Heather v Hikvision Australia Pty Ltd
[2021] FCCA 196
•5 February 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Heather v Hikvision Australia Pty Ltd [2021] FCCA 196
File number(s): MLG 3222 of 2019 Judgment of: JUDGE RILEY Date of judgment: 5 February 2021 Catchwords: INDUSTRIAL LAW – Fair Work – adverse action – prospective employee – alleged age discrimination Legislation: Fair Work Act 2009 (Cth), ss 340, 342, 351, 360, 361 Cases cited: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; (2012) 290 ALR 647; (2012) 86 ALRJ 1044; (2012) 220 IR 445; [2012] HCA 32
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; (2014) 314 ALR 1; (2014) 88 ALJR 980; (2014) 245 IR; [2014] HCA 41
Fair Work Ombudsman v AJR Nominees Pty Ltd [2013] FCA 467
Pezzimenti v Rotary International (2019) 290 IR 219; [2019] FCCA 1854
Western Union and Business Solutions (Australia) v Robinson (2019) 272 FCR 547; (2019) 290 IR 414; [2019] FCAFC 181
Number of paragraphs: 104 Date of last submissions: 22 December 2020 Date of hearing: 15 and 22 December 2020 Place: Melbourne Counsel for the Applicant: Geoff Lake Solicitor for the Applicant: McDonald Murholme Counsel for the Respondent: Julie Zhou Solicitor for the Respondent: Nicole Dunn Lawyers Pty Ltd ORDERS
MLG 3222 of 2019 BETWEEN: LANCE HEATHER
Applicant
AND: HIKVISION AUSTRALIA PTY LTD
(ACN 164 676 671)Respondent
ORDER MADE BY:
JUDGE RILEY
DATE OF ORDER:
5 FEBRUARY 2021
THE COURT ORDERS THAT:
1.The application filed on 25 September 2019 be dismissed.
REASONS FOR JUDGMENT
INTRODUCTION
This is an adverse action claim brought under the Fair Work Act 2009 ("the Act"). It was common ground that:
(a)the applicant was offered employment with the respondent as a business development manager ("BDM");
(b)afterwards, upon request, the applicant sent the respondent a copy of his passport, which revealed that the applicant was 71 years old; and
(c)the respondent then rescinded the offer of employment.
In these circumstances, the applicant argued that the respondent had taken adverse action against him by refusing to employ him by reason of, or for reasons including, his age.
The respondent said that it did not refuse to employ the applicant because of his age, which was unknown to the decision-maker, but because its sales data required a change of business strategy. The change of business strategy made it preferable to have an internal candidate as the BDM, who could focus on existing clients who bought products at the entry and mid-level, rather than attempting to win new clients who might buy products at a higher level.
APPLICANT’S SUMMARY OF THE FACTS
In his written submissions filed on 4 December 2020, the applicant provided the following summary of the relevant facts from his point of view:
1.On 17 June 2019 the Applicant applied for the position of Business Development Manager (BDM) with the Respondent.1
1 Statement of Claim [3]; Affidavit of Lance Heather [6].
2.On 19 June 2019 Wen Shan (Ms Shan) – Recruiter at Bayside Group, telephoned the Applicant and invited him to attend an interview on 20 June 2019.2
2 Statement of Claim [4]; Affidavit of Lance Heather [8].
3.On 20 June 2019 the Applicant attended the job interview with Ms Shan and progressed to the next stage of the recruitment process.3
3 Statement of Claim [5]; Affidavit of Lance Heather [9]-[10].
4.On 21 June 2019 the Applicant attended a job interview with Rina Wan (Ms Wan) – Human Resources Manager, Oceania for the Respondent.4 Later that day, Ms Shan invited the Applicant to a third and final interview with Evan Liu (Mr Liu) – Manager Director, which took place on 25 June 2019.5
4 Statement of Claim [6]; Affidavit of Lance Heather [12].
5 Statement of Claim [7]-[8]; Affidavit of Lance Heather [13] and [15].
5.On [Friday] 28 June 2019 Ms Shan telephoned the Applicant and advised him, inter alia, that:
(a)the Applicant was the successful candidate from five other applicants and would be offered the role of Business Development Manager;
(b)the Applicant’s expected start date was 15 July 2019; and
(c)the Applicant should expect an official email of offer from the Respondent on either 1 or 2 July 2019.6
6 Statement of Claim [9]; Affidavit of Lance Heather [17].
6.On [Tuesday] 2 July 2019 Ms Wan sent an email to the Applicant in which she offered the Applicant employment with the Respondent (Offer of Employment).7
7 Statement of Claim [10]; Affidavit of Lance Heather [19].
7.The terms of the Offer of Employment included, inter alia, that:
(a)the Offer of Employment would be open for acceptance until 4 July 2019;
(b)the employment would be permanent full-time in nature;
(c)the Applicant would be remunerated at a base rate of $125,000 per annum plus superannuation and a car allowance of $18,000; and
(d)the Applicant would commence work on 15 July 2019.8
8 Statement of Claim [11]; Affidavit of Lance Heather [19].
8.Relevantly, and contrary to the Defence at paragraph 10, the Offer of Employment was not made conditional in any way, including by making it subject to:
(a) the Applicant providing further information as requested;
(b) satisfactory reference checks being completed; or
(c) the drawing up and execution of a formal contract of employment.
9.On 2 July 2019 the Applicant sent an email to Ms Wan in which he accepted the Offer of Employment and attached copies of his passport and an Employee Information form, which disclosed the Applicant’s date of birth and age, being 71 years at the time (the Age Disclosure).9
10.On 3 July 2019 Ms Wan sent an email to the Applicant in which she confirmed receipt of the Age Disclosure.10 Later that day, she telephoned the Applicant and congratulated him on securing the role with the Respondent. She further advised him that he would be required to attend a company conference in Sydney the following week.11
11.On [Friday] 5 July 2019 Ms Shan and the Applicant had a telephone discussion during which, inter alia:
(a)Ms Shan told the Applicant that the Respondent had ‘rescinded’ the Offer of Employment (the Refusal to Employ); and
(b)the Applicant queried whether the Refusal to Employ was related to his age and Ms Shan refused to respond.12
12.On 5 July 2019 Ms Wan sent an email to the Applicant titled “About Rescinding the Offer Letter”, which confirmed the Refusal to Employ.13
9 Statement of Claim [12]; Affidavit of Lance Heather [20]-[21].
10 Statement of Claim [13]; Affidavit of Lance Heather [22].
11 Statement of Claim [14]; Affidavit of Lance Heather [23].
12 Statement of Claim [15]; Affidavit of Lance Heather [24].
13 Statement of Claim [16]; Affidavit of Lance Heather [25].
The respondent did not accept all of those assertions of fact.
RESPONDENT’S SUMMARY OF THE FACTS
In its written submissions filed on 30 November 2020, the respondent provided the following summary of the relevant facts from its point of view:
2.Hikvision Australia Pty Ltd (‘Hikvision’) is a manufacturer and supplier of video surveillance products. Hikvision’s parent company is headquartered in China. In Australia, Hikvision has three offices in Sydney, Melbourne and Brisbane. Its products are predominantly sold through distributors, who promote and sell their products to downstream clients.1
1 Unsworn affidavit of Liang Liu filed 12 June 2020, [5], [8]-[9].
3. Hikvision has three levels of market for its products:
a)High-level market, which includes large corporate and government clients, often for products that include more advanced technologies, such as facial recognition technology;
b)Mid-level market, which includes small to medium sized enterprises and less high-tech products; and
c)Entry-level market, which includes mainly residential products and clients.2
2 Ibid, [25].
4. In August 2018, Mr Liang Liu joined Hikvision as the CEO. At the time, Hikvision's Melbourne office had a total of six staff members, including one Business Development Manager (‘BDM’).3
3 Ibid [10].
5.Between late 2018 and early 2019, five staff members left Hikvision’s Melbourne office.
6.In or around early June 2019, Hikvision commenced recruitment for the role of a BDM based in the Melbourne office. The recruitment process was undertaken by Hikvision's HR manager, Ms Rina Wan and an external recruitment agency, Bayside Group Automotive (‘Bayside’).
7.On 20 June 2019, Bayside recommended two candidates for the BDM role, including the Applicant, Mr Heather.4
4 Unsworn affidavit of Ms Rina Wan filed 12 June 2020, [14].
8.On 21 June 2019, Ms Wan interviewed Mr Heather, in addition to other candidates for the role, approximately ten in total.5
9.On 25 June 2019, Mr Liu interviewed Mr Heather for the BDM role in Melbourne.6
10.On or around 1 July 2019, Mr Liu made the decision to offer Mr Heather the BDM role, and told Ms Wan.7
11.On 1 July 2019, Ms Wan called Mr Heather and made a verbal offer of employment, conditional upon background and reference checks.8
12.On 2 July 2019, Ms Wan emailed Mr Heather a written offer (‘Offer’), open for acceptance until 4 July 2019, and stated “[s]hould you accept this offer, please provide the following files/information with acceptance confirmation, so that formal employment contract could be made accordingly”.9 The email attached an employee information sheet form, which sought – inter alia – consent from the employee for background checks to be conducted.
