Keenan v Cummins South Pacific Pty Ltd
[2018] FCCA 2600
•14 September 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KEENAN v CUMMINS SOUTH PACIFIC PTY LTD | [2018] FCCA 2600 |
| Catchwords: INDUSTRIAL LAW – Adverse action. |
| Legislation Fair Work Act 2009 (Cth), ss.340(1)(a)(ii), 341(1)(c)(i), 342(1), 346, 351(1), 352, 360, 361, 546 Commonwealth Powers (Industrial Relations) Act 1996 (Vic) Supreme Court (General Civil Procedure) Rules 1996 (Vic), O 25.02, O 36.03 |
| Cases cited Adami v Maison de Luxe Ltd (1924) 35 CLR 143 AKD16 v Minister for Immigration and Border Protection & Anor (2016) 315 FLR 228 |
| Other materials Cross on Evidence, (LexisNexis Butterworths, 10th ed, 2015) The Honourable Justice Kenneth Hayne AC, ‘Statutes, Intentions and Courts: What Place Does The Notion of Intention (Legislative or Parliamentary) Have in Statutory Construction?’ (2014) 13(2) Oxford Commonwealth Law Journal 271 |
| Applicant: | ANDREW KEENAN |
| Respondent: | CUMMINS SOUTH PACIFIC PTY LTD (ACN 006 332 949) |
| File Number: | MLG 127 of 2016 |
| Judgment of: | His Honour Judge Wilson |
| Hearing dates: | 14, 15, 16, 17 and 18 August 2017; 15 September 2017; and 21 February 2018 |
| Date of Last Submission: | 15 June 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 14 September 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr R A Millar |
| Solicitors for the Applicant: | McDonald Murholme Solicitors |
| Counsel for the Respondent: | Mr J Forbes with Mr J Fetter on 21 February 2018 Mr J Fetter on 14, 15, 16, 17 and 18 August 2017, and 15 September 2017 |
| Solicitors for the Respondent: | Fisher Jeffries |
DIRECTION
Within 14 days the parties bring in minutes to give effect to these reasons.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 127 of 2016
| ANDREW KEENAN |
Applicant
And
| CUMMINS SOUTH PACIFIC PTY LTD (ACN 006 332 949) |
Respondent
REASONS FOR JUDGMENT
Introduction
The issue for determination in this case was whether the respondent discharged the reverse onus that fell upon it concerning the respondent’s decision to terminate the applicant’s employment.
After the applicant had served the respondent for 34 years, during which he occupied a very senior role earning a very significant annual salary, his employment with the respondent was terminated. He now works periodically as an Uber driver earning in the order of $15 000 per annum.
In this case the applicant contended that the respondent had no proper basis for terminating his employment. He sought relief under the Fair Work Act (“FWA”) alleging that the respondent took adverse action against him in contravention of s 340(1)(a)(ii) of the FWA. He also alleged breaches of s 351(1) and s 352 of the FWA.
The respondent denied all of the contraventions of the FWA alleged by the applicant. In relation to the specific allegation of adverse action, the respondent contended that its direct evidence from relevant decision-makers as to their motivations for acting should be accepted, none of which included a proscribed reason.
Liability was split from quantum, by agreement.
Synopsis
For the reasons that follow, in my judgment the applicant is entitled to the orders he sought in this proceeding.
Arrangement of these reasons
The trial of this proceeding ran for seven days. The court book was comprised of more than 1 000 documents. The exhibits to affidavits were voluminous and the chronology of events that counsel traversed was long, complex and factually intricate, involving numerous people and key events. In respect of the adverse action alleged, the applicant said the cause of action was constituted by five separate events, an internal investigation into his conduct, a proposed dismissal plus the suspension of his employment, among other things.
Regrettably, these reasons are long, mainly on account of the factual and legal intricacies of the subject matter.
Persons relevant to the evidence
In the trial of this proceeding eight witnesses gave viva voce evidence. But a large number of persons were named in the evidence as having some importance in the factual setting of this dispute. It is useful to outline early in these reasons the dramatis personae, if for no other reason than to explain their relevance and significance.
Andrew Keenan, the applicant, commenced employment in September 1981 as a technician engineer apprentice initially with Cummins Darlington of the United Kingdom, a subsidiary of Cummins Inc. In mid-1994 or thereabouts Mr Keenan was offered the position of product manager with Cummins Australia Pty Ltd, now known as Cummins South Pacific Pty Ltd, the present respondent in this litigation. Mr Keenan accepted the offer of employment in February 1995 and relocated to Australia thereafter working continuously with the respondent until the termination of his employment in November 2015.
At all relevant times the respondent was one of a number of subsidiaries of Cummins Inc, the parent and subsidiaries collectively forming what the parties described as the Cummins Group. At all relevant times the Cummins Group was a very substantial multinational commercial enterprise concerned in the manufacture, sale and service of engines used mostly in an industrial context. At all times relevant to this litigation Cummins Inc was the parent of the group with its head office in Columbus, Indiana, in the United States of America. Members of the Cummins Group carried on business in the Middle East, Mexico, Europe, Africa and elsewhere.
The person in ultimate control of the Cummins Group did not give evidence.
Several of the respondent’s witnesses referred to a business unit in this litigation called Cummins Business Services (“CBS”). That seemed to be an unincorporated business name that referred to some group of persons within the Cummins Group. Its staff provided services to members of the Cummins Group.
Janet Munari was at all relevant times Mr Keenan’s wife. She gave viva voce evidence in the trial.
John Pallozzi at one stage worked with Mr Keenan. When he gave evidence in this proceeding he was no longer an employee of the respondent.
Christina Denise Beaulieu was at all relevant times an employee of the respondent and a person who, under the banner of CBS, provided certain human resources services to members of the Cummins Group including the respondent. She gave evidence in this case.
Sharmili Baldota was an employee of the respondent. It seemed she may have also been part of CBS. Her title was described in Mr Keenan’s affidavit material as CBS line human resources leader – South Pacific and South East Asia. She did not give evidence in this case. A very large amount of time in this case was consumed with the unworkability of the business relationship between the applicant and Ms Baldota.
Ms Baldota’s superior was Suzanne Elderbrant whose occupation was given as global line human resources CBS. Ms Elderbrant was answerable to Ms Kirsch. Ms Elderbrant gave evidence in this case.
Mr Sanjay Pandita was the executive director of CBS Finance, according to Mr Keenan’s affidavit. Mr Pandita did not give evidence.
In March 2014 Mr Keenan was the superior of Rakesh Sharma, the financial controller of the respondent. Mr Sharma was mentioned throughout the evidence in this case by several witnesses. He did not give evidence in this case.
Ms Rebecca Kirsch was the executive director of CBS. She was based in the United States. She gave viva voce evidence in this case.
Joe McClelland, a relatively junior employee of the respondent also gave viva voce evidence.
The respondent’s organisational structure
Several witnesses gave evidence that the respondent was –
a)a process driven company;
b)concerned to follow procedures;
c)well-ordered with policies and procedures on a large array of matters; and
d)very structured, especially hierarchically.
All employees of the respondent were awarded a salary grade commensurate with their seniority and responsibilities. Mr Keenan was a senior employee with a salary grade of 10. Ms Kirsch was on a substantial salary. The respondent undertook regular performance reviews in respect of its employees and obtained what it called “stakeholder feedback”, although the respondent treated its own employees as stakeholders for certain purposes.
An employee whose performance called for improvement, as determined by that employee’s superior, was subjected to what the respondent called a “performance improvement plan”, described in this case as a “PIP”. Ordinarily, an employee was placed on a PIP when the employee’s performance called for improvement. In that eventuality, a particular period of time was prescribed by the employee’s superior within which improvement had to be demonstrated. At the end of the prescribed period, the superior “closed off” (as that phrase was used) the employee’s compliance or otherwise with the improvement that was stipulated in the PIP. When closing off, the superior usually recorded that the employee had in fact improved in the manner prescribed or the superior recorded that the employee had failed within the stipulated time to improve in the manner prescribed.
Similarly, the respondent adopted a particular procedure that it called the “show cause procedure”. It was used where the respondent considered that serious transgressions of its policies and procedures had occurred. In this litigation both the PIP and the show cause procedure were used. In view of the circumstances in which each was used, it became necessary for me to examine those issues in considerable detail as I have done in the passages below.
No criticism was made in this case about the fact of the respondent having an array of far reaching policies and procedures. However, the applicant did complain that the ethics complaint in particular was exercised in a manner that was unfair and in breach of the FWA.
The applicant’s appointment as regional leader
On 6 December 2013 the respondent offered the applicant appointment as its regional leader, South Pacific and South-East Asia. On 16 December 2013 the applicant accepted that offer. The new appointment was effective from 1 March 2014.
Prior to the making of the offer of promotion, the applicant had served from May 2007 until December 2013 in the global head office of Cummins Inc in Columbus, Indiana, pursuant to a secondment. The evidence revealed that he served very successfully in that role.
On 1 March 2014 the applicant commenced as regional leader at the respondent’s Box Hill operations in Victoria. He was paid at salary grade 10 director level, as was common ground. As a regional leader, the applicant’s responsibilities were extensive. He oversaw 60 people including Sharmili Baldota.
It is a fair distillation of the evidence in this case that the applicant did not enjoy a harmonious working relationship with Ms Baldota. In terms of corporate hierarchy, at all relevant times Ms Baldota was Mr Keenan’s underling. She was required to comply with his lawful directions.
Within the first week of the applicant’s commencement as a regional manager, complications arose between Mr Keenan and Ms Baldota. On 5 March 2014, CBS’s human resources manager for Europe, the Middle East and Africa requested Mr Keenan to provide an organisational chart for his region. Mr Keenan sent that request to Ms Baldota for her attention. Ms Baldota provided the organisational chart direct to Ms Alison who had asked Mr Keenan for the chart. Ms Alison and Ms Baldota were colleagues. Based on that version of the organisational chart, Mr Keenan circulated to members of his team a presentation as well as the organisational chart that Ms Baldota had prepared.
On 7 March 2014 Ms Elderbrant sent an email to Mr Keenan that provided commentary about seven slides in Mr Keenan’s presentation, ominously introduced with the opening words of the email “I wanted to provide some initial feedback with absolute positive intent”. The email was copied to Ms Baldota. In relation to the organisational chart, being slide three, Ms Elderbrant was critical of the fact that the chart consisted of photographs on different coloured backgrounds, that font sizes describing titles were not uniform and that at a first glance she stated, in grammatically erroneous language, “it does not looking professional”. Ms Elderbrant observed that slide four included a reference to a person who had left the role in the preceding week and the particular administrative role was an open position. So far as slide five was concerned, Ms Elderbrant stated that the first letter in “CBS” was missing so she only read “BS”. She said of the slide –
… Sharing just this slide could be perceived as ‘have we not been doing well all this time – CBS 1.0 sounds quite negative as a snap shot slide. What are the take away points from the slide as an audience member how and when are we going to discuss how we get to CBS 2.0 ? …
Her comments on slide six were unimportant. However, in relation to slide seven Ms Elderbrant was more direct and blunt. She said the following –
Slide 7 - Feels like this is exactly what we talked about you not wanting to do in the car journey - prescriptive style - your thinking on a subject - could be perceived as a tell.....where is the discussion, team engagement and sharing/brain storming of their perceptions and issues.
Then followed seven bullet points of what she described as “some agenda points to perhaps think about”.
While expressed as bearing a positive intent, that email was early evidence of a high degree of micromanagement exhibited by Ms Elderbrant in respect of Mr Keenan’s day to day discharge of his duties. He had assumed his role as a regional leader on and from 1 March 2014. That email was sent on 7 March 2014, less than a full week into Mr Keenan’s regional leadership role. Comments in it, especially those relating to font size and slide colour, were scarcely appropriate observations to a person of Mr Keenan’s seniority. The comments about slide seven were highly subjective and likewise, scarcely appropriately directed to a senior executive.
