Hendriks v eReports Pty Ltd as Trustee for the eReports Trust
[2023] FedCFamC2G 259
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Hendriks v eReports Pty Ltd as Trustee for the eReports Trust [2023] FedCFamC2G 259
File number(s): MLG 2705 of 2021 Judgment of: JUDGE MANSINI Date of judgment: 5 April 2023 Catchwords: INDUSTRIAL LAW – FAIR WORK – application made under ss.341, 343 and 344 of the Fair Work Act 2009 (Cth) – inadequate pleadings – where the applicant did not articulate necessary elements of claims – cross-claim for alleged misappropriation of funds – accrued jurisdiction – application dismissed – cross-claim dismissed. Legislation: Clerks-Private Sector Award 2010
Clerks-Private Sector Award 2020
Fair Work Act 2009 (Cth) ss.119, 340, 341, 342, 343, 344, 353, 360, 361, 365, 539(2), 550(1), 570
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 rr.1.34, 16
Federal Court Rules 2011 r.1.06
Cases cited: Australian Building and Construction Commissioner v Hall [2018] FCAFC 83; (2018) 261 FCR 347
Cadbury Schweppes Pty Ltd v ALHMWU & Anor [2000] FCA 1793
Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17
Esso Australia Pty Ltd v The Australian Workers’ Union [2016] FCAFC 72
Fencott v Muller (1983) 152 CLR 570
National Tertiary Education Industry Union v Commonwealth of Australia and Another (2002) 117 FCR 114; [2002] FCA 441
Re Wakim (1999) 198 CLR 511
Schanka v Employment National (Administration) Pty Ltd [2000] FCA 202
Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15
Division: Division 2 General Federal Law Number of paragraphs: 119 Date of last submission/s: 17 August 2022 Date of hearing: 16 & 18 August 2022 Place: Melbourne The Applicant: Appeared in person Counsel for the Respondent: Mr L Howard Solicitor for the Respondent: EI Legal Pty Ltd ORDERS
MLG 2705 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JACOBUS HENDRIKS
Applicant
AND: EREPORTS PTY LTD AS TRUSTEE FOR THE EREPORTS TRUST
Respondent
order made by:
JUDGE MANSINI
DATE OF ORDER:
5 April 2023
THE COURT ORDERS THAT:
1.The application is dismissed.
2.The cross claim is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Mansini
IN SUMMARY
These proceedings were commenced by Mr Jacobus Hendriks against his former employer, eReports Pty Ltd as Trustee for the eReports Trust (Company).
Mr Hendriks was employed for almost 4 years as the Finance Manager of the Company until terminated by reason of dishonest behaviour and failure to follow reasonable and lawful directions. Mr Hendriks, who represented himself in these proceedings, denied those allegations and claimed that the Company had breached the Fair Work Act 2009 (Cth) (Act) in the following ways:
(a)sections 343 and 344, by conducting a disciplinary process that was materially unjust, unfair and misleading to the Applicant; and
(b)section 341, by failing to comply with the Company’s internal instruments and policies in relation to consultation and redundancy.
The Company denied those allegations and brought a cross claim for $64,957.75 in relation to alleged misappropriation of money discovered after the cessation of the employment relationship.
For the reasons that follow I have determined that Mr Hendriks was not dismissed in contravention of the Act as claimed and the Company’s cross claim be dismissed. No relief will be granted.
CONTEXT
Below is a summary of the evidence before the Court which provides context as to Mr Hendrik’s claims and the Company’s cross-claims and was not contentious unless otherwise indicated.
Terms and conditions of employment
The Company primarily provides medical advisory and independent health services to insurers, government agencies, corporations and law firms.
By letter dated 31 August 2017, Mr Hendriks was offered employment with the Company in the position of Finance Manager (Employment Contract). The terms and conditions were set out therein.
The Employment Contract relevantly included those express terms extracted at Annexure A to these reasons.
Schedule 1 of the Employment Contract provided a salary of $85,000.00 per annum. It also specified there were ordinary hours of 37.5 per week to be worked Monday to Friday between the hours of 8.00am and 6.00pm. Schedule 2 contained a list of duties of the position of Finance Manager which were specified as including but not limited to those duties extracted at Annexure B to these reasons.
In February or March 2019, there was a meeting at which it is accepted that the parties struck an agreement to increase Mr Hendriks’ salary to $100,000 plus superannuation. According to Mr Argyle (Founder, Sole Director and Chief Executive Officer of the Respondent) and the payslip in evidence, this change came into effect on 28 June 2019. Mr Argyle said that the increase was to reflect changes in Mr Hendriks’ duties, namely the management of employees outside of the Finance team. Mr Hendriks agreed that he had taken on some additional duties but maintained this agreed salary increase, and any terms now said by the Company to have been attached, were not reflected in an update to his Employment Contract and were to compensate Mr Hendriks for up to 5 hours per week to perform the duties of a former contractor.
It was not contentious that there was also a “Staff Policy and Procedures Manual” which Mr Hendriks was required to follow at all relevant times but did not provide a guarantee of the conditions and benefits described therein. It included, relevantly, terms and conditions of employment (not limited to but including hours of work, overtime and leave entitlements) and procedures for management of employees, termination of employment and an employee code of conduct.
Payroll duties
As part of his role, Mr Hendriks was responsible for processing payroll for all of the Company’s employees, including his own pay. Payroll was processed on a fortnightly basis using computer-based software. Employees were paid in arrears. It was not contentious that Mr Hendriks was entrusted with the responsibility to prepare payroll and ensure that the payroll accurately reflected the hours worked by all employees.
The CEO was responsible for authorising the payments to go through once prepared by Mr Hendriks, also using computer-based software. Mr Argyle gave evidence that he did not usually review each employee’s payroll and it was rare he would ever need to question a payment. Mr Argyle recalled that he would authorise the processing of the payroll in reliance on Mr Hendriks’ data. In cross-examination, Mr Argyle accepted that he had the ability to review the detail of payroll to see what was being claimed on every occasion. Mr Argyle’s evidence was that he (or, at times, the executive general manager) had authorised all payments made to Mr Hendriks and when he had done so it was because he “trusted” his finance manager.