13.On the same day, Mr Heather accepted the offer and returned the completed form, along with a copy of his passport.10 The completed form and passport copy contained Mr Heather’s date of birth.
14.After receiving Mr Heather’s completed form and passport copy, Ms Wan asked Bayside to conduct reference checks.11
15.At around the same time as the Offer, in June-July 2019, Mr Liu received Hikvision’s sales data as part of the company’s midyear review.12 Due to the results of the midyear review, Mr Liu decided to change Hikvision’s business strategy and to recruit an internal candidate to the role of BDM.
16.On or around 3 July 2019, Mr Liu met with Ms Wan, told Ms Wan that he has decided to redeploy an internal candidate to the role of BDM and that Ms Wan was to rescind the offer to Mr Heather.13
17.On 5 July 2019, Ms Wan emailed Mr Heather to rescind the offer and to apologise.
5 Ibid [15].
6 Unsworn affidavit of Liang Liu filed 12 June 2020, [18]-[22].
7 Ibid [23].
8 Unsworn affidavit of Ms Rina Wan filed 12 June 2020, [22].
9 Unsworn affidavit of Lance Heather filed 30 April 2020, Annexure LH-5.
10 Ibid, Annexures LH-7 and LH-8.
11 Unsworn affidavit of Ms Rina Wan filed 12 June 2020, [28].
12 Unsworn affidavit of Liang Liu filed 12 June 2020, [24], Annexure LL-1.
13 Ibid [35], Unsworn affidavit of Ms Rina Wan filed 12 June 2020, [29].
The applicant did not accept all of those asserted facts.
ISSUE IN DISPUTE
The parties were in agreement that the applicant was a prospective employee, and that the refusal to employ him was adverse action. They agreed that the decision maker was Liang Liu, the Chief Executive Officer of the respondent. There was agreement that the reverse onus applies. The only issue for the court to determine was whether the respondent had discharged the reverse onus in relation to the question of whether the respondent did not employ the applicant because of, or for reasons including, his age.
MATERIALS RELIED UPON
The parties did not state explicitly which materials they relied upon. However, it appears that the applicant relied upon:
(a)his application filed on 24 September 2019;
(b)his form 2 filed on 24 September 2019;
(c)his statement of claim filed on 27 November 2019;
(d)his reply filed on 8 January 2020;
(e)his unsworn affidavit filed on 30 April 2020;
(f)his unsworn affidavit filed on 10 July 2020; and
(g)his written submissions filed on 4 December 2020.
It appears that the respondent relied upon:
(a)its defence filed on 18 December 2019;
(b)the unsworn affidavit of Rina Wan filed on 12 June 2020;
(c)the unsworn affidavit of Liang Liu filed on 12 June 2020;
(d)its written submissions filed on 30 November 2020;
(e)its written submissions in reply filed on 9 December 2020; and
(f)its amended closing written submissions emailed to chambers on 23 December 2020.
LEGISLATION
Section 340 of the Act provides as follows:
Protection
(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.
Note: This subsection is a civil remedy provision (see Part 4 1).
(2)A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.
Note: This subsection is a civil remedy provision (see Part 4 1).
Section 342 of the Act relevantly provides that a prospective employer takes adverse action against a prospective employee if the prospective employer refuses to employ a prospective employee.
Section 351(1) of the Act provides as follows:
Discrimination
An employer must not take adverse action against a person who is … [a] prospective employee … of the employer because of the person’s … age ...
There are various exceptions to that provision but it was not suggested that any of them apply in the present case.
Section 360 of the Act provides as follows:
Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
Section 361 of the Act provides as follows:
Reason for action to be presumed unless proved otherwise
(1) If:
(a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2) Subsection (1) does not apply in relation to orders for an interim injunction.
(3) Subsection (1) does not limit section 550.
AUTHORITIES
The leading case on adverse action is Board ofBendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; (2012) 290 ALR 647; (2012) 86 ALJR 1044; (2012) 220 IR 445; [2012] HCA 32. In that case, French CJ and Crennan J said:
42.Determining why a defendant employer took adverse action against an employee involves consideration of the decision-maker's "particular reason" for taking adverse action (s 361(1)), … at the time the adverse action was taken (ss 342, 346(a), 346(b), 347 and 361(1)).
43.Clearly a defendant employer interested in rebutting the statutory presumption in s 361 can be expected to rely in its defence on direct testimony of the decision-maker's reason for taking the adverse action. The majority in the Full Court correctly rejected an argument put by the respondents that the introduction of the statutory expression "because" into a legislative predecessor to s 34619, in place of the previous statutory expression "by reason of",20 rendered irrelevant the state of mind of the decision-maker.21
44.There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression "because" in s 346, or the statutory presumption in s 361, as requiring only an objective enquiry into a defendant employer's reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains "why was the adverse action taken?".22
45.This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer.23 Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker24 or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.25
…
54.In Pearce, an employee who was a member of an organisation registered under the Conciliation and Arbitration Act 1904 (Cth) was dismissed from his employment. A director of the defendant employer gave evidence that the employee was not dismissed “because of being in a union”, but rather because he was dissatisfied with his wages and conditions40. A question arose as to whether the director’s evidence was sufficient to satisfy the onus cast upon the employer. In deciding that the director’s evidence was sufficient, the majority in Pearce recognised that mere declarations of an innocent reason or intent in taking adverse action may not satisfy the onus on an employer if contrary inferences are available on the facts41. In the minority, Isaacs and Higgins JJ decided that the director’s evidence of his reasons for dismissing the employee did not satisfy the onus because other evidence given by the director had contradicted it. In considering this issue, Isaacs J recognised that it is not possible to “peer into [an employer’s] mind”42. Equally, it is not possible in a curial process to plumb the depths of “[an employer’s] unconscious”43.
19 Section 334 of the Industrial Relations Act 1988 (Cth) (as enacted).
20 The expression “by reason of” last appeared in s 5(1) of the Conciliation and Arbitration Act 1904 (Cth) (as amended by the Conciliation and Arbitration Amendment Act 1984 (Cth)).
21 Barclay (2011)at [25].
22 Purvis v New South Wales (2003) 217 CLR 92; 202 ALR 133; 77 ALD 570; [2003] HCA 62 at [236] per Gummow, Hayne and Heydon JJ.
23 See, for example, General Motors-Holdens Pty Ltd v Bowling (1976) 51 ALJR 235 at 241; 12 ALR 605 at 617 (Bowling) per Mason J.
24 See, for example, Pearce v WD Peacock & Co Ltd (1917) 23 CLR 199 at 208; 23 ALR 212 at 216; [1917] HCA 28 (Pearce) per Isaacs J, at CLR 211; ALR 217–18 per Higgins J.
25 See, for example, Harrison v P & T Tube Mills Pty Ltd (2009) 188 IR 270; [2009] FCAFC 102 at [31]–[33].
40 Pearce (1917) 23 CLR 199 at 202.
41 Pearce (1917) 23 CLR 199 at 203 per Barton A-CJ (with whom Gavan Duffy and Rich JJ agreed). See, subsequently, Heidt v Chrysler Australia Ltd (1976) 26 FLR 257; 13 ALR 365; Lewis v Qantas Airways Ltd (1981) 54 FLR 101.
42 Pearce (1917) 23 CLR 199 at 206.
43 Barclay v Board of Bendigo Regional Institute of Technical and Further Education (2011) 191 FCR 212 at 221 [28] per Gray and Bromberg JJ.
Also in Barclay, Gummow and Hayne JJ said:
79.With respect to the operation of s 9, Barton A-CJ said57: “No doubt, it is an inquiry in a large measure as to motive; and no doubt also, the motive is to be inferred from facts, and mere declarations as to the mental state that prompted the employer’s action are entitled to little or no regard.”
…
104.In light of the legislative history of s 346 and the intention of Parliament outlined above, the reasoning of Mason J in Bowling is to be applied to s 346. An employer contravenes s 346 if it can be said that engagement by the employee in an industrial activity [or other protected activity] comprised "a substantial and operative" reason, or reasons including the reason, for the employer's action and that this action constitutes an "adverse action" within the meaning of s 342.
…
127.In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a “substantial and operative factor” as to constitute a “reason”, potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.
57 (1917) 23 CLR 199 at 203.
Additionally, in Barclay, Heydon J said:
141.Dr Harvey gave an account of her mental processes in an affidavit. The respondents’ searching cross-examination of her is recorded over seventy pages of the trial transcript. The record of her re-examination extends over three pages of that transcript. The assessment of a witness’s mental processes is an assessment of that witness’s state of mind. It is pre-eminently a matter in which a trial judge has a considerable advantage over an appellate court. In the course of his great speech in Nocton v Lord Ashburton, Viscount Haldane LC said:110
“it is only in exceptional circumstances that judges of appeal, who have not seen the witness in the box, ought to differ from the finding of fact of the judge who tried the case as to the state of mind of the witness.”
