Ermel v DuluxGroup (Australia) Pty Ltd (No 2)
[2015] FCA 17
•28 January 2015
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 21Workplace 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 293Date 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
ApplicantAND: 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 OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
FAIR WORK DIVISION
VID 792 of 2013
BETWEEN: STEVEN ERMEL
ApplicantAND: DULUXGROUP (AUSTRALIA) PTY LTD (ACN 000 049 427)
Respondent
JUDGE:
BROMBERG J
DATE:
28 JANUARY 2015
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Relevantly to the issues raised by this application, the Fair Work Act 2009 (Cth) (FW Act) prohibits an employer from taking action against its employee because the employee has exercised a ‘workplace right’. The FW Act also protects an employee from being dismissed from employment because the employee has been absent from work temporarily because of illness or injury. Those protections are conferred by ss 340(1) and 352 of the FW Act.
Section 340(1) provides:
(1) A person must not take adverse action against another person:
(a) because the other person:(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b) to prevent the exercise of a workplace right by the other person.
Section 341(1) defines ‘workplace right’ and provides:
(1) A person has a workplace right if the person:
(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c) is able to make a complaint or inquiry:
(i)to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee-in relation to his or her employment.
The term “adverse action” utilised by s 340(1) is defined by s 342 of the FW Act and includes an employer dismissing its employee.
Section 352 of the FW Act provides:
An employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
There are two other pertinent provisions which have application to a s 340(1) and s 352 cause of action. Section 360 relevantly has the effect that adverse action is prohibited by s 340(1) where a reason for the taking of the action is that the employee has a workplace right. Section 361 relevantly has the effect of imposing a rebuttable presumption that the adverse action was taken because or including because the employee had the workplace right. Similarly and in relation to s 352, the reason for the dismissal need only be one reason not the only or dominant reason and s 361 imposes a rebuttable presumption that the dismissal occurred including because of that reason.
The applicant (Ermel) was an employee of the respondent (Dulux). He claims that Dulux contravened s 340(1)(a) of the FW Act by dismissing him from his employment for reasons including that he had exercised the following workplace rights:
(1)the right to a working environment that was safe and without risk to his health;
(2)the right to make a complaint; and
(3)the right to take paid personal leave on each of 28 and 31 May 2013.
Ermel also alleged that Dulux breached s 352 of the Act as he was dismissed because he was temporarily absent from work because of an illness on each of 28 and 31 May 2013.
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.
Sometime thereafter, Griffith devised a new structure for the procurement team. The position he allocated to Ermel in that new structure was a new position called “Sourcing Specialist” (new position).
On 24 April 2013, Griffith conducted Ermel’s mid-year performance review (performance review). Griffith intended at that meeting to give Ermel a performance grade of two, which meant that his performance needed improvement, and to tell Ermel about the new structure and the position Griffith had in mind for Ermel in it. For those reasons, Griffith anticipated that the performance review could be acrimonious and had Simpson attend.
At the performance review, Griffith advised Ermel of his performance rating. Griffith explained the new structure to Ermel and the new role that he had in mind for him in it.
Ermel was genuinely surprised and aggrieved by the performance grade given to him. He expressed his disagreement. He also genuinely (and with some justification) regarded the proposal to move him to the new position as an attempted demotion. He described that to Simpson as a constructive dismissal, a characterisation that Simpson disputed. Simpson said to Ermel that if Ermel did not accept the new position he would be “terminating his own employment”.
Consistently with Griffith’s expectation, the meeting was acrimonious. Whether the conduct in which Griffith and Simpson engaged constituted bullying and harassment is relevant to one issue which I will later address.
At the performance review, Ermel told Griffith that he intended to apply for the position of Senior Brand Manager for Trade (alternative position). The alternative position was located in a different division of Dulux. Ermel asked Griffith to hold off on announcing the new structure until Ermel knew whether he had been successful in his application for the alternative position. Griffith agreed to hold off. His evidence was that he told Ermel that he could have one to two weeks to go through the process of applying for the alternative position, after which time Ermel would need to move to the new structure and accept the role that Griffith was offering him. Ermel’s evidence was that “there wasn’t a hard and fast time” set, but the difference on that issue is not a matter of much significance.