In paragraph 24 of his affidavit sworn 24 November 2016, Mr Keenan stated that Ms Baldota, a recipient of the 7 March 2014 email from Ms Elderbrant, did not inform Ms Elderbrant that she (Ms Baldota) was the creator of the organisational chart and that an acknowledgment of responsibilities for the chart ought to have been offered by Ms Baldota. None was.
On 7 March 2014 Mr Keenan discussed with Ms Baldota how the two seemed to have started on a bad note. Mr Keenan sent an email on 11 March 2014 requesting her to follow-up with Ms Elderbrant and Ms Allison aspects of the unprofessional organisational chart. Mr Keenan did not say whether Ms Baldota actually followed up aspects of the organisational chart with Ms Elderbrant or Ms Alison. Ms Baldota did not give evidence so her version of events was not known in this case.
Pausing at that juncture in the narration, it is useful to record some details about Ms Baldota. Next to no evidence was led by either party about her role in the respondent beyond Mr Keenan’s statement at paragraph 18 of his 24 November 2016 affidavit that she was the CBS line human resources leader of South Pacific and South East Asia. Her job description was not given in evidence. Nor was it stated anywhere in the evidence precisely how her role and the role of Mr Keenan interacted. I have inferred that her role involved undertaking certain human resources activities. However, no direct evidence was given about her seniority, her salary level and most importantly -
a)whether she was answerable to Mr Keenan; and
b)required to act on directions given by Mr Keenan to her.
The relevance of that information was readily apparent. She and Mr Keenan suffered a mostly uncooperative and at times borderline hostile working relationship. The respondent cast its case in this litigation to the effect that the existence of that lack of cooperation reflected poorly on Mr Keenan’s management skills. I do not share that view. Yet Ms Baldota was his inferior. She was required to adopt an approach to her work that facilitated the implementation of his lawful directions. To the extent that any proven want of cooperation on her part meant that she failed to facilitate the implementation of lawful directions given by Mr Keenan, then that was a consideration I was required to weigh carefully in the balance. It has been the law since 1924 that in certain circumstances wilful disobedience of lawful orders may constitute grounds for summary dismissal, as the High Court held in Adami v Maison de Luxe Ltd.[1]
[1] (1924) 35 CLR 143
Returning to the narrative, in March and early April 2014 three relevant events occurred. First, as deposed to by Mr Keenan in paragraphs 31 and following of his 26 November 2016 affidavit, Mr Keenan and Mr Sharma (then a financial controller of the respondent) decided to visit Singapore for work purposes. Ms Baldota asked to go. Mr Keenan told her that her attendance was not required. According to Mr Keenan, Ms Baldota made some disparaging comments about Mr Sharma. About two weeks later, Ms Baldota again requested Mr Keenan’s approval for her to accompany him and Mr Sharma to Singapore. Mr Keenan told her the situation remained unchanged and that her attendance was not required in Singapore. Mr Keenan’s decision should have been the end of the matter. Instead, Ms Baldota sent an email direct to Ms Elderbrant without Mr Keenan’s knowledge or approval. No evidence was adduced from Ms Elderbrant about the unusual nature of a person in the shoes of Ms Baldota going directly to Ms Elderbrant about such an issue. However, Ms Elderbrant did say that Ms Baldota reported to Ms Elderbrant, that Mr Keenan did not always include Ms Baldota in decisions “as a business partner as he was meant to do” and that her “role was to keep the business safe and ensure it complied with respondent’s policies and legislation”.
Of those three matters let me say the following. Mr Keenan and Ms Baldota were not business partners. They worked together as employees of the respondent. Mr Keenan was not meant to work with Ms Baldota as a business partner. She was not his partner. Mr Keenan was not required to involve Ms Baldota in decisions that he made. He was the regional leader. She was a human resources employee. Ms Elderbrant’s comment that Ms Baldota’s role was to keep the business safe was essentially meaningless. I have placed no reliance on that statement. As for the comment that Ms Baldota’s role involved ensuring that the respondent complied with legislation, it must not be overlooked that the respondent had its own internal solicitor. No evidence was adduced that Ms Baldota had legal qualifications or specific training or skills to enable her to ensure that the respondent complied with legislation. As with other aspects of Ms Elderbrant’s evidence, I found her assertions on that issue to carry almost no probative value.
On 7 April 2014 Mr Keenan sent an email to Ms Elderbrant. The email and its reply were expressed in corporate language that was typically imprecise. In it, Mr Keenan wrote –
Would you be okay with sharing Sharmili’s 2013 review and stakeholder feedback with me for my records and understanding.
That was a long winded request by Mr Keenan for Ms Elderbrant to provide him with a copy of Ms Baldota’s 2013 review and stakeholder feedback. His request was perfectly reasonable, it seemed to me. Obviously, Mr Keenan made that request because he was concerned about asking Ms Baldota personally for the information so he disclosed to Ms Elderbrant, Ms Baldota’s superior, what he was seeking. Rather than acceding to his request or refusing it, Ms Elderbrant sent Mr Keenan an email the same day in which she told him, in effect, to ask Ms Baldota himself. Her reply was punctuated with roundabout corporate jargon that included phrases such as “share” (rather than “provide”) “coach and support you through the leadership journey” (rather than “advise you about your leadership”) and “connect with you” (rather than “contact you”). At all events, the email was in the following terms (with errors in the original) –
Hi Andrew
Upon reflection - I think it would be good idea to talk to Sharmili directly and ask for the information on her 2013 performance. She has excellent stakeholder feedback and I am sure she would like to share this with you so that you can support her success in 2014.
At the same time I would encourage you to share your feedback and development areas/challenges so that Sharmili can coach and support you through the leadership journey.
I have also asked family to share her 2014 Work Plan information.
Sharmili and I have also been talking about how she stays connected with you this week. It makes sense to debrief regularly as I know from experience these busy weeks are fully utilised , it can be very difficult to recall meetings and discussions over the course of the week.
Sharmili has some good ideas and will connect with you today.
Thank you
Kind Regards
Suzanne Elderbrant
Human Resource Director
Global Line HR
Cummins Business Services
It will be apparent that in the second last sentence of that email, Ms Elderbrant wrote of the difficulty she encountered in attempting to recall meetings and discussions over the course of a week. As will become apparent later in these reasons, when Ms Elderbrant gave viva voce evidence she gave her version of events in August 2017, over three years after she wrote to Mr Keenan telling him of the difficulty she had in recalling meetings held earlier in that week. Yet when she gave her evidence before me, on most matters she spoke with apparent authority, never expressing caution that she had trouble recalling matters discussed at meetings held only a week earlier. In terms of the reliability of her evidence, I found that Ms Elderbrant was willing to give evidence conveying confidence in the truth and believability of what she said, yet in reality her command of detail was poor and she spoke in such generalities as to render her evidence of dubious probative value.
Later, on 29 April 2014 Mr Keenan and Ms Elderbrant had an exchange by instant messenger. Among the things they discussed was Ms Baldota. Mr Keenan stated in paragraph 37 of his affidavit that he told Ms Elderbrant that he was of the view that since her return from holidays she (Ms Baldota) had improved and he felt better about their working relationship. In reply, Ms Elderbrant expressed her surprise that Mr Keenan had not reflected on his style. Relevantly paraphrased, during the instant messenger exchange Ms Elderbrant reported that Ms Baldota had returned from holidays, Ms Baldota felt Mr Keenan’s partnering had improved and that Ms Baldota had changed. Ms Elderbrant said she (that is to say Ms Baldota) felt much better about “our working relationship” (presumably meaning the working relationship between Mr Keenan and Ms Baldota). Ms Elderbrant then asked whether Mr Keenan had changed his approach. In response Mr Keenan said he was not sure when and how that happened but if it had improved his working relationship with Ms Baldota then he was good with that.
For no apparent reason, Ms Elderbrant then wrote –
you know I am really surprised at your reaction - I feel Sharmili has taken all the coaching discussions we have had (indecipherable) flex her styles to support you
and yet I am not hearing anything from you on that side
just that she sorted herself our (sic) over holidays
…
yes but you didn’t say anything about your reflection
that perhaps you have looked at your style as well as Sharmili
Ms Elderbrant responded in her affidavit sworn 28 March 2017 to Mr Keenan’s evidence in paragraph 37 of his affidavit sworn 24 November 2016. She swore that she remembered coaching Mr Keenan and Ms Baldota to change in order that they could work together properly. She said Ms Baldota made the changes Ms Elderbrant suggested but that Mr Keenan did not change his style as she had suggested. Ms Elderbrant swore in her affidavit that Mr Keenan kept saying that Ms Baldota needed to change. Then she added –
Andrew had no ownership or accountability for his own leadership style and behaviours.
Pausing there, Ms Elderbrant’s comments in paragraph 39 of her affidavit about that quoted portion were bereft of detail or substance. She did not say –
a)what coaching she gave to Mr Keenan and Ms Baldota in order that they could work together properly, nor did she say when she gave any such coaching, nor did she described in detail whether the alleged coaching had been absorbed by both Mr Keenan and Ms Baldota nor did she give details of the changes she said she told Mr Keenan and Ms Baldota to make;
b)in what way Mr Keenan did not change style in the manner she suggested, nor did she say what Mr Keenan’s style was that she said had to be changed nor did she give details of the so-called suggested changes she made;
c)in what respect Mr Keenan allegedly kept saying Ms Baldota needed to change, nor what he allegedly said; and
d)what Ms Elderbrant meant when she swore that Mr Keenan had “no ownership or accountability”, nor the “behaviours” (plural) of which she spoke, nor what she was referring to when speaking of Mr Keenan’s leadership style and behaviours.
At the risk of pointing out the obvious, people in management roles almost invariably have differences in their management techniques. Some adopt a nurturing and engaging technique. Some adopt a pastoral style. Some spend countless hours discussing their ideas with those who are their subordinates. Some document meetings and events whereas others adopt a more broad brush approach. At another end of the spectrum is the manager whose communication is direct and clipped. In that category are managers who are intolerant of those who fail to listen or those who do not understand the task to hand when told for the first time. Some are computer savvy while others are not. In short, the world of commerce is so broad and multifaceted that there is no such thing as a one-size-fits-all management style. Management styles are also founded on the personality of the manager, some of whom are retiring and shy and are equally as effective as managers as are the charismatic yet loud personalities. It seemed to me that a management style was an idiosyncratic matter, varying from one person to the next and that it was wrong for Ms Elderbrant to be critical of Mr Keenan’s management style without identifying precisely in what way his style was somehow defective or deficient.
The mere fact that Mr Keenan and Ms Baldota suffered a fractious relationship did not necessarily tell of any deficiencies in Mr Keenan’s leadership and style. There was nothing defective in a manager taking issue with an inferior employee who refused to recognise her proper place in the corporate hierarchy, it seemed to me. To my mind, it reflected badly on Ms Elderbrant that she focused on the conflict between Mr Keenan and Ms Baldota and so easily so took the view that in Mr Keenan’s new role he had not “reflected” (whatever that meant) on his own management style merely by reason of the fact that the conflict between Mr Keenan and Ms Baldota continued and seemed insuperable. Naturally, one option open to Ms Elderbrant by 7 April 2015 was to remove Ms Baldota to a different role or to the same role in a different team. I found Ms Elderbrant’s evidence at paragraph 39 of her affidavit unconvincing when she so glibly stated that Mr Keenan had no ownership (whatever that meant) of his leadership style or behaviours. Common sense dictated, dare I say demanded, that Ms Elderbrant should have stepped in differently in April 2015 by requiring a different solution than her simple and to that date wholly ineffective prescription for Mr Keenan to change in some unspecified way. While change by him may have led to greater harmony for Ms Baldota in the workplace, it must not be forgotten that the respondent had then recently promoted Mr Keenan on account of what can only be assumed as its satisfaction with his performance. So why, one asks rhetorically, was he as the senior person not entitled to expect and require his junior employee Ms Baldota to modify her practices to fit into Mr Keenan’s leadership style? It seemed to me that Ms Elderbrant had the situation as at 29 April 2015 entirely back to front. She should have but failed to require the underling Ms Baldota to modify her (Ms Baldota’s) practices so as to ensure they coincided with the leadership style of Mr Keenan. And, in the absence of any evidence of proof of the way Mr Keenan’s management style was somehow defective, I do not accept as legitimate the comments in paragraph 39 of Ms Elderbrant’s affidavit nor her comments in the instant messenger communications.