The trial judge possesses great learning in the present field. He has considerable experience of oral hearings. He said that Dr Harvey “provided convincing and credible explanations of why it was that she took the steps she did”. He said that she “maintained her denials of having acted against Mr Barclay for any reason associated with his union membership, office or activities”. He concluded: “I accept her evidence. I am satisfied that she did not act for any proscribed reason. Rather, she acted for the reasons which she gave”.111 Of course, “mere declarations” by a witness as to his or her “mental state” may not be sufficient to discharge the appellant’s burden of proof under s 361112. External circumstances could put into question the reliability or credibility of those declarations. But Dr Harvey’s evidence did not consist only of “mere declarations”. There was nothing to suggest that her evidence was incorrect.
110 [1914] AC 932 at 957. See also at 945 and 949. And see Clark Boyce v Mouat [1994] 1 AC 428 at 436-437.
111 (2010) 193 IR 251 at 257-258 [54].
112 Pearce v W D Peacock & Co Ltd (1917) 23 CLR 199 at 203 per Barton ACJ; [1917] HCA 28.
Significantly, s.361 of the Act creates a statutory presumption that adverse action was taken for a prohibited reason, but that presumption may be rebutted by evidence. Also significantly, s.360 of the Act recognises that there may be multiple reasons for a particular action. It is sufficient for an applicant to establish that any one of the reasons for the adverse action was a prohibited reason, provided that it was a substantial and operative reason.
In addition, in Western Union and Business Solutions (Australia) v Robinson (2019) 272 FCR 547; (2019) 290 IR 414; [2019] FCAFC 181, O'Callaghan and Thawley JJ said:
115.First, putting to one side whether any of the exceptions in s 351(2) apply, the Court’s task in determining the application of s 351(1) is to determine, on the balance of probabilities, why the employer took adverse action against the employee, and to ask whether it was for a prohibited reason or reasons which included a prohibited reason — see: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 (Barclay) at [5] (French CJ and Crennan J); at [101] (Gummow and Hayne JJ).
116.Secondly, where adverse action is taken as a result of a decision made by an individual within a corporation, the identification of the operative reasons for taking the adverse action turns on an inquiry into the mental processes of the relevant individual: Barclay at [140] (Heydon J); Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243 (BHP) at [7] (French CJ and Kiefel J); [85] (Gageler J).
117.Thirdly, the object of that inquiry is to determine the actual reasons. These are determined from all of the facts and circumstances and inferences properly drawn from them. In light of s 361, one would ordinarily expect direct evidence from the individual responsible for the employer’s action as to their reasons for that action, which may properly include positive evidence that the action was not taken for a prohibited reason. Of course such statements must be assessed against all of the facts and circumstances. In Victoria v Grant (2014) 246 IR 441 at [32], Tracey and Buchanan JJ summarised the following propositions from Barclay at 517 (French CJ and Crennan J); 542 (Gummow and Hayne JJ); 545-546 (Heydon J) and BHP at [19]-[22] (French CJ and Kiefel J); [85]-[89](Gageler J):
•The central question to be determined is one of fact. It is: “Why was the adverse action taken?”
•That question is to be answered having regard to all the facts established in the proceeding.
•The Court is concerned to determine the actual reason or reasons which motivated the decision-maker. The Court is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker. Nor should such an enquiry be made.
•It will be “extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer.”
•Even if the decision-maker gives evidence that he or she acted solely for non proscribed reasons other evidence (including contradictory evidence given by the decision-maker) may render such assertions unreliable.
•If, however, the decision-maker’s testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by s 361.
Also, in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; (2014) 314 ALR 1; (2014) 88 ALJR 980; (2014) 245 IR; [2014] HCA 41 Crennan J said at [56]:
… It is open to a trier of fact to accept as honest and credible a decision-maker’s explanation of his or her decision for taking adverse action, then to weigh all the evidence (including an assertion that the decision-maker did not act for any prohibited reason) but not be satisfied that an employer has discharged the statutory onus of proving that the reasons did not include any prohibited reason.
MR LIU’S REASONS AS STATED IN HIS AFFIDAVIT
Mr Liu said in his affidavit that:
(a)he is the Chief Executive Officer of the respondent, which is the Australian subsidiary of Hangzou Hikvision Digital Technology Co Ltd ("Hangzou");
(b)Hangzou has its headquarters in China; and
(c)Hangzou is a manufacturer and supplier of video surveillance products.
Mr Liu went on to say in his affidavit:
BDM RECRUITMENT
14.Due to a significant loss of staff at our Melbourne office, I had to recruit a number of roles there. One of the roles Hikvision was recruiting for in or around June 2019 was the role of a BDM.
15.A BDM is responsible for duties such as exploring and following up on sales opportunities, developing new customers and growing customer business, hitting sales targets, and working with Hikvision's internal and external stakeholders to turn potential sales opportunities into business for Hikvision.
16.I delegated the recruitment process to my HR Manager, Rina Wan ('Rina'). After. Rina had reviewed the initial applications, she provided a number of CVs to me for review so that I could interview the candidates.
17.I recall that I flew down to Melbourne a few times in June 2019 and interviewed around six to eight candidates in total for the BDM role.
INTERVIEW WITH LANCE HEATHER
18.On or around 25 June 2019, I recall I had a face-to-face interview with Mr Heather for the BDM role at Hikvision's Melbourne office.
19.I asked him questions about his experience at his former employer NEC Australia, and the type of customers and product solutions he was responsible for there.
20.I also recall that I asked him words to the effect "what experience do you have with facial recognition products?" He told me that he had experience working with clients at NEC Australia such as casinos and governments.
21.I asked him words to the effect "what is your project management experience?" and "what do you know about Hikvision and its products?" I recall he did not provide very detailed responses about Hikvision's products.
22.I did not know Mr Heather's age at the interview. I did observe that he was a more senior person with grey hair, but I did not think much about his age. What I cared about was his customer and product experience.
23.After the interview, on or around 1 July 2019, I said to Rina that we should make an offer to Mr Heather with a salary of between $120,000 to $130,000 per annum. The reason that I initially offered Mr Heather the role was that he had experience at NEC Australia with facial recognition products and working with customers in high-level markets such as government and casino. Hikvision also supplied facial recognition products and I felt like his experience would assist us in entering the high-level market.
MID-YEAR REVIEW AND CHANGE OF BUSINESS STRATEGY
24.At around the same time as the interview with Mr Heather, Hikvision had its mid-year review. In or around June and July every year, I receive Hikvision's sales data for the first half of the year and the analysis of that data. I review the sales data and formulate our business strategy for the second half of the year. Now produced and shown to me marked 'LL-1' is a true copy of the sales data for Victoria I reviewed.
The sales data was as follows:
HIKVISION
2019 Mid-Year Business Review _ Challenges
☐ VIC State : Sales revenue is a negative growth
2019Q2 NSW QLD VIC & TAS WA SA & NT
ACT Others Total 2018 [unknown language characters]
27% 25% 24% 12% 7% 2% 3% 2019 [unknown language characters]
28% 28% 21% 14% 7% 2% 2019 Growth Rate 7% 15% -8% 15% 2% 8% 3% ☐ VIC State : the sales volume from valued customers is dramatically dropped
Level $ Q2_19 $ YTD_19 QonQ% YonY% Diamond 106,970.55 368,739.27 -51.3% 18.9% Platinum 573,125.86 1,017,301.96 -31.4% -27.0% Gold 326,830.95 671,815.57 43.9% 21.8% Silver 658,669.31 1,261,762.31 -7.8% -9.3% Ruby 105,842.07 225,851.07 -9.5% -7.0% [unknown language characters] 1,771,438.74 3,545,470.18 -16.2% -8.9%
See Far, Go Further
The information is confidential and only used for the designated purpose
Mr Liu continued in his affidavit as follows:
25.Hikvision's business strategy is based on the three levels of market for our products:
a.High-level market: this includes large corporate and government clients with bigger budgets for our products. The products for this market often include more advanced technologies, such as facial recognition technology;
b.Mid-level market: this includes small to medium sized enterprises. The products are not as high tech as the products tailored for the high-level market; and
c.Entry-level market: this includes mainly residential products and clients.
26.When I joined Hikvision in Australia in August 2018, I observed and understood that Hikvision had a reasonable share of the mid-level market for video surveillance products in Australia. My strategy for Hikvision at the time was to enter the high-level market and get larger corporate and government clients, this is what I did with Hikvision in South Africa. This was part of the reason why I initially wanted to recruit a BDM like Mr Heather, who had experience working with larger clients and with facial recognition products.
27.When I received our sales data for the mid-year review, two factors caused me to change business strategy and the type of BDM I wanted to recruit for our Melbourne office.
28.First, I realised that we were at risk of losing our existing client base. This was partly due to the significant loss of staff we had at the Melbourne office. As I mentioned in paragraph 11, after I joined Hikvision in Australia in August 2018, we lost five (5) out of six (6) staff members in the Melbourne office by mid-2019. We also had problems with our relationship with the distributors. As customer support was mainly provided by our local offices and distributors, this meant that our clients in Melbourne were receiving less support and service than they had received previously. Now produced and shown to me marked 'LL-2' is a true copy of the list of roles vacated in the Hikvision Melbourne office between August 2018 and December 2019.