After the performance review, Griffith and Ermel discussed the new position on a number of occasions. Their evidence as to Ermel’s attitude to the new position differed, but again the difference was not particularly significant to the issues I need to determine. Griffith’s evidence was that Ermel told him that he could see that the position being offered to him held “some potential”, but that Ermel wanted more money and a higher job grade. Ermel’s evidence placed less emphasis on his desire for a higher salary and job grade and more emphasis on his view that the problem with the new position was that it constituted a demotion.
On or around 29 April 2013, Griffith decided to make two changes to the new position to make it more attractive to Ermel. The first change was that Ermel would report directly to him. The second change was to the title of the position, which was changed from “Sourcing Specialist” to “Procurement Manager Sourcing”. Griffith communicated these changes to Ermel. Ermel said that those changes would improve the proposal, but told Griffith that he still felt that it was a role that he did not want to take. A position description for the position, and a slide of the new structure was emailed to Ermel on 30 April 2013.
On 1 May 2013, Griffith handed Ermel a letter of offer for the new position (letter of offer). The letter of offer opened by stating that “[w]e are pleased to confirm our offer to you [sic] a transfer of position within DuluxGroup (Australia) Pty Ltd”. Contained within the letter of offer was a new contract of employment for Ermel to execute.
The terms set out in the new contract offered to Ermel differed from Ermel’s then extant contract of employment. Some of those differences were highlighted by Ermel at trial and were said to be disadvantageous to him. The differences highlighted by Ermel were:
·a change to the requirement in respect to working hours, to the effect that Ermel could be required to work on public holidays;
·an extension of the notice of termination period from one month to three months’ written notice; and
·a more onerous restraint of trade clause.
Around ten days after the letter of offer was provided to Ermel, Griffith spoke to Ermel about the need to finalise and announce the new structure. While Ermel did not accept the letter of offer, he did not resist Griffith announcing the new structure. Details of the new structure were circulated by Griffith on 13 May 2013.
On 27 May 2013, Ermel advised Griffith that he had been rejected for the alternative position. Griffith then asked Ermel for a response to the letter of offer. Ermel asked Griffith for more time to consider the offer before responding. Griffith deposed that Ermel sought one day. Ermel disputed that a specific amount of time was specified. Again, it is not necessary to resolve that conflict. It is sufficient that I find, as I do, that Griffith understood that Ermel had agreed to provide a prompt response within a day or so.
On 28 May 2013, Ermel was away from work due to illness. Griffith was aware of that absence. He was told by another member of his team that Ermel had called in to say he was unwell.
On 29 May 2013, Ermel returned to work. Despite Griffith’s expectation that he provide a response to him, Ermel made no attempt to meet with Griffith and communicate his response to the offer. That was a matter of some frustration for Griffith. As a result, Griffith scheduled a meeting with Ermel for 9.00 am on 30 May 2013.
At that meeting, Ermel told Griffith that he could not sign the letter of offer as there was “nothing in it for him”. Ermel wanted to negotiate changes to the terms of the new position. Consistently with his earlier advice to Ermel, Griffith told Ermel he could not offer Ermel any more money or a higher job grade. Griffith advised Ermel to speak to Simpson. He told Ermel he could lose his position.
Ermel then met with Simpson to discuss the letter of offer. Simpson had not seen or spoken to Ermel since the day of the performance review. Ermel again expressed his view to Simpson that the position being offered to him amounted to a constructive dismissal. Simpson again denied that assertion. In cross-examination, Simpson denied (and I accept) that the assertion by Ermel that the offering of the new position amounted to a constructive dismissal had “incensed” him and that he had intimidated Ermel during this meeting.
In an account of what was said at the meeting (not challenged by Ermel), Simpson deposed that he told Ermel that Dulux was not going to offer him any more money or a higher job grade. Simpson told Ermel that he had had the offer of the new position for four weeks and that he needed to accept the offer by midday the following day or Dulux would take appropriate action. Simpson explained to Ermel that if he rejected the offer he would be terminating his own employment. Ermel responded by telling Simpson that he would be a terrible poker player and that Ermel could not be bluffed. Simpson insisted that he was not bluffing.