In July 2014 Ms Baldota’s performance again came under scrutiny, on that occasion in the context of Mr Sharma’s Singapore assignment. Slightly earlier, on 30 April 2014 Ms Kirsch had approved a five month assignment to be taken by Mr Sharma in the Singapore office. To what entity Mr Sharma was to be posted was not stated in the email exchanges between Mr Keenan and Ms Baldota and Ms Elderbrant on 30 April 2014. However, in a letter dated 7 May 2014 to Mr Sharma the opening line a read –
We are pleased to offer you a temporary assignment in the position of Interim Finance Controller - CBS Singapore located in the Singapore office, reporting to Andrew Keenan.
On 4 July 2014 Ms Baldota sent documentation relevant to Mr Sharma to Janice See, the human resources services leader in Singapore. Ms See responded to the 4 July 2014 email from Ms Baldota by email dated 7 July 2014, a copy of which was provided to Mr Keenan. That email from Janice See was detailed. It referred to the very compressed time that presented itself (two days) and that a number of steps had to be successfully completed if the start date of 9 July 2014 was to eventuate. Ms See pointed out various errors made by Ms Baldota in Ms Baldota’s email. As a result, Mr Keenan convened a conference call between Ms See in Singapore and him with Ms Baldota in Melbourne on 8 July 2014. Mr Keenan said in paragraph 42 of his affidavit sworn 24 November 2016 that the discussion between Ms See and Ms Baldota was heated. Mr Keenan gave evidence that he suggested a third person expert be brought in immediately to provide a third person’s point of view. Mr Keenan said a third person then joined the teleconference and was not told about the differences of opinion but was only asked for subject matter expert advice. Mr Keenan said the third-party sided with Ms See’s point of view. Mr Keenan said that he decided to agree with the third-party, to which Ms Baldota became what he said was “extremely upset” and she then left the room. Mr Keenan said Ms See told Mr Keenan that Ms Baldota was difficult to deal with.
Pausing there in the narrative, only Mr Keenan gave evidence about that event, even though four persons were involved, namely, Mr Keenan, Ms Baldota, Ms See and a third party. There being no evidence to contradict the evidence given of the event by Mr Keenan, and there being no reason to reject his evidence on point, I accept Mr Keenan’s version of events on 8 July 2014 and in the lead up to those events. That evidence revealed that Ms Baldota was combative with an overseas colleague and that Ms Baldota’s uncompromising approach necessitated Mr Keenan enlisting the services of a third party to quell the disputation between Ms Baldota and Ms See.
By July 2014 Ms Baldota was emerging as a most difficult employee of the respondent who presented an unacceptably large number of problems for Mr Keenan.
At all events, seemingly in a spirit of cooperation Mr Keenan met with Ms Baldota on 9 and 10 July 2014 and agreed that each would reduce to three or four bullet points in an email how each could improve the working relationship with the other. To my way of thinking Mr Keenan’s gesture in making that offer was gracious but unnecessary. Ms Baldota was behaving badly. She refused to accept her station. She spoke out when she had no right to. She locked horns with a colleague when she should have been cooperative. It was plain that Ms Baldota provided Mr Keenan with the source of distracting and time-consuming deviations from his real role as a regional leader. She was an unwarranted thorn in his side. Moreover, Mr Keenan’s superiors should have reacted quickly to the events of July 2014 by instructing Ms Baldota that she was overstepping her role, that she was consuming too much of Mr Keenan’s leadership time and that she was distracting him from his leadership activities. Instead, on 11 July 2014 Mr Keenan sent an email to Ms Elderbrant. It is useful to set it out verbatim (with errors in the original) –
Hi Suzanne, per our email exchanges and your request for me to share my concerns.
As explained previously, I have been concerned about some of Shamili’s actions that affect our working relationship, the first one noticed was as early as 6th March which was my third day on the job. Since then there has probably been 15+ events/instances where we have had stressful and difficult conversations without coming to resolution.
The most recent incident was on Tue this week which prompted Shanili to send me an email requesting an urgent discussion which we have at 9am the following morning on the 9th. We met for approx 75 minutes with no resolution but it was agreed that I will document my thoughts/concerns and we would meet again.
The email attached is my documented concerns and we met again yesterday for about 70 minutes which was a lot more meaningful and constructive, with the conclusion that show Millie will document her concerns about me (as requested below) and then we can meet again to discuss further.
This is no situation that either of us are enjoying and is causing us both a lot of personal stress .
Hopefully we can discuss further next week on the 17th.
Purpose of the meeting next week is secular instruction in development of a strategy to resolve the current situation.
Regards
Andrew
That email was not the first time Mr Keenan had raised with Ms Elderbrant his concerns about Ms Baldota. But the precise content of his concerns about Ms Baldota had been sent to Ms Elderbrant only a few days earlier. Mr Keenan had sent to Ms Elderbrant a copy of his 10 July 2014 email to Ms Baldota. Relevantly, Mr Keenan expressed his views about his working relationship with Ms Baldota in the following terms (with errors in the original) –
Hi Sharmili, per our previous discussion and future discussions.
Attached are my concerns based on our working relationship over the last four months.
1. Unwillingness to accept responsibility for your own actions, and blaming others for mistakes or understandings, in particular around written communications,
2. Challenging my desire to seek different perspectives and gather more facts from different sources when needing to resolve differences of opinion within our team.
3. Escalating issues prematurely where we are still discussing locally as a team and we have not concluded our discussions.
I want to reiterate that I do value the role of Line HR and none of my concerns are about your role as Line HR leader, their concerns based on incidents and interaction between you and I as individuals, that we have previously attempted to discuss/resolve.
The Line HR role is a valuable part of my team, but likewise so are my Finance, IT and HR Services team members.
I would also invite you to provide feedback on my own working style so that we can have a 2 way conversation on our differences.
Regards
Andrew
From that email Ms Elderbrant was appraised of the specific issues raised by Mr Keenan as well is Mr Keenan’s proper characterisation of the fact that human resources was important to his team but it was no more important than was finance and information technology.
Mr Keenan swore that Ms Elderbrant’s response to his 11 July 2014 email was given during a teleconference call on 17 July 2014. Mr Keenan said Ms Elderbrant told Mr Keenan that Ms Baldota was “just more touchy feely”. In my view that response by Ms Elderbrant was woefully inadequate. Instead of descending into the detail, Ms Elderbrant sloughed off the bad behaviour by Ms Baldota on the basis that Ms Baldota was “just more touchy feely”. Instead of demanding from Ms Baldota a respectful approach towards her leader Mr Keenan Ms Elderbrant excused Ms Baldota’s bad behaviour as being “touchy feely” – whatever that meant. Instead of showing an even handed approach to a developing skirmish between employees Ms Elderbrant abandoned support for the leader, preferring instead to support the underling. In my view the behaviour of Ms Elderbrant was poor. It reflected bad management and may well have escalated, or contributed to the escalation of, the thoroughly unsatisfactory attitude exhibited by Ms Baldota towards her superior Mr Keenan. I do not accept the comment made by Ms Elderbrant at paragraph 40 of her affidavit that Mr Keenan needed to work on his style and his approach.
The working relationship between Mr Keenan and Ms Baldota continued past July 2014.
At about that period, Mr Keenan was exploring how the positions of finance leader South East Asia and finance leader South Pacific could be combined into a regional leader position. On raising the matter with her, Ms Elderbrant told Mr Keenan that the new role should be advertised internally and that it be allocated salary grade 8. Mr Keenan was keen to appoint Mr Sharma to the newly created role of a regional leader. Mr Keenan swore he told Ms Elderbrant that he disagreed with the need to advertise for the role and that Mr Sharma could face redundancy if he was unsuccessful in his appointment to the role. As it happened Mr Sharma was the only applicant for the role and he accepted an offer of appointment as a regional leader with a salary grade of 8.
On 8 December 2014 Rebecca Kirsch, Executive Director CBS, visited Australia from the United States. The subject of Mr Sharma’s performance assumed considerable importance during Ms Kirsch’s visit. Ms Kirsch told Mr Keenan that Mr Sharma had been the subject of complaints, that Ms Kirsch told Mr Keenan that staff did not take their complaints to Mr Keenan on account of their perception that the two were personal friends, and that she (Ms Kirsch) wanted Mr Keenan to put Mr Sharma on a non-urgent performance improvement plan. In putting Mr Sharma on a performance improvement plan, Mr Keenan had to nominate a point score that accurately and appropriately reflected Mr Keenan’s rating of Mr Sharma. According to Mr Keenan, Mr Pandita, executive director and CBS controller, had encouraged Mr Keenan to rate Mr Sharma as a solid 2. Based on Mr Sharma’s performance year to date in Singapore, Mr Keenan swore he was prepared to rate Mr Sharma as a 1 or possibly 2 plus. Mr Pandita wrote to Mr Keenan by email on 16 December 2014 that, in his view, Mr Sharma was not a 2 plus or 1 rating, that Mr Sharma had met expectations but that he had not exceeded expectations.
Mr Pandita did not give evidence in this case so it was not possible to obtain a detailed understanding of his reasoning for that rating of 2 rather than 1 or 2 plus. Ms Elderbrant gave evidence about the rating that she said Mr Sharma deserved. Her evidence was discursive and barely coherent. At paragraph 43 of her affidavit sworn 28 March 2017, responding to paragraph 61 of Mr Keenan’s affidavit, she said the following (with errors in the original) –
As regards to paragraph 61, there is a lot of background to this. I said I would need to have a conversation with the cash in the stakeholders. We had calibration reviews. Those reviews happen in the leadership team and then that happens in the region and then outside the region and then the calibration is done. Everyone was clear he was coming out as a 2-. People not made aware of ethics investigations. Sometimes a direct line manager will be told that there is an investigation happening so as to observe behaviours as such investigations are hard on people and we want to make sure they are properly supported. Rakesh was not a 2‑ due to the ethics investigations. That is separate.
She did not go to her discussions, if any, with Mr Sharma. She did not say whether she spoke to shareholders and, if so, to whom nor on what issue. She did not give evidence of the detail of the calibration reviews, whatever they were. She did not say what calibration was done. So far as her comment was concerned “everyone was clear he was coming out as at 2‑” she did not identify the persons with whom she spoke nor did she say the contents of the comments by which she concluded that they scored Mr Sharma a 2 minus. Nor did she give the objective, rather than her subjective, reasons for stating that Mr Sharma was not a 2 minus due to the ethics investigations. But even to that point it was apparent that within the respondent’s own hierarchy of senior management, no consistent view emerged about the appropriate way to score Mr Sharma. Mr Keenan wanted to rate Mr Sharma one or 2 plus, Mr Pandita wanted to rate Mr Sharma is a solid 2 yet Ms Elderbrant refused to entertain a rating of even 2 minus. Curiously, Ms Kirsch, who had flown to Australia from the United States for the specific purpose of dealing with complaints about Mr Sharma, said nothing on his rating.
That mercurial and highly subjective approach by senior management within the respondent caused me to focus very keenly in this case on the respondent’s approach to important decisions that involved matters of judgment on which minds may differ. I also focused on incidents that involved the exercise by the respondent of discretions, especially whether the exercise of those discretions was necessarily valid. Many of those matters bore upon the legal issues that fell for my determination in this case.