Reasonable additional hours and additional duties
Reasonable additional hours
Mr Argyle accepted that Mr Hendriks did sometimes work outside of ordinary hours or more than 37.5 hours per week but considered this was allowed under the Employment Contract. Mr Argyle referred to the Employment Contract in his evidence – specifically, that Mr Hendriks was required to work “reasonable additional hours” from time to time to meet the operational requirements of the Company.
Mr Argyle’s evidence was that the number of reasonable additional hours was never defined but could, in an extraordinary circumstance, include up to 10 hours on a weekend. One example he provided was during “BAS time” which may temporarily increase the workload. Mr Argyle could recall having received emails from Mr Hendriks on weekends and weekday evenings but could not recall other specific examples of work said to have been completed on weekends when put to him by Mr Hendriks in cross-examination. Mr Argyle maintained that Mr Hendriks was an “executive” for whom timesheets were not required.
Mr Argyle also accepted that he did not know the hours that Mr Hendriks actually worked and had kept “no accounting” of Mr Hendriks’ hours, no timesheets or record of work that Mr Hendriks did outside of hours. Mr Argyle maintained that Mr Hendriks was an “executive” for whom timesheets were not required.
Additional duties
As earlier referenced, after the engagement of an external contractor came to an end in January 2019, Mr Hendriks took on some extra duties to cover for tasks that had previously been undertaken by that consultant.
Mr Hendriks also contended that he was given various other additional responsibilities. For example, from March to September 2020 when he was charged with managing the JobKeeper financial support program in addition to the COVID-19 commercial rent relief scheme.
In July 2020, a new consultant brought in to work with the Chief Financial Officer was introduced to Mr Hendriks. For example, Mr Hendriks was asked to work with the new consultant on some new business ventures and contended this meant additional duties for his role which were not reflected in the Employment Contract or an increase in his remuneration. It was at about that time, in August 2020, that Mr Hendriks became aware that the Company intended to hire a Group Accountant (addressed further below).
First disciplinary issue & warning
On or about 14 January 2021, Mr Hendriks was invited to a disciplinary meeting scheduled to take place within around 90 minutes’ time. The meeting was to discuss allegations that Mr Hendriks had: made a verbal employment offer and a formal written employment offer to a prospective candidate without the consent of the CEO; refused to carry out a lawful and reasonable management instruction including a direction to hold a second interview with the candidate; and continued to advise the CEO that he was organising a second interview when a verbal and written offer had already been made and accepted.
On 15 January 2021, Mr Hendriks received his first formal warning letter (First Formal Warning Letter). The letter outlined Mr Hendriks’ responses to the allegations which included: denial of having made a verbal employment offer; agreement that a formal written employment offer was made, which occurred due to lack of training and was an accident; denial of any direction by Mr Argyle to conduct a second interview before making an offer but rather accepted Mr Argyle had made a suggestion to that effect. The letter also outlined the Company’s findings, essentially that the allegations were substantiated and that this amounted to unacceptable conduct justifying a formal written warning. The express warning due to misconduct read as follows:
..should this or similar conduct occur in the future, further disciplinary action may be taken, up to and including termination of your employment.
Group Accountant role
As earlier referenced, since August 2020, Mr Hendriks was aware that the Company intended to hire a Group Accountant. Mr Hendriks’ evidence was that, at that time, he was told that the role would most likely be part-time and would in part support some functions of his role such as roll out of financial policies and procedures.
In March or April 2021, Mr Hendriks was informed of a hiring process for the Group Accountant position. Mr Hendriks was aggrieved about this, and said he felt shocked and embarrassed at the time.
From April to June 2021, the Company engaged a recruitment company in the search for a Group Accountant.
In May 2021, Ms Hogarth (Chief Operating Officer of the Company and wife of Mr Argyle) disclosed to Mr Hendriks via telephone conversation that the Group Accountant was to be full time and lead the Finance Team.
Second disciplinary issue & termination
At 6.22pm on Friday 9 July 2021, Mr Hendriks was invited by a Mr Phillip Hamilton (HR Partner – Employment Innovations, external consultant appointed independent investigator) to attend a disciplinary meeting scheduled for 9.00am on Monday 12 July 2021. The meeting was to discuss allegations of misconduct which were described as, in summary: dishonest behaviour; acting in a way that is inconsistent with the best interests of the Company; and failure to follow lawful and reasonable direction from the Company or an authorised representative of the Company. The underlying issue related to a 3-month performance review that Mr Hendriks claimed to have conducted with one of his two direct reports. The direct report in question was the employee subject of the offer of employment which resulted in the First Formal Warning Letter. Mr Hendriks was invited to bring a support person to that disciplinary meeting.
On 12 July 2021, Mr Hendriks objected to the lack of adequate notice of the disciplinary meeting.
Subsequently, on 12 July 2021, the disciplinary meeting was rescheduled to 13 July 2021 and Mr Hendriks’ employment was suspended on full pay pending the outcome of a “full investigation” (Suspension Letter). The Suspension Letter included a statement that no findings had yet been made.
On 13 July 2021, the disciplinary meeting was attended by Mr Hamilton, Ms Hogarth, Mr Argyle and Mr Hendriks.
During the 13 July 2021 meeting, Mr Hendriks requested to see all evidence on which the Company relied. He was shown an email from Ms Hogarth to Mr Hamilton dated 6 July 2021. That email commenced with the writer’s explanation that it contained notes from her engagement and subsequent investigation of whether a 3-month review was conducted by Mr Hendriks with his direct report. In that email, Ms Hogarth expressed her opinion about certain breaches of policy by Mr Hendriks, inferred dishonesty on the part of Mr Hendriks and stated that his direct report could not continue past probation. A concluding paragraph stated:
I am recommending that a type of ‘conservatorship’ is applied to the accounts department effective immediately. That Jack is removed as Kelly’s manager and we can begin to properly recruit for the much needed positions in the Accounts department.