Simpson’s evidence was that in their meeting on 30 May 2013, Ermel told him that he would be in by 9.00 am the next morning and that he would come to see Simpson and tell him what his answer was. Ermel accepted that he had agreed that he would meet with Simpson the next day. He disagreed that he had told Simpson that he would make a decision by then. However, it was not disputed that Simpson imposed a deadline of 12 pm on 31 May 2013 for Ermel to accept the new position. The solicitors’ letter sent by Ermel’s solicitors on 31 May (to which I will shortly refer) referred to the deadline and sought its extension.
Following his meeting with Ermel, Simpson conveyed to Griffith the substance of his conversation with Ermel and informed Griffith that he had set a deadline of midday the following day by which Ermel had to accept the new position or have his employment terminated. Simpson also told Griffith that Ermel had promised to be in the following day at 9.00 am to provide his response.
On 31 May 2013, Ermel was absent from work. Shortly after 9 am, he rang in and spoke to a receptionist named Hayley. He left a message with Hayley that he would not be in that day due to illness and asked that the message be conveyed to Griffith. Griffith denied knowing that Ermel was absent due to illness. There was no direct evidence to contradict that denial. Whether I should draw an inference that the message left by Ermel came to Griffith’s attention is a matter I will later address.
At around 9.45 am, Griffith attempted to contact Ermel on his personal mobile phone. That occurred after Simpson had come into Griffith’s office to ask him if he had seen Ermel, as Ermel had not presented to Simpson at 9 am. Ermel did not answer Griffith’s call. Griffith left a voicemail message asking Ermel to contact him. Ermel did not call back.
At around 11 am on 31 May 2013, a letter sent that morning by solicitors engaged by Ermel (solicitors’ letter) to Michael McMullen, General Manager Human Resources, came to the attention of Simpson. The solicitors’ letter set out a number of allegations made by Ermel against each of Griffith, Simpson and Dulux.
The letter alleged that:
·various misrepresentations were made to Ermel in respect to his employment at Dulux, in breach of the Australian Consumer Law;
·during his performance review, Ermel felt pressured and bullied by Griffith and Simpson due to their “aggressive attitude”;
·Ermel had been subjected to “threats” should he not sign the offer;
·the “bullying and intimidating behaviour” of Griffith and Simpson was a breach of Dulux’s policy in respect to appropriate workplace behaviour;
·Dulux had breached an implied term of trust and confidence in its contract with Ermel;
·Dulux had breached section 389 of the FW Act by failing to provide Ermel with a suitable alternative position after the restructure; and
·Griffith and Simpson had imposed “arbitrary time limitations” on Ermel in respect to accepting the offer of the new position.
The reference made in the solicitors’ letter to arbitrary time limits was a reference to the 12 pm deadline imposed by Simpson. In relation to that deadline, the letter stated “[w]e trust that any ‘appropriate action’ will be delayed until our client’s concerns have been investigated and addressed by the company”.
On receiving the solicitors’ letter, Simpson showed it to Griffith and later provided him with a copy. They had a discussion about the letter and decided to wait for the 12 pm deadline before taking any further steps.
Shortly after 12 pm, Griffith again discussed the situation with Simpson. Griffith decided to terminate Ermel’s employment.
During the course of the morning, Griffith and Simpson instructed Dulux’s external lawyers to draft a termination letter (termination letter). Both Griffith and Simpson assisted in drafting that letter.
When the termination letter was ready at approximately 12.30 pm, Griffith signed it and emailed it to Ermel and his solicitors. It was also couriered to Ermel’s home.
It is necessary to set out the termination letter in full:
Dear Steven,
On 8 November 2011 you were employed in the position of Indirects Procurement Manager on an annual salary of $140,000. As your Letter of Offer states, “As with any dynamic organisation, your role and responsibilities may change from time to time” and “the Company may transfer you to another position within the company or within the DuluxGroup for which you are suitably qualified.”As you know, since you commenced employment with us we have acquired Alesco. That has resulted in a need to change roles and responsibilities.
On Wednesday 24 April, 2013, we offered you the role of Procurement Manager Sourcing at a Fixed Annual Remuneration (FAR) of $155.344.26. This role is also within your skills, qualifications and experience, does not submit you to unreasonable geographic disadvantage and recognises your prior service with us.