The ethics investigation of which Ms Elderbrant spoke was exposed in paragraph 61 of Mr Keenan’s affidavit. He said he learned for the first time that an ethics case had been commenced against Mr Sharma on 13 January 2015 in an email from Ms Elderbrant. Mr Kennan said in his affidavit that Mr Sharma would need to be placed on a performance improvement plan, that he was to be rated 2 minus and that Mr Sharma was subject to an ethics case, being an internal investigation in relation to a complaint. Mr Keenan exhibited to his affidavit the respondent’s performance management policy, clause 5.3 of which created the performance improvement plan. Under that clause, where employees were not performing to expectations, their manager could have initiated a performance improvement plan. The clause spoke of such a plan being applicable “for any employee who is not performing in accordance with expectations and who requires documented intervention to change behaviour and to improve performance”.
The seriousness of being the subject of a performance improvement plan lay in clauses 5.3.7 and 5.3.8. Clause 5.3.7 provided that a performance improvement plan was complete when the employee –
a)had improved performance as outlined in the plan and both employee and manager signed the plan to reflect that;
b)changed assignment to more closely suit his or her capabilities; or
c)left Cummins.
An employee who did not improve and who was rated 3 for a second consecutive year was dismissed (quaintly described in clause 5.3.8 as “separated from the organisation”).
Mr Sharma was duly placed on a performance improvement plan. A junior respondent employee, Joe McClelland, was engaged as the ethics investigator in relation to Mr Sharma. Mr Keenan met with Mr McClelland on 14 January 2015. According to Mr Keenan, at that meeting Mr McClelland told Mr Keenan that an ethics investigation was underway in relation to Mr Sharma and that Mr Keenan should not talk to staff about Mr Sharma while the investigation was underway. Mr Keenan gave evidence that Mr McClelland did not say what Mr Sharma needed to improve or what Mr Keenan needed to avoid discussing with staff. The same day Mr Keenan sent to Ms Elderbrant an email to report that he had commenced discussions with Mr Sharma concerning a performance improvement plan. The email was in fact sent more widely to Ms Kirsch, Ms Elderbrant, Mr Pandita, and with a copy even going to Ms Baldota. The email was largely of a reporting type. That was unsurprising as Mr Keenan had not been given any details of the ethics investigations then underway beyond the fact that an ethics investigation was underway. In that email Mr Keenan informed his superiors of the steps he had taken as a leader. The language used was highly reflective of the wording Ms Elderbrant had used when criticising Mr Keenan’s want of leadership in the context of Mr Keenan’s clashes with Ms Baldota, especially words such as “self reflection”, “behaviours” and the like. This was his communication to his superiors –
…
I wanted to let you know that Rakesh has been doing a lot of self reflection and I believe he is genuinely motivated to improve and make changes to his approach/style/behaviours especially once we can clearly define the specific problems that need addressing, which I am also very keen to do.
…
But Mr Keenan was also communicating his need to learn of the details of the specific procedures that needed addressing. It was a peculiar state of affairs that a serious investigation was underway about an employee for whom Mr Keenan was responsible and whose work activities bore directly on the success of the team Mr Keenan led yet the particulars and details of the issue in respect of which Mr Sharma was under investigation were concealed from Mr Keenan as regional leader. One wonders how Mr Keenan was expected to adequately lead his team when blindfolded in that way. He needed to know in what respect he was expected by his superiors to improve on Mr Sharma’s performance yet he was not told.
Rather than stating the objective facts, Ms Elderbrant in paragraph 44 of her affidavit volunteered a construction of events relating to Mr Sharma’s being placed on a performance improvement plan. Her construction was not helpful. Rather than giving detail of the substance she focused on the periphery, concentrating on how Mr Keenan described the plan preferable to Mr Sharma as “development plan” rather than a “performance improvement plan”. She sought to highlight the importance in the definitional difference between the two, saying a “big distinction” existed in the nomenclature. She said that Mr Keenan’s use of a particular nomenclature indicated that he was reluctant to engage in the Cummins process which was endorsed globally and that he liked to do his own thing.
To my way of thinking that short deposition revealed Ms Elderbrant’s views of and towards Mr Keenan. She took the view that his use of a particular phrase in reference to a document was incorrect, that in his using incorrect terminology Mr Keenan was not engaging in the globally endorsed Cummins process, that such use of terminology indicated that Mr Keenan “liked to do his own thing” and, inferentially, he refused to conform. Most importantly Ms Elderbrant’s assessment of Mr Keenan as just described revealed to me that by mid January 2015 Ms Elderbrant was not assessing Mr Keenan with an open mind or with a mind open to persuasion. Instead it appeared to me that Ms Elderbrant had formed an adverse view about Mr Keenan’s management style and she was thereafter unwilling to alter that view.
The subject of Mr Pallozzi’s telephone use and charges emerged for the first time as issues relevant to Mr Keenan on 14 January 2015. Ms Kirsch sent Mr Keenan an email saying Mr Pallozzi’s telephone charges were excessive. Precisely why a matter so similarly small and one within Mr Keenan’s scope of responsibilities went as high as to Ms Kirsch was unexplained. At all events Mr Keenan swore at paragraph 66 of his affidavit that Ms Kirsch requested Mr Keenan to investigate ways the respondent could physically obtain Mr Pallozzi’s mobile telephone from Mr Pallozzi. Unremarkably Mr Keenan passed that request down the leadership chain and asked Ms Baldota to obtain Mr Pallozzi’s telephone.
Mr Keenan’s 2014 performance and development form was settled on 16 January 2015 in consultation with Ms Kirsch. It included several positive comments from Ms Kirsch, such as “I have enjoyed working with Andrew this year. He is highly motivated to improve CBS in South Pacific annd (sic) we are starting to see positive results.” The form spoke of Mr Keenan’s need to learn to accept team decisions and that Ms Kirsch was to identify a possible mentor. As it transpired no mentor was found for Mr Keenan between that date and the date he ceased employment with the respondent. Further, on the form Ms Kirsch stated that Mr Keenan was new to the general management type of role, that there was a “fair bit of gray (sic)” involved in that it was her “perception that Andrew [was] uncomfortable with gray (sic).” No factual basis was given for that perception, if indeed the perception could be validly drawn at all, about Mr Keenan’s state of being uncomfortable with grey. To my mind that was an unsupported throwaway line or, if it was at all a considered position, no objective basis was given for it so one was left uninformed about the propriety of the basis for stating it in the first place.
Between mid and late January 2015 Mr Keenan was involved with aspects of Mr Sharma. Ms Baldota and Mr Keenan were in disagreement about the rating that Ms Baldota said Mr Sharma ought to be given. She said 2 minus whereas Mr Keenan considered Mr Sharma was appropriately rated at 2, a rating with which Mr Pandita agreed. A few days later, while he was in Malaysia Mr Sharma sent an email to Mr Keenan seeking permission to visit India following a work visit to Singapore, a request Mr Keenan refused on account of the controversy in which Mr Sharma was then embroiled. At around that time Ms Elderbrant sent an email to Mr Keenan. It was in indirect and confusing terms that used imprecise language, including the following (with errors in the original) –
Thank you Andrew
I to feel we are now in a position to progress with the Performance Improvement Plan for Rakesh based on the multiple feedback areas that have received. If there are any additional outcomes from the Ethics Investigation relating to Rakesh we will manage and support those separately.
I have spoken to Sharmili in detail and I know you are both working together to capture all of the voices and are partnering to move this forward. I believe that we are now in a good position to allow Rebecca and Sanjay to step out of the discussions and I will commit to supporting you and Sharmili moving forward.
I have been looking for a mutual time to connect with you - I am attending an HR Academy today and tomorrow so next week may be a better option for both of us. I know you are travelling to.....
Mr Keenan began reporting to Ms Beaulieu, CBS general operations leader, from January 2015. Mr Keenan deposed to there being contact from her until 5 February 2015 when Ms Beaulieu telephoned Mr Keenan to reprimand him for not having placed Mr Sharma on a performance improvement plan. On the same day Mr Keenan sent Ms Beaulieu an email explaining he had tried unsuccessfully to obtain details of the problem with Mr Sharma despite Mr Keenan’s daily request for that information. Mr Keenan told Ms Beaulieu he was “feeling very uncomfortable about this whole process.” There was a good deal of merit in Mr Keenan’s position that he had not been told precisely why the respondent was so keen to put Mr Sharma on a performance improvement plan. In those circumstances it was difficult to understand the basis on which Ms Beaulieu reprimanded Mr Keenan for failing to put Mr Sharma on a performance improvement plan. As events transpired, on 5 February 2016 Mr Keenan, in conference with Ms Baldota and Mr Sharma, drafted Mr Sharma’s performance improvement plan, which Mr Keenan sent by email to Mr Pandita, Ms Beaulieu and Ms Elderbrant on 7 February 2015. At paragraph 46 of her affidavit Ms Elderbrant said of that performance improvement plan that it was well done. Perhaps Ms Elderbrant was being coy in her accolades of Mr Keenan because Mr Keenan said that Ms Elderbrant’s response to the performance improvement plan was as follows –
… this Performance Improve Plan is excellent, one of the best and well thought through plans I have seen.
It struck me as odd that Ms Elderbrant was unwilling in her affidavit to more accurately convey the applause she gave to Mr Keenan for his performance improvement plan in relation to Mr Sharma. I began to suspect Ms Elderbrant was unable to fairly and impartially give evidence about relevant events in this case insofar as they involved Mr Keenan. I suspected that she formed personal enmity towards him.
By mid February 2015 Ms Baldota had not procured the return of Mr Pallozzi’s mobile telephone, despite being told to retrieve it by Mr Keenan. That instruction seemed to me to be simple enough. But as Ms Baldota did not give evidence in this case her explanation for the lapse of time in, and failure to, return the mobile telephone was not given. Mr Keenan said in paragraph 79 of his affidavit that Ms Baldota or Ms Elderbrant were responsible for the return of Mr Pallozzi’s telephone.
Pausing there, Mr Keenan’s narration of his request for Ms Baldota or Ms Elderbrant to involve themselves in the return of Mr Pallozzi’s mobile telephone was uncomplicated. It did not involve an analysis of personalities or performances. His version of events cited the respondent’s applicable policy. He even exhibited a copy of the relevant policy.
In pretended answer to Mr Keenan’s evidence on point, Ms Elderbrant provided a 14 line response at paragraph 47 of her affidavit. To say that in it she offered gratuitous, unresponsive and unhelpful commentary was an understatement. In it she said, variously –
a)John Pallozzi was a 2 minus and a 3 in his last year;
b)he had significant performance problems;
c)Ms Kirsch requested Mr Keenan to connect with Mr Pallozzi about the telephone (for “connect with” read “contact”);
d)while the respondent had a policy about who was to physically retrieve the telephone, it was practical for Mr Keenan to do the collecting (inferentially, whatever policy existed could be applied or modified according to her perception of the practicality of the situation);
e)Mr Pallozzi got the worst possible performance ratings for two consecutive years; and
f)he went on gardening leave by reason of his long service with the respondent but would otherwise have been terminated.
That dissertation was scarcely relevant or responsive to the matters about which Mr Keenan gave evidence in paragraph 79 of his affidavit concerning steps to retrieve Mr Pallozzi’s mobile telephone. I found it inexplicable that she felt compelled to engage in such derision of Mr Pallozzi in response to simple, uncomplicated evidence about securing the return of his telephone. That evidence from Ms Elderbrant caused me to focus very carefully on not only what she said in evidence but also how she said what she said and why she said it. In short, I was concerned that Ms Elderbrant may not have been a reliable witness.
