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

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FEDERAL COURT OF AUSTRALIA

Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17

Citation: Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17
Parties: STEVEN ERMEL v DULUXGROUP (AUSTRALIA) PTY LTD (ACN 000 049 427)
File number: VID 792 of 2013
Judge: BROMBERG J
Date of judgment: 28 January 2015
Catchwords: INDUSTRIAL LAW – whether applicant dismissed because of temporary absence due to illness in contravention of s 352 of the Fair Work Act 2009 (Cth) (FW Act) – whether adverse action taken against the applicant in contravention of s 340 of the FW Act because the applicant exercised various workplace rights – whether s 21 of the Occupational Health and Safety Act 2004 (Vic) conferred a “workplace right” upon the applicant – whether the making of complaints was an operative factor in the decision to dismiss the applicant – whether the applicant’s absence from work due to illness was an operative factor in the decision to dismiss him – whether a contravention of s 352 of the FW Act, and of s 340(1) in combination with s 97(a) of the FW Act, requires satisfaction that a reason for the adverse action (or dismissal) was the employee’s absence due to illness, or whether absence per se is a sufficient reason – whether Jones v Dunkel inference should be drawn by respondent’s failure to call witness to corroborate direct testimony from decision-maker – application dismissed.
Legislation:

Fair Work Act 2009 (Cth) ss 12, 97(a), 340(1), 340(1)(a), 340(1)(c)(ii), 341(1), 342, 352, 360, 361, 361(1)
Industrial Relations Act 1988 (Cth) ss 170CA(1), 170DF(1)
Occupational Health and Safety Act 2004 (Vic) s 21

Workplace Relations Act 1996 (Cth) ss 170CK(2)(a), 659(2)(a)
Cases cited: Khiani v Australian Bureau of Statistics [2011] FCAFC 109
Board of Bendigo Regional Institute of Technical and Further Education v Barclay [No 1] (2012) 248 CLR 500
Stevenson v Murdoch Communities Services Inc (2010) 202 IR 266
Sperandio v Lynch [2006] FCA 1648
Barclay v Board of Bendigo Regional Institute of Technical and Further Education (2011) 191 FCR 212
Jones v Dunkel (1959) 101 CLR 298
Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 211 IR 1
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2010) 187 FCR 293
Date of hearing: 16 and 17 December 2014
Place: Melbourne
Division: FAIR WORK DIVISION
Category: Catchwords
Number of paragraphs: 102
Counsel for the Applicant: Mr C Gunst QC with Mr R Millar
Solicitor for the Applicant: McDonald Murholme
Counsel for the Respondent: Mr J Tracey
Solicitor for the Respondent: HR+WorkLaw

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

FAIR WORK DIVISION

VID 792 of 2013
BETWEEN:

STEVEN ERMEL
Applicant
AND:

DULUXGROUP (AUSTRALIA) PTY LTD (ACN 000 049 427)
Respondent

JUDGE:

BROMBERG J

DATE OF ORDER:

28 JANUARY 2015

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The applicant’s application is dismissed.

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


IN THE FEDERAL COURT…

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Details
Case
[2015] FCA 17
Decision Date

CaseChat Overview and Summary

In Ermel v DuluxGroup (Australia) Pty Ltd (No 2), Ermel brought proceedings against Dulux, alleging that he had been dismissed in contravention of sections 352 and 340 of the Fair Work Act 2009 (Cth) (FW Act). Ermel claimed that he was dismissed because of his temporary absence due to illness, which he argued contravened s 352, and that his dismissal was adverse action taken against him for exercising various workplace rights, including the right to a safe working environment under s 21 of the Occupational Health and Safety Act 2004 (Vic), which he argued contravened s 340. The Court had to determine whether Ermel's absence from work due to illness or the making of complaints were operative factors in the decision to dismiss him, and whether absence per se is a sufficient reason for dismissal under s 352 of the FW Act.

The Court found that Ermel's absence from work on 28 May 2013 was not seriously pursued as a reason for his dismissal. The Court held that there was no evidence to suggest that Ermel's absence on that day was a reason for his dismissal. The Court also found that Ermel's right to a safe working environment under s 21 of the Occupational Health and Safety Act 2004 (Vic) did not confer a "workplace right" upon him. The Court held that the making of complaints was not an operative factor in the decision to dismiss Ermel. The Court further held that a contravention of s 352 of the FW Act requires satisfaction that a reason for the adverse action (or dismissal) was the employee’s absence due to illness, and absence per se is not a sufficient reason. The Court found that there was no evidence that Ermel's absence from work on 31 May 2013 was a reason for his dismissal.

The Court dismissed Ermel's application. The Court found that Ermel had not succeeded in relation to each of the causes of action upon which he relied. The Court held that Ermel's absence from work on 28 May 2013 was not a reason for his dismissal, and that the making of complaints was not an operative factor in the decision to dismiss him. The Court also found that Ermel's right to a safe working environment under s 21 of the Occupational Health and Safety Act 2004 (Vic) did not confer a "workplace right" upon him. The Court held that absence per se is not a sufficient reason for dismissal under s 352 of the FW Act.

