he is writing there, yes, please understand that I do need real – some – some real time off. Yes.
And did you, at this stage, discuss with Mr Skrobanek the applicant being burnt out?---Can’t recall.
And he told you – if I can take you to the top of page 3978?---But can I – can I make a comment?
Yes, sir?---Mr Skrobanek is copied on that, so - - -
So because he was copied on it, you didn’t feel the need to discuss it with Mr Skrobanek?---I can’t recall whether I did. I’m just seeing that he was copied, so - - -
And he’s telling you that taking some time off is a must for his personal health and wellbeing?---Yes.
And having been told that, all you can recall doing is telling him to take some time off and get some professional help?---Yes.
Did you tell him that following this email, either in writing or in a discussion?---I think I did it also in writing, but maybe not in the direct context of this email. I remember I wrote an email – I think still in the same year, asking for his health – his health situation, and recommending again, you know, that he should – should seek for medical help. So I think I said it, and I also wrote it somewhere.
Between 5 and 13 June 2018, Mr Dorsch worked with Mr Bruce Ma (who worked in the Accounts Department of Mares AP) to obtain the underlying records to support his claimed entitlement to 87 days’ of accrued annual leave.
Notably, as a result of this process, on 6 June 2018, Mr Dorsch conceded that his annual leave entitlement was “over 30 days”, namely 53 days less than he had previously asserted, and where he accepted with respect to a large proportion of his claimed accrued leave, being in “Y2017”, the following:
Y2017; that’s the “black spot” with no records. I’ve checked with my AU colleagues whom I always inform by email when taking days off, but never included Bruce. Jo didn’t took any record against the leave days accrued in AU either (we have to show this as part of the AU work Visa obligations. This short emails (attached the only one we could still locate for 1 day 17.11.2017) everybody just files in the bin, so am I. Sorry but this has been a complete oversight from all of us. Grace was requesting and sending records on a quarterly base to and from me, which obviously Bruce wasn’t informed about either. As you can see on all leave records attached there is a reference to my email submissions. I haven’t received any separate leave records for and during 2017. Assuming because of the change of payslip format. Frankly I simply didn’t check this for leave records also because of the large amount of accrued days. As recent as end of April 2018, I was asking Bruce and Fabrizio for current leave records when on my way to Italy. Fabrizio was able to provide 2016, the last records from Grace. It looks like Bruce has not got a complete handover and detailed instructions of how to handle this from Grace. Not excusing my mistake of not following up proactive also from myside.
Checking my calendar I am able to come up with below best assumption:
16.01-18.01.: 3 days, Jeanny family visit from NZ
12./17./18.04.: 3 days, friend visit from Sydney
06./07./10.07.: 3 days, stopover MUC after DM 2017
14./15./18.09.: 3 days, stopover MUC after BUD/FCT meetings 17
17.11.: 1 day
Further to above, and this is a best guess, there are probably 2-3 days in addition that were used locally like mentioned earlier and informed to the AU team. I have taken several half days Fridays off. Let’s call it 5 days.
Summary: there should be a total adjustment of -25 days against previous years as per above summary. This should bring the number of total unused days and after the 2018 adjustments to ~53 days. Upside, this looks much better than previously ~77days.
(my emphasis)
Accordingly, I find that his claim of accrued annual leave was based not on contemporaneous records and, in part, was based on assumption.
After further review, Mr Dorsch sent an email on 13 June 2018, to the following effect:
Hi Fabrizio, Bruce,
Please find attached AU annual leave accrual. Please deduct 39 days accordingly of my HONG KONG records so we don’t have a double accrual. Moving forward, I’d suggest to:
a.) Accrual 20 days under AU and 5 days in HK
b.) I’ll specifically inform of which accrual I’ll consume
@ Bruce, after deleting 39 days in HK, there should be still 13 days, correct. Please note that I will take leave before and after the upcoming distributor meeting in Elba. I will advise dates and details via separate email. This should be taken off the remaining 13 days HK leave record.
@ Jo, please deduct upcoming 15th Friday as annual leave of my records.
Under cross-examination, Mr Dorsch then accepted that his leave balance was as follows:
MR MEEHAN: In terms of your annual leave, in January 2018 you had three days of leave in Japan, correct?---I can’t recall off the top of my head, but I would - - -
All right. Three days in Germany in January ’18?---Oslo?
Yes. That was after you attended the boot show?---Yes.
And you received approval to take – and you took – the leave after the Elba conference and that was just Spain and Germany, am I right?---Yes.
And prior to you taking that leave, that is to say, the leave of the 10 days before and after Elba, the proposition that Mr Michl was advancing, that you only had 12 days accrued, was correct, was it not?---Yes.
Isn’t one of your criticisms of Mr Michl that he was only acceding to the proposition that, in 2018, you had 12 days of leave outstanding with Mares Asia Pacific?---Yes, because he denied the 53 days where these 12 days were part of, to recognise from previous years.
You told Mr Ma to remove that from your leave record?---Yes, but there is a lot of - - -
Having done that, Mr Michl was correct about your entitlement, wasn’t he?---There’s a reason why I instructed Mr Ma to delete the 39 days of records, because it was - - -
No doubt you have dealt with that in your evidence.
MR BRITT: Well, can the witness be allowed to answer the question?
MR MEEHAN: We’re moving to an unresponsive territory, your Honour.
HER HONOUR: It’s true. But, I think, in a sense it – it would be – there would be capacity to ask questions of it in re-examination, so, in a sense, it’s beneficial to, please.
THE WITNESS: I was pressed by Mr Michl to delete those 39 days.
I make specific further findings below that Mr Dorsch did not establish that he had an entitlement to 39 days of accrued annual leave which were “deleted”.
19 June 2018 communication (fifth adverse action)
Mr Dorsch alleges that, by reason of an email sent from Mr Michl on 19 June 2018, HEAD Oceania informed Mr Dorsch to end his discussion about untaken leave, the only leave that would be recognised was the remaining entitlement of 12 days for 2018, and that HEAD Oceania was considering taking disciplinary action against Mr Dorsch (fifth adverse action).