29.Having conducted the mid-year review, I decided to change Hikvision's business strategy from attempting to enter the high-level market to focussing instead on retaining our existing clients in the mid-level market and building the team in Melbourne.
30.The second reason for why I changed Hikvision's business strategy was that during the mid-year review, I believed it would be very difficult for Hikvision to enter the high-level market in Australia. At the time, I was new to the Australian business of Hikvision. I believed that the demand for facial recognition technology in the high-level market in Australia was not high. Moreover, because of the trade tensions between China and the United States of America in late 2018 and early 2019, I believed there was a negative perception of the information security of our products in the market, and consequently it would be difficult for us to get clients in the high-level market and I changed my mind with the strategy and decided it was not a good idea to replicate what I did in South Africa with Hikvision Australia. Given the difficult of trying to enter the high-level market in Australia, I decided it was better to focus on retaining our clients in the mid-level market.
RECRUITING THE BDM ROLE
31.As I had changed strategy to focus on retaining existing clients, I decided that it was important that the BDM in Melbourne was a person who had knowledge and experience with our existing clients and products. I realised that at the Hikvision office in Melbourne, we had an internal candidate who was suitable for the role.
32.Wenjie ('Wendy') Sun is a staff member who joined Hikvision's Melbourne office in February 2019. In early 2019, Mr Cai the former CEO of Hikvision Beijing introduced me to Wendy. Mr Cai was Wendy's manager during her employment with Hikvision Beijing. …
Mr Liu then explained in his affidavit that:
(a)Mr Cai recommended Wendy to him in early 2019;
(b)in February 2019, Wendy began working for the respondent in a technical role, although she had expressed a preference for a sales role;
(c)on 2 or 3 July 2019, Mr Liu asked Wendy if she would be interested in the BDM role;
(d)she said she would be; and
(e)Mr Liu said he would put her in the role on a trial basis, and, if it worked out, they would sign a contract.
Mr Liu then said in his affidavit that:
34.The contract with Wendy was not formally amended to reflect her appointment to the BDM role until on or around 14 August 2019. The reason it was not amended until August was because my usual practice was to trial a person in the role first. Now produced and shown to me marked 'LL-3' is a true copy of the Amendment to Contract signed by Wendy and myself on 14 August 2019 and 12 August 2019 respectively.
35.After I agreed with Wendy to redeploy her to the BDM role, on or around 3 or 4 July 2019, I met with Rina and we had a discussion to the following effect:
I said:
"I've decided to change business strategy because of the mid-year review, and I want to focus on retaining existing clients. We have had six or seven staff resign and five out of six are from the Melbourne office since I started, and we are losing customers in Victoria. I've decided to redeploy Wendy to the BDM role to focus on our existing customers."
Rina replied:
"I've already made an offer to Mr Heather. The contract has not been signed. We could rescind the offer."
I replied:
"Please pass on my apologies to Mr Heather, but he is not suitable for the role I have now decided we need. I do want to keep Mr Heather in mind for any non-ongoing opportunities at Hikvision."
She replied:
"Okay, I will let Mr Heather know."
36.After Wendy commenced in the BDM role, I eventually hired two more BDMs for the Melbourne office. One of the two BDMs I later hired was a former BDM at Hikvision who returned to work for us. The other one used to work at a distributor for one of our main competitors in the entry to mid-level market in Australia. I did not consider Mr Heather to be suitable for either of these roles, because our business strategy is still to focus on retaining existing clients in the mid-level market.
MR HEATHER'S AGE
37.At all relevant times, I did not know Mr Heather's age, including from the time I interviewed him on 25 June 2019 to when I asked Rina to withdraw the offer on 3 or 4 July 2019, I recall it was just before I left for China which was on 4 July 2019.
38.I am the decision-maker in the hiring of the BDM role. However, I do not deal with the day-to-day tasks of recruitment. I do not know what forms are filled out and what information is provided by the candidates. In a typical recruitment process, I would only see the final contract of employing for signing. Rina, as Hikvision's HR Manager, deals with the day-to-day tasks of recruitment.
39.I have not received any documents from Rina or anyone else at Hikvision that included Mr Heather's age or date of birth.
40.Mr Heather's age played no part in my decision not to hire him. My decision was only based on the new business strategy and the suitability of the internal candidate for that role, as set out in paras 24 – 30 of this affidavit.
Ms Wan said in her affidavit that:
(a)when she recruited the applicant, she had worked in human resources for about 15 years, of which 10 years was in China and five years was in Australia;
(b)on 20 May 2019, she began working as HR manager for the respondent;
(c)from 20 May 2019 until early June 2019, she was engaged in training and orientation as a new staff member;
(d)on 7 June 2019, Mr Liu asked her to recruit a BDM for Melbourne;
(e)also on 7 June 2019, she contacted Ms Shan at Bayside Group Automotive to start the recruitment process;
(f)on 20 June 2019, Ms Shan recommended two candidates to Ms Wan;
(g)the two candidates were the applicant and a woman;
(h)Ms Shan said that she recommended the applicant because he could assist Hikvision in expanding into large enterprises and more lucrative markets; and
(i)on 21 June 2019, Ms Wan interviewed the applicant by Zoom.
Ms Wan went on to say in her affidavit that:
16.During the interview, I did not know Mr Heather's age and I did not ask him what his age was. I knew from my previous experience in HR in Australia that it was prohibited to discriminate on the basis of age. I did observe on our Zoom video call that he was older, but it was not something I thought about. We have employees of all ages at Hikvision. In fact, at that time, one of our BDMs in Sydney was a mature age worker and I believed it was not uncommon for staff in sales or business development roles at Hikvision to be older and some of our technical staff to be younger.
17.In addition to engaging Bayside to conduct the recruitment, I also sourced candidates on Linked In for the recruitment of the BDM role. In total, I interviewed around ten people by telephone and Zoom, including Mr Heather.
18.After my interview with Mr Heather, I asked Bayside to arrange for him to attend an interview with Evan. I recall that Evan was in Melbourne the following week for business and I scheduled meetings for him to interview six candidates over two afternoons. As I was new to the Hikvision, I was not familiar with Evan's management style or hiring preferences, so I thought it would be best that I organise more interviews than I normally would for the CEO to interview for this role.
19.During Evan's business trip to Melbourne, on or around morning 28 June 2019, we spoke about the interviews and had a telephone discussion to the following effect:
He said:
Out of the six candidates I interviewed, Mr Heather was the most suitable for the role because of his previous experience at NEC Australia. NEC is an electronics company. The problem with Mr Heather and the other candidates is that none of them are familiar with Hikvision's products. It will be a problem as Hikvision has over 100 products and as none of them know our product range it will not help us move ahead.
I replied:
Yes, that might be a problem. While the head-hunter told me that Lance had an influence on C level [CEO/CIO/CFO and executive members] and he might be a good candidate for high-end market, you told me that we want to break through the new business area into the high-end market.
…
21.After Evan returned from Melbourne, in the early morning of 1st July 2019, I met with him to seek his further comments on other candidates, so I could give them feedback. We had a discussion to the following effect:
I said:
Is it okay to offer Lance Heather $125,000 per annum, it's the middle point between $120K and $130K, so would that be okay?
Evan replied:
Yes that's fine.
22.I refer to paragraph 23 of the Heather affidavit, where Mr Heather deposes that I called him on 3 July 2019 to congratulate him on securing the role at Hikvision. I did not speak with Mr Heather on 3 July 2019, and I deny that I ever congratulated Mr Heather for securing a role. The offer is conditional on background and reference checks and internal approval processes and I never telephone any candidate to congratulate them. I called Mr Heather on 1 July 2019. I remember that I called him on that day because my usual practice is to call a candidate to speak with him or her about the offer first, and then issue the written offer. On this occasion, I remember that I called Mr Heather the day before I issued him the written offer, which I issued on 2 July 2019. I set out the actual content of my conversation with Mr Heather on 1 July 2019 in the following paragraph.
23.On 1 July 2019, during my telephone conversation with Mr Heather,
a.I asked him words to the effect "would you be ok with an offer of $125,000 per annum?" I through Mr Heather was keen on the role because he immediately told me that it was "ok".
b.I asked him words to the effect, "if we thought you were the right candidate, when would you be able to start?" He said words to the effect, "I'm flexible with the date". I recall that we agreed to a start day of 15 July 2019.
c.I do recall that there was a security industry conference in Sydney in late July 2019. I said to him words to the effect: "if you start on 15 July 2019, there might be a possibility that you could attend the security industry conference as an employee of Hikvision". I did not 'require' him to represent Hikvision at the conference. It was discussed as a possibility.
24.On 2 July 2019, following my conversation with Mr Heather the previous day, I made a written offer to him by email. The offer attached an employee information sheet form, which he was required to fill out as part of the hiring process. I refer to Annexure LH-5 of the Heather Affidavit, which exhibits a copy of the written offer I sent on 2 July 2019.