Also during the 13 July 2021 meeting, Mr Hendriks asked to see a copy of the Company’s whistle-blower policy. He told the Court that he had requested the policy because he anticipated that his employment was going to be terminated and he held genuine concerns that, upon his departure, the Company would not meet its liabilities under corporations law. Mr Hendriks was understood to hold concerns about his personal exposure in this respect. The policy was not in evidence or before the Court but was provided voluntarily to Mr Hendriks during the course of these proceedings who suggested he may use it for purposes of another jurisdiction.
On 15 July 2021, Mr Hendriks and Mr Hamilton had an exchange of correspondence which may be summarised as follows:
(a)At 11.47am, Mr Hendriks sent an email to Mr Hamilton requesting copies of material which had been presented to him during the 13 July 2021 meeting.
(b)At 2.12pm, Mr Hamilton sent an email to Mr Hendriks providing material including a copy of Ms Hogarth’s 6 July 2021 email.
(c)At 4.14pm, Mr Hendriks sent an email to Mr Hamilton pointed out that the concluding paragraph set out above had been removed from the 6 July 2021 email conveyed his view that the email had been “materially amended”.
(d)At 6.08pm, Mr Hamilton replied to Mr Hendriks’ email explaining that the concluding paragraph of the 6 July 2021 email had been “redacted” as it was not considered relevant to the investigation into Mr Hendriks’ conduct. Mr Hamilton also provided Mr Hendriks with an original and complete copy of the 6 July 2021 email.
On 5 August 2021, Mr Hendriks was given a letter signed by Mr Argyle with the outcome of the Company’s disciplinary investigation carried out by Mr Hamilton. Each allegation was described as “substantiated”, with a summary of findings. The findings included that Mr Hendriks had: deliberately provided false and misleading information to Ms Hogarth pertaining to undertaking a formal 3-month probationary review of his direct report; produced a falsified 3-month probationary review form which was not signed by Mr Hendriks and the employee concerned to confirm the legitimacy of the document; and failed to undertake and complete the 3-monthly probationary review in line with general company practice as directed by the COO and the CEO. Mr Hendriks was offered a “final opportunity” to show cause as to why the Company should not terminate his employment – by 12.00pm the following day.
On 6 August 2021, Mr Hendriks provided the Company with a response.
Subsequently on 6 August 2021, Mr Hendriks was emailed a letter signed by Mr Argyle which confirmed that the Company had decided to terminate his employment by reason of the findings of the investigation – that is, the substantiated allegations of misconduct which included dishonest behaviour and failure to follow lawful and reasonable directions from senior management of the Company (Termination Letter). Among other things, the Termination Letter stated that, as a result of Mr Hendrik’s “behaviour”, the Company considered that the relationship of trust and confidence had been lost such that his continued employment was no longer viable. Mr Hendriks’ employment was terminated with immediate effect.
Financial affairs and management of the Company
In presenting his case to the Court, Mr Hendriks placed some focus on describing the financial affairs and financial management of the Company. For example, he gave evidence about the Company’s alleged superannuation liabilities, tax liabilities and (non-)payment of debts over the period of his employment – from commencement to termination. Such analyses was presented as Mr Hendriks’ own assessment and, to the extent it was intended to demonstrate financial mismanagement or wrongdoing, were strongly denied by the Company in broad terms.
Mr Hendriks acknowledged that these may properly be matters for the corporate regulator or another jurisdiction.
At its highest, this evidence has been received as context that the business may have been experiencing financial stress at the relevant times. However, as the relevance of this litany of allegations to the present proceedings was not explained, those matters apparently extraneous to these proceedings are not repeated here.
Other issues during employment
There was evidence brought by Mr Hendriks of difficulties he had experienced with a medical specialist. According to Mr Hendriks, the medical specialist had unpaid amounts outstanding and, both prior to and in August 2020 and October/November 2020, had accused Mr Hendriks in his role as Finance Manager of attempting to frustrate and annoy him and of fraudulent and criminal behaviour. According to Mr Hendriks, those comments by the medical specialist were the source of ridicule in the period through to July 2021 which he found stressful but “laughed off” as not to visibly display his stress to his colleagues. He also said the medical specialist had ignored him including when Mr Hendriks would greet him.
There was also evidence brought by Mr Hendriks of a competitor of the Company have made allegations that attacked his professionalism, conduct and integrity. Mr Hendriks’ evidence was that it was discussed with him and resolved to take no action in this respect.
Post-termination issue
On 28 September 2021, a Mr Michael Murphy (employed by the Company) identified slight variances in Mr Hendriks’ fortnightly payroll when preparing his separation certificate. Mr Argyle provided evidence to the Court that the discrepancies were identified upon trying to ascertain Mr Hendriks’ average salary, which is required to be stated on the separation certificate. Mr Argyle undertook some enquiries and identified that Mr Hendriks’ had been paid wages in excess of his agreed annual salary.
Mr Argyle filed affidavit evidence of 102 payslip summaries which were issued to Mr Hendriks throughout his employment from 4 July 2017 to 4 August 2022. Based on the payslip summaries, a table was prepared for the Court which showed that Mr Hendriks was regularly paid in excess of 37.5 hours each week (regularly more than 80, and sometimes more than 90, hours per fortnight) and received leave accruals calculated on the hours paid. Superannuation contributions were always paid in consistent amounts, and varied only around the time of the agreed salary increase.
Post-termination litigation
By application to the Fair Work Commission, Mr Hendriks brought a dismissal-related dispute alleging contravention of the general protections provisions pursuant to s.365 of the Act. On 7 October 2021, the Commission certified that reasonable attempts to resolve the dispute (other than by arbitration) had been unsuccessful.