There was no dispute that an email was sent by Mr Michl on that date. I accept the email was in the following form:
I have now received and viewed the emails you provided with improvements and corrections to your holiday records and travel expenses. A detailed review of the entire 2008-2017 period regarding holiday entitlement can only be carried out with further detailed checks on your travel expenses. The effort for this should be several days, since your claims principle, especially with the flight, is not precise to the month and is therefore relatively complex. This must also be changed for the future to be able to better control your presence, travel activity and AL taken.
Below is my assessment of the information you have provided so far:
- The list you originally sent to me of unused AL days up to December 31, 2017 contained an entitlement of 85.5 days. This list as a basis is and was completely wrong. Based on my initial research and inquiries, you reduced this alleged claim by the first 25 days and additional days over the years. All this is and remains vague because many of your statements are made from your memory without providing direct evidence. Supposedly there are still 51 days to book.
- According to your email of June 6th, 2018, you have no Outlook records from 2008-2011. (Quote from your email: I don’t have any travel details in my OUTLOOK calendar from before 2012 nor do I have email records. However, it looks like 2008 – 2011 are correct). From your point of view, the essential claims also come from these times in a significant way.
- Holidays have not been reported by you properly in advance, but mostly registered afterwards if necessary. The mail exchange in the past few days with Bruce/Fabrizio confirms this. 2017 as a full year is a good example of this. The complete annual leave as well as half days taken, and possibly other days not listed were missing.
- The same scenario in 2018, where vacation for Japan/Hochfuegen/PHP was only entered through my inquiries and to this day, even after your corrections, the calculation with 3 days for the PHP is wrong. You need 4 days for this. So, you have taken 13 days AL for 2018 so far. There are still 12 vacation days left for 2018. This is the only provable and valid claim for me so far.
In summary, it can be said about AL that your alleged claim against the company is unfounded, since we have to assume that recording was incorrect not only from 2012-2017, but also in the years before 2011. Even with inquiries in 2018 for PHP the correct AL days have not been entered independently. Whether this happened consciously or unconsciously because of a lack of accuracy or just because of a missing time recording system I leave uncommented. The fact is that this requires an appropriate adjustment, since based on the knowledge gained so far it can be assumed that your information was/is incorrect.
As in my mail from 05.06. also reminded, were private travel expenses settled by you via the company/or charged to the company. This applied both to the PHP holiday and to your girlfriend's flight bookings to Mallorca. This has now been corrected. If I had not carried out an examination, this would have been to the financial loss of the company. Unfortunately, it must be assumed that such a misconduct on your part also exists or has existed in the past. Here, too, I spare myself whether this happened consciously or unconsciously.
…
Therefore, please be aware that the above facts would be reason enough to think about disciplinary consequences in your case.
After you expressly wish for an “amicable” solution with the company despite the considerable misconduct on your part, I suggest that we end the unfounded discussion about vacation not taken and that you confirm your remaining entitlement of 12 days for 2018.
For the future, I would ask you to keep a “shared calendar” in Outlook, in which you document your presence and absence in the office. Please share the calendar with me Paola and Bruce. Please enter there exactly what you do in the morning and afternoon and when you are in the office. I will consider missing entries as vacation. The principle can be carried out daily and thus controlled for all those involved. So, there should be in the future no “guessing” when you may have taken vacation and it should be controllable. I think it is in our mutual interest as our current situation shows.
I would also ask you to submit or send me your travel expense reports for national and international trips by the 15th of the following month at the latest for approval. All costs including flight costs that were carried out in the month must be accounted for and listed. After you buy some flights months in advance, I ask you to pay for them with Company CC so that you do not suffer any interest disadvantages. Please enclose all receipts as a copy of the statement as a scan. I have attached a fictitious statement of mine as an Excel table so that you have a template for it. This means that trips in connection with the directly assignable costs can also be better controlled. You do vehicle/KM billing in AU, so you can either enter it there or do it separately.
Please get back with the confirmation of your AL and let me know when the calendar is set up. I would like to inform Paola and Bruce at the same time as well as put Fabrizio in the loop as far as the travel expense is concerned.
(Emphasis added.)
Mr Michl was cross-examined about emphasised portion of this email and described what he meant to convey by the sentence:
…Yes, it’s a recommendation. If somebody register things which are incorrect – I found travel expenses that were incorrect which had been – or would have led actually to a disadvantage of the company, and I – I feel among colleagues it’s very appropriate to say, you know, “Please be careful with this for the future”.
I accept this evidence and find that this is what he intended. There was no serious challenge to this evidence.
It was Mr Michl’s evidence, which I accept, that he understood, the statement that Mr Dorsch’s annual leave entitlement “would be 12 days for 2018” was the conclusion both he and Mr Dorsch had come to after checking all his annual leave documentation. There was no challenge to this evidence.
Regarding the statement that annual leave would expire on 31 March of the following year, Mr Michl accepted, under cross-examination, that this was his decision based on how they handled it in Germany and Italy and that Mr Skrobanek was not a party to that decision. Further, it was Mr Michl’s decision to inform Mr Dorsch that he had to take annual leave before 31 December in the year it expires and only in exceptional cases prior to 31 March in the following year (which again was not Mr Skrobanek’s decision).
Late 2020 – first request for a salary increase
Mr Dorsch claims that, in or about late 2020, he made a request for a salary increase in a conversation with Mr Skrobanek.
Mr Dorsch claimed that the conversation was as follows:
In or around October 2020, I had a phone conversation with Mr Skrobanek in relation to a salary increase to the following effect:
Me:Now that the integration of Zoggs is over, I would also like to discuss with you my salary because of the increased workload and responsibilities. It also doesn’t correspond with the salary of the other directors of HEAD Oceania, particularly Robert Davies.
Gerald Skrobanek: We will discuss your salary during the performance review early next year. I agree to review your salary and to adjust it.
Me: Ok, I was also not expecting a salary increase mid-year but I wanted to raise it in due time.
This conversation was in German. I have translated the conversation into English.
No challenge was made of this evidence, either in Mr Skrobanek’s evidence or under cross-examination. I find that the conversation occurred as Mr Dorsch recollects.