25.On the same day, Mr Heather returned by email his completed form and a copy of his passport. I refer to Annexures LH-6 and LH-8 of the Heather Affidavit, which exhibits a copy of Mr Heather's email and completed form received on 2 July 2019. I did notice Mr Heathers age, however I don't think age is a barrier to business development in Australia, especially in high-end markets.
26.On the same day, I emailed Mr Heather acknowledging receipt of the email and stating that I was waiting for Bayside to complete the reference check. I refer to Annexure LH-7 of the Heather affidavit, which exhibits a copy of my email acknowledging receipt.
27.I did not forward Lance's email attaching his completed form or passport copy to Evan, nor did I give him this information in any other way. Now produced and shown to me marked 'RW-3' is a true copy of the outlook search which shows that I did not forward this information to Evan.
28.After I received Mr Heather's completed form, I contacted Ms Shan at Bayside by telephone and asked her to do reference checks. I had not heard back from her about the reference check and 2 days later I advised her that Hikvision decided to rescind the offer.
Rescinding the offer to Lance
29.On 3 July 2019, late in the afternoon, I met with Evan after his mid-year review of the company. He said to me words to the effect:
After the mid-year review, I've been thinking about the BDM role and have decided that we need to focus on keeping the business we have so I've decided to redeploy Wendy Sun, a technical support officer at the Melbourne office, into the BDM role. I think that's the best way to stabilise the business given the current status of Victorian team and customer relation.
We've had about five of six people leave by the middle of this year and have lost customers in Victoria, the Victorian business is declining and we need to work on keeping what we have. I think as our customers know Wendy, it's best that she be put into the role and that we don't introduce new staff. I think introducing new people may be destabilising to the business. Wendy knows the business, the customers and our products, I think this is the best way to maintain our existing customer base.
I replied:
I understand, but I have already made an offer to Mr Heather. In this case, should we rescind the offer?
Evan replied:
Please pass on my apologies to Mr Heather, you need to rescind the offer for the BDM role. Although we don't have anything for him permanently, or full-time, we could perhaps engage him in a consulting role opportunity if one comes up.
I replied:
Okay, I will contact Bayside and Mr Heather and let him know.
30.After my conversation with Evan, on 4 July 2019 I called Ms Shan at Bayside and we had a discussion to the following effect:
I said:
The CEO has decided to fill the BDM role internally and we need to rescind the offer to Lance Heather. It's Thursday today, we should let him know on Friday, so he has the weekend to process it.
Ms Shan replied:
I'm a bit disappointed, I've put in a lot of effort for this role and now I won't get any commission, but I understand, I'll call Lance tomorrow.
I replied:
I'll email him once you have called him. Thank you for letting me know after your call.
31.I remember it was a Thursday. At the time, I thought it was bad news and Mr Heather would likely be disappointed, so I thought letting him know on Friday would be better so he could process it over the weekend.
32.On 5 July 2019 I receive a call from Ms Shan and we had a discussion to the following effect:
Ms Shan said:
I've spoken with Lance. I informed him of Hikvision's decision and we did not talk much.
I replied:
I'll email him now.
33.On 5 July 2019, I emailed Lance to rescind the offer and to apologise. I refer to Annexure LH-9 of the Heather affidavit, which exhibits a copy of my email entitled "About rescinding the Offer letter".
The hiring process
34.At the time I rescinded the offer on 5 July 2019, Mr Heather's offer was conditional upon reference checks being completed and the hiring process being concluded.
…
36.At the time the offer was rescinded on 5 July 2019, I had not heard back from Bayside about Mr Heather's reference check. I also had not commenced the internal new hire approval process on the OA System.
…
37.After Wendy Sun was placed internally into the BDM role, I recruited another two BDMs for the Melbourne office on 1 August 2019 and 2 December 2019. One of those employees was Mr Cliff Simons, a former staff member who had worked in a Senior BDM role at Hikvision between July 2015 and July 2018. He returned to work at Hikvision and said to me upon his return that: "I'm keen to work with the new CEO, Evan, I've heard on the grapevine that he is a good and inclusive leader". I understand from assisting in the recruitment process for Mr Simons that he was considered suitable for the role because he had experience with existing Hikvision customers and products, and could recover customer relationships lost during the period of high staff turnover in the Melbourne office in 2018/2019. The other BDM role was filled by a former employee from a national distributor of our main competitor in the Australian middle-level market. Both Mr Simons and the other employee who secured the BDM role are both very familiar with Hikvision's products.
WHETHER MR LIU WAS AWARE OF THE APPLICANT’S AGE
It was implicit in the applicant’s case that he is older than he looks, given that the decision-maker met him in person. I am unable to say whether the applicant is older than he looks. Firstly, the hearing was conducted by Microsoft Teams. When the applicant commenced giving evidence, relative to the camera, he was sitting at the far end of a board table. When the court asked for the applicant to be seated in a position more usual for Microsoft Teams hearings, which does give a very good view of witnesses’ faces, he sat somewhat closer to the camera. However, my view of him was still far from ideal. All I could say is that the applicant appeared to have white hair, and he looked like an older person.
Secondly, my subjective views of the applicant’s age are not relevant. The only view of the applicant’s age that matters in this case is Mr Liu’s view, if he had a view at all.
The respondent argued that it had discharged the reverse onus, firstly, because Mr Liu was not aware of the applicant’s age. It was argued, correctly, that Mr Liu could not have decided to rescind the offer of employment to the applicant because of his age if Mr Liu had no knowledge of the applicant’s age.
Mr Liu met the applicant during a face-to-face interview on or about 25 June 2019. Mr Liu said in his affidavit that:
22. I did not know Mr Heather's age at the interview. I did observe that he was a more senior person with grey hair, but I did not think much about his age. …
…
37.At all relevant times, I did not know Mr Heather's age, including from the time I interviewed him on 25 June 2019 to when I asked Rina to withdraw the offer on 3 or 4 July 2019 ....
38.I am the decision-maker in the hiring of the BDM role. However, I do not deal with the day-to-day tasks of recruitment. I do not know what forms are filled out and what information is provided by the candidates. In a typical recruitment process, I would only see the final contract of employing for signing. Rina, as Hikvision's HR Manager, deals with the day-to-day tasks of recruitment.
39.I have not received any documents from Rina or anyone else at Hikvision that included Mr Heather's age or date of birth.
40.Mr Heather's age played no part in my decision not to hire him. …
Ms Wan said in her affidavit that:
24.On 2 July 2019, following my conversation with Mr Heather the previous day, I made a written offer to him by email. The offer attached an employee information sheet form, which he was required to fill out as part of the hiring process. …
25.On the same day, Mr Heather returned by email his completed form and a copy of his passport. … I did notice Mr Heathers (sic) age, however I don't think age is a barrier to business development in Australia, especially in high-end markets.
...
27.I did not forward Lance's email attaching his completed form or passport copy to [Mr Liu], nor did I give him this information in any other way. Now produced and shown to me marked 'RW-3' is a true copy of the outlook search which shows that I did not forward this information to [Mr Liu].
The exhibit marked RW-3 is an email from the respondent’s IT department saying that the email from the applicant to Ms Wan on 2 July 2019 was not forwarded to Mr Liu.
Mr Liu was cross-examined through an interpreter. In cross-examination, Mr Liu denied that he rescinded the offer to the applicant because he became aware of his age. It was put to Mr Liu that his becoming aware of the applicant’s age was the only explanation for the sudden refusal to employ him after a long recruitment process. Mr Liu denied that, saying:
As in my evidence I made it very clear we stopped any input or any efforts in the high-end market and we’re focusing on the medium level of market. The evidence … that I’ve provided shows that the staff that we recruited … has catered for the medium level … market such as Wendy. Even our sales data can prove this and we didn’t have further development in [the] high-end market.
It was then put to Mr Liu that, when the applicant provided a copy of his passport to Ms Wan, she told Mr Liu how old the applicant was and that caused him to change his mind about recruiting the applicant. Mr Liu said:
I didn’t remember or I didn’t recall Ms Wan mention about Mr Heather’s age to me.
Mr Liu was then asked whether his evidence was that he did not remember whether Ms Wan mentioned the applicant’s age to him. Mr Liu replied:
Can’t remember.
In re-examination, Mr Liu was asked about his impression of the applicant’s age before 3 July 2019. Mr Liu said:
So, actually, I interviewed Mr Heather. So during the face-to-face interview I realised … his age might be a bit old but I don’t know the exact age.
When asked when he found out the applicant’s age, Mr Liu said he found out in the context of the complaints and the hearings.
Ms Wan was also cross examined through an interpreter. When asked about her knowledge of the applicant’s age at the time of his recruitment, she said that she asks candidates for a copy of their passports to check whether they have work rights in Australia. She confirmed that she noticed the applicant’s age when she received a copy of his passport. She denied that she noticed it because it was unusual to have a person in their seventies applying to work for the respondent.