Despite having this offer since Wednesday 1 May, 2013, you have not responded to us about it until two days ago. When you did respond, you told me you refused to sign it. You asked me for more money and a higher job grade. You did not question the tasks, duties or responsibilities. I told you the offer was as it is and there would be no more money and no higher job grade. The terms of the offer, as is, were reinforced to you by Brad Simpson yesterday when you also asked him for more money or a higher job grade.
Given you had taken so long to respond to the offer and when you did, you refused to sign it, after we responded to your questions about more money and you still refused to sign the offer we have now accepted your rejection of that offer.
Given you have rejected the role offered to you and that it is within your skills, qualifications and experience, does not submit you to unreasonable geographic disadvantage and recognises your prior service with us, you will not receive any redundancy pay except that provided for under the NES.
In addition to rejecting the role, you have not attended work today and have not responded to my voice message for you to explain your absence.
In the circumstances, we are exercising our right to effect your termination today by paying out your notice period. Your final pay including any accrued entitlements will be paid to you by eft into your usual bank account.
Please contact me on the number listed below to arrange for the collection of any property belonging to you and for the return of any property in your possession belonging to DuluxGroup.
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
Nor is there any apparent merit in Ermel’s allegation that s 340(1) of the FW Act was contravened because Ermel exercised his workplace right to a working environment that was safe and without risk to health under s 21 of the Occupational Health and Safety Act 2004 (Vic) (OH&S Act).
For reasons I will shortly explain, I do not accept Dulux’s contention that s 21 of the OH&S Act did not confer upon Ermel a workplace right. Nevertheless, this aspect of Ermel’s claim failed to raise a plausible basis upon which he could succeed.
The first difficulty which Ermel confronts is that his pleading on this aspect of his claim was misconceived. The Statement of Claim pleaded that by the sending of the solicitors’ letter, Ermel exercised his workplace right to a safe working environment. The solicitors’ letter included a complaint that Ermel had been bullied. Accepting that the letter raised and made a complaint that Ermel was denied a safe workplace, the making of a complaint about a safety issue is not the exercise of the benefit provided by s 21 of the OH&S Act, namely the capacity of Ermel to enjoy a “working environment that is safe and without risk to health”.
The capacity to enjoy a safe working environment is the nature of the benefit provided by s 21 of the OH&S Act. It is the enjoyment of that benefit, not the making of a complaint about its denial, which Ermel needed to allege was an operative reason for his dismissal. No such claim was either pleaded or pressed. Nor, if such a claim had been made, is there any evidence which would suggest, even as a plausible possibility, that Ermel was dismissed because or including because he enjoyed or had the right to enjoy a safe working environment.
The terms of s 21 of the OH&S Act impose an obligation on employers to provide and maintain for their employees (so far as is reasonably practicable) a working environment that is safe and without risk to health. The corollary of that obligation is that employees are given the benefit of an entitlement to enjoy a safe working environment. Contrary to the submissions of Dulux, such a benefit is a workplace right. The meaning of “workplace right” given by s 341(1) of the FW provides that a person has a workplace right “if the person…is entitled to the benefit of…a workplace law”. The definition of “workplace law” given by s 12 of the FW Act specifically refers to “any other law of…a State…that regulates the relationships between employers and employees (including by dealing with occupational health and safety matters)”.
For those reasons, although I disagree with Dulux’s contention that Ermel did not have a workplace right, this aspect of Ermel’s claim must also be rejected.
Ermel’s right to make a complaint
Ermel contended that a reason for his dismissal was the complaints made by him through the solicitors’ letter.
Although Dulux initially denied that Ermel had a workplace right to complain pursuant to s 340(1)(c)(ii) and had exercised that right via the solicitors’ letter, that resistance fell away. The only question which I need to determine on this part of Ermel’s case, is whether the making of the complaints was an operative reason for the dismissal.
Ermel contended that the serious allegations made in the letter against both Griffith and Simpson and the proximity in time between Griffith receiving the solicitors’ letter and terminating Ermel’s employment, should cause me to reject Griffith’s evidence that the making of a complaint by Ermel and specifically the complaint made by the solicitors’ letter, was not a reason for the termination.