It was Mr Dorsch’s evidence that he was notified in February or March 2021, that he would not receive a salary increase until 2022 due to the COVID-19 pandemic, during his annual performance review meeting in which the following was said:
In or around March 2021, I had my annual performance review virtual meeting with Mr Michl and Mr Skrobanek. During that meeting, we had a discussion to the following effect:
Gerald Skrobanek: I know you were promised and expecting a salary increase but given the ongoing COVID impacts, there are no salary increases approved for 2022. You will receive one in 2023.
Me: This is very disappointing since my workload and responsibilities have substantially increased. Also, we have finished 2020 despite, or because of COVID, with a record result. The first quarter of 2021 is looking also very good with substantial increase of sales versus the same period of 2020.
Gerald Skrobanek: I appreciate your efforts and the good results but there will be no salary increase approved for 2021. Many staff within the HEAD/MARES group have experienced more workload due to the Zoggs integration but we cannot increase everybody’s salary.
Me:I cannot speak for others but think if one gets a substantially higher workload and responsibilities, this should be also rewarded and reflected in the salary. Okay, let’s discuss salary increases in due time for 2022.
This conversation was in German. I have translated the conversation into English.
Again, there was no challenge to this evidence and I find that this conversation occurred.
The lack of support complaint
Mr Dorsch pleaded the following:
48. The Applicant notified Mr Skrobanek that the ongoing work demands of the accounting team and the lack of support in the accounting department caused staff in the accounting department and himself to be overworked (Lack of Support Complaint).
Particulars
i. Telephone Conversation in Mid-November between the Appellant Mr Skrobanek, Mr Michl and Francesco LaRocca (CFO, Mares Spa Italy).
Accordingly, he relied on a telephone conversation said to have arisen in mid-November (year unspecified) between himself, Mr Skrobanek, Mr Michl and Mr La Rocca. In his closing submissions he identified it as being a conversation in mid-November 2020, which Mr Dorsch attested to being as follows:
In or around mid-November 2020, I had a telephone conversation with Mr Skrobanek, Mr Michl and Francesco LaRocca (CFO, Mares Spa Italy) in which I stated:
Me:Staff in the accounting department are being overworked due to the ongoing work demands of the accounting team and the lack of support in the accounting department. I also feel overworked.
It was Mr Skrobanek’s evidence that he did not “particularly” recall the conversation. It was his impression that Mr Dorsch had talked about the quality issues within the accounting department rather than overwork, but he did accept that Mr Dorsch had raised that the accounting department lacked support. Ultimately, for the reasons set out below, I do not think, it is necessary to make a factual finding about the content of this conversation.
15 October 2021 – second request for a salary increase and low salary increase (eighth adverse action)
Mr Dorsch claims that he made a second request on or around 15 October 2021 in a conversation with Mr Michl and by email. I find that this request was made. Mr Dorsch claims that he made a second request on or around 15 October 2021 in a conversation with Mr Michl and by email. I find that this request was made.
Later on the same day, Mr Michl sent Mr Dorsch an email in the following terms (relied upon as said to comprise the eighth adverse action):
As promised, I explored the salary options with Gerald that are possible within the salary framework of the HEAD Group:
I understood your wishes as follows:
‐ From 2022 salary increase by 20% to the current annual salary of €121k (plus €24.2k) i.e. €145,200.00
‐ From 2023 salary increase by 5% to an annual salary of €145.2k (plus €7.26k) i.e. €152,605.00
‐ Bonus 20%
‐ Takeover of pension funds, payment in AU with approx. 5k€ annual costs
We cannot accept these requests, but we would like to show you what is possible:
‐ From 2022 salary increase by €10k to a total of €131k ‐ Bonus 20% as usual with criteria from the new HEAD Group Policy with a split across the brand areas (weighting 70% MARES/20% ZOGGS/10% HEAD)
‐ Takeover of pension funds, payment in AU with approx. 5k€ annual costs if this is a general benefit that the other colleagues also get ‐ No further increases in this function in subsequent years (except for index adjustments)
I suggest we discuss the rest by phone, but there is little room for negotiation here. If you are not satisfied with the offer, we should reach an amicable exit agreement in the coming weeks.
November 2021 – the purported third request for a salary increase
Mr Dorsch claims that, in early November 2021, he made his third request for a salary increase to Mr Skrobanek by telephone. However, Mr Dorsch relied upon no evidence in support of this allegation. Mr Dorsch made no reference to this so-called third request in his closing submissions. I find that no such request was made.
Failure to pay Mr Dorsch’s annual leave in full (ninth adverse action)
HEAD Oceania did not pay Mr Dorsch’s annual leave in full in accordance with the 2018 Employment Contract and the FW Act (ninth adverse action). It was not disputed that Mr Dorsch was terminated on 9 December 2021 but was not paid his accrued annual leave entitlements until 30 March 2022. I find that this is what occurred.
Discrete factual matters requiring determination
There are a number of factual matters that require determination, relevant to a number of Mr Dorsch’s causes of action.
Mr Skrobanek’s authority
Mr Dorsch contends that HEAD Oceania has not discharged its onus under s 361 because he submits that Mr Skrobanek could not be the decision-maker of HEAD Oceania by the combined operation of s 361 and s 793 of the FW Act as he was not an employee or officer of HEAD Oceania at the relevant time. For the following reasons, the evidence establishes that Mr Skrobanek was acting as agent for HEAD Oceania, and so it may be inferred had authority to so act when he made the decision to terminate Mr Dorsch’s employment.
It is not in dispute that Mr Skrobanek was not an employee or office-holder of HEAD Oceania in December 2021. However, Mr Skrobanek is the Chief Operating Officer of HEAD International Holding GmbH (HEAD International), a position which he has held since 2019. He is also director of approximately 20 HEAD Group entities globally, including HEAD International, HTM Sport GmbH and HEAD Sport GmbH. In addition, he has held the position since 2005 of Executive Vice President of HEAD’s Watersport Division and President of Mares S.p.A, a member of the HEAD Group registered in Rapallo, Italy. It was his evidence that by virtue of his role as a director of HEAD International, he oversees the operations of Mares AP and also HEAD Oceania. Mr Skrobanek deposed he is authorised to make his affidavit “on behalf of” HEAD Oceania. Mares AP wholly owns HEAD Oceania.
