Jermiin v Commonwealth Scientific and Industrial Research Organisation
[2021] FCCA 549
•25 March 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JERMIIN v COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION | [2021] FCCA 549 |
| Catchwords: INDUSTRIAL LAW – Alleged breach of employment contract – organisational restructure to implement CSIRO 2020 strategy – Where applicant was made redundant – whether Enterprise Agreement varied contract of employment –– whether Enterprise Agreement governed termination process – whether proper process in redundancy under Enterprise Agreement where no precise process identified – Application dismissed. |
| Legislation: Fair Work Act 2009 (Cth), ss.50, 389 |
| Cases cited: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 Kucks v CSR Ltd (1996) 66 IR 182 National Tertiary Education Union v La Trobe University (2015) 254 IR 238 Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union (2016) 248 FCR 18 Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd (2014) 245 IR 449 Transport Workers Union of Australia v Linfox Australia Pty Ltd (2014) 318 ALR 54 |
| Applicant: | LARS SOMMER JERMIIN |
| Respondent: | COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION |
| File Number: | CAG 14 of 2018 |
| Judgment of: | Judge W J Neville |
| Hearing date: | 3 & 4 November 2020 |
| Date of Last Submission: | 4 November 2020 |
| Delivered at: | Canberra |
| Delivered on: | 25 March 2021 |
REPRESENTATION
| Counsel for the Applicant: | Dr A Greinke (direct brief) |
| Counsel for the Respondent: | Mr J Darams |
| Solicitors for the Respondent: | Ashurst Australia |
ORDERS
The Amended Application filed 10 May 2019 be dismissed.
There be no Order as to costs.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
CAG 14 of 2018
| LARS SOMMER JERMIIN |
Applicant
And
| COMMONWEALTH SCIENTIFIC AND INDUSTRIAL RESEARCH ORGANISATION |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant, with extensive qualifications and experience of the highest order, has had a distinguished scientific research career overseas and more recently in Australia through his employment with the Respondent (“the CSIRO”).[1] As set out in his 5 Yearly Review, dated 28th March 2014, his areas of expertise were/are in the fields of environmental biotechnology and in genomics and evolutionary biology.[2] That Review described the Applicant as “an internationally recognised expert in molecular phylogenetics and evolution.”[3] In the Affidavits affirmed by the Applicant and filed in these proceedings, he described his professional position as “evolutionary biologist and bioinformatician.”
[1] The Applicant’s curriculum vitae is located behind Tab 37 of the Court Book (“CB”).
[2] The 5 Yearly Review is in CB at 108 – 113.
[3] CB at 110. The Applicant’s peer-reviewed publications, since 2009, and his single Provisional Patent, is at CB at 112.
In 2008 the Applicant was “head-hunted” by the Respondent to work within the fields of his expertise. According to the Agreed Chronology (set out later in these reasons) the Letter of Offer from the Respondent to the Applicant was dated 16th December 2008. It was signed by the Applicant on 31st December 2008.[4] He commenced employment with the Respondent in July 2009.
[4] The letter of Appointment, dated 16th December 2008, with the Applicant’s signature affixed dated 31st December 2008, is in CB at 80 – 84.
On 7th July 2011, the CSIRO Enterprise Agreement 2011 – 2014 commenced (“the EA”).[5] The EA applied to the Applicant and to the Respondent. Indeed, both parties, in their respective pleadings, confirmed that the Applicant was covered by the EA as from 7th July 2011.[6]
[5] See CB at 85 – 107.
[6] See par.12 of the Amended Statement of Claim, and par.12 of the Defence at Tabs 2 and 3 respectively of the CB.
In July 2016, the CSIRO published its 2020 Strategy. The ultimate implementation of that Strategy involved (or resulted in), among other things, making up to 350 existing positions within the CSIRO redundant.
On 4th February 2016, the Chief Executive Officer of the Respondent, Dr Marshall, advised all employees of CSIRO by email that, among other things, the new business strategy (“normally a business has to cut to grow”) would inevitably lead to some job losses within CSIRO.[7] By email dated 26th April 2016 to all CSIRO staff, Dr Marshall advised with greater detail the numbers of staff in each section or Department of the CSIRO who would be made redundant – simply referred to in the email as “staff redundancies.”[8]
[7] Among other places, Dr Marshall’s email is extracted at par.16 of the Applicant’s Amended Statement of Claim. CB Tab 2.
[8] Ibid.
Over the succeeding months, various meetings took place and information was disseminated to the Respondent’s staff including things like “leadership team priorities”. Some correspondence was passed to the Land and Water Business Unit (“L and W”), and other CSIRO staff, from Dr Marshall regarding the 2020 Strategy. The Applicant worked in the L and W section, which contained within it the Environmental Contaminants Mitigation and Technologies (“ECMT”) program in which the Applicant worked more particularly.
Other correspondence, noted further below, came from those in management positions regarding, for example, the “impact on L and W staff” of the 2020 Strategy.[9] By 27th April 2016, correspondence to L and W staff provided further details about what the relevant changes would mean for the Land and Water unit, including information about “staff reductions, restructure and recruitment.”[10]
[9] See CB at Tab 21, 157 – 158.
[10] See CB at 187 – 189.
On 3rd May 2016, the Applicant attended a meeting with others, including a “Senior Human Resources” advisor regarding the Applicant’s position being potentially “impacted” by the 2020 Strategy.[11]
[11] See CB 35, 55 – 56, and 64 – 65.
From that time, meetings and correspondence continued apace, which are well documented in the Applicant’s material and collated in the Court Book provided by the Respondent. That correspondence and those meetings are summarised in the Agreed Chronology, set out below. The correspondence focussed, among other things, on the Applicant’s labours at CSIRO concentrating even more carefully on his aim “to increase external revenue”, and the production of a “business case” on the Applicant’s behalf to show his alignment with CSIRO’s 2020 Strategy in order that he not be made redundant.[12]
[12] See CB 36, 197 – 201, 202, 209 – 213, and 294 – 297.
On 17th May 2016, a letter was provided to the Applicant in the course of a meeting advising him that his position at CSIRO was potentially redundant.[13] This letter was ultimately replaced by a second letter, dated 14th June 2016, regarding the Applicant’s potential redundancy.
[13] Generally, see the documents at CB Tabs 4, 8, 9, 34, 35 and 36.
There was some attempt, ultimately fruitless, to find an appropriate positon for the Applicant within CSIRO by way of re-deployment.
In an email dated 16th August 2016, Dr Hardisty, “Director, Land and Water Flagship” at the CSIRO at the time, informed the Applicant that attempts to re-deploy him were unsuccessful. That email concluded:[14]
… External revenue generation is critical for the whole business unit, and our budgetary pressures mean that we must reduce staff. Capability we retain must be tied to expectations of external revenue generation, and in your case this emerged as a key factor. I’m sorry it’s worked out this way.
[14] CB at 361.
Respectfully, the “Land and Water Flagship” appeared to be sailing into a commercial headwind, seemingly somewhat imposed upon the Respondent by Government funding cuts, among other things, and was jettisoning quite a number of its precious cargoes, if I may use a somewhat crass analogy. How quickly ersatz commercial trade winds manifested themselves, only two years after the Applicant’s completely favourable 5 Yearly Review. We can all be grateful that the pressures and expectations of “external revenue generation” were not around when Marie and Pierre Curie, Louis Pasteur, Alexander Fleming, and Jonas Salk, among innumerable others, were experimenting and/or discovering. No less curious, and fortunate, is the fact that many of these selfless researchers decided not to patent their discoveries precisely to enable the benefits discovered to be shared widely and [relatively] freely, as opposed to being forced to seek “external revenue generation.”