As earlier stated, it was Griffith that made the decision to terminate Ermel’s employment. He was assisted by Simpson in making that decision and Simpson’s evidence is relevant to the extent that it throws light on Griffith’s reason or reasons for the termination. However, it is Griffith’s state of mind that needs to be assessed. It is not in contest that by reason of s 361(1) of the FW Act, Dulux must establish that Ermel was not dismissed for a prohibited reason: Board of Bendigo Regional Institute of Technical and Further Education v Barclay [No 1] (2012) 248 CLR 500 at [1] (French CJ and Crennan J). Nor is it contested that only an operative reason is of any significance: Barclay at [65] (French CJ and Crennan J); [103]-[104] (Gummow and Hayne JJ) and at [140] (Heydon J).
Griffith’s denial that he was motivated by any prohibited reason is not determinative. In assessing what actuated Griffith’s decision, it is both permissible and necessary to examine the circumstances surrounding the decision and in particular those matters likely to have been germane to the decision-making process in which Griffith engaged.
The evidence is clear that by 30 May 2013, Griffith had decided that he needed to take prompt and decisive action in relation to Ermel’s employment. He had shown patience in awaiting the outcome of Ermel’s application for the alternative position. He had an expectation that Ermel would provide a final response to the offer of the new position on 28 or 29 May 2013. That expectation was not fulfilled. The deadline set by Simpson became Griffith’s deadline and led to Griffith effectively deciding (at a time before he saw the solicitors’ letter) that unless Ermel accepted the offer by 12 pm on 31 May 2013, he would dismiss Ermel from his employment. In his evidence, Griffith said, and I accept, that “it was firm in [his] mind” that “if that deadline was not met, this process had to come to an end…it was a serious deadline, and I felt we needed to stick to that deadline…”
It was in that context that Griffith was dismissive of the suggestion that he was at all motivated to terminate Ermel’s employment by reason of the solicitors’ letter. I accept Griffith’s evidence that he viewed the solicitors’ letter as a desperate stalling tactic by Ermel. I also accept Griffith’s evidence that he was unconcerned by the allegations made in the solicitors’ letter because he did not regard those allegations as legitimate.
Whilst Griffith agreed that relations with Ermel had been tense, he had no reason to think that either he or Simpson had been involved in bullying Ermel as the solicitors’ letter alleged. That Ermel thought that he had been bullied, unduly pressured or threatened is not to the point. The evidence did not demonstrate any obvious wrongdoing by either Griffith or Simpson. Whilst both Griffith and Simpson would have recognised that they were imposing some pressure upon Ermel, there is no basis for thinking that they were conscious of any wrongdoing on their part in the application of that pressure. I accept Griffith’s evidence that he regarded the bullying and similar allegations made in the solicitors’ letter as having no substance.
Those circumstances provide a basis for accepting Griffith’s evidence that he was not troubled by the letter, did not feel threatened by it and that he was bemused rather than angered by its content. In Griffith’s mind, the decision to dismiss Ermel should he not meet the deadline, had effectively already been made. The deadline, rather than the solicitors’ letter, explains the timing for the termination. The solicitors’ letter confirmed that Ermel did not intend to comply with the deadline. It was otherwise of little consequence and, in the circumstances, the complaints made by it were not likely to have been an operative reason which motivated Griffith to dismiss Ermel.
For those reasons, Dulux has established that the complaints made by Ermel in the solicitors’ letter were not operative reasons for Dulux’s decision to dismiss Ermel from his employment. That part of Ermel’s case must also be rejected.
Ermel’s absence on 31 May 2013
A plausible possibility that I need to consider is whether Ermel’s absence from work on 31 May 2013 was the basis for a contravention of s 340(1) or s 352 of the FW Act.
Ermel’s s 340(1) claim relied upon his workplace right to take personal leave under s 97(a) of the FW Act by being absent from work because he was not fit for work due to illness. It was not disputed that the right to take personal leave was a workplace right conferred by s 341(1)(a) of the FW Act. It was also not disputed that Ermel’s absence from work on 31 May 2013 was due to illness.