Mr Skrobanek was a signatory to Mr Dorsch’s 2008 Contract, approved Mr Dorsch’s 2021 bonus, approved Mr Dorsch’s 2016 Contract with Mares AP, was the person to whom Mr Dorsch reported to under that contract as CEO of Mares Italy together with Mr Prete as director of Mares AP and was the person at whose direction Mr Dorsch’s salary was split. It was Mr Skrobanek’s evidence, to which there was no challenge under cross-examination, that he “was always the one approving salaries and salary increases to Mr Dorsch”. As to salary increases from 2018 onwards, it was Mr Skrobanek’s understanding that Mr Dorsch wanted the Australian salary to remain unchanged, with any increase being paid into his Hong Kong bank account.
According to Mr Skrobanek:
…The – the salary paid by the respondent, as per my collection, remained unchanged since 2016, which were this $82,000. So we always negotiated, you know, a compensation over all of his responsibilities and the entities, which was the – the relevant amount in my eyes, and – and the payment split between – or, the split between the various legal entities was then another topic. But as per my collection, he kept the Australian salary the same. And so the increases affected both on the base salary side and on the bonus side I think only the Hong Kong portion.
And that was to reflect, as you said – sorry, that was to reflect the work he was performing both in Australia and in Hong Kong?---I mean, in Hong Kong he not only performed work for Hong Kong. So till end of 2019 he was responsible for the entire Asia Pacific business, which was run under the Hong Kong portion of the business which, in pure numbers, was bigger than the Australian one.
It was Mr Skrobanek’s evidence, which I accept, that the salary increases which he approved were to reflect the work Mr Skrobanek had performed in both Australia and Hong Kong. It was his evidence that he was the Executive Director of Head International Holdings, which is “the 100 per cent mother company of Mares Asia Pacific”.
The starting point of the inquiry as to whether summary termination of employment is justified is the terms of the employment contract: Eldrige v Wagga Wagga City Council [2021] NSWSC 312 at [285], as his Honour Bell P (as his Honour then was) held:
[t]he starting point of any inquiry as to whether the summary termination of employment is justified is the terms of the relevant contract, in recognition of the fact that an employer’s right of summary dismissal, as a matter of law, is “no more than an example of the general right of any contracting party to treat certain breaches as bringing the agreement to an end”: see B Creighton and A Stewart, Labour Law (5th ed, 2010, Federation Press) at [18.24]; North v Television Corp Ltd (1976) 11 ALR 599 at 608–609.
The relevant contractual clause relied upon by HEAD Oceania as allowing for summary dismissal by reason of serious misconduct is as follows:
17.2 Termination
…
(g) Your employment may be terminated by us at any time without notice if you:
…
(ii) engage in serious misconduct, including dishonesty, theft, or misrepresentation (whether or not connected with your employment with us);
…
(iv) commit a serious breach of this agreement;
…
(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);
…
Whilst the 2018 Employment Contract does not define “serious misconduct”, the seminal decision of Blyth Chemicals Ltd v Bushnell [1933] HCA 8; 49 CLR 66 at 81–2 per Dixon and McTiernan JJ assists in broadly identifying conduct which may ground termination:
Conduct in respect of important matters is incompatible with the fulfilment of an employee’s duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal. But the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises.
(Footnotes and references omitted.)
As HEAD Oceania accepted correctly, mere misconduct is not enough, the impugned conduct must involve a serious transgression from the obligations that the employee was required to perform: see Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; 229 FCR 221 at [19].
Mr Dorsch submitted that HEAD Oceania had failed to prove that his conduct warranted summary dismissal. His submission is essentially made on the following bases. First, a Jones v Dunkel inference ought to be drawn against HEAD Oceania on the basis of their failure to call a significant number of persons “who have been said to have been sworn at by the Applicant, abused by the Applicant or impacted by the Applicant such that they have resigned or behaved differently as a result of the Applicant’s conduct”. Secondly, the purported serious allegations were made against Mr Dorsch were “inexact, vague or based on indirect inference” for which the Court cannot give “much if any” weight. Thirdly, HEAD Oceania has condoned or waived any contractual breach given the previous allegations made by Ms Ho, Ms Hawes and Mr Lardner. Fourthly, as to the allegations of swearing, even if they are found to have occurred, the Court should be reluctant to find that the conduct justified dismissal in the circumstances. Fifthly, with respect to the allegation of bullying, given there was no workplace policy, Mr Dorsch’s impugned conduct “on many occasions” was in fact “reasonable management action”, embracing the undefined term in the FW Act. Sixthly, with respect to each of the pleaded allegations of Mr Dorsch’s subordinate employees, Mr Dorsch submits that the claims cannot be made out or otherwise do not warrant summary dismissal.
Consideration
It may be accepted that behaving inappropriately towards workplace colleagues may constitute serious misconduct for the following reasons.
At common law and under the uniform work, health and safety legislation, employers have legal duties to their employees in relation to health and safety at the workplace, and bullying may expose workers to health and safety risks, thereby exposing the employer to liability by way of a statutory offence. This liability can give rise to criminal sanction (under the relevant work, health and safety legislation) or liability in negligence, as an employer owes a non-delegable duty of care to its employees to avoid exposing them to unnecessary risk of injury.
An employer may be vicariously liable for the conduct of an employee. The High Court recently affirmed this proposition in CCIG Investments Pty Ltd v Schokman [2023] HCA 21; 410 ALR 479 at [17]–[34]. There have been many instances in the authorities where employers have been held vicariously liable for employee misconduct directed at co-workers or subordinates: Nationwide News Pty Ltd v Naidu [2007] NSWCA 377; 71 NSWLR 471. Such conduct may be destructive of the necessary confidence between employer and employee. For these reasons, inappropriate conduct towards co-workers is capable of being serious misconduct. The question is one of nature and degree determined by all surrounding circumstances.
