Jingmin Zeng v Vectus Biosystems Ltd
[2015] FWC 5536
•19 AUGUST 2015
| [2015] FWC 5536 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jingmin Zeng
v
Vectus Biosystems Ltd
(U2015/1396)
SENIOR DEPUTY PRESIDENT HAMBERGER | SYDNEY, 19 AUGUST 2015 |
Application for relief from unfair dismissal.
[1] Dr Jingmin Zeng has applied under s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy against his former employer, Vectus Biosystems Ltd (Vectus).
The hearing
[2] The matter was heard on 8 July 2015. Dr Zeng represented himself. With permission, Vectus was represented by Mr Hassall, solicitor.
The evidence and the submissions
[3] Dr Zeng tendered his own witness statement with annexures, 1 along with:
● emails between himself and other employees of Vectus; 2
● a Vectus “employee information update” form containing contact details, information relating to his pay, etc.; 3
● a medical certificate advising he was unfit for work on 12 March 2015; 4
● documents outlining scientific experimental procedures, scientific journal abstracts and articles; 5
● a Vectus document titled “External Access to E-mails”, which contains instructions on how its employees can access their work email account while not on work premises; 6 and
● several of his employee performance reviews. 7
[4] Vectus tendered the witness statement of its Medical Scientific Director, Dr Duggan, with annexures. 8 The annexures included copies of:
● Dr Zeng’s original employment contract, signed on 31 July 2008; 9
● a deed executed by Dr Zeng, assigning certain intellectual property rights to Vectus and agreeing to maintain the confidentiality of certain information, dated 28 July 2008 (the deed); 10
● its internet and email policy, dated 31 July 2008; 11 and
● Dr Zeng’s renewed employment contract, signed on 9 May 2013. 12
[5] On 23 March 2015, Vectus issued a letter to Dr Zeng, terminating his employment immediately. It explained the reason for his dismissal in this way:
“On 13 March 2015, Vectus wrote to you, through its lawyers, asking you to respond to allegations that between the dates of 30 May 2014 and 6 March 2015 you forwarded highly confidential and valuable research raw data to the personal email address [address redacted]. The information included several years’ worth of research data.
You then used the email address [address redacted] to attach the confidential information to a complaint to the directors of Vectus.
By forwarding confidential information owned by Vectus to an outside and unsecure email address, you have breached your confidential information obligations which you owe to Vectus. You have also breached Vectus’ internet and email policy. As you’re aware, the intellectual property of a biotechnology company is well known to be confidential and relates directly to the company’s intellectual property portfolio.
[...]
You have breached Vectus’ policies, your employment contract and your statutory obligations which you owe to Vectus as an employee in a position with access to confidential information. The severity of these breaches, the potential for Vectus to be irreparably harmed by your conduct and your disregard for the seriousness of the matter by your failure to provide reasonable undertakings, leads Vectus to decide to terminate your employment, effective immediately.” 13
[6] The proposed undertakings to which the letter refers were sent to Dr Zeng by Vectus’ lawyers on 13 March 2015, 14 and again via email on 19 March 2015.15 They were:
“I, Jingmin Zeng, undertake as follows:
1 I have delivered up to Vectus all confidential information or intellectual property in my possession, custody or control.
2 I have deleted or destroyed all confidential information which I have or have had in my possession.
3 I do not have any confidential information or intellectual property (including all copies of computer files) in my possession, custody or control which is the property of Vectus.
4 I do not have any information or data belonging to Vectus in my possession, custody or control that is not capable of delivery to Vectus.
5 I have not disclosed to any person or entity any confidential information belonging to Vectus.
6 I will not use or disclose any confidential information or intellectual property belonging to Vectus to which I had access during my employment.
7 I will not:
(a) file, register or record any confidential information or trade secrets with any regulatory or other authority or in any public office
(b) assert rights of any nature in respect of any of confidential information or trade secrets, and
(c) contest Vectus’ or its related bodies corporate ownership of confidential information and trade secrets.
8 If requested by Vectus, I will make available any storage device or drive, both internal and external, or any internet based storage facility (including any access codes) onto which I have stored or copied information belonging to Vectus, for the purpose of copying and examination by an expert appointed by Vectus.