The respondent adopted a practice of canvassing widely on matters involving feedback. For example, even though in the lead up to February 2015 Mr Keenan and Ms Baldota enjoyed (or suffered) a tempestuous work relationship, Ms Baldota was permitted by the respondent to provide feedback in relation to Mr Keenan’s work. Ms Baldota freely and seemingly enthusiastically took up the offer. Unsurprisingly, her comments were less than charitable. Two serve to make the point. They with these (with errors in the original) –
1.In Q2 2014, decisions were made regarding role changes for Natalie and Ilona. I was only consulted for follow up actions following the decisions. In my view, those decisions were legally incorrect and that Cummins exposed. It was only after my involvement and direct inputs to Andrew and the concerned supervisor that appropriate decisions were made. This situation was very stressful as it took a great deal of effort to establish the facts and the credibility of my opinion.
2.While we were working on Regional Finance consolidation , Andrew had already concluded that the role should be graded as grade 9 , without engaging me in any evaluation of the new consolidated role. I thought I was only being invited into the evaluation process after Andrew had decided the grade for the role. I felt unvalued at this point as I felt that the decision was already made without my inputs. I found particularly stressful to insist on due process . After I established all the facts, no grade change was effected.
Mr Keenan said he found those accusations distressing. Ms Baldota used the feedback process to publicly ventilate her ongoing grievances with Mr Keenan. When describing two incidents, she turned the focus of the event on to her when in truth the feedback related to Mr Keenan. Two examples sufficed –
This situation was very stressful as it took a great deal of effort to establish the facts and the credibility of my opinion.
And the second –
I felt unvalued at this point as I felt that the decision was already made without my inputs.
Once again Ms Baldota inverted the leadership hierarchy. Mr Keenan was the superior. She was the inferior. Mr Keenan was required to decide issues. He was not required to adopt everything (or for that matter, anything) Ms Baldota contributed or volunteered. If Ms Baldota’s ego suffered by reason of her not being accepted at her recommendations that was a problem for her. The fragility of her ego or her sense of being “unvalued” were psychological issues for Ms Baldota. In my view they raised no legal issue proper for determination in this case. Conversely, when her subjective and unsubstantiated views were circulated within the respondent they were damaging to Mr Keenan’s reputation. In a different forum they may even have amounted to actionable defamation, although I pass over that for this narration.
In this case the respondent focused, inordinately in my view, on Mr Keenan’s method of communicating. The respondent said he was abrupt. The respondent found Mr Keenan’s method of communicating unacceptable. Matters came to a head during a meeting attended by Ms Beaulieu, Mr Keenan and others in Nashville, Tennessee, on 24 February 2015. Ms Beaulieu considered Mr Keenan’s manner to have been direct. Mr Keenan said at paragraph 83 of his affidavit that on that day he was required to deal with a 4pm conference call with an ethics investigator and that he was very stressed in the lead up to that call. He said that he participated in a teleconference call at 4pm that day during which the ethics investigator, Mr McClelland, said the allegations against Mr Sharma were unsubstantiated. On 25 February 2015 minutes of that meeting were circulated. Prior to seeing the details of the allegations against Mr Sharma in those minutes, Mr Keenan was unaware of the specifics of those allegations. They were dismissed. But they included allegations of harassment, victimisation and discrimination.
By late February 2015, almost a year to the day from his commencement as regional leader, Mr Keenan remained embroiled in conflict with Ms Baldota. He convened a meeting with Ms Beaulieu and Ms Elderbrant to discuss Ms Baldota’s performance, her conduct and the false allegation she made against Mr Keenan. According to Mr Keenan at paragraph 86 of his affidavit, he asked Ms Elderbrant and Ms Beaulieu why Ms Baldota was making false allegations against him. He said Ms Beaulieu responded telling Mr Keenan that he needed to “listen better” (those were the words Mr Keenan quoted Ms Beaulieu as having said). Mr Keenan said he told Ms Beaulieu that he did listen, that his mind operated rapidly and he responded to matters with corresponding rapidity leading to the mistaken conclusion that he was not listening. Mr Keenan said Ms Beaulieu and Ms Elderbrant told him to reflect on his behaviour. He said that in addition, Ms Elderbrant separately told him that she had been avoiding him as she did not wish to discuss Ms Baldota with him.
Before turning to the version of the same incident as given by Ms Elderbrant and Ms Beaulieu, several things must be said about Mr Keenan’s version of that incident. First, it was immediately apparent that Mr Keenan was endeavouring to raise, yet again, an ongoing (borderline insuperable) problem he was having, namely Ms Baldota and, on this occasion, specifically about her making false accusations against Mr Keenan. Perfectly appropriately Mr Keenan was attempting to raise with his superiors issues that bore directly upon Ms Baldota’s propriety and honesty, having regard to Mr Keenan’s characterisation of Ms Baldota’s conduct of making false accusations against him. Mr Keenan was right to bring that to the attention of his superiors. By way of response, Mr Keenan’s superiors told him to self reflect. They fobbed him off. They refused to entertain his approach. They sloughed off his concerns in a perfunctory and dismissive manner. They told Mr Keenan he needed to examine his behaviour. They were entirely resistant to his concerns. They showed poor leadership by their disdain for his concerns. They reacted badly. Their requirement for him to reflect on his behaviour was reminiscent of an earlier comment by Ms Elderbrant to like effect. One could be forgiven for concluding that her requirement for self-reflection was her mantra for crisis management. The crisis between Mr Keenan and Ms Baldota cried out for intervention by Ms Elderbrant or Ms Beaulieu. It had festered for long enough for them to conclude that reflection upon his behaviour was not an effective remedy. It had not worked previously. There was no rational basis for concluding that it would work on that occasion. The solution lay in disciplining Ms Baldota by requiring her to comply with Mr Keenan’s legitimate orders. She was unchecked. She behaved with disregard for Mr Keenan’s leadership. For reasons unexplained she seemed to think she was the regional leader, superior to Mr Keenan. Ms Elderbrant and Ms Beaulieu put their heads in the sand on this issue. They failed to act properly in response to Mr Keenan’s implores for help.
I have made the above observations having taken into account the version of events as given by Ms Elderbrant and by Ms Beaulieu. Turning first to the version given by Ms Elderbrant, she denied Mr Keenan convened a meeting. She said the event was social in nature in a bar following dinner. She said it was a networking event. She said he had a drink in his hand. She said there was no way she “would get into a discussion like that” while having a social drink. That statement did not mean that such a discussion unfolded in the manner canvassed by Mr Keenan. I was unable to see the inherent improbability of the discussion unfolding in the way Mr Keenan said. In paragraph 48 of her affidavit Ms Elderbrant used the phrases “would get” (once) and “would not have” (twice), connoting to me that she had no direct recall of the event and was speculating. It must be pointed out that she did not, in terms, deny what Mr Keenan said. Instead, she ventured what she believed would or would not have occurred. When comparing direct evidence from one witness that an event occurred against evidence of another witness about things that other witness believed would have happened but in respect of which the witness did not positively say did or did not happen, I prefer the direct evidence over the speculative evidence. I prefer Mr Keenan’s version.
The version of the 26 February 2015 discussions, as given by Ms Beaulieu, did not mirror or even approximate the version as given by Ms Elderbrant. She was quick to point out that she did not consume alcohol over dinner. She said that after dinner a group that included her, Ms Elderbrant and Mr Keenan went to a bar. She said that while in the bar Mr Keenan approached Ms Beaulieu and Ms Elderbrant stating that he had issues with Ms Baldota. That much corresponded with Mr Keenan’s version. She said Mr Keenan told her of complaints he had made about Ms Baldota. Again, that much corresponded with Mr Keenan’s version. Ms Beaulieu said she told Mr Keenan that it was not the time or place to be discussing those matters. Mr Keenan did not say Ms Beaulieu said that. Ms Elderbrant said she told Mr Keenan that she (Ms Elderbrant, not Ms Beaulieu) told Mr Keenan she did not want to discuss that evening the matters he raised. Ms Beaulieu said she told Mr Kennan that Mr Keenan was not listening to her when she said to him that she did not want to discuss it that evening. Ms Beaulieu said Ms Elderbrant told Mr Keenan that he was incorrect in his complaints about Ms Baldota and that he needed to work those matters out. Ms Elderbrant did not give evidence in paragraph 48 of her affidavit that she told Mr Keenan he was incorrect in his complaints about Ms Baldota.
Ms Beaulieu added to the evidence she gave in paragraph 39 of her affidavit sworn 20 March 2017 that Ms Baldota reported to Ms Elderbrant rather than to Mr Keenan. Ms Beaulieu said Ms Baldota was under Ms Elderbrant’s leadership. There being no other evidence on point, especially no contradictory evidence, I accept that Ms Baldota reported to Ms Elderbrant. That made it all the more important for Ms Elderbrant to have displayed proper and responsible managerial skill by devising a way to successfully overcome the impasse that permeated the relationship between Mr Keenan and Ms Baldota. One corrective measure involved placing Ms Baldota on a performance improvement plan, having regard to her belligerent and obdurate approach towards fitting into Mr Keenan’s team. Another might have been removing her from Mr Keenan’s team and placing in Mr Keenan’s team a more cooperative worker. According to Ms Beaulieu, Ms Elderbrant told Mr Keenan on 26 February 2015 that Mr Keenan’s complaints about Ms Baldota were not right. Ms Beaulieu did not say on what material Ms Elderbrant relied to reach that state of learning. Ms Elderbrant did not say that she told Mr Keenan his complaints were not right. To the contrary. In Ms Elderbrant’s affidavit she said at paragraph 48 that she avoided all attempts by Mr Keenan to engage her at all in the whole subject of criticisms of Ms Baldota. Mr Keenan said Ms Elderbrant told him that she did not want to discuss Ms Baldota with him. It seems to me that Ms Beaulieu was in error when she said that Ms Elderbrant told Mr Keenan that his complaints about Ms Baldota were not right. If those words had been at it, as Ms Beaulieu said they were, Ms Elderbrant revealed a serious prejudgement of the issue by aligning herself with Ms Baldota’s position without having first properly investigated the subject of Mr Keenan’s complaints. In any event, as the person directly responsible for the conduct of Ms Baldota, Ms Elderbrant failed dismally to supervise Ms Baldota and to control her proper interaction with Mr Keenan.
Mr Keenan’s affidavit revealed an event on 27 February 2015 during which Ms Kirsch publicly derided Mr Keenan over his views on pricing. After Ms Kirsch apologised for her comments, Mr Keenan accepted her apology. That event seemed to me to be relatively inconsequential in the narrative of this dispute. However, the response to it from the respondent’s witnesses provided an insight into the venom that pervaded the attitude of the respondent’s higher management towards Mr Keenan. Ms Elderbrant said that during the public discussion Mr Keenan became visibly angry. She said he was tunnel visioned to his region and he did not see the global context. It must be recalled that the subject of discussions was the mobile telephone pricing. Ms Kirsch said Mr Keenan could not agree with the pricing model then under discussion. She was critical of his independence of thought. She took the view that when the respondent was minded to take a particular direction he needed to accept that and not to speak out about the direction. Ms Kirsch said the following –
… Andrew just simply could not accept the pricing. It is difficult to explain pricing to customers. The pricing may have been confusing, Andrew may be right about this but it is all Cummins’ money, it is a shared service and the price was set. That decision was taken at a team level and it was decided on by the team. Andrew would not accept the team decision. I remember we were talking for over an hour about this. Even if you do not like it, when the team makes that decision you simply need to support it and do your best to explain it to the business and he could not. He could not see that it was all Cummins’ money.