As to what constitutes “bullying”, both parties proceeded on the basis that the Court ought to apply the definition of bullying contained in s 789FD of the FW Act, namely that bullying involves repeated unreasonable behaviour towards an employee or group of employees where that behaviour creates a risk to health and safety but does not include “reasonable management action” carried out in a reasonable manner. I note that in Roberts-Smith v Fairfax Media Publications Pty Ltd (No 41) [2023] FCA 555 Besanko J, in the context of considering the meaning of a “campaign of bullying” and after having referred to the statutory meaning of “bullying” as provided for by s 789FD at [1697] stated:
[1840]Bullying involves oppressive or unreasonable behaviour which often has an element of repetition because it often involves targeting a particular person. …
[1841]Reasonable action taken to discipline for misbehaviour or non-performance is not bullying. …
His Honour does not appear to embrace the second limb of the statutory definition, it is my view that the adoption of the statutory definition, as urged upon me, is appropriate in this case.
By way of summary, HEAD Oceania relied upon the following evidence which it says demonstrates that Mr Dorsch’s conduct was of a sufficiently serious character to warrant summary dismissal:
(a)The evidence from Ms Fookes that Mr Dorsch failed to take any meaningful steps to ensure that she had safe and sustainable work hours.
(b)The evidence of Ms Andersen that Mr Dorsch repeatedly called her “stupid” and that Mr Dorsch yelled at her and banged his hands on the table in a meeting with her.
(c)The evidence from Mr Montgomery that Mr Dorsch used harsh language when speaking to him, that Mr Dorsch swore at Mr Montgomery and raised his voice at him.
(d)The evidence from Mr Bramich that Mr Dorsch frequently screamed and swore at him, and that Mr Dorsch frequently banged his hands on the table when speaking to him.
(e)The evidence from Mr Butler that Mr Dorsch regularly swore at and berated him over the phone, banged his fists on the table and diminished Mr Butler in front of customers. HEAD Oceania emphasised that Mr Butler also gave evidence that he left his role at HEAD Oceania to take up a position which paid approximately $50,000 less per year.
Mr Dorsch submitted that HEAD Oceania’s evidence regarding the alleged serious misconduct was not capable of justifying summary dismissal because the Court should draw an inference based on the rule in Jones v Dunkel (1959) 101 CLR 298 by reason of a failure to call a significant number of persons who have either been said to have been sworn at, abused or impacted by Mr Dorsch such that they have resigned or behaved differently as a result of Mr Dorsch’s conduct or, arising from Mr Butler’s evidence, were subjected to or witnessed conduct of Mr Dorsch (including a number of clients). Mr Dorsch claimed that there were 40 individuals who were not called and also provided an additional list after hearing identifying the relevant clients. One of those individuals was Ms Hauer and I have already dealt with that submission above. As to the remaining number of individuals, the submission was mystifying. It will be readily apparent from my reasoning that there was ample evidence to prove Mr Dorsch’s serious misconduct (without needing to rely on the evidence about which the alleged 40-plus witnesses are said to have been relevant). Indeed, the only aspect of the impugned evidence which HEAD Oceania relied upon in its closing submission related to the treatment of Mr Butler in front of clients. I have not relied upon that evidence in my reasoning.
Mr Dorsch also submitted that the allegations made against him in the termination letter dated 10 December 2021 and the discussion of 9 December 2021 at 8:00 pm are serious in the sense described in Briginshaw v Briginshaw (1938) 60 CLR 336. Mr Dorsch contended, given the nature of the allegations made against him, and the consequences that flow from them, the Court will require clear, cogent and strict proof: Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 ALR 449 at 450. I have carefully considered the evidence of the subordinate employees. I do not accept that, those portions of the proofs ultimately relied upon in these reasons, were inexact and vague. The subordinate employees gave numerous specific examples of conduct which could comprise each of the pleaded types of behaviour said to give rise to the misconduct.
Mr Dorsch submitted in his closing submission that HEAD Oceania had condoned or waived any contractual breach comprising the misconduct. Again, this appeared to be an attempt at the end of the trial to argue a substantive point, not pleaded, raised in opening or otherwise raised in argument such that it was veiled attempt to amend his claim at the end of the hearing, which I will not allow.
Notably Mr Dorsch relied upon a number of occasions where he says HEAD Oceania had full knowledge of prior misconduct, including where Mr Michl was provided with an email from Ms Hawes, which in Mr Dorsch’s submission was “forwarded to Mr Dorsch”. This appears contrary to Mr Dorsch’s pleaded claim, that he was shocked and dismayed when he was informed of the termination of his employment in circumstances where HEAD Oceania had never raised serious misconduct issues with him prior to the termination. Further, HEAD Oceania pleaded in response that they had not raised serious misconduct issues with Mr Dorsch prior to the termination of his employment.
Mr Dorsch bears the onus of proving that HEAD Oceania had elected, in the face of misconduct or contractual breach, to retain rather that dismiss the offending employee: see Commonwealth v Verwayen (1990) 170 CLR 394 at 406–7 (per Mason CJ); Rankin at [355]; Carter v Dennis Family Corporation [2010] VSC 406 at [124]. A party responding to such a claim is entitled to know, with some precision, the case they are required to meet. That was not done in this case, and I do not accept that Mr Dorsch is able to argue a claim in closing not actually advanced at trial.
In any event, the issue would be what constituted the “serious misconduct” and HEAD Oceania’s knowledge of that conduct. Here, as will be apparent from the below, the misconduct arose from a number of allegations of misconduct which post-date the alleged misconduct Mr Dorsch relied upon as forming part of HEAD Oceania’s prior knowledge. Further, a difficult issue would also arise as to HEAD Oceania’s state of knowledge on each of the occasions relied upon by Mr Dorsch as to comprising that knowledge. By way of example, it is not clear how it could be argued that the substance of Ms Ho’s complaint in 2016 formed part of HEAD Oceania’s knowledge when the entity was not incorporated until after that time. Furthermore, it is not without difficulty to attribute the knowledge of Mr Michl and Mr Prete to that of HEAD Oceania. Furthermore, I have found that it was Mr Skrobanek who made the decision to terminate Mr Dorsch’s employment and the alleged bases submitted by HEAD Oceania to warrant the “serious misconduct” are premised on different allegations at a later point in time (save for the complaint of Ms Hawes). It is not apparent therefore, in the circumstances, how Mr Dorsch would have been able to argue that the breadth and severity of Mr Dorsch’s “serious misconduct” was known by HEAD Oceania before 2021 such that it had “full knowledge of the misconduct” prior to the termination and had made a decision to continue to employ the employee: Rankin at [352]; Phillips v Foxall (1872) LR 7 QB 666 at 680.