Whether Griffith was motivated to dismiss Ermel because of his absence on 31 May 2013 is a matter that was hotly disputed. The dispute raised questions about the proper construction of s 352 as well as s 340(1) in combination with s 97(a) of the FW Act. Ermel contended that the contravention of those provisions did not require satisfaction that absence because of illness was a reason for the adverse action or dismissal, but that absence per se was sufficient as a prohibited reason.
Griffith denied that he was actuated by Ermel’s absence at all. He further denied that Ermel’s absence due to illness was a motivating reason because he denied having any knowledge that illness was the cause or asserted cause for Ermel’s absence.
If Ermel’s absence (irrespective of its cause) was not a reason for Ermel’s dismissal, Ermel’s claim must be rejected irrespective of how the statutory construction issue is resolved. I will therefore address that factual issue first.
Ermel contended that the letter of termination made it abundantly clear that a reason for Ermel’s dismissal was that he was absent from work on 31 May 2013. Ermel relied on the following passage at the bottom of the letter’s first page:
In addition to rejecting the role, you have not attended work today and have not responded to my voice message for you to explain your absence.
That sentence was immediately followed by the statement that:
In the circumstances, we are exercising our right to effect your termination today by paying out your notice period.
Ermel submitted that the express acknowledgment in the termination letter that Ermel’s failure to attend for work was an additional reason for Ermel’s dismissal, is more reliable and ought to be preferred over Griffith’s evidence that Ermel’s absence was not a reason for the dismissal.
The letter of termination clearly records Ermel’s absence on 31 May 2013 and his failure to explain that absence as a basis for the decision to terminate Ermel’s employment. Those matters are part of “the circumstances” referred to in the letter for Dulux “exercising our right to affect your termination”.
Griffith accepted that the letter of termination recorded his reasons for dismissing Ermel, other than for the sentence dealing with Ermel’s absence. He referred to the contents of that sentence as an observation of fact rather than a reason. He asserted that the sentence was observing Ermel’s absence rather than “saying that it is a problem or that it is part of the decision making”. However, Ermel’s absence was not recorded in the letter of termination as an observation. It was recorded as a source of additional wrongdoing justifying the decision to dismiss Ermel. The terms of the letter are unambiguous and I do not accept Griffith’s evidence that the words were intended merely to record the fact that Ermel had been absent from work. The purpose of making such an observation of fact was not explained, but the purpose of the impugned sentence is clear from its content and the context in which the words appear. The usual purpose of a letter of termination is to set out the reasons for and thus the justification for the dismissal. The letter of termination takes up that common purpose and the impugned sentence can only be understood as Griffith’s expression of an additional reason relied upon by him to justify Ermel’s termination.
I accept that Griffith’s state of mind from the morning of 30 May 2013 was that he was determined to dismiss Ermel if Ermel did not accept the new position by midday on 31 May. I also accept that Simpson held the same view. In the absence of what Griffith described as “debilitating” circumstances, Griffith was fixed upon dismissal as the necessary response to a failure by Ermel to accept the new position. He considered that his credibility as a manager required the deadline to be enforced. In Griffith’s own words, the deadline “had to stand”. In that context, absent “debilitating” circumstances, whether Ermel was or was not at work on 31 May 2013 would have made no difference. If Ermel did not accept the offer by midday on 31 May he would have been dismissed. It was that state of mind which, in my view, drove Griffith (and likewise Simpson) to view the sentence in the termination letter referring to Ermel’s absence as irrelevant to the decision to dismiss him.
In my view however, the sentence was not irrelevant. In formulating the reasons for Ermel’s dismissal, Griffith chose to rely upon Ermel’s absence as an additional reason. Whether it was necessary to do so or not, at the time of the dismissal, Ermel’s absence was expressly relied upon as a reason for the decision to dismiss him from his employment. I am not satisfied that the reliance expressed in the letter of termination was unintended. To the contrary, as Simpson intimated in his evidence, a lot of thought went into the preparation of the letter of termination. Ermel’s absence from work on 31 May 2013 must therefore be regarded as an operative reason for the dismissal of Ermel from his employment.
Having made that finding, it becomes necessary for me to resolve the issues of statutory construction to which I earlier referred.
Ermel contended that s 352 does not require the absentee’s illness to be part of the reason for the dismissal which that section proscribes. That contention is misconceived.