Mr Keenan was criticised for his expression of free thought on a matter that was closed for discussion. According to Ms Kirsch, once the team had decided on some matter or other that was the end of the matter. She did not say who the “team” was nor did she give details of which of the large number of respondent policies provided that team decisions were final and binding. That was to be contrasted with the instruction given by Mr Keenan’s superiors that he needed to operate in the “grey areas” by thinking about new ideas where he needed to engage in self reflection, he needed to challenge assumptions and test orthodox theories. It was readily apparent that a high degree of inconsistency pervaded the approaches adopted by those superior to Mr Keenan. For a person in the shoes of a regional leader, it was understandable that such inconsistency created day-to-day difficulties, not the least of which was the complex concept of mobile telephone pricing that needed to be explained to customers and operators under the regional leader’s control. Ms Kirsch herself considered that the pricing was difficult to explain to customers and that the pricing was confusing. If a regional leader such as Mr Keenan sought an explanation about aspects of the pricing, in view of its confusing nature when explaining it to customers, it was no valid response to tell the regional leader that the team (whomsoever that was) had decided the matter and there was no room for discussion. That comment by Ms Kirsch flew in the face of reason. It offended principles of good corporate governance. It smacked of an autocratic approach to corporate governance, wholly antithetical to principles of Australian company law.
It should not be forgotten that Ms Kirsch was a level 13 employee, Ms Beaulieu was a level 12 employee and Mr Keenan was a level 10 employee. Ms Kirsch was the highest ranking respondent employee who gave evidence in this case.
During March 2015 Ms Baldota featured again by presenting an uncooperative approach towards Mr Keenan. The situation was becoming intolerable for Mr Keenan. The person to whom Ms Baldota reported, Ms Elderbrant, refused to involve herself in the developing problems or in a resolution of the conflict that existed with Ms Baldota. The problems associated with the retrieval of Mr Pallozzi’s mobile telephone resumed. To show the depths to which this issue had sunk it is necessary to record the contents of an email dated 3 March 2015 from Mr Keenan to Ms Beaulieu. It said the following –
The attached email from Suzanne has put me in a tricky dilemma and I am going to struggle to respond without it sounding negative, so would appreciate some guidance.
Basically Rebecca sent a note in January to me and Bruce Smith asking about how to surrender John’s hardware (John is my predecessor), and so I spoke to Sharmili to ask that she talks to Suzanne as John does not work for me and in Australia a company phone is considered to be of benefit, so taking a benefit off somebody probably needs HR involvement, especially when John is a peer of mine and not a direct report.
It seems from the attached note that Sharmili has not spoken to Suzanne, so try to respond as such will come across negative (which I’m desperately trying to avoid !).
I am on vacation right now so will leave it a day or two, although I do know John’s phone is being surrendered this month and I don’t know if we should pursue him to recover costs, especially when it is not my decision to take, I think.
Thanks
Andrew
It was obvious from the tenor of that email that Mr Keenan was seeking his superior’s guidance about the dilemma into which Ms Elderbrant and Ms Baldota had thrown him by not retrieving Ms Pallozzi’s mobile telephone. In the email Mr Keenan twice expressed his fears of sounding negative, something he said he was “desperately trying to avoid”. He had no option but to write the email in view of the position into which he was put by Ms Elderbrant and Ms Baldota. Ms Baldota had not done – again – what Mr Keenan asked her to do by communicating with Ms Elderbrant on the issue. The involvement of human resources people was required. If any response emerged from Ms Beaulieu, it was not given in a timely manner. Instead, on 6 March 2015 Ms Baldota sent Mr Keenan an email falsely accusing Mr Keenan of approving Mr Pallozzi’s request to keep his mobile telephone, when in truth Mr Keenan gave no such approval. Rather than taking umbrage at Ms Baldota’s falsehood, Mr Keenan sent her an email on 11 March 2015 reminding her that six weeks earlier he had discussed with her the task of her retrieval of Mr Pallozzi’s mobile telephone. Mr Keenan’s email was stunningly polite in the circumstances. Mr Keenan told Ms Baldota that he had contacted Mr Pallozzi – a task he had asked her to do – who told Mr Keenan to collect the mobile telephone. Mr Keenan requested Ms Baldota to make arrangements for the collection of the phone.
One of the bigger issues in this case related to Mr Keenan’s role in a formal ethics investigation into Mr Sharma. Mr Keenan was interviewed on 16 March 2015. Mr McClelland conducted the interview. Comprehensive notes of the interview were prepared. They were not a verbatim transcript, however.
The interview process was less than balanced. It was not particularly fair. The interviewee was required to divulge all information in his possession, without reservation, irrespective of the nature of the information. Information that would elsewhere have been amenable to a claim against self-incrimination was not. In the body of the notes of the interview, the following appeared –
Participation Agreement
·You are expected to participate and tell us everything you know.
·We take withholding information in an ethics investigation very seriously.
·We expect you to tell the truth throughout this interview.
·Employees who lie during ethics investigations may face serious disciplinary actions.
Confidentiality Agreement
·We take all policy violations very seriously.
·Discussion should be limited to the investigators.
·We will do everything possible to maintain confidentiality.
·We expect that you will not discuss the facts of this investigation with anyone.
·If you are asked about the investigation, you can say there is an investigation, I have been called as a witness but I have signed a confidentiality agreement so I cannot discuss any details.
·If you are pressured by an employee to give information, refer them to the investigator.
Threats of disciplinary action for untruths were made and an employee was expected to remain silent for having participated in the interview. The process foreclosed any benefit in favour of the interviewee. Mr Keenan made handwritten additions to the written record of the interview. In many, although not all places, he initialled his inclusions. The written record noted the start time as 11am although no end time was given. As that written record became the foundation of subsequent important events, it is as well to record its more important provisions.
It recorded four allegations against Mr Sharma. They were –
a)a breach of the respondent’s travel, accommodation and entertainment policy whereby Mr Sharma purchased personal travel on his company credit card for travel to India from Singapore in May 2014;
b)a breach of the respondent’s code of business conduct ethical principle 9 whereby he misguided the respondent about his personal needs in requesting company to accompany him on a short-term international assignment to Singapore in May 2014;
c)a breach of the respondent’s code of business conduct ethical principle 7 whereby Mr Sharma fraudulently obtained reimbursement for $328 in personal expenses relating to him and his family; and
d)a breach of the respondent’s travel, accommodation and entertainment policy whereby Mr Sharma travelled business class from Singapore to the United States and he failed to use his company credit card to do so.
Then followed a rapid and dramatic deterioration in the esteem in which Mr Keenan had been previously held. Ms Millar said that such a turnaround went largely unexplained. I agree. It was unexplained. But dramatically adverse it certainly was. Mr Millar categorised what he termed a miscellany of trivial and unconvincing events, erroneously characterised by the respondent as performance concerns. They included –
a)an asserted delay in purchasing a coffee machine a year earlier;
b)cancelling a lunch;
c)an innocuous comment to a pregnant woman; and
d)the unremarkable approval of carer’s leave for a staff member.
Correctly, Mr Millar pointed to Mr Keenan’s participation in a candid self-assessment only to have his responses used against him in the so‑called (and wrongly so‑called) performance improvement plan. He also relied on the fact that by 30 April 2015 Ms Beaulieu had sought and obtained legal advice in connection with the termination of Mr Keenan’s employment. Mr Millar pointed to a high degree of predetermination on Ms Beaulieu’s part in Ms Beaulieu having booked an airline ticket to Australia on 17 August 2015, arriving in Melbourne on 31 October 2015, the phenomenon of the visit not having been previously revealed to Mr Keenan. Mr Millar also relied on the decision to issue the show cause letter well in advance of its issue.[87]
[87] Ibid 453
In my view, the matters referred to immediately above carry a great deal of merit. I agree with Mr Millar’s characterisation of them. I do not accept that performance issues were generally the reason or reasons for Mr Keenan’s termination.
Insofar as Ms Beaulieu was the relevant decision maker, I find that the respondent did not discharge the reverse onus it fell to it to discharge.
That left Mr McClelland as the relevant decision-maker concerning the ethics case. In paragraph 197 of the respondent’s final submissions counsel provided the unqualified submission that Mr McClelland was a relevant decision maker in relation to the ethics investigation into Mr Keenan’s conduct commenced in May 2015. The respondent conceded the Mr McClelland initiated the investigation and was responsible for it. The respondent advanced the argument that by reason of Mr McClelland being the relevant decision-maker who was responsible for initiating the ethics investigation Mr Keenan had failed to prove this aspect of the case because, so the respondent’s counsel said, Mr Keenan failed to prove that the ethics investigation was commenced by Ms Beaulieu and Ms Elderbrant.
I reject that submission. Mr McClelland was a very junior employee of the respondent. He had extremely limited authority. The senior executives who gave evidence in this case were Ms Kirsch, Ms Elderbrant and Ms Beaulieu. It was nonsensical to suggest that Mr McClelland, as a very junior employee, could have made a decision (any decision, for that matter) that could not have been countermanded, qualified, reversed or approved by Ms Beaulieu, Ms Elderbrant or Ms Kirsch. It may well be the fact that Mr McClelland had some small role, as a functionary, in the ethics case process but I find as a fact that he was not the decision-maker in respect of the ethics investigation. In my view, the relevant decision-maker in respect of the ethics investigation was Ms Beaulieu. And for reason set out above, I reject the contention that she was properly actuated by performance issues pertaining to Mr Keenan. The fact that Mr Keenan commenced an investigation in relation to Ms Beaulieu was the exercise of a workplace right in respect of which the respondent took adverse action against Mr Keenan. In my view, the respondent did not discharge the relevant onus that fell to it to discharge in respect of the ethics investigation.
The respondent’s failure to call Ms Baldota
The foregoing reasons reveal how Ms Baldota was a witness of central relevance and importance in this case. She did not give evidence. Precisely why she did not give evidence was not stated. In many respects, her evidence was almost as significant and important as was Mr Keenan’s. Without her evidence, I was able to obtain the respondent’s evidence at a supervisory level, as deduced from Ms Baldota’s superiors, rather than being able to obtain first-hand direct evidence from Ms Baldota. The fact of there being a major personality clash between Mr Keenan and Ms Baldota was obvious. However, the respondent did not produce Ms Baldota to give the version of the evidence nor did the respondent adduce evidence in affidavit form so that Ms Baldota could be subjected to cross-examination with her version of events being tested.
In the ordinary course of adversarial litigation, one party’s unexplained failure to call a witness on a material issue may – although, not must – support an inference more easily to be drawn from the evidence called by the opposing party. So much has been the subject of academic commentary of indisputable veneration, such as Cross on Evidence.[88] That statement has come to be known as the rule in Jones v Dunkel, emanating from the 1959 High Court decision bearing that name.[89] The rule in Jones v Dunkel has not been countermanded, qualified or negated by s 140 of the Evidence Act, as Branson J observed in Booth v Bosworth,[90] a matter on which I wrote in Mohammed v Minister for Immigration & Anor.[91]
[88] LexisNexis Butterworths, 10th ed, 2015 (at [1215])
[89] Jones v Dunkel (1959) 101 CLR 298
[90] (2001) 114 FCR 39
[91] [2017] FCCA 2741
Pursuant to the rule in Jones v Dunkel, a court is entitled to take into account of the fact of one party’s failure to call certain evidence. However, where a party fails to call certain evidence, the court is not entitled to conclude that the uncalled evidence would have been damaging to the case of the party who failed to call the evidence, as was held in HML v The Queen.[92] Further, the rule in Jones v Dunkel cannot be used to fill gaps in one party’s evidence.[93]
[92] (2008) 235 CLR 334
[93] (1959) 101 CLR 298, 308, 312, 321
In the 1774 decision of Blatch v Archer,[94] Lord Mansfield CJ famously stated[95] –
that all evidence is to be weighed according to the proof which it was in the power of one side to produce and in the power of the other side to have contradicted.
[94] [1774] 98 ER 969
[95] [1774] 98 ER 969, 970.