On 21 October 2021, these proceedings were commenced by way of originating application filed by Mr Hendriks.
On 18 January 2021, Mr Hendriks’ then legal representatives filed a notice of address for service.
On 7 December 2021, a Registrar of the Court ordered that the proceeding continue by way of pleadings and afforded Mr Hendriks opportunity to file a statement of claim. Subsequent extensions were granted in favour of Mr Hendriks.
On 24 February 2022, Mr Hendriks’ lawyer filed a notice of withdrawal.
On 10 March 2022, Mr Hendriks filed a statement of claim.
On 7 April 2022, the Company filed a defence and a cross-claim.
On 3 May 2022, Mr Hendriks’ filed a defence to the cross-claim.
On 22 July 2022, at the request of Mr Hendriks, the Court’s Registry entered subpoenas requiring Mr Coucerio (Accountant for the Company), Mr Perra (manager of client doctors and employee of the Company) and Ms Hogarth to attend Court to give evidence, and for Mr Argyle to produce specific documents.
On 29 July 2022, the Company filed an interlocutory application (dismissal application) essentially seeking that the application be dismissed and cross-claim awarded in the Company’s favour on account of Mr Hendriks’ defaults (4 specified instances of non-compliance with orders of the Court including his failure, at that time, to file any affidavit evidence in support of his claim). The Company also sought its costs be paid.
On 4 August 2022, the Company filed a further interlocutory application (subpoena objections) seeking orders that the subpoenas be set aside. The Company also sought its costs be paid.
On 9 August 2022, Mr Hendriks filed an affidavit dated 28 July 2022.
On the morning of the hearing on 16 August 2022, Mr Hendriks lodged an amended statement of claim. The Company did not oppose permission to file the amended statement of claim and the 28 July 2022 affidavit and did not press its application for default judgment on the basis that it just wanted finality brought to the proceedings.
Mr Hendriks represented himself and the Company was represented by Counsel.
On the first day of hearing, the subpoena objections were heard and the subpoenas were either no longer pressed or set aside on grounds of relevance, fishing and abuse of process.
The proceedings were then adjourned to 18 August 2022 to allow Mr Hendriks additional time to prepare.
THE CASE BEFORE THIS COURT
Materials relied upon
At the final hearing, the Applicant relied on:
(a)the amended statement of claim filed on 16 August 2022 (marked as exhibit A1);
(b)the affidavit of the Applicant dated 28 July 2022 (marked as exhibit A2);
(c)a bundle of three documents contained in Applicant’s Version 1 Court Book (marked as exhibit A3);
(d)a bundle of documents at TAB15 of Applicant’s Version 2 Court Book (marked as exhibit A4);
(e)the outline of submissions dated 9 August 2022 (marked as exhibit A5); and
(f)the Applicant’s response affidavit to applications in a proceeding dated 4 August 2022 (marked as exhibit A6).
60Mr Hendriks did not seek to give evidence orally and was not required for cross-examination.
The Respondent relied on:
(a)the response and cross-claim dated 7 August 2022 (marked as exhibit R2); and
(b)the affidavit of Mr Argyle dated 9 August 2022 (marked as exhibit R3).
Mr Argyle also gave oral evidence before the Court on 18 August 2022.
The Respondent tendered a bundle of documents (marked as exhibit R1) as follows:
(a)a formal written warning dated 15 January 2021 addressed to Mr Hendriks for offering employment to Mr Caravall without the consent of the Company;
(b)a notice to attend a disciplinary meeting dated 9 July 2021 addressed to the Mr Hendriks alleging serious misconduct;
(c)a suspension of employment letter dated 12 July 2021 addressed to Mr Hendriks advising him of a suspension of his employment to allow the investigation to occur;
(d)an outcome of investigation letter dated 5 August 2021 addressed to Mr Hendriks whereby the allegations that were investigated were substantiated; and
(e)a termination lettered dated 6 August 2021 addressed to Mr Hendriks concluding that dismissal should occur on the commission of serious misconduct.
The pleadings
Amended statement of claim
The amended statement of claim contained a series of factual contentions at paragraphs 1 to 32. By paragraphs 33 to 38, the Applicant articulated the “Relief Sought” as:
(a)Declarations that the Company contravened:
(i)ss.353 (orally, at trial, corrected to s.343) and 344 of the Act by conducting a disciplinary process that was materially unjust, unfair and misleading to the Applicant; and
(ii)s.341 in that the Company failed to comply with the Company’s internal instruments and policies in relation to consultation and redundancy.
(b)Orders that the Company pay compensation being for: loss of income (for the period 6 August 2021 to 25 October 2021), 26 weeks’ salary plus superannuation, loss of income due to reduction in salary, 26 weeks’ variance in salary, redundancy payout, a further 7 weeks’ pay for expansion of role and additional duties.
(c)Interest up to judgment.
(d)A pecuniary penalty in the total amount of $60,000 pursuant to ss.340, 341, 343 and 344 of the Act, payable to a charity of the Applicant’s choosing in the amount of 33% and the remainder to the Applicant.
(e)Costs.
(f)Any other order the Court considers appropriate.
This amended statement of claim was met with substantially the same defence. The Company’s defence objected to the substance of the statement of claim on grounds that it did not disclose a cause of action (paragraphs 11 to 18) and contained pleading(s) irrelevant to the causes of action alleged (paragraphs 20 to 23), and those paragraphs should be struck out or amended.
Cross claim
By its cross claim, the Company contended that, between 3 November 2017 and 9 July 2021, Mr Hendriks had paid himself in excess of what was payable under the Employment Contract in both wages and annual leave accruals. Further, that Mr Hendriks had recorded superannuation payments in excess of what was payable as to avoid the superannuation guarantee charge.