When asked how many people in their seventies had applied for a job with the respondent, Ms Wan said that, at the time, she had only been with the respondent for about a month, so was not fully aware of the ages of staff members. However, she said that, in her previous company, the CEO met a dealer who was in his eighties.
Ms Wan denied that the applicant was older than the impression she had formed during her interview with him and went on to say:
Actually, because back then I newly joined the company, so I’m not fully aware about the recruitment age of the industry, but my CEO told me we need to hire someone who’s senior enough to explore the high end market, so when the recruiter introduced or recommended [the applicant] because they told us actually he would have a great impact on the C level group, including the executives and other seniors.
When it was put to Ms Wan that she had told Mr Liu how old the applicant was she said:
No, no.
When it was put to Ms Wan that she had told Ms Shan that the applicant’s age was the reason that the respondent had decided to rescind the job offer to the applicant, Ms Wan said:
So what you said is incorrect, because I told Ms Shan it’s something to do with the company strategy and also we’ve got an internal candidate.
Ms Wan was asked whether she had ever discussed with Ms Shan the applicant’s claim that he asked Ms Shan whether the respondent withdrew the offer of employment because of his age. Ms Wan answered that she had asked Ms Shan about that when she had first received the applicant’s Fair Work Commission application in about late July or early August 2019. Ms Wan said:
… I noticed he mentioned about his age, so I actually asked Shan later on, “So how you responded to his question?” And Shan said, “Because you didn’t tell me much and I had nothing to say so I actually kept silent.”
If all of that evidence were accepted, it would follow that Mr Liu did not rescind the offer of employment to the applicant because of his age. However, the applicant said that the evidence was implausible, and should not be accepted, for 10 reasons. As those 10 reasons also apply to the respondent’s claims about its change of business strategy, I will discuss the 10 reasons after addressing those claims.
THE CHANGE OF BUSINESS STRATEGY
The respondent submitted that, not only did Mr Liu not know the applicant’s age when he decided to rescind the offer to the applicant, Mr Liu had a perfectly good reason for rescinding the offer, being a change in business strategy.
Mr Liu explained in his affidavit that:
(a)he moved to Australia in August 2018 as CEO of the respondent and was based in Sydney;
(b)between late 2018 and early 2019, five of the six staff in the Melbourne office resigned, including the BDM;
(c)Mr Liu had to re-establish the Melbourne team through recruitment;
(d)in June 2019, recruitment was undertaken for a number of positions including the BDM;
(e)in June 2019, Mr Liu flew to Melbourne and interviewed six to eight candidates for the BDM role, including the applicant;
(f)Mr Liu asked Ms Wan to offer the BDM position to the applicant because it seemed that his experience would help the respondent enter the high-level market, being large corporate and government clients, who had bigger budgets for more advanced technologies, including facial recognition technology;
(g)the applicant had experience at NEC with facial recognition products;
(h)at this stage, Mr Liu understood that the respondent had a reasonable share of the mid-level market, which consisted of medium sized enterprises which did not seek high tech products;
(i)Mr Liu wished to break into the high-level market, as he had done in South Africa;
(j)Mr Liu received the sales data for Victoria at about the same time as he interviewed the applicant, as part of the customary mid-year review;
(k)Mr Liu realised that the respondent was at risk of losing its mid-level client base;
(l)Mr Liu formed the view that it would be difficult to enter the high-level market in Australia because there was not the demand here, particularly because of the trade tensions between the USA and China, and the respondent’s business being video surveillance products and, in the high-level market, facial recognition technology;
(m)having conducted the mid-year review, Mr Liu decided to change the business strategy from attempting to enter the high-level market to retaining the mid-level market;
(n)Mr Liu recalled that Wendy Sun had joined the respondent in February 2019 and would be a good candidate for the BDM role focussed on mid-level clients;
(o)Ms Sun accepted the BDM role on a trial basis;
(p)Mr Liu told Ms Wan to rescind the offer to the applicant and apologise to him; and
(q)Mr Liu later recruited two more BDMs, for which roles the applicant was not suitable for because the respondent was still focussing on mid-level clients.
Ms Wan said in her affidavit that:
(a)late in the afternoon on Thursday 3 July 2019, being the day after the applicant had provided a copy of his passport, Ms Wan met Mr Liu after his mid-year review;
(b)Mr Liu said that, following the mid-year review, he had decided to focus on retaining existing clients, so he had decided to redeploy Wendy Sun to the BDM role;
(c)Ms Wan told Mr Liu that she had already offered the position to the applicant; and
(d)Mr Liu told her to pass on his apologies and rescind the offer.
In cross-examination, in relation to the mid-year review, Mr Liu said:
(a)he conducted two reviews per year, where he looked at the market, the competition and the sales data;
(b)the mid-year review takes two to three days to communicate to head office, but the data collection takes much longer;
(c)Mr Liu was in charge of the region so he made the decisions affecting it;
(d)he collected data from January to June 2019;
(e)the main focus of the mid-year review was which level of market;
(f)the mid-year review for 2019 is in Mr Liu’s computer;
(g)they are usually between 30 and 50 pages long;
(h)the mid-year review has not been put into evidence because it is highly confidential and because it is in Chinese;
(i)he would have started writing the report in June 2019, about one month before he needed to deliver it to head office in July 2019, but he would have been thinking about the issues earlier than that;
(j)the sales data [set out above] is one page of the mid-year review;
(k)data in the report is in English and the decision making is in Chinese;
(l)he would have received the sales data for June 2019 a bit after the end of the month;
(m)he was not surprised that the respondent’s sales data for the first half of 2019 was down, but he did not expect such a huge drop;
(n)in the first half of 2019, the respondent did not have any BDMs in Melbourne;
(o)there were only two staff in Melbourne in the first quarter of 2019 and only one in the second quarter;
(p)not having sales staff would have impacted sales but the drop of 8% exceeded Mr Liu’s expectations;
(q)the respondent’s sales usually go through franchises for lower level clients, so even if the respondent has no staff, sales still occur;
(r)the business strategy is written down;
(s)the business strategy as at June 2019 is in the mid-year report;
(t)the trade war between the USA and China had an impact on the higher level market;
(u)a business decision is not so simple that it can be made in a short space of time;
(v)the main drop in sales was in the key clients in the lower and medium levels;
(w)between 2 July 2019, when the offer was made to the applicant, and 4 July 2019, when the offer was rescinded, there were rumours that the respondent’s parent company in China would be added to the sanctions list in the trade war between the USA and China;
(x)things were very unpredictable at that time, although they may look different now with hindsight; and
(y)Mr Liu had other data to show that the respondent’s high end products were not doing well in the Australian market.
If all of that evidence were accepted, it would provide a plausible explanation for rescinding the offer to the applicant. However, as mentioned above, the applicant submitted that there were 10 reasons that the respondent’s case should not be accepted. I turn to them now.
THE 10+ REASONS
The applicant argued that the respondent’s explanation was not substantiated by any contemporaneous documents, apart from the one page of sales data, which was itself questionable. Consequently, the applicant argued, the respondent’s case amounted to a mere declaration, which, as stated at [79] and [127] of Barclay, may be insufficient to discharge the respondent’s burden of proof.
In any event, the applicant relied on 10 reasons, in combination, to say that the respondent had not discharged its onus.
Firstly, the applicant said that it was implausible that the respondent would have walked away from a recruitment process that had taken a lot of time and money and involved:
(a)the engagement of an external recruiter;
(b)10 interviews conducted by Ms Wan;
(c)six interviews conducted by Mr Liu; and
(d)Mr Liu flying from Sydney to Melbourne for two days to conduct those interviews.
Secondly, the respondent did not point to anything that dramatically changed between 2 and 4 July 2019 so as to justify rescinding the offer, given that:
(a)the mid-year review had been underway for several weeks;
(b)Mr Liu could not recall when he received the sales data;
(c)the trade tensions between the USA and China had existed before the offer was made to the applicant; and
(d)as Mr Liu himself said, business decisions cannot be made in a short space of time.
Thirdly, the mid-year review, which was a 30 to 50 page document, was not put into evidence, and it was only revealed in cross-examination that the one page sales data was part of the mid-year review.
Fourthly, the one page sales data:
(a)although supposedly part of the mid-year review, does not have a page number on it, and is written in English, although part of Mr Liu’s explanation for not providing the mid-year review to the court was that it was written in Chinese; and
(b)shows a drop in sales, but that was to be expected, given that the Melbourne office had no sales staff.
Fifthly, no document was provided to the court that shows the respondent’s business strategy, or the changes to it.
Sixthly, Mr Liu’s affidavit mentioned trade tensions between the USA and Australia in late 2018 and early 2019, but said nothing about any significant change in those tensions between 2 and 4 July 2019. Nor was any document provided to the court relating to a significant change in those trade tensions between 2 and 4 July 2019.
Seventhly, Mr Liu claimed that Wendy Sun agreed on 3 July 2019 to take on the BDM role, but her contract of employment shows that she began in that role with effect from 19 August 2019. There was no documentary evidence to substantiate Mr Liu’s claim that he discussed the matter with Ms Sun on 3 July 2019 or that she began in the role at that time. Moreover, Ms Sun was not called to give evidence, and there was no explanation for her absence.