Despite being over 240 years in age, that statement is as true in 2018 as it was when first uttered in 1774 and its gravamen is now enshrined in s 55 of the Evidence Act.
But the principle does not apply if the failure to give evidence is demonstrated by evidence that establishes a legitimate explanation. So much was held by the Court of Appeal of the New South Wales Supreme Court in Duke Group Ltd (in liquidation) v Pilmer.[96] The onus of establishing unavailability is on the party against whom the adverse inference is to be drawn, as was held in Australian Securities and Investments Commission v Rich.[97]
[96] (1998) 27 ACSR 1, 15.
[97] (2009) 75 ACSR 1.
The principle permits an inference to be drawn that the untendered evidence would not have helped the party who failed to tender it. It entitles the judge to take that into account in deciding whether to accept any particular evidence which relates to a matter on which the absent witness could have spoken, as was held in O’Donnell.[98]
[98] [1975] VR 916, 929
But the rule applies only where a party is required to explain or to contradict something, as was held in the 1820 decision of R v Burdett.[99] What a party is required to explain or contradict depends on the issue in the case as thrown up in the course of evidence in the case, as was held in Nuhic v Rail & Road Excavations.[100] No inference can be drawn unless evidence is given facts “requiring an answer”, according to the High Court decision in Jones v Dunkel. Where a witness is missing, the evidence of the missing witness must be such as to have elucidated the matter. That much was said by Glass JA in Payne v Parker.[101]
[99] (1820) 106 ER 873, 898
[100] [1972] 1 NSWLR 204, 221
[101] [1976] 1 NSWLR 191
In order for the rule in Jones v Dunkel to be operative, there must be an unexplained failure by a party to give evidence, to call one or more witnesses to tender documents. In this case, no explanation for Ms Baldota’s absence was offered. She was unarguably in the respondent’s camp, as that concept was explained in O’Donnell v Reichard.[102] It seemed to me that a reasonable expectation existed that the respondent would have called her. She was a participant in many key conversations and meetings involving Mr Keenan. Ms Baldota was privy to discussions with Ms Elderbrant and Ms Beaulieu. It seemed to me that the respondent’s failure to adduce evidence from Ms Baldota enlivened the High Court’s observations in RPS v The Queen where the plurality said as follows[103] –
In a civil trial there will very often be a reasonable expectation that a party would give or call relevant evidence. It will, therefore, be open in such a case to conclude that the failure of a party (or someone in that party's camp) to give evidence leads rationally to an inference that the evidence of that party or witness would not help the party's case and that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference. (footnotes omitted)
[102] [1975] VR 916
[103] (2000) 199 CLR 620 (at [26])
To my mind, an adverse inference should be drawn in this case by reason of the respondent’s failure to call Ms Baldota that her evidence would not have assisted the respondent.
Counsel for the respondent ambitiously contended as follows –
The submission is misconceived. The submission that “Ms Baldota’s involvement in the process leading to termination is clear” is unsupported by any of the evidence in the case. The presence of Ms Baldota’s name in the background narrative is one thing – it is another thing altogether to submit that she was possibly involved in or had a role in the alleged adverse action. There is not a jot of evidence that she was nor from which such an inference can be drawn.
Suffice it to say that I reject that submission. I also reject the assertion that her attendance was not called for by reason of her not being the relevant decision maker. The respondent was incorrect in its contention that Ms Baldota’s evidence would not have been probative on any issue in dispute. The lengthy reasons that are set out above reveal how Mr Keenan and Ms Baldota were in conflict at an early stage of their working arrangements. In my judgment, contrary the respondent’s submission, there was no doubt whatever that Mr Keenan’s complaints about Ms Baldota were in the mind of Ms Beaulieu. I am persuaded on the balance of probabilities that the relevant decision maker took adverse action against Mr Keenan because Mr Keenan had made one or more complaints about Ms Baldota.
The respondent’s counsel’s characterisation of the significance of Ms Baldota’s evidence as “interesting” then demeaningly relegating it to a position of inferiority, was a matter of considerable importance. The respondent was to be expected to have called her. I have drawn an adverse inference against the respondent, consonant with the authorities recorded above, by reason of the respondent’s unexplained failure to adduce evidence from Ms Baldota.
Temporary absence from work
While possibly not the centrepiece of his claims in this litigation, Mr Keenan advanced a claim that his employment was terminated by reason of his absence from work and on account of illness or injury. Mr Keenan said that the respondent breached s 352 of the FWA by doing that. In response, the respondent contended that Mr Keenan was terminated by reason of performance issues.
Mr Millar correctly pointed out that the statutory presumption under s 361 operates in relation to s 352 in the same way as it operates in relation to s 340. He argued that any conclusion to the effect that the respondent failed to discharge the reverse onus cast upon it in relation s 340 contravention, applied with equal force and effect in relation s 352 contraventions.
Mr Millar quite properly pointed out that Mr Keenan’s grievance in relation to any s 352 contravention was set in a very different factual context than were Mr Keenan’s grievances in relation s 340 contraventions. Naturally enough, the principal difference related to the involvement of Ms Baldota. For the purposes of the s 352 contravention, Ms Baldota was irrelevant. That aside, Mr Millar contended that –
a)the respondent was required to demonstrate the Mr Keenan’s temporary absence from work was not a reason for Mr Keenan’s termination; and
b)the respondent failed to so demonstrate.
It seemed to me that there was real merit and Mr Millar’s contention on point. I agree that the respondent did not discharge the onus that fell to be discharged. In other words, I find that the respondent did in fact terminate Mr Keenan’s employment – not for poor performance reasons as it asserted – but rather, by reason of a reason or reasons which included the exercise of one or more workplace rights. It follows that s 352 of the FWA was infringed.
Long service leave
In this proceeding Mr Keenan claimed payment of unpaid and accrued long service leave entitlements. He asserted that his entitlement to such payments arose on 1 September 1981.
The respondent accepted that Mr Keenan had worked with entities within the group of companies described by the respondent as the “Cummins group” for more than 32 years.
The respondent argued that Mr Keenan’s entitlement to long service leave arose by operation of legislation enacted by the Parliament of the State of Victoria and that its presumed intendment was for the benefit of persons who had worked in the State of Victoria rendering long service in employment having a substantial connection to Victoria. The respondent argued that Mr Keenan’s time while working out of the state of Victoria should not be included in the calculation of long service leave entitlements.
It was common ground that Mr Keenan commenced employment in September 1981, then with an entity described in the pleadings as “Cummins Darlington”. That pleading was admitted by the respondent in paragraph two of its response, with the consequence that proof of that assertion was neither required or permitted, as was held in such authorities as Pioneer Plastic Containers Ltd v Commissioners of Customs and Excise[104] and Divcon (Australia) Pty Ltd v Devine Shipping Pty Ltd.[105]
[104] [1967] Ch 597
[105] [1996] 2 VR 79
While proof of the fact of that employment and its commencement day was rendered unnecessary, the admission told little about the entities that employed Mr Keenan in 1981. I accepted Cummins Darlington (in whatever corporate emanation that trading entity took legal persona) was somehow connected with Cummins Inc, the precise form and structure of the shareholding of it was not the subject of evidence.
Mr Keenan’s employment details emerged from several sources. Relevantly paraphrased, they were as follows –
a)on 1 September 1981 he commenced with Cummins Darlington;
b)in February 1985 Mr Keenan commenced with Cummins Australia Pty Ltd in Australia;
c)between 1995 and 2007 Mr Keenan was based in Scoresby, Victoria;
d)between May 2007 and December 2013 Mr Keenan was employed in the United States of America, although the respondent did not contest that his employment in those years was other than with the respondent;
e)in December 2013 Mr Keenan was promoted to a senior executive role within the respondent, commencing March 2014;
f)the respondent terminated Mr Keenan’s employment in late November 2015.
In this litigation, Mr Keenan said he was entitled to long service payments pursuant to the provisions of the Victorian Long Service Leave Act 1992. Mr Keenan argued that his time while working in the United Kingdom was to be taken into account for the purpose of calculating his overall entitlement to long service. Arithmetically, Mr Keenan argued that unpaid long service leave to which he said he was entitled amounted to $106 466.14 being an amount corresponding to an additional 19.24 weeks on top of long service payment he received for service in Victoria, an amount equivalent to 10.43 weeks.
In his written submissions, Mr Millar for Mr Keenan posed the issue for determination the following terms –
The issue on this part of the claim is simply whether, on termination of employment, Mr Keenan was entitled to payment of accrued long service leave based upon his employment within the Cummins Group, which extends back to 1 September 1981, or whether it is limited to service with the Respondent, from 18 February 1995.
After recognising that this issue fell to be determined against principles of statutory construction, the respondent raised the argument that the provision of the Long Service Leave Act was not intended to operate in such a way that a worker who had performed 30 years of service, some of which was in a foreign jurisdiction, should benefit from that foreign service by acquiring a benefit for long service leave. Counsel of the respondent argued as follows –
238.It is unlikely that parliament intended that such an employee should obtain a windfall gain (26 weeks’ pay) at a huge cost to his Victorian employer, where the employee’s former peers working the same period overseas would have no entitlement.
239.According to the so-called Golden Rule of statutory construction, legislation should be construed in a manner which avoids such absurdity or repugnance. This means that if the literal approach to the text of legislation leads to absurdities or repugnancy, the grammatical and ordinary sense of words may be modified so as to avoid those outcomes.
240.Furthermore where patently unfair or absurd outcomes are produced, a purposive approach to the legislation should be embraced. Construction of the Act should be referable to the particular mischief which parliament was intending to address by making the law.
(footnotes omitted)
In my view, that recital of principles of statutory construction was not accurate.
As I stated in Commissioner of State Revenue v Kimiora,[106] ultimately, it is the primacy of the words used in the legislation itself that determines the proper construction of the legislation. Since the decision of the High Court of Australia in Project Blue Sky Inc v Australian Broadcasting Authority[107] Australian law has held that the primary object of statutory construction is to construe the relevant provisions so that it is consistent with the language and purpose of all of the provisions of the statute.[108] That much is consistent with the observations of Barwick CJ in Taylor v Public Service Board (NSW).[109] According to Lord Scarman’s speech in the House of Lords in Southwest Water Authority v Rumble’s[110] as well as the observations of Wilson and Mason JJ in Cooper Brooks (Wollongong) Pty Ltd v Commissioner of Taxation,[111] the meaning of a particular legislative provision must be determined by reference to the language of the instrument viewed as a whole. The context, the general purpose and policy of the provision of a piece of legislation as well as its consistency and fairness are surer guides to meaning than is the topic with which the legislation is constructed.[112] As was held in Toronto Suburban Railway Co v Toronto Corporation,[113] Minister for Lands (NSW) v Jeremias[114] and K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd,[115] the process of construction must always begin with an examination of the context of the provision that is being construed.
[106] (2016) 309 FLR 277
[107] (1998) 194 CLR 355
[108] (1998) 194 CLR 355 (at [69])
[109] (1976) 137 CLR 208
[110] [1985] AC 609
[111] (1981) 147 CLR 297
[112] (1998) 194 CLR 355 (at [69])
[113] [1915] AC 590, 597
[114] (1917) 23 CLR 322
[115] (1985) 157 CLR 309
High Court authority of very long standing has prescribed that a court construing a statutory provision must strive to give meaning to every word of the relevant provision. So much was held in TheCommonwealth v Baume[116] as well as in Chu Kheng Lim v Minister for Immigration.[117] No sentence, clause or word is superfluous, void or insignificant if by any other construction they may all be made useful and pertinent.[118]
[116] (1905) 2 CLR 405, 414 and 419
[117] (1992) 176 CLR 1, 12
[118] R v Berchet [1794] EngR 1806
In Project Blue Sky the majority pointed out that the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended those words to have.[119] Ordinarily, that meaning will correspond with the grammatical meaning of the relevant provision.