The Company asked the Court to find that this alleged conduct was a breach of Mr Hendriks’ express and implied duties to: serve the Company faithfully and diligently; exercise all due care and skill in performing his duties; and/or in the alternative to act in the Company’s best interests. It further or alternatively claimed unjust enrichment by the misappropriation of funds to the Company’s detriment.
The cross claim articulated the relief sought as repayment of the alleged misappropriated funds in the amount of $64,957.75; or in the alternative damages – plus interest and costs.
STATUTORY AND LEGAL FRAMEWORK
General protections
Part 3-1 of the Act is titled “General Protections”.
Within it, “Division 3 – Workplace rights” includes provisions designed to protect certain workplace rights and industrial activities. Essentially, proscribed persons are prohibited from: taking “adverse action”, engaging in “coercion” and applying “undue influence or pressure” on others because of defined “workplace rights”.
Section 340 of the Act provides (and provided) that a person must not take adverse action against another person because the other person has exercised a workplace right. Section 340(1) provides as follows:
(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.
“Workplace right” is defined at s.341, in three broad categories which relevantly provides (and provided) as follows:
Meaning of workplace right
(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.
“Adverse action” is (and was) defined at s.342(1). Relevantly, adverse action is taken by an employer against an employee if the employer:
a)dismisses the employee;
b)injures the employee in his or her employment;
c)alters the position of the employee to the employee’s prejudice; or
d)discriminates between the employee and other employees of the employer.
Sub-section 342(2) goes on to clarify that the meaning of “adverse action” includes a threat of such action: s.342(2)(a). There are then exceptions for action authorised by or under certain State, Territory and Commonwealth laws and employees in certain stand-down situations none of which apply here: s.342(3).
Section 343 of the Act provides (and provided) a prohibition on a person organising or taking or threatening to organise or take any action against another person with intent to coerce the other person or a third person to exercise or not exercise or propose to exercise or not exercise a workplace right. It is well-established that coercion involves the application of illegitimate pressure to induce the other party to act: Cadbury Schweppes Pty Ltd v ALHMWU & Anor [2000] FCA 1793. The pressure being only illegitimate if it involves unlawful threats or amounts to unconscionable conduct: Schanka v Employment National (Administration) Pty Ltd [2000] FCA 202. Further, in Esso Australia Pty Ltd v The Australian Workers’ Union [2016] FCAFC 72 the Full Court held at [174] that:
Coercion has been held to require the satisfaction of two elements: negation of choice; and, the use of unlawful, or illegitimate or unconscionable means.
The former (negation of choice) involves a subjective test of intent. The latter element (be unlawful etc) is an objective test.
Section 344 of the Act provides (and provided) a prohibition on the exertion of undue influence or pressure by an employer on an employee, as follows:
An employer must not exert undue influence or undue pressure on an employee in relation to a decision by the employee to:
(a)make, or not make, an agreement or arrangement under the National Employment Standards; or
(b)make, or not make, an agreement or arrangement under a term of a modern award or enterprise agreement that is permitted to be included in the award or agreement under subsection 55(2); or
(c) agree to, or terminate, an individual flexibility arrangement; or
(d) accept a guarantee of annual earnings; or
(e)agree, or not agree, to a deduction from amounts payable to the employee in relation to the performance of work.
Note 1: This section is a civil remedy provision (see Part 4‑1).
Note 2:This section can apply to decisions whether to consent to performing work on keeping in touch days (see subsection 79A(3)).
The authorities say that there is a difference in ordinary meaning between concepts such as influence, persuasion, inducement and the like, on the one hand, and coercion, on the other: National Tertiary Education Industry Union v Commonwealth of Australia and Another (2002) 117 FCR 114; [2002] FCA 441 (National Tertiary Education) at [99] and [103] (Weinberg J).
Division 7 is titled “Ancillary Rules” and recognises that some adverse action may be taken for more than one reason. In order to be actionable under Part 3-1, it is sufficient that the relevant adverse action is taken for reasons that include a proscribed reason: s.360.
The statute also provides a rebuttable presumption concerning the proof of the reasons for which adverse action was taken: s.361. That is – if, in an application in relation to a contravention of Part 3-1 of the Act, a person is accused of having taken action for a particular reason or with particular intent and if the taking of that action for that reason or with that intent would constitute a contravention of Part 3-1 then it is presumed that the conduct was engaged in for that reason, unless or until the person who engaged in it proves otherwise.
Section 341 is not but each of ss.340, 343 and 344 of the Act are civil remedy provisions. The Act confers jurisdiction upon this Court to hear applications for relief relating to contraventions of those sections: s.539(2). That power extends to relief in the form of declarations, compensation and penalties. A person may be taken to have contravened a civil remedy provision if they were in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention: s.550(1).
CONSIDERATION
Mr Hendriks’ claims
The pleadings issue
At trial, the Company did not press its application for default judgment but maintained that the Court should dismiss the application on the basis that the pleadings do not disclose a cause of action and/or contained pleadings otherwise irrelevant to the causes of action alleged, and the reverse onus at s.361 of the Act is therefore not engaged.
Mr Hendriks maintained that he pressed the statement of claim as amended on the first day of the trial (with the amended reference at 33(a) therein, as marked below).
The only reference in the amended statement of claim to a statutory provision, by which the cause(s) of action may be gleaned, are at paragraphs 33, 36 and 37:
Relief sought
33.The Applicant seeks the following declaratory relief that the Respondent contravened:
(a)Section
353343 and 344 of the FW Act by conducting a disciplinary process that was materially unjust, unfair and misleading to the Applicant;(b)Section 341 of the FW Act in that the Respondent failed to comply with the respondent’s internal instruments and policies in relation to consultation and redundancy.