Eighthly, the respondent did not call Ms Shan, the external recruiter, as a witness. When the applicant asked her if the offer had been rescinded because of his age, Ms Shan remained silent. It was this fact that convinced the applicant that he had been discriminated against because of his age. The respondent’s only explanation for not calling Ms Shan was that her evidence was irrelevant, while the applicant considered that Ms Shan’s evidence was highly relevant.
Ninthly, the respondent made false statements in its response to the applicant’s Fair Work Commission application (exhibit 1), namely, that:
(a)Mr Liu did not know on 2 or 3 July 2019 that a job offer had been made to the applicant; and
(b)the offer was a preliminary offer.
Tenthly, the respondent has been represented by experienced lawyers throughout the Fair Work Commission proceedings, and these proceedings. If the respondent’s explanation had been true, there would have been documents supporting it, and appropriate protections for any confidentiality could have been obtained. Similarly, Ms Sun and Ms Shun could have been called as witnesses. However, they were less likely to have lied to cover up the respondent’s real reasons for rescinding the offer than Mr Liu and Ms Wan.
In connection with the tenth point, the applicant relied on Fair Work Ombudsman v AJR Nominees Pty Ltd [2013] FCA 467, where Gilmour J said:
Jones v Dunkel
123.The rule in Jones v Dunkel (1959) 101 CLR 298 was conveniently summarised by the Full Federal Court in Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53 at [79], as follows:
It is accepted that where a party fails, without explanation, to call a witness who that party might have been expected to call and whose evidence might have elucidated the matter in dispute, then the inference may be drawn that the evidence of the absent witness would not have assisted the party that failed to call that witness: Jones v Dunkel at 308, 312 and 320-321. By itself that inference is frequently somewhat barren, for knowing that the evidence of a witness would not have assisted tells one nothing about what the witness’s evidence affirmatively would have been. Often more directly useful is the allied principle that in such a case the trier of fact may more confidently draw any inference unfavourable to the party that failed to call that witness if that witness appears to be in a position to cast light on whether the inference should be drawn: Jones v Dunkel at 308 per Kitto J, 312 per Menzies J, and 320-321 per Windeyer J. Neither inference is mandatory and, generally speaking, these inferences only become material where the balance of the evidentiary record is equivocal.
(Original emphasis.)
124.Natalie Minniti was a material witness. She was a director of AJR Nominees and is Minniti’s wife. She ought be regarded as in the “camp” of the respondents. There was evidence that she witnessed many of the disputed conversations, including the end of the critical meeting on 3 February 2011, and received from Bill the scientific name for his disease on a piece of paper. She did not give evidence. In cross-examination, Minniti volunteered that she was unwell, but there was no statement from her; no medical evidence as to her condition; and no application for an adjournment to suit her state of health. The explanation for her absence that was volunteered by Minniti is not satisfactory.
125.Minniti stated under cross-examination, for the first time, that his son Adrian was present at his office when the meeting between Minniti and Bill occurred on what I have found was 3 February 2011. However, Adrian Minniti did not give evidence, and there was no explanation for that.
126.In the respondents’ Outline of Opening Submissions dated 30 November 2012 at [8], Travis Abreu, an employee of AJR Nominees and said to have witnessed Bill’s resignation on 3 February 2011, was nominated as a witness for the respondents. Minniti, in his written evidence, said Abreu was present at the “resignation” meeting in February 2011. No statement from him was filed. Counsel for the respondents on the first day of the trial said that it had been understood that he was coming to give evidence but that he had since advised that he would not be coming as he was “working away at the mines”. This is not a satisfactory explanation for his absence.
127.In my view, a Jones v Dunkel inference may be drawn in respect of the failure by AJR Nominees and Minniti to call the above witnesses. Accordingly, I infer that their evidence would not have assisted the respondents, and further, it enables me, more confidently, to come to the conclusions which I have concerning what actually occurred at the meeting between Bill and Minniti and AJR Nominees precisely on 3 February 2011.
The applicant also relied on Pezzimenti v Rotary International (2019) 290 IR 219; [2019] FCCA 1854, where Judge Driver said:
95.Mr Newbauer’s affidavit83 provides context in which decisions about Mr Pezzimenti’s employment were made and the circumstances in support of those decisions. Mr Huerta’s affidavit and Mr Newbauer’s affidavit seek to explain those decisions and those actions in their proper and lawful context.
96.Nevertheless, in my view, Rotary has failed to discharge its onus in relation to the dismissal decision. The Skype meeting which Mr Pezzimenti was required to attend has no particular significance except as a precursor to the dismissal. Rotary viewed the meeting as a formal step necessary (presumably to demonstrate that procedural fairness had been accorded) prior to the dismissal.
83 CB 534-535.
Finally, the applicant noted that, at paragraph 22 of her affidavit, Ms Wan described the offer to the applicant as conditional on background and reference checks. The offer is at CB76. The offer was not conditional, except as to a formal contract being signed.
THE RESPONDENT’S RESPONSE
The respondent said in reply that:
(a)there was no need to call Wendy Sun, because there was no real dispute that she worked as a BDM;
(b)there was no need to call Ms Shan, because the applicant’s subjective belief about why the offer was rescinded has no bearing on the case;
(c)Ms Shan could give no admissible evidence about Mr Liu’s subjective reasons for deciding to rescind the offer;
(d)consequently, the Jones v Dunkell inference should not be drawn;
(e)in relation to the Fair Work Commission response, Mr Liu authorised the offer of a position, but was unaware at the relevant time that the offer had been made;
(f)in and since July 2019, the respondent has employed three BDMs in the Melbourne office directed at the entry and mid-level markets, and still does not have a BDM directed at the high-level market; and
(g)this establishes that the respondent did in fact change its business strategy in about July 2019.
THE THREE BDMS
The evidence that the respondent relied on to establish that it had employed three BDMs for the entry and mid-level markets in and after July 2019 and none for the high-level market was in the affidavit evidence and in Mr Liu’s oral evidence.
The evidence that Ms Sun was engaged as a BDM to work with mid-level clients was clear.
At paragraph 36 of his affidavit, Mr Liu said:
After Wendy commenced in the BDM role, I eventually hired two more BDMs for the Melbourne office. One of the two BDMs I later hired was a former BDM at Hikvision who returned to work for us. The other one used to work at a distributor for one of our main competitors in the entry to mid-level market in Australia. I did not consider Mr Heather to be suitable for either of these roles, because our business strategy is still to focus on retaining existing clients in the mid-level market.
That paragraph does not explicitly state that the two additional BDMs were for the entry or mid-level markets. However, it was arguably implicit that the former BDM who returned to work for the respondent was intended to work with that level of client, because that was the level of the respondent’s current and previous clients. It was also arguably implicit that the person recruited from the competitor was intended to work with the entry and mid-level clients because that is the type of client he had worked with previously.
Ms Wan said at paragraph 37 of her affidavit that:
After Wendy Sun was placed internally into the BDM role, I recruited another two BDMs for the Melbourne office on 1 August 2019 and 2 December 2019. One of those employees was Mr Cliff Simons, a former staff member who had worked in a Senior BDM role at Hikvision between July 2015 and July 2018. … I understand from assisting in the recruitment process for Mr Simons that he was considered suitable for the role because he had experience with existing Hikvision customers and products, and could recover customer relationships lost during the period of high staff turnover in the Melbourne office in 2018/2019. The other BDM role was filled by a former employee from a national distributor of our main competitor in the Australian middle-level market. Both Mr Simons and the other employee who secured the BDM role are both very familiar with Hikvision's products.
That paragraph does not explicitly state that the two additional BDMs were for the entry or mid-level markets. However, it was arguably implicit that Mr Simons was intended to work with entry and mid-level clients, because he had experience with the respondent’s existing customers and products, which were entry to mid-level. Again, it was arguably implicit that the person recruited from the competitor was intended to work with entry and mid-level clients because that is the type of client he had worked with previously.
The position was made more clear in Mr Liu’s oral evidence in cross-examination, when he said:
As in my evidence I made it very clear we stopped any input or any efforts in the high-end market and we’re focusing on the medium level of market. The evidence … that I’ve provided shows that the staff that we recruited … has catered for the medium level … market such as Wendy. Even our sales data can prove this and we didn’t have further development in [the] high-end market.
The applicant submitted in reply on this point that the facts and circumstances of the case as a whole cast doubt on the flimsy and self-serving claims about the three BDMs being focussed on entry and mid-level clients. The applicant accepted that the respondent does now have three BDMs in the Melbourne office. The applicant conceded that it was not put to Mr Liu or Ms Wan that the three BDMs, or any of them, are not working on the entry and mid-level markets. However, the applicant said that there was no evidence in support of that beyond Mr Liu and Ms Wan’s say-so.