I acknowledge, accept and understand the undertakings set out above.” 16
[7] Dr Zeng did not deny that he had emailed research data obtained in the course of his employment to his personal email address, 17 nor that the data belonged to Vectus rather than to him personally,18 nor that he had refused to provide the undertakings sought.19 However, he submitted that:
● The real reason Vectus had terminated his employment was to “cover up” 20 Dr Duggan’s alleged misconduct, because he had alleged that she had selectively reported and falsified experimental results. He had made this allegation both verbally to his supervisor Dr Hendriks21 and in writing to the chairman of Vectus’ board of directors.22 The scientific material he tendered23 was directed at substantiating this allegation.24 He had sent the data to his personal email address to use as evidence in support of further complaints he intended to make.25 He characterised himself as a “whistleblower”.26
● He did not consider the data truly confidential because it was encrypted and therefore, even if a third party were to gain access to it, he or she would not be able to understand it or make use of it without the key to the code used to encrypt it. 27 He therefore did not think he had acted improperly.28
● He did not think that sending the data to a non-work email address was an issue, as he had never been told not to do so, 29 other staff members were aware that he regularly did so30 and he was not the only one to do so. In particular, he contended that Dr Duggan had emailed information relating to Vectus to the non-work email address of the chairman of its board of directors.31
[8] Vectus initially submitted that the personal email address to which Dr Zeng had sent the research data belonged to his wife rather than himself, and that she worked for the CSIRO. 32 At the hearing, it did not press the latter submission,33 but there remained a dispute over whether the email address belonged to Dr Zeng or his wife. I consider the significance of this later in my decision. Vectus relied on the fact that Dr Zeng had recorded that email address as his wife’s in the “Next of Kin” field of his “employee information update” form.34 Additionally, the username of the email address is an amalgam of Dr Zeng’s surname, his wife’s surname and their common first initial. Dr Zeng maintained that the email address belonged to him and his wife did not use it.35 He gave evidence that he had mistakenly recorded his own email address as his wife’s because he was busy and not paying close attention when he filled out the “employee information update” form.36 He stated that his email address contained his wife’s surname because when he created that email account, no suitable username comprising his name alone was available.37
[9] Vectus submitted that it had had other concerns about Dr Zeng’s conduct before discovering the confidentiality breaches. These related to:
● Dr Zeng’s allegedly aggressive behaviour towards his colleague at a work meeting on 13 January 2015, which upset her and caused her to leave the meeting abruptly; 38
● his subsequent confrontation of that colleague on 15 January 2015 despite being advised that he should not speak to her without another staff member present; 39
● his decline in productivity following his return from a period of annual leave, in respect of which Dr Duggan issued him a warning letter on 2 March 2015; 40 and
● his criticism of the scientific methodology Vectus used. 41
[10] Vectus’ letter of 23 March 2015 identified Dr Zeng’s confidentiality breaches, together with his refusal to remedy them by providing undertakings, as the serious misconduct that triggered its decision to dismiss him summarily. For the reasons that follow, that is the conduct I must examine in order to determine this matter. It is not necessary for me to make findings about the other, peripheral concerns Vectus had.
Consideration
[11] It is not in dispute that Dr Zeng is a person protected from unfair dismissal. 42 I am satisfied that he is so protected.
[12] Section 385 of the Act provides:
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”
[13] Section 385(a) of the Act is satisfied. It is not in dispute that Dr Zeng has been dismissed.
[14] With respect to s.385(d) of the Act, Vectus did not contend that Dr Zeng’s position had been made redundant. Nor is this suggested on the evidence.
[15] The parties’ submissions were primarily directed to s.385(b) of the Act, i.e. whether Dr Zeng’s dismissal was harsh, unjust or unreasonable. However, Vectus also submitted that it had fewer than 15 employees at the time Dr Zeng’s dismissal took effect, 43 and Dr Zeng did not challenge this. I find that Vectus was a small business at the relevant time. Therefore, if Vectus complied with the Small Business Fair Dismissal Code (the Code) in relation to Dr Zeng’s dismissal, then he cannot have been unfairly dismissed, regardless of whether s.385(b) is satisfied on the facts before me. This is the combined effect of ss.385(c) and 388(2) of the Act.
[16] The Code was declared by the Minister for Employment and Workplace Relations on 24 June 2009. It relevantly provides:
“Summary Dismissal
It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.”