[…]
36.Pursuant to section 340, 341, 343 and 344 of the FW Act, the Respondent pay a pecuniary penalty to the applicant with the Applicant donating 33% to a charity of the Applicant’s choosing or as the court considers appropriate as follows:
a. Inadequate notice (two occasions) for disciplinary meeting attendance $10,000
b. Misleading and deceptive conduct including evidence tampering $25,000
c. Failing to prevent and allowing injury to employee $25,000
37.Pursuant to section 570 of the FW Act, the Court should be satisfied that the Respondent contravened section 340, 341, 343 and 344 of the FW Act, the Respondent pay the Applicant’s costs in this proceeding on an indemnity basis, or alternatively at scale costs pursuant to Schedule 2 of the FCFCA Act.
[…]
(tracked change inserted to reflect an amendment made at the hearing)
The purpose of pleadings is well established as to define the issues for determination in the case and enable the other party to understand the case they have to meet. In Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], the Full Court observed that:
It is well-established that the main purposes of pleadings are to give notice to the other party of the case it has to meet, to avoid surprise to that party, to define the issues at trial, to thereby allow only relevant evidence to be admitted at trial and for the trial to be conducted efficiently within permissible bounds: see, eg Dare v Pulham[1982] HCA 70; (1982) 148 CLR 658 (at 664–665). However, it is also well-established that pleadings are not an end in themselves, instead they are a means to the ultimate attainment of justice between the parties to litigation: see Banque Commerciale S.A. (in liq) v Akhil Holdings Ltd[1990] HCA 11; (1990) 169 CLR 279 (at 293) per Dawson J who cites Isaacs and Rich JJ in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81; (1916) 22 CLR 490 (at 517). For these reasons, the courts do not, at least in the current era, take an unduly technical or restrictive approach to pleadings such that, among other things, a party is strictly bound to the literal meaning of the case it has pleaded. The introduction of case management has, in part, been responsible for this change in approach: see the observations of Martin CJ in Barclay Mowlem Construction Limited v Dampier Port Authority[2006] WASC 281; (2006) 33 WAR 82 (at [4]–[8]). Even before the widespread use of case management, the High Court reflected this approach in decisions such as Leotta v Public Transport Commission (NSW)(1976) 50 ALJR 666 (at 668–669) per Stephen, Mason and Jacobs JJ and Water Board v Maustakas[1988] HCA 12; (1988) 180 CLR 491 (at 497) per Mason CJ and Wilson, Brennan and Dawson JJ.
As will be apparent from the procedural context, the present case was ordered to run by way of pleadings at a relatively early stage. It therefore attracted the application of the Federal Court Rules 2011 (Cth) with regard to procedure: r.1.06 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, Div 16.1, Federal Court Rules 2011 (Rules). Relevantly, those Rules provide:
(a)a pleading must identify the issues that the party wants the Court to resolve: r.16.02(1)(c);
(b)a pleading must state the material facts on which the party relies that are necessary to give the opposing party fair notice of the case to be made against that part at trial, but not the evidence by which the material facts are to be proved: r.16.02(1)(d);
(c)a pleading must state the provisions of any statute relied on and the specific relief sought or claimed: r.16.02(1)(f);
(d)a pleading must not fail to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading or otherwise be an abuse of the process of the Court: r.16.02(2)(e) and (f);
(e)a party is not entitled to seek any additional relief to that claimed in the originating application: r.16.02(4); and
(f)a party must plead a fact if it is necessary to meet an express denial or if failure to do so may take another party by surprise, except that a party need not plead a fact if the burden of proving it does not rest with them: r.16.03.
The Court has a broad discretion to dispense with the rules about the requirements of pleadings: r.1.34 of the Rules. And the Court may make any order that the Court considers appropriate in the interests of justice.
By the case management process, including on the first day of the trial, Mr Hendriks was afforded substantial opportunity to file and amend his statement of claim. Mr Hendriks was also on notice of the Company’s objections to his pleadings from a relatively early stage.
To the extent that Mr Hendriks sought to expand his case at trial beyond the pleadings, I would not allow it. To dispense with the pleading requirements in this case would be to revisit a ruling made some time ago in this proceeding in circumstances where Mr Hendriks had substantial opportunity to prepare and amend his case. Further, to do so would not rectify a mere technicality and would be to allow the Company to be essentially ambushed. I am not persuaded this is an appropriate case, including when regard is had to the serious nature of the remedies sought which include penalties: Australian Building and Construction Commissioner v Hall [2018] FCAFC 83; (2018) 261 FCR 347.
In considering this issue, I have had regard to the fact that Mr Hendriks is a lay-person who has represented himself for the most part of these proceedings. He told the Court that legal representation was not a matter of affordability but rather that he could not find another lawyer who would take on his case. Mr Hendriks did not appear to appreciate that such difficulty may be a reflection of the prospects of his case. In any event, the reasons why Mr Hendriks chose to continue to pursue the litigation in those circumstances are a matter for him.
The challenges facing every self-represented litigant in this jurisdiction do not excuse a failure to adhere to the requirements of pleadings which are intended to ensure a fair trial for all.
Accordingly, I will now turn to consider the contraventions in the amended statement of claim as plead therein.
The Company contravened ss.343 and 344 by conducting a disciplinary process that was materially unjust, unfair and misleading to the Applicant
Mr Hendriks contended a contravention of s.343 but did not articulate allegations directed at the necessary elements of coercion. That is, no allegation was made as to the particular nature or character of the intent to coerce. Mr Hendriks objected to the involvement of Ms Hogarth and Mr Hamilton in the investigation which preceded his termination, but nowhere alleges coercion on the part of either of them. Further, neither in his pleadings or his evidence did he articulate or draw any link between an alleged coercion and an alleged exercise, non-exercise or proposed exercise or non-exercise of a workplace right.
Similarly, Mr Hendriks contended a contravention of s.344 but did not articulate the necessary elements of s.344. The prohibition under s.344 is limited to a decision by an employee to make or not make agreements or arrangements under the NES or a modern award, to agree to or terminate an individual flexibility arrangement, to accept a guarantee of annual earnings or agree or not agree a deduction of amounts payable in relation to the performance of work. Mr Hendriks does not contend to have made or proposed to make any decision of a kind specified at s.344(a) to (e). He has therefore not made out even a basis for a claim under s.344 of the Act.