The alleged misconduct
For the reasons set out above, I prefer the evidence of the subordinate employees to that of Mr Dorsch.
I do not accept Mr Dorsch’s submission that, even if it is accepted that Mr Dorsch swore routinely, the Court should be reluctant to find that such conduct can justify summary dismissal. The “serious misconduct” relied upon, and established, was not limited to instances of Mr Dorsch’s use of profanities per se. The misconduct included not only swearing, but the manner in which he did it — repeatedly acting aggressively and disrespectfully towards subordinate employees and bullying those employees.
The circumstances in which such language is used are relevant. Mr Dorsch’s submission was that his use of profanities was directed at an inanimate object (for example the circumstances), rather than at an individual. As the evidence above reveals, to the extent that such a distinction goes very far, Mr Dorsch, as the most senior employee, manager and supervisor in Australia, swore at employees or about the circumstances. No angelic standard is being applied here. I agree with Mr Dorsch’s submission that the severity of the conduct will depend on the nature of the business and the position held by the employee. I accept this was a workplace where employees routinely swore. However, the evidence did not establish that employees routinely swore at one another or behaved in the way that Mr Dorsch did. Furthermore, in any event there is a difference, about which Mr Dorsch is blind, in what he did by comparison to his subordinates: Holding that position of power must be taken into account given the effect of Mr Dorsch’s swearing around or towards others will be different. He sets the standard for the workplace. Employees will be limited in their ability to call out such behaviour.
Furthermore, whilst I accept that account must be taken of the fact that Mr Dorsch was instrumental in the building of the Queensland office and was the de-facto head in Australia (such that he did not have the support of other managers at his level). I am of the view that these matters do not mitigate a finding of “serious misconduct”.
I do not accept Mr Dorsch’s submission that the allegation of bullying cannot be relied upon given there was no workplace policy and Mr Dorsch’s impugned conduct “on many occasions” was in fact “reasonable management action”, embracing the term used in the FW Act. Whether Mr Dorsch’s conduct could be labelled as “bullying” or not is of no significant moment, the issue is the nature of the conduct. Furthermore, whether there was a policy or not regarding bullying may be relevant in the determination of the seriousness of the misconduct, for example, where there is blatant disregard for a known extant policy. However, the absence of one does not mean that, in the circumstances of this case, HEAD Oceania was not able to include the alleged bullying within the bounds of what constitutes “serious misconduct” under the contract. For the same reason I reject any argument that as to the fifth limb of the pleaded “serious misconduct”, that the absence of a policy regarding the same meant that it could not be relied upon by HEAD Oceania. Furthermore, for the reasons set out above, I reject Mr Dorsch’s claim that his aberrant behaviour could constitute “reasonable management action”.
It is concluded that Mr Dorsch engaged in serious misconduct by reason of the findings I have made above as to his conduct towards his subordinates.
Further, I do not accept that one only looks at the conduct which was known about by HEAD Oceania at the time of the termination. However, even if I were wrong about that, it is my view that HEAD Oceania has established on what was known at the time that the conduct did constitute “serious misconduct” for which it was entitled under the contract to terminate Mr Dorsch’s employment. As is apparent from my findings above, Mr Skrobanek knew prior to Mr Dorsch’s termination of Ms Fookes’, Mr Butler’s and Mr Bramich’s actual or proposed resignations because of Mr Dorsch’s conduct. Mr Skrobanek was informed of their complaints at the meeting on 24 November 2021. In addition, Mr Skrobanek understood the extent of the inappropriate conduct from his conversation with Ms Fookes on 26 November 2021, the email he received from Mr Montomery on 2 December 2021 and his conversation with Mr Bramich on 3 December 2021. In addition, on 6 December 2021, he had received a copy of the email from Ms Borden describing the nature of Mr Dorsch’s management style, described as “toxic and demotivating”.
The misconduct comprised the entirety of the conduct and its effect on the workplace. Accordingly, to look in isolation at each allegation and seek to diminish it is not the correct approach.
The evidence of Ms Fookes establishes that Mr Dorsch did not manage her workload and that she resigned, in part, by reason of what she perceived about his managerial style. It establishes that Ms Fookes sought to suggest initiatives that would improve systems and processes, as well as to reduce her workload and that of others and that it was her perception that Mr Dorsch would assist her. I accept also that she resigned, in part, because of his conduct.
Mr Dorsch sought to diminish his role in setting Ms Fookes’ workload by him pointing to Mr Prete being responsible for the financial and accounting activities of HEAD Oceania, Ms Fookes being trained by Mr Prete and making complaints to Mr Prete about her workload which led to Mr Prete taking on some of her work. For the reasons set out above, it is my view that Mr Dorsch sought to infantilise himself relative to Mr Prete and others. I did not accept his evidence. Whilst I accept there were limitations on Mr Dorsch’s resourcing, including on occasion hiring new staff, all businesses have finite resources. I also accept that Ms Fookes agreed that there were numerous drivers leading to her overwork. For the reasons stated above, I reject Mr Dorsch’s incorrect, repeated submission that at no stage did Ms Fookes state that Mr Dorsch was the cause of her excessive workload. Ultimately, I accepted Ms Fookes’ evidence that it was Mr Dorsch who was requiring her to undertake the workload she did. Whilst I accept that Mr Prete was also a director of HEAD Oceania and involved in the creation and allocation of work, Mr Prete was not located in Australia and was not Ms Fookes’ day to day supervisor. I accept that this allegation on its own may be insufficient to establish serious misconduct warranting summary dismissal. However, it is part of the cumulative conduct. It illustrates, as the other conduct does, that Ms Fookes did not have faith in Mr Dorsch, as her manager, to manage that workload.