CONSIDERATION
This seems to me to be a very finely balanced case. I am very conscious of the reverse onus, and that the respondent has provided little in the form of documentation or witnesses beyond Mr Liu and Ms Wan to support their version of events. Ms Wan’s affidavit evidence was wrong when she said that the offer to the applicant was conditional on reference checks.
However, based on the affidavit evidence and more importantly on Mr Liu’s oral evidence in cross-examination, I accept the respondent’s evidence that it now has three BDMs working in the Melbourne office with entry and mid-level clients and no BDM working with high-level clients. This is a critical fact. It means that the respondent did change its business strategy, in or around 3 July 2019. The paucity of documents relating to the change of business strategy is more than offset by the reality that the respondent, to this day, does not have a BDM for the high-level market. This finding answers many of the applicant’s 10+ points. However, for completeness, I will deal with them in order.
Firstly, even if, in the abstract, it was implausible that the respondent would walk away from a prolonged recruitment process because of a change of business strategy, the fact is that the respondent did change its business strategy. The fact that there was in reality a change of business strategy makes it plausible that the respondent walked away from the prolonged recruitment process for that reason. Moreover, the fact that the respondent did not employ the second ranked candidate in the recruitment process demonstrates that the respondent did walk away from that recruitment process.
Secondly, it was not entirely true that nothing changed between 2 and 4 July 2019. Mr Liu referred in his oral evidence to rumours about worsening trade tensions with China. Given what is now publicly known about Australia’s trade tensions with China, it is not implausible that Mr Liu would have heard something from his colleagues in head office in China in July 2019 about a forthcoming escalation of those tensions. It is a matter of public record that Australia at that time had already banned Huawei from our 5G network and was encouraging other five-eyes nations to do the same, and that President Trump was engaged in a trade war with China. In this environment, it is plausible that a Chinese company, such as the respondent, would have formed the view that it had little chance of selling video surveillance equipment and facial recognition technology to Australian governments and large corporations.
While the timing does seem extraordinary, it is important not to fall into the logical fallacy of post hoc ergo propter hoc – after this therefore because of this. The classic example of this is that a rooster crows just before dawn, so it is the rooster’s crowing that causes the sun to rise.
In the present case, the applicant observed that the job offer was withdrawn just after he disclosed his date of birth. But that juxtaposition of events does not mean that one caused the other. Logically, there may have been many events occurring in the background of which the applicant was unaware. Indeed, I accept that there was such an event in this case, being the change of business strategy.
While Mr Liu could not remember the precise date on which he received the sales data, that is not surprising. Why would a CEO remember that date with precision? While the rescission of the offer of employment was of huge significance to the applicant, it was a relatively minor event for Mr Liu.
It is true that Mr Liu gave evidence that business decisions could not be made in a short space of time, while his case in the present matter is that he did change his business strategy in regards to attempting to enter the high level market in a couple of days. Mr Liu explained that by saying that he received the sales data, which was worse than expected, and because of the unpredictability of the trade war. I accept that explanation. It seems to me that it could take a great deal of time and research to decide to embark on a new strategy, but not much time at all to decide not to pursue a particular strategy. That is what happened in this case.
Thirdly, it is understandable that the mid-year review was not put into evidence, when it is in Chinese, it is commercially sensitive and it did not advance the respondent’s case. The applicant speculates that it may have assisted him, but there is no reason to suppose that is so. Similarly, there was no reason for the respondent to reveal that the sales data were part of the mid-year review. The respondent revealed the part of the mid-year review that was relevant to this case. The applicant presumes that the mid-year review would have shown that the respondent did not change its business strategy. However, there is no reason to suppose that is the case. It was not put to Mr Liu that the mid-year review did not exist and that it was a fabrication for the purposes of this proceeding.
Most importantly, the respondent’s business strategy did change, as discussed above. The mid-year review presumably just consists of words and declarations of intent. The reality of the respondent having no high-level BDM to this day means the mid-year review is of marginal significance at best.
Fourthly, it is true that the one page of the sales data does not have a page number on it, and that it is predominantly in English, when Mr Liu said that the sales data were part of the mid-year review, which was written in Chinese for the benefit of head office in China. However, it was not put to Mr Liu that the one page sales data sheet was a fabrication. He explained that the discussion part of the mid-year review was in Chinese but the figures were in English. That is a sensible and plausible explanation.
It is also true that the drop in sales was to be expected, given that the Melbourne office had no sales staff. However, Mr Liu explained that as well, saying that the drop was steeper than expected, especially given that many sales were effected through franchises, which were unaffected by the lack of sales staff in the respondent’s Melbourne office.
Again, any issues with the one page of sales data are overcome by the respondent still not having a BDM for high-level clients.
Fifthly, it is true that no document was provided to the court showing the respondent’s change in business strategy. However, as discussed above, the evidence of there being no BDM’s in the Melbourne office, to this day, who work with high level clients shows that the respondent’s business strategy did change.
Sixthly, it is true that there was no document provided to the court that shows a significant change in the trade tensions between Australia and China between 2 and 4 July 2019. However, Mr Liu did not suggest that there was such a document. He said there were rumours. As discussed above, I find that plausible. More importantly, the respondent did change its business strategy, as demonstrated by the fact that, 18 months later, it still has not employed a BDM for high-level clients.
Seventhly, the applicant’s points about Ms Sun are answered by the fact that, to this day, the respondent has no BDM who works with high level clients. Moreover, it is simply not necessary to call every person who could corroborate a particular claim. There was a document showing that Ms Sun commenced as a BDM in August 2019. Mr Liu explained the time lag on the basis that he likes to try people out in a role before formally appointing them. I find that plausible. But, most importantly, the respondent still does not have anyone in the high-level BDM role.
Eighthly, Ms Shan could shed no light on Mr Liu’s reasons for rescinding the offer to the applicant, particularly in circumstances where it was not disputed that Mr Liu did not speak directly with her, or otherwise communicate with her, and in circumstances where Ms Wan’s evidence was to the effect that she did not discuss the applicant’s age with Ms Shan, but only said that the offer was rescinded because an internal candidate was available.
It is possible that Ms Shan thought that the reason for the rescission was the applicant’s age, and that might be why she remained silent when the applicant asked her about it. However, speculation about Ms Shan’s speculation about this matter is not probative.
Additionally, Ms Shan was not in the respondent’s camp. She was not employed by the respondent. She was an external recruiter, who lost her commission when the respondent rescinded the offer to the applicant. In these circumstances, Ms Shan might be adverse to the respondent. There was no evidence that Ms Shan is in a continuing commercial relationship with the respondent. In any event, there is no property in witnesses. The applicant could have called her as a witness, if he had thought there was anything to be gained.
Ninthly, it is true that a false statement was made to the Fair Work Commission about the offer to the applicant being a preliminary or conditional offer. It was not.
The statement in the Fair Work Commission response that Mr Liu did not know that an offer had been made to the applicant is not consistent with:
(a)Ms Wan’s affidavit where she said at paragraph 29 that, on 3 July 2019, she told Mr Liu that she had already made an offer to the applicant; or
(b)Mr Liu’s affidavit at paragraph 25 which was to the same effect.
However, Mr Liu denied in his oral evidence that he was aware of the Fair Work Commission process at all. There is no reason to suppose that Mr Liu, as the CEO of the respondent, knew what was in the Fair Work Commission response. It is plausible that he was too senior to be involved in such matters.
I do not consider that these errors in the respondent’s response to the Fair Work Commission application significantly damage Mr Liu’s credibility, particularly in the light of the fact that the respondent to this day does not have a BDM who is focussed on the high-level market.
Tenthly, it is true that the respondent has been represented by experienced lawyers throughout these proceedings and the Fair Work Commission proceedings. However, as discussed above, the lack of documents is more than made up by the fact that, to this day, the respondent does not have a BDM who is focussed on the high-level market. The failure to call Ms Sun and Ms Shan is discussed above.
It is true that, in matters such as this, the respondent’s mere declaration of an innocent explanation might not be sufficient to discharge the reverse onus. However, in the present case there was more than a mere declaration. There is the evidence, which I accept, that the respondent, in the 18 months since the offer to the applicant was rescinded, has not employed a BDM whose role was to seek clients in the high-level market. If the respondent had really rescinded the offer to the applicant because of his age, it would be expected that the respondent by now would have engaged another, younger BDM to attempt to win clients in the high-level market, and may have employed the second ranked candidate in the original recruitment process. The fact that the respondent has not engaged a younger BDM to win governmental and large corporate clients is strong evidence that the respondent really did decide to not attempt to enter that market.
Taking into account all of the evidence in the case, on balance, I am not persuaded that Mr Liu, as the decision-maker, was aware of the applicant’s age when he decided to rescind the offer of employment to him. I am satisfied that the respondent changed its business strategy in or around 3 July 2019, such that it decided not to attempt to enter the high-level market.
All in all, although the respondent’s case had some weaknesses, it was, in my view, sufficient to discharge the reverse onus. I am not persuaded that the respondent rescinded the applicant’s offer of employment because of, or for reasons including, his age.
Consequently, the application will be dismissed.
I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Riley. Deputy Associate:
Dated: 5 February 2021
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