[17] In John Pinawin T/A RoseVi.Hair.Face.Body v Domingo, 44 the Full Bench set out a two-step test to determine if an employer had complied with the summary dismissal aspect of Code:
“[29]... There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.” 45
[18] Vectus’ letter of 23 March 2015 terminating Dr Zeng’s employment expressly states that:
“The severity of [the confidentiality] breaches, the potential for Vectus to be irreparably harmed by your conduct and your disregard for the seriousness of the matter by your failure to provide reasonable undertakings, leads Vectus to decide to terminate your employment, effective immediately.” 46
Dr Duggan also gave evidence to this effect at the hearing. 47
[19] I consider that Vectus’ course of action upon discovering the confidentiality breaches is consistent with a genuine belief that Dr Zeng’s conduct was sufficiently serious to justify immediate dismissal. When it became aware that Dr Zeng had not only included research data in his email to its board of directors on 12 March 2015, but that he had also been sending such data to a personal email address since May 2014, 48 it sought legal advice immediately. There was no dispute that Vectus’ lawyers sent Dr Zeng a letter the next day, 13 March 2015, requesting that he “delete and destroy all copies of our client’s confidential information”, confirm in writing that he had done so and provide signed undertakings not to use or disclose that information.49 Neither was it disputed that Dr Zeng refused to do so.50 I further find that Vectus’ lawyers followed this with another letter via email on 19 March 2015, to the same effect.51
[20] Vectus’ requirement that Dr Zeng execute the deed 52 at the start of his employment supports a finding that it would have genuinely believed that the confidentiality breaches constitute serious misconduct. So does the fact that its internet and email policy53 and its employment contracts with Dr Zeng54 expressly created obligations to maintain confidentiality and made his continued employment contingent upon those obligations. Vectus’ actions demonstrate that it valued the information in question, had gone to considerable lengths to protect it and had brought its expectations about how that information should be handled to Dr Zeng’s attention. It follows that Vectus would regard any breaches of those obligations as serious.
[21] I am therefore satisfied that Vectus believed Dr Zeng’s transmission of Vectus’ research data to a personal email address was conduct sufficiently serious to justify summary dismissal.
[22] I must next consider whether that belief was based on reasonable grounds.
[23] Relevantly for the purposes of this application, the definition of serious misconduct includes “wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment” 55 (the first aspect) and “conduct that causes serious and imminent risk to the reputation, viability or profitability of the employer’s business”56 (the second aspect).
[24] In relation to the first aspect, I find that Dr Zeng was candid and unapologetic about the fact that he had emailed research data to himself, 57 despite having signed the deed, which included such data in the definition of “confidential information”58 and provided that he ought not to do so.59 His actions were deliberate, being motivated by a desire to amass evidence to support complaints to regulatory bodies and the media about Dr Duggan’s alleged misconduct.60 I also find that Dr Zeng earnestly believed he was justified in refusing to delete that data or provide the undertakings Vectus sought, because to do so would jeopardise his prospective complaints.61 Given that his contracts of employment incorporated the deed by reference,62 I consider that Dr Zeng’s actions were inconsistent with the continuation of his contract of employment and that it was therefore reasonable for Vectus to have considered them sufficiently serious to justify summary dismissal.
[25] In relation to the second aspect, I accept Dr Duggan’s evidence that maintaining the confidentiality of the research data Vectus generates is crucial to its commercial interests as a research and development business, particularly its ability to apply for patents. 63 I consider it reasonable for Vectus to have grave concerns about this information being transmitted other than via its own secure email system, because this could have caused serious and imminent risk to its viability and profitability.
[26] I further consider that Vectus’ concerns about the dissemination of its research data would justifiably have been amplified by the fact that at the time it discovered this, it thought Dr Zeng was sending the data to a third party, his wife. 64 Even accepting Dr Zeng’s evidence that he mistakenly recorded his own personal email address on his “employee information update” form as his wife’s, it does not appear that Dr Zeng brought that mistake to Vectus’ attention until the hearing.
[27] I note Dr Zeng’s submissions that he was unfamiliar with the internet and email policy, that he would have at best skimmed the renewed employment contract before signing it and that he did not have the policy to hand when he was given the renewed employment contract to sign. 65 However, I do not consider that this makes Vectus’ belief any less reasonable. I find it was reasonable for Vectus to rely on Dr Zeng’s signature on the policy and both employment contracts as evidence that he agreed to abide by their provisions, and therefore to believe that breaching those provisions in such a calculated way constituted serious misconduct.