Even, if it were accepted, contrary to this view, that Mr Dorsch was responsible for the business but not in charge of it (which I do not accept), it is my view that the other bases relied upon by HEAD Oceania are sufficient to justify the termination.
Mr Montgomery’s evidence revealed that Mr Dorsch swore during his interactions with him and was aggressive towards him. In addition, it revealed that rather than Mr Dorsch modelling the behaviour he expected of his subordinates, employees had to call out and document his behaviour. Similarly, Mr Bramich’s and Mr Butler’s evidence established that Mr Dorsch yelled and swore at employees and would hit his hand or fist on the table when speaking to employees. All of their evidence supports the conclusion that Mr Dorsch swore and acted aggressively and disrespectfully towards subordinate employees. It equally can be relied upon as constituting bullying conduct.
Mr Dorsch submitted that “great caution” should be exercised with respect to Mr Butler’s evidence. First it was said that that caution should be exercised because of Mr Butler’s inconsistent evidence as to how common swearing was in the office. I do not accept this submission. Mr Butler was a sales manager, he spent half of his time with clients and not in the office. I do not accept Mr Dorsch’s submission that I should not accept Mr Butler’s evidence by reason of so-called inconsistencies in his evidence regarding the degree of his own swearing and the swearing of others. It was my view that, when his evidence is viewed as a whole, he made concessions that were indicative of his attempts to be truthful but otherwise his evidence was consistent. To the extent that I have made findings based on Mr Butler’s evidence, they relate to Mr Dorsch’s conduct towards him and what he observed of Mr Dorsch’s treatment of another subordinate employees considered above.
I reject Mr Dorsch’s submission that Mr Butler’s allegations of Mr Dorsch’s behaviour towards him were exaggerations and that Mr Butler failed to provide a sound explanation for why he did not act on the alleged behaviour at the time. Mr Butler explained why Mr Dorsch’s conduct towards him was inappropriate. For example, it was his evidence that Mr Dorsch did shout at him, did bang his fist on the table in meetings and that the inappropriateness of Mr Dorsch’s behaviour was not the subject matter of the discussion but instead it concerned the manner in which he conducted himself. Further, contrary to Mr Dorsch’s submission, Mr Butler did explain why early in his employment he did not feel confident in challenging Mr Dorsch’s behaviour. In response to questioning regarding what was inappropriate about a phone call in which Mr Dorsch was asking about whether Mr Butler had obtained a particular order and where Mr Dorsch said “well, why didn’t they give you that fucking order, you promised me that fucking order”, Mr Butler’s evidence was that the manner in which he was spoken to was inappropriate, that he had been doing this job for 35 years and it was his view that to “undermine [his] abilities in such a way was not appropriate”. Further, contrary to Mr Dorsch’s submission, he gave a plausible explanation for why he did not protest the way Mr Dorsch was speaking to him. His repeated evidence was that it was his belief that “to do so would [lead to] repercussions” and that he “elected not to out of fear of being dismissed”.
Furthermore, the evidence revealed that Mr Dorsch’s conduct had a not insignificant effect on the employees. Ms Hawes and Mr Butler gave evidence as to what they perceived was the toll his behaviour had on them. Ms Hawes recalled having to retreat to a car from Mr Dorsch at the OZTek Conference. Mr Butler deposed that by the beginning of 2021, having worked for approximately seven years in an environment usually involving several phone calls a day from Mr Dorsch of a “hostile nature” – among the other abusive interactions – his mental health had suffered and he often felt a knot in his stomach which was accompanied by an increased heartrate as he approached the office. Their evidence was not the subject of challenge.
Mr Dorsch accepts that Ms Andersen’s evidence included evidence of Mr Dorsch swearing at or acting aggressively or disrespectfully towards her but does not accept that her evidence could amount to her being bullied or subjected to unreasonable work demands. By reason of my factual findings regarding Ms Andersen’s evidence, I conclude that over a long period she was the subject of Mr Dorsch’s demeaning behaviour, including repeatedly being called ‘stupid’ and “fucking stupid”. To suggest that this could not constitute bullying is unexplained. To seek to explain it away by Ms Andersen’s concessions concerning others swearing goes nowhere. Furthermore, to suggest somehow that, by reason of it occurring in the context of managing her performance, it was “reasonable” must be rejected.
Mr Dorsch submitted that the fact that Mr Skrobanek was prepared to consider alternative employment goes to his belief as to the objective seriousness of the conduct. There is a question as to whether Mr Skrobanek’s subjective belief as to the seriousness of the conduct is relevant. Mr Dorsch cited no authority supportive of the proposition. In any event, for the reasons set out above, the two are not mutually exclusive, Mr Skrobanek’s evidence was compelling in this regard. Mr Skrobanek envisaged future employment in a different role with supervision.
The combination of all of these factors warranted the summary termination of his employment.
For these reasons, Mr Dorsch’s contractual claims fail (save for his claim regarding the delay in receiving his annual leave upon termination).
Mr Dorsch’s damages claims
By reason of the foregoing, Mr Dorsch has only been successful with respect to his claim that there was an impermissible delay in the making of his annual leave payment. HEAD Oceania accepted that this comprises a breach of both s 90(2) of the FW Act and of his contract. By reason of this, Mr Dorsch is entitled to damages under contract and by operation of s 545(2)(b) of the FW Act. Neither party submitted to me that I should treat the damages to be awarded any differently by reason of the dual claim in contract and under the FW Act arising from the same facts.
HEAD Oceania submitted that Mr Dorsch suffered no damage because he was paid his annual leave entitlement in full. Therefore, no remedy is available in respect of this claim. Mr Dorsch rejected this submission. He contended that the delay in being paid his annual leave deprived Mr Dorsch of the use of money and resulted in him selling off his German life insurance and pension insurance. This compounded his stress, and added to his financial position which contributed to him developing his major depressive disorder.