The legislative predecessors of s 352 of the FW Act can be traced back to 1994 when s 170DF(1) of the Industrial Relations Act 1988 (Cth) (IRA Act) provided that an employer must not terminate an employee’s employment for a range of specified reasons including:
(a) temporary absence from work because of illness or injury;
That provision later became s 170CK(2)(a) of the Workplace Relations Act 1996 (Cth) and was later renumbered as s 659(2)(a) of that Act.
Section 170DF of the IR Act was located in Part VIA-Div 3 of that Act. The object of that Division as specified by s 170CA(1) of the IR Act, was to give effect to the International Labour Organisation’s (ILO) Convention Concerning Termination of Employment at the Initiative of the Employer (Convention) and the ILO’s Recommendation Concerning Termination of Employment at the Initiative of the Employer (Recommendation No 166) (Recommendation). Article 6.1 of each of the Convention and the Recommendation provided:
Temporary absence from work because of illness or injury shall not constitute a valid reason for termination.
Employees may be validly dismissed for a whole range of reasons to do with a temporary absence from work. Section 352 is not concerned with protecting employees from dismissal merely because the employee was temporarily absent from work. Consistently with the ILO standard from which the provision was initially sourced, s 352 of the FW Act seeks to negate the validity of a dismissal effectuated because the employee was temporarily absent from work because of illness or injury.
In other words, the reason for dismissal that s 352 proscribes is not merely the employee’s temporary absence but the temporary absence from work because of illness or injury. That conclusion is consistent with the legislative history of the provision, its text and the approach taken in a number of cases which have considered it or its predecessor provisions: Khiani at [34]; Stevenson v Murdoch Communities Services Inc (2010) 202 IR 266 at [102], [104], [106] and [110] (Gordon J).
In Sperandio v Lynch [2006] FCA 1648 at [91] Jessup J said:
Turning to s 170CK(2)(a) of the Act, the “reason” to which that provision refers is, I consider, the temporary absence from work. For an employer to act in breach of the provision, there must be an awareness that the absence was because of illness or injury, and the absence must be the reason for the termination. Or, to put it defensively, an employer will succeed in avoiding an adverse finding under the provision upon proving either that he or she did not know the reason for the absence or that he or she did not terminate the employment by reason of the absence. In the present case the respondents have not proved either: indeed, I find the contrary in each case.
Although Jessup J there described the reason to which the provision referred as “temporary absence from work”, it seems clear from the observation thereafter made that a breach of the provision required an awareness that the absence was because of illness or injury. That approach is consistent with that which I prefer. Ermel’s counsel sought to distinguish the observations made in the quoted paragraph on the basis that s 170CK(2) was in relevantly different terms to s 352 of the FW Act. The basis for that attempt to distinguish s 170CK(2) was that unlike s 352, the former provision used the word “because” once, not twice. However, the two provisions are in substance the same. In s 352, the conjunction “because” is used instead of “for reasons including any one or more of the following reasons”, which is the approach taken in s 170CK(2). The change made when s 352 was enacted was stylistic and not substantive: Barclay v Board of Bendigo Regional Institute of Technical and Further Education (2011) 191 FCR 212 at [24] (Gray and Bromberg JJ).
There is an obvious overlap between the subject matter dealt with by s 352 and that dealt with by s 340(1) in relation of the exercise of the workplace right provided by s 97(a). That provision provides:
An employee may take paid personal/carer's leave if the leave is taken:
(a)because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee;
…
As the Full Court in Khiani said at [34], the same question arises in relation to the taking of sick leave as a workplace right pursuant to s 340(1) as arises pursuant to s 352. The question is whether the action taken against the absent employee was taken because the employee “had a right to sick leave or had exercised it”. The prohibited reason which s 97(a) gives rise to is the taking of paid personal leave by an employee because the employee is not fit for work because of personal illness or personal injury. I reject Ermel’s contention that the prohibited reason is merely the taking of paid personal leave.
For Ermel to succeed therefore, I need to be satisfied that Griffith dismissed Ermel including for the reason that he was absent because he was ill. Dulux had the onus of rebutting the presumption made by the operation of s 361 of the FW Act. Whilst for the reasons earlier given, I am not satisfied that Ermel’s absence on 31 May 2013 was not an operative reason, Dulux has satisfied me that Ermel’s absence because he was ill was not an operative reason for his dismissal.