[119] (1998) 194 CLR 355 (at [78])
More recently, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue,[120] the majority (Hayne, Heydon, Crennan and Kiefel JJ) held that the task of statutory construction must begin with a consideration of the text itself and that historical considerations and extrinsic material cannot be relied upon to displace the clear meaning of the text.[121] Other decisions of the High Court reflect similar reasoning such as Yanner v Eaton,[122] Yarmirr v Northern Territory,[123] Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue,[124] Stevens v Kabushiki Kaisha Sony Computer Entertainment,[125] Carr v Western Australia,[126] Director of Public Prosecutions for Victoria v Le[127] and Northern Territory v Collins.[128]
[120] (2009) 239 CLR 27
[121] (2009) 239 CLR 27 (at [47])
[122] (1999) 201 CLR 351, 366 (at [17])
[123] (2001) 208 CLR 1, 38-39 (at [13]-[14])
[124] (2001) 207 CLR 72
[125] (2005) 224 CLR 193
[126] (2007) 232 CLR 138
[127] (2007) 232 CLR 562
[128] (2008) 235 CLR 619
In many respects, modern Australian jurisprudence on the subject of statutory interpretation has placed former High Court Justice, the Honourable Justice Kenneth M Hayne at the vanguard. His extra- judicial writing on point is illuminating.[129]
[129] The Honourable Justice Kenneth Hayne AC, ‘Statutes, Intentions and Courts: What Place Does The Notion of Intention (Legislative or Parliamentary) Have in Statutory Construction?’ (2014) 13(2) Oxford Commonwealth Law Journal 271
The submissions of counsel for the respondent proceeded with the notion of a “golden rule” of statutory construction, citing Australian Boot Trade Employees’ Federation v Whybrow & Co.[130] Counsel of the respondent argued that in certain circumstances, the grammatical sense of the word may be modified if it leads to a particular outcome. Mr Forbes cited the decision of the Court of Appeal of the Supreme Court of Victoria in Footscray City College v Ruzicka[131] in which Chernov JA made various observations about aspects of statutory interpretation then in the context of the Accident Compensation Act.
[130] (1910) 11 CLR 311, 341
[131] (2007) 16 VR 498
Several things must be said of the respondent’s submissions on point.
First, in Project Blue Sky no mention was made of the golden rule of statutory construction. Instead, the majority (McHugh, Gummow, Kirby & Hayne JJ) spoke of the primary object of statutory construction being the construction of the relevant provision so that such construction is consistent with the language and purpose of all of the provisions of the statute. In support, the majority relied on the decision of the High Court of Australia in Taylor v Public Service Board (NSW).[132] Whenever apparent conflict in statutory provisions emerges, the court must engage in the process of reconciling those conflicting provisions so as to ascertain which provision is the leading provision and which provision is the subordinate provision, a point made clear by the House of Lords in Institute of Patent Agents v Lockwood,[133] a task that will lead to grading in some form of hierarchy the relative importance of statutory provision so that a determination can be made about which gives way to the other.
[132] (1976) 137 CLR 208, 213
[133] [1894] AC 346 (Lord Herschell LC)
The next thing to be said of the respondent’s submissions related to the origin and application of the so-called “golden rule”. Chernov JA addressed the matter in Footscray City College where his Honour extracted the relevant passage from the judgement of Lord Wensleydale in Grey v Pearson.[134] There, his Lordship held as follows –
[134] (1857) 6 HLCas 61, 106
I have been long and deeply impressed with the wisdom of the rule, now, I believe, universally adopted, at least in the Court of Law in Westminster Hall, that in construing wills and indeed statutes, and all written instruments, the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no farther.
(footnote omitted)
It must be recognised that the speech of Lord Wensleydale in Grey v Pearson emanated in an era since which considerable advances have been made in Anglo‑Australian jurisprudence on principles of statutory construction. Some of those were synthesised in the High Court’s decision in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation.[135] Those propositions may be catalogued in the following manner –
a)when interpreting a statute an elementary and fundamental principle is for the court to “see what is the intention expressed by the words used”;[136]
b)it is not unduly pedantic to begin with the assumption that words mean what they say;[137]
c)if when a section is read as part of the whole instrument its meaning is clear and unambiguous, generally speaking nothing remains but to give effect to the unqualified words used;[138]
d)some instances exist where the result of giving words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman made a mistake, in which case canons of construction are not so rigid as to prevent a realistic solution in such a case;[139]
e)if the language of the statutory provision is clear and unambiguous and is consistent and harmonious with other provisions of the enactment and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning even if it leads to a result that may seem inconvenient or unjust;
f)the danger that lies in departing from the ordinary meaning of unambiguous provisions is that it may degrade into mere judicial criticism of the propriety of the acts of the legislature;[140] and
g)if two constructions are open, the court will prefer that which will avoid what the court considers to be inconvenience or injustice as language, read in context, very often proves to be ambiguous in which case such a principle of construction not infrequently forced to be applied.[141]
[135] (1981) 147 CLR 297, 305
[136] River Wear Commissioners v Adamson (1877) 1 AC 743, 763
[137] Cody v J H Nelson Pty Ltd (1947) 74 CLR 629, 648
[138] Metropolitan Gas Company v Federated Gas Employees’ Industrial Union (1925) 35 CLR 449, 455
[139] Cramas Properties v Connaught Fur Trimmings Ltd [1965] 2 All ER 382
[140] Vacher & Sons Ltd v London Society of Compositors [1913] AC 107 (Lord Moulton)
[141] Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 (Gibbs J)
It seemed to me that those principles of statutory construction were the guiding principles, rather than the glib and imprecise paraphrasing of them recorded in paragraphs 238, 239 and 240 of the submissions of counsel for the respondent.
In those circumstances, I agree with Mr Millar that the issue concerning Mr Keenan’s entitlement to long service leave was one of statutory construction rather than some extraterritorial application of state legislation. Even on grounds relating to extraterritorial application of legislation, ample authority exists to the effect that legislation, whether federal or state enacted in Australia is operative in respect of activities undertaken outside Australia. Several illustrations will suffice including XYZ v Commonwealth,[142] Bonser v La Macchia,[143] Pearce v Florenca[144] and Mobil Oil Australia Pty Ltd v Victoria.[145]
[142] (2006) 227 CLR 532
[143] (1969) 122 CLR 177
[144] (1976) 135 CLR 507
[145] (2002) 211 CLR 1
Once it is accepted that the determination of Mr Keenan’s long service leave entitlements involved matters of statutory construction in the manner recorded above, then it became necessary to go to the provisions of the legislation, aided by the second reading speech and explanatory memorandum. To that I now turn.
Provisions concerning long service leave were originally enacted in the Employee Relations Act 1992 (Act no 83 of 1992). Under the Commonwealth Powers (Industrial Relations) Act 1996 (Act no 59 of 1996) the name of the Employee Relations Act was changed to the Long Service Leave Act1992. Division six, that set out detailed provisions concerning long service leave, first appeared as ss 56 to 81 of the Employee Relations Act 1992. That division was preserved in the Long Service Leave Act although in the Long Service Leave Act a new s 56A was introduced entitled “entitlement to long service leave after 10 years”. Significantly, under the Employee Relations Act the phrase “employee” was defined as was the phrase “employer”. The expression “employee” was defined to not include any person engaged under a contract for services and “employer” included any person employing an employee, neither of which definition was particularly helpful. Neither definition gave any insight into one of the issues in this case, namely, the significance of a person’s employment over time with various members within a group of companies.
At all events, the word “employee” and the word “employer” were repealed from the definitions in s 4 of the Long Service Leave Act 1992. New definitions were inserted in s 59.
Section 56 of the Long Service Leave Act established an employee’s basic entitlement to long service leave. It made provision for –
a)13 weeks of long service leave upon an employee completing 15 years of continuous service with one employer; and
b)four and one‑third weeks of long service leave upon an employee completing each period of five years of continuous employment with that employer.
In s 59, the word “employee” was inserted. It was different to the definition of that word in the Employee Relations Act. In s 59 the word “employee” was defined to mean a person employed by an employer to do any work for hire or reward and included an apprentice, a casual employee or a seasonal employee. In s 59, the word “employer” was defined to include a person who was not an employer at the time of transfer.
Section 60 provided the answer to the respondent’s submissions in this case about the identity of Mr Keenan’s employer not being the same over the duration of his employment. The section was extremely broad. Section 60(1) was in the following terms –
This section sets out several situations in which an employee is to be regarded, for the purposes of this Division, as having been employed by the one employer, even though the employee may have worked over the relevant period of time for more than one employer in a strict legal sense.
Section 60(2) covered a situation where the employer, being a corporation, was managed by substantially the same personalities. The section was in the following terms –
If an employee is employed by a corporation, he or she is to be regarded as having been employed by that corporation during any period that—
(a)he or she was employed by a related body corporate of that corporation (within the meaning of the Corporations Act); or
(b)he or she was employed by another corporation and—
(i)the directors of that other corporation and the employee’s present employer were substantially the same; or
(ii)that other corporation and the employee’s present employer were under substantially the same management.
Section 60(1) spoke in express terms of the fact that s 60 covered a situation in which an employee was to be regarded as having been employed by the one employer even though the employee may have worked over the relevant period of time for more than one employer in the strict legal sense. That was precisely the situation in which Mr Keenan found himself. The entities that employed Mr Keenan during his employment were one or more corporations within the respondent group companies were related bodies corporate of the respondent, as that expression was used in company law, especially for the purposes of the Corporations Act. It seemed to me that on several bases set out in s 60, the respondent was “one employer” for the purposes of s 56 and it was “that employer” for the purposes of s 57 of the Long Service Leave Act. I reject the respondent’s submissions to the contrary. I do not accept the respondent’s contention that the conferral of some form of windfall gain was occasioned to Mr Keenan “at huge cost to his Victorian employer” (the words in quotes were those of the respondent’s counsel’s) by the application of the provisions of the Long Service Leave Act to the facts of this case. Nor do I agree that by applying the principles of statutory construction set out above “absurdity”, “repugnancy”, “patent unfairness” or an “absurd outcome” was thereby achieved (that was the contention in paragraphs 239 and 240 of the respondent’s counsel’s written final submissions).
It seemed to me that the provisions of the Long Service Leave Act were enacted so as to provide for long service leave to be conferred on employees who had served their employer (as defined) for prescribed periods. Here Mr Keenan did just that. He therefore became entitled to payment in accordance with s 56 of that Act. It did not lie in the hands of a trial judge such as me to fail to apply that which Parliament enacted. The presumption mentioned by the respondent’s counsel in paragraph 243 of his submissions was wrong in law. I reject it. Equally, the submission in paragraph 245 of those submissions was wrong and I likewise reject it. The point was one of statutory construction.
The point may be tested by analogy. Let it be assumed that an employee of 30 years’ service was employed as a geotechnical engineer in offshore oil exploration, his employer being a publicly listed resources company the head office of which was in Melbourne. Let it also be assumed that for his employer’s onshore mining operations one entity employed the employee and that for his employer’s offshore oil exploration operations another company within the group employed him, yet all companies were related corporations. In those circumstances it could not be seriously contended that long service leave was not payable on account of the service being rendered offshore. Nor could it be seriously suggested that the employee’s 30 years of service did not amount to “long service” as defined merely because of the fact that the employee’s service was with different companies within the group.
In my judgment, Mr Keenan was entitled to the long service leave he claimed.
Conclusion
In my judgment Mr Keenan succeeded in this proceeding. He is entitled to compensation and other relief.
I direct that within 14 days the parties bring in minutes that address the further conduct of this proceeding.
I certify that the preceding three hundred and eighty-five (385) paragraphs are a true copy of the reasons for judgment of his Honour Judge Wilson
Date: 14 September 2018
Correction Notice
The applicant’s address was redacted from the quote in paragraph 184.
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