Orders

Orders of the court

1. The applicant’s application is dismissed.

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

Background

Background to the litigation

For the reasons that follow, Ermel has not succeeded in relation to each of the causes of action upon which he relied.BACKGROUND FACTS Most of the relevant facts were not in contest and many of the facts in contest were either not relevant or of little consequence to the issues I need to determine. The following narrative records my factual findings in relation to those facts that were of significance. Other factual findings are also later recorded. Dulux is a publicly listed company. Its main business operations comprise the manufacturing and marketing of paint and related products. Its head office is located at Clayton in Victoria. Ermel commenced his employment with Dulux on 14 July 2010. His contract of employment (contract of employment) specified his position as Indirects Procurement Manager. That position, as Ermel described it, involved “the strategic acquisition of goods and services to maximise the value that [Dulux] obtains and to properly meet the requirements of the business”. The contract of employment identified Ermel’s total remuneration as $140,000 per annum. This later increased to $155,344 per annum. Ermel also had a right under his contract of employment to an incentive payment of 15% of his total package. Ian Griffith (Griffith) is, and for a time during Ermel’s employment was, the Head of Procurement at Dulux. He commenced employment with Dulux in October 2012. Griffith was recruited into this role from outside of Dulux. Ermel had been an internal applicant for the same position, but was unsuccessful in obtaining it. During Ermel’s employment, Ermel reported to Griffith. It was Griffith who made the decision to dismiss Ermel. Bradley Simpson (Simpson) is, and during Ermel’s employment at Dulux was, Human Resources Manager with responsibility for the area of Dulux’s operations in which Ermel was employed. Part of his role as HR Manager was to work with senior managers to assess the performance and potential of employees. At various times during Ermel’s employment, Simpson was involved in assessing Ermel’s performance and potential. Simpson was involved in advising Griffith in the decision made by Griffith to dismiss Ermel. In December 2012, Griffith participated in a succession planning meeting with various other senior executives. One of the functions of his role as Head of Procurement was to participate in such discussions. In that meeting, Griffith expressed his view to other senior executives that Ermel was not a suitable candidate to take his role should it become vacant. Griffith’s manager, Brad Hordern, and others agreed with that view and, as a result, Ermel was removed from the matrix used by Dulux to record its succession plan. At the end of 2012, Dulux acquired another company, Alesco. That acquisition increased the scope of the responsibilities of the procurement area of the company. Griffith determined that there was a need to alter the structure of the group to account for those increased responsibilities. During that time, Griffith decided that Ermel was not capable of fulfilling the role of Indirects Procurement Manager considering the increased responsibilities in that role that had come with the acquisition of Alesco.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Ermel received the termination letter in the afternoon of 31 May 2013.CONSIDERATION The very strong impression I have of Ermel, having seen him give his evidence, is that he is an earnest, hardworking and honest individual who was very much driven to resist the new position because he genuinely held the belief that he was being unfairly treated. His strong and genuinely held sense that he was unfairly treated no doubt drove him to institute this proceeding. However, whether or not it was just or fair that Ermel should have his employment terminated for refusing to accept the new offer is not a matter which this proceeding calls upon me to determine. Even if I was to accept that the offer of the new position involved an attempt to unfairly demote Ermel and require him to accept inferior conditions of employment, there is no claim before me which directly engages with that unfairness. In a general protections claim brought pursuant to s 340 of the FW Act, success depends upon the Court being satisfied that the applicant has been subjected to adverse action for one or more of the specific reasons identified by the FW Act as an impermissible basis upon which action adverse to the applicant may be taken. A general protections proceeding is not a broad inquiry as to whether the applicant has been subjected to a procedurally or substantively unfair outcome. As Gray, Cowdroy and Reeves JJ said in Khiani v Australian Bureau of Statistics [2011] FCAFC 109 at [31]:A general protections application is not intended to provide an opportunity for the appellant to raise whatever issues she wishes to about the validity of the steps taken before her dismissal. The crucial issue in such an application is the causal relationship between adverse action and one or more of the factors mentioned in the various provisions of Pt 3-1. The issue is whether the person who has taken the adverse action has done so because the person against whom the adverse action has been taken has one or more of the relevant characteristics or has done one or more of the relevant acts.Ermel’s absence from work on 28 May 2013 Ermel raised four reasons which he contended motivated Griffith to dismiss him from his employment in contravention of s 340(1). Two of those alleged reasons concerned Ermel’s absence from work, firstly on 28 May 2013 and secondly on 31 May 2013. Likewise, Ermel’s allegation that s 352 of the FW Act was contravened relied upon firstly, Ermel’s absence on 28 May 2013 and secondly, his absence on 31 May 2013. Ermel’s case in relation to the alleged contraventions relating to his absence from work on 28 May 2013 was not seriously pressed (if pressed at all) by Ermel’s counsel in final submissions. Griffith denied that Ermel’s absence on 28 May 2013 was a reason for his decision to dismiss Ermel. That denial was not challenged and Ermel pointed to no evidence which served to undermine it. There is nothing apparent in the evidence which would suggest, even as a plausible possibility, that a reason for the dismissal of Ermel was his absence from work on 28 May 2013 because of illness or injury or the taking of paid personal leave due to illness. Those parts of Ermel’s case must be rejected. Ermel’s right to a safe working environment