There was no evidence that Dulux or Griffith had any history of concern about or opposition to the taking of sick leave by employees at Dulux. Nor was there any evidence which suggested that Ermel’s history in relation to the taking of sick leave had or was in any way likely to have been a concern in the mind of Griffith. There was therefore nothing in the evidence which raised any likelihood that Griffith was motivated to take any action against Ermel (let alone the drastic action of dismissing him) because Ermel took sick leave either generally or specifically on 31 May 2013.
The only possible basis for rejecting Griffith’s denial that he was not motivated by Ermel’s absence due to illness is that I have not accepted Griffith’s evidence that he was not influenced by Ermel’s absence at all. However I do not regard Griffith to have given his evidence on that issue dishonestly. Rather, I think that he failed to appreciate the operative nature of Ermel’s absence as a reason for the dismissal in light of his emphatic view that Ermel’s refusal to accept the offer by the deadline was what drove him to dismiss Ermel.
Whilst I regard Ermel’s absence on 31 May 2013 as a minor factor in Griffith’s thinking, I consider that Griffith was at least somewhat aggrieved by that absence because, from his perspective, Ermel had once again not turned up when he had said he would to provide a response to the offer of the new position. It was in that sense that Ermel’s absence on 31 May 2013 was likely to have impacted upon Griffith’s considerations and for that reason found its way into the letter of termination. I am satisfied however that the fact that Ermel was absent because of illness was not an operative reason for Ermel’s dismissal.
That conclusion is reinforced by Griffith’s evidence that at the time he dismissed Ermel, he was not aware that Ermel’s absence was a result of Ermel taking paid personal leave or due to his illness.
Ermel challenged that evidence on the basis that there was undisputed evidence that Ermel had telephoned a receptionist at Dulux on the morning of 31 May and advised her to tell Griffith that he would be absent from work that day due to illness. Ermel contended that a Jones v Dunkel inference should be drawn from Dulux’s failure to call the receptionist.
There was no evidence that the receptionist passed on Ermel’s message to Griffith or anyone else. She may have. She may not have. She may have but for other reasons the message may not have come to Griffith’s attention.
The fact that the message was left with the receptionist falls well short of providing an irresistible basis for inferring that the message came to the attention of Griffith. That is so including because the usual manner in which such a message was communicated was to Griffith directly or to an employee within Griffith’s team. Further, the receptionist in question was relieving and not the usual receptionist.
No inference could be drawn in the face of Griffith’s unchallenged denial that he was unaware that Ermel’s illness was the reason for his absence. Implicit in that denial is a denial that the message left by Ermel ever came to Griffith’s attention. That evidence was supported by the evidence of Griffith’s attempt to contact Ermel to query his absence.
The essence of Ermel’s submission that a Jones v Dunkel inference should be drawn is that Dulux should have called the receptionist to corroborate Griffith’s evidence that the message did not come to his attention. The failure to do that, so Ermel contended, warranted an inference being drawn to the effect that the message left by Ermel did come to Griffith’s attention.
In Jones v Dunkel (1959) 101 CLR 298 at 321, Windeyer J said that “unless a party’s failure to give evidence be explained, it may lead rationally to an inference that his evidence would not help his case”. However, the rule in Jones v Dunkel “only applies where a party is required to explain or contradict something”: see Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 211 IR 1 at [29] (Moore J), citing Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2010) 187 FCR 293 at [47] (Barker J). Insofar as Dulux was required to explain that Griffith was unaware of Ermel’s illness, it did that by the evidence which Griffith gave. In that context, it is understandable that Dulux did not think it necessary to call further evidence that might have corroborated Griffith’s evidence to the effect that the message had not come to his attention. Its decision not to call that evidence does not call for a Jones v Dunkel inference to be drawn.
DISPOSITION
For those reasons, Ermel’s application must be dismissed.
Dulux did not seek an order for costs should it succeed. Accordingly, no costs order will be made.
I certify that the preceding one hundred and two (102) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg. Associate:
Dated: 28 January 2015
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