While each of ss.343 and 344 may be understood to deal with distinct concepts, there is plainly some overlap in the way Mr Hendriks has chosen to run his case. Similar to the problems identified in relation to the alleged s.343 contravention, the claim does not articulate any allegation that Mr Hendriks was unduly influenced or pressured by any particular person to act in a particular way. He has not articulated any pressure or influence sought to be exerted.
The substance of Mr Hendriks’ amended statement of claim plainly goes to the alleged (un)fairness of the disciplinary process(es) that ultimately lead to his dismissal. Including that: Mr Hendriks was given insufficient notice of both disciplinary meetings (though he accepted that the second disciplinary meeting was delayed when he raised the issue); the evidence on which the second investigation was based was inaccurate (“tampered with”) and/or overlooked; that Ms Hogarth was tainted by a conflict of interest as wife of the CEO; that Mr Hamilton was also conflicted because he was involved in the email tampering. There are procedural flaws apparent on the evidence of the Company’s disciplinary process. These may be legitimate complaints for an appropriate jurisdiction. However this Court does not have jurisdiction to determine an unfair dismissal claim as to whether Mr Hendriks’ dismissal was harsh, unjust or unreasonable (or misleading as put in the amended statement of claim). A general protections proceeding is not a broad inquiry as to whether the Applicant has been subjected to a procedurally or substantively unfair outcome: Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17 at [48].
Contravened s.341 by failing to comply with Company policies and procedures in relation to consultation
Section 341 is definitional and not of itself able to amount to a contravention of the Act. Adopting a most beneficial interpretation of the pleadings in favour of Mr Hendriks, when regard is had to the relief sought at paragraphs 36 and 37 therein, the contravention alleged is that at s.340 together with s.341.
It was not expressly plead but may be accepted that Mr Hendriks’ termination was at the heart of his case. Dismissal from employment is an “adverse action” as defined at s.342 of the Act. Mr Hendriks did not plead or articulate any other form of “adverse action” taken in contravention of s.340 because of the exercise of a workplace right at s.341.
If this claim were understood to contend that the real reason for the termination was to avoid Mr Hendriks’ workplace right to entitlements under a redundancy policy or procedure, which appeared in part of the amended statement of claim, then he has not established the source of such entitlement. The Staff Policy and Procedures Manual that was before the Court was referenced in the terms and conditions of employment but expressly not contractually binding on the Company. Mr Hendriks did not produce any other document said to constitute a redundancy policy or procedure as to make out this claim.
If this were a claim that the dismissal was effected in order to avoid Mr Hendriks’ entitlement to a workplace right under another type of redundancy instrument, such as the Act or an Award, Mr Hendriks again does not succeed. The pleadings at least referenced Award coverage in the summary of material facts, but did not link this to an alleged contravention. At the hearing, Mr Hendriks elaborated to say it was the Clerks-Private Sector Award (Award) that applied to his employment, which the Company strongly denied on the basis it was an “executive” role. Even if it did so apply, that Award (read with s.119 of the Act) required that an employee is entitled to be paid redundancy pay by the employer if the employee’s employment was terminated at the employer’s initiative because the employer no longer required the job done by the employee to be done by anyone. However, on his own case, the role of Mr Hendriks was still very much required to be performed. Indeed, the omitted paragraph of Ms Hogarth’s 6 July 2021 email that drew so much focus in these proceedings further supports a finding that Mr Hendriks’ role was “much needed” and was to be backfilled.
For completeness, there was some reference to a verbal complaint about the alleged email tampering. Such complaint is not plead in terms of when it was made, to whom it was made or the source of a workplace right to make such complaint. There is no evidence of such complaint nor any foundation on which the Court may make a dispositive finding in this respect.
Further, it may be observed that a lot of noise was made about matters that might properly have underscored a complaint with serious consequences for the Company. For example, a complaint to a corporate or financial regulator. However, nowhere did Mr Hendriks suggest that he had made or even foreshadowed such complaint prior to his termination as for this to underscore a motive for termination. The highest the pleadings and indeed the evidence go in this respect is that: Mr Hendriks requested a copy of the Company’s whistleblower policy in the 13 July 2021 meeting; that request post-dated the issue of the formal warning; and Mr Hendriks only made that request during the disciplinary meeting of 13 July 2021 because he considered his employment was about to be terminated and he wanted to ensure that he was protected from any failures by the Company and/or adverse consequences in relation to what he perceived to be the Company’s financial mismanagement.
As concluded above, the disciplinary investigation may have been flawed, not consistent with the Company’s own policies and/or unfair. However it is not the task of this Court to speculate about what is intended by the claim or embark on a broad inquiry as to whether Mr Hendriks has been subjected to a procedurally or substantively unfair outcome.
Resolution
For the above reasons, Mr Hendriks has not articulated the basis of his claims sufficient to engage the reverse onus. Accordingly, the jurisdiction of this Court is not engaged.
CROSS-CLAIM
Accrued jurisdiction
The source of the cross-claim is said to be in the Court’s accrued jurisdiction, and is founded in common law for the misappropriation of funds in the performance of Mr Hendrik’s payroll duties by:
(a)paying to himself wages exceeding amounts due and payable under his contract of employment;
(b)recording annual leave accruals exceeding the rate of accrual under his contract of employment;
(c)recording payments in respect of his superannuation that exceeded what was payable so as to avoid the superannuation guarantee charge; and
(d)performing such duties listed above without the knowledge of, or approval from the Company.
In considering whether a matter is within the accrued jurisdiction of the Court, the High Court in Fencott v Muller (1983) 152 CLR 570 (Fencott) at [34] stated:
the question … is whether the claim under the relevant federal law is a substantial part of a controversy the whole of which would be appropriately and conveniently determined by the court vested with jurisdiction in matters arising under that law.