Parenthetically, governments of all persuasions have continued to impose increasing pressures on other institutions, notably universities, to chase and give precedence to, commercialised research. It has now reached the bizarre apotheosis (or nadir, depending on one’s perspective), where potentially more commercially promising studies (e.g. in the sciences) are privileged through fee structures, while other areas, notably the humanities, are prejudiced through the same crass vehicle of fees. According to this utilitarian “external revenue inducing/production” model, the study of Kant, Milton, Keats, or Augustine, to name only a very few, will never attract commercially viable funding. To put it slightly more directly: according to the prevailing, politically preferred commercialised model, studying things like aesthetics, logic or ethics, is to be discouraged because there is no relevant “profit” to be found or yielded.
The Applicant’s redundancy was formalised by letter from the almost dreaded “human resources” section, here from the Senior Human Resources Adviser and Executive Coach, Ms Rogers, dated 28th November 2016.[15] I say “almost dreaded”, decidedly not to cause any offence, but simply to observe that most human resource sections are regularly required to reduce the “human resources” of the enterprise in question. Doubtless a thankless and sometimes, like the present matter, distressing task. Ms Rogers kindly advised the Applicant of his “retrenchment options”, all of which only resulted in the same end, namely exit from the CSIRO, which had sought out his services 8 years earlier. The commercialisation of research claimed another scalp.
[15] See Tab 73, CB 410 – 419.
The Applicant’s termination of employment with CSIRO took effect on 30th January 2017. His final entitlements were paid on 8th February 2017.
Although their respective questions or issues were rather similar, ultimately, however, the parties were unable to agree on the specific questions or issues for the Court to determine. The relatively short list of issues by each of the parties is set out below. However, in my view, the basic questions relate to two matters: (a) the construction question regarding the terms and conditions, applicable to the Applicant, under his contract of employment and under the EA, and (b) the procedural course taken by the Respondent purportedly in compliance with those terms. In short form, the basal question may be styled in the following terms: “was there due compliance by the Respondent with the terms and processes under the Applicant’s contract of employment and/or under the EA? If not, what if any is the appropriate remedy (including compensation) for the Applicant?”
For the reasons that follow, the documentation supports the arguments of the Respondent. Legally, the Respondent complied with the terms of the Applicant’s contract and/or with the terms of the EA. As will have been apparent already, the commercial reality confronting the Respondent essentially forced its hand, reluctantly or not. For such an eminent and sought after researcher as the Applicant, it was certainly an unfortunate, indeed ethically fraught, end to an illustrious career. But this is not a Court of ethics or morals. It is a Court of law. Sometimes, as here, the ethical and the legal do not happily or easily co-exist. Indeed, in many respects, the power of “external revenue generation” usurps all before it.
For the reasons that follow, the Amended Application, filed 10th May 2019, must be dismissed.
The Applicant’s contract of employment – relevant terms
As noted above, the Applicant’s contract of employment was contained in a Document of Appointment, sent to him by the Respondent under cover of a letter dated 16th December 2008.[16] Clauses 1 – 4 of that Document dealt with the Applicant’s position, his duties, and remuneration.
[16] See CB at 80 – 84. Dr Jermiin signed the contract on 31st December 2008.
Clause 5 was headed “Duration” and stated:
Subject to the successful completion of your probationary period (if any) and to the fulfilment of the appointment conditions set out in Part 2, your appointment is for an indefinite period (i.e. no end date has been specified for it).
Clause 6 confirmed that the Applicant’s appointment commenced on 1st July 2009.
Clause 7 was headed “Termination.” It provided as follows:
Your appointment may be terminated:
a) by you giving a minimum of two weeks’ written notice to CSIRO of resignation or voluntary age retirement;
b) by CSIRO in the event of –
(i)failure to meet an appointment condition;
(ii)being found guilty of an offence warranting dismissal (i.e. misconduct);
(iii)inefficiency, incompetency, incapacity or unsuitability;
(iv)redundancy (i.e. your becoming excess to CSIRO’s staffing requirements);
(v)conflict of interests.
Clause 12 of the contract of employment, entitled “Governing provisions”, provided that the Applicant’s appointment will be “subject to and governed by … (c) relevant present or future legislation, Awards and Certified Agreements that are binding on CSIRO.” As noted below, no one referred to this Clause in submissions or otherwise. Why this was so was never explained or addressed. Although the formalities regarding the EA, such as its approval under Part 2-4 Division 4 of the Fair Work Act 2009 (Cth) (“the FW Act”), were not before the Court, its validity in any relevant respect was never put in issue. Plainly, there was no question that the EA applied to and bound each party. As noted later in these reasons under “Pleadings”, such matters were recognised and accepted by both parties in the filed pleadings.
CSIRO Enterprise Agreement 2011 – 2014 – relevant terms
Also as noted above, the CSIRO Enterprise Agreement (“the EA”) commenced on 7th July 2011. Schedule 3 of that Agreement dealt with “Redeployment and Retrenchment.”[17] It is sufficient for present purposes to note the following from that Schedule.
[17] Schedule 3 of the EA is at CB at 95 – 100.
Clause 2 of the Schedule refers to “potentially redundant officers”. This includes the following definition:
An officer is potentially redundant if:
(i) The officer is included in a group of officers, which group comprises a greater number of officers than is necessary for the efficient and economic working of CSIRO …
Clause 3 dealt with “Consultation”. Sub-clauses (a) and (b) of that Clause provided for a range of particular information to be provided to “the relevant unions.” Clause 4 dealt with “voluntary redundancy substitution.”
A principal focus during the trial was Clause 5, which dealt with the identification of individual officers from an impacted group of officers. Clause 5 was as follows:
(a) After voluntary redundancy substitution has been considered, in any situation where the number of roles available is fewer than the current number of officers occupying those roles, the following process will be adopted.
(b) The responsible Line Manager will use available knowledge and information to undertake an assessment of each officer against the organisational requirements for the role/s developed in line with the applicable work classification standards. The principles of procedural fairness will be applied. The officer will have the opportunity to provide information if they so choose, however, they will not be required to make a formal application for their existing role.
(c) The final decision will be made by the responsible Line Manager and affected officers will be advised. Where it is determined that there is no ongoing organisational requirement for the officer’s skills, the officer will be advised that they are potentially redundant and will be provided with information in accordance sub-paragraph 6(a).
It will be immediately apparent that, although the terms of Clause 5 referred to, or prescribed, the relevant Line Manager to “use available knowledge and information to undertake an assessment of each officer against the organisational requirements for the role/s developed …” (emphasis added), the reality was there was no detail or specification of what that assessment precisely involved or required. Similarly, under the contract of employment there was no specificity of any process to be undertaken regarding “redundancy.”
The terms of Clause 5 also required that “the principles of procedural fairness will be applied.” Again, no details or procedures were actually detailed or specified. That said, the documentation collated in the Court Book, and in the light of the oral evidence, made plain that the Applicant was relevantly and regularly involved in discussions with Dr Davis, and others, throughout the difficult time in 2016 when the issue of redundancy was being discussed. Those discussions also involved whether redeployment was a possibility for the Applicant. This is to say that the Applicant was given regular opportunity, which he took, to question what was happening (including the decision-making process) and to advance his case.
Clause 6 provided for “advice and information” to be provided to the “impacted officer”. This included the senior manager advising the officer of “details of the circumstances which have given rise to the potential redundancy” and “why the individual officer’s position has been identified as potentially redundant.” Other information to be provided also included potential re-deployment and “other options available which may prevent the redundancy,” among other things.
Clauses 7 and 8 of the Schedule dealt with, respectively, “redeployment” and “retrenchment.” The remaining sections of the Schedule dealt primarily with matters relating to various kinds of payments.
Pleadings
The pleadings of the parties are located at Tabs 2 and 3 of Court Book.
Relevantly, the Applicant’s Amended Statement of Claim, filed 10th May 2019, at par.15A, pleaded that “clauses 2 and 5 of Schedule 3 of the Enterprise Agreement has the effect of varying clause 7(b)(iv) of the Agreement to conform with the Enterprise Agreement.”
Par.15B of the Statement of Claim pleaded that “alternatively, by operation of s.50 of the Fair Work Act 2009, CSIRO was prohibited from terminating the Applicant’s employment except in accordance with Clauses 2 and 5 of the Enterprise Agreement.”
Pars.16 – 26 outlined the Applicant’s account of the notification of possible redundancies at CSIRO and the process that ensued. The steps identified are essentially summarised in the Agreed Chronology set out below and the documents in the Court Books to which reference was made in the Chronology.
Summarised, the Applicant challenged various members in the management of CSIRO regarding (a) their knowledge of the Applicant’s capabilities, and (b) the redundancy process. The Applicant also pleaded (par.18) that the Respondent could not provide a document that outlined the criteria against which redundancies would be assessed. It was not relevantly explained where or how any duty to provide such a document arose.
At pars.20 and 23, the Applicant quoted from two letters provided to him, dated respectively 17th May 2016 and 14th June 2016, which, he averred, each contained different reasons for the Applicant’s redundancy. Both letters were from Dr Paul Hardisty, who was Director of the Land & Water Section at CSIRO.[18]
[18] Those letters are at CB 217 – 219 (this letter had attached to it a “Redundancy Booklet”); the second letter was at CB 326 – 328.
Par.27 set out the specific grounds of the alleged “wrongful and invalid” termination of the Applicant’s employment with the Respondent. These grounds included the contention that the Respondent did not carry out any assessment, or any genuine assessment of the Applicant as against other officers in the affected group (Land & Water). The Applicant further contended among other things, that:
(i)CSIRO decided the redundancies by reference to financial and budgetary considerations, rather than the organisational requirements for the roles, and the capabilities of the officers, including the Applicant, for those roles;
(ii)CSIRO failed to assess, or genuinely assess, whether there was an ongoing organisational requirement for the Applicant’s skills; and
(iii)It was not the case that there was no ongoing organisational requirement for the Applicant’s skills at CSIRO.
On 24th May 2019, the Respondent filed an Amended Response to the Application and a Defence to the Amended Statement of Claim. For current purposes, it is sufficient to note that the Respondent (a) denied that it had repudiated the Applicant’s contract with CSIRO, (b) denied that it was in any way relevantly liable for any of the claims made by the Applicant, and (c) relied upon the correspondence (set out essentially in full) in the Amended Defence in support of its decision to make the Applicant redundant. Accordingly, the Respondent sought Orders for the Application to be dismissed.
Issues to be determined
The Applicant’s stated issues for determination were as follows:
1. Did Schedule 3 of the Enterprise Agreement have the effect of varying the applicant’s contract of employment regarding termination for redundancy?
2. Was CSIRO required to comply with clause 5 of Schedule 3 in order to terminate the Applicant’s employment on the grounds of redundancy?
3. Did CSIRO comply with clause 5 of Schedule 3 and in particular:
(a) did the responsible Line Manager (Dr Greg Davis) both purport to and in fact carry out the assessment required by clause 5(b)?
(b) did Dr Davis purport to determine that there was no ongoing organisational requirement for the Applicant’s skills as referred to in clause 5(c) of Schedule 3?
(c) was it in fact the case that there was no ongoing organisational requirement for the applicant’s skills at CSIRO?
4. What is the proper measure of compensation, whether for breach of contract or pursuant to s 545 of the Fair Work Act 2009 (Cth)?
The Respondent’s issues to be determined, not dissimilar to those of the Applicant, were as follows:
1. Did Schedule 3 of the CSIRO Enterprise Agreement 2011-2014 vary clause 7(b)(iv) of the Applicant’s contract of employment?
2. Did clause 5 of Schedule 3 of the CSIRO Enterprise Agreement 2011-2014 apply to the Applicant’s circumstances at the times material to the issues in the proceedings?
3. If the answer to Question 2 is "yes", was the Respondent required to comply with clause 5 of Schedule 3 in order to terminate the Applicant's employment on the grounds of redundancy?
4. If the answer to Question 2 is "yes", did the Respondent :
(a) comply with the requirement to conduct the assessment required by clause 5(b) of Schedule 3?
(b) determine that there was no ongoing organisational requirement for the Applicant’s skills as referred to in clause 5(c) of Schedule 3?
5. If the answer to Question 4(a) and/or 4(b) is "no", what is the proper measure of compensation, whether for breach of contract or pursuant to s 545 of the Fair Work Act 2009 (Cth)?
Agreed Chronology
The Agreed Chronology was as follows. It provides a convenient and very helpful overview of the many signal meetings and documents relevant to the issues before the Court, helpfully cross-referenced to the Court Book:
| Date | Event | Court Book reference | Reference in affidavit/s |
| 31 December 2008 | Letter of offer from CSIRO dated 16 December 2008 and document of appointment signed by Dr Jermiin. | Tab 12, | - |
| July 2009 | Dr Jermiin commenced employment at CSIRO. | Tab 4, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [2]. |
| 7 July 2011 | CSIRO Enterprise Agreement 2011-2014 commenced. The Agreement covered and applied to CSIRO and Dr Jermiin until the termination of Dr Jermiin's employment. | Tab 13, | - |
| July 2015 | CSIRO 2020 Strategy published. | Tab 17, | Affidavit of Lars Sommer Jermiin affirmed 18 January 2019, [17] and Annexure LSJ-17. |
| 14 December 2015 | Email from Paul Hardisty, Director of Land & Water Business Unit (L&W) to staff in L&W with an update about leadership team priorities, including alignment of the L&W Strategy with the CSIRO 2020 Strategy. | Tab 19, | - |
| 3 February 2016 | Dr Greg Davis, Research Director, Environmental Contaminants Mitigation and Technologies Program (ECMT) and other Research Directors within L&W attended a meeting with Dr Hardisty, and Dr Paul Bertsch, the Deputy Director of L&W, to discuss the impending announcement regarding the CSIRO 2020 Strategy and its implications for L&W. | Tab 8, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [8]-[9]. |
| 4 February 2016 | Email from Larry Marshall, CSIRO CEO, to all CSIRO staff regarding the CSIRO 2020 Strategy | Tab 20, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [5] and Annexure LSJ-1. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [6]-[7]. |
| 4 February 2016 | Email from Dr Hardisty to L&W staff regarding impact of the CSIRO 2020 Strategy on L&W staff. | Tab 21, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [6] and Annexure LSJ-2. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [10]. |
| Between February and April 2016 | Dr Davis undertook an assessment of all of the then current positions within ECMT to identify potentially excess positions. | Tab 8, Tab 25, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [14]-[17], [21]-[23] and Annexure GD-2. |
| 22 March 2016 | Meeting between Dr Marshall and L&W staff to discuss the 2020 Strategy. | Tab 4, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [7]. |
| 12 April 2016 | Business case for approval to proceed to implementation of business unit restructuring – Land & Water finalised | Tab 22, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [12] and Annexure GD-1. |
| 26 April 2016 | Email from Dr Marshall to CSIRO staff regarding update about the changes to help deliver the 2020 Strategy. | Tab 23, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [9] and Annexure LSJ-3. |
| 27 April 2016 | Email from Dr Hardisty to L&W staff regarding staff reductions, restructure and recruitment. | Tab 24, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [10] and Annexure LSJ-4. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [13]. |
| 3 May 2016 | Meeting between Dr Davis, Dr Jermiin, Dr John Oakeshott and Ms Kathryn Rogers, Senior Human Resources Advisor, ECMT, regarding Dr Jermiin's position being potentially impacted. | Tab 4, Tab 8, Tab 9, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [12]-[14]. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [26]-[28]. Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [11]-[14]. |
| 3 May 2016 | Email from Ms Rogers to Dr Davis regarding process and forwarding an email from Dr Jermiin attaching two documents: · Alignment of Dr Jermiin with CSIRO's aim to increase external revenue; · Projects that have benefited from capabilities provided by Dr Jermiin | Tab 28, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [30] and Annexure GD-4. |
| 3 May 2016 | Email from Dr Davis to Dr Jermiin regarding action items arising from the meeting. | Tab 29, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [29] and Annexure GD-3. |
| 4-5 May 2016 | Dr Jermiin had discussions with Dr Oakeshott and Dr Owain Edwards, Group Leader, Environmental Genomics, regarding presenting a business case to CSIRO to not make him redundant. | Tab 4, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [15]. |
| 6 May 2016 | Email correspondence between Dr Davis and Dr Jermiin regarding action items and preparation of Dr Jermiin's business case. | Tab 40 | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [] and Annexure GD-10. |
| 10 May 2016 | Email from Dr Hardisty to L&W staff regarding clarification of the process for identifying impacted capabilities in L&W. | Tab 32, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [17] and Annexure LSJ-5. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [13]. |
| 16 May 2016 | Email from Dr Jermiin to Dr Davis attaching a document titled Business case for retaining Lars Jermiin in CSIRO. | Tab 33, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [18] and Annexure LSJ-6. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [32]. |
| 17 May 2016 | Meeting between Dr Davis, Dr Jermiin, Dr Oakeshott and Ms Rogers to advise Dr Jermiin that he had been identified as potentially redundant. A letter advising Dr Jermiin that his position was potentially redundant was provided to Dr Jermiin at this meeting. | Tab 4, Tab 8, Tab 9, Tab 34, Tab 35, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [19]-[20] and Annexure LSJ-7. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [34]-[35], [37] and Annexure GD-5. Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [16]-[25]. |
| 20 May 2016 | Letter from Dr Jermiin to Dr Davis provided by email in response to the meeting and letter of 17 May 2016. | Tab 36, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [21] and Annexure LSJ-8. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [39]. |
| 2 June 2016 | Email from Dr Jermiin to various CSIRO officers including Gary Fitt, Andrew Young, Paul De Barro and Andy Sheppard, copying Dr Davis, Dr Oakeshott and Dr Edwards attaching documents titled: · Business case for retaining Lars Jermiin in CSIRO; and · Business case covering the timeframe 2016-19 | Tab 41, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [40] and Annexure GD-6. |
| 2 June 2016 | Dr Davis provided Dr Jermiin's business cases to Dr Fitt, Deputy Director of Health and Biosecurity Business Unit, and Dr Young, Director of National Collections and Marine Infrastructure and initiator of the Environomics FSP, ahead of redeployment meetings on 3 June 2016. | Tab 8, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [46]. |
| 3 June 2016 | Dr Davis and Dr Oakeshott had meetings with Dr Fitt and Dr Young, to discuss redeployment opportunities for Dr Jermiin outside of ECMT. | Tab 8, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [46]. |
| 14 June 2016 | Email correspondence between Dr Davis and Dr Jermiin regarding redeployment discussions. | Tab 58, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [48] and Annexure GD-12 |
| 15 June 2016 | Letter dated 14 June 2016 to replace the letter of 17 May 2016 advising Dr Jermiin that his position was potentially redundant provided to Dr Jermiin by email from Ms Rogers to Dr Jermiin, copying Dr Davis. | Tab 44, Tab 45, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [22] and Annexure LSJ-9. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [42]. Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [27] and Annexure KR-2. |
| 15 June 2016 | Redeployment period for Dr Jermiin commenced. | Tab 9, | Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [28]. |
| 21 June 2016 | Email from Dr Jermiin to Dr Davis attaching a letter in response to the letter dated 14 June 2016 advising Dr Jermiin that he was potentially redundant. | Tab 48, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [43] and Annexure GD-7. |
| 22 June 2016 | Email from Dr Jermiin to Dr Davis attaching an updated copy of the letter provided by Dr Jermiin to Dr Davis on 21 June 2016. | Tab 49, Tab 50, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [44] and Annexure GD-8. Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [23]-[24] and Annexure LSJ-10. |
| 22 June 2016 | Email from Dr Davis to Dr Jermiin in which Dr Davis provides an update about redeployment. | Tab 52, | Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, Annexure LSJ-11. Affidavit of Gregory Bruce Davis sworn 17 October 2018, [48] and Annexure GD-12 |
| 13 July 2016 | Email from Dr Davis to Dr Jermiin in which Dr Davis provides an update about redeployment discussions. | Tab 55, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [48] and Annexure GD-12 |
| 14 July 2016 | Email correspondence between Ms Rogers, Dr Davis and Dr Edwards in relation to Future Science Platform Leader – Synthetic Biology position | Tab 56, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [46] and Annexure GD-11 |
| 20 July 2016 | Email correspondence between Dr Davis and Dr Jermiin with a request from Dr Jermiin for an update about redeployment discussions. | Tab 58, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [48] and Annexure GD-12 |
| 25 July 2016 | Email from Dr Davis to Dr Jermiin in which Dr Davis provides an update about redeployment discussions. | Tab 57, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [48] and Annexure GD-12 |
| 3 August 2016 | Email from Dr Jermiin to Dr Marshall and Dr Hardisty following meetings to discuss his potential redundancy. | Tab 60, | - |
| 16 August 2016 | Email from Dr Hardisty to Dr Jermiin advising that the course of Dr Jermiin's case was not able to be changed. | Tab 61, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [45] and Annexure GD-9. |
| 22 August 2016 | Email correspondence between Ms Jen Appleby, Administrative Officer and Dr Jermiin inviting Dr Jermiin to attend a meeting with Dr Davis on 25 August 2016 | Tab 62, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [51]-[52] and Annexure GD-13. |
| 23 August 2016 | Dr Jermiin absent from duty on sick leave. Dr Jermiin did not return to duty after this date. | Tab 9 | Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [34]. |
| 28 November 2016 | Email from Ms Rogers to Dr Jermiin attaching letter advising Dr Jermiin of his retrenchment and options. | Tab 73, | Affidavit of Gregory Bruce Davis sworn 17 October 2018, [55]. Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [42] and Annexure KR-13. Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [25] and Annexure LSJ-12. |
| 30 January 2017 | Termination of Dr Jermiin's employment with CSIRO takes effect. | Tab 9, Tab 73, | Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [52]. |
| 8 February 2017 | CSIRO pays Dr Jermiin his final entitlements (including severance pay). | Tab 90, | Affidavit of Kathryn Alison Rogers sworn 17 October 2018, [55] and Annexure KR-24. Affidavit of Lars Sommer Jermiin affirmed 22 August 2018, [27]. |
Matters of Evidence
Given the amount and significance of contemporaneous documentation relied upon by both parties and collated in the Court Book, the oral evidence, to a not insignificant degree, was necessarily somewhat limited. Indeed, in my view, and in no critical way of any of the witnesses, the oral evidence assisted the Court very little.
The Applicant filed three Affidavits on 23rd August 2018, 21st January 2019, and 26th October 2020 respectively. These are located behind Tabs 4, 5 and 6 of the Court Book.
The Respondent relied upon two Affidavits, one sworn by Dr Greg Davis (Research Director in the Environmental Contaminants and Biotechnology Program of the Respondent) on 17th October 2018 (filed 18th October 2019). The other Affidavit was sworn by Ms Kathryn Rogers on 17th October 2018, and filed on 18th October 2018. Ms Rogers was the Human Resources Manager of the Respondent at the relevant time(s). These Affidavits are behind Tabs 8 and 9 of the Court Book.
The only witnesses called to give oral evidence were the Applicant, and Dr Davis on behalf of the Respondent. This is also to say that Ms Rogers was not required for cross examination. The Applicant’s brief evidence, relevantly summarised, was as follows.
The Applicant’s evidence
The Applicant had a number of colleagues to support him in the course of this very difficult process. The Applicant confirmed that he trusted in particular one of these colleagues, namely Dr Oakeshott. He trusted some others, such as Dr Edwards, rather less so. The Applicant said that Dr Oakeshott understood his (the Applicant’s) capabilities and that he was putting these capabilities forward to others within CSIRO with a view to exploring other possible employment opportunities within the organisation.
In a slightly similar vein, the Applicant said that he advocated on his own behalf to Dr Hardisty, who was then Director of the Land and Water section in CSIRO. He said that he advanced, as best he could, his capabilities with Dr Hardisty. The Applicant said, however, that he had the general impression that while Dr Hardisty was sympathetic, he felt that Dr Hardisty’s hands were tied by policy decisions. The Applicant said that he also felt that Dr Hardisty did not comprehend or appreciate as fully as the Applicant would have liked, his range of capabilities. The Applicant nonetheless, fairly in my view in all of the trying circumstances in which he found himself, said that he trusted Dr Hardisty. He also said that he was given a fair hearing by Dr Hardisty.[19] As it happens, Dr Hardisty resigned from the Respondent in February 2017. Nothing turns on this fact for current purposes.
[19] Among other documents, see the important albeit brief email from Dr Hardisty to the Applicant, dated 16th August 2016, at CB 361. This email confirmed that Dr Hardisty had explored other employment options fort the Applicant but none were found. He also confirmed that “external revenue generation” was critical and that “budgetary pressures mean that we must reduce staff. Capability we retain must be tied to expectations of external revenue generation, and in your case this emerged as a key factor.”
The Applicant confirmed that he expressed to Dr Hardisty his frustration at the process and the criteria used by Dr Davis in assessing the redundancy issue. He said that the sole focus was on “financial reasons” with essentially no reference to scientific capabilities. The Applicant confirmed that he had a great deal of respect of Dr Hardisty. This was reflected, at the time of the redundancy process, in the Applicant’s long, cordial and collegiate email to Dr Marshall, who was head of the CSIRO at the relevant time, and Dr Hardisty, dated 3rd August 2016. It is headed “Thanks for listening earlier today.”[20] In the course of that email, the Applicant said:
Being able to articulate my concerns to those who actually have the power to change things was comforting, even though it may have no consequences on my case.
[20] This email is at CB 359 – 360.
The Applicant also confirmed that there were many of his colleagues at CSIRO who faced the same predicament as he did regarding redundancy and that they too faced this fate on the basis of financial considerations at CSIRO. In short, the Applicant’s view was that CSIRO had taken a position whereby revenue took precedence over research.
The evidence of Dr Davis
Dr Davis’ oral evidence was in the context where, in his Affidavit (filed 18th October 2018), the following matters were outlined:
(a)On 4th February 2016, the Chief Executive of CSIRO (Dr Marshall) announced that CSIRO would be “refocussing its strategy and investment in particular areas as a result of its 2020 Strategy to help deliver on the government’s desire to use innovation to drive growth, productivity, exports and jobs …” (par.6);
(b)At par.7 of this Affidavit, Dr Davis deposed that this new strategy “would lead to up to 350 positions being made redundant across the organisation, but predominantly in Data61, Oceans & Atmosphere, Land & Water and Manufacturing…”;
(c)At an earlier meeting on 3rd February 2016 with Dr Hardisty (among others) there was discussion about the need to “re-shape the capability and profile of Land & Water…” which had a particular focus on “potential for growth of external revenue …” and “100 fulltime equivalent positions within Land & Water would be made redundant and 50 new positions which align to the [new] Land & Water Strategy could be created” (par.9);
(d)Pars.14 – 19 set out the steps undertaken by Dr Davis to identify “potentially excess positions and determination of excess positions in ECMT”. I need not detail what is set out in those paragraphs, other than to note that eight positions were identified, including the Applicant’s position, as “potentially excess positions”;
(e)Dr Davis deposed (par.21) that the Applicant “had a high level of science capability, somewhat unique in the CSIRO”. He said that certain “mapping” had been undertaken, which showed that the Applicant “had not been successful in obtaining externally funded projects and that opportunities beyond Dr Jermiin’s sphere of direct control were also not available”;
(f)Pars.24 and following outlined various meetings between Dr Davis and the Applicant in May 2016 and various events following those meetings. Again, I need not outline those matters;
(g)At pars.46 – 48, Dr Davis outlined various steps and inquiries about possible redeployment opportunities for the Applicant, which were ultimately unsuccessful. In this regard, I note that in Ms Rogers’ Affidavit, filed 18th October 2018, at par.32, she confirmed that, when the Applicant was seeking redeployment, there were approximately 350 other officers also seeking redeployment of which the CSIRO could redeploy [only] some 82 officers or thereabouts. Therefore, together with the Applicant, there were approximately 267 officers who could not be redeployed;
(h)Pars.49 – 56 outlined the steps taken in relation to, including the correspondence concerning, the termination of the Applicant’s employment. At pars.49 – 50 in particular, Dr Davis deposed that, after more than “two months of actively seeking to identify redeployment opportunities” within CSIRO and where it was apparent that this would not be possible for the Applicant, he had determined that
(i) Dr Jermiin’s position was no longer needed for the efficient and economic working of the CSIRO;
(ii) The services of Dr Jermiin could not be effectively used in the CSIRO; and
(iii) Dr Jermiin was excess to requirements.
Dr Davis’ brief oral evidence, summarised, was as follows.
By reference to par.9 of his Affidavit, Dr Davis confirmed that as early as 3rd February 2016, Dr Hardisty (and others) confirmed that “sources of external revenue” was a particular focus for CSIRO. He said that this emphasis upon “external revenue” was not a completely new focus for the Respondent, and indeed, it had been a significant focus generally, if not a priority, for quite some time.
Dr Davis said that his first meeting with the Applicant on 3rd May 2016 was not, per se, about making him redundant. Rather it was a general discussion about the Applicant being a potentially “impacted officer” that would likely, or may, lead to redundancy. He said that at the 3rd May meeting with the Applicant there was a general discussion about the “documents” relevant to the process then underway regarding possible redundancy. The main document he referred the Applicant to was the Enterprise Agreement. He said, contrary to the Applicant’s contentions, that they discussed the criteria involved regarding the redundancy of officers. Dr Davis said the discussion canvassed the need for external revenue source(s), which needed to be approximately 20 – 30% of funding. He confirmed that he did not raise with the Applicant any concerns about lack of external funding in the past.
Dr Davis said that the focus regarding “external revenue sources” was primarily about an officer’s ability “to sell their work”.
Regarding the letter provided to the Applicant, dated 17th May 2016 (at CB 214), Dr Davis confirmed that it was incorrect in relevant parts, notably regarding the Applicant’s apparent sole research specialty in phylogenetics. He said however that not only did he agree to update and correct the letter but also that he took into account all of the Applicant’s capabilities, not just in phylogenetics. He denied that he did not know all of the Applicant’s capabilities.
By reference to the EA (clause 5(b)), Dr Davis confirmed that he was the responsible “line officer” in relation to the Applicant. At the time of his first meeting with the Applicant on 3rd May 2016, he said that the Applicant was relevantly an “impacted officer” but by the time of the second meeting with him the Applicant had become a “potentially redundant officer.”
Dr Davis stressed that, in his view (he confirmed that he took advice regularly from Ms Rogers of HR), the Applicant was not covered by Clause 5 of the EA because it referred to “identification of individual officers from an impacted group of officers”. His focus was on the description “an impacted group of officers”.
Subject to what is said later in these reasons, in my view, Clause 5 is open to a range of different possible interpretations. It is less than clear, or helpful, for any individual officer facing redundancy, as opposed to “an impacted group of officers”, how Schedule 3 of the EA assists such a person. Moreover, again subject to what is said later in these reasons, Schedule 3 is opaque in its lack of definition regarding who is, and who is not, or what does, and what does not, constitute, “an impacted group of officers.” Clearly, someone who is employed by the Respondent, and who is facing redundancy, is “impacted”. Necessarily, if there are other officers of the Respondent facing a similar dilemma, as a group, they will all be “impacted officers.” This is so even if they are from different parts or sections of the CSIRO. And in any event, the Applicant, like many others affected by the Respondent’s 2020 Strategy, was part of all those “impacted officers” within the Land and Water Section of the Respondent, which would, thereby, bring him within the terms of Clause 5 of Schedule 3 of the EA.
Dr Davis said that there was no one else within CSIRO, and certainly no relevant “group of officers”, who were at the same level as the Applicant, namely a senior Level 8 scientist. The Applicant’s unique position, in Dr Davis’ view, highlighted that the terms of Clause 5 of Schedule 3 of the EA did not apply to him.
Dr Davis confirmed that he looked at everyone as a “group” for the purposes of possible “redeployment” of members within the group generally and the Applicant in particular. His focus was on trying to align the Applicant’s capabilities with the “strategic direction of the CSIRO” and the requirements of the organisation with respect to the importance of securing sources of external revenue. He also confirmed that in making his assessments, he checked regularly with Ms Rogers (of HR) and with Dr Hardisty, head of Land and Water.
At a little length, Dr Davis was questioned about CSIRO priorities and the correlation between “scaled research opportunities” and external funding. In his view, there was always a strong, direct link between the two, and that the Applicant was not able to demonstrate, historically or through various business models proposed, sufficient “capability” that linked his research capabilities with relevant, external income streams.
Following a range of questions regarding the difference between an individual who is being considered for redundancy, as opposed to someone who was part of a “group” who was being similarly considered, Dr Davis confirmed effectively that whether it was an officer considered as an individual, or someone considered as part of a group, the considerations in Clause 2 of Schedule 3 were the points of reference, limited as they were, in my view. He also said that he was not across the finer detail of such distinctions (e.g. between an individual qua individual, compared to an individual who was part of a group). He seemed to accept, albeit inferentially, that the considerations in Clause 5(b) were used perhaps more by coincidence and overlap with Clause 2.
In a similar vein, Dr Davis confirmed that the areas of the Applicant’s “capability” set out in the letters dated 17th May 2016 and 14th June 2016, addressed to the Applicant, at CB 214 and 326 respectively, remained areas in which the Respondent conducted research. He confirmed further that the areas of research noted in those letters were precisely the areas he canvassed with others regarding possible redeployment for the Applicant, but unfortunately to no avail.
Dr Davis confirmed that officers of the calibre, and in the position, of the Applicant were in positions that were, for a time, fully funded by CSIRO and not dependent upon external funding. He said that this was, initially, the case when the Applicant was employed by CSIRO. And although the Applicant’s position was an expensive one, budgetary considerations were not (he said), per se, directly relevant to matters relating to the Applicant’s redundancy. Further, Dr Davis said, it was not a criticism of the Applicant that he had no track record in securing external funding. It was, he said, simply a statement of fact that the lack of external funding by the Applicant was a factor in the weighing of matters relating to redundancy.
Dr Davis accepted that the 2014 review of the Applicant was a glowing assessment of him. At the same time, he said that events subsequent to that review sought to bring about what he called an “external alignment” with a focus on external funding, which was, he confirmed, “policy driven”, and ultimately led to the significant number of redundancies. He said the primary focus was on the financial and practical benefit to the nation of the research being done at CSIRO. He also acknowledged that there was a constant tension for scientists to become “more business oriented.”
Dr Davis confirmed that he sought out possible other positions for the Applicant, and that these inquiries led to a position where 60% of funding was available to retain the Applicant at the CSIRO.[21] Relevant parts of that correspondence were as follows.
[21] See the email correspondence between Dr Davis and the Applicant at CB 356 – 357.
First, in an email to the Applicant, dated 13th July 2016, Dr Davis reported on his various discussions with various other units at CSIRO. Dr Davis said that he was “not happy” about the results achieved thus far. He continued:
All we spoke to appreciated the depth of science you had to offer but also articulated strong pressures in their business units on staffing levels and increasing levels to secure external funding. Because of this, across all discussion, we have not found a critical mass of opportunities that would support your position, and to date could not find a redeployment position in one of our business units …
Dr Davis confirmed that he (and others named in the correspondence) were “still looking.”
To this email, the Applicant responded briefly on 20th July 2016:
Thanks for your latest update. It doesn’t look good, but I think it is worth fighting on. Can you tell me what commitments you have received so far and from whom?
Dr Davis replied on 25th July 2016, saying, in part:
… The commitment from H & B was 20% and from NCMI was also 20%. L & W was also around 20%. Note that this is all largely appropriation (strategic investment). Key missing factors are external project opportunities and a redeployment position in one of the other business units. The latter is required because of the impost on the head count in L & W…
In summary, Dr Davis said that it was not a case of the Applicant not having expertise or capabilities relevant to CSIRO but more so that, across the whole of the CSIRO, there was not the demand for his capabilities sufficient to create, or to maintain, his position. He also confirmed that from approximately 2015, whenever he gave any presentation, he emphasised the importance or significance of external revenue sources, and that there could be redundancies. In fact, during a re-structure in 2014, he said there were many redundancies in middle management at CSIRO. In these circumstances, the “round of redundancies in 2016” did not come totally “out of the blue” within the CSIRO. What was of concern and a surprise (obviously not a happy one) was the scale or magnitude of the redundancies in 2016.
Dr Davis said that the number of redundancies in the Land and Water section were ultimately made by the CEO of CSIRO, Dr Marshall, and other senior executives. He said that he was not part of those discussions, which would also have involved Dr Hardisty as the Business Leader for Land and Water.
Again Dr Davis confirmed that phylogenetics was only one area of the Applicant’s various capabilities. He also again confirmed that the reasons for the Applicant’s redundancy were as set out in the Respondent’s revised letter, dated 14th June 2016.[22] In part, that letter provided:
[22] See CB 326 – 328. The letter was signed by Dr Hardisty, the Director of Land and Water.
As discussed when we met on 17th May 2016, following concerns you raised at the meeting this is an amended letter to confirm that CSIRO no longer requires the job that you are doing to be performed due to our changed operational requirements.
The reasons for your potential redundancy are as follows:
The impact of CSIRO shifting investment away from Land and Water to other areas is having substantial effects on staffing including that in our Program [sic]. It is compelling Land and Water to increasingly support staff on external funds and business opportunities. … Though these capabilities will continue to be important for genome bioinformatics research, Land and Water’s foreseeable business opportunities are not of a scale to support ongoing fundamental genome bioinformatics research based on phylogenetics and molecular evolution theory and tools.
Dr Davis said that in earlier annual reviews concerning the Applicant, the issue of external funding had been raised.
Observations on the evidence
By way of general observations on the oral evidence of both witnesses, I note the following.
First, both the Applicant and Dr Davis gave their evidence fairly and in a relatively straight-forward manner, accepting that the Applicant was the aggrieved party and Dr Davis was, in a sense, seeking to defend his employer (CSIRO). The so-called defence was in relation to both its policy decisions (e.g. especially regarding the constant emphasis on “external funding”, and in turn, the flow-on effects regarding redundancies), and also concerning the process that ultimately led to the Applicant’s departure from CSIRO. What began with something of a [positive] “bang” for the Applicant in 2008 certainly ended in a most unfortunate “whimper” for him, but which obviously included the hundreds of other CSIRO officers who were made redundant as a result of economically enforced “policy decisions.”
Secondly, there was a certain, quiet defensiveness in Dr Davis’ oral evidence. Doubtless some of this was because he was giving evidence electronically, as did the Applicant (from Ireland). That said, there was something of an impression that he was more of a “company man”, who was very careful in his comments not to stray too far from CSIRO policy. In saying this, I do not suggest that he was untruthful or that there was any relevant “spin” put on his evidence. It is simply that he was very careful to keep to the evidence in accordance with the stated policy.
Thirdly, on both the oral evidence and particularly in the light of the significant documentation before the Court collated in the Court Book, there can be little doubt that, from at least early 2016, the Applicant was well aware of the policy shift of the Respondent regarding either a new, or a renewed, policy that placed procurement of external funding streams above what might be called “pure research”. By this latter term I seek to refer to research that was not commercialised in any relevant way and in turn was not tied to, or dependent upon, either external revenue sources, or prospective commercial gain (e.g. through patents), either for CSIRO and/or the researcher(s) involved.
Moreover, despite the understandable chagrin, inhumanity, commercial indifference, sense of humiliation, injustice at an employer effectively being able to change a contract of employment unilaterally, and much else besides, the Applicant clearly knew from an early stage (a) the policy shift of the Respondent, (b) the focus upon external revenue sources, (c) the likelihood if not near certainty of redundancies across a range of units within CSIRO, and (d) that the Land and Water “section” of the Respondent, like other sectors also, were likely to suffer staff losses as part of the implementation of the new and commercially-oriented policy. He was also aware that he, among others, was clearly in the cohort of officers more likely than not to face redundancy – whatever his specific contract said in 2008. Further, the correspondence collected in the Court Book includes emails between the Applicant and Dr Davis, among others, which set out or confirm a degree of recognition and regretful acceptance by the Applicant that his position was, from the perspective of the Applicant, commercially untenable.
In Byrne v Australian Airlines Ltd the plurality judgment of Brennan CJ, Dawson and Toohey JJ, said:[23]
Short of a law deeming an employment relationship to exist when it does not, the question whether or not it continues to exist seems to us to be a question of fact.
[23] Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 428.
Subject to the discussion later in these reasons, as a question of fact, throughout 2016, the documentary and oral evidence confirms that, ultimately as a result of policy decisions taken by the Respondent, which included certain levels of re-structuring the CSIRO based to a significant degree upon financial considerations, the employment relationship between the Applicant and the Respondent was ending and ultimately ended.
Submissions on behalf of the Applicant
The Applicant’s submissions, filed 6th October 2020, were as follows (footnotes omitted):
Applicant’s outline of opening submissions
1. In 2009 the applicant (Dr Jermiin) was appointed as an officer of the respondent (CSIRO) and OCE Science Leader at CSIRO Entomology, Canberra. He was headhunted by CSIRO for this position.
2. This senior appointment came with academic tenure, an indefinite contract of employment that could only be terminated within the limited circumstances contained in clause 7(b) of his agreement.
3. The circumstance in clause 7(b)(iv) is where the applicant is “redundant”.
4. From 2011 the employment became subject to the CSIRO Enterprise Agreement 2011-2014 (Enterprise Agreement). Clause 5(c) of Schedule 3 of the Enterprise Agreement defined redundancy as where:
… there is no ongoing organisational requirement for the officer’s skills.
5. In 2016 CSIRO became subject to budget reductions, which ultimately resulted in the termination of staff purportedly for redundancy.
6. Dr Jermiin contends that his termination was wrongful because his position was not redundant within the meaning of the Enterprise Agreement.
7. Further, CSIRO did not comply with the procedural requirements of the Enterprise Agreement for an assessment of his skills and role in CSIRO.
8. He claims damages for breach of contract, or alternatively, compensation pursuant to s 545 of the Fair Work Act 2009 (FWA).
9. The damages or compensation is claimed as the loss of future salary to retirement in 2027 and superannuation, less his termination payment.
10. He has attempted to mitigate his loss by applying for other academic positions but has been unsuccessful to date. This is unsurprising because at the time of termination he was 57 years old.
Redundancy – Enterprise Agreement
11. Dr Jermiin was employed pursuant to a written employment agreement, being an instrument made under s 32 of the Science and Industry Research Act 1949.
12. He commenced duties on 1 July 2009. His duties are set out in clause 2 of the written agreement. Clause 5 provided that his appointment was “for an indefinite period (i.e. no end date has been specified for it)”.
13. Clause 7(b) provided that his employment may be terminated by CSIRO on in limited circumstances, including by clause 7(b)(iv) in the event of redundancy.
14. From 2011 Dr Jermiin’s employment became subject to the Enterprise Agreement, made pursuant to s 182 FWA. The provisions applied to Dr Jermiin by clause 4 of the CSIRO Enterprise Agreement.
15. Schedule 3 of the Enterprise Agreement codifies redeployment and retrenchment for redundancy. Clause 5(c) of Schedule 3 defined redundancy as where:
… there is no ongoing organisational requirement for the officer’s skills.
16. Clause 5(b) requires that the responsible Line Manager:
… will use available knowledge and information to undertake an assessment of each officer against the organisational requirements for the roles developed in line with the applicable work classification standards.
17. The applicant submits that the effect of the Enterprise Agreement was to vary the terms of his common law employment agreement, to conform with the requirements of the Enterprise Agreement.
18. The effect of awards was considered in Ansett Transport Industries (Operations) Pty Ltd v Wardley, where Wilson J observed that an award will seldom lend itself to a “covering the field” test of inconsistency on the subject of the contract of employment. Rather it will generally be a case of specific provisions having the effect of rendering inoperative any provisions of subordinate law, whether common law or statutory, touching that employment.
19. In Soliman v University of Technology, Sydney (No 2) the Full Court of the Federal Court quoted with approval an earlier Full Court in Quickenden v O’Connor, in which Black CJ and French J considered the effect of a certified agreement on common law contractual rights as:
It created rights and obligations which were statutory in character and could operate in addition to the rights and obligations under his contract and, where inconsistent, no doubt displace them.
20. And also from Quickenden in which Carr J stated:
As the High Court of Australia explained in Byrne v Australian Airlines Ltd … an award imposes certain statutory terms and conditions which do not necessarily displace underlying common law contractual relations. If they conflict, the award or certified agreement may modify the contractual provisions, but otherwise they continue to co-exist.
21. Applying the above principles, the effect of the Enterprise Agreement was to modify Dr Jermiin’s common law employment agreement in respect of termination for redundancy, so that clause 7(b)(iv) was replaced by the definition in clause 5(c) of Schedule 3 of the Enterprise Agreement, and the imposition of the procedural requirements in clause 5(b) of Schedule 3.
22. Alternatively, CSIRO was prohibited by the operation of s 50 FWA from terminating Dr Jermiin’s appointment except in accordance with clause 5 of Schedule 3 of the Enterprise Agreement.
Invalid Redundancy
23. The two critical requirements for a valid redundancy in Schedule 3 are:
(a) the process in clause 5(b) that the responsible Line Manager must undertake an assessment of each officer against the organisational requirements for the role; and
(b) the test in clause 5(c) for a redundancy which requires that there be no ongoing organisational requirement for the officer's skills.
24. Redundancy was considered by the Full Court of the Supreme Court of South Australia in R v Industrial Commission of South Australia; ex parte Adelaide Milk Supply Co-operative Ltd, in which Bray CJ said that:
… the concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him but because the employer no longer wishes the job the employee has been doing to be done by anyone.
25. Accordingly, identification of the job role or duties will be of critical importance.
26. The concept of redundancy may also draw meaning from the statutory, industrial or contractual context in which it is used. Here the position was a senior scientific research leader akin to a professor with academic tenure.
27. Consistent with this context, the test in clause 5(c) is focussed on the skills of the officer and imposes the high bar that there be no ongoing organisation requirement for those skills as well the assessment process in clause 5(b).
28. The applicant contends that the test in clause 5(c) was not met and that the assessment required by clause 5(b) was not carried out.
29. On 4 February 2016 Larry Marshall then Chief Executive sent an email to CSIRO staff announcing job losses arising from budget cuts. On 26 April 2016 he announced numbers of planned staff reductions by research area. This was followed by an email from Paul Hardisty to CSIRO Land and Water staff.
30. On 3 May 2017 Dr Jermiin attended a meeting with Greg Davis (then Research Director of CSIRO Land and Water) and was informed he was likely to be made redundant. When Dr Jermiin asked for a copy of the criteria against which redundancies would be decided, he was told that there was no such document.
31. Dr Jermiin then said:
Well, how can you then make such a decision? It would not be appropriate to consider my redundancy unless there is a clear set of criteria against which I am to be compared.
32. Dr Davis said that eight staff were to be made redundant “for financial reasons”.
33. When he asked what he could do to cancel a decision to make him redundant, Dr Jermiin was told there would need to a better alignment of his research with external revenue-generating projects.
34. On 9 May 2016 Dr Davis invited Dr Jermiin to a second meeting to be held on 17 May 2016, to formally advise him of his redundancy. On 16 May 2016 Dr Jermiin sent an email to Dr Davis attaching a business case has had discussed with John Oakeshott and Owain Edwards.
35. At the meeting on 17 May 2016 Dr Davis handed Dr Jermiin a formal letter, which advised Dr Jermiin that:
… CSIRO no longer requires the job that you are doing to be performed due to our changed operational requirements.
36. Then followed a paragraph purporting to explain the reason for the redundancy.
37. On reading the letter Dr Jermiin became upset and emotional. He said:
This letter is simply wrong. Phylogenetics is just one of the many capabilities that I provide to CSIRO.
38. Dr Oakeshott agreed, “Lars is right. He provides capabilities in many other areas, none of which were taken into consideration in this letter.”
39. The response from Dr Davis was, “The justification will need to be updated”, and made an annotation on the letter to that effect.
40. Dr Jermiin then asked whether Dr Davis or those above him (Paul Hardisty or Paul Bertsch) knew his capabilities and the value of his capabilities. Dr Davis admitted that he did not know.
41. On 20 May 2016 Dr Jermiin sent a letter of protest to Dr Davis.
42. On 15 June 2016 Dr Jermiin received a revised version of the letter given to him at the meeting on 17 May 2016, with the justification updated to add “molecular evolution” to “phylogenetics”.
43. On 22 June 2016 Dr Jermiin wrote a further letter of protest, pointing out again that this was a limited and wrong view of his capabilities. Dr Davis responded by email, stating:
As unpalatable as it is, the bottom line as I see it is we are struggling to find resources across L&W to support staff (given 70 FTEs of resources are being taken away) and, as I tried to articulate in the letter, business opportunities to fund your area of work are or were not viable at the scale required.
44. On 28 November 2016, Kathryn Rogers sent a letetr retrenching Dr Jermiin with effect from 30 January 2017.
45. In his evidence, Dr Davis attempts to offer an ex post justification for his decision to make Dr Jermiin redundant. Even if his evidence were accepted, it would not demonstrate compliance with the assessment process required by clause 5(b) and fails to show that the test in clause 5(c) was satisfied, or even considered.
46. Dr Davis repeatedly refers to a "Land & Water Strategy" but does not explain this strategy was or produce any document setting out this strategy. It is apparent that the decision to terminate Dr Jermiin was driven by a "business case", by reference to funding limitations, not by an assessment of his skills.
47. This is highlighted by Greg Davis's admission at paragraph 23 that Dr Jermiin could not be "supported" (meaning funded) because:
This was because the present and future mapping of Dr Jermiin's capability did not demonstrate sufficient engagement on internally or externally funded projects.
48. The mapping document at GD-2 was something never previously discussed with Dr Jermiin, never formed part of his employment expectations (or any other CSIRO Officer to the best knowledge of Dr Jermiin) and was simply wrong.
49. Dr Davis asserts that Dr Jermiin had failed to perform in securing externally funded research projects. Such a role was not part his duty statement or discussed in any of Dr Jermiin’s annual reviews. This reason would not be a proper basis for redundancy but a disguised termination for dissatisfaction with performance.
50. It was wrong to characterise Dr Jermiin’s research as limited to “fundamental research” as asserted in the revised explanation letter.
51. Dr Jermiin’s research from 2014 included applied research aligned with CSIRO’s 2020 Strategy, including work on a patent as well as papers in international peer-reviewed scientific journals.
52. It was the case that CSIRO continued to have organisational needs for his skills, demonstrated by the employment of new researchers in genomics following Dr Jermiin’s retrenchment.
53. A week after his termination, on 8 February 2017, CSIRO announced a new $3 million program in Synthetic Biology Future Science Platform. He was already working in several areas relevant to this platform and had research and leadership capabilities that were critical to this platform.
54. After his redundancy, current and former CSIRO researchers have continued to consult Dr Jermiin for advice and guidance in relation to ongoing CSIRO research, including Matthias Nachtschatt, Andreas Zwick and Louise Teasdale.
Quantum
55. Dr Jermiin was terminated at age 57, and since has been unable to find work, despite applying for positions in Australia and internationally. He remains unemployed. He has accordingly acted reasonably to mitigate his loss.
56. His base salary was at the CSOF7M level, with a higher salary loading set to CSOF8.2 for five years, which in 2014 was renewed for a further five years.
57. On termination his salary was $163,776 per annum. On termination he received an eligible termination payment of $47,092.14. Dr Jermiin claims for the balance of his salary to retirement at age 67, plus superannuation, adjusting for vicissitudes, less the termination payment.
58. Despite being adversely affected emotionally by the redundancy, Dr Jermiin does not claim damages for psychiatric injury, nor does he seek any grossing up of damages or compensation having regard to the impact of personal taxation.
In my view, the processes undertaken by and on behalf of the CSIRO to give effect to the economically-driven management policy announced by Dr Marshall in early 2016, and the resulting personally and professionally unfortunate and regrettable determination of the Applicant’s redundancy (doubtless the same regret and human toll on the Applicant was felt similarly by all other officers made redundant at CSIRO), (a) complied with the terms of the EA (as a supplement to the contract of employment), and therefore (b) does not give rise to any relief (including compensation) for the Applicant. Accordingly, the Amended Application, filed 10th May 2019, must be dismissed.
As a matter of formality, because of the nature of the claim and the relevant references to relief sought under the FW Act, in my view it is apposite that there be a further Order that there be no Order as to costs.
I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of Judge W J Neville
Associate:
Date: 25 March 2021
Key Legal Topics
Areas of Law
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Employment Law
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Statutory Interpretation
Legal Concepts
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Breach
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Remedies
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Statutory Construction
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Procedural Fairness
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