[28] I am not persuaded by Dr Zeng’s submission that the data was not truly confidential. The research data was given its confidential character by the deed. The fact that data may not immediately be intelligible because it is encrypted does not of itself negate that character.
[29] In all the circumstances, I am satisfied that it was reasonable for Vectus to believe that Dr Zeng’s conduct was sufficiently serious to justify summary dismissal. I am therefore satisfied Dr Zeng’s dismissal was consistent with the Code. It is therefore not necessary to reach a final view on whether it was harsh, unjust or unreasonable in order to determine his application.
Conclusion
[30] Vectus complied with the Code in effecting Dr Zeng’s dismissal. Accordingly, the dismissal was not unfair. The application is dismissed.
SENIOR DEPUTY PRESIDENT
Appearances:
J Zeng in person.
R Hassall, solicitor, for the respondent.
Hearing details:
2015.
8 July.
Sydney.
1 Exhibit Z1.
2 Exhibits Z2 and Z5.
3 Exhibit Z3.
4 Exhibit Z4.
5 Exhibits Z6, Z7, Z8, Z9 and Z11. Exhibit Z7 also contains what appear to be excerpts from various websites about British copyright and Australian privacy legislation.
6 Exhibit Z10.
7 Exhibits Z12, Z13 and Z14.
8 Exhibit V1.
9 Ibid annexure KD7.
10 Ibid annexure KD8.
11 Ibid annexure KD9.
12 Ibid annexure KD10.
13 Exhibit Z1 annexure “Document Q”.
14 Ibid para 17; exhibit V1 para 42.
15 Exhibit Z1 para 19 and annexure “Document P”; exhibit V1 para 39.
16 Exhibit Z1 annexure “Document P”.
17 PN176-PN182.
18 PN183-PN187.
19 PN521-PN523.
20 PN573, PN590.
21 Exhibit Z1 para 1.
22 Ibid para 16.
23 Ibid annexures “Document M” and “Document N”; exhibits Z6, Z7, Z8, Z9 and Z11.
24 I indicated at the hearing that I considered it neither necessary nor appropriate for me to make findings about whether Dr Zeng’s allegations were substantiated: PN549, PN556.
25 PN294; applicant’s outline of submissions, p 5, point (3)(a).
26 Exhibit Z1 para 10; applicant’s outline of submissions pp 3-5.
27 PN188-PN197, PN865; exhibit Z1 para 21.
28 PN201.
29 PN255-PN256.
30 PN257-PN261.
31 Exhibit Z1 para 23 and annexure “Document S”.
32 Respondent’s outline of submissions para 13.
33 PN226-PN235, PN695-PN701.
34 Exhibit Z3; PN690-PN694.
35 PN205-PN218, PN224-PN225.
36 PN211.
37 PN222.
38 Exhibit V1 paras 13-4.
39 Ibid paras 22-5.
40 Exhibit Z1 para 12 and annexure “Document G”; exhibit V1 para 31.
41 Exhibit V1 paras 28-9.
42 Fair Work Act 2009 (Cth) s.382.
43 PN9; exhibit V1 para 8.
44 [2012] FWAFB 1359.
45 Ibid [29].
46 Exhibit Z1 annexure “Document Q”.
47 PN670.
48 Exhibit Z1 annexure “Document Q”; exhibit V1 paras 35-7.
49 Exhibit Z1 para 17; exhibit V1 para 42.
50 PN521-PN523.
51 Exhibit Z1 para 19 and annexure “Document P”; exhibit V1 para 39.
52 Exhibit V1 annexure KD8, especially cl 3.
53 Ibid annexure KD9 cl 8.15.
54 Ibid annexure KD7 cl 15.1 and annexure KD10 cl 13.
55 Fair Work Regulations 2009 (Cth) reg 1.07(2)(a).
56 Fair Work Regulations 2009 (Cth) reg 1.07(2)(b)(ii).
57 Exhibit Z1 para 22 and annexure “Document R”; PN176-PN182.
58 Exhibit V1 annexure KD8 cl 1.1.
59 Ibid cl 3.1.
60 PN294.
61 PN312, PN524-PN530.
62 Exhibit V1 annexure KD7 cl 15.1 and annexure KD10 cl 13.
63 PN82; exhibit V1 paras 7, 36.
64 Exhibit V1 para 37.
65 PN265-PN282, PN513.
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