In Re Wakim (1999) 198 CLR 511 (Re Wakim) found that accrued disputes must have one common substratum of individual facts and that the determination of one dispute is essential to the determination of the other. Hayne J said in Re Wakim at [139]:
The central task is to identify the justiciable controversy. In civil proceedings, that will ordinarily require a close attention to the pleadings (if any) and to the factual basis of each claim.
Further explanation was given by the High Court in Re Wakim, at [140] and [141].
In this case, although the cross-claim was opposed, there was no real dispute that the Court has accrued jurisdiction to hear and determine the breach of contract claims by the Company as part of a single matter involving the claims of Mr Hendriks for alleged contraventions of the Act. There may be some doubt about whether the judicial controversy between the parties, including the claims for breach of contract, arises out of a single substratum of facts. The common facts relate to the Employment Contract and its terms. However, the cross-claim controversy was only identified post-termination and therefore does not form part of the reasons for termination. Further, it is not connected with the disciplinary process(es) that lead to the formal warning or the termination, or the allegation of avoidance of redundancy entitlements.
In any event, were it accepted that the judicial controversy essentially arises out of the same substratum of facts, I would not find that the cross-claim is made out.
Overpayment of wages
There was no dispute that Mr Hendriks’ contracted hours of work were 37.5 hours per week, to be worked Monday to Friday between the hours of 8.00 am to 6.00 pm. There were express contractual obligations to: perform certain duties within those hours; perform (undefined) reasonable additional hours; to faithfully and diligently and exercise all due care and skill in performing the duties of the position and to act in the best interests of the Company at all times. There was no express provision for overtime or penalty payments over and above the salary.
There was an agreement to increase Mr Hendriks’ salary as specified in the Employment Contract to $100,000 per annum, which was not attached to any other written or express variation of the contracted terms and conditions. The evidence was that Mr Hendriks worked hours in addition to the contracted 37.5 hours per week and outside of the contracted times for performance of those hours.
Mr Argyle gave evidence that he (or, at times, the executive general manager) authorised Mr Hendriks’ pay. The Company produced records that Mr Hendriks was paid in excess of his 37.5 hours and therefore in excess of his salaried rate on a weekly basis, consistently over an extended period between 3 November 2017 and 9 July 2021. By this, the Company may be taken, or implied, to have agreed to pay Mr Hendriks additional overtime during the course of the employment relationship.
Overpayment of leave and other amounts
It was also contended that the damages sought totalling $64,957.75 was inclusive of the overpayment of Mr Hendriks’ wages, superannuation, payroll tax liability and the payments of annual leave accruals that accrued by reason of the overpayments.
Similarly, if the identified amounts were overpayments then the Company’s endorsement by express approval over such a period of time constituted the Company’s agreement.
For completeness, to the extent it was a separate issue, the cross claim as to superannuation was not clearly articulated and I do not find it to be established on the materials before the Court.
Resolution
I consider the evidence to establish an implied agreement to pay Mr Hendriks for overtime as submitted and approved. Such agreement extended to payments of accruals applied to those overtime payments.
I do not consider the evidence to establish a fraud on the part of Mr Hendriks in this respect, given he was required to obtain and did obtain the approval of Mr Argyle or the executive general manager for each alleged overpayment.
CONCLUSION
For the above reasons, both the application and the cross-claim are dismissed.
I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate:
Dated: 5 April 2023
Annexure A
LOCATIONS AND RESPONSIBLITIES
[...]
Your duties will include those set out in your position description in Schedule 2 and such other duties as eReports may allocate to you from time to time. We may from time to time modify your duties but only to those for which you have the skill and competence. We may also vary or change your title and position in response to the needs of the business.
You agree to:
(a)serve eReports faithfully and diligently and exercise all due care and skill in performing the duties of your position;
(b)perform your duties as directed by eReports;
(c)act in the best interest of eReports at all times;
(d)restrain from acting or giving the appearance of acting contrary to the interests of the eReports;
(e)use your best endeavours to promote and protect eReports’ good name and reputation; and
(f)devote the whole of your time and attention to the business of eReports during your normal hours of work and at such other times as may be reasonably necessary for you to perform your duties and discharge your responsibilities.
REMUNERATION
Your will be paid the remuneration set out in Schedule 1.
Your remuneration is compensation for and is in satisfaction of all payments and benefits to which you are entitled, whether under an award or otherwise, including but not limited to:
(a) all hours worked by you including all hours worked in excess of your ordinary hours;
(b) any entitlement to overtime rates and penalty rates;
(c) any entitlement to allowances and annual leave loading; and
(d) any entitlement to any other payment, benefit or other form of salary loading.
[…]
HOURS
Your ordinary hours of work are specified in the schedule. However, it is an expectation of your role that you will work reasonable additional hours outside of these times as required to fulfil the requirements of the role. Your remuneration has been calculated to compensate for all hours worked. Your hours are subject to change by eReports Pty Ltd following consultation with you.
[…]
POLICIES
You will be required to comply with any reasonable directions given from time to time by eReports Pty Ltd management. You will also be required to comply with the workplace policies, procedures and rules of employment determined and amended by eReports Pty Ltd from time to time and you agree that such policies, procedures and rules are not incorporated as terms of this letter of appointment and they do not create any enforceable rights in your favour.
[…]
Annexure B
Duties:
Include but not limited to:
•Cash Flow Management
•Preparation and Lodgement of BAS/ IAS
•Payroll Tax – All States
•Payroll – processing, maintaining
•Payroll – maintaining staff leave
•Superannuation payments
•Workcover – all states
•Bank Reconciliation
•Banking online payments/transactions
•Credit card payments
•RCI invoices and payments
•Invoicing
•Accounts rec/pay – assist
•Company Insurances
•Working with Ext Accountants
•Data Entry
•Managing Finance Team
•Adhoc Duties as required
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