In his closing submissions, counsel for HEAD Oceania did not accept that Mr Dorsch had established a link between the delay in being paid accrued annual leave and Mr Dorsch having to sell his German life insurance and pension insurance. If this submission were not accepted, HEAD Oceania submitted that the evidence would not satisfactorily answer why selling the insurance policy would crystallise some loss. Further, HEAD Oceania submitted that, on the evidence, there did not appear to be any differentiation between Mr Dorsch becoming unemployed as opposed to him not having to hand the amount of annual leave that was payable on termination. Given the same, HEAD Oceania contended that it was “too long a leap” to attribute the loss of future prospective earnings from a life insurance and pension policy held overseas.
It is difficult to assess the claim for damages arising from this breach. Mr Dorsch did not identify in his schedule of loss a specific claim for damages (both economic and non-economic) that he claims arises specifically (and only) from this claim. This was curious given it was known at the commencement of the hearing that this was the one aspect of the claim that was admitted.
As to the potential economic loss claim, I note that I have only accepted that there was a delay of three months in paying Mr Dorsch his accrued annual leave entitlement of $8,022.82. I note that Mr Dorsch’s claim, when he prepared his affidavit evidence, was that he had been deprived of his accrued annual leave (claiming he was not paid all that he was entitled to, quite aside from the delay) (comprising $22,965) and long service leave entitlements (comprising $13,365), and that I have rejected these claims. Mr Dorsch’s evidence in this regard was in general terms. By way of illustration, he deposed:
273. The termination and the refusal to pay unused annual leave, long service leave and the other deductions from my final pay, left me in serious financial distress and hardship. I found it very difficult to service loans, make mortgage payments and keep up with my living expenses, whilst also providing financial support to my mother who is dependent on me.
274. I was forced to sell off my German life and pension insurance, which would have been otherwise due for payout in 2033. I was also forced to fully withdraw my Hong Kong Mandatory Provident Fund. Due to such an early pay-out of my life insurance and pension insurance, I have suffered a huge loss of interest and dividends. I have also suffered a loss of my life insurance payout in the event of death, pension and retirement security. I estimate that I have lost my German Life Insurance a total of around EUR 35,000. I estimate that I have lost EUR 125,000 by withdrawing my Hong Kong Mandatory Provident Fund.
As can be seen from the above, the estimated loss is asserted to have arisen from a combination of factors, the termination of his employment (and, it may be inferred, the consequential loss of salary), as well as what he claims to be the refusal to pay “unused annual leave” and long service leave (in total over $35,000), the scope of which this breach does not relate to. Mr Dorsch provided no evidence as to what his actual financial commitments were between December 2021 and March 2022 (when he received the payment for his accrued annual leave). Accordingly, it is not possible to determine whether the delay in making the $8,022.82 payment, quite apart from the fact of his loss of salary and the other unpaid claimed amounts, had a causal connection with him being “forced” to withdraw from the Hong Kong Fund or had an effect on his German life insurance. I note in this regard that Mr Dorsch did not assert that he was “forced” by HEAD Oceania to make these financial decisions but rather he felt that he had no choice, in the circumstances, but to do as he did. Without proper evidence, I cannot come to any conclusion as to what economic loss he suffered as a result of this breach.
In a similar way, Mr Dorsch’s non-economic claim was asserted without reference to any particular evidence. Whilst both parties made submissions regarding the extent to which I should accept their respective experts, this is not an issue that I need to resolve. The deficiency is evident not only from Mr Dorsch’s evidence extracted above, but also from the evidence of his medical expert, Dr Samuels. Even if I were to accept Dr Samuels’ evidence, no particular attention is given to what impact the delay in making the annual leave payment had on his mental health or any condition he developed said to be causally related to any breach. Further, it was Dr Samuels’ understanding that Mr Dorsch had been “paid out his annual leave but not any long service leave”. It may be accepted that Mr Dorsch was acutely distressed by the fact of and manner in which his employment came to an end. It may also be accepted that he suffered mental distress as a result of the effect the termination of his employment had on his financial circumstances. However, it is very difficult to unscramble the egg to work out what level of that distress was associated with the delay in the payment of the annual leave, particularly when there was the associated distress related to the purported amount he claimed he was entitled to (but about which I have found there to be no breach). Ms Terry’s evidence was also at a level of generality and concerned the fact of financial stress and mental distress generally following the termination.
The assessment of general damages requires me to make findings as to the harm Mr Dorsch suffered as a result of the delay in receiving his accrued annual leave entitlement. I am unable to deduce from the evidence of either expert how their evidence assists me in making this finding. Mr Dorsch did not assist me in this regard. Section 545(2)(b) confers a power on the Court to make orders awarding compensation for loss that a person has suffered because of the contravention. It may be accepted, and was not disputed, that that power includes compensation for non-economic loss. Mr Dorsch made no submission as to the amount he was seeking by way of general damages in this regard.
By reason of the evident distress Mr Dorsch suffered in the immediate aftermath of his termination and the fact of him suffering financial strain, I am able to infer that Mr Dorsch suffered some distress by reason of the delay in paying the payment. In the circumstances, it is my view that HEAD Oceania should be ordered to pay Mr Dorsch a modest amount of general damages to compensate him for the unlawful delay in paying his accrued annual leave entitlement. I have taken into account the limited probative general evidence as the distress he suffered as a result of his financial circumstances after the termination of his employment. I award the sum of $10,000 as compensation for the distress he suffered from the delay in making the payment.
As to the damages claims otherwise, I have found that HEAD Oceania took no adverse action against Mr Dorsch, save for the delay in paying him his annual leave entitlement. I have found that none of the other purported action was taken for a prohibited reason and therefore it was not unlawful and nor did it constitute a breach of contract. Therefore, it is unnecessary to determine whether Mr Dorsch has suffered any loss or damage as a result of these unsuccessful claims.
As observed by Mortimer J, as her Honour then was, in Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19 at [293], where findings have been made in a trial so that other issues no longer fall for decision, it is a matter for the trial judge to determine whether she or he should go on and determine those issues, citing Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355; 31 VR 46 at [103] and Housden v Boral Australian Gypsum Ltd [2015] VSCA 162 at [154]–[155].
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.
I certify that the preceding four hundred and fifty-eight (458) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Raper. Associate:
Dated: 29